Decomposition Analysis for Impact of Backward Integration on Input Use Pattern and Profitability of Chilli Farmers in Andhra Pradesh

The present study find out the was impact of backward integration on chilli farmers in terms of input use pattern and profitability in Andhra Pradesh. Multistage random sampling was selected adopted for the sample selection. A total of 128 sample were taken. Two major Agribusiness firms, i.e., ITC and Synthite that are following backward integration in chilli farming in Prakasam district were purposively selected for the study. The decomposition analysis showed that the per hectare returns of integrated farming was 13.28 per cent higher than that of non-integrated farming. The integrated technology component was contributing 3.7 per cent to the total increase in output. The total contribution of changes in the levels of input use to the outcome differences between the two groups was 9.58 per cent.

Decomposition analysis was used to analyse the impact of backward integration on input use pattern and profitability of chilli farmers, the farmers who are following backward integration are getting higher income than farmers who are not following backward integration.