Karnataka J. Agric. Sci.

,25 (2) : (203-207) 2012

Organic and inorganic cultivation of chilli and its marketing- An economic analysis*
V. R. NAIK, L. B. KUNNAL, S. S. PATIL AND S. S. GULEDGUDDA
Department of Agricultural Economics
University of Agricultural Sciences, Dharwad - 580 005, India
(Received: June, 2010 ; Accepted: May, 2012)
Abstract : The present study was conducted in Belgaum district, the major vegetable producing district of north Karnataka.
Large numbers of farmers practice the organic cultivation of chilli in the district. For the study, 30 farmers each practicing
organic and inorganic cultivation of chilli spread over the district of Belgaum were selected randomly. The data collected from
respondents was analysed using budgeting technique. The estimated per acre cost of cultivation of organic and inorganic chilli
was ` 18337.00 and `19115.00 respectively. The per acre average yield of organic chilli was 4.10 tonnes as against 4.86 tonnes
in inorganic chilli. The per tonne market prices for organic and inorganic chilli were ` 9830.00 and ` 6300.00, respectively. The
transportation cost including loading and unloading for organic chilli was ` 265.00 per tonne as against ` 285.00 for inorganic
chilli. The per tonne commission charges for organic and inorganic chilli were ` 644.00 and ` 432.00, respectively. The total
marketing cost per acre for organic chilli was ` 3726.00 as against ` 3485.00 for inorganic chilli. The gross returns of organic
chilli were ` 40290.00 per acre as against ` 30583.00 for inorganic chilli. The net returns of organic chilli (` 18227.00) were
higher than that of inorganic chilli (` 7984.00). The B:C for organic chilli was 1.83 as against 1.35 for inorganic chilli. Hence
it is advisible for the farmers to switch over to organic farming which minimizes the environmental degradation and also brings
higher net returns
Key words: Green manuring, Inorganic chilli, Organic chilli, Premium price, Vermicompost

Introduction
India is a leading vegetable producing country in the world
with an area of 7.05 m.ha with the annual production of 108.20
m.t (Agriculture Today, 2008). Karnataka is one of the leading
vegetable producing state in the country with a production of
45,78,600 t, from an area of 3,82,200 ha (APEDA, 2005-06) of
which, chilli occupies about 69,880 ha. Belgaum is the major
vegetable producing district in the Northern Karnataka, with an
area of 49,576 ha and production of 6,77,706.56 t, respectively.
The total area and production of chilli in Belgaum district is
7,237.40 hectares and 96,786.10 tonnes, respectively.
The Government of Karnataka has made separate cell called
'organic cell' especially for the farmers, where in 100 hectares of
area in each district and taluk to be converted to organic farming
for which state government has selected 29 Non Government
Organizations and given them the responsibility to work with
farmers to make their farms organic and fifty per cent of the
funding for organic farming has been given by Government of
Karnataka and rest will be incurred by farmer himself.
Organic Food Club (OFC) which was established in
Yamakanmaradi village of Belgaum district is a unique voluntary
service oriented organization. Its motto is to establish a fair
marketing system with direct relationship between the producer
and the consumers. Its aim is also to offer expert advice to the
farmers who want to convert to organic farming by way of
periodical visits to such farms. Organic Food Club has
successfully established organic farming practices in the
following sites and programmes namely Govt of Karnataka made
Organic Village Site Programme (2004-07) for 132 small farmers in
250 acres at Yamakanmaradi village of Belgaum district and also
for 90 farmers in 250 acres at Khanapur taluk of Belgaum district
(2007-2010). Hence the study has been undertaken with the
objectives to study the type, pattern and levels of use of manures,
fertilizers and plant protection measures and the cost involved
under both the types of farming and to compare the yields, market
prices and returns of organic chilli with that of inorganic chilli.
Material and methods
The study was conducted in Belgaum distritct as the organic
cultivation of vegetable is practiced largely in the district. The
chilli crop was selected for the study as large number of farmers
practice the organic cultivation of chilli in the district. To
compare the type of input use pattern, costs involved, yields,
market, prices and the returns in organic and inorganic
cultivation of chilli, 30 farmers each practicing organic and
inorganic cultivation of chilli spread over the district of Belgaum
were selected randomly for the study.
The tabular method was followed to study the type, level
and pattern of input use, the yield level and market price. The
averages and percentages were worked out. The budgeting
technique was used to estimate the costs and returns. The
following recent farm management cost concepts were used for
calculating the cost per acre of chilli crop. The classification of
costs based on Dr. Sen's Committee report (1979) is as follows.
Cost - A1: It included wages of hired human labour, cost of
bullock labour, charges of hired machinery, cost of seed, value
of organic manure and chemical fertilizers, value of plant
protection components, interest on working capital, depreciation
on farm machinery, implements, equipments, farm buildings, land
revenue etc.
Cost - A2: Cost 'A1' plus rent paid for leased in land.
Cost - Cost 'A1'or 'A2' plus interest on fixed capital invested in
the business excluding the value of the land.
Cost - B2: Cost 'B1' plus rental value of own land.
Cost - C1: Cost 'B1' plus imputed value of family labour.
Cost - C2: Cost 'B2' plus imputed value of family labour.

*Part of M. Sc.(Agri.) thesis submitted by the first author to University of Agricultural Sciences, Dharwad - 580 005, India

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Karnataka J. Agric. Sci., 25 (2) : 2012

Results and discussion The maximum per acre cost of input involved (` 1822.00)
was in the use of FYM followed by vermicompost (` 1437.00),
The type, level, pattern of inputs used and cost involved on
neem seed cake (` 544.00), green manuring (` 444.00), seeds
each input in organic cultivation of chilli are presented in the
(` 372.00),VAM (` 162.00), neem seed kernel extract (` 90.00),
Table 1. It was observed that in the study area seeds, FYM
panchagavya (` 74.00) and trichoderma (` 37.00).
(Farm Yard Manure), green manuring, vermicompost, VAM
The type, level, pattern of inputs used and cost involved on
(Vascicular Arbascular Mycorriza) and biopesticides which
each input in the inorganic cultivation of chilli are presented in
included neem seed cake, neem seed kernel extract, panchagavya
the Table 2. It was observed that in the study area seeds, farm
and trichoderma were used in the organic cultivation of chilli.
yard manure, urea, DAP (Di Ammonium Phosphate), Single super
Chilli seedlings were raised in the nursery and then transplanted
phosphate, complex fertilizers and plant protection chemicals
to the main field. About 117.60 gm seeds were used to raise the
which included monocrotophos, mancozeb, carbandizam and
nursery for an acre of area.
dimethoate were used in the inorganic cultivation of chilli
The farmers used about 1.82 tractor loads of farm yard
Under the inorganic cultivation also the chilli seedlings were
manure, which was applied at the time of transplanting by the
raised in the nursery and then transplanted to the main field.
way of broadcasting method. In case of green manuring, about
About 106.38 gm of seeds were used to raise the nursery for an
17.76 kg seeds were used for an acre of area, which was applied
acre of area. The farmers used about 2.26 tractor loads of FYM
two weeks before transplanting by the method of insitu
per acre which was applied at the time of transplanting by the
application. In case of vermicompost, about 0.72 tonne was
way of broadcasting. In fertigation to the crop 120.29 kg of urea
applied at the time of transplanting by following the broadcasting
per acre was used, in that 50 per cent was applied as basal dose
method. VAM was used at the rate of 4.06 kg per acre, which was
at the time of transplanting and remaining 50 per cent was top
mainly applied at the nursery stage by the way of soil application.
dressed at the flowering stage by the way of broadcasting. In
In case of biopesticides, neem seed cake which was used at the
case of DAP, about 81.16 kg per acre was applied at 5-6 weeks
rate of 90.68 kg per acre, was applied at the time of transplanting
after transplanting by following the broadcasting method.
by mixing with FYM and vermicompost to control nematodes
About 38.41 kg single super phosphate per acre was broadcasted
and root grubs, neem seed kernel extract was used at the rate of
after 5-6 weeks after transplanting. In case of complex fertilizers
0.727 l per acre, which was applied at 10-12 days interval after
about 33.33 kg per acre was used after flowering by the way of
transplanting by the way of spraying to control incidence of
broadcasting. In case of plant protection chemicals,
thrips and mites, panchagavya was used at the rate of 14.70 l per
monocrotophos was used at the rate of 0.61 l per acre to spray
acre, sprayed at 18-20 days interval after transplanting to control
at 10-15 days interval after transplanting mainly to control fruit
fungal diseases and about 0.93 kg of trichoderma was used,
borer and thrips, mancozeb was used at the rate of 1.03 kg to
which was applied at the time of sowing by the way of seed
spray for an acre area at 8-10 days interval 3 weeks after
treatment to control seedling rot disease and also sprayed at 20
transplanting to control leaf spot disease, carbandizam was used
days interval after transplanting to control fruit borer.
at the rate of 0.47 kg to spray for an acre of area at 15-20 days

Table 1. Type, level, pattern of inputs used and cost involved in organic cultivation of chilli
Type of inputs Unit Quantity used Time of Method of Used to Per acre cost
(per acre) application application control of inputs (`)
Seeds g 117.60 372.00
FYM Tractor loads 1.82 At the time of Broadcasting 1822.00
transplanting
Green manuring kg of seeds 17.76 Two weeks before Insitu application 444.00
transplanting
Vermicompost Tonne 0.72 At the time of Broadcasting 1437.00
transplanting
VAM (Vascicular
Arbascular Mycorriza) kg 4.06 Nursery stage Soil application 162.00
Biopesticides
Neem seed cake kg 90.68 At the time of Mixing with FYM Nematodes and 544.00
transplanting and vermicompost root grubs
and Broadcasting
NSKE l 0.727 10-12 days interval Spraying Thrips and mites 90.00
after transplanting
Panchagavya l 14.70 18-20 days interval Spraying Fungal diseases 74.00
after transplanting
Trichoderma kg 0.93 At the time of sowing Seed treatment Seedling rot 37.00
20 days interval Spraying Fruit borer
after transplanting

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Organic and inorganic cultivation of chilli............

Table 2. Type, level, pattern of inputs used and cost involved in inorganic cultivation of chilli
Type of inputs Unit Quantity Time of Method Used Per acre
used of of to cost of
(per acre) application application control inputs (`)
Seeds g 106.38 491.00

FYM Tractor loads 2.26 At the time of Broadcasting 2261.00

transplanting
Urea kg 120.29 50% as basal and 50% Broadcasting 604.00
at flowering stage
DAP (Di Ammonium kg 81.16 5-6 weeks after Broadcasting 787.00
Phosphate) transplanting
Single super kg 38.41 5-6 weeks after Broadcasting 211.00
phosphate transplanting
Complex kg 33.33 After flowering Broadcasting 285.00
Plant protection
chemicals
Monocrotophos l 0.61 10-15 days interval Spraying Fruit borer 197.00
after transplanting and thrips
Mancozeb kg 1.03 8-10 days interval 3 Spraying Leaf spot 440.00
weeks after
transplanting
Carbandizam kg 0.47 15-20 days interval Spraying Powdery 188.00
after transplanting mildew
Dimethoate l 0.75 3 weeks interval Spraying Thrips and 285.00
after transplanting mites

Table 3. Cost involved in chilli cultivation on organic and inorganic farms (`/acre)
Particulars Organic farms Inorganic farms Difference
Cost Per cent to total cost Cost Per cent to total cost Cost Per cent
Variable costs
Seeds 372.00 2.00 491.00 3.00 -119.00 15.00
Farm yard manure 1822.00 10.00 2261.00 12.00 -439.00 56.00
Green manuring seeds 444.00 2.00 - - 444.00 -57.00
Vermicompost 1437.00 8.00 - - 1437.00 -185.00
Biofertilizers 162.00 1.00 - - 162.00 -21.00
Biopesticide 745.00 4.00 - - 745.00 -96.00
Chemical fertilizers - - 1887.00 10.00 -1887.00 242.00
Plant protection chemicals - - 1110.00 6.00 -1110.00 143.00
Human labour 5114.00 28.00 5690.00 30.00 -576.00 74.00
Bullock labour 2849.00 16.00 2081.00 11.00 768.00 -99.00
Machine labour 905.00 5.00 1035.00 5.00 -130.00 17.00
Interest on working capital 969.00 5.00 1019.00 5.00 -49.00 6.00
Sub total (A) 14819.00 81.00 15574.00 81.00 -755.00 97.00
Fixed costs
Land revenue 25.00 0.14 25.00 0.13 0.00 0.00
Rental value of the land 2500.00 14.00 2500.00 13.00 0.00 0.00
Depreciation 466.00 3.00 469.00 2.00 -3.00 0.44
Interest on fixed capital 527.00 3.00 546.00 3.00 -20.00 3.00
Sub total (B) 3517.00 19.00 3541.00 19.00 -23.00 3.00
Total cost of cultivation (A+B) 18337.00 100.00 19115.00 100.00 -778.00 100.00

interval after transplanting to control powdery mildew disease
and about 0.75 l of dimethoate was sprayed at 3 weeks interval
to control thrips and mites.
In all these inputs maximum per acre cost of input involved
(` 2261.00) was on FYM, followed by DAP (` 787.00), urea
(` 604.00), seeds (` 491.00), mancozeb (` 440.00), dimethoate
(` 285.00), complex fertilizer (` 285.00), single super phosphate
(` 211.00), monocrotophos (` 197.00), and carbandizam
(` 188.00). the results are in conformity with Pandey et al. (2006).
Per acre cost of cultivation and farm management costs of
chilli crop on organic and inorganic farms are presented in the
Table 3 and 4. And the comparative picture of cost of cultivation
is depicted in Fig.1.
Perusal of the table indicated that the total cost of chilli
cultivation on organic farms was less than that of inorganic
farms. The average cost of cultivation per acre of chilli on organic

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Karnataka J. Agric. Sci., 25 (2) : 2012

Table 4. Farm management costs of chilli cultivation organic and inorganic

farmers
(`/acre)
Particulars Organic Inorganic
Cost A1 13713 14165
Cost A2 13713 14165
Cost B1 14239 14711
Cost B2 16739 17211
Cost C1 15837 16615
Cost C2 18337 19115

yield of chilli on organic farm (4.10 tonnes) was comparatively

lower than that of inorganic farm (4.86 tonnes).The average per
tonne market price of organic chilli (` 9830) was found to be
higher than that of inorganic chilli (` 6300).The average
transportation cost of organic chilli was ` 265 per tonne as
against ` 285 per tonne of inorganic chilli. The commission
charges paid during marketing of organically produced chilli
farm was ` 18337 as against ` 19115 on inorganic farms. The was ` 644 per tonne, as against ` 432 per tonne for inorganically
cost of chemical fertilizers and cost of plant protection chemicals produced chilli because of more cost charged by the middlemen
on inorganic farms were the differentiating factors in the cost. since there was high premium price for organic chilli since the
In the total cost, variable costs accounted for a major share. The organic farmers send their produce to the distant markets like
proportion of variable cost was ` 14819 and ` 15574 accounting Belgaum, Pune, Solhapur and Bangalore as they unable to get
for 81per cent of the total cost of cultivation of chilli on each the premium price in the local market. The organically produced
organic and inorganic farms. chilli could fetch premium price in the market. The total marketing
In the case of organic farms, the variable costs mainly cost was ` 3726 for organic chilli and ` 3485 for inorganic chilli.
comprised of cost of human labour, cost of organic manure (FYM, Similar results were observed by Bennett (1999) and Suresh
green manuring, vermicompost, biofertlizers and biopesticides) (2001).
and cost of bullock labour which were ` 5114, ` 4610 and The return structure in chilli clearly revealed that the gross
` 2849 accounting for 28 per cent, 25.00 per cent and 16 per cent returns per acre were higher (` 40290) on organic farms
of the total cost of cultivation respectively. The expenditure on compared to that of inorganic farms (` 30583) with a positive
organic manure found to be an important item in total cost of net return on both the categories of the farms. The net return
cultivation on organic farms. The other variable cost items such on organic farm was ` 18227 and was ` 7984 on inorganic
as cost of seeds, cost of machine labour and interest on the farms. Though the yield levels on organic farms were lower
working capital accounted for 2.00 per cent (` 372), 5. per cent compared to inorganic farms, the net returns were higher
(` 905) and 5 per cent (` 969) of the total cost of cultivation of because of the premium price received and lower cost of
chilli on organic farms respectively. cultivation. The B:C was also higher on organic farms (1.83)
In the cost of cultivation of chilli on inorganic farms, the compared to inorganic farms (1.35). The findings are in
variable cost mainly comprised of cost of human labour, cost of conformity with the study conducted by Bharadwaj et al.
FYM, cost of bullock labour, cost of chemical fertilizers and cost (2000) and Mallikarjun Patil (2008)
of plant protection chemicals which were ` 5690, ` 2261, The results of the study revealed that the yields on organic
` 2081, ` 1887 and ` 1110 accounting for 30.00 per cent, 12 per farms were found to be lower than inorganic farms. Though
cent, 11per cent, 10 per cent and 6.00 per cent of the total cost of organic farming gives relatively lower yields in the initial years,
cultivation respectively. The expenditure on chemical fertilizers its continuous practice will help to build up the soil fertility,
found to be an important item in the total cost of cultivation on
inorganic farms. The other variable cost items such as cost of Table 5. Yield, market price and returns of chilli cultivation on organic
seeds, cost of machine labour and interest on working capital and inorganic farms
accounted for 3 per cent (` 491), 5 per cent (` 1035) and 5 per Particulars Organic farms Inorganic farms
cent (` 1019) of the total cost of cultivation of chilli on inorganic Yield (tonne per acre) 4.10 4.86
farms respectively. Market price (` per tonne) 9830 6300
Transportation cost including 265 285
The share of fixed cost in total cost of cultivation of chilli on
loading and unloading (` per tonne)
organic farms and inorganic farms was 19 per cent (` 3517) and
Commission charges (` per tonne) 644 432
19 per cent (` 3541) respectively. Among the items of fixed cost, Total marketing cost (` per acre) 3726 3485
the rental value of the land had a maximum share in the total cost Gross returns (` per acre) 40290 30583
of cultivation on both organic and inorganic farms. The average Cost of cultivation (` per acre) 18337 19115
yield level, market price, transportation cost, commission charges Net returns (` per acre) 18227 7984
and net returns are presented in the Table 4. The per acre average B:C 1.83 1.35
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Organic and inorganic cultivation of chilli............
there by to get increased yield in the later years. Hence it is
advisable for the farmers to switch over to organic farming which
minimizes the environmental degradation. The difference in cost
of cultivation between organic farming and inorganic farming is
marginal as per the study. The organic inputs are mostly
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