Profitability of Hybrid Rice Seed Contract Farming Business in Telangana, India

Abstract

Contract farming safeguards the small and marginal farmers by limiting price fluctuation through a contractual agreement between farmers and the firm. Similarly, rice being the staple food crop of India and the agro-climatic conditions of Telangana favors the production of hybrid rice seed production among small and marginal farmers and enables the farmers to improve their livelihood through contractual agreement and ensures income security. Bhadradri Kothagudem and Karimnagar district were purposively selected as they were highly hybrid rice producing districts of Telangana.  The data were gathered and analyzed for profitability measures. Based on the study, it was found that the total cost of cultivation and gross returns of Bhadradri Kothagudem district was Rs. 49852 and Rs.73560; while in Karimnagar it was Rs. 58498 and Rs. 83400 respectively. The benefit cost ratio in hybrid rice seed production of Bhadradri Kothagudem district was 0.67 and Karimnagar district was 0.70. Though hybrid rice seed producers were able to earn higher profits through contractual agreement, rules and regulations should be established by authorized institutes and implemented as per standards.