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Performance of Onion in Bihar-An economic analysis

Article in Economic Affairs · July 2016

DOI: 10.5958/0976-4666.2016.00038.3

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 Performance of Onion in Bihar - An Economic Analysis

Lokesh Kumar Meena1*, Shoji lal Bairwa2, Meera Kumari3 and M.K. Wadhwani4
Assist. Professor-cum-Junior Scientist, Deptt. of Agril Economics, BAU, Sabour
1

2
Assist. Professor-cum- Junior Scientist, Deptt. of Agril. Economics, Kalam Agriculture College, Kishangang, BAU, Sabour
3
Assist. Professor-cum- Junior Scientist, Department of Agricultural Economics, BAU, Sabour-813210
4
Professor-cum- HOD, Department of Agricultural Economics, BAU, Sabour-813210

ABSTRACT
Present study was conducted in Bihar state to measure the performance of onion for this purpose 40 years secondary data were
collected and compiled for period from 1974 to 2014. Decade wise as well as whole period analysis was done i.e. 1975-1984, 1985-
1994, 1995-2004, 2005-2014 and 1975-2014. Results of the study shows that in the first decade onion gain the area at the compound
growth rate of 1.7% per annum. The production of onion registered highest growth rate during this decade that was 2.9 %, despite
an increase in productivity was at slow pace. During the second decade performance of the onion in area and production was much
better than first decade but onion lost the productivity at the compound growth rate of 0.3% per annum. Onion in the third decade
shows very poor performance and onion lost the area and production. Performance of onion was recorded much better and onion
gained recorded area, production and productivity with highest growth rate in the fourth decade. Finally during the whole study
period best performance of onion was found in production followed by area and productivity. The similar trend was found in the
calculated value of the mean, standard deviation, coefficient of variation and compound growth rate during the study period.
Keywords: Growth, trends, standard deviation, coefficient of variation and onion.

Agriculture is the backbone of our country and has provides livelihood to more than 65 percent of the
a prime role in Indian economy. Agricultural sector labour force. Under agriculture sector horticultural
crops play very important role to economy (Meena et al.
Access this article online 2013). Due to low operational holdings, it is really not
Publisher easy by the small farmers to get better their earnings
Website:
http://www.ndpublisher.in only by raising the yields of the existing crops by using
crop specialization, mainly cereals. They should shift on
high value crops like vegetable with available modern
DOI:10.5958/0976-4666.
DOI: farm inputs may provide a stable economic base of the
2016.00038.3
poor peasants (De and Chattopadhyay, 2010; Meena

Address for correspondence

Lokesh Kumar Meena: Assistant Professor-cum- Junior Scientist, Department of Agricultural Economics, Bihar
Agricultural University, Sabour-813210
E-mail: lokeshmn04@gmail.com

Economic Affairs 61(2): - June 2016 1

 Meena et al.

et al. 2016). Vegetables being a rich and cheap source constitute around 70 percent of the area under onion
of vitamins and minerals, occupy an important place in the country. During recent years, Rajasthan, Madhya
in the food basket of Indian consumers, a majority of Pradesh and Bihar have emerged as an important onion
whom are vegetarian by either choice or lack of access. growing States. On the contrary, Orissa, Uttar Pradesh
This persistent vegetarianism coupled with rising per and Tamil Nadu have lost their proportion in the total
capita income is fuelling a rapid growth in consumption area under onion in the country. Maharashtra state
of vegetables (Sant Kumar et al. 2004). Onion (Allium covers maximum area and production of onion in India.
cepa L.) is a most important bulbous crop among the Bihar state has 5th position in area (10.64 lakh tonnes)
cultivated vegetable or horticultural crops and it is of while 4th position in both production (1064.17 thousand
universal importance (Purse glove 1972 and Meena tonnes) and productivity (19.86 tonnes/hectare) of onion
et al. 2013). India has varying climatic conditions and in India (Gummagolmath 2012).
provides an opportunity for growing a large number of
horticulture crops including vegetables. It is regarded as Data and Methodology
a highly export oriented crop and earns valuable foreign Present study was conducted in Bihar state and
exchange for the country (Kulkarni et al. 2012). Onion is an based on the secondary data and was collected from
important vegetable crop grown and consumed widely various published sources such as institute of social
across the world. As a culinary ingredient it adds to the and economic change (ISEC), Bangluru, directorate of
taste and flavour in a wide range of food preparations economic and statistics (DES) and state horticultural
and it is also used as a salad. India produces all three board (SHB) of Bihar. 40 years time series data on area,
varieties of onion – red, yellow and white. In some part production and productivity of onion was collected and
of the country, onion is grown in all the three seasons. In collected period from 1975 to 2014. Whole set of data was
the northern part of the country, onion is usually grown divided in to four decade and analysis was done decade
in winter (Rabi) season. However, in the southern and wise as well as whole period i.e. 1975-1984, 1985-1994,
western States of Andhra Pradesh, Karnataka, Tamil 1995-2004, 2005-2014 and 1975-2014. Simple statistics
Nadu, Gujarat and Maharashtra, it is grown in winter and economic tools average, coefficient of variation,
(Rabi) as well as in the rainy (kharif) seasons. Thus there standard deviation and compound growth rate were
is a steady increase in the demand for onion across the used for measuring performance of onion.
world.
China is the leading producer of onion constituting The analytical economic and statistical tools
about 27 per cent of the world total production
(205.07.76 Lakh tonnes) Gummagolmath (2012). In India Complete behavior of time series cannot be understood
it has been grown in 1173.3 thousand hectares with by any single statistical tool, therefore following
the production of 18777.5 thousand tonnes (2013-14). important statistical measures were used to analyse the
India being a second major onion producing country data.
in the world has a productivity of 16.0 MT/ha only (a) Arithmetic mean: The mean was worked out by
(Indian Horticulture Database, 2011 and Anonymous, using given formula.
2012). The reasons for lower productivity of onion in 1
India could be attributed to the limited availability of x=
n
∑x
quality seed and lack of development of hybrids in
onion is the major limiting factors among the others (b) Measure of variability: To measure the
(Kulkarni et al. 2012). Although onion is produced in all magnitude of variability in each of the three
the States in India, the key onion producing states are variables- area, production and productivity the
Maharashtra, Karnataka, Madhya Pradesh, Rajasthan, coefficient of variation was computed by using
Gujarat, Andhra Pradesh and Bihar which together formula (Maunder et al. 1999).

2 Economic Affairs 61(2): - June 2016

 Performance of Onion in Bihar - An Economic Analysis

Standard deviation The compound growth rate for production of onion was
C.V. = × 100 worked out by fitting the following functional from
Mean ×
Y = abt or, log Y=loga+t logb or, U=A+Bt
ΣY 2 ( ΣY ) / N
2

S.D. = Where,
N
Y = Area/ Production/Productivity
Where, Y= area, production and productivity N=
Number of observation (years) a = Constant or intercept value

(c) Growth rate and trend analysis: The following b = Régression coefficient
linear model was fitted to area, and production t = Time variable
and productivity. U = log Y
a = log a
Régression équation
B = log b
Y = a ± bx+E
b = 1+r, with ‘r’ as the compound growth rate
Where,
a = antilog (A)
Y = Area/production/productivity, a= Constant or
b = antilog (B)
intercept value;
Compound growth rate (%) = [Antilog (B)-1]×100
b = Regression coefficient, x = Time period..
E = Error term with mean zero and constant The trend value of b for study period was tested for
variation significance using following formula

Where regression coefficient (b) was worked out as t = b/SE of b

follows: Where,
(∑ x)(∑ y) b = Trend value of study period, SE of b= Standard
∑ xy - n error of b
byx =
(∑ x 2 )
∑ x 2
- Results and Discussion
n
Table 1: Mean of area, production and production of onion in
 (∑ y 2 )   (∑ x 2 )  Bihar
∑ − − ∑ −
2 2
xy  b x 
 n   n 
SE of byx = Mean
 (∑ x 2 )  Period Area (‘000 Production Productivity
(n − 2)  ∑ x 2 − 
n  ha) (‘000 MT) (Tonne/ha)

1975-1984 13.52 98.05 7.24
t = b/SE of b 1985-1994 15.23 131.63 8.65
The intercept value (a) was estimated as following formula 1995-2004 16.98 151.20 8.83
2005-2014 41.90 827.54 17.28
a = ỹ - bx
The linear growth rates of area, production of onion has 1975-2014 21.91 302.10 10.50
been worked out by fitting the linear function. Linear
Above table indicated that mean value of area and
growth rate (%) = b/ ỹ×100
production and productivity of onion were continuously
b = Trend value, ỹ = Average of production increased from first decade to fourth decade. During

Economic Affairs 61(2): - June 2016 3

 Meena et al.

the whole study period mean value of production was of India (Gummagolmath 2012). Mean value of area,
increased more as compare to area and productivity. production and Productivity were found during whole
From this we can concluded that farmers of Bihar period 21.91(‘000 ha), 302.10 (‘000 MT) and 10.50 (Tonne/
state were growing more onion from last four decades ha) respectively.
because its high value and high foreign earning crop.
Greater increased in area during fourth decade was Table 2: Standard Deviation of area, production and
mainly due vast increase in area of onion from year production of onion in Bihar
2007 to year 2008. Because of the rise in prices of onion
Standard Deviation
during October, 2005 was mainly due to delayed sowing
Period Area Production Productivity
of kharif onion in major producing States. However, the
policy decision to import onion again led to steep fall in 1975-1984 1.12 14.00 0.75
the prices of onion. The prices of onion during October 1985-1994 1.60 13.52 0.37
and November, 2005 were in the range of ` 1000-1500 in 1995-2004 2.95 40.30 1.12
major markets and declined to ` 300-500 during January 2005-2014 18.44 497.18 6.46
and February, 2006. Again prices of onion during from
1975-2014 14.63 385.30 5.05
2007 to December, 2010 revealed that, the price touched
a high of more than ` 6000 in the case of major market

Fig. 1: Pattern of area of onion in Bihar (1975 to 2014)

Fig. 2: Pattern of production of onion in Bihar (1975 to 2014)

4 Economic Affairs 61(2): - June 2016

 Performance of Onion in Bihar - An Economic Analysis

Fig. 3: Pattern of productivity of onion in Bihar (1975 to 2014)

Above table indicated that standard deviation of instability in area of onion was observed in first decade
area and production and productivity of onion were while lowest instability in production and productivity
continually increased from first decade to fourth decade. of onion was found during the second decade. In whole
But value of SD was found more during the fourth study period coefficient of variation of area, production
decade i.e. 2005-2014. It was due sudden increased in and productivity of onion were found 66.78, 127.54 and
area in the year 2008 (51.6 thousand hectare) just from 48.13 respectively. Means higher instability was found
2007 (14.6 thousand hectare). It was due to either price in production of onion followed by area and yield of
of onion was very high in 2007 which added more area onion.
in next year 2008 by the state. Standard deviation of
area, production and Productivity found during period Table 4: Compound growth rate of area, production and
were 14.63, 385.30 and 5.05 respectively production of onion in Bihar

Table 3: Coefficient of variation of area, production and Compound Growth Rate (%)
production of onion in Bihar Period Area Production Productivity
1975-1984 1.7 2.6 0.9
Coefficient of variation
1985-1994 2.6 2.3 -0.3
Period Area Production Productivity
1995-2004 -3.5 -2.7 0.8
1975-1984 8.32 14.28 10.30
2005-2014 17.5 34.4 14.4
1985-1994 10.48 10.27 4.23
1975-2014 3.2 5.8 2.5
1995-2004 17.35 26.65 12.71
2005-2014 44.01 60.08 37.41 Table 4 indicated that compound growth rate of area
1975-2014 66.78 127.54 48.13 and production and productivity of onion. Growth
performance of the onion in Bihar during the last four
Above table indicated that coefficient of variation of decade is concluded that during the first decade onion
area and production and productivity of onion were gain the area at the compound growth rate of 1.7% per
continuously increased from first decade to fourth annum. The production of onion registered highest
decade. Based on the value of the coefficient of variation growth rate during this decade that was 2.9 %, despite
greater instability was observed in fourth decade an increase in productivity was at slow pace. During
followed by third, second and first decade and lowest the second decade performance of the onion in area and

Economic Affairs 61(2): - June 2016 5

 Meena et al.

production was much better than first decade but onion shows very poor performance and onion lost the area
lost the productivity at the compound growth rate of and production. During the fourth decade performance
0.3% per annum. During the third decade performance of onion was recorded much better and onion gained
of onion was very poor and onion lost the area and recorded area, production and productivity with highest
production with compound growth rate 3.5 % and growth rate. It was due to increased in area in the year
2.7 % per annum due to the area of onion in 2001 was 2008 because of the rise in prices of onion during the
reduced as compare to 2000 it was due to price reached year 2006 and 2007 was mainly due to delayed sowing
at recorded level (` 26.32/ kg) in 1998 and after 1999 to of kharif onion in major producing States. Finally during
2000 it started decline due market interventions involve the whole study period best performance of onion was
in stabilization of price through procurement of onion found in production followed by area and productivity.
when/ where the price were low and distribution to The similar trend was found in the calculated value of
consumer at reasonable price when the ruling retail the mean, standard deviation, coefficient of variation
market price were high and due to low price of onion in and compound growth rate during the study period.
2000 the area of onion in 2001 was reduced as compare
to 2000. During the fourth decade performance of onion References
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6 Economic Affairs 61(2): - June 2016

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