Economic feasibility of polyhouse establishment with and without government subsidy support: A case of bell pepper (capsicum annuum l.) cultivation in maharashtra, india

Abstract

The Indian government provides subsidies to farming communities to adopt efficient farm technologies to improve farm productivity and income. In India, 86% of all farmers are small and marginal (possessing landholding <2 ha) who often face financial constraints to adopt capital intensive technology. The government has been providing input subsidies to farmers to improve farm productivity and income. The adoption rate of technologies varies and some technologies are adopted without subsidy support. Protected cultivation may provide better yield and increased profitability. The study was undertaken to determine the economic feasibility of polyhouse establishment with, and without, subsidy support. The profitability of bell pepper cultivation under a polyhouse was estimated along with its price spread in the market. A farmer with a polyhouse was more educated compared to open field farmers, likely due to the need for a better understanding of the technology involved, and on how to obtain government subsidy support. Total cost of bell pepper cultivation in a polyhouse was 607% higher than open field cultivation, but net returns were 594% higher than open field for 0.4 ha. Feasibility analysis indicated that bell pepper cultivation under protected cultivation is feasible with, and without, subsidy support. It is more profitable for farmers with subsidy support, as it has a shorter payback period. Farmers preferred a marketing channel comprised of aggregators due to higher income surety compared to other channels. Cultivation under protected condition is more profitable compared to open field but its establishment cost is high, which can be reduced with subsidies.