Financial analysis of tender coconut plantation in Coimbatore district of Tamil Nadu

Abstract

India ranks first in coconut production and productivity and ranks third in cultivation area globally. Twelve million people in India depends on coconut for their livelihood either directly or indirectly. But the prevailing practice of determining the price of coconut by the price of coconut oil which is highly fluctuating in nature has resulted in non-remunerative price for the coconut farmers. To promote the sustainability in the coconut sector, it is imperative to delink the sector from dependency of coconut oil and enhancing the production of diversified coconut products. The present study was conducted with the objective of studying viability of tender coconut cultivation among small, medium and large farmers as a measure of product diversification. The investment decision model was used to analyse the viability of investing in tender coconut cultivation. Research results showed that the NPV was Rs.5.71 lakhs, Rs. 4.87 lakhs and Rs. 5.37 lakhs and the BCR was 2.99, 3.6, 3.2 for small, medium and large-scale tender coconut farmers. The IRR was 18.9 percent, 17.2 percent and 18.3 percent for small, medium and large tender coconut farmers respectively indicating that tender coconut cultivation is financially feasible. The data used for the potential 25 years of economic life of plantation, tender coconut plantation is profitable in the study area.