Supply chain intervention in marketing of rainfed chillies in thoothukudi, Tamilnadu

In the year 2015, India was the biggest dry chillies producer with the production of 1.6 million metric ton. In 2016India is the world's leading producer of dry chilies accounting for nearly 35.45% of the global dry chillies market followed by Thailand, Ethiopia, China, and Pakistan. Chilli is an important spice crop. Mundu chilli is a round shaped chilli, grown in Ramnad district in Tamil Nadu, India, It is also called as Ramnad S9 red mundu chilli. The study was undertaken with an overall objective of analyzing the production and marketing of chilli in Thoothukudi district of Tamil Nadu. Specific objectives were i) To assess the resource use efficiency in chilli production, (ii) To study the marketing channels, price spread and marketing efficiency in chilli marketing, (iii) To identify the constraints in production and marketing of chilli and evolve suitable policy measures for ensuring sustainability. Thoothukudi district was purposely selected for this study. Vilathikulam, Pudur, and Ottapidaram blocks were selected for this study on the basis of largest area and production of rainfed chilli. The technical efficiency of the sample farms in the production of chilli was worked out by adopting Maximum likeli-hood Estimation (MLE) method using Stochastic Frontier Production function. Results of the study showed that one per cent increase in the respective input could decrease chilli yield by 0.171 per cent. Besides, the importance of seed, nitrogen, human labour and others in improving per ha yield of chilli in Thoothukudi district was also established. Four different market channels were identified in the study. Price spread was found to be the highest in channel III and it was lowest in channel II. Marketing Efficiency Indices calculated through Acharya's approach and Shepherds approach revealed that marketing efficiency was relatively more in channel I. Labour shortage, high wage rate, rain during harvest, water scarcity and pest and disease problem were some major constraints in chilli cultivation. Above conclusions suggest following policy implications for sustaining yield and income of chilli under rain fed condition in Thoothukudi district. 1. Increasing potassium application from the mean level was found to reduce the yield of chilli and hence there is a need to find out the correct recommendation of nutrient application to chilli through research. 2. Long distance to the market, high cost of transportation and loss of fruits while handling and transportation were some problems faced by the farmers in marketing of chillies and hence steps may be taken to open more procurement centres for chilli close to the production centres 3. Lack of storage facilities and financial constraints were some major problems faced by the intermediaries in chilli marketing and hence necessary efforts may be taken to create cold storage facilities for chilli in the district and the wholesalers may be provided with pledge loan facility. 4. Farmers may be encouraged to form Farmer Producer Organisation (FPO) for chilli so that wholesalers approach farmers directly without depending on the village traders. This will in a long way sustain the chilli supply chain with higher share of farmers’ price in consumer rupee.