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Mapping the Value Chain, Price Spread and Value Addition of Paddy in Nalgonda District


Suhasini Korabandi, Shakuntala Devi Irugu, and Samarpitha Athota



Indian Journal of Economics and Development
Year : 2016, Volume : 12, Issue : 1a
First page : ( 123) Last page : ( 128)
Print ISSN : 2277-5412. Online ISSN : 2322-0430.
Article DOI : 10.5958/2322-0430.2016.00044.5

Mapping the Value Chain, Price Spread and Value Addition of Paddy in Nalgonda District

Korabandi Suhasini, Irugu Shakuntala Devi, Athota Samarpitha*
Department of Agricultural Economics, College of Agriculture, Professor Jayashankar Telangana State Agricultural University (PJTSAU), Rajendranagar, Hyderabad-500 030, India

*Corresponding author’s email:

JEL Codes M31, Q11, Q13

Online published on 26 April, 2016.

The value chain study of paddy was carried out in Nalgonda district as paddy is an important crop under canal and tank irrigation. The farmers who depend on pendlipakala tank for the irrigation source are considered for the present study and the value chain is tracked from the farmers to the ultimate consumers. Thus identifying two prominent channels private marketing channel (Channel-I) and FCI procurement (Channel-II). It was found that 92.13 of the respondents per cent dispose of their produce through Channel-II as the minimum support price is guaranteed. The price spread and producers share in consumers rupee is calculated which showed that in Channel-I it is 0.44 and Channel-II, it is 0.73. The cost of value addition is 399 per quintal when milled where as the margins received is 446.45 per quintal in Channel-I The retailer’s price for 75 kg of rice after milling is 1858.8 and for 1 quintal of rice it is 2478.4. The byproduct bhusa is identified which is also useful to farmers. In channel II there are too many intermediaries involved and the marketing costs accounted to 364.75 per q moreover there are no margins and the sale price is only Rs 1380.25/q. The consumer’s price as announced by the state govt. of Andhra Pradesh is l per kg it costs 75 per 75 kg and 100 per q. Farmers realized a better price when sold to FCI and there is only paddy milled to rice in the study area if diversified value added products are made like parboiled rice, rice bran oil from by-product, making riceflakes etc and if these processors and farmers are linked together farmers will get a better price.

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