Dr. V. ALAGAPPAN, M.Com., Ph.D.

Professor of Commerce
Madural Kamaraj University
MADURAI
- 625 021.

CERTIFICATE

This is to certify that the thesis titled, “ECONOMICS OF

PRODUCTION AND MARKETING OF COTTON IN KAMARAJAR DISTRICT,

TAMIL NADU”, Submitted to Madurai Kamaraj University, Madurai, India,

for the award of the degree of DOCTOR OF PHILOSOPHY
is a record
of bonafide research work done by Mrs. S$. BANUMATHY, from January,
1993to April 1997 under my supervision and guidance. The subject
on which the thesis has been prepared is
her original research work
and it has not been previously formed the basis for the award to any
candidate, of any degree, diploma, fellowship or other similar title
of any University or Institution.

a yee,
Bel

Place : Madurai - 21

Date : April 24, 1997 (Vv. ALAGAPPAN)

S. BANUMATHY, M.Com., M.Phil.
Lecturer in Commerce (S.G.)

-
V.V. Vanniaperumal College for Women
VIRUDHUNAGAR 626 001.

STATEMENT BY THE CANDIDATE

I
hereby state that the thesis titled, “ECONOMICS OF
PRODUCTION AND MARKETING OF COTTON IN KAMARAJAR
DISTRICT, TAMIL NADU”, submitted to Madurai Kamaraj University,
Madurai, India, for the award of degree of DOCTOR OF PHILOSOPHY is
based on my original research work and no
part of this thesis has been
submitted for the award of any other degree, diploma, fellowship or other
similar title to any University or Institution.

Place : Madurai-21
Date April 24, 1997
MAN
BANUMATHYNr
:
(S.

ene
Countersigned

( Dr. V.
ALAGAPPAN)
—
 DEDICATED

TO MY FATHERSRI. D.SAMBANTHAM

AND TO MY SON K. SHIVAKUMAR

 CONTENTS
PAGE No.

ACKNOWLEDGEMENT
LIST OF TABLES iii
LIST OF FIGURES vii
LIST OF ABBREVIATIONS viii

CHAPTER
| INTRODUCTION AND DESIGN OF THE STUDY
DESCRIPTION OF THE STUDY AREA 43

-
II

ll INPUT - OUTPUT AND COST RETURN

STRUCTURES AND ECONOMICS OF PRODUCTION
OF COTTON 79
IV PRODUCTION EFFICIENCY AND YIELD GAP 127
V MARKETING OF COTTON 162
VI SUMMARY OF FINDINGS AND SUGGESTIONS 207

BIBLIOGRAPHY 221

APPENDICES

APPENDIX - : Countrywise Area, Production

and Yield of Cotton 229

APPENDIX
- : Area and Production of Cotton
in India 230
APPENDIX - : Area, Production and Yield of
Cotton in Tamil Nadu 23)
APPENDIX - : Area and Production of Cotton
in Kamarajar District 252
APPENDIX - : Talukwise Cropped Area and
Acreage under Cotton 233
APPENDIX - : Interview Schedule for Cotton
Cultivators 234
APPENDIX
- G : Garrett's Ranking Table 244
 ACKNOWLEDGEMENT

|
express my deep sense of gratitude and sincere thanks to
Dr. V. ALAGAPPAN, Professor of Commerce, Madurai Kamaraj
University, Madurai, for his direction in selecting this problem, valuable
and eminent suggestions, proper guidance, perpetual interest and
constant encouragement throughout the course of this investigation.
| have immensely benefited from the vast reservoir of his research
knowledge, deep insight and experience. | am very much thankful
and grateful to him for his timely help and encouragement
throughout my research work.

My gratitude is due to the Professor and Head of the

Department of Commerce, Madurai Kamaraj University, Madurai,
Dr. N. Thanulingom, for his constant encouragement. |
record with
appreciation the encouragement given to me by the other members
of the Department.

|
extend my sincere thanks and gratitude to
Dr.K.Ramamoorthy (Central Institute of Cotton Research, Coimbatore)
for his humane help in the successful completion of this study.

| thank Mr. U. Amaravel (Agri. Officer, Kamarajar district)

Mr.S.K. Natarajan, Mr. D. Murugesan and other members in the
District Statistical Office, Virudhunagar for their help in data collection.
| profusely thank Dr. M. Dominic Raj, and Dr. J. Caroline for their
help.
 | am thankful to the Correspondent and the Principal of
V.V.Vanniaperumal College for Women, Virudhunagar for their
permission to carry out this research work under part-time basis and
also for their encouragement. | acknowledge the encouragement
and support received from the faculty members of the Department
of Commerce and also from my colleagues in the college.

On a record my sincere thanks to my

personal note, |

husband, Dr. N. Kannan, daughters Nageswari and Kartheswari,

in-laws and all the family members, especially to my brothers
Dr.S.Manickam and Mr. S. Chandra Mohan for helping me
in
innumerable ways and for putting up with a lot of inconveniences.

|
thank the faculties of Hiland Computer Centre and N.1.T.,

Chidambaram for their assistance.

Finally, |
express my thanks to a host of others unnamed
here, yet, whose help have been useful to me in many ways in the
completion of my research work.

Poems wredhe
BANUMATH
.
 LIST OF TABLES

TABLE No. TITLE OF THE TABLE PAGE No.

Lad: Sampling Design of Cotton Producers

in Aruppukottai Taluk 33

1.2 Sampling Design of Cotton Cultivators

in Srivilliputhur Taluk 35

ol Land Utilisation Pattern in

Kamarajar District o1

Zu Talukwise Land Utilisation Pattern

in Kamarajar District 32

2.3 Temperature, Humidity, and Rainfall

in Kamarajar District 34

2.4 Distribution of Land Holdings in

Kamarajar District 96

2.0 Irrigation Pattern in

Kamarayjar District 08

26 Talukwise Gross and Net Area Under

Irrigation in Kamarajar District 99

28 ropping Pattern in
Kamarajar District 61

2.8 Talukwise Area Under Principal

Crops in Kamarajar District 64

2.9 Total and Irrigated Area Under

Cotton in Various Taluks of
Kamarajar District 66
1
TABLE No. TITLE OF THE TABLE PAGE No.

Sek o Talukwise Area Under LRA-5166

and MCU-5 Varieties of Cotton 67

aed Input and Output Structure for

Total Farmers Cultivating LRA-5166
and MCU-5 Varieties of Cotton 81

Ded: Input and Ouput Structure for Small

and Large Farmers Cultivating LRA-5166 84

3.3 Input and Output Structure for Small

and Large Farmers Cultivating MCU-5 85

3.4 Labour Requirement for the

Cultivation of LRA-5166 G2

3.5 Labour Requirement for the

Cultivation of MCU-5 a3

3.6 Labour Requirementof Small

Farmers Cultivating LRA-5166 96

3.7 Labour Requirement of Large

Farmers Cultivating LRA-5166 97

3.8 Labour Requirement of Small

Farmers Cultivating MCU-5 98

3.9 Labour Requirement of Large

Farmers Cultivating MCU-5 100

#10 Cost and Return Structure of LRA-5166 103

Cost and Return Structure of MCU-5 104

TABLE No. TITLE OF THE TABLE PAGE No.

3.12 Cost and Return Structure of Small

and Large Farmers (LRA-5166) 110

3.13 Cost and Return Structure of Small

and Large Farmers (MCU-5) 113

3.14 Economics of Production of LRA-5166 LAr

3.15 Economics of Production of MCU-5 118

4.1 Resource use Efficiency for LRA-5166 130

4.2 Resource use Efficiency for MCU-5 13Z

4.3 Production Function for LRA-5166 140

4.4 Production Function for MCU-5 143

4.5 Test of the Stability of Intercept

and Slope between Small and Large
Farmers Cultivating MCU-5 146

4.6 Test of the Stability of Intercept and

Slope between LRA-5166 and MCU-5 147

4.7 Constraints Causing Yield Gap in the

Production of LRA-5166 and MCU-5 150

4.8 Problems of Cultivators in the

Production of LRA-5166 154

4.9 Problems of Cultivators in the

Production of MCU-5 155
TABLE No. TITLE OF THE TABLE PAGE No.

9.1 Marketing Agents 164

5.2 Reasons for not Marketing

Through Market Institutions 169

9.3 Marketing Period of Cotton 176

5.4 Disposal Pattern of Cotton 178

3.9 Price of LRA-5166 and MCU-5 Cotton 187

9.6 Average Cotton Price (1985-94) 189

oF Results of Statistical and Price

Trend Analyses 190

5.8 Price Spread Analysis for Cotton

between Farm-gate and Mill-gate 195

5.9 Cost-Return Components in the

Price Spread 196

5.10 Share of Different Functionaries

and Other Incidental Costs 198

S11 Problems of Marketing of Cotton 200

V1
 LIST OF FIGURES

FIGURE No. PAGE No.

LI Districtwise Area Under Cotton in
Tamil Nadu 10
Lad Districtwise Cotton Production in
Tamil Nadu 11

1.3 Varietywise Area Under Cotton in

Kamarajar District \2
2.1 Location map and Topographical
Picture of Kamarajar District 46
2.2 Cropwise Yield and Production for
Someof the Principal Crops 69
3.1 Input and Output Structure of
Small Farmers Cultivating LRA-5166
and MCU-5 88
3.2 Input and Output Structure of
Large Farmers Cultivating LRA-5166
and MCU-5 89
3.3 Structure and Distribution of
Cost Components of the Operational
Cost for LRA-5166 and MCU-5 107
4.1 Maximum Yield, Average Yield and
Yield Gap (LRA-5166 and MCU-5) 152
3.1 Knowledge About Cotton Price
Fixation 172
9.2 Sources of Information about Market
Price of Cotton 174
9.3 Quantity of Cotton Disposed in
Various Market Channels 181
5.4 Cotton Market Structure 183
9.9 Price Trend lines for the two
Varieties of Cotton 192

Vil
 LIST OF ABBREVIATIONS

APK Aruppukottai
CCl Cotton Corporation of India
Cost-A Variable or Operational Cost of Production
Cost-C Total Cost of Production
(Cost-C = Cost-A + Fixed Cost)
EICA East India Cotton Association
ELS Extra Long Staple
FCR Fixed Cost Ratio
FL Female Labour
FLC Female Labour Cost
GAP Gross Average Productivity
GAPP Gross Average Physical Productivity
GATT General Agreement on Tariffs and Trade
GAVP Gross Average Value Productivity
ha hectare (1 ha = 2.471 acres, or 10,000 m7?)

ICAC International Cotton Advisory Committee

ICAR Indian Council for Agricultural Research
(New Delhi)

kilogram(s)
km kilometer(s)
km? Square kilometer(s)
km? per square kilometer
L.F. Large Farmers / Farms
LRA Laxmi X Reba.B.50 X AC 122

(Multiple Cross) Cotton

M bales Million bales (1 Bale = 170 kg of Cotton kapas)

Vill
MCU Madras X Cambodia X Uganda
(Multiple Cross) Cotton
M ha Million hectares

M T Million Tonnes (1 Ton = 1000 kg)

Max. Maximum
Min. Minimum
ML Male Labour

MLC Male Labour Cost

MLR Multiple Linear Regression

MSP Minimum Support Price
NTC National Textile Corporation

Qtl Quintal (1 Qtl = 100 kg)

RACP Residual Average Capital Productivity

RALP Residual Average Labour Productivity
Residual Average Productivity
RPM Rajapalayam
Rs. Rupees
SAT Sattur
SVR Srivilliputhur
S.F. Small Farmers / Farms
Tha Thousand hectares
TCR Total Cost Ratio
TLC Total Labour Cost
TNAU Tamil Nadu Agricultural University (Coimbatore)
TRI Tiruchuli
T.F. Total Farmers / Farms
VCR Variable Cost Ratio
VNR Virudhunagar
WAM Weighted Arithmetic Mean
1X