Karnataka J. Agric. Sci.

,26 (2) : (217-219) 2013

Economics of capsicum production under protected conditions in Northern Karnataka*

D. S. SREEDHARA, M. G. KERUTAGI, H. BASAVARAJA, L. B. KUNNAL AND M. T. DODAMANI
Department of Agricultural Economics
Kittur Rani Channamma College of Horticulture, Arabhavi - 591 310, Karnataka, India
Email: mgkerutagi@yahoo.com
(Received : April, 2010 Accepted:June, 2013)
Abstract : India contributes one fourth of world production of capsicum with an average annual production of 0.9 million tons
from an area of 0.885 million hectare with a productivity of 1266 kg per hectare. Andhra Pradesh stands first in area 236.5
thousand ha with a production of 748.5 thousand tons, while Karnataka stands second in area (76 thousand ha) with a
production of about 131thousand tons. The cost of establishment of capsicum production under protected condition
was ` 2,51,109 per unit (0.25acre). The total cost of cultivation of capsicum production under protected conditions was
` 55,080 per units. The total variable cost was ` 20,374 per unit. Among the variable costs, the labour cost was highest
(` I0,291), followed by expenditure on material cost(` 8,487). Among the total cost of cultivation, the proportion of total
fixed cost was highest (` 34,707) compared to total variable cost (` 20,373). The total yield of capsicum production
under protected conditions was 5.50 tons per unit. The total returns and net returns from capsicum production under
protected conditions were ` l,54,734 per unit and ` l,15,279 per unit, respectively. The B: C ratio of capsicum
production under protected conditions was 3.92.
Key words: Capsicum economics, Establishment cost, Protected cultivation, Shade net structure

Introduction
Capsicum (Capsicum annuum L. var. grossum Sendt) is also
called as bell pepper or sweet pepper and is one of the most
popular and highly remunerative annual herbaceous vegetable
crop. Sweet pepper (Capsicum annuum L. var. grossum Sendt)
is different from chilli (Capsicum annuum L. var. longum) belongs
to the family solanaceae. It is known by other names such as
shimla mirch, green pepper and capsicum. Capsicum is cultivated
in most parts of the world, especially in temperate regions of
Central and South America and European countries, tropical and
subtropical regions of Asian continent mainly in India and China.
India contributes one fourth of world production of capsicum
with an average annual production of 0.9 million tons from an
area of 0.885 million hectare with a productivity of 1266 kg per
hectare. In India, capsicum is extensively cultivated in Andhra
Pradesh, Karnataka, Maharashtra, Tamilnadu, Himachal Pradesh,
and hilly areas of Uttar Pradesh. Andhra Pradesh stands first in
area of 236.5 thousand ha with a production of 748.5 thousand
tons. While, Karnataka stands second in area of about 76
thousand ha with a production of about 131 thousand tons
(Anon., 2005).
Capsicum is extensively cultivated in most of the districts of
Northern Karnataka. However, the large scale cultivation of
capsicum is concentrated in Belgaum and Haveri districts, with
a production of 3,984 and 4,538 tons and an area of 264 ha and
316 ha, respectively. In India, capsicum is grown for its mature
fruits and is widely used in stuffing and baking. It is also used in
salad and soup preparation. It is very rich in vitamins A and C
than that of tomatoes. From every 100 gram of edible portion of
capsicum 24 k cal of energy, 1.3 gram of protein, 4.3 gram of
carbohydrate and 0.3 gram of fat is provided (Anon., 1997). Sweet
pepper is big in size compared to hot pepper and shape of the
fruit is bulky and blunt with three to four lobes besides having

thick walls. Capsaicin is the main chemical content in sweet

pepper. It has attained a status of high value crop in India in the
recent years and occupies a pride place among vegetables in
Indian cuisine, because of its delicate taste and pleasant flavour
coupled with rich content of ascorbic acid and other vitamins
and minerals. The mature fruits (green, red and yellow) of sweet
pepper are eaten raw or widely used in stuffings, bakings, pizza
and burger preparations.
Sweet pepper consumption in India is increasing now-adays due to increasing demand by urban consumers. There is a
good demand for export too. The export market needs fruits
with longer shelf life, medium size, tetra lobed fruits with an
attractive dark colour, mild pungency and good taste. But, the
supply is inadequate due to low productivity of the crop. There
are no much studies on economic aspects of capsicum
production. But there is increased demand for capsicum by the
consumers and lot of farmers are also showing interest in the
cultivation of this crop under protected conditions, as this type
is having definite qualitative and quantitative advantage over
the traditional cultivation. Keeping in view of these aspects,
the present study was a modest attempt to analyze the
economics of capsicum production under protected conditions
in Northern Karnataka. The specific objectives were: to estimate
cost and returns and to study the constraints in capsicum
production under protected condition.
Material and methods
Belgaum and Haveri districts were purposively selected. In
Belgaum district, Belgaum and Hukkeri taluks and in Haveri
district, Byadagi and Ranebennur taluks were purposively
selected for the study. Villages were selected from each taluk on
the predominance of capsicum area. The sample farmers were
randomly selected from each of the selected villages for getting
required information on capsicum cultivation using pretested

*Part of M.Sc.(Agri.) thesis submitted by the first author to the University of Agricultural Sciences, Dharwad -580 005, India
217

Karnataka J. Agric. Sci., 26 (2): 2013

and well structured schedules. The total size of the sample
selected for the study was 30 from each district. Thus, making the
sample size 60. The data pertained to agriculture year 2008-09.
The secondary data related to area, production and productivity
of capsicum in Karnataka and district - wise (2004-05) were
collected from Directorate of Horticulture, Lalbagh, Bangalore.
Taluk -wise area and villages, where growing concentration under
both the method of cultivation were collected with the help of
district and taluk horticulture officers.
For the purpose of analysis to meet the objectives of the
study, different analytical tools and techniques employed are
presented here under. Tabular presentation was adopted to
compile the cost structure, returns and profits. Simple statistical
tools like averages and percentages were used to compare,
contrast and interpret results properly. The establishment cost
under protected condition included value of land, cost of
irrigation structure, shadenet cost, electric installation cost and
land preparation in the beginning year. Average size of the shade
net unit was 0.25 acres (10 guntas). Average life of the shadenet
structure was four years and for calculation of cost of cultivation
amortized establishment cost was calculated for the period of six
months.
Cost of cultivation under protected condition includes all
the cost incurred annually for the maintenance cost was divided
into variable and fixed costs. The variable cost items were costs
on materials, labour and interest on working capital at the rate of
8.5 per cent (prevailing lending rate). Fixed cost includes rental
value of land, land revenue, interest on fixed capital at the rate of
9.5 per cent (prevailing interest on deposits by institutional
agencies) and amortized cost for the period of six months. Gross
returns are the values of total quantity of capsicum produced at
the prices, where the product is sold.
B: C ratio was obtained by dividing total returns from a unit with
total cost of a unit.
Problems faced by sample farmers in capsicum production under
protected cultivation were ascertained by conducting opinion
survey regarding the constraints in production and marketing
of capsicum
Results and discussion
It could be observed from the Table 1, that establishment of
shadenet required more investment as a hi- tech unit
(` 2,51,109). Among the establishment cost, cost of shade net
structure (` 1,66,778) was the major item of cost. Average life of
the shade net was considered as four years. For calculation of
cost of cultivation amoltized establishment cost was calculated
for the period of six months. Cost of establishment under
Table 1. Per unit cost of establishment of shade net (`/0.25acre)
Particulars
District
Pooled
Belgaum
Haveri
Value of land
49667
52432
51049
Irrigation structure
16383
14670
15527
Shade net structure
173917
159638
166778
Electric installation
15250
11835
13543
Land preparation
4667
3760
4213
Total
259884
242335
251109
218

protected condition for production of capsicum in Belgaum

district was higher compared to Haveri district. This was mainly
due to the fact that cost incurred by the Belgaum district
respondents on the items like shade net structure, irrigation
structure, electric installation, and land preparation were high.
These results are in conformity with the study conducted Anon.,
(2004) on economics of capsicum production on low cost
polyhouse.
It was observed from the Table 2, that average material cost
incurred in pooled sample was ` 8,487 and labour cost was
` 10,291. Total variable cost and total fixed cost were worked
out to ` 20,374 and ` 34,707, respectively. Thus, total cost of
cultivation per unit was estimated at ` 55,080. It could be
observed that the fixed cost components were higher than the
variable cost in case of protected cultivation. Cost of plant
protection chemicals was the major item among the variable
Table 2. Per unit cost structure of capsicum production (protected)
(`/0.25acre)
SI. Particulars
Belgaum
Haveri
Pooled
No
district
district
I Variable cost
A Material cost
a Farm yard manure
1843
1922
1883
b Seeds
632
673
653
c Seed treatment
132
152.
142
d Plant protection chemicals
3909
4240
4074
e Chemical fertilizers
1960
1810
1735
Total
8176
8797
8487
B Labour cost
Labour cost for nursery
a Seed bed preparation &
sowing
297
248
272
b FYM & fertilizer application
316
288
302
c Hand weeding & Irrigation
194
210
202
C Labour cost for main structure
a Land preparation& Planting
2288
2099
2193
b transportation of FYM
595
615
605
c FYM application
481
476
478
d Spraying of PPC
876
915
896
e Fertilizers application
415
331
373
f Irrigation
848
796
821
g Slaking & Pinching
979
953
966
h Weeding & Inter-cultivation
1095
1246
1170
i Harvesting
2059
1968
20130
j Labour cost for main structure
9634
9398
9516
k Total labour cost
10440
10143
10291
l variable cost
18616
18940
18778
m interest on working capital
@ 8.5%
1582
1610
1596
Total variable cost
20198
20550
20374
II Fixed cost
A Rental value of land
3033
2984
3008
B Land revenue
21
22
22
C Interest on fixed capital
@ 9.5%
290
286
288
D Amortized esta.cost for
the period of 6 months
32486
30292
31389
Total fixed cost
35830
33588
34707
III Total cost (I+II)
56028
54133
55080

Economics of capsicum production under protected....

Table 3. Per unit yield and returns structure in capsicum production
(protected)
Particulars
District
Pooled
Belgaum
Haveri
Total yield (tons)
Price(`/ kg)
Total cost (`)
Total returns(`)
Net returns(`)
B:C Ratio

5.62
28.50
40403
160170
119767
3.96

5.48
27.25
38508
149330
110822
3.87

5.55
27.88
39455
154734
115279
3.92

Table 4. Problems faced by sample farmers in capsicum production.

Problems
District
Pooled
Belgaum Haveri
(% of farmers)
Higher initial investment
86.50
92.50
89.50
Lack of owned fund
80.00
76.67
78.33
Lack of credit facility
74.00
66.67
70.33
Lack of technical guidance
65.00
71.67
68.33
High cost of pesticides
85.00
81.67
83.33
Nonavailability of high yielding
and pest resistant varieties
76.67
88.33
82.50

cost owing to the higher incidence of pests and diseases. Cost

incurred on plant protection chemicals by the Haveri district
farmers, were higher than Belgaum district farmers as pest menace
was more severe in the farmer. In addition to the cost on plant
protection, Haveri district farmers also spent more on chemical
fertilizers and seeds. This was mainly due to low fertility of land
in that district and less viability of seeds. It could be observed
that the fixed cost components were higher than the variable
cost in protected cultivation in both the selected districts. These
results are in conformity with the study conducted on economics
of capsicum production in low cost polyhouse (Anon., 2004).
It could be seen from the Table 3 that, the average total yield
obtained and price received in the pooled sample farmers were
5.55 tons per unit and ` 27.88 / kg. Gross and net returns obtained

were about ` 1,54,734 unit and ` 1,15,279 unit respectively with

a B:C ratio of 3.92 in case of capsicum cultivation under protected
condition. From this, it is clear that the yield levels were higher
in capsicum production under protected condition and farmers
got more returns due to higher prices in markets for the capsicum
fruits grown under protected condition because of higher size,
shining, good colour and better quality as expressed by the
respondents. It could be also observed that B: C ratio under
protected cultivation of capsicum was found more compared to
open conditions in both the selected districts. These results are
in conformity with the study conducted on comparative
statement on cost of cultivation of capsicum under conventional
farming system and precision farming system (Anon., 2005a).
It could be observed from the Table 4 that, higher initial
investments (89.50 %), high cost of pesticides (83.33 %),
incidence of pests and diseases (83.33 %) and nonavailability
of high yielding and pest resistant varieties (82.50 %) were the
major problems expressed by most of the farmers. The other
problems in the order of severity were lack of owned fund
(78.33 %), lack of credit facilities (70.33 %), and lack of technical
guidance (68.33 %). Capsicum growers in the study area
expressed the problem of high incidence of pests and diseases
and high cost of pesticides. Farmers took frequent spraying of
plant protection chemicals and they also reported that many
times, pests were not controlled even for higher dose of
pesticides application. It shows that many pests have
developed resistance due to indiscriminate use of pesticides.
The other problems were non availability of high yielding and
pest resistant varieties. Farmers opined that they could not
get any varieties, which were resistant or tolerant to pests.
Availability of labour on time was another problem in the study
area because capsicum is labour intensive crop. These findings
are in conformity with the studies conducted by Ravishankar
(1995) and Bonny (1996), because the production problems
were similar irrespective of the production under open and
protected conditions.

References
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Anonymous, 2005a, Comparative statement on cost of cultivation

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Bonny, P. B., 1996, Constraints in commercial production of vegetables.
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