Agro-processing in Kerala: a case study of rice mills in Kalady

Abstract

The present study quotAgmpmcessing in Kemla - A case study of rice miils in Krtladyquot, analyses the cawes and factors that led to the clustering of rice rn ills in and aruund Kakaand. Applicability of Porter b Diamond model of cl~tering along with the jhancial performance and problems. The sbuand is mainly based on both primary and secondary data for the period 2000 to 2005. Out of the 120 modern rice mills in the state 80 are located in Ernakulam District with a cluster of 52 modern rice mills in and around Kakady. Out of this 42 modern rice mills are selected as sample units to analyse the reasons and eflects of conglomeration of rice mills, 20 mills are selected for financial performance analysis. The trend in output growth is decomposed in to the yield efect, area eflect and cropping pattern efect to anulyse the deceleration of rice production in Kerala based on secondary andta for a period of 30 years JEom 1974- 75 to 2003-04. The study result shows that the factors that led to the clustering of rice mills in Kulady are location spec$c viz entrepreneurial growth and availability of pure water form perennial water source of river Periyar The financial result shows that all the 20 modern rice mills are running at a pmfit and technically advanced mills (Fully - Automate4 are having an edge over sales than the less advanced mills (semiautomated). The long term Borrowings and capital are efecfively investedIn fixed assets and working capita! in the rice mills under stat. The real cause for the deceleration of rice production in the state of Kerala is identified as negative change in the cropping pattern eflect which also created a serious problem of raw material shortage. The other problem identated as cost ofelectr icily, transport cost, high input cost, un healthy competibion, poor linkageelectr icily, transport cost, high input cost, un healthy competibion, poor linkage with supporting indus~ies etc. newline newline