An Econometric analysis of Value addition in Chilly Industries in Southern Tamil Nadu

The study was an attempt to estimate economics of chili powder and sauce production in major chilly marketing area in Southern Tamil Nadu. Further optimization technique was used to analyse the resource allocation in chillies industries. It was found that cost of production of chilli powder was Rs. 30.15/ pocket (200 gm/pocket) andthe profit earned was estimated as Rs. 14.85per pocket of chilli powder product. Whereas cost of production of chilli sauce was Rs. 31.02/ pocket (200 gm/pocket) and the profit earned was estimated as Rs. 8.98 per pocket of chilli sauce product. The establishment of rural chillies processing industry as a cooperative venture, covering about 1000 chillies growers (5-10 villages) was also found to be economically viable. The linear program analysis indicted that 47,945 Chillies powder pockets/year should be produced @ 160 pockets (200 gm pockets) per day. It fetched thegross income accounting for Rs.21.57 lahks /year .Further It would save the chilly industry scarce resources towards effective supply chain optimization