Efficiency in the Use of Working Capital among the Small Tea Growers: A Study in Golaghat District of Assam

The advent of tea cultivation on small holding is one of the prominent changes that the Indian tea industry has witnessed in the recent past. Though tea plantation on small holdings is an added fillip to the tea industry of Assam as well as the nation, the small tea growers must attain efficiency in the use of resources for making production commercially remunerative. This study examines the efficiency in the use of working capital among small tea growers in Golaghat district of Assam. Following multi-stage sampling technique, 136 small tea growers were selected as samples. Economic efficiency in the use of working capital has been determined by comparing the marginal value productivity of working capital with its marginal cost and for this Cobb-Douglas production function has been worked out. It is found that marginal value productivity of working capital is much higher than the marginal cost of capital and hence the level of working capital use is less than optimum. It indicates that there is still scope for attaining economic optimum through increase in the proportion of working capital in the factor combination.