Comparative Analysis of Financial Viability and Supply Chain Management of Organic and Conventional Farming in Telangana

Abstract

Increased awareness about the ill effects of synthetic chemicals in the food chain, the falling dividends from the conventional production system and growing consumer preference for pesticide-free food have paved the way for organic agriculture as an alternative to the conventional system of farming which solely depends on chemicals. The study aims to compare and analyze the financial viability of selected crops viz., paddy and cotton under organic and conventional farming and the analysis of different supply chains involved in the marketing of organic and conventional food products. The present study was carried out in Jangaon district, which is very well known in the organic farming sector of Telangana state. For the study during the period of 2019-20, ten organic and ten conventional farmers had been selected for each selected crop using a simple random sampling technique. Thus, the sample consists of 20 organic farmers and 20 conventional farmers. The data collected from respondents were analysed using the cost concepts, budgeting technique and Acharya’s approach according to the objectives. The results indicated that the cost of cultivation of conventional crops are more than organic crops due to the increased usage of expensive chemicals in conventional farming. The farmers realize a high premium price for their organic produce and also high net returns, thus have higher financial viability in organic farming. The supply chain of organic produce involving Farmer Producer Organisation (FPO) has high efficiency because it offers the producers a major share in consumer’s rupee and establishes a direct link between the producer and consumer. The study has revealed that organic farming gives better income to the farmers, if marketing linkages are established and they can fetch a better price for organic products than conventional products.