Determination of producer's surplus and consumer's surplus in organic rice

A study was undertaken with an objective of empirical assessment of consumer's surplus and producer's surplus in organic rice. For this purpose. a sample of 30 consumers and 30 producers was chosen purposively from Bangalore city and Shivamogga taluk respectively. Since organic rice consuming population could not be found in organic rice producing area (Shimoga), it was decided to choose the 30 consumers of organic rice in Bangalore city. The study revealed that most of the consumers of organic rice were well educated having health consciousness. The other factors affecting consumption of organic rice include, absence of chemical residues, sweet aroma, taste, media advertisement, etc. The consumer surplus was estimated to be ` 9.42 kg-1 of organic rice indicating that the consumers are willing to pay an extra price of ` 9.42 kg-1 over and above the market price. The producers, obtained Rs. 14.19 kg-1 of organic rice over and above the prevailing market price thus earning better profits in organic rice cultivation.

Author : D Nagaraj and B Chinnappa