An assessment of economic viability of jatropha plantation in North East India
International Journal of Energy Sector Management
ISSN: 1750-6220
Article publication date: 15 February 2019
Issue publication date: 16 September 2019
Abstract
Purpose
This paper aims to analyze the economic viability of jatropha plantation in North East India.
Design/methodology/approach
Economic viability is measured through the net present value and the benefit–cost ratio (BCR) at four different production standards along with four different prices of jatropha seed.
Findings
At a very low price and small production, jatropha plantation is economically not feasible. However, when the price of seed increases from INR 5 to 8, BCRs become greater than 1, provided that the discount rate is less than equal to 8 per cent. The minimum threshold of BCR indicates that the threshold of 1.5 BCR at a production level of 1.5 tons/ha can be achieved with a combination of seed price of INR 10 per kg and a discount rate of 1 to 3 per cent. Thus, jatropha cultivation is economically viable but not highly profitable.
Research limitations/implications
Present study analyzes the economic viability of jatropha plantation from purely financial point of view. Social cost and benefit of energy crop plantation is not included in the study. This suggests to adopt social cost–benefit analysis to evaluate the overall feasibility of plantation crops in future studies.
Originality/value
This paper contributes to the academic literature of economic viability of energy plantation crops. Economic viability of jatropha plantation is shown in different cost and revenue conditions with statistical evidences.
Keywords
Acknowledgements
This paper is the outcome of a project entitled Sustainability of Biodiesel Industry in NE India financially supported by SANDEE. The authors gratefully acknowledge this support. The authors wish to thank SANDEE advisor Subhrendu Pattanayak for helpful suggestions and comments. The authors also thank Priya Shyamsundar, Mani Nepal and the SANDEE Secretariat for all the support they have provided towards the execution of the project. The authors found the comments and suggestions from J. M. Baland, M. N. Murty and E. Somanathan helpful.
Citation
Goswami, K., Choudhury, H.K., Hazarika, A. and Tripathi, R. (2019), "An assessment of economic viability of jatropha plantation in North East India", International Journal of Energy Sector Management, Vol. 13 No. 4, pp. 935-959. https://doi.org/10.1108/IJESM-11-2018-0009
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited