Economics of high-tech farming in Kerala: an explorative analysis of greenhouse vegetable farms

Abstract

Kerala launched high-tech vegetable cultivation in greenhouses (GH) in 2009–10, but it failed to gain widespread adoption among farmers. This study aimed to provide a comprehensive economic analysis of this farming method in the state. Specifically, the study examined the extent of greenhouse cultivation, the socio- economic features of greenhouse farmers, unit costs, revenue, and profit, as well as techno-economic constraints. The findings of this study provide valuable insights for policymakers and farmers on how to promote the adoption of high-tech vegetable cultivation in the state. This study was based on both primary and secondary data. Secondary data were collected from district-level principal agricultural offices, various issues of Economic Review, the database of the EPW Research Foundation, published articles and official reports. Primary data was collected from 165 GH farmers from all over the state through interactive personal interviews. Non-parametric tests like chi- square, Mann-Whitney U, Kruskal-Wallis, Spearman's rho, and Mc Nemar's test were used to analyse data. Regression models were used to determine production function and cost-output elasticity, while a logit model was used to identify significant factors affecting profit earning. Despite generous government subsidies, high-tech vegetable cultivation in greenhouses has a negligible impact on the state's vegetable production, accounting for only 37 hectares of the total vegetable cultivation area. Greenhouse farming in Kerala is a semi-tech activity, with no significant difference in annual output across different social characteristics. However, full-time farmers and sufficiently trained farmers have significantly higher annual average output than part-time farmers and untrained or insufficiently trained farmers, respectively. The most popular greenhouse crops in Kerala were yardlong beans, salad cucumbers, and tomatoes. The Cobb-Douglas-type production function of GH cultivation revealed an increasing return to scale (1.154). The benefit-cost ratio (BCR) of GH farming in Kerala was low (0.715 without subsidy and 1.1 with subsidy). The logit model revealed that full-time activity, contracts with traders, better prices, experience, type of ventilation, and regular visits of agricultural officers were the major determining factors in categorising the farms as profit earners. {The model was statistically significant [χ 2 (12, N = 165) =119.508, p<0.001]. The model explained 84.1% (Nagelkerke R square) and correctly classified 95.2%}. The principal technical challenges of GH farming were pest infestation, limited glazing sheet durability, a lack of scientific disposal of used glazing sheets, and inadequate pollination strategies. The major economic constraints of GH farming in the state included unsold products, insufficient prices, merchants' attempts to reduce prices, a lack of government support for marketing, heavy debt, delayed subsidies, and a lack of insurance coverage for crops. These findings suggest that high-tech vegetable cultivation in greenhouses has the potential to increase vegetable production in Kerala, but more needs to be done to promote its adoption among farmers. This could include providing additional training and support to farmers, as well as addressing the techno-economic constraints that are currently limiting its adoption.