Economics of Tea Plantation in Non-Estate Sector: A Study of Sivasagar and Lakhimpur District of Assam

  • *Ranjit Kumar Gam1, Jugal Kumar Deka2, Dharmendra Nath3
    1Assistant Professor,
    Department of Economics,
    The Sibsagar College, Joysagar, Assam

    2PhD scholar,
    OKD institute of Social Change and Development,
    SB Deorah College,
    Guwahati, Assam

  • Tea plantation in the non-estate sector i.e. small tea growers sector is transforming the rural subsistence economy into a modern self-sustained economy which provides sufficient income and employment to educated unemployed youths of Assam. Tea is a perennial crop in which investment is made long before the realisation of income flows. In tea plantation growers have to wait at least two years or more from the first plantation to receive the flow of incomes. Thus, it is very much essential to study the economic feasibility of investment in non-estate sector tea production. For understanding the economics behind this sector this study analyze two criterion i.e. profitability and economic feasibility of non-state tea sector in Assam. As like other investment projects, economic feasibility of small tea plantation is measured by using the mathematical tools like, Payback period (PBP), Net Present Value (NPV), Benefit Cost Ratio (BCR) and Internal Rate of Return (IRR). Study results shows that small tea growers in the sample districts are fetching considerable surplus from their economic venture. Sustainability study shows, BCR value equal to 1.45 giving positive NPV of investment, relatively shorter PBP of 6.39 years and a very high IRR exceeding the rate of discount.

  • Key words: Non-estate, profitability, economic feasibility, perennial cro

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