Economics of Tea Leaf Production by the Small and Marginal Farmers in Assam

Abstract

The study was carried out to examine the present status of tea cultivation and the economic feasibility of small growers in tea leaf production. Primary data pertaining to tea leaf production were collected from 60 small and marginal tea grower following simple random sampling without replacement technique by interviewing the farmers with the help of pre-tested structured schedules. The Financial Rate of Return from tea cultivation over Cost A1, Cost B and Cost C was estimated as 42.35 per cent, 34.38 per cent, and 31.66 per cent, respectively which is above the presumed opportunity cost of capital i.e. 10 percent per annum. The average annual constant net cash flows from tea plantation were98, 010, 82, 263 and74, 240 per hectare over Cost A1, Cost B and Cost C respectively. It was also observed that production of tea leaf was more profitable and employment generating in comparison to other selected crops in the study area. The benefit-cost ratio was estimated at 1.11 with a net present worth of Small Tea processing unit was estimated to be23.57 lakhs, considering 15 years of life time. The financial rate of return was arrived at 37.07 per cent which is above the presumed opportunity cost of capital. The annual constant flows of net return for the sample tea processing unit was found to be3.10 lakhs