Financial analysis of homegardens: A case study from Kerala state, India

Abstract

Homegardens are touted as economically and biologically sustainable systems, but studies to quantify the economics of these gardens are limited. This study used inventories, survey information and market data to estimate the productivity of 75 homegardens in Thrissur district of Kerala state, India, and applied benefit-cost analysis to ascertain the current financial values of these systems. All homegardens were found to be economically profitable and also to be of better economic utility to the farmer than selling or leasing the land. Sensitivity analyses indicated that these systems were easily resilient to 10% shifts in the prices of hired labor and in the prices of the three most economically important crops: coconut (Cocos nucifera), arecanut (Areca catechu ((), and banana (Musa spp.). Profit value of the gardens tended to increase with holding size and with increasing years of cultivation. Labor hours (both household and hired) and gender of the decision-maker were not suitable predictors of profit. Intensity of profit generation was highest in the smaller gardens, thus perhaps indicating both adaptive management to land constraints, and the presence of other intangible benefits that might affect land management strategies.