Economic and Resource Optimization in Traditional Paddy Varieties: A Value Chain Assessment

Efficient resource utilization and market-driven approaches are the pillars for enhancing traditional paddy value chains. This study investigates the economic viability and resource use efficiency of traditional paddy varieties cultivated in the Erode District, Tamil Nadu. Primary data were collected from 120 farmers encompassing demographic, socio-economic, environment and market parameters. The study assesses production elasticity, marginal efficiency, cost concepts, marketing channels and post-harvest price realization for paddy grains and milled rice. Cobb-Douglas regression results indicated that seed, nitrogen, plant protection and machinery are significant inputs in traditional paddy variety cultivation. Resources like seed, nitrogen, phosphorus, plant protections and irrigation were under-utilized and potassium, mechanization and labour were over-utilized in the production of traditional varieties of paddy. These inefficiencies are the key entry points for value chain interventions. Compared to traditional varieties, non-traditional varieties yield more but economic returns are superior in traditional varieties. For instance, the benefit cost ratio was found to be 1.65 for traditional paddy varieties whereas, market prices for milled traditional rice ranged from Rs.50 - Rs.125 / kg which was more than double that of non-traditional rice, highlighting the untapped value chain potential. This study concludes that traditional paddy varieties represent a sustainable niche due to higher market value and lower input intensity. On the other hand, consumers prefer innovative value added products from traditional rice rather than milled rice. This leads to higher price realization for farmers if they themselves involved in value addition through FPO. Policy recommendations include developing procurement centers for traditional paddy varieties, strengthening input advisories and enhancing processing infrastructure to promote value chain inclusivity and farm-level profitability.