An economic appraisal of investment feasibility of coping strategy to combat seasonal scarcity of rainfall in Robusta coffee production in Kodagu

Abstract

In this article the economic feasibility of investment on coping strategy (sprinkling irrigation) to combat seasonal scarcity of rainfall during the critical growth period of coffee from blossom to berry is appraised. Through partial budgeting the difference worked out is Rs. -484 indicating that, there is an additional burden of Rs. 484 per acre on the planters who hire the coping strategy. The same is the benefit due to owning the coping strategy. The gain in terms of additional yield of Robusta coffee favoured the planters who are using the coping strategy to the tune of additional 3 bags. Therefore it is found that owning the coping strategy was found to be more feasible rather than hiring. The net present value is to the tune of Rs. 25,434 per acre in the production of Robusta coffee by adopting coping strategy, while the same is negative under the situation where coping strategy was not adopted. Similarly, the discounted cost benefit ratio indicated a higher rate of benefit under the condition where coping strategy is adopted. Whereas, under the conditions of non-adoption of coping strategy, the cost benefit ratio was found to be less than one (1: 0.98 i.e., loss of Rs. 0.2). Thus, it indicates that adoption of coping strategy did have a positive effect on the production and productivity of Robusta coffee in the region. Coping strategy in Robusta coffee is being adopted by the planters not just merely because of earning higher income but to stay at the cost of production level at least (which was possible to achieve through the use of coping strategy). Further, logarithmic Cobb-Douglas production function is used to study the relationship between the total investment on coping strategy in Robusta coffee production and the relative factors. The inducement to invest on coping strategy is effectively depicted through incorporating a regression function of Cobb-Douglas type of model. It revealed a highest rate i.e., 0.64 of co-efficient of determination (R2), which indicates that, the variables selected in the model are sufficient enough to measure the variability in Y.