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Risk and Diversification in Coffee Plantations in India: An empirical analysis

Publication Type : Journal Article

Publisher : International Journal of Agricultural Resources

Campus : Bengaluru

School : School of Business

Verified : Yes

Year : 2018

Abstract : Coffee cultivators in India are prone to risks of different types. Risks associated with coffee cultivation arise due to variability in yields, volatility in prices, uncertainty in inputs, and problems associated with markets. With the primary information gathered from farmers in one of the largest coffee growing districts of India, the study analyses the risks and identifies sources of those risks in coffee plantations. As the coffee growing regions in India are also suitable for cultivation of different varieties of crops, we examine, through a quantitative analysis, the possible crop diversification scenarios before the farmers. Portfolio analysis using Markowitz mean variance theory reveals the relative risks associated with each crop and suggests on the portfolio of crops that would help farmers in minimising risks. The study, using the mix method of research, also tries to understand the extent to which coffee plantations are diversified, the reasons behind the reluctance of the farmers towards crop diversification and the policies that are needed to support diversification.

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