03-05-2014, 12:34 PM
Economic Analysis of Processing of Guava (Psydium guajava L.) in Uttar Pradesh State of India
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Abstract
A study was conducted to analyse the economics of guava processing with the objectives of estimating benefit cost
ratio, capacity utilization, cost of processing, price spread, marketing efficiency and constraints faced by guava
processors in processing of guava in Allahabad district of Uttar Pradesh (U.P.) India. The processing of fresh
guava was undertaken only by 10 units (processing firms) in the study area, so all the 10 units were evaluated for
the present study. The processing units included cottage scale (03), small scale (05) and large scale (02). The study
revealed that returns per rupee invested in cottage scale units, was calculated as 2.74 in making jelly and 2.99 in
jam; for small scale units, it was 2.28 in jelly, 2.43 in jam and 1.89 in toffee; and for large scale units, the returns
per rupee invested were 2.52 in the manufacture of jelly, 2.82 in jam and 2.01in toffee. As far as capacity
utilization is concerned, the large scale units utilized 92.16% of installed capacity followed by cottage scale units
with 86.73% and small scale with 79.89% capacity utilization, respectively. The cost of processing per quintal of
guava was found to be Rs.176.60 (cottage scale), Rs.195.58 (small scale) and Rs.222.90 (large scale). Major
problems faced by processors were non-availability of skilled labours, lack of capital, setting of guava products
and degree of competition, etc.
Introduction
Food processing industries are of enormous significance for the development of Indian economy, because of the
vital linkages and synergies that it promote between the two pillars of the economy, namely; industry and
agriculture. India is one of largest producers of raw materials for food processing industry. The industry itself is
under developed in India as till now only less than 2% of fruits and vegetable production is processed compared
with 30% in Thailand, 70% in Brazil, 78% in Philippines and 80% in Malaysia. The total wastage in all food
sectors is as high as Rs. 50, 000 crores. Even if half of the wastage could be prevented, we would have enough
calories to bring the nutritional status of our poor to above subsistence level. In this scenario, food processing
becomes critical. This would move up surpluses at the farm level and ensure fair prices for the producers.
Research Methodology
The study was conducted in district Allahabad within the province of U.P., because this district has the reputation
of growing best quality guava in the country. A complete list of all processing units was collected from Ministry of
Food Processing Department, Lucknow. The study was conducted only for those processing units which were
having FPO license. As per the FPO record there were 21 processing units in Allahabad district. Out of these 21
processing units, processing of fresh guava was undertaken only by 10 units. Therefore, all the 10 processing units
were studied for the present study. The processing units were classified into three categories on the basis of the list
obtained from the Ministry of Food Processing Department, Lucknow, i.e., cottage scale (03), small scale (05) and
large scale (02). To get the desired information the data for the present study were collected from the selected
processing units through personal interviews with the help of specially developed schedules. Simple statistical/
economic tools, as given below, were used for the estimation and interpretation of results.
Costs and Margins in the Processing of Toffee
It was observed from the Table 6 that the cost incurred by large scale units in the processing of one quintal of guava
for making toffee was Rs. 8344.43 which included cost of processing, cost of raw material, transportation charges,
fuel charges, loss during processing, cost of ingredients (sugar, citric acid, glucose, skimmed milk, butter), packing
and labeling charges, miscellaneous charges and interest on working capital, i.e., 2.67, 6.11, 0.16, 1.18, 0.10, 15.10,
0.62, 11.50, 10.79, 7.19, 35.23, 0.25, and 9.09 per cent, respectively of the total cost. On processing of one quintal
of raw guava 1.40 quintals were recorded by the large scale units. The net margin received by the processors in
selling 1.40 quintals of toffee was Rs. 8455.57 and per kg net margin stood at Rs. 60.40.
Conclusions and Policy Implications
Processing of Guava is economically feasible and hence needs to be encouraged. It provides wide scope for
employment opportunities to the skilled and unskilled labourers in the rural areas, besides it has potential to earn
valuable foreign exchange to the country. There is wide scope for processing industry, as production is higher than
the demand particularly during the peak period. Though a variety of guava products can be prepared, but a very
little portion of the surplus production of guava is utilized for processing and value addition. To avoid the glut
during peak period, processing industry can prove very successful in better marketing, and boosting the interest of
the guava growers towards this popular fruit for their overall prosperity.