ECONOMIC PERFORMANCE OF VANILLA CULTIVATION (Vanilla planifolia): A CASE STUDY IN KANDY DISTRICT

Abstract

Vanilla (Vanilla planifolia) is the main vanilla species cultivated in Sri Lanka, with cultivation is mainly concentrated in the Kandy District. The Kandy District was selected as the study area to obtain detailed information on vanilla cultivation practices in Sri Lanka. Although vanilla is considered a minor export crop, it has significant potential for expansion due to the favorable agro-climatic conditions available in the country. Therefore, this study aimed to conduct an economic analysis of vanilla cultivation in Sri Lanka to assess its profitability and potential contribution to the national economy. A total of 150 vanilla farmers registered under the Gangai Ihala Korale Divisional Secretariat Division constituted the study population, from which 80 farmers were selected using Simple random sampling. Primary data on the economic aspects of vanilla cultivation were collected through face-to-face interviews, while secondary data were gathered through an extensive literature review. The results revealed that the total annual variable cost was Rs. 15,750, accounting for 29.1% of the total cost, while the total annual fixed cost was Rs. 38,214, representing 70.8% of the total cost. Accordingly, the total annual cost of vanilla cultivation was Rs. 53,964.29. The gross income per acre was Rs. 259,370.10, with a cumulative gross income from the establishment period to the present amounting to Rs. 889,814.60. The average annual yield was 73.38 kg, and the gross profit margin per plant was Rs. 1,134.22 during the final year of harvesting. The net profit margin was calculated as Rs. 205,405.90. The benefit–cost ratio was 4.8, the gross revenue ratio was 0.21, and the expense structure ratio was 2.43. The payback period was estimated at 3.2 years, and the return on investment was 4.37. Since the benefit–cost ratio exceeded unity, the findings indicate that vanilla cultivation is economically profitable. The study highlights that vanilla cultivation represents a promising income-generating activity for farmers and has potential to contribute to rural economic development. Therefore, it is recommended to promote vanilla cultivation, particularly among women and youth. Furthermore, improvements in protection methods against wild animal damage, dissemination of technical knowledge on improved cultivation practices, and enhanced extension services are recommended to strengthen the sustainability and expansion of vanilla cultivation in Sri Lanka.