An Economics Analysis of Contract Farming of Organically Produced, Natural Colour Cotton in Karnataka

The present study, conducted in 2005-06, was based on a data from a purposive sample of 80 farmers contracted for organically cultivating naturally coloured cotton and supervised seed multiplication from Uppinbetageri village of Dharwad taluk. The per hectare variable costs for coloured cotton cultivation was Rs.13,078 and formed 82 per cent of the total costs which was Rs.15,934. About 67.92 human days, 14.70 bullock pairdays and 1.43 tractor hours of labour were required per hectare of cultivation. The yield was 8.53 qtls per hectare and resulted in a net profit of Rs.3398. Kapas was purchased by the Khadi Nekar Sahakari Utpadak Sangh Niyamit (KNSUSN), Uppinabetageri under a contract for a market linked price. Area under coloured cotton, seed, manure and manpower would improve returns if their use was increased. There was an increasing returns to scale. However, except for bullock labor, all other inputs could be profitably increased. Maintaining field isolation for genetic purity, lack of more cotton colours, non - availability of a broader market, moisture stress, proper price and yield fluctuations were the major cultivator’s problems.