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Understanding Capital Structure in Flower Farms, Varanasi, Uttar Pradesh,

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Article in Asian Journal of Agricultural Extension Economics & Sociology · August 2023
DOI: 10.9734/ajaees/2023/v41i92101

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 Asian Journal of Agricultural Extension, Economics &
Sociology

Volume 41, Issue 9, Page 766-773, 2023; Article no.AJAEES.103700

ISSN: 2320-7027

Understanding Capital Structure in

Flower Farms, Varanasi,
Uttar Pradesh, India
Pavan Kumar Singh a++, K. K. Singh b++, Supriya b++,
Bhartendu Yadav c#*, Ajeet Kumar d++
and Sachin Kumar Verma e†
a
Mangalayatan University, Beswan, Aligarh (U.P.), India.
b
Department of Agriculture, Economics, ANDUA&T, Kumarganj, Ayodhya, India.
c
C.S. Azad University of Agriculture and Technology, Kanpur (U.P.), India.
d
Om Sterling Global University, Hisar (Haryana), India.
e
A.N.D. University of Agriculture and Technology, Ayodhya (U.P.), India.

Authors’ contributions

This work was carried out in collaboration among all authors. All authors read and approved the final
manuscript.

Article Information
DOI: 10.9734/AJAEES/2023/v41i92101

Open Peer Review History:

This journal follows the Advanced Open Peer Review policy. Identity of the Reviewers, Editor(s) and additional Reviewers,
peer review comments, different versions of the manuscript, comments of the editors, etc are available here:
https://www.sdiarticle5.com/review-history/103700

Received: 28/05/2023
Accepted: 30/07/2023
Original Research Article
Published: 07/08/2023

ABSTRACT

A study on 120 flower farmers was made in the district Varanasi to analyze the farm structure and
investment patterns of the selected farms. A multistage stratified purposive cum random sampling
procedure was adopted for the study. Findings reveal that the overall average cropping intensity on
sample farms was found 213.04%. Among the overall cropping pattern of the crops in the study
_____________________________________________________________________________________________________
++
Assistant Professor;
#
Teaching Associate;
†
Research Scholar;
*Corresponding author: E-mail: [email protected];

Asian J. Agric. Ext. Econ. Soc., vol. 41, no. 9, pp. 766-773, 2023
 Singh et al.; Asian J. Agric. Ext. Econ. Soc., vol. 41, no. 9, pp. 766-773, 2023; Article no.AJAEES.103700

area, the percentage of rose was 8.57 and marigold was found 11.12 percent. Per farm investment
on farm, structure was highest on small size group of farms i.e., Rs. 750644.34 followed by
marginal size group of farms which found the money value of Rs. 463367.02 respectively showing
the direct relation to farm size.

Keywords: Marigold; rose; cropping pattern; investment.

1. INTRODUCTION policymakers and financial institutions about the

need for targeted support to boost the
Floriculture has established itself as a viable agricultural sector [8].
business. It has also been recognized for its
potential as a profitable agriculture. Floriculture Investigating the investment patterns of flower
was once only done on tiny farms, but it has farms can provide insights into the factors
since spread to a few larger ones. The National influencing investment decisions, such as
Commission on Agriculture has advised that by technological upgrades, infrastructure
the year 2000 A.D., 5 lakh hectares of land be development, or expansion to new markets.
planted in floriculture to increase productivity. Understanding these factors can assist farmers
Floriculture continues to provide rural residents in making prudent investment choices [9]. It can
with employment opportunities. A family of 5 to 6 help identify the barriers to investment and
people can live in a region where flowers are entrepreneurship in the flower farming industry,
grown. Roses, carnations, gladioli, marigolds, potentially leading to policy recommendations
and orchids are among the most highly prized aimed at fostering a conducive business
flowers growing here. India is ranked 18th, with a environment.
0.6 percent share of the worldwide floriculture
market. It shows growing trend and reveals a The study's findings can have direct implications
scope further. Although, conventional farming is for District Varanasi's economy, as it can
largely being adopted on every farm. But flowers contribute to the sustainable growth of the flower
are also now being trending to be included in the farming industry, generate employment, and
cropping pattern of the farmers, however large boost income levels. Improved economic
farms on flowers can be seen on very area conditions in the region can lead to enhanced
specific only. Farm size is a major factor in living standards, better access to education and
influencing the cropping pattern. A change in healthcare, and overall socio-economic
cropping pattern implies a change in the development.
proportionate area under different crops. An
increase in the area under high-value crops is A comparison with tropical agricultural territories
likely to result in an increase in total return even in Latin America allows for a broader
if there is no increase in the yield rate or price understanding of agricultural practices and
provided there is simultaneous decrease in the economic dynamics in different regions [10,11]. It
proportionate area under equally or more can reveal similarities and differences in the
valuable crops [1]. Marginal farmers can be more capital structure, investment patterns, and overall
attentive about better utilization of their tinny land financial performance of flower farms in Varanasi
holding [2]. Agricultural sectors, including flower and Latin America [12,13,14]. The insights drawn
farming, play a crucial role in the economic from this comparative analysis can provide
development of rural areas [3,4]. The study can valuable lessons and best practices that can be
shed light on the capital structure of flower farms, adapted and applied in both regions, promoting
analyzing the proportion of debt and equity used cross-learning and knowledge exchange [15,16].
to finance operations [5,6].
The study can contribute to the existing body of
Identifying the optimal capital structure for flower knowledge on agricultural economics, capital
farms can lead to improved financial structure, and investment decisions, both in the
performance and increased profitability [7]. specific context of flower farms in Varanasi and
Understanding the sources of capital can help in a comparative context with Latin American
farmers make informed decisions regarding territories. It can serve as a reference for future
investment and expansion. The study can also research on similar topics, inspiring scholars to
highlight the challenges farmers face in explore related issues in different agricultural
accessing financial resources, which can inform sectors and geographical regions. Overall, the

767
 Singh et al.; Asian J. Agric. Ext. Econ. Soc., vol. 41, no. 9, pp. 766-773, 2023; Article no.AJAEES.103700

study on capital structure and investment in Distribution of cultivated land owned by different
flower farms in District Varanasi, coupled with a size group of sample farms revealed that 47.64
comparison with socioeconomic studies in % of cultivated land was owned by 75.00 of
tropical agricultural territories of Latin America, marginal size of farms. Table 1 also revealed that
holds immense potential for generating valuable 52.36 % of area (land) were owned by 45 of
insights, facilitating economic growth, and small size group of farms.
informing policy decisions for the agricultural
sector in both regions. The result is also showing in the Fig. 1.

Therefore, flower cultivation can be a better 3.3 Cropping Pattern

option to utilize their every inch of holding as well
as can be a return generating on daily basis. Cropping pattern represents the area attached to
Therefore, to analyze the status of flower the various crop during the given period,
cultivation and investment pattern on it the study customarily (conventionally) in a single year. It
has been performed. indicated the yearly sequence and arrangement
of crops grown by farmer in a particular area.
2. METHODOLOGY The cropping patterns follow by the sample farms
Multistage stratified purposive cum random are presented in Table 2. It reveals that on an
sampling procedure has been adopted for the average the highest area was covered under in
present investigation to select the ultimate unit of paddy and Wheat 13.42, followed by Marigold
the sample. Out of 75 District and 18 Divisions in 11.17 % in kharif season, rose 9.57 %, maize
Uttar Pradesh state, the Varanasi division of 4.26 %, Mustard 6.38%, Pea 4.26%, Gram
Uttar Pradesh was been selected purposively to 3.19%, Urd 2.13 % and Vegetable 1.60 %. Rose
avoid the investigator's operational and Marigold have popular flower occupied
inconvenience. A list of all 8 blocks of Varanasi 9.57% and 11.17%, 6.58 in kharif and of gross
district of Uttar Pradesh along with acreage in cropped area which was distributed as 1.88 ha.
field flowers cultivation were prepared and on marginal farms followed by small 3.35 ha.
arranged in descending order. Out of 8 blocks, respectively of their total cultivated area.
two blocks namely Chiraigaon and Arazi Line
having highest area under field flowers were 3.4 Cropping Intensity
selected purposively for this study. Five villages
from each block and a total of 120 respondents The details of cropping intensity depicted in the
were selected for the study at random. Tabular Table 3.
analysis was made to compare different aspects
of analysis of costs and returns on different Intensity of cropping refers to the number of
categories of the sample farms. The simplest and crops raised on a field during an agriculture year
the most important measures of average mean 2021-22. This can be computed by dividing gross
and weighted mean were applied. Simple sown area by the net cultivated area. Cropping
comparisons have been made on the basis of intensity expressed in %.
percentage.

3. RESULTS AND DISCUSSION

Table 3 reveals that the overall average cropping
3.1 The Structure of Sample Farms intensity on sample farms having 213.04% which
was found highest on marginal farms 213.64 %
This section deals with the size of farms, farm followed by small 208.07 %, respectively, also
assets structure, irrigational structure, cropping showed in the Fig. 2. Cropping intensity was
pattern and cropping intensity. inversely related to size of farms.
3.2 Average Holding Size on Sample 3.5 Farm Asset Structure on Sample
Farms Farms
The average size of land holding of marginal and 3.5.1 Per farm investment on sample farms
small farms were found 0.88 and 1.61 hectares,
respectively with an overall average size of land Table 4 depicted the per- farm asset structure on
holding were obtained as 1.15 hectare. sample farms. Table 4 revealed that major

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 Singh et al.; Asian J. Agric. Ext. Econ. Soc., vol. 41, no. 9, pp. 766-773, 2023; Article no.AJAEES.103700

components of farm asset structure are farm structure was highest on small size group
buildings, machinery & implements and livestock of farms i.e., Rs. 750644.34 followed by marginal
which constituted 70.42 %, 17.09 % and 12.49 % size group of farms which found the money value
of total asset value, respectively on the basis of Rs. 463367.02 respectively. It was concluded
of overall average. Per farm buildings, machinery that per farm investment on sample farm were
& implements and livestock came to Rs. showed the direct relationship with size of
407394.41, Rs. 94800.18 and Rs. 68901.43 holding, whereas component wise investment on
respectively on the basis of basis. Table marginal and small farm did not show any
4 revealed that per farm investment on definite trend.

Table 1. Average size of holding on different size of sample farms

S. No. Size groups of No. of Net Cultivated land(ha.) Average size of

farms Farmers holding
1 Marginal 75 66.23 (47.64) 0.88
2 Small 45 72.78 (52.36) 1.61
Grand Total 120 139.01 (100.00) 1.15
Figure in parenthesis indicate percentage to the total cost

139.01
140
120
120
100
75 72.78 No. Of farmers
80 66.23
Net Cultivated land
60 45
Average size of Holding
40
20 0.88 1.61 1.15
0
Marginal Small Total

Fig. 1. Average size of holding on different size of sample farms

213.04
cropping intensity (%) 208.07
213.64
2.45
Gross Cropped Area 3.35 Over All
1.88
1.15 Small
Net Cultivated Land(ha) 1.61
0.88 Marginal

120
No. of Farmers 45
75

0 50 100 150 200 250

Fig. 2. Cropping intensity of different size group of samples

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 Singh et al.; Asian J. Agric. Ext. Econ. Soc., vol. 41, no. 9, pp. 766-773, 2023; Article no.AJAEES.103700

Table 2. Cropping pattern

S.No. Crop Marginal Small Overall Average

A. Kharif 0.88 (46.81) 1.61 (48.06) 1.16 (47.35)
1 Paddy 0.26 (13.83) 0.41 (12.24) 0.33 (13.42)
2 Maize 0.08 (4.26) 0.23 (6.87) 0.15 (6.07)
3 P. Pea 0.08 (4.26) 0.12 (3.58) 0.10 (3.88)
4 Urd 0.04 (2.13) 0.10 (2.99) 0.06 (2.55)
5 Rose 0.18 (9.57) 0.29 (8.66) 0.21 (8.57)
6 Merigold 0.21 (11.17) 0.41 (12.24) 0.27 (11.12)
7 Vegetable 0.03 (1.60) 0.05 (1.49) 0.04 (1.53)
B Rabi 0.64 (34.04) 1.20 (35.82) 0.85 (34.69)
1 Wheat 0.28 (14.89) 0.41 (12.24) 0.33 (13.42)
2 Mustard 0.12 (6.38) 0.21 (6.27) 0.14 (5.77)
3 Vegatable 0.07 (3.72) 0.09 (2.69) 0.07 (2.65)
4 Gram 0.06 (3.19) 0.14 (4.18) 0.09 (3.67)
5 Lentil 0.03 (1.60) 0.12 (3.58) 0.06 (2.60)
6 Potato 0.08 (4.26) 0.23 (6.87) 0.16 (6.58)
C Zaid 0.36 (19.15) 0.54 (16.12) 0.44 (17.96)
1 Urd 0.19 (10.11) 0.23 (6.87) 0.21 (8.37)
2 Moong 0.08 (4.26) 0.12 (3.58) 0.10 (3.88)
3 Chari 0.05 (2.66) 0.09 (2.69) 0.07 (2.65)
4 Vegetable 0.04 (2.13) 0.10 (2.99) 0.06 (2.55)
Gross Cropped Area (A+B+C) 1.88 (100.00) 3.35 (100.00) 2.45 (100.00)
Figure in parenthesis indicate percentage

Table 3. Cropping intensity of different size group of samples

S. No. Size groups No. of Net Cultivated Gross Cropped Cropping

of farms Farmers land (ha.) Area (ha.) Intensity (%)
1 Marginal 75 0.88 1.88 213.64
2 Small 45 1.61 3.35 208.07
Over All 120 1.15 2.45 213.04

Table 4. Per farm investment on different size group of sample farms (Rs.)

Sl. Particulars Size of Farms Overall Average

No. Marginal Small
1 Buildings 316178.69 (68.24) 559420.60 (74.53) 407394.41 (70.42)
I. Residential 261366.24 (56.41) 520406.00 (69.33) 358506.15 (60.89)
a. Kachcha 10872.53 (2.35) 19268.23 (2.57) 14020.92 (2.42)
b. Pucca 250493.71 (54.06) 501137.77 (66.76) 344485.23 (58.47)
II. Cattle shed 54812.45 (11.83) 39014.60 (5.20) 48888.26 (9.53)
a. Kaccha 14642.24 (3.16) 10327.41 (1.38) 13024.18 (2.54)
b. Pacca 40170.21 (8.67) 28687.19 (3.82) 35864.08 (6.99)
2 Live stock 62569.76 (13.50) 79454.20 (10.58) 68901.43 (12.49)
I. Milch Animals 62569.76 (13.50) 79454.20 (10.58) 68901.43 (12.49)
a. Cow 20942.37 (4.52) 29832.57 (3.97) 24276.20 (4.33)
b. Buffalo 41627.39 (8.98) 49621.63 (6.61) 44625.23 (8.16)
3 Machinery and implements 84618.57 (18.26) 111769.54 (14.89) 94800.18 (17.09)
I. Minor Implements 989.61 (0.21) 1987.92 (0.26) 1363.98 (0.23)
II. Major Implements 83628.96 (18.05) 109781.62 (14.62) 93436.21 (16.86)
Grand Total 463367.02 (100.00) 750644.34 (100.00) 571096.02(100.00)

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 Singh et al.; Asian J. Agric. Ext. Econ. Soc., vol. 41, no. 9, pp. 766-773, 2023; Article no.AJAEES.103700

3.5.2 Per hectare investment on different size influencing investment decisions, such as
group of farms technological upgrades, infrastructure
development, or expansion to new markets.
Investment on different size groups of farms on Understanding these factors can assist farmers
per hectare basis depicted in Table 5. On an in making prudent investment choices [9]. It can
overall average per hectare investment was help identify the barriers to investment and
found Rs. 5039353.42, which was recorded entrepreneurship in the flower farming industry,
higher marginal farms Rs. 526553.43, followed potentially leading to policy recommendations
by small Rs. 466238.72 and respectively. It aimed at fostering a conducive business
concluded that per hectare investment on farm environment.
assets at different size group of farms had
inverse relationship with holding size. The study's findings can have direct implications
Agricultural sectors, including flower farming, for District Varanasi's economy, as it can
play a crucial role in the economic development contribute to the sustainable growth of the flower
of rural areas [3,4]. The study can shed light on farming industry, generate employment, and
the capital structure of flower farms, analyzing boost income levels. Improved economic
the proportion of debt and equity used to finance conditions in the region can lead to enhanced
operations [5,6]. living standards, better access to education and
healthcare, and overall socio-economic
Identifying the optimal capital structure for flower development.
farms can lead to improved financial
performance and increased profitability [7]. A comparison with tropical agricultural territories
Understanding the sources of capital can help in Latin America allows for a broader
farmers make informed decisions regarding understanding of agricultural practices and
investment and expansion. The study can also economic dynamics in different regions [10,11]. It
highlight the challenges farmers face in can reveal similarities and differences in the
accessing financial resources, which can inform capital structure, investment patterns, and overall
policymakers and financial institutions about the financial performance of flower farms in Varanasi
need for targeted support to boost the and Latin America [12,13,14]. The insights drawn
agricultural sector [8]. from this comparative analysis can provide
valuable lessons and best practices that can be
Investigating the investment patterns of flower adapted and applied in both regions, promoting
farms can provide insights into the factors cross-learning and knowledge exchange [15,16].

Table 5. Per hectare Investment (Rs. /ha.)

Sl. Particulars Size of Farms Overall Average

No. Marginal Small
1 Buildings 359293.97 (68.24) 347466.21 (74.53) 354858.56 (70.42)
I. Residential 297007.09 (56.41) 323233.54 (69.33) 306842.01 (60.89)
a. Kachcha 12355.15 (2.35) 11967.84 (2.57) 12209.91 (2.42)
b. Pucca 284651.94 (54.06) 311265.70 (66.76) 294632.10 (58.47)
II. Cattle shed 62286.88 (11.83) 24232.67 (5.20) 48016.55 (9.53)
a. Kachcha 16638.91 (3.16) 6414.54 (1.38) 12804.77 (2.54)
b. Pucca 45647.97 (8.67) 17818.13 (3.82) 35211.78 (6.99)
2 Live stock 71102.00 (13.50) 49350.43 (10.58) 62945.16 (12.49)
I. Milch Animals 71102.00 (13.50) 49350.43 (10.58) 62945.16 (12.49)
a. Cow 23798.15 (4.52) 18529.55 (3.97) 21822.42 (4.33)
b. Buffalo 47303.85 (8.98) 30820.89 (6.61) 41122.74 (8.16)
3 Machinery and implements 96157.47 (18.26) 69422.07 (14.89) 86131.69 (17.09)
I. Minor Implements 1124.56 (0.21) 1234.73 (0.26) 1165.87 (0.23)
II. Major Implements 95032.91 (18.05) 68187.34 (14.62) 84965.82 (16.86)
Grand Total 526553.43(100.00) 466238.72 (100.00) 503935.42 (100.00)

771
 Singh et al.; Asian J. Agric. Ext. Econ. Soc., vol. 41, no. 9, pp. 766-773, 2023; Article no.AJAEES.103700

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