Economic evaluation of chawki rearing centres in Kanakapura Taluk of Karnataka

Introduction

Sericulture is a craft and science of rearing silkworms to produce silk. It includes cultivation of mulberry, rearing of silkworms, reeling of silk thread from cocoons, weaving the silk yarn and further processing to produce the silk fabric (Kumar et al., 2019) [1] . Silkworm rearing is an important aspect of sericulture. The silkworm larvae grow during rearing by undergoing five instars along with four moults in between the instars. The rearing period starts from the hatching of the silkworm eggs and ceases at spinning of matured worms covering a total span of 23-24 days. Considering the physiology of the silkworms and effect of ecological factors at different growth stages, the silkworm rearing is conducted separately as young age and late age rearing. Distinctively, the rearing of young age silkworms up to the second moult is known as chawki rearing. The success of silkworm crop depends greatly on the performance of chawki rearing. The concept of chawki rearing is based on the Japanese Kego rearing which has numerous advantages over traditional silkworm rearing. The prominent advantages are proper egg incubation & uniform hatching, robust and disease free chawki worms, prevention of crop loss and cocoon crop stabilization, reduction in production cost of cocoons and increased yield of good quality cocoons (20-25% higher) leading to higher profits of the farmers (Sivaprasad et al., 2015) [10] . The rearing of chawki worms is carried out in some specialized centres called Commercial Chawki Rearing Centres (CRCs) bearing high tech infrastructure and facilities with controlled environmental conditions extensively supervised by skilled technicians. CRCs are more prevalent in the traditional sericulture states of southern India viz. Karnataka, Tamil Nadu and Andhra Pradesh catering to the exclusive development of sericulture by supplying the farmers with healthy and uniform chawki worms. In the recent years, many private entrepreneurs have ventured into the field of sericulture and managed to create big CRCs based on the model developed by CSR&TI, Mysuru. Around 800 CRCs have been registered as per the Central Silk Board (Amendment) Act, 2006 throughout the country (Sivaprasad et al., 2015) [10] and the number of centres is on the rise every year. In Karnataka, around 460 CRCs are functioning properly providing lakhs of robust mulberry chawki disease free layings (DFLs) annually to the farmers (Dasari et al., 2018) [5] . The adoption of chawki rearing technology by the farmers in the state has led to tremendous growth of sericulture and is currently leading the whole country in terms of raw silk production with 11,823 MT (Anonymous, 2023) [2] . The feasibility and profitability of running a CRC has attracted the new entrepreneurs. Several studies have been carried out to elucidate the economic growth of CRCs. According to Vijaya Kumari and Rajan (2005) [12] , the concept of commercial chawki rearing can be a dynamic enterprise of resources as there was positive influence on variables of production, such as mulberry acreage, number of DFLs brushed per annum, the costs related to www.extensionjournal.com disinfection, FYM application and chawki transportation on income derived from CRCs. Dasari et al., 2018 [5] revealed in their studies on economics of CRCs in Tumakuru district, that investment in CRC is a financially appealing and successful idea. The CRCs of Kanakapura Taluk in Ramanagara district are also motivated by the profitability of this occupation and contributing a lot to the development of sericulture in the state. Hence, in our present study we have tried to analyse the economic factors pertaining to the performance of CRCs in the area and assess the total cost of production & total profit from the centres.

Materials and Methodology

The present study was conducted in Kanakapura Taluk in the Ramanagara district of Karnataka. The selection of the region was based on the number of CRCs, the area under mulberry cultivation, the engagement of sericulturists and the quantity of raw silk production. In our study, 15 CRCs were selected randomly and personal interview sessions were conducted using a pre-set questionnaire with the CRC owners and data concerning the different set of variables for annual maintenance of a CRC were recorded. The CRCs were categorized into three types based on the availability of mulberry acreage-Type I (2-3 acres), Type II (4-5 acres) and Type III (6-7 acres). Factors like maintenance cost of mulberry garden, cost of chawki rearing house and rearing appliances & equipments, cost of disinfectants, labour cost and other miscellaneous costs were taken into account. The recorded data were organized properly and economic variables viz. recurring cost, nonrecurring cost, total cost of production, gross return, net return and benefit cost ratio were calculated.

Recurring cost

Recurring costs refer to costs incurred on inputs, which are exhausted in one use in the production process. For example, cost of chemicals fertilizers, daily labour wage, cost of power tiller operations, DFLs, disinfectants, paraffin paper, transportation charges, other miscellaneous costs and interest on working capital etc. are recurring costs of CRCs.

Non-recurring cost

Non-recurring costs are incurred on resources which can be utilized in production process again and again as it does not get exhausted in one use. These are fixed in nature and occur one time only such as land revenue and taxes, rental value of owned land, management cost, risk factor and amortization cost etc. (Nath, 2008) [9] . The annual amortization cost of borewell, drip irrigation system and rearing house & appliances in CRCs are calculated by the Straight-Line Method (Normal Amortization Method) formula given below (Dagistan and Kaya, 2022) [4] :

, where A= Annual amortization cost, D= Fixed asset value n= Useful life of the asset (year)

Total cost of production

The sum of both the recurring cost and non-recurring cost in a production firm (CRCs) contribute to the total cost of production.

Gross return:

The amount of revenue generated by selling of Chawki reared DFLs is the gross return.

Net return

The difference between gross return and the total cost of production in a CRC is calculated as the net return.

Benefit cost ratio (B: C ratio)

The ratio of gross return to the total cost of production is known as Benefit Cost Ratio. The BC ratio has to be more than 1 in order to confirm the economic feasibility of running a CRC (Kumar et al., 2021) [7] .

Results and Discussion

The feasibility of running a CRC depends on the profitability from selling of chawki reared worms. While preparing chawki reared worms in the CRCs, a great deal of costs is incurred annually for the maintenance of mulberry chawki garden and conduction of chawki rearing operations. The size of the mulberry garden decides the level of production and cost associated with it. In our study, we classified the CRCs based on the mulberry acreage as Type I (2-3 acres), Type II (4-5 acres) and Type III (6-7 acres) respectively. The mulberry variety V1 was cultivated in all types of CRCs with different spacing: 2ft x (3ft +5ft) for Type I, 4ft x 3ft for Type II and 5ft x 3ft for Type III which optimized the leaf yield per acre. The leaf yield is an important prerequisite for determining the quantity of DFLs that can be brushed in a CRC. Generally, 20 kg of chawki leaf is required for 100 DFLs of chawki worms. Overall, 1.60 lakh DFLs can be reared @ 5000 DFLs/crop in 32 crop schedule per annum (3 crops/ month) from 1 ha of land annually (Sivaprasad et al., 2015) [10] . Despite this recommendation, the amount of DFLs or the number of batches varies among the CRCs, depending on factors such as availability of manpower and resources, demand of chawki worms and seasonal influence etc. (Kallimani et al., 2021) [6] . Based on our study, we found that average number of chawki DFLs (both crossbreed and bivoltine) reared by Type I, Type II and Type III CRCs were around 1.40 lakh DFLs, 2.22 lakh DFLs and 3.15 lakh DFLs respectively where crossbreed chawki production was around 4 times the bivoltine chawki production. The financial analysis of the three types of CRCs for maintenance of chawki rearing garden and regulation of chawki rearing operations was performed by taking into account the number of DFLs brushed and presented in Table 2, Table 4 and Table 6. The maintenance of mulberry chawki garden was done by daily wage labours who perform activities like application of FYM & chemical fertilizers, irrigation, weeding, hoeing, pruning, leaf harvesting and power tiller operation for interrow ploughing based on the number of leaf harvest throughout the year. However, inside chawki rearing house, the operations starting from the brushing of worms followed by bed spacing, bed cleaning, dusting of lime during moulting & bed disinfectants after moulting and management of environmental conditions untill the release of worms to the farmers at 2 nd moult were handled by skilled and trained workers. Material inputs like FYM and chemical fertilizers (Urea, MOP, SSP etc.) were applied at times to maintain an established chawki garden using specific recommended practices (Thippeswamy et al., 2013) [11] while paraffin paper, lime and other disinfectants (Asthra, Bleaching Powder, Vijetha Forte) were needed for carrying out rearing operations in chawki rearing house. The www.extensionjournal.com manpower and material costs vary with the level of production and are determined as recurring costs. In Type I CRCs, the total recurring cost for managing the chawki rearing performance annually was estimated to be around Rs. 32,60,334 comprising of recurring cost for chawki garden calculated at Rs. 3,82,640, recurring cost for chawki rearing house @ Rs. 25,81,300 and interest on working capital considering 10% rate per annum evaluated at Rs. 2,96,394 (Table 2). In case of Type II CRCs, the recurring cost for chawki garden and chawki rearing house were valued at Rs. 5,63,600 and Rs. 40,12,860 respectively while the interest on working capital per annum was Rs. 4,57,646 making the total recurring cost valued at Rs. 50,34,106 (Table 4). While estimating the total recurring cost for Type III CRCs of Rs.71,18,643, the recurring cost for chawki garden and chawki rearing house were found out to be around Rs. 8,10,800 & Rs. 56,60,694 respectively and the interest on working capital per annum to be Rs. 6,47,149 (Table 6). The recurring cost for chawki garden, chawki rearing house and interest on working capital @10% per annum when expressed in percentage with regard to the total recurring cost were found out to be around 11%, 79% and 9% respectively in all types of CRCs. Moreover, the expenditure on DFLs was substantial bearing about 53-55% of the total recurring cost which suggested about the expensiveness of raw material for chawki production. Besides the recurring costs of maintaining a CRC, some costs are based on assets like rearing house, rearing appliances, borewell, drip irrigation system and owned land which are incurred during the establishment stage. They are referred to as non-recurring cost. Non-recurring costs included amortization cost of rearing house & appliances, borewell and drip irrigation system, land revenue and rental value of owned land etc. Moreover, management cost and risk factor were also considered under non-recurring cost. The different types of non-recurring costs for the CRCs are presented in Table 2, Table 4 andTable 6. The total amortization cost of rearing house and appliances were calculated out to be Rs. 60,332 (Table 1), Rs. 95,280 (Table 3) and Rs. 1,59,522 (Table 5) for Type I, Type II and Type III CRCs respectively. The computation and summation of each non-recurring cost factors led to the total non-recurring cost. The total non-recurring cost of the CRCs in the increasing order of garden size were Rs. 6,78,153, Rs. 10,10,579 and Rs. 14,35,573 respectively. The total recurrent cost and non-recurrent cost governs the total cost of production. The total cost of production per annum shows the accurate picture of the overall expenditure for maintaining a CRC. In Type I CRCs holding 2-3 acres chawki mulberry acreage, the total cost of production was Rs. 39,38,487. In Type II CRCs, the total cost of production was Rs. 60,44,685 with a considerable increase of 53.5% over Type I CRC. Furthermore, the total cost of production in Type III CRCs with 6-7 acres was Rs. 85,54,216 exceeding over the Type I and Type II CRCs by 117% and 42% respectively. The study also revealed that recurring cost shared about 83% while the non-recurring cost contributed only about 17% of the total cost of production. Hence, with the increase in level of production, the total recurring cost increased significantly which ultimately effected the total cost of production. However, the production cost of 100 DFLs chawki worms was highest in Type I CRCs (Rs. 2813) and lowest in Type III CRCs (Rs. 2716) which highlighted that production cost per unit DFL decreased with the increase in production capacity. The production capacity of a CRC is directly related to the demand of the chawki worms by the farmers. While surveying, it was found that the demand of chawki worms from the farmers varied among the CRCs. In large CRCs, the demand was high compared to the small CRCs as depicted by Mithilasri et al., 2024 [8] and the supply of chawki worms was done accordingly. Besides this, the demand for crossbreed chawki was more than bivoltine chawki as in the findings of Basavaiah and Kallimani, 2020 [3] . The price setting of chawki worms was regulated based on farmers' demand & CRCs' supply and the gross returns were calculated. In Type I CRCs, the selling price of 100 DFLs crossbreed and bivoltine chawki worms were www.extensionjournal.com Rs. 5000 and Rs. 4200 respectively which amounted to gross returns of Rs.67,60,000. Similarly, the total revenue generated in Type II CRCs was around Rs. 1,08,90,000 by selling of 100 DFLs crossbreed worms at Rs. 5000 and bivoltine chawki at Rs.4500. Also, considering the high demand in Type III CRCs, the selling price of 100 DFLs crossbreed chawki was Rs. 5400 while that of bivoltine chawki was Rs. 4500 and the total gross income accumulated was Rs. 1,64,43,000. The actual benefit from the gross income is assessed using net return by subtracting the total cost of production. Therefore, the BCR of more than one made it clear that all the types of CRCs in our study area had been running profitably and the large CRCs with more mulberry garden size were slightly more profit-making than small CRCs with less mulberry acreage. Regardless of the size of the mulberry chawki garden, a CRC owner can make profit from a centre by brushing optimum number of DFLs. Hence, it can be concluded that chawki rearing centre is an economically viable enterprise.

Conclusion

In the recent scenario, chawki rearing centres plays a major role in the sericultural economy of the state. Kanakapura is seen as a hotspot of numerous successful CRCs. Many new entrepreneurs have invested in this enterprise while others are interested in joining this endeavour. The economic analysis of different types of CRCs will help the entrepreneurs to properly allocate funding resources towards the overall maintenance of CRCs. The success of chawki rearing enterprise depends on the effective utilization of mulberry acreage, rearing house, constant demand of the farmers, consistency and regularity in production, quality control, adoption of scientific package of practices and proper management of manpower etc. This study revealed that the larger CRCs are more profitable than smaller CRCs. However, smaller CRCs also offer lucrative profits as suggested by the benefit-cost ratio.

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