Araku Valley Coffee Production study in Visakhapatnam district of Andhra Pradesh, India

Abstract

Aims: This study mainly intends to analyze the production side of coffee that would throw light on the scenario of coffee growers to understand the cost structure and returns from coffee cultivation in the study area. Study Design: Purposive sampling technique was adopted for the current study on Araku valley coffee, where the primary data has been collected from 120 coffee growers. Place and Duration of Study: The research was carried out in the Visakhapatnam district of Andhra Pradesh and the primary data was collected from April to July 2022. Methodology: Costs and returns of coffee cultivation were estimated for Araku Valley Coffee in the study area. Results: The establishment cost of Araku Valley coffee in the Visakhapatnam district was Rs. 144039.06/ha, which encompassed both the initial investment costs and maintenance costs during the coffee gestation period. The cost of cultivation during the coffee fruit-bearing period was Rs. 611353.67/ha. With this total cost per hectare, the cost per Kg of coffee produced turns out to be Rs 9.83/kg. Fresh fruit berries were sold on the market for an average price of Rs. 40/kg. Net profits were Rs. 2317053.55/ha while gross returns were Rs. 3072446.28/ha. The BCR, NPV@12% discount rate, and IRR recorded were 1.68, Rs.144581, and 28.7% respectively. It was an undeniable fact that raising coffee plantations in Andhra Pradesh was lucrative and could be operated on a commercial scale for fostering profits over a generation. Conclusion: The pace of tribal development in the Visakhapatnam district was sustained in large part by coffee production. From a long-term viewpoint, this study signifies and validates the real economics of coffee production for sustainable resource management, profitable revenue generation, and expanded employment opportunities.