08 - Chapter 1
08 - Chapter 1
1.1 INTRODUCTION
economies, for which agriculture plays a vital role.1 Ever since India has become
independence, agriculture and allied sectors provide more than half of the total
employment.2 Agricultural growth during the tenth five year plan was broadly as
anticipated and production targets were by and large achieved for food and oil
seeds. 3
per cent of the GDP and about 70 per cent of the population is dependent of
agriculture for their livelyhood.4 The green revolution of the 1960’s ushered in
rapid increase in production of food crop like wheat, rice and other cereals. Efforts
sugarcane, cotton and the like. In recent years a large number of national
programmes for coconut development have been launched in many Asian and
The high oil content of the endosperm of the coconut (copra) is widely used
in both food and non-food industries like margarine and soaps. The coconut palm
2
and its products are important sources of livelihood to a sizeable section of the
rural folk in the tropics and also contribute substantially to the total export
Besides being an important oil seed crop, its raw nut and edible copra are
ablution, tender coconut water is a refreshing unadulterated cool health drink. The
coconut shell and husk are main raw materials for the manufacture of handicraft
articles. Coconut leaves are used for thatching roofs and for making brooms. Husk
is used for producing coir. Coconut milk, the aqueous extract of the solid coconut
endosperm, plays an important role in the cuisines of South Asia and in the food
consumed as coconut milk.7 The trunk of the tree is used as building material, fuel
and for making furniture and the like. Every part of the coconut tree is of great
growing, depend solely on the palm for their domestic requirements such as food,
3
fuel and shelter.9 Among the coconut based industries such as, coir making and oil
milling are significant and coir products constitute one of the major items of
export every year. Coconut occupies a place of importance in the social and
religious functions of the people of India.10 Coconut contributes over Rs. 7000
crores per year to the Gross Domestic Product of India and it earns foreign
exchange to the value of Rs. 292 crores by way of export of coir and coir products.
Coconut based farming system provides large quantity of biomass to satisfy the
diversification, coconut has become the main agro-based raw material for many
coconut, coconut milk powder, tender coconut water and coconut vinegar. It is a
Lakshadweep coconut toddy is used for producing vinegar and jaggery. In West
Bengal 80 per cent of the nuts produced are consumed as tender nuts. In
Karnataka coconut is used for making ball copra and desiccated coconut whereas
in Tamilnadu it is used for producing milling copra and coconut oil. Invariably in
all the states of India, coconut is used in raw form or in dry form for various
The coconut cabbage, the tender meristematic shoot in the heart is also used
in the treatment of ‘Vatha’ and ‘Pitha’. Coconut inflorescence is used for curing
urinary complaints, back pain and headache.12 Tender coconut water is effective in
Coconut kernel is good for increasing body weight and can be also used as an
Coconut is an important tropical oil seed crop which gives coconut water,
kernel and oilcake for cattle and the like. Since it is one of the leading
production and net return obtained per unit would determine the profitability of the
crop. The profitability of an enterprise depends upon the efficient use of the
resources in production.
provide less gain to the producers when there is no efficient marketing system.
The producers depend upon the market conditions to fulfill their hopes and
unregulated markets and superfluous middlemen are the problems faced by the
are more pronounced in markets for perishable commodities which require quick
transportation and better storage facilities. Though coconut products have a pride
not only for its diverse uses but also for its special preference to consumers, rich
and poor it is subjected to the above stated production and marketing problems.
The Coimbatore district of Tamilnadu is one of the rich coconut and its products
producing regions and therefore an attempt has been made to analyze the
strength and weakness of the concepts used earlier and specifies appropriate
cultivation” pointed out the significance of coconut as a source of edible oil and as
the west coast of India. Vinegar and Jaggery are important by–products of
coconut toddy. The tree trunk is used as a building material and for making
6
furniture. Fifty per cent of the total coconut production is converted into copra.
Coconut crop is raised in India under varying soil and climatic conditions in 17
states and three union territories. As the coconut tree is versatile in its adaptability
to wide range of soil conditions, coconut cultivation has begun to spread from the
west coast of India to interior regions of Tamilnadu especially to erode district and
Thanjavur district.14
Shalini Rani and Mohamed Mohideen in their study entitled “Coconut oil –
product derived from coconut, has significant impact on the country’s national
economy besides its influence on the economic social and cultural lives of millions
India’s Pride”, Sugata Ghose traced the different stages of coconut development.
Expansion of European soap and edible oil companies offered great opportunity to
India to export copra in the latter half of the 19th century. Steady increase in
export trade enhanced the pace of coconut development. On the eve of the First
World War, India was one of the leading exporters of copra, the annual quantum
of export being 30 tonnes of copra and 10,000 tonnes of coconut oil. But the post
war period witnessed fall in prices. The Second World War worsened the
7
situation. Hence the government of India set up the central coconut committee in
1945. It did yeomen service for the growth of coconut sector. In 1966 this
committee was replaced by the directorate of coconut development, but its powers
Parliamentary act was passed in 1979 which paved way for the formation of the
Since the formation of the board, systematic crop research resulted in the
(4) Pollution free quicker wetting of fresh husk in cement tanks for
(7) Coir net and geo-textiles for prevention of soil erosion and land-
slides
(8) Light weight bricks and fuel briquettes from coir pith
8
(10) Coconut shell or cellular blocks are used in concrete masonry units
technique.
climbing device.
oil. In recent decades manufacturing of edible ball copra and desiccated coconut
has gained some importance. Though a few units have been set up for
manufacturing shell powder, shell charcoal, activated carbon and different shell
and wood handicrafts, processing of wet kernel into different edible products of
commercial importance has not yet become popular. The researcher concludes the
study with an optimistic note that in all the aspects of the coconut crop
technology, there is much scope for further development. Future strategy of the
New Look’, the most common indicator used to understand the crop situation of a
country were area and production. But the per capita availability is also an
steadily increased from 9.92 Coconuts Per head (CPH) in 1951 to 10.56cph in
1961 and to 11.08 cph in 1971 but dropped beyond the 1951 level by 1981 to 8.37
cph due to various constraints. The situation improved during the eighties and the
PPR increased to an all time high of 11.49 cph by 1991. Among the 13 coconut
producing states, the PPR of Lakshadweep was at the maximum of 512.60 cph
followed by Andaman and Nicobar Islands with 289.57 cph and Kerala with
Rethnam in his study entitled ‘World Coconut Industry- Its Past, Present
and Future’. He pointed out that over a period of 30 years India, Indonesia and the
Philippines had considerably increased the area under coconut, while Malaysia,
Srilanka, Thailand, Vietnam among Asian countries and Fiji among pacific
increase in production in some of the APCC member countries due to the increase
in area, the increase in production does not match with the total area under this
crop. The productivity in many countries remain below one tone /ha/year while the
10
Crop is capable of producing three to six tones/ha depending upon the input
management.18
copra production in Kerala”, revealed that favorable climatic factors like rainfall,
long day length, high temperature, low humidity during initiation and
developmental stages of the inflorescence and of the female flowers during the
period of 32 months before opening in the hot weather season march to may
account for a high yield in a year. In coconut there are marked fluctuations in
annual yield of nuts but they do not follow any specific trend as in the case of
the inflorescence and long day length with bright sunshine, high temperature, low
humidity and summer showers during the formation and development of female
flowers result in maximum yield in the three coconut yield groups of palms-high,
Dealing with the value added products from tender coconut, Neelofar
Ittiaskutty, et al., in the study entitled “Value Added Products from Tender
Coconut”, pointed out that there has not been much progress in the development of
coconut products when compared to the countries like the Philippines, Indonesia
and Thailand. Hence the need of the hour for India is to accomplish product
11
technology so that various processed coconut based products can tap both the
export and domestic markets. One of the options to overcome the present crisis in
water pineapple beverages have been developed. Blending of fruit juices helps to
develop new products. Tender coconut fraction can serve as a valuable ingredient
for many products and hence its application needs to be exploited in India as well
recalls the dominant position held by coconut oil in the midst of vegetable oils
trade during the early half of the 19th century and says that by the end of the 20th
century coconut had been dethroned from the position it held in the international
to him , the development of new high yielding varieties did not result in increasing
lower copra outturn prevented the wider use of new cultivation technology,
particularly among the small holders. There were also other factors which
12
contributed to the low productivity such as senility of palms, climatic factors, pests
and diseases and non-adoption of cultural practices. It is also pointed out that the
increasing competition from substitutes, campaign against coconut oil and EEC
copra meal, resulted in decline in volume and value of these exports. Hence the
utilization for value addition. Campaign against coconut oil, however, was a
stimulator for serious research on coconut oil. Biological Researches proved that
coconut oil has health supporting functions and it acts as an essence and a natural
anti-viral, anti-fungal food. The researcher concludes with the suggestion that for
the future development of the coconut industry steps should be taken to increase
this non traditional coconut growing area, different varieties have been imported
from the neighbouring states and also from the southern parts of the country. The
Horticultural Research Station under the Assam Agricultural University has been
13
maintaining a large number of germ palms including exotic as well as local types.
the most promising cultivars for this region. Some of the salient features of this
variety are (i) High yield of 106 nuts/palm/year (ii) Better fruit quality (iii) Copra
yield 16-34 kgs /palm/year and oil content of 64-50 per cent (iv) Tolerant against
major pests and diseases (v) Tolerant to high rainfall (vi) Capacity to withstand
cold injury (vii) It can be grown easily in acidic soils (viii) Highly responsive to
Scenario”, is of the opinion that coconut is one of the oldest crops of India with
1.5 million hectare under the crop and a total production of 10,000 million nuts per
year. It stands third in production in the world after Indonesia and the Philippines,
although it has got a potential of much higher production from the existing area.
countries. Imported oils like rape seed oil, palm oil and Soya bean oil are the
threat to coconut oil. To bring down oil imports, the government of India set up a
productivity and production of different oil seeds crop and imports of edible oil
14
and oil derivatives decreased from Rs. 769 crores in 1985-86 to 41 cores in
1992-93. As against this the export of oil derivatives increased from Rs. 257
crores to Rs. 1400 crores during the same period .The Technology Mission also
undertook massive programmes for developing oil palm plantations which are
expected to yield additional 8 to 10 lakh tons of edible oil by next decade. He also
opinioned that increasing production of other oils in the country will have an
adverse effect on the Indian coconut oil industry. This calls for a long term
large scale as is done in Sri Lanka and Philippines. These countries have agreed to
provide consultancy and training under the aegis of the APCC to other countries.
The UNIDO is prepared to provide funding for proposals on these lines. Kaul
concluded that India’s share in the export of coir and coir products is sizeable
whereas the export of other coconut based products is very negligible. Increasing
networks have significant impact on the character and shape of the global market
According to him , of all the coconut based industries like copra making,
oil making, cream making, milk powder making, desiccated coconut making,
making coconut water concentrate and jam, vinegar, coconut water packing and
the like only oil and copra making dominate and their marketing alone decides
The researcher concludes his study by pointing out the need for more
exhibitions and exhibit Indian coconut products for which the gulf countries offer
great opportunities.24
Approach”, pointed out that after the removal of restriction on the import of 715
items, India would face stiff competition in coconut and coconut oil from the
point out that, in spite of the fact India accounts for 25.57 per cent of the world
production of coconut, the present system of marketing of coconut and its products
16
market. In almost all primary markets, they normally dictate the prices. Further
there are several malpractices in the coconut market. Apart from this, during the
past two decades there had been abnormal price fluctuation-both seasonal and
(1) Farmers are unaware of the current market price of coconut. They are
on recovery percentage.
(2) Farmers do not have proper storing facilities to keep their produce until
(3) Import of palm oil and vegetable oil from abroad tells heavily on the
(4) Credit purchase of coconut by merchants from the garden itself and
irregular and delayed payments of the low prices already fixed deprive
regulated markets.
17
improving quality for export promotion (2) reduction of cost of production (3)
at the farm level itself (4) Formation of coconut committees in each block
(7) Restriction of import of copra and edible oils (8) Revival of future trading (9)
Integrated multi-cropping (10) Establishment of display and sales outlets for the
Industry”, explains the importance of coconut and its by products and described
that the price fluctuations of coconut products upset the economy of millions of
coconut farmers and small processors of primary products. According to him price
stabilization can occur only when marketing of coconut and its by products is
coconut farmers for stock piling and creating infra-structure facilities. Coconut
and marketing of different coconut products. The researchers suggest that coconut
revealed the following facts. Coconut is grown in 93 countries across the world in
an area of 11.85 million hectares producing 57.514 billion nuts or 10.52 million
tonnes of copra. Asia and Pacific Countries alone occupy 10.4 million hectares
i.e., 87.9 per cent of total coconut area and produce 8.63 million tonnes of copra.
Copra and coconut oil are traded commodities which are exported to various
countries since 1960. The export of copra decreased considerably over the period
of years due to the fact that the countries exporting copra started making CNO as a
first step in value addition. The global exports of coconut products indicate that
coconut cream, coconut powder, coco chemical, activated charcoal and coir
products have good export market. According to Rethinam, the use of medium
chain fatty acids and Lauric acid in producing antiviral, antifungal and
cure of HIV/AIDS virus will go a very long way in creating market potential for
Since coconut is not grown in many countries, and there is the need to
meet the increasing needs of the growing population for coconut products, Asia
and Pacific Region being the largest producer of coconut will have to meet the
He also pointed out that since the liberalization of world trade, the coconut
oil, imposition of strict standards for incidence of aflatoxins in copra meal used in
for transport of bulk edible oils including coconut oil, certification of desiccated
coconut consignments as being free of pest and diseases and the like. Further, to
make the coconut trade competitive in the domestic and international markets, the
The researcher concluded that the future prospects of the coconut industry
depend upon the overall competitive ability. The industry has to tap the full
range of environmentally, friendly natural products with a wide variety of end uses
and applications. The producing countries need to exploit to the fullest their
coconuts.28
Price Polices”, pointed out that marketing plays a significant role in the economic
technology and strategies have to keep pace with the ever changing production
of life and better society. Today’s society demands more of marketers, who are
about environment and the like. Hence the marketing function can no longer
marketing practices such as harvests, grading, packing, marketing channel and the
like and throws much light on the marketing costs, margins, price spread, effect of
variations in the consumer’s price on the share of the producer seller and the
retailer as well as in the efficiency of the market system. Besides analyzing the
problem faced by the traders in coconut marketing, the researcher concludes his
study saying that marketing efficiency is high due to fewer middlemen and low
marketing margin and the producer’s share is inversely related to consumer’s price
are of the opinion that rural India offers a plethora of opportunities for marketers
of Fast Moving Consumers Goods (FMCG). While rural market offers a big
attraction to marketers, it would be natural to think that they can easily enter the
market and walk away with sizable profit. But they have to face many challenges
22
circumvent this is to use company delivery vans which can serve two purposes:
(i) it can take the product to the customers in every nook and corner of the market
and (ii) it enables the firm to establish direct contact with them and thereby
personal selling, marketers need to understand the psyche of the rural consumers
and act accordingly and reach them wherever they assemble-festivals, weekly
cattle market or the well where village women wash their clothes. The researchers
concluded that marketing well-made products to the rural people is not just a
business opportunity, but it is a sign of commercial respect for people whose needs
are often overlooked. Further, the future is very promising for those marketers,
who can understand the dynamics of rural markets and exploit them to their
advantage.33
coconut in the Theni District of Tamilnadu. As per their analysis the marketing
cost incurred by producers per thousand nuts was maximum (Rs. 630.18) in
transportation. It was also found that under Channel III, the producers realized the
maximum share of 58.73 per cent in consumer’s price. Their share in Channel II
and Channel I was 58.32 per cent and 50.20 per cent respectively. Commission
Agents got very meagre margin with a small effort. Wholesalers got 6.02 per cent
in Channel III, 4.57 per cent in Channels I, and II respectively. The share of the
retailers worked out to equal the cost of all channels. The study also revealed that
the marketing efficiency was higher in Channel III followed by Channel II and
Channel I .34
in their study entitled “The Recent Fall in Copra and Coconut Oil Prices in India”
have made an analysis of the price movements of coconut products and attributed
the recent fall in the prices of copra and coconut oil to a combination of various
import of coconut oil and cake during the crucial months, adulteration as well as
the recently introduced Value Added Tax (VAT) The introduction of VAT has
caused a major set back to the coconut oil industry in Kerala, a major coconut
24
producing state and is considered to be one of the reasons for the sudden fall in the
the copra buyers for the upcountry and domestic coconut oil mills shifted their
purchasing centre to the neighbouring Tamilnadu, where traders are benefited not
only because of peak production season but also due to non introduction of VAT.
VAT attracts 4 per cent tax on coconut purchase for converting into copra. A study
on the price spread of coconut in Kerala has revealed that the net profit margin to
oil millers is only 5 per cent based on the cost of production. Thus the additional
Subburaj and Singh conducted a study entitled “Marketing Mix for Coconut
Products”. In our country, coconut has more or less constant and inelastic
demand, but its supply has considerably increased owing to increase in crop
higher as compared to that in other countries of the world. Free and liberal entry
of coconuts and coconut products of foreign origin into Indian markets also has
eroded the demand for home products. This situation gives rise to the urgent need
to diversify the end use of coconuts with the help of technological innovations.
goods like desiccated coconuts, processed and packed coconut milk, coconut
cream, processed tender water, coconut jam, coconut chips etc. Such products are
offered to consumers all over the world and thus they have successfully positioned
their products in tune with the needs and wants of the consumers.
farm price for coconuts, it is imperative that the markets for coconut products
enquiry about the buying motives and behaviour of consumers towards coconut
empirical enquiry about the buying motives and behaviour of consumers towards
revealed that the income level and living standard of consumers exert influence on
the purchase behaviour towards coconut products. Moreover the perception on the
marketing mix for coconut products varies among consumers in general and
distribution mix, whereas other than high income category finds problems with
price mix. Therefore promotion mix is to be designed and executed in such a way
that it could address the expectations and wants of target consumers in general and
coconut products and to exploit the market potential for coconut products through
effective marketing strategies meant for both creating and fulfilling the demand.36
than production, but he could neither control nor regulate production in tune to
production functions nor can market his product in tune to market requirements
due to his own internal constraints. He faces the chronic problem that he can
the problem is with distribution. Coconut farmers are not exempted from the
above phenomenon. They have very little control over production as also on
marketing.
coconut farmers in the villages of the Dindigul District revealed that the coconut
farmers adopt both direct and indirect modes for disposal of their coconuts
including by - products. The direct mode is very simple wherein coconut farmers
sell their products directly to the consumers, the ultimate users either within or
outside their village. In the indirect method disposal of the products is done
wholesalers, agents of processing units, trader – cum – lease holders, big farmer –
cum – traders and big farmer – cum – traders and big farmer – cum – lease
Direct mode is popular among farmers possessing very few coconut trees.
Indirect mode is the most common and prominent mode for disposal of coconuts
and byproducts. Two thirds majority of farmers adopt this method. Based on sale
practices, four categories of coconut farmers have been identified. They are:
(v) to overcome problems relating to direct sale and labour. Less than one
third of the coconut farmers including large scale coconut farmers, and farmers
possessing a very little number of trees have adopted direct mode of disposal of
coconuts. They have not availed financial assistance as advance or loan from any
28
are opportune farmers who do not sell their coconuts as per the wishes of traders.
They sell their product at a price prevailing in the market on cash and carry basis.
number of trees besides retaining the rest for their own harvesting. They are
called ‘mixed practice coconut farmers’. Though the mixed – practice coconut
with them help to infer the effects of channel intermediaries especially the lessee
traders on the levels of income and other economic aspects of coconut farmers and
the price of coconut. Following are the reasons for mixed practices:
Debt bonded coconut farmers are those who sell their coconuts to their
creditors from whom they have obtained loans on condition that the loan amount
and interest thereof would be repaid from out of their sale proceeds after selling
the produce to their financier – cum – buyers. Such type of farmers is generally
small in number and they are mostly those adopting dry farming.
29
In short there are two channels for the disposal of coconuts–Direct channel
and Indirect channel, the former is very simple while the latter is very complex.
The researchers conclude their analysis pointing out their finding that indirect
coconut farmers. Farmers following direct channel are those who have
comparatively better financial base than others. Since majority of the coconut
organized marketing bodies should come forward to tackle their problems through
integrated means and should encourage them to exert influence on the functions of
equalization.37
opportunities for coconut products, indicate the inherent weakness of the coconut
sector even though coconut production in the country has made greater strides
during the past two decades, the total crop area being 1.89 million areas with an
too high and so in the global market Indian coconut products are pricewise less
better options. But in the case of most of the kernel based coconut products, the
cost of raw material is often too high; with the result after value addition the
market price of these products often goes beyond the reach of the masses. In the
with new coconut products is a better option. Besides the efforts of the Coconut
develop technologies for the production of new coconut products such as coconut
cream, coconut spray, dried milk powder, packed and preserved tender coconut
water etc. Commercialization of these products and their market promotion will,
in the long run, enhance the demand for coconut and thereby ensure remunerative
International Trade Fair held from 14th to 17th November 2003, at Pragati Maidan,
New Delhi by setting up a pavilion in an area of 450 sq.m, these researchers give
out their findings based on a survey involving 641 sample participants as follows:
31
i) Public perception on the Coconut Development Board and its schemes has
ii) Products like coconut oil, edible, copra, and desiccated coconut could be sold
trade fairs will have greater impact on increasing demand for coconut products
secured through an assured market and minimum support price citing sugar cane,
wheat and rice and cotton as examples. According to him such an assured market
with a minimum support price is not available for most other crops. The practice
of disposing of the produce at the farm gate soon after harvesting deprives the
farmer of fair price for his produce. Somasundaram suggests that the farmers
should be guided to process, package and market their produce through a network
promoted to use agricultural produce as raw material and generate value added
products which enjoy a steady market within and outside the country. Such
Situation”, pointed out that coconut in Andhra Pradesh is marketed in three major
forms namely dry coconut, copra and coconut oil. The only market for these
items in the state is Ambajipeta. Palakol in West Godavari is the centre for water
water coconut and 30 percent as dry coconut. The rest is marketed either as copra
or oil or as both based on market demand. But coconut trade is facing certain
The existing market committees are not working properly. Most of them
lack minimum facilities like sufficient yards and go downs. They collect market
cess without providing required facilities. The dry coconut is mostly exported to
Rajasthan, Madhya Pradesh and Maharashtra. Even transport has become a major
constraint. Up to the 80’s 99 percent of the trade utilized rail wagons for
transport. Thereafter the railways stopped allotting wagons. Instead racks were
pooled over a long period to load one racke, which causes spoilage of the
commodity. Therefore road transport is resorted to. It is not only costly but also
Situation”, has analysed world coconut situation and points out that after meeting
market. Important among them are copra, coconut oil, oil cake, desiccated
coconut, coir fibre, fibre products and shell products. Besides these, fresh
coconuts, coconut cream and powder and coconut sugar also appear in the export
market. Though India is the third largest producer of coconuts in the world, the
entire external trade is limited to export of coir and coir products like mats,
World trade of coir products has been stagnant now mainly due to low
domestic consumption of these products is on the increase. Use of coir in the field
into geo-textiles. Trade in fresh coconuts has been minimum only. Owing to
expansion of area and increase in coconut production since 1985, trade in coconut
Jacob concludes his study with an emphasis on the need for product diversification
has dealt with the global competitiveness of coconut industry. He pointed out that
coconut as a traditional crop, particularly in the third world, has not received the
analysed the magnitude of threats facing the coconut industry such as competition
about coconut oil as edible oil and inconsistent supplies of coconut products.
He suggested the following strategies for ensuring a better future for the
coconut farmers :
yielding varieties/hybrid with large nut size and resistant to major maladies,
iv) Bringing down the cost of production which needs urgent consideration
more profitable
35
support for expanding the demand through identification of new markets and
concludes that avenues are available to reduce the impact of the threat to the
major R&D efforts with a more open and strong global coordination to ensure
world coconut production, their share being 44 billion nuts as against the 60
billion world total. Indonesia takes the lead with 18 billion nuts, trailed by the
Philippines with 14billion and India with 12 billion nuts. In the international
market four products or group of products dominate coconut trade. They are
coconut oil, copra meal, desiccated coconut and oleo chemicals. Besides these,
there is a wide range of coconut products like coconut shell charcoal, activated
carbon, coir products, coconut milk, coconut cream, coconut water, nate-de-coco,
36
Coconut vinegar, coconut sugar, coconut wine etc. manufactured both for the local
The United States and Europe are still the primary markets for coconut
products, particularly coconut oil, desiccated coconut, copra meal and oleo
standards, or health issue. For example coconut oil may miss the opportunity in
the U.S. food industry because of high power campaign by soybean interests,
branding coconut oil as increasing the risk of coronary heart disease. Augustine
concludes that among coconut products, coconut oil offers more market
the Coconut Industry,” explained that one of the fears expressed in the sixties
regarding the future of the coconut industry, apart from stagnation in production,
was the restrictive nature of the market. However, product diversification and
too. Today more than 100 countries import coconut oil in big or small quantities.
America and Europe still dominate the trade. Asian countries are increasingly
37
getting into it and they emerge as a key importer of desiccated coconut. Apart
from the traditional products, new products are finding their way to new markets.
Coconut shell charcoal is bought by more than thirty countries in the form
of activated carbon, chief among them being U.K., France, Belgium, Holland,
Japan, Korea, Taiwan, South Africa and Australia. There cannot be any country in
the world where some part or derivative of coconut is not used in the daily life
today, in the form of vegetable oil, margarine, beverage, bakery item, sweets,
industry.44
the cost of raising and maintaining coconut plantation and the profitability of
coconut farming reveals the fact that after meeting the initial expenditure on land,
fencing, irrigation and buildings, in most places in Kerala the average expenditure
over the first seven years after planting tall variety palms is around Rs. 125,000
per hectare while the same in Tamilnadu exceeds Rs. 1,75,000. The components
Household Survey involving 198 households ranging in farm size from 0.5 ha to 5
regions of Kerala, brought out the fact that the average quantity of organic
manures used was 32.45 kg per palm per year and over the different size classes,
the expenditure incurred on manures and fertilizers showed variation from Rs.
47.43 to Rs. 68.63 per palm per year, the average being Rs.38.19 per palm per
year.
expenditure, per palm is the highest at Rs. 44 for the size class below 0.5 ha and
Rs. 40 for the size class above 5 ha. The amount spent for plant protection varied
from Rs. 13 to Rs. 50 per palm per year, the lowest being in small holdings of less
than 0.5ha in size . In the state only less than 50 percent of the holdings have
irrigation facilities. In the study the per palm expenditure varied from Rs.1.95 to
Rs.14.37 with the annual average for all size classes being Rs.10.16. Harvesting
cost is met in cash and kind. Cash part varies from Rs. 150 to Rs. 360 and kind
part from 60 nuts to 4 nuts per 100 trees. At a price of Rs. 4 per nut and for
average 6 harvests per year the total expenditure ranged from Rs. 18 to 24 per
progressively from Rs. 25,473 per ha for the lowest class below 0.5 ha to Rs.
28,190 per ha for the highest size class above 5 ha. An analysis of cost of
39
production and income shows that the average household income from all the
holdings worked out to Rs. 46,343.5 per ha. The highest household income is for
size class 2-3 ha at Rs. 55,313 followed by class 1-2 ha at Rs. 50,969 and the
Thampan concludes his study pointing out that coconut farming in Kerala is
generally profitable but the level of profitability showed substantial increase when
Nair et. al. of the Central Plantation Crops Research Institute, Kasargod
of coconut in India has increased considerably due to the steep rise in the factor
cultivating the palm in one hectare under rain-fed conditions with good
management in Kerala ranges from Rs. 20750 during the first year to about Rs.
10500 between 6-7 years and to about Rs. 12000 between 8-60 years (at 1993-94
prices). But the average yield per palm is only 40. This low productivity and high
Hence the researchers suggest this problem may be overcome through two
approaches: (i) by reducing the annual cost of cultivation and (ii) by reducing unit
40
by using modern equipments like dryer for post harvest operations. Low
which are generally late bearers and poor yielders compared to high yielding
which have a higher benefit cost ratio, pay back period and internal rate of
return.46
taking into account both capital and current expenses as the opportunity cost of
land.47
Cost of bringing up the palms to the stage of bearing (ii) Cost of maintenance
under the first category includes cost of land, seedlings, manuring, watering and
fencing. The second category includes all agricultural operations, manuring and
harvesting. 48
41
Management’ stated that coconut palms under homestead and plantation situation
suffer considerable damage due to the infestation by nematodes right from the
important endoparasites are red ring nematode and the burrowing nematode which
cause considerable damage to the nuts. It is the major problem faced by the
Caterpillar Opisina Arenosella W/K’ pointed out that coconut palm is attacked by
107 pests. Among them the leaf eating caterpillar is one of the major pests. It
infests the coconut palm throughout the year with varying intensities. Under
occurs during the months of February to May, which may even prolong to June in
chlorophyll. Dry and green patches which appear on the lower surface of the
leaves are the major symptoms of infestation. Palms of all ages are susceptible to
Secondly, there is a lack of quality planting materials to the farmers; Thirdly, lack
without applying fertilizer and irrigation; Fourthly, pest problems and diseases
source of income and food to the people of the district. Coconut products provide
the basic raw materials to so many coconut related product industries in the
district. The present study covers only production and marketing of coconut
products in Coimbatore district and does not go into the industrial activities using
coconuts. The study has been undertaken from the point of view of the Coconut
The village merchants are the first purchaser of the nuts from the producers.
The middle men who are also merchants convert the coconut into copra on
sun drying or kiln dry or by following both the methods. Drying normally takes
Traders (Millers)
The copra procured is brought for further sale to millers by the traders. The
traders are associated with particular miller but can go to other agency if they have
Grading
Wholesale traders adopt the practice of grading copra based on the quality
factors prevailing in the trade. The coconuts are categorized in the two forms,
fresh and dry, while copra into edible and milling. The edible copra is classified as
ball copra and cup copra, depending on the quality, edible copra is further graded
as copra from dry nuts, copra from semi-dry nuts and copra from fresh nuts. Each
grade is again classified into different trade name. Such as Office Pass, Rassi,
Rajpur, Moong etc. The office pass grade is generally used for milling purpose
and sold to miller. The traders grade the copra in the order of its market value. The
grading is mainly based on moisture content with maximum limit of 10 per cent,
the foreign matter up to two per cent and black copra up to five per cent. However,
the good quality copra ideally should have moisture up to six per cent, oil content
71 per cent, acid value 2.5 per cent, foreign matter 0.5 per cent, mouldy cups five
per cent, wrinkled cups five per cent and black copra one per cent.
Cultivator
engaged in the production of cereals and millets such as paddy, wheat, jowar,
45
bajra, ragi and some other crops like sugarcane, ground nut, tapioca, pulses and
raw jute, kindred fibre, cotton and other fibre crops are considered as cultivators.
Agricultural Labourer
A person who works in another person’s land for wages in money, kind or
cultivation, but merely works in another person’s land for wages and has no right
Literate
A person who can both read and write with understanding in any language
is a literate. A person who can merely speak but cannot write is not considered as
a literate.
Cropping Pattern
Main Occupation
Main occupation of the household is that from which the head of the
Allied Occupation
Hybrid Varieties
Edible Oil
Edible Copra
Milling Copra
Coconut
harvested, enclosing a thick fibrous coating or husk. Inside the husk there is a
woody shell covering the kernel which is separated from it by a brown skin. The
kernel is a solid white layer preserving an aqueous liquid known as coconut water.
Copra
It refers to the coconut kernel which has been processed from raw coconut
after removing the lint and the shell. It is used for extracting oil. The oil content
preparations and also as an ingredient in the processing of betel nuts for chewing.
The copra used for extracting coconut oil is called milling copra.
47
Husk
colour depending upon the variety and maturity of the coconut. The husk usually
forms 35 to 45 per cent of the weight of the whole nut when ripe. The percentage
decreases with the ripening of the nut. The thickness of the husk of an ordinary
nut is from 2.5 to 3.0 cm in the case of thin husked nuts and 4.0 to 5.0 cm for thick
husked nuts. The weight of the husk and its thickness are usually controlled by
both hereditary and environmental conditions. The husk has fibre, which is used
Coconut Shell
carbon contained from other sources of materials such as coal, lignite, wood,
paddy husk and the like. Shell charcoal, shell-based activated carbon, shell
powder, shell handicrafts, shell ice cream cups, ladles, forks, show pieces and
Harvesting
Plucking and gathering the matured coconuts from the coconut tree are
traditional instruments.
48
Desiccated Coconut
Coconut Farming
the trees are planted they are nurtured carefully to get the yield.
Yield
The output received from the coconut tree is called yield. It denotes the
Cost
for some purpose and the amount of expenditure incurred in the realization of the
objective. The amount spent on developing the coconut palm and the upkeep of
1.7 METHODOLOGY
First-hand data required for the study were collected from respondents directly by
the researcher herself. The data relating to the Copra producers were collected
Appendix A.
49
Secondary data were collected from the published and unpublished records
of the offices of the RBI, the NABARD, and Government of India. journals,
Government of Tamilnadu.
with the topic of the study. She also discuss the problems of the production of
selected district.
The variables to be studied were identified by the researcher with the help
Tamilnadu and agriculturists functioning in the study area. The available literature
in the study area was also consulted. After having identified the variables, the
process of coconut products production. With the help of such people, the draft
50
interview schedule was prepared and then it was circulated among a few
The interview schedule was revised and redrafted in the light of criticisms
and the suggestions put forth by them. Then the interview schedule was pre-tested
with 15 respondents to judge word arrangement, format and the like. In the light of
their suggestions, the interview schedule was once again modified to incorporate
all the pertinent suggestions for the purpose of bringing it to its present form.
approximately 497 km from Chennai, the state capital, and 330 km from
Bangalore. It is the highest revenue yielding district in the state, next only to
Chennai. The district was ruled successively by several dynasties of South India.
Under the Cholas during the 11th century, the present-day Coimbatore came into
existence as a jungle village under an Irula chieftain. The district was occupied by
Mysore in 1700s from the Madurai rulers and after the Mysore wars in 1799, the
district was occupied by the British until the Indian independence in 1947. 52
Coimbatore district lies in the western part of Tamilnadu, part of the Kongu
Nadu region. The district borders with Palakkad district of Kerala in the West,
51
Nilgiris district in the North, Erode district in the North East and East, Idukki
district of Kerala in the South and Dindigul district in the south east. The district
has an area of 7,649 square kilometers. The South Western and Northern parts are
hilly, part of the Western Ghats, and enjoys pleasant climate all throughout the
year with heavy rainfall. To the West is the Palghat Gap, the only major pass in
the long stretch of the ghats abutting Tamilnadu and Kerala. The Palghat Gap,
connecting Coimbatore city and Palakkad city, serves as an important transit link
for both the states. The rest of the district lies in the rain shadow region of the
53
Western Ghats and experiences salubrious climate most parts of the year. The
mean maximum and minimum temperatures for Coimbatore city during summer
and winter vary between 35°C to 18°C. The average annual rainfall in the plains is
around 700 mm with the North East and the South West monsoons contributing to
. The major rivers flowing through the district are Bhavani, Noyyal,
Amaravathi, Siruvani and Aliyar. The Siruvani river is the main source of drinking
water for Coimbatore city and is known for its tasty water. Amaravathi Dam,
The literacy rate of the district is 69 per cent. Tamil is the principal
language spoken in the district, with sizable minorities of Telugu, Malayalam and
52
Kannada speakers. Hindus formed the majority of the population at 90.08 per cent
followed by Muslims at 5.33 per cent, Christians at 4.35 per cent and others at
0.24 per cent. As per the 2001 Census, Coimbatore district had a population
density of 600 persons per square kilometer and a sex ratio of 963 females for
to this, there are several deemed universities in the district. There are various
Engineering, Medical, Law, Hotel Management and Arts & Science colleges, the
The district Coimbatore enlists the details of Revenue Divisions, Taluks, Firkas
TABLE 1.1
Revenue Divisions, Taluks, Firkas and Revenue Villages
Coimbatore 3 4 15 100
Pollachi 3 6 18 225
Total 6 10 33 325
connected by roads and highways. There are five Regional Transport Offices at
Pollachi. Three national highways namely NH-47, NH-67 and NH-209 connect the
district to other parts of the country. Coimbatore district has a total of 21 railway
stations and the Coimbatore junction is the largest railway station. Coimbatore
Junction is the highest revenue yielder in Southern Railways after Chennai. But it
Airport.
National Park. The Park and the Sanctuary is the core of the Nilgiri Biosphere
World Heritage site58. The park is the home to a wide variety of flora and fauna
typical of the South Western Ghats. There are over 2000 species plants of which
about 400 species are of prime medicinal value. The animals in the park include
Tiger, Leopard, Sloth Bear, Elephant, Giant Flying Squirrel. The birds endemic to
the Western Ghats residing here include Nilgiri Wood Pigeon, Nilgiri Pipit,
54
Flycatcher, and Malabar Grey Hornbill. The Amaravathi reservoir and the
Coimbatore is the Capital of the district and third largest city in Tamilnadu.
famous for Kora puttu, SIV industry (rayon) and Temples (in the north of
centre (in the north of Coimbatore). Annur-A town panchayat rich in textile
industry and agriculture (in the north-east of Coimbatore on the National Highway
209). Sulur-A town panchayat, rich in textile industry (in the east of Coimbatore).
agriculture.60
Textiles are the major industry in the Coimbatore district; it is one of the
South India" because it houses many textile industries. India's leading Textile
machinery for textile mills in India and abroad. LMW is pride of Coimbatore.
Coimbatore, such as Deccan, CRI, Texmo, KSB, Sharp. Coimbatore also houses
some auto component manufacturing brands, such as Roots, Pricol and LGB.
German Auto Component Major Robert Bosch started their R & D facility in
Perot Systems. The district is the home to almost 50 per cent of the poultry
population of Tamilnadu. 61 The district has Major crops like Gingelly (With 34%
share, the district is the top producer in Tamilnadu.) Cotton, Coconut, Arecnut and
betel, Corn, maize and millet, Wheat and rice (limited areas) Sugarcane (limited
Coimbatore and Pollachi with three Taluks each. There are 100 revenue villages
in the Coimbatore revenue division and 225 revenue villages in the Pollachi
revenue division. One respondent, from each revenue village, who was supposed
technique. The required data for analysis were collected from all the 325
observed that, of the selected 325 respondents, the data entered in the interview
56
hence rejected.
The present study is based on both primary and secondary data. The
primary data were collected from the coconut product producers through personal
coconut product producers in the region, interview schedule was designed, pre-
tested and finalised. Detailed information were collected from the coconut product
The data required for the study of marketing of coconut products were also
gathered by interviewing the different market functionaries using the same well-
Data regarding prices of Copra, area, production and other secondary data were
Board, Cochin, Statistical Year Book, and the Reports of Director of Economics
and Statistics, Ministry of Agriculture, New Delhi and Director of Economics and
The fieldwork for the study was carried out by the researcher herself.
It was conducted during the period July 2009 to March 2010. For the collection of
primary data from the sample members, an interview schedule was used. (Vide
generally during their leisure time, with the help of the interview schedule. In
order to have a close rapport with the customers, she got herself first introduced by
the staff of the Department of Agriculture. The interview was quite informal and
respondents and the data were recorded by the researcher in the interview
schedule. After the completion of each interview, a check-up of the data was made
to ensure completeness and accuracy. Each interview took about two hours on an
average.
data was made. The missing data were collected immediately by referring to the
records of the Department of Agriculture and afterwards the coding of data was
completed. The coding was made with the help of a master table. The coded
transcription cards. The analysis of data was made with the help of a desk
Primary data were collected from coconut product producers. The study
was undertaken during the months from July 2009 to March 2010. Secondary data
collected.
yield.
In order to find out the growth rate in area, production and productivity of
copra equivalent and copra, Compound Growth Rate has been calculated using
Time Series Analysis has been carried out to study temporal variations in
1.16 LIMITATIONS
The study is confined to the Coimbatore district only. The researcher has
depended on the information and data supplied by the coconut farmers most of
them are not used to keep proper records about cost of manures, seeds and the
actual prices received for their produce. Hence the study suffers from respondent’s
recall bias. These had been minimized by suitable interaction with the cultivators
as well as cross checks then and there with the agricultural departmental field staff
during the survey. Moreover, as the study is based on opinion provided by the
sample respondents, the results of the study cannot be generalized and should be
introduces the topic and traces the development of coconut trade with special
previous studies, scope of the study, objectives of the study, operational definition
coverage, period of the study, field work and collection of data, data processing,
studies the various characteristics of the sample respondents and the usage to
Copra.
the growth rate, magnitude of variability and trend values in area, production and
productivity of coconut and copra in the coconut in the major coconut producing
countries in the world, APCC countries, India, Tamilnadu and the sample district.
REFERENCES
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1998, pp.27-31.
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20. Neelofar Illiaskutty, Mary Ukkuru and George V. Thomas, “Value Added
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