Economic Tools for Evaluating Grape Business

The capital investment and land-use pattern in Indian agriculture has traditionally promoted cereal-based cropping systems. However, diversification towards more productive and profitable crops like grape and other higher returns crops has become the new milestone to be achieved in Indian agriculture. A shift in area towards horticulture crops as a more viable and attractive alternative is a part of such diversification drive. In the present study production and financial feasibility of grape cultivation was done using primary data collected pertaining to Vijayapur district of Karnataka. The results of study revealed an annual establishment cost of 1, 59, 889/ha with a net returns of 3, 43, 987/ha. The financial feasibility analysis revealed that the investment in grape orchards can be recovered within five years. The net present values (NPV) were positive and high indicating worthiness of investment in grape business. The estimated B.C. ratio (1.42) was also revealed the profitableness of grape enterprise. The internal rate of return (IRR) was found to be (34.10%) found to be much higher than the cost of capital (12.50%), indicating grape cultivation as a highly profitable enterprise.