Vol. 12, Special Issue 9 (2023)

This research delves into a comprehensive analysis of the economic aspects surrounding tobacco cultivation and distribution in the region of Muzaffarpur, situated in the state of Bihar. The primary goals encompass an in-depth examination of the local currency's market dynamics, pricing structures, productivity levels, distribution networks, and the portion of earnings allocated to producers. The investigation collected valuable insights through individual interviews conducted with tobacco industry representatives, utilizing a meticulously devised questionnaire in line with the 2021-2022 planning program.

To evaluate the growth trajectory in terms of cultivated land area, production output, and productivity levels, an exponential analysis was employed. Pertinently, it's worth noting that the prevailing illiteracy rate within the region averages at 17.3%, indicative of the socio-economic context. In terms of agricultural practices, the average sown land area per farm varies significantly, registering figures of 0.52 hectares, 1.5 hectares, 3.25 hectares, and 1.75 hectares collectively.

Diving into the financial aspects, the study found that the average cost incurred for cultivating chewing tobacco (PT 76) amounted to Rs. 73,772.9 per hectare, while the resulting yield averaged at 21.7 quintals/ hec. Farmers received a unit price of Rs. 3,353.5 per ton for their produce. Notably, the surplus commercial stock of chewing tobacco (PT 76) ranged between 17.02 quintals to 18.99 quintals per farm, constituting a notable portion of 19.20% to 24.65% of the total production across farms of varying sizes.

In order to gather comprehensive data on the market landscape, this study adopted a multi-tiered sampling approach to engage with various market representatives. The study scrutinized three distinct marketing channels: producer-consumer, producer-rural trader/retailer-consumer, and producer-wholesale/consignment agent-retailer/rural trader-consumer. Interestingly, the average remuneration received by farmers varied depending on the scale of their farming operations.

As observed through the findings, the tobacco marketing scenario, particularly for chewing tobacco (PT 76), encounters significant challenges, with high labor wages accounting for 92% and substantial commission charges amounting to 84.55%. These factors emerge as prominent barriers in the marketing of chewing tobacco (PT 76), posing significant economic implications for the local industry.