Agri Marketing Tip #2:
Price Calculation - Detailed (Contnd from
tip#1)
Thanks for responses from many for Tip#1 , and requests for more details on the calculation of expenses. These are some typical expenses for a 'generic' vegetable short cycle crop, starting from scratch. (and some common practices/thumb rules)
Key expense headers :
a) Land cost
For most farmers as they inherit land for 'free' from ancestors this is ZERO ! But if you were to 'lease' land today, typical rates are Rs 10,000 per acre per year.
b) Land Preparation cost
Make soil ready, flattening, making bunds etc . Usualy done by tractors/tools so rentals cost/ day
c) Fertilisers
If organic, then usualy input costs may be cheaper but compensate for manual labour required to prepare ingredients
d)Seed/Sapling costs
Farmers used to make their own seeds (from previous crop) or exchange seeds with others. But thanks to modernisation & laziness, buying seeds from shops is the norm. Also, tissue culture crops (or from nurseries) and planting as saplings is increasing chances of survival. So this costs varies with method chosen.
e)Planting costs
Labour costs for short duration (typically ladies) for 2-3 days .
Use of tools/tractors with automatic planting trays is also common now.Then add rentals
Some plants need additional support (planter boxes, frames, shade nets etc). Equate to a 'per harvest' cost .
f)Water / Electricity
Though govt does give free electricty , it often is too erratic times or low voltage to run motors. Use of diesl to run pumps incur costs. So also additional costs of bore wells/drip (but dont add ALL the fixed expense to a single harvest- these have to be spread over life of the equipments- take 10 years)
g)Weeding
Often farmers spend a LOT of labour in plucking weeds , which adds a LOT to their expenses. If proper mulching is done , can reduce the growth of weeds and also costs drastically.
h)Pest control
Pesticides - Materials costs + Labour to apply periodically is very high.
Pests/Insects are EVERYWHERE ! Whether organic or inorganic cultivation, they DO come - often RIGHT around harvest when the crop is in full bloom and ravage it ! A key insight - they often come at NIGHT when you are sleeping , so youll never know what 'ate' ur crops
Instead of synthetic chemicals/poisons , there are LOTS of organic or 'bio pest' control techniques and tools to safeguard the farms.
Also have heard from experts that plants themselves give out smells/tastes which can repel them (especially tulsi is known to be good inspect repellant)
i) Harvesting
Often manually done, and over a period. Typically vegetables require plucking every alternate day for say 2-3 weeks to a few months . Finding labour is biggest challenge. Use of harvester tools is more common in plantation crops or staple crops (sugarcane , wheat , paddy etc) but still require manpower to loading/packing
j) Storage/Loading / Transport
In most cases buyers bring their team at time of harvest to pick items at their cost. If not, farmer handles it .
Even plastic bags cost Rs 25+ today , crates Rs 300+ per piece!
Though it seems like an elaborate exercise, often this can be done with just pen and paper or a blackboard. Avoid laptops ! You will find farmers coming forward more easily if you use simple tools and even in their own mother tongue . And typically once you start doing for few, most data points will be similar .. for e.g. most horticultural crops we find the cost of production ranges between Rs 5 - Rs 8 per kg max. And more than 60% of costs is always LABOUR which is always on CASH BASIS .
Thanks for responses from many for Tip#1 , and requests for more details on the calculation of expenses. These are some typical expenses for a 'generic' vegetable short cycle crop, starting from scratch. (and some common practices/thumb rules)
Key expense headers :
a) Land cost
For most farmers as they inherit land for 'free' from ancestors this is ZERO ! But if you were to 'lease' land today, typical rates are Rs 10,000 per acre per year.
b) Land Preparation cost
Make soil ready, flattening, making bunds etc . Usualy done by tractors/tools so rentals cost/ day
c) Fertilisers
If organic, then usualy input costs may be cheaper but compensate for manual labour required to prepare ingredients
d)Seed/Sapling costs
Farmers used to make their own seeds (from previous crop) or exchange seeds with others. But thanks to modernisation & laziness, buying seeds from shops is the norm. Also, tissue culture crops (or from nurseries) and planting as saplings is increasing chances of survival. So this costs varies with method chosen.
e)Planting costs
Labour costs for short duration (typically ladies) for 2-3 days .
Use of tools/tractors with automatic planting trays is also common now.Then add rentals
Some plants need additional support (planter boxes, frames, shade nets etc). Equate to a 'per harvest' cost .
f)Water / Electricity
Though govt does give free electricty , it often is too erratic times or low voltage to run motors. Use of diesl to run pumps incur costs. So also additional costs of bore wells/drip (but dont add ALL the fixed expense to a single harvest- these have to be spread over life of the equipments- take 10 years)
g)Weeding
Often farmers spend a LOT of labour in plucking weeds , which adds a LOT to their expenses. If proper mulching is done , can reduce the growth of weeds and also costs drastically.
h)Pest control
Pesticides - Materials costs + Labour to apply periodically is very high.
Pests/Insects are EVERYWHERE ! Whether organic or inorganic cultivation, they DO come - often RIGHT around harvest when the crop is in full bloom and ravage it ! A key insight - they often come at NIGHT when you are sleeping , so youll never know what 'ate' ur crops
Instead of synthetic chemicals/poisons , there are LOTS of organic or 'bio pest' control techniques and tools to safeguard the farms.
Also have heard from experts that plants themselves give out smells/tastes which can repel them (especially tulsi is known to be good inspect repellant)
i) Harvesting
Often manually done, and over a period. Typically vegetables require plucking every alternate day for say 2-3 weeks to a few months . Finding labour is biggest challenge. Use of harvester tools is more common in plantation crops or staple crops (sugarcane , wheat , paddy etc) but still require manpower to loading/packing
j) Storage/Loading / Transport
In most cases buyers bring their team at time of harvest to pick items at their cost. If not, farmer handles it .
Even plastic bags cost Rs 25+ today , crates Rs 300+ per piece!
Though it seems like an elaborate exercise, often this can be done with just pen and paper or a blackboard. Avoid laptops ! You will find farmers coming forward more easily if you use simple tools and even in their own mother tongue . And typically once you start doing for few, most data points will be similar .. for e.g. most horticultural crops we find the cost of production ranges between Rs 5 - Rs 8 per kg max. And more than 60% of costs is always LABOUR which is always on CASH BASIS .
