A committee appointed by the Arecanut Research Development Foundation (ARDF) here has recommended to the State Government that the production cost of white arecanut and red arecanut be fixed at Rs. 114 a kg and Rs. 148 a kg respectively.
Earlier this year, the State Government had asked Central Arecanut and Cocoa Marketing and Processing Cooperative Limited (CAMPCO) to study the production of arecanut afresh and submit a report to it. Subsequently, CAMPCO assigned this task to the ARDF, the managing trustee of which is the CAMPCO president. The ARDF constituted a committee to study arecanut production.
The head of the seven-member committee, G.V. Joshi, released the summary of the committee report at a press conference here on Tuesday.
Konkodi Padmanabha, president of the CAMPCO, said that the report would be submitted to Chief Minister B.S. Yeddyurappa by the month-end. The State Government will in turn forward it to the Union Government.
At present, the Union Government has fixed the production cost of white arecanut at Rs. 69 a kg and red arecanut at Rs. 89 a kg. This is the base rate for providing minimum support price for arecanut.
The State Government had fixed the minimum support price for white arecanut at Rs. 75 a kg and that for red arecanut at Rs. 95 a kg, Mr. Padmanabha said.
He said that earlier a CAMPCO delegation had informed the Union Government that the production cost it had set was not fixed on scientific basis.
Mr. Joshi, who is also a member of the Karnataka Planning Board, said the committee took into consideration the annual maintenance cost of arecanut plantation, interest expenses, and establishment cost while calculating the production cost.
The committee members visited Sringeri, Koppa, Thirthahalli, Shimoga, Chennagiri, Bhadravati, Bhairumbe, Yaddalli, Neernalli, Herur, Honnavar, Jalavalli, Bantwal, Puttur, Karkala, Belthangady and Sullia during July-August 2010 and interacted with growers before coming out with their findings, Mr. Joshi said.
He said the annual maintenance cost of white arecanut was about Rs. 56,075 an acre and that of red arecanut was at Rs. 64,065 an acre. This includes irrigation, labour charge, processing of the commodity and repair works at the plantations. The average labour charge has been put at Rs. 150 a day.
The interest expenses have been calculated at Rs. 36,865 an acre for white arecanut and Rs. 43,008 an acre for the red variety.
The establishment cost has been calculated at Rs. 21,032 an acre for white arecanut and Rs. 19,145 an acre for red arecanut. The committee considered 1998-99 as the base year for calculating the establishment cost, as the maximum expansion of arecanut plantation took place during that period.
According to the committee's findings, the average labour cost during that period was Rs. 100 a day.