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Cost and returns of coffee cultivation in Visakhapatnam district of Andhra Pradesh, India

The paper highlights cost and returns of coffee growing by tribal farmers at Paderu division in Visakhapatnam district of Andhra Pradesh.Data collection was done using pre tested questionnaire administrated on 90 coffee producers selected randomly. According to the study small scale traditional farms had negligible fixed costs. So we have not taken the fixed costs in computation of cost of cultivation of coffee in the present study. The gross margin analysis indicates average total variable cost of coffee was Rs.27644 per ha, average gross returns per ha obtained by selling the fresh fruit berry was Rs.84550 average gross margin was Rs.56876.17 per ha and profitability index was 2.05 indicating that the farmer earned Rs.2.05 on each rupee invested. The capital costs were found to be much lower in the study area. Amortized cost and returns of coffee plantation revealed that the anticipated marginal net revenue was more than amortized net revenue indicating that it is profitable to continue with the existing plantation.Farm investment techniques like net present value, BCR, IRR and payback period were computed and found to be Rs.243136, 2.03, 26.39 and 9 years respectively which pointed out that the investment on coffee plantation was feasible and economically viable. For instance use of machinery was almost nil indicating no costs involved in carrying out operations. In other words, the tribal farmers were saved from incurring maintenance and fuel costs for machines. | Cost and returns of coffee cultivation in Visakhapatnam district of Andhra Pradesh, India