(Final Report)

Submitted to :
The Commissioner,
Department of Sericulture
Government of Andhra Pradesh
Hyderabad

Team Members

Dr.K.J.S.Satyasai
Dr.G.H.V.Ratna Babu
Associate Team Member

Shri B.N. Lakshmipathaiah

Joint Director (retd.), CSTRI, Bangalore

Overall Guidance & Review

Sri J.R.Sarangal, CGM
Dr.P.Renganathan, GM
Sri S.K. Bhatnagar,DGM

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Acknowledgements
We, on behalf of National Bank
Consultancy Services P. Ltd. (Nabcons), a
wholly owned subsidiary of National Bank
for Agriculture and Rural Development
(NABARD), Mumbai is grateful to the
Department
of
Sericulture
(DoS),
Government of Andhra Pradesh for
entrusting the present assignment. We
gratefully acknowledge the assistance and
co-operation received from DoS and its
staff at head office as well as district level
during the study. Help and inputs from
DDMs of NABARD from all the districts
especially
Chittoor, Nalgonda, East
Godavari and Mehaboobnagar
need
appreciation. Special mention has to be
made of the interactions we had with the
Commissioner, Additional Director and
other staff during the presentation of the
draft report in the Department of
Sericulture.
Suggestions from there
greatly eased our task of finalising the

Acknowledgements
List of Tables
List of Figures
List of Boxes
List Of Annexures
List of Project Models Suggested
SUMMARY & ACTION POINTS ................................................................................. i
SUMMARY..................................................................................................................... i
Objective .......................................................................................................................... i
Present status.................................................................................................................... i
Demand for silk goods ................................................................................................... iii
Strategy and Policy Issues ............................................................................................. iv
Physical Projections ........................................................................................................ v
Financial Projections...................................................................................................... vi
Implementation .............................................................................................................. vi
Action points................................................................................................................ viii
CHAPTER I INTRODUCTION ..................................................................................... 1

Silk industry and Sericulture sector An overview ....................................................... 1

Why the Project?............................................................................................................. 5
Vision of DoS ................................................................................................................. 6
Analytical Framework .................................................................................................... 6
Basis for project targets .................................................................................................. 8
Structure of the project report ......................................................................................... 8

CHAPTER II SERICULTURE IN ANDHRA PRADESH.......................................... 9

Who is behind? ............................................................................................................. 10
Farm sector activities ................................................................................................... 11
Non-farm sector ............................................................................................................ 28
CHAPTER III DEMAND FOR SILK AND SILK FABRICS................................. 35
Domestic Demand......................................................................................................... 35
Export Market for Silk .................................................................................................. 40
Imports .......................................................................................................................... 43
Imports .......................................................................................................................... 44
Demand Projection........................................................................................................ 45
Future Outlook .............................................................................................................. 46
CHAPTER IV ISSUES FOR STRATEGY AND POLICY ....................................... 49
Geographical spread of the activity .............................................................................. 49
Farm Sector................................................................................................................... 52
Non-Farm Sector - Reeling & Twisting........................................................................ 56
Structure of the industry and organisation of production ............................................. 59
Scope for Contract Farming in sericulture.................................................................... 59

CHAPTER V PLAN OF ACTION FOR PROJECT................................................ 64

Physical Projections ...................................................................................................... 64
Financial Projections..................................................................................................... 72
CHAPTER VI PROJECT MODELS......................................................................... 76
Establishment of Kissan Nurseries ............................................................................... 76
Establishment of Commercial Chawki Rearing Centres .............................................. 76
Installation of Drip Irrigation System ........................................................................... 76
Mulberry Cultivation and Silkworm Rearing ............................................................... 76
Reeling Sector............................................................................................................... 78
Reeling-cum-Twisting .................................................................................................. 79
Twisting Units............................................................................................................... 80
Large-Scale Reeling-cum-Twisting .............................................................................. 80
CHAPTER VII CREDIT FOR THE PROJECT......................................................... 81
Credit Needs of sericulture sector................................................................................. 81
Existing credit arrangements......................................................................................... 82
CHAPTER VIII IMPELMENTATION, MONITORING & EVALUATION OF
THE PROJECT ........................................................................................................ 86
Implementation & Role of Institutions ......................................................................... 86
Monitoring and Evaluation ........................................................................................... 90
EPILOGUE ..................................................................................................................... 92
What the Project Achieves by the end of XI Plan ?...................................................... 92
Funds required for the project implementation............................................................. 93
ANNEXURES AN1.. AN15
APPENDIXAP1

./
FARM SECTOR MODELS
NON-FARM SECTOR MODELS
Reeling.
Reeling-cum-Twisting
Twisting
Large-scale Reeling-cum-Twisting

1
42

42
77
89
98

! 0
Table 1.1. Area under mulberry in major states...........................................................................................3
Table 1.2. Production of cocoons in major states..........................................................................................4
Table 1.3. Productivity of cocoons in major states ........................................................................................4
Table 2.1. Sericulture Development in Andhra Pradesh - A Glance............................................................9
Table 2.2. Area under mulberry and cocoons production in Andhra Pradesh .........................................11
Table 2.3. District-wise mulberry area and cocoon production ..................................................................13
Table 2.4. Revised area and production estimates.......................................................................................15
Table 2.5. Spread of sericulture activity within districts, 2003-04 .............................................................17
Table 2.6. Progress of BV programme in Chittoor district ........................................................................21
Table 2.7. Cocoon transactions in markets in different regions ................................................................25
Table 2.8 Growth rates in quantity of cocoon arrival, average price and value.....................................27
Table 2.9. Correlation matrix of prices across markets ............................................................................27
Table 2.10. Status of reeling units by 1999..................................................................................................30
Table 2.11. Status of reeling units based on feedback from districts (2003-04).........................................30
Table 2.12. Status of Twisting units ,1999..................................................................................................31
Table 2.13. Status of twisting units as per data from districts, 2004..........................................................31
Table 2.14. Particulars of Silk Handloom Weaves Cooperative Societies visited ....................................33
Table 3.1 Consumption of silk, cotton and synthetic blend fabric in India................................................35
Table 3.2. Expenditure on different types of fabrics vis--vis income per capita.....................................36
Table 3.3. Trends in implicit unit prices and indices for different fabric materials...................................36
Table 3.4. Urban- rural divide in annual per capita consumption of silk vs. other fabric types ...............37
Table 3.5. Distribution of consumption of silk among income groups in India.........................................38
Table 3.6. Region-wise distribution of silk consumption ............................................................................38
Table 3.7. Parameters of consumption (revealed demand) function for silk fabric...................................39
Table 3.8. Production of raw silk in different countries. ............................................................................40
Table 3.9. Indias total exports and share of textiles and silk exports......................................................41
Table 3.10. Product category-wise exports of mulberry silk goods............................................................42
Table 3.11. Country-wise silk export earnings ...........................................................................................43
Table 3.12. Import statistics .........................................................................................................................44
Table 3.13. Countrywise import of raw silk .................................................................................................44
Table 3.14. Secular trend in raw silk* production and imports..................................................................45
Table 3.15. Demand projection for silk based on trends in per capita silk consumption...........................45
Table 4.1. Contours of sericulture activity in the Andhra Pradesh ...........................................................49
Table 5.1. Demand projection for silk and cocoons ...................................................................................64
Table 5.2. Projection of mulberry area required meeting silk demand ......................................................65
Table 5.3. District-wise area expansion programme for V-1 ......................................................................65
Table 5.4. Projected Cocoon and Silk Production Path..............................................................................66
Table 5.5. Estimated requirement of dfls and rearing sheds.......................................................................67
Table 5.6. Reeling basins required and feasible ..........................................................................................69
Table 5.7. Cocoons to be consumed by reeling basins proposed................................................................69
Table 5.8. Cumulative number of reeling units to be installed/revived ......................................................70
Table 5.9. Additional reeling units to be installed .......................................................................................70
Table 5.10. Silk production path from the proposed reeling capacity ........................................................71

Table 5.11. Projected twisting capacity requirement .................................................................................. 71

Table 5.12. Annual Financial outlay needed for bringing area under V1 and requirements for Kissan
Nursery.................................................................................................................................................. 72
Table 5.13. Projection of financial outlay for installing reeling and twisting capacity............................. 73
Table 5.14. Working capital needs of reeling units. ................................................................................... 74
Table 5.15 Cluster-wise location of proposed new reeling basins........................................................... 75
Table 6.1. Farm Models and Break Even Prices under Various Scenarios ........................................... 77
Table 7.1. Activity-credit need matrix for sericulture sector ...................................................................... 81
Table 7.2. Summary projections of financial outlays required for different activities ............................. 82
Table 7.2. NABARD refinance to sericulture sector (farm sector) ........................................................... 83
Table 7.3. District-wise NABARD Refinance to Sericulture (farm sector)................................................ 83

)
Figure 1. Activity Chain In Silk Industry ......................................................................................... 2
Figure 2. Trends in mulberry area, cocoon production, productivity and raw silk production .... 12
Figure 3. Comparative mulberry area as per DoS and revision, region-wise, 2003-04 .............. 16
Figure 4. Trends in market arrivals in different cocoon markets in the state............................... 25
Figure 5. BV and CB prices over three years ................................................................................ 28
Figure 6. Trends in per capita income (nominal) and expenditure on silk, cotton and synthetic
blends (Rs)........................................................................................................................... 37
Figure 7. Trend in consumption of silk (metres per capita) in rural and urban areas.................. 38
Figure 8. Trend in expenditure on silk (Rs. per capita) in rural and urban areas ........................ 39
Figure 9. Country-wise shares in Indias
silk export earnings, 1999-00
.. 43
Figure 10. Country-wise shares in Indias silk export earnings, 2002-03 .................................. 43

1
Box 2.1.
Box 3.1.
Box 3.2.
Box 8.1.

Benefit derived from National Sericulture Project (NSP) ...........................................................10

Building brand image of Pochampally handloom products........................................................47
Silk Mark Scheme: Out of the cocoon at last! .............................................................................47
Activities of Serifed .......................................................................................................................87

00
ADS/DDS
APCO
APCOB
APMIP
APSSRDI
BCR
BEP
BNV
BV
CB
CBU
CDP
CRCs
CSB
CSRTI
CSTRI
DCCB
DDM
DFLs
DIC
DoS
DPAP
DRDA
ICBU
ICT
IRR
LDM
LSPs
MERU
MFA
MIS
MOU
MT
NABARD
NABCONS
NCDC
NFTSC
NGO
NSP
PDRT
PIT
REDS
SERIFED
SHG
SLBC
TSC

Assistant/Deputy Director of Sericulture

Andhra Pradesh State Handloom Weavers Cooperative Society
Andhra Pradesh State Cooperative Bank Ltd.
Andhra Pradesh Micro Irrigation Project
Andhra Pradesh State Sericulture Research and Development Institute
Benefit Cost Ratio
Break Even Point
Bivoltine Nucleus Village
Bivoltine
Cross Breed
Cottage Basin Units
Catalytic Development Plan
Chawki Rearing Centers
Central Silk Board
Central Sericultural Research and Training Institute
Central Silk Technological Research Institute
District Cooperative Central Bank
District Development Manager
Disease Free Layings
District Industries Commission
Department of Sericulture
Drought Prone Area Programme
District Rural Development Agency
Improved Cottage Basin Units
Information & Communication Technology
Internal Rate of Return
Lead District Manager
Licensed Seed Producers
Multi-End Reeling Units
Multi - Fibre Agreement
Management Information System
Memorandum of Understanding
Metric Tonnes
National Bank for Agriculture and Rural Development
NABARD Consultancy Services
National Cooperative Development Council
Non-Farm Technical Service Centre
Non-Governmental Organisation
National Sericulture Project
Project Direction and Review Team
Project Implementation Team
Rural and Environmental Development Society
The Federation Of Sericulturists & Silk Weavers Coop. Societies Ltd.
Self-Help Group
State Level Bankers Committee
Technical Service Centres

1
Annexure 1
Annexure 2
Annexure 3
Annexure 4
Annexure 5
Annexure 6
Annexure 7
Annexure 8
Annexure 9
Annexure 10
Annexure 11
Annexure 12
Annexure 13
Annexure 14
Annexure 15
Appendix 1

District-wise production and productivity of mulberry cocoons in

Andhra Pradesh during 2003-04: Reported by DoS vis-a-vis
Assessed by us
Variety-wise area under mulberry during 2003-04
Estimated financial outlay for installation of drip irrigation system
in mulberry plantations under Andhra Pradesh Micro Irrigation
Project (APMIP)
Races of silkworms reared in Andhra Pradesh
Rearing activity in Andhra Pradesh at a glance
Seed farms in Andhra Pradesh and their performance during
2001-02 and 2002-03
Infrastructure with regard to production of disease-free layings
(DFLs) in the state and their operation during 2003-04
Market-wise cocoon transactions in the Cocoons Markets of
Andhra Pradesh during the past 3 years
Time series data on average price realisation of cocoons transacted
in some select Government Cocoon Markets in Andhra Pradesh
vis--vis Ramanagaram in Karnataka
Time series data on quantity of cocoons transacted in some select
Government Cocoon Markets in Andhra Pradesh vis--vis
Ramanagaram in Karnataka
Time series data on value of cocoons transacted in some select
Government Cocoon Markets in Andhra Pradesh vis-a-vis
Ramanagaram in Karnataka
Monthly transaction details of major Government cocoon markets
in Andhra Pradesh during 2003-04
Weighted average prices of crossbreed and bivoltine reeling
mulberry cocoons in Karnataka
Non-Farm Technical Service Centre (NFTSC)-wise production of
raw silk during 2003-04
Production of raw silk in the Government silk reeling units in
Andhra Pradesh during 2003-04
Characteristics of CSR Hybrids

AN-1
AN-2
AN-3
AN-4
AN-5
AN-6
AN-7
AN-8
AN-9
AN-10
AN-11
AN-12
AN-13
AN-14
AN-15
AP-1

/
FARM SECTOR
Model 1
Large scale production of mulberry saplings through Kissan Nurseries
Models 2 & 3 Establishing Commercial Chawki Rearing Centres - CSR Bivoltines
(Project Model No. 2) and Crossbreed races (Project Model No. 3)
Model 4
Model 5
Model 6
Model 7
Model 8
Model 9
Model 10

Approved unit cost for installation of drip irrigation system in mulberry

under APMIP
Mulberry cultivation (V-1 variety) in one acre and rearing of CSR
hybrid races with 10 crops per year
Mulberry cultivation (V-1 variety) in one acre and rearing of CSR
hybrid races with 5 crops per year
Mulberry cultivation (V-1 variety) in two acres and rearing of CSR
hybrid races with 10 crops per year
Mulberry cultivation (V-1 variety) in one acre and rearing of
Crossbreed races with 10 crops per year
Mulberry cultivation (V-1 variety) in one acre and rearing of
Crossbreed races with 5 crops per year
Mulberry cultivation (Improved varieties) in one acre and rearing of
Crossbreed races with 10 crops per year

1
6
23
24
27
30
33
36
39

NON-FARM SECTOR

Model
Model
Model
Model
Model
Model
Model
Model
Model
Model

11
12
13
14
15
16
17
18
19
20

REELING
Reeling : Twin charka (motorised)
Reeling : Twin charka for dupion silk (motorised)
Reeling : Four charka (motorised)
Reeling : 6 basin cottage basin (with basic machinery) for CB cocoons
Reeling : 6 basin improved cottage basin (with boiler and jettebout)
Reeling : 10 basin improved cottage basin (with boiler and jettebout)
Reeling : Establishing new multi-end reeling unit (6 basin)
Reeling : Establishing new multi-end reeling unit (10 basin)
Economics of a revived multi-end reeling unit (6 basin)
Economics of a revived multi-end reeling unit (10 basin)

42
46
50
54
58
62
66
70
73
75

Model 21
Model 22
Model 23

Model 24
Model 25
Model 26

Model 27
Model 28

REELING - CUM TWISTING

Four charka (motirised) -cum - twisting (160 spindles) for weft yarn
6 Basin cottage basin (with basic machinery)- cum- twisting (200 spindles)
for weft and warp yarns
6 Basin improved cottage basin (with boiler and jettebout) - cum- twisting
(240 spindles) for warp yarn

TWISTING
200 spindles twisting unit for weft
200 spindles twisting unit for warp and weft
240 spindles twisting unit for warp
LARGE SCALE REELING - CUM - TWISTING
24 Basin improved cottage basin (with boiler and jettebout) - cum- twisting
(480 spindles) for warp and weft yarns
48 Basin improved cottage basin (with boiler and jettebout) - cum- twisting
(960 spindles) for warp and weft yarns

77
81
85

89
92
95

98
103

//

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ilk industry in India involves both farm and non-farm sector participation and provides
income and employment to cross-section of rural as well as urban population. Silk is a
natural fibre and no manmade fibre till date could excel the grandeur and the splendour of this fibre. It
is the most preferred raw material for making premium sarees and dress material since ages and no
wonder silk, once upon a time, was valued at par with gold on weight basis. In Asia, silk clothes were
part of the royal wardrobe. Even in modern times, in India silk sarees and dhotis are essential
customary gifts exchanged during wedding and other major occasions. Apart from uses in textiles, silk
has got quite a wide range of uses in human health care (stitches to body), nutrition (as protein
supplement), cosmetics (as powder in atomised form), diagnostics (as bio-sensors), etc.
Sericulture encompasses all the activities involved in raising the mulberry plantation, rearing silk
worms on the mulberry leaves for obtaining cocoons, reeling the silk thread and twisting it to make it
suitable for weaving. It is an important sector given its income and employment generation potential.
Further, it also provides employment and income in associated activities such as (i) grainages, chawki
rearing centres, seed farms and mulberry nurseries which provide backward linkages and (ii) dyeing,
weaving, garment making and marketing at different stages which provide forward linkages. Different
activities in silk industry are shown in Figure 1.
The sector has unique advantages over other sectors, such as:
It is an evergreen sector as demand for silk clothing has continued for ages.
It is basically a small farmers activity.
Land requirement is relatively less.
Income per unit area is high.
No need of pesticide use and no residue problems.
Can take one batch of rearing once in every two months. With careful planning, one can take
one crop every month and thus regular cash flow can be obtained.
Can engage entire family throughout the year.
Mulberry plantation is conducive for soil conservation.
It employs skilled and unskilled labourers in sub-sectors like rearing, reeling, twisting,
weaving, trading, etc.

Figure 1. Activity Chain In Silk Industry

#

/ # !

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Mulberry
leaves

Early age worms

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Silkworm eggs (DFLs)

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#6 '

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(#

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(7!5

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5# $#

8)

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Sale of raw silk

Silk fabric

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dyeing, printing
!

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Domestic/ export sales

Sericulture in India
In India, silk industry as a whole employed about 70 lakh persons to produce silk fabrics worth Rs
8750 crore in 2000-01. This includes about 5 lakh persons engaged in reeling industry, let alone the
weavers, earning their livelihood from the sector even while giving expression to their creativity in
weaving and design patterns and other persons employed in supporting activities like dyeing,
marketing, etc.
There are four types of silk viz. mulberry, eri, tasar and muga. India is the only country to produce all
these types of silk. Mulberry silk accounts for 90 per cent of the silk production. The estimated annual
silk production is 18000 tonnes in the country. Our domestic demand is placed at 25000 tonnes per
annum, leaving a gap between demand and supply, most of which is met through imports from
countries like China, Brazil, etc.
State-wise growth of mulberry-based sericulture sector over the past two decades with reference to
area under mulberry, cocoon production and productivity is presented in Tables 1.1 to 1.3. The area
under mulberry plantation declined in recent years and reached 1,94,463 ha by 2002-03. While the
production of cocoons is steady over last two years or so with a production of 1,28,181 tonnes of
cocoons in 2002-03, the productivity per ha of mulberry area increased from 406.16 kg in 1995-96 to
659 kg in 2002-03.
Karnataka, Andhra Pradesh, West Bengal, Tamil Nadu and Jammu & Kashmir are the traditional
states for the sericulture activity. Apart from these, 12 more states have started this activity under the
World Bank aided National Sericulture Project (NSP), viz. Kerala, Maharashtra, Gujarat, Madhya
Pradesh, Uttar Pradesh, Bihar, Rajasthan, Punjab, Haryana, Assam, Himachal Pradesh and Orissa.
Table 1.1. Area under mulberry in major states

(ha)
State

Andhra Pradesh
Jammu & Kashmir
Karnataka

1980-81 1990-91 2000-01 2001-02 2002-03

16,775 76,348 48,442 52,225

(10.2)
(24.1)
(22.4)
(22.5)
501
1,803
5,478
5,740
(0.3)
(0.6)
(2.5)
(2.5)
1,16,313 1,49,785 1,12,557 1,16,158
(70.7)
(47.3)
(52.1)
(50.1)

Growth rate (%)

1990-91 over 2000-01 over 2002-03 over

1980-81
1990-91
1990-91
54,384
16.4
-4.4
-2.8
(28.0)
5,986
13.7
11.8
10.5
(3.1)
88,903
2.6
-2.8
-4.3
(45.7)

Tamil Nadu

16,500
(10.0)

36,798
(11.6)

11,060
(5.1)

13,096
(5.6)

5,394
(2.8)

8.4

-11.3

-14.8

West Bengal

10,194
(6.2)

17,165
(5.4)

18,106
(8.4)

18,794
(8.1)

12,569
(6.5)

5.3

0.5

-2.6

4,304 34,711 20,278 26,063 27,227

(2.6)
(11.0)
(9.4)
(11.2)
(14.0)
1,64,587 3,16,610 2,15,921 2,32,076 1,94,463
(100.0) (100.0) (100.0) (100.0) (100.0)

31.0

-5.2

-2.0

6.8

-3.8

-4.0

Others
All India

Note: Figures in parentheses represent per cent share.

Source : Sericulture & Silk Industry Statistics 2003, CSB, Bangalore.

Table 1.2. Production of cocoons in major states

(tonnes)
State

Andhra Pradesh
Jammu &
Kashmir
Karnataka
Tamil Nadu
West Bengal
Others
All India

1980-81 1990-91 2000-01 2001-02 2002-03

Growth rate (%)

1990-91
2000-01
2002-03
over 1980- over 1990- over 199081
91
91
50,664
12.9
1.6
3.8

9,560

32,262

37,651

42,982

(16.4)
1,036

(27.7)
700

(30.2)
882

(30.8)
714

(39.5)
849

(1.8)
38,066
(65.4)
5,600

(0.6)
59,033
(50.6)
11,800

(0.7)
66,518
(53.4)
6,400

(0.5)
73,860
(52.9)
5,882

(0.7)
55,851
(43.6)
4,005

(9.6)

(10.17)

(5.1)

(4.2)

(3.1)

3,700
(6.4)
246

10,780
(9.2)
2,088

11,328
(9.1)
1,884

14,329
(10.3)
1,849

15,171
(11.8)
1,641

(0.4)

(1.8)

(1.5)

(1.3)

(1.3)

58,208 116,663 124,663 139,616 128,181

(100.0) (100.0) (100.0) (100.0) (100.0)

-3.8

2.3

1.6

4.5

1.2

-0.5

7.7

-5.9

-8.6

11.3

0.5

2.9

23.8

-1.0

-2.0

7.2

0.7

0.8

Note: Figures in parentheses represent per cent share

Source : CSB (2004)

Table 1.3. Productivity of cocoons in major states

(kg/ha of mulberry)
State

422.6
388.2

777.2
161.0

823.0
124.4

327.3

394.1

591.0

635.9

Growth rate (%)

2002-03
1990-91 2000-01
over
over
over
1990-91
1990-91
1980-81
931.6
6.8
-2.9
6.3
141.8
-8.0
*
-8.4
628.2
4.0
1.9
4.1

Tamil Nadu

339.4

320.7

578.7

449.1

742.5

-0.6

6.1

7.2

West Bengal
Others
All India

363.0
105.8

628.0
60.2

625.6
92.9

762.4 1,207.0
70.9
60.3

368.5

577.4

601.6

0.0
4.4
4.6

5.6
0.0

353.7

5.6
-5.5
0.4

Andhra Pradesh
Jammu & Kashmir
Karnataka

1980-81 1990-91 2000-01 2001-02 2002-03

569.9

Figures in parentheses represent per cent share

Source : CSB (2004)

659.2

5.0

*Not in the normal range

Three important conclusions emerge from the data given in the Tables 1.1 to 1.3. First, the area under
mulberry has declined over time after 1990-91 at all-India as well as the states. Second, productivity
of cocoons per ha of mulberry area generally improved across the states. And, due to this, cocoon

production has not fallen down and in fact, increased compared to 1990-01. Third, the share of
Andhra Pradesh in mulberry area improved from about 24 per cent in 1990-91 to 28 per cent in 200203. Due to large gains in cocoon productivity, share in production has improved from 27.7 to 39.5 per
cent during the same period.

5'" !'#

2# !9

Andhra Pradesh, as can be seen from the data given in above tables, occupies second position in the
country after Karnataka, recording 54,384 ha of the mulberry area and 50,664 tonnes of cocoon
production in 2002-03. Production of cocoons further increased to 53693 tonnes in 2003-04.
Assuming a renditta of 9, raw silk production estimated from these cocoons was 5965 tonnes.
However, the actual production of raw silk in the State is stated to be only one-sixth of this estimate.
This is because of the inadequate reeling capacity existing in the State. As per an estimate of the
Department of Sericulture (DoS), Govt. of Andhra Pradesh (GoAP) 22372 reeling basins are required
to convert the entire production of reeling mulberry cocoons into raw silk. Against this, only 4286
basins had been established in the state. Further, a major percentage of these basins have become nonoperational/closed down during the past few years. As a result, during the last three years, on an
average, only 10 per cent of the total cocoon production was traded within the state and the rest was
sold in Karnataka markets. Even this quantity of cocoons was not being processed within the state, as
Karnataka reelers purchase bulk of the cocoons marketed within Andhra Pradesh.
Sale of bulk of cocoon production outside the state has serious implications for our state economy.
First, due to sale of cocoons outside the state, the exchequer loses heavily in terms of market cess (1%
ad valorem each from farmer and reeler). It works out to Rs 11.70 crore per annum, taking the
average price realised for cocoons at Rs.117.14 /kg during 2003-04. Second, the employment
potential from the reeling and twisting activities cannot be harnessed fully. An estimated loss of
employment to the state would be 37.3 lakh person days per annum (assuming that a two-charka unit
churns out 4 kg of fine silk per day employing 3 workers). As the activity is done throughout the year,
the quality of employment provided is superior in view of stability and continuity. Third, the state
also loses about Rs 5.60 crore per annum in terms of market fee on sale of raw silk in silk exchange.
Fourth, the farmers are showing preference for cocoon markets outside the state on account of better
reeler participation. This acts as a natural barrier for the spread of sericulture activity beyond the
districts neighbouring Karnataka. Such a situation does not encourage local reeling industry for want
of competitive advantage vis--vis Karnataka reelers. Last, in the absence of development of forward
linkages, especially local reeling capacity, the cascading impact of such linkages on the local rural
economy will be missed.

About the current exercise

In the light of the above, a comprehensive plan is needed for developing the sericulture sector by
integrating and strengthening various sub-sectors. DoS has rightly decided to get a plan prepared for
integrated development of sericulture in Andhra Pradesh. This task was entrusted to NABCONS
(NABARD Consultancy Services P. Ltd.), a fully owned subsidiary of NABARD, the apex bank for

agriculture and rural development in the country.

below.
1.
2.
3.
4.

The terms of reference of the study are as given

Replacement of traditional mulberry varieties with V-1

Promoting contract farming
Strengthening/Integrating of reeling, twisting and weaving sectors of sericulture industry
Suggest independent monitoring and evaluation of action plan.

The long-term vision of DoS is to see the state as a sericulture-major with a strong and well-integrated
sector in place. The specific target towards this goal is to raise the area under mulberry to 99748
hectare by 2020.* This would provide 1,58,750 MT of reeling cocoons, of which 9.7 per cent should
be of bivoltine races. By improving the quality of cocoons and renditta to 8.0 for cross breed (CB) and
6.5 for bivoltine (BV) cocoons, the silk production by 2020 is targeted to reach a level of 20264 MT
(of which, BV silk is 2240 MT). Further, it is envisaged to enhance the disease free layings (dfls)
brushed from 1800 per ha at present to 3750 per ha by 2020. For this, leaf productivity should double
by 2020 AD to a level of 30000 kg/ha, which needs propagation of high yielding varieties like V-1.
This would result in trebling of productivity of cocoons to 2425 kg/ha by 2020 AD. However, nonfarm sector activities required to absorb the projected increase in cocoon production are not
envisioned in the document.
"!

/#5

We have taken time horizon up to the end of XI Plan, i.e. 2011-12, for the present project. For the
present study, the entire sector is divided into 4 sub-sectors, viz.
(a) on-farm activity covering mulberry cultivation and silkworm rearing,
(b) reeling,
(c) twisting, and
(d) weaving.
The basic premise behind the approach to the present assignment is that the demand for silk is a
derived one emanating from the demand for silk fabric and garments. The demand for finished silk
products gives rise to development of weaving sector. Thus, weaving sector holds the key for
development of the other sub-sectors. Hence, weaving pockets are also studied as to their problems
and prospects, sourcing of raw material, etc. Special emphasis is laid on reeling sector, as this sector
is the most crucial but the most troubled link in the entire silk supply chain. Crucial, as it converts
easily perishable cocoons into stable and more durable silk for end use in fabric making. Troubled,
because reeling sector bears the maximum brunt of volatility of cocoon and silk prices.
We have analysed the per capita silk fabric consumption at all India level from 1995 to 2002 and
projected the total consumption of silk fabric using the population projections till 2012. From these
projected series, raw silk consumed and from there cocoon production required are estimated. Taking
*

Departments Manual documented by Dr.MCR Human Resource Development Institute of Andhra Pradesh, Hyderabad

the share of the state in all India cocoon production during 2002-03, we estimated the quantity of
cocoons to be produced by the state till 2011-12. This cocoon production is converted into area terms
using estimated productivity growth path. Norms and detailed assumptions used for these calculations
are discussed at appropriate places in the report. These demand-based area estimates are compared
with possible area expansion plan and gaps are estimated. The aim is to reduce the gap by 2012 to the
minimum.

Coverage
The project is proposed to be implemented in all the potential districts of the state. But an in-depth
study has been conducted in Rayalseema districts of Chittoor and Ananthapur, which account for bulk
of the activity. Here, sericulture is a traditional activity and accounts for about 80 per cent of the total
area under mulberry. In these two districts, all the four sub-sectors are covered. Besides, three nontraditional districts viz. Nalgonda, Mahaboobnagar and East Godavari districts are also taken up for
the visits so as to cover weaving pockets available, in addition to other sub-sectors, to gain insights
into the problems and prospects of sericulture development in non-traditional districts. In case of
these, as also the other districts, extensive secondary information from the district as well as state level
offices of the DoS have been collated.

Data base
The study is based on both secondary and primary sources. For the purpose of assessing the potential,
data on area, production and productivity of mulberry, varieties of mulberry being cultivated, cocoon
production and productivity, infrastructure available for the supply of inputs, marketing etc., and the
status of reeling and twisting activities in the districts are collected from the DoS, as also through
discussions with the concerned officials of DoS at the district level. Data on different technical and
financial parameters, aspects relating to marketing, such as demand, prices, etc., were collected from
sample mulberry growers/silk worm rearers, reelers and twisters, CSB and published sources.
The study focuses on existing level of credit support and assess the credit requirement for
implementing the proposed Integrated Master Plan for the state as a whole. Based on the study, a
Banking Plan has been prepared with year-wise physical and financial programme for improving the
cocoon production and strengthening reeling/twisting activities in the State. An institutional
mechanism for implementation and monitoring and evaluating the system has been suggested.
The following work programme has been followed for the study:
a. Collection of secondary data from the state and district level offices of DoS, cocoon
markets, financing banks, etc.
b. Collection of primary data from silkworm rearers, reelers, twisters, weavers, weavers
cooperative societies and traders through suitable questionnaires and discussions.
c. Visits to Central Silk Board and Central Silk Technological Research Institute,
Bangalore, SERIFED, Dharmavaram and Hyderabad, APSSRDI, Hindupur.
d. Visits to cocoon market and reeling units in Ramanagaram, Karnataka.

2# ! !

(#!

On thorough analysis of data collected from DoS, Hyderabad and field studies, many anomalies in
respect of mulberry area, cocoon productivity per ha of mulberry area, etc., were observed. It was
found that these anomalies were on account of large scale uprooting of mulberry plantations, which
did not reflect in the data maintained at the state level. We used detailed data obtained from district
level units of DoS and field observations to reassess the mulberry area and cocoon production districtwise and found that the present area under mulberry in the state would be about 30000 ha, against
53,693 ha as reported for 2003-04. We used this reassessed area as basis for further projections.
!

) !'#

2#
2
# !

The report is presented in two parts. Part I is the main report. The structure of the remaining portion
of the main report (Part I) is given below.
Chapter II that follows gives the present status of the sericulture sector and resources available
covering both farm and non-farm sectors. Demand for silk and silk fabric is covered in the subsequent
Chapter. Both domestic and export demand are discussed.
Chapter IV discusses the strategies and policy support for strengthening the sericulture sector in the
light of the past experiences. Options for the spatial and temporal spread of the activity, small farmer
coverage, promotion of different mulberry varieties, choice of reeling and twisting technology,
organisation of production, scope of contract farming, etc., are evaluated.
Project goals and plan of action for achieving them both in physical and financial terms are outlined in
Chapter V. Project modules, both in farm and non-farm sectors, are summarised in Chapter VI. Credit
needs for the sector and the present level of credit flow are discussed in Chapter VII.
Role of Institutions, issues in implementation, monitoring and evaluation mechanism for the proposed
project are discussed in Chapter VIII.
Part II gives details of various model projects suggested in the Chapter-VI of Part I.

C
F

3C

F
3F C

n this chapter we discussed the present status of sericulture sector in the state. After a quick
glance at the achievements of the state over time and the role played by DoS in the
development of this sector, status of farm and non-farm sector activities in the state are discussed
in detail. The discussion is based on the data collected from DoS, its district offices and field
visits undertaken by the study team.Sericulture at a glance
Andhra Pradesh emerged as the second largest producer of mulberry reeling cocoons in the
country. As at the end of 2003-04, 1,15,565 families, spread over 8082 villages, were practicing
sericulture in the state.* Sericulture and all its related activities presently contribute 1.05 % to
gross state domestic product, which is targeted to reach 1.35% by the end of 2007. Over 15.66
lakh persons were directly or indirectly employed in the sector. The development of sericulture
industry in the state of Andhra Pradesh at a glance between 1980-81 and 2003-04 is presented in
Table 2.1.
Table 2.1. Sericulture Development in Andhra Pradesh - A Glance
Parameter
Area under mulberry cultivation (ha)
DFLs brushed (lakh no.)
Reeling cocoon production (MT)

1980-81
16,580
268.602
9,560

2003-04

Increase (by
2003-04 over
1980-81)
57,230
3.45 fold
1008.099
3.75 fold
53,693
5.62 fold

Cocoon production per 100 dfls (kg)

Cocoon production per ha (kg)
Estimated raw silk production (MT)
Raw silk production per 100 dfls (kg)

35.59
575
797
2.967

53.26
938
5,966
5.918

1.50 fold
1.63 fold
7.49 fold
1.99 fold

Raw silk production per ha of mulberry cultivation (kg)

Renditta
Maximum cocoon price (Rs/kg)
Average cocoon price (Rs/kg)

48.05
12
40
NA

104.25
9
219
117.14

2.17 fold
(+) 33%
5.48 fold
_

Source : Department of Sericulture/CSB

Between 1980-81 and 2003-04, the area under mulberry has increased 3.45 fold, the reeling
cocoon production by 5.62 fold, mainly through the phenomenal increase in the productivity of
cocoons from 575 kg to 938 kg per hectare of mulberry cultivation. Du e to the above factors, as
also due to improved renditta from 12 to 9 during this period, the raw silk production increased
by 7.49 fold. Perhaps, increasing prices of reeling cocoons during this period might have acted as
an incentive for these trends.

Source: Central Silk Board, 2004.

5'

#'

Department of Sericulture, which came into being as a separate entity in 1981, through its staff
working across the state played commendable role in this achievement. Its strategy of
coordinated functioning with other developmental departments, harnessing programmes like
Drought Prone Area Programme (DPAP), National Sericulture Project (NSP) and Swiss
Development Mission paid off well (see Box 2.1).
On structural front, DoS has Head Office at Hyderabad under the overall control of the Director /
Commissioner of Sericulture, who is well supported by an Additional Director and a Joint
Box 2.1. Benefit derived from National Sericulture Project (NSP)
Aided by the World Bank / Swiss Development Corporation during the period from 1989 to 1996,
allocation under NSP was Rs. 134.79 crore. Credit flow from financial institutions and subsidies
accounted for Rs. 75.68 crore. DoS facilitated credit mobilization and recovery. The project helped
establishment of the Andhra Pradesh State Sericulture Research and Development Institute
(APSSRDI) in Hindupur. It also helped establishing 7 F1 grainage units, 60 Technical Service
Centres (TSCs) (57 Farm Sector and 3 Non-Farm Sector), 3 Regional Training Centres, 4 Regional
Reelers Training Centres, one Reelers Training Institute at Madanapalli, 4 Mobile Farmers Training
Units, 4 Cocoon Testing Units and one Cocoon Market.

Director (Monitoring). For effective control of various activities at the regional level, each of the
four regions of Chittoor, Anantapur, Warangal and Visakhapatnam is headed by a Regional Joint
Director. The entire sericulture belt in the state is divided into 8 sericulture zones, each headed
by a Deputy Director. At the divisional level, programmes of the Department are executed by the
Assistant Directors. At the ground level, 41 Assistant Directors are ably supported by 185
Sericulture Officers, 243 Assistant Sericulture Officers, 627 Technical Officers and 927
Technical Assistants. The study team found that the grassroot level functionaries have very good
local feel and know their clientele very intimately. This is a plus point that helps in future
programme implementation.
Technical Service Centres (TSCs) operate at grassroot level headed by Assistant Inspector of
Sericulture (Extension Manager). These perform extension functions. There are two types of
TSCs- one for on-farm and the other for non-farm activities. The main functions of the on-farm
TSCs are to bring about an increase in mulberry area, productivity and quality of reeling cocoons,
liaison with other Government agencies for implementing and data reporting for management
information system. Each TSC has a plan of action to implement or a target to achieve in terms
of mulberry crop area or number of sericulturists. Non-Farm Technical Service Centres
(NFTSCs) aim at developing the post-cocoon sector by identifying and organising entrepreneur
development programmes for reelers, twisters and weavers. Presently, 11 out of the 14 NFTSCs
established in April 1999 are functional. These centres have reeling units attached to them for
training purpose.
On training front, for farm sector department staff are training the farmers and providing
technical assistance throughout the rearing cycle. At the beginning of the rearing activity,

10

especially in non-traditional districts, departments farm workers are placed in the rearing sheds
for training the farmer and his labourers. For non-farm sector also, department staff are staying
with the new reelers for about three months, so as to train the reelers as also the workers.
However, the Reelers' Training Institute (RTI), Madanapalli, established during 1991 at
Valasapalli, near Madanapalli in Chittoor district, imparts formal training in the post-cocoon
sector to upgrade the skills of the entrepreneurs (both technical and managerial) and the workers
of the reeling / twisting / weaving units. This institute since its inception had trained a total of
920 persons, comprising 614 in the reeling activity and 306 in the twisting activity. However,
there has been no system of obtaining feed back from the trained persons who wished to become
entrepreneurs after undergoing training, so as to assess the extent of success rate in promoting
new entrepreneurs in these fields.

# !

! $!#

Trends in mulberry area and cocoon production

Table 2.2 gives the long term trends in mulberry area, cocoon production and productivity.
Table 2.2. Area under mulberry and cocoons production in Andhra Pradesh
Year

Mulberry area (ha) cocoon prodn. (tonnes)

Raw silk (tonnes)*

Cocoon productivity
(kg/ha)

Renditta

1980-81

16775

9560

797

570

12.0

1981-82

25731

6709

564

261

11.9

1982-83

33603

12000

750

357

16.0

1983-84

37247

12800

900

344

14.2

1984-85

40891

15000

1250

367

12.0

1985-86

35268

12340

1028

350

12.0

1986-87

36437

14899

1460

409

10.2

1987-88

43289

19063

1887

440

10.1

1988-89

55361

24609

2590

445

9.5

1989-90

68288

28169

2789

413

10.1

1990-91

76348

32262

3194

423

10.1

1991-92

79632

27032

2846

339

9.5

1992-93

79632

34533

3139

434

11.0

1993-94

79632

24511

2228

308

11.0

1994-95

29960

22541

2450

752

9.2

1995-96

35546

21722

2361

611

9.2

1996-97

33128

22524

2444

680

9.2

1997-98

38084

24809

2696

651

9.2

1998-99

42314

30179

3335

713

9.0

1999-00

44641
48442

34194
37651

3757

766

9.1

4183

777

9.0

52225

42982

4775

823

9.0

54384

50664

5629

932

9.0

2000-01
2001-02

2002-03
Source: CSB
* Estimated production based on the average renditta.

11

As at the end of 2003-04, the area reported by DoS under mulberry cultivation was 57902 ha in
the state. The above data reveals two important aspects. First, mulberry area reached a peak of
79632 ha by the end of 1993-94, which is about 5 times that in 1980-81. In 1994-95 the area was
revised downwards based on a survey and is put at 29960 ha. Second, cocoon production reached
to 24511 tonnes by the same time from about 9560 tonnes in 1980-81. Surprisingly, not much
revision took place in cocoon production which came down only by about 2000 tonnes to reach
22541 tonnes by 1994-95. That is, while the area was revised downwards by 62 per cent, the
cocoon production fell only by 8 per cent. The result is almost three fold increase in cocoon
productivity per ha in a single year! Renditta also has fallen by almost 2 points from 11 to 9.2 in a
single year. These trends are shown in Figure 2.
Figure 2. Trends in mulberry area, cocoon production, productivity and raw silk
production

80000

6000
area (ha)
Cocoon Prodn (t)
raw silk (t)
cocoons kg /ha

5000

70000

Area & Production

60000

4000

50000
3000
40000

30000

2000

20000

Productivity & Raw silk Production

90000

1000
10000

19

80
19 -81
81
19 -82
82
19 83
83
19 -84
84
19 85
85
19 -86
86
19 -87
87
19 88
88
19 -89
89
19 90
90
19 91
91
19 -92
92
19 93
93
19 -94
94
19 -95
95
19 -96
96
19 -97
97
19 -98
98
19 99
99
20 -00
00
20 -01
01
20 02
02
-0
3

Given the concentration of the activity in two traditional districts of Ananthapur and Chittoor
districts, it will be interesting to know spread of the activity to other districts (Table 2.3).

12

Table 2.3. District-wise mulberry area and cocoon production

District

Srikakulam
Vizianagaram

2001-02

2002-03

2003-04

Mulberry Cocoon Cocoon Mulberry Cocoon Cocoon Mulberry Cocoon Cocoon

area (ha) prodn. prodvity. area (ha) prodn. prodvity. area (ha) prodn. prodvity.
(tonnes) (kg/ ha)
(tonnes) (kg/ ha)
(tonnes) (kg/ ha)
12
26.20
516
23
45.38
562
27
47.48
473
27

155.56

12

17 1439.66

195

11

55.48

Visakhapatnam

410

17

42.46

451

27

58.92

500

22

43.20

East Godavari

42

47 1108.50

48

41

857.56

361

39

106.65

West Godavari

64

45

703.78

46

61 1331.73

781

64

81.32

Krishna

204

19

90.88

248

79

316.32

331

62

188.27

Guntur

48

114 2355.37

40

53 1325.00

406

60

147.67

Prakasam

985

349

354.26

1090

118

107.87

1276

106

83.39

Nellore

405

48

118.36

262

58

219.98

606

46

76.26

Coastal
Andhra
Chittoor

2659

656

246.60

2713

476

175.33

5018

436

86.90

19402

19199

989.56

19812

22853 1153.51

20711

Cuddapah

2035

992

487.28

2183

Anantapur

20834

20460

982.02

21240

2594

1095

422.24

2825

44865

41746

930.47

46059

Mahabubnagar

NA

38

NA

NA

47

NA

503

39

77.00

Ranga Reddy

60

10

166.67

40

23

565.00

330

21

62.15

Medak

780

149

190.98

862

80

93.29

908

54

59.83

Nizamabad

166

16

93.42

186

12

66.07

205

43.46

Adilabad

302

57

187.23

328

28.68

344

26.49

Karimnagar

694

165

237.64

756

39

51.17

859

55

64.34

Warangal

413

43

104.79

474

58

121.33

529

31

57.66

Khammam

301

51

169.38

342

48

139.95

378

44

117.07

Nalgonda

72

53

736.11

40

23

575.00

322

25

78.95

2788

581

208.39

3027

339

111.98

4377

287

65.57

50312

42982

854.32

51800

50664

978.07

57902

53693

927.30

Kurnool
Rayalaseema

Telangana
Andhra
Pradesh

1117

511.93

2289

23654 1113.65

22415

2225

787.61

3091

49849 1082.28

48507

24484 1182.16
897

391.94

25498 1137.51
2091

676.44

52970 1092.01

The two traditional districts of Ananthapur and Chittoor dominate the sericulture map of the State
both in mulberry area and cocoon production. Depending on the availability of irrigation water,
prevailing market prices, etc., 3-5 cycles of rearing are taken up in a year. In Chittoor and
Anantapur districts 5 crops are taken in a year with single-plot system and up to 10 crops in a
year under two-plot system. During 2003-04, the average number of dfls reared in a year per
hectare of mulberry area for the state as a whole was 1680. It ranged from 100 dfls in
Vizianagaram district to 225 dfls in Anantapur district per acre per crop. At the reported state
average productivity of 55.30 kg of cocoons per 100 dfls, the average cocoon productivity per

13

hectare of mulberry area worked out to be 927.30 kg. However, a comparison of the district-wise
data with regard to the reported mulberry area and the cocoon production revealed huge
variations in the productivity levels among various districts (Annexure 1). The productivity per
hectare ranged from as low as 26 kg in Adilabad district to 1182 kg in Chittoor district. It
remained below 100 in most districts. Such a low level of productivity cannot make the activity
economically viable and sustainable. But the fact is that a majority of the farmers continue to
pursue the activity. This observation has led us to have a further insight into the area estimates
available with DoS, by looking at district level information and correlating with observations
during the field visits.

Large scale uprooting of mulberry plantations

During field visits, large scale uprooting of mulberry gardens was reported both by official and
unofficial sources. Further, except for Chittoor and Anantapur districts, the data reported from all
the districts for the year 2003-04 were far below than those reported at the state level. It was
learnt from district level offices that the figures reported for the year 2003-04 pertain to the
productive area after netting out the unproductive acreage from the earlier area estimates.
Unproductive acreage was referred to as the area no more available for cocoon rearing due to
neglect of garden or uprooting. This could be due to persistent drought situation in various
districts across the state during the past few years and declining groundwater levels that resulted
in drying up of large number of bore wells. In Mahabubnagar district, for instance, a joint survey
conducted by the Technical Service Centres and Panchayat Secretaries indicated that 417 ha
(1043 ac) mulberry area was uprooted, leaving only 74.8 ha (187 ac) as on 31 March 2004. Of
this, only 21.8 ha (54.5 ac) was productive and available for rearing. On the other hand, as per
the data recorded with DoS the mulberry area is to an extent of 3091.46 ha, 40 times the actual
area. Similar variations were observed from most other districts.
In Chittoor and Anantapur, the area estimate by the district and state offices was the same, but it
is an overestimate considering the ground reality. During the discussions with the district level
officials, it was unfailingly reported that mulberry area suffered set back due to uprooting in
recent years, the extent of this phenomenon varied across divisions, though. For example, in
Kuppam division of Chittoor district, the extent of uprooting was about 34 per cent out of the
total area of 7015 ha. In Palamaner division of Chittoor district and Madakasira division of
Anantapur district, uprooting to an extent of 66 and 57 per cent, respectively, was reported. Data
with regard to other indicators such as dfls brushed, production of cocoons, etc., could also be
correlated with this phenomenon. Thus, the present area under mulberry, as available with DoS,
appeared to be overestimated. This suggests that the area estimates require a comprehensive
revision, based on ground level survey.
Based on the information received from districts and on our assessment in respect of the districts
visited by us, revised area estimates for the year 2003-04 are made and furnished in Table 2.4 and
Figure 3. We have used area figures given by district level units either in writing or on phone for
all the districts except Chittoor and Ananthapur districts, where area was reassessed using
information from our field visits duly correlated with other indicators. As per our assessment, the
productive area under mulberry at present could be about 30,000 ha (precise assessment is

14

beyond the scope of the present assignment). Increased production of cocoons has been reported
in all the districts in spite of decline in area. The estimates appear to have been arrived at on a
notional basis applying norms of average productivity, average no. of dfls brushed per unit area,
etc., to the reported area under mulberry. Hence, in respect of districts for which data were
available with us, cocoon production was reassessed using the present level of cocoon
productivity per 100 dfls and the reported total brushing of dfls. In respect of other districts, the
cocoon production as reported by the DoS was taken into consideration. On the other hand, in
respect of Chittoor, Anantapur and Cuddapah districts, as the reported production appeared to be
on a notional basis based on the reported area, which recorded an unrealistic productivity of about
2000-2200 kg/ha based on the assessed area, the norm of average productivity of 931 kg/ha (as
per the reported states average productivity during 2002-03 by CSB) was applied and the cocoon
production was reassessed for these districts. Based on these revised estimates, the total cocoon
production in the state during 2003-04 could be 26929 tonnes.
Table 2.4. Revised area and production estimates, 2003-04
District
Srikakulam
Vizianagaram

Productive mulberry area (ha)

27
40

Cocoon production (tonnes) Cocoon productivity (kg/ha)

26.76
999
10.80
270

Visakhapatnam

40

21.60

540

East Godavari

80

38.57

481

West Godavari

147

69.52

433

Krishna

52

62.40

1200

Guntur

100

60.04

600

Prakasam

120

106.40

887

60

45.24

766

666

441.33

655

12283

11435.47

931

Cuddapah

400

372.40

931

Anantapur

13213

12301.30

931

3030

2091.20

690

28926

26200.38

906

Mahabubnagar

75

38.74

517

Ranga Reddy

42

20.49

488

Medak

46

54.30

1180

8.90

1483

Adilabad

20

9.10

455

Karimnagar

80

55.30

691

Warangal
Khammam
Nalgonda
Telangana

40
38
41

30.50
44.30
25.34

763
1166
620

388

286.97

740

29979

26928.67

898

Nellore
Coastal Andhra
Chittoor

Kurnool
Rayalaseema

Nizamabad

Andhra Pradesh

15

Figure 3. Comparative mulberry area as per DoS and revision, region-wise, 2003-04

:>?,+

60000

-<:,>
50000

+??>?

40000

+<?+=
30000

20000

-@>>

:,; <
===

@<<

10000

sh
ad
e

na

As per
DoS
R e v is e d

An
d

h ra

Pr

la n
ga
Te

ee
ma
ya
la s
Ra

Co

as
ta l

Intra-district spread of sericulture

The sericulture activity is very thinly spread within the districts, except in Ananthapur and
Chittoor (Table 2.5). As at the end of 2003-04, sericulture is spread over 28.4 per cent of the
mandals and covers 19.4 per cent of the total number of villages in the state. Thus, the average
area under mulberry cultivation in the state, based on the re-assessed area, works out to about 105
ha per mandal and 8.37 ha per village. As expected, in Anantapur the activity has spread across
84 % of the mandals, 58.2 % of villages and in Chittoor district to 68.2 % mandals and 47.5 % of
villages. The area under mulberry is 273 ha per Mandal and 7.98 ha per village in Chittoor
district, while it is 249.30 ha and 8.01 ha, respectively, in Anantapur district. The sericulture
activity in the Chittoor district is concentrated in Kuppam, Palamaner, Madanapalli, Chittoor and
Tirupathi divisions. Based on the data of 2000-01, more than 82% of the area under mulberry in
the district was in 3 divisions viz. Kuppam (33.7%), Palamaner (30.2%), and Madanapalli
(18.4%).
The sericulture activity in Ananthapur district is concentrated in Hindupur,
Madakasira, Mudigubba, Penukonda, Dharmavaram, Guntakal and Kalyanadurg divisions, with
about two-thirds of the area under mulberry being in 3 Divisions viz. Hindupur (5622 ha, 26%),
Mudigubba (4568 ha, 21%) and Madakasira (3712 ha, 17%). The Mandals where sericulture
activity is predominant are Hindupur (1528 ha), Lepakshi (1282 ha), Somadepalli (1120 ha),
Madakasira (1070 ha), Chilamathur (1017 ha) and Parigi (940 ha).

16

Table 2.5. Spread of sericulture activity within districts, 2003-04

District

%
% sericulture
Seri
sericulture
villages
villages/Man
mandals
dal

Av. area under Mulberry (ha)

Per Farmer

Per Village

Per Mandal

Srikakulam

71.1

1.8

1.3

0.17

0.79

0.99

Vizianagaram

35.3

1.0

1.3

0.51

2.50

3.33

Visakhapatnam

NA

NA

NA

NA

NA

NA

East Godavari

20.7

1.1

1.3

0.40

5.33

6.67

West Godavari

32.6

5.4

3.2

0.57

3.05

9.77

Krishna

36.0

NA

NA

NA

NA

2.89

Guntur

28.1

2.2

1.4

1.01

4.35

6.25

NA

NA

NA

NA

NA

NA

Nellore

17.4

1.6

2.3

0.58

3.35

7.54

Coastal

29.0

2.0

1.4

0.74

4.32

6.16

Chittoor

68.2

58.2

34.2

0.24

7.98

272.96

Cuddapah

NA

NA

NA

NA

NA

NA

Anantapur

84.1

47.5

31.1

0.32

8.01

249.30

Kurnool

77.8

18.0

3.9

1.08

18.36

72.14

Rayalaseema

59.8

47.7

24.0

0.31

8.62

206.61

Mahabubnagar

28.1

1.5

1.3

1.63

3.12

4.16

Ranga Reddy

32.4

2.8

2.5

0.42

1.40

3.50

Medak

NA

NA

NA

NA

NA

NA

Nizamabad

NA

NA

NA

NA

NA

NA

Adilabad

NA

NA

NA

NA

NA

NA

Karimnagar

NA

NA

NA

NA

NA

NA

Warangal

NA

NA

NA

NA

NA

NA

Khammam

NA

NA

NA

NA

NA

NA

Nalgonda

13.6

2.0

2.3

0.30

2.28

5.13

9.5

2.0

1.9

1.38

5.39

10.21

28.4

19.4

12.5

0.31

8.37

104.82

Prakasam

Telangana
State*
NA not available

* Based on the data from available districts only.

Source: Data furnished by the district offices of the Department

In non-traditional districts, the activity is too widely scattered across many mandals and villages.
For example, in Srikakulam district, the total area of 26.73 ha under mulberry cultivation was
spread in 27 Mandals and 34 villages, thereby the average coverage per mandal and per village
has been as low as 0.99 ha and 0.79 ha, respectively. This would render Departments task rather
unwieldy and expensive. Department has, now, rightly decided to expand mulberry area,
especially for bivoltines, through the concept of nucleus villages, which is discussed elsewhere in
this chapter.

17

Size of mulberry holding

Traditionally, sericulture has been predominantly taken up by small and marginal farmers. As per
CSB, as at the end of 2003-04, there were 1,16,713 sericulturists in the state, comprising 42197
marginal (37.0%), 57738 (50.6%) small and 14,065 large farmers (12.4%). However, of late,
with the increased awareness regarding the profitability and viability of the activity and due to
various incentives being provided by the Central Silk Board and the State Government under the
Catalytic Development Programme, a few large farmers are also taking up this activity. For
example, in Nalgonda and West Godavari districts about 20% and 23%, respectively, of the
sericulturists are large farmers. The average land holding size under mulberry cultivation in the
state would be about 0.26 ha (0.65 ac). An analysis of district-wise data indicates that the average
land holding under mulberry ranged from a mere 0.17 ha in Srikakulam district to 1.08 ha in
Kurnool district.

Varieties of Mulberry
The most commonly grown varieties of mulberry in the state are M-5 and S series (S-13 and S36). District wise details with regard to variety-wise distribution of mulberry are neither firm
nor available. However, it is gathered based on the field level discussions that much of the area
under mulberry plantation in the state is under M-5 variety (about 24000 ha), followed by SSeries. District-wise and variety-wise details, based on the details furnished by the district offices
of the Department, are furnished in Annexure 2.
Of late, DoS is popularising V-1 variety, which is superior in yield and quality of leaf. It is
planning to replace the existing mulberry varieties with V-1. With whatever data available, it may
be assessed that approximately about 2500 ha to 2750 ha area is under V-1 variety in the state
accounting for about 8% of total area under mulberry (Annexure 2).
The varieties of mulberry grown in Chittoor district are M-5, S- Series (S-13, S-34, etc.) and V-1.
As at the end of 2003-04, an area of 864.29 ha was under V-1 variety ( 4.22% of the total area),
mainly concentrated in Kuppam (489.76 ha), Palamaner (198.80 ha) and Madanapalli (124.73 ha)
divisions. In Kuppam division its cultivation has been picking up in Ramakuppam (146 ha),
Kuppam (133 ha) and V. Kota (105 ha) mandals.
The varieties of mulberry grown in Ananthapur district and their area as at the end of 2003-04 are
M-5 (20760 ha), S- Series (156 ha) and V-1 (1106 ha). V-1 is mainly cultivated in Madakasira
(368 ha), Hindupur (241 ha), Mudigubba (160 ha), Dharmavaram (138 ha) and Penukonda (130
ha) divisions. Prominent mandals with V-1 area are Hindupur, Lepakshi, Gorantla,
Amarapuram, Rolla, Somadepalli, etc. An additional area of 2040 ha under V-1 is planned over a
period of next 3 years (2004-05 to 2006-07) in Anantapur district.
For scaling up area under V-1 and to supply quality saplings, nurseries are established by DoS in
their farms. To complement their efforts, the Department is encouraging some identified
progressive farmers to multiply and supply saplings to the farmers who are covered under
bivoltine programme. A few farmers have already established nurseries for commercial
production of V-1 saplings in V. Kota mandal of Chittoor district and Lepakshi mandal of
Anantapur district.

18

Drip Irrigation
Mulberry is almost cultivated as an irrigated crop in Andhra Pradesh. Considering the scarcity of
water, the Government of Andhra Pradesh has launched, Andhra Pradesh Micro Irrigation
Project (APMIP) to popularize water saving devices like drip and sprinklers. Under the project,
an area of 24,641 ha of mulberry plantation was proposed under drip irrigation system. Of this,
about two-thirds of the area (16,149 ha) was proposed to be covered in Chittoor district followed
by Anantapur (4,680 ha), Cuddapah (1,400 ha) and Kurnool (1,100 ha) districts. Under the
APMIP, State Government extends 50% of the cost as subsidy, while the farmer meets the
balance cost through own savings or bank loan. The district-wise programme proposed under the
APMIP is furnished in Annexure - 3. The approved unit cost under the project is Rs. 45,700/ha
with 12 mm laterals and Rs. 56,090/ha with 16 mm laterals.
In addition, DoS is also implementing a similar scheme under the Catalytic Development
Programme for providing assistance to the farmers for installation of drip irrigation system in the
mulberry gardens. The unit cost for installation of drip system in one hectare of mulberry garden
is Rs. 48,000, which will be shared by the CSB, Department of Sericulture and the beneficiary in
the ratio of 45:5:50.

Bivoltine Races
In India, over 95% of the commercial silk being produced is from multivoltine female and
bivoltine male parent. The existing cross breed Pure Mysore x NB18/NB4D2 has some
limitation, especially lower shell weight, high renditta, low cocoon shell ratio, poor fibre quality,
etc. Keeping in view the production of quality silk, the breeding work initiated at the Central
Sericultural Research and Training Institute (CSRTI), Mysore under Bivoltine Sericulture
Technology Development (JICA) Project by utilizing two Japanese commercial hybrids has
resulted in the evolution of highly productive CSR hybrids. These hybrids give yarn comparable
to international standards (2A to 3A grade). The important characteristics of the new CSR
hybrids authorised by the Central Silk Board for commercial exploitation are furnished in
Appendix - 1.
The Project of Japanese International Co-operation Agency (JICA), started in 1997, has been
working for the promotion of practical bivoltine sericulture technology aimed at producing higher
quality silk and implemented in Andhra Pradesh, Karnataka and Tamil Nadu. The project
farmers had been able to get better crop by the technical and financial advices and financial
supports from JICA, CSB and the State Departments of Sericulture. As the results were
encouraging the technology may be diffused to other sericulturists.
At present, 96% of the total silk production in Andhra Pradesh is contributed by the hybrid of
Pure Mysore (PM) and bivoltine NB4D2, which is popularly called as '
Cross Breed'or CB. As
per DoS, the average productivity of cocoons in the state per 100 dfls had increased from 48.9 kg
during 2001-02 to 53.4 kg by the end of 2003-04.
Andhra Pradesh State Sericulture Research and Development Institute (APSSRDI), established
during 1996 under the World Bank assisted National Sericulture Project, in collaboration with
Centre for DNA Fingerprinting and Diagnostics (CDFD), Hyderabad developed productive and

19

superior quality silkworm hybrids suitable to the tropical conditions by adopting a combination of
conventional selection and hybridisation and DNA marker technologies. As an outcome, one
multivoltine x bivoltine hybrid named as '
Swarnandhra'and two hardy bivoltine x bivoltine
hybrids named as '
Kalpatharuvu'and '
Hemavathi'have been developed. The most striking
features of these hybrids are their consistent cocoon yield attributes under the tropical ecoclimatic conditions of Andhra Pradesh over a range of seasons and regions and international
grade silk.
Of late, a crossbreed Kolar Chinna, developed by a private grainage with the parentage Pure
Mysore x CSR2, is favoured by the farmers in the state. This race of silkworm has been slowly
replacing Swarnandhra. The draw backs of Swarnandhra like low fecundity (250-30 eggs/dfl
compared to 400-450 eggs/dfl for other crossbreeds), irregular emergence of the moths resulting
in difficulties in breeding, etc., are being addressed to, according to the Director, APSSRDI. Five
new races (2 are bivoltine hybrids while 3 are crossbreeds) have been developed in the Institute,
which are under testing by the Central Silk Board. Details of the silkworm races and their
performance is presented in Annexure - 4.

Bivoltine nucleus village (BNV) programme

Bivoltine Nucleus Village concept, conceived by DoS, helps District personnel to have
focussed attention in implementation of bivoltine programme that envisages to produce 1500 MT
of bivoltine hybrid cocoons and 215 MT of bivoltine silk by covering 3750 farmers in Chittoor
and Anantapur districts. The important provisions/norms of the programme were as follows.
i.
ii.
iii.
iv.
v.
vi.

Selected farmer should have good mulberry garden with high yielding variety of
mulberry such as V-1, S-36,
Farmer should have assured irrigation facility.
Farmer should have separate rearing shed.
For every 100 dfls, the farmer should harvest at least 50 kg of bivoltine cocoons.
Quality of cocoons should be good with a renditta of around 7.
Farmers have to form into groups of 8 members each to facilitate themselves in
chawki rearing, mass disinfection, training, etc.

In Chittoor district 36 villages were identified as Bivoltine Nucleus Villages. The dfls for the
programme are arranged from the Palamaneru grainage. CSR hybrids CSR2 x CSR4 / CSR4 x
CSR2 are reared from July to February while during the summer months of March to June CSR18
x CSR19 race, which can tolerate higher temperature, is reared. The progress of BV programme
in Chittoor district is given in Table 2.6.

20

Table 2.6. Progress of BV programme in Chittoor district

Year
Dfls brushed
(Lakh)
BV cocoons
(tonnes)
Productivity
(kg/100 dfls)

Target

2002-03
Achievement

16.85

10.24

%
achievement
60.80

758.00

537.44

45.00

52.47

Target

2003-04
Achievment

17.50

7.33

%
achievement
41.88

71.00

875.00

372.74

42.60

116.7

50.0

50.8

101.1

The achievement, in terms of dfls brushed as well as production of cocoons, is short of targets.
The shortfall increased in 2003-04 compared to previous year. Productivity, though shot over the
anticipated level in both the years, did decline, in fact, in the second year.
For Anantapur district, progress of the programme is not available. During 2004-05, a
programme to brush 16 lakh dfls of bivoltine races has been planned so as to cover 5 major
divisions of the district viz. Hindupur, Madakasira, Kadiri, Penugonda and Dharmavaram. In
Hindupur and Madakasira divisions, 15 and 29 BN villages are identified during 2004-05. The
dfls of BV hybrids for the programme envisaged in Anantapur district are arranged from the
Government grainage at Penugonda.

Rearing House
While it is always desirable to have a separate rearing house, till today, a majority of the
sericulturists use a part of their dwelling house for the rearing purpose, resulting in unhygienic
rearing leading to lower productivity. It may be seen from Annexure-5 that, based on the details
available from 11 districts, only 26.9% of the sericulturists / holdings (25799 out of a total of
95843) in the state have separate rearing sheds, while more than 70% of the farmers use a part of
their dwelling houses for rearing activity. More rearing houses are available in Anantapur district
(22450 holdings out of a total of 40477 sericulturists in the district). On the other hand, in
Chittoor district, which is one of the traditional areas of mulberry activity in the state, only 6 out
of every 100 sericulturists have separate rearing sheds. In some non-traditional districts, such as
Ranga Reddy, Mahabubnagar and Nalgonda also the concept of having a separate rearing shed
for achieving the optimum benefits has been picking up, where 30 to 40 % of the sericulturists
have separate rearing sheds. The farmers evolve appropriate measures for achieving economic
cooling of their rearing sheds through proper selection of wall and roofing fabrication, orientation
of building, design, etc. Accordingly, depending on the site, climate and topographical
conditions, various types of rearing house designing in the state are Kachcha brick wall with
thatched roof, Kachcha brick wall with tiled roof, pucca brick wall with tiled roof, pucca brick
wall with RCC roof, etc. While no authentic data are available, it is generally found that the
farmers having separate rearing sheds practise the most effective shoot system of feeding, while
those rearing in dwelling houses adopt leaf feeding to the silkworms.
Subsidy under the Catalytic Development Programme of Central Silk Board for various types/
designs of the rearing houses up to 50% of the cost is available. Eligible subsidy is shared by the
CSB and the State Department of Sericulture in equal ratio. The Department of Sericulture is

21

encouraging construction of a rearing shed of 40'x 20'(800 sft) for the farmers having one acre
of mulberry with a unit cost of Rs. 1.00 lakh, of which Rs. 25000 (@ Rs. 31.25 per sft) is given as
subsidy. It is assumed that a rearing house of the above size can have an effective bed area of
1500 sft under multi-tier rack system, which is sufficient to rear 250 dfls of bivoltine races at a
time (@ 600 sft bed area per 100 dfls) till spinning stage with shoot feeding (the requirement is
650 sft under leaf feeding system). In respect of crossbreeds, the recommended bed space
requirement for 100 dfls under shoot feeding system is 400 sft (the requirement is 450 sft under
leaf feeding system).
For any reason, if the farmer is unable to go for 800 sft rearing shed, he is advised to construct a
smaller shed of 480 sft (30'x 16'
), where he can rear about 125 dfls per crop by utilizing the
leaf/shoot yield from 0.50 ac mulberry garden. In this case, the available area of one acre
mulberry may be divided into two plots of 0.50 acre each and the rearing may be taken up in 10
batches per year @ 5 crops from each plot. By this method, the cost on rearing shed can be saved
by the farmer. For a shed of 480 sft, the eligible subsidy is Rs. 15000/ (@ Rs. 31.25 per sft).

Availability of Disease Free Layings

Needless to say, timely and adequate availability of disease free layings (dfls) is the most
important aspect in sericulture. Important steps involved in the process are production of P1 seed
cocoons of parent lines, processing, certification of cocoons and distribution of eggs to the
commercial rearers.
Disease free layings are produced by both government and private agencies, also called as
Licensed Seed Producers (LSPs). LSPs are permitted to handle cross breed seed production,
whereas the government grainages (under the Central Silk Board as well as DoS ) handle pure
races as well as cross breeds.
In India, a three level system of seed management is in operation to retain the original characters
besides multiplication. In P3 Seed Farms, P4 layings obtained from research institute/breeding
institutions are reared. At this level, a portion of layings is utilised for further maintenance and
balance layings are utilised for supplying layings to P2 farms. Layings from P3 stations are
reared in P2 seed farms to obtain P2 seed cocoons. P2 cocoons will be utilised for producing P1
layings in mass scale. There are two P3 Seed Farms, at Horsely Hills (Chittoor district) for
foreign races (bivoltine) and at Tadakalapally (Anantapur district) for local races (multivoltine).
There are 21 P2 Seed Farms, 41 P1 Seed Farms catering to entire state (Annexure-6).
DoS notified seed areas both for local and foreign races. Identified farmers, i.e., Seed Growers,
from these areas will rear parental silkworms. The production programme in these seed areas is
attached to a separate Technical Service Centre called Seed Area TSC. Gorantla (LR) &
Madakasira (FR) in Anantapur, Koilamasinapalli (LR) & Punganur (FR) in Chittoor, Rayachoti
(LR) & Rayachoti (FR) in Cuddapah, Adoni (LR) & Peapully (FR) in Kurnool, Pothipadu (LR) in
Krishna and Paderu (FR) in Visakhapatnam districts are the seed areas for producing seed
cocoons required for the cross breed grainages.
There are 5 Seed Cocoon Markets in the state viz. Gorantla (LR) and Madaksira (FR) in
Ananthapur district, Punganur (LR&FR) in Chittoor district and Adoni (LR / FR) in Kurnool

22

district. They collect indents for LR and FR cocoons, test lots for pebrine and other diseases and
supply cocoons to grainages at the rates fixed as per guidelines of Seed Committee.

Grainages
Grainages produce silkworm eggs. Particulars of grainages in the state are furnished in
Annexure -7. Of the 49 grainages existing in the state as on 31 March 2004, 25 were in
Government sector with a total installed production capacity of about 200 lakh dfls per annum
(particulars of government grainages at Rayachoti in Cuddapah, Markapur in Prakasam,
Gannavaram in Krishna and Elkaturthy in Karimnagar districts are not available). Aggregate
production capacity of 24 LSPs is 55.62 lakh dfls. During 2003-04, only 51.41% of the total
installed capacity of all the grainages was utilised to produce 131.45 lakh dfls. Capacity of
government grainages was severely under-utilised to the extent of 24 per cent, with a production
of only 47.83 lakh dfls against installed capacity of 200.08 lakh dfls (based on the data of 19
grainages). In contrast, the capacity utilisation in private grainages was significant (150%).
It is important to note that total production of dfls during 2003-04 was enough to meet mere
13.54% of the total dfls demand in the state. Even considering the downward revision in area, the
estimated requirement / brushed dfls during the year 2003-04 could be about 486.92 lakh only
(Annexure-1), as against 970.86 lakh dfls reported, and the existing Govt. grainage production
could meet 27% of this.
It appears that about 73% of the states dfls requirement is being met by the Karnataka
grainages. This needs attention of DoS for assessing the real picture and then augmenting states
dfl production. It is intriguing that in spite of having a wide gap in the demand and production of
dfls, the utilisation of the installed capacity of the Government grainages was less than 25%.
Added to this, 11 grainages in the Government sector had been closed in the recent past, which
were converted into Technical Service Centres / Chawki Rearing Centres / leased out, etc.
The Department has targeted to produce 135 lakh dfls during 2004-05. This target seems to be
about 3 times more than the actual production undertaken by the government grainages during
2003-04. Even if the target is achieved, total production of layings during 2004-05 could be
around 219 lakh dfls, which can meet only about 45% of the state'
s demand. This calls for a rapid
expansion of the internal production capacity of grainages.

Chawki Rearing Centres

Importance of chawki rearing for improved cocoon productivity and quality needs no emphasis.
In Chittoor district there are 121 CRCs, of which 120 are in the private sector. The total annual
production of these centres is 4.87 lakh dfls per year. There are 45 centres in Kuppam region, 43
in Palamaner region, 26 in Madanapalli region, 4 in Chittoor region and 2 in Tirupati region. In
addition, one Government chawki rearing unit is operating in Kuppam division.
In Anantapur district, a total of 115 CRCs have been established, of which 111 are in private
sector and 4 are Government CRCs. The total annual production of these centres is about 62.62
lakh dfls, of which the capacity of private units is about 60.77 lakh dfls. There are 44 CRCs in

23

Hindupur division, 30 units in Madakasira division, 25 in Penukonda division, 14 in Kadiri

division, 9 in Kalyandurg division and 2 units in Dharmavaram division.

Productivity Clubs
The Department of Sericulture under SERI-2000 programme is supporting weaker sericulturists
to upgrade their productivity levels by forming groups, each comprising 8 members. Each club
is provided with a revolving fund assistance of Rs. 10,000. Further, each club is required to
promote one chawki rearing centre, for which assistance of Rs. 25000/- is provided by the
Department towards building (@ 50% of the estimated cost of chawki rearing house of Rs.
50,000/-, the balance being the contribution by the Club) and Rs. 5000/- towards equipment. As
at the end of 2003-04, 120 Productivity Clubs are operating in Chittoor district.

Marketing of Reeling Cocoons and their Prices

Marketing of cocoons is an important link in the sericulture sector. Post-harvesting operations
like sorting, grading, storage, transportation and taking them to the right market assume
importance in this quality conscious times. Farmers were not properly sorting cocoons according
to shape (normal, oval, dumb-bell, oblong, etc.) and quality (such as good, double, uzi pierced,
flimsy, urinated and stained cocoons, etc.). Further, most of the lots were also found to contain
floss, faecal material, loose webs, etc. All these factors reflected in poor price realisation.
Cocoon transactions in the state are carried out in 24 regulated/ notified cocoon markets. There
are 10 markets in Coastal Andhra region, 9 in Rayalaseema region and 5 in Telangana region.
Particulars of transactions are given in Annexure-8. Quantity of cocoons transacted in the state'
s
cocoon markets had recorded a downward trend from about 6040 MT during 2001-02 to 5440
MT during 2002-03 and further to 3332 MT during 2003-04. In other words, between 2001-02
and 2003-04, the transactions fell significantly by 45% (Table 2.7).
During 2003-04, about 98% of the transactions were carried out in the 9 markets located in
Rayalaseema, while the share of markets in Coastal Andhra and Telangana accounted for 1.25%
and 0.75% respectively. Cocoon market in Hindupur accounted for 40% of the total transactions
in the state (volume of trade here is one-fifth of that in Ramangaram market of Karnataka)
followed by Madanapalli (22 %) and Dharmavaram (19%).
Hardly, 14% of the internal production of cocoons was transacted within the state during 200102. The proportion declined to 10.74 per cent during 2002-03 and 6.20 per cent (12.5 % based
on revised production estimate for 2003-04) during 2002-03 and 2003-04, respectively. That is,
86 to 94% of the production is transacted outside the state.
During 2003-04, hardly 12.4%, 13.0% and 6.4% of the estimated production in Coastal Andhra,
Rayalaseema and Telangana regions was marketed within the respective regions. Quality
cocoons produced in the Coastal Andhra and Telangana regions are generally transacted in
Rayalaseema markets, such as Hindupur and Madanapalli in anticipation of better price. Only
low quality cocoons are sold locally. This is reflected in the lower average price commanded by
cocoons in Coastal Andhra and Telangana markets in comparison to Rayalaseema markets. On
the other hand, a major chunk of the production in Rayalaseema districts is marketed in
Karnataka markets such as Ramanagaram, Sidlaghatta, Vijayapura, Chikkaballapur, Kolar, etc.,

24

which are nearer to these markets and where more number of reelers participate than in the
Rayalaseema markets. The average market prices of cocoons in Ramanagaram market in
Karnataka were always higher (by Rs. 4.11 per kg during 2001-02 to as high as Rs. 14.57 per kg
during 1997-98) than those in Andhra Pradesh markets.
Table 2.7. Cocoon transactions in markets in different regions
Region & market locations

Parameter

2001-02

2002-03

2003-04

Coastal Andhra : Srikakulam, Sithampeta

(Srikakulam), Venugo-palapuram
(Vizianagaram), Yelamanchili, Paderu
(Visakhapatnam), Chebrolu (East Godavari),
Hanuman Junction (Krishna), Guntur
(Guntur), Markapur (Prakasam) and Nellore
(Nellore).
Rayalaseema: Palamaneru, Kuppam,
Madanapalli (Chittoor), Rayachoti
(Cuddapah), Hindupur, Kadiri, Dharmavaram
(Anantapur) and Kurnool (Kurnool).

Qty.
Qty. as %
prodn.*
Value

57.93
8.84

66.06
13.89

57.41
13.01

54.97

48.23

56.11

Avg. Price

94.89

73.01

97.74

Qty.
Qty. as %
prodn.*
Value
Avg. Price
Qty.
Qty. as %
prodn.*
Value

5900.63
14.13

5319.8
10.67

3255.71
12.43

6670.96
113.06
80.95
13.90

4449.03
83.63
53.66
15.83

3830.75
117.66
18.45
6.43

76.49

38.32

15.58

Telangana: Hyderabad (Ranga Reddy),

Utnoor (Adilabad), Karimnagar (Karimnagar),
Hanumakonda (Warangal) and Bhadrachalam
(Khammam).

Avg. Price

Andhra Pradesh

94.49

71.41

84.44

Qty.

6039.51

5439.52

3331.57

Qty. as %
prodn.*
Value

14.05

10.74

12.37

6802.42

4535.58

3902.44

Avg. Price

112.63

83.38

117.14

* For 2001-02 and 2002-03, based on production data reported by the DoS. For 2003-04, based on the
production assessed.

Farmers who harvest sizable quantities of reeling cocoons were selling in distant markets. They
ensure that the average cost of transportation and other incidental expenses can be more than
offset by the additional price they realise. For example, a sericulturist in East Godavari district
brushed on an average 200 dfls per crop to obtain above 100 kg cocoons. He prefers Madanapalli
market in Chittoor district to Hanuman Junction market in Krishna district if the price in the
former is higher by at least Rs.20/kg. His logic is that he should get at least a margin of Rs.8 to
take care of weight loss, etc., as he would spend Rs.1200 towards travel and incidentals if he
takes 100 kg cocoons to Madanapalli.
Time series data on transactions during 11-year period from 1993-94 to 2003-04 in respect of
some major Government cocoon markets in Andhra Pradesh are presented in Figure 4 and in
Annexures-9, 10 and 11. The data show that volume of transactions in all the markets have
declined.
Figure 4. Trends in market arrivals in different cocoon markets in the state

25

13500
12500

12364

11500
10500

10518

11265

10927
10155

11033
10433

10180

10160

9730

9500
8500

Ramanagaram market

7500
6500
5500
4500

3577

3500

2500
Hindupur

2000
1500
Madanapalli

1000
500
0

Dharmavaram

Kadiri

Palamaneru
1993-94

1994-95

Hanuman Jn.
1995-96

1996-97

1997-98

1998-99

19992000

20002001

20012002

20022003

20032004

Note: Data for Hindupur market not available for initial years

Prices of Cocoons
The prices of cocoons are determined by their quality, race and physical properties like shape,
size, weight, compactness, grain or wrinkle, shell thickness, shell permeability, shell ratio, length
of bave, filament weight, filament size (denier), reelability, raw silk percentage, neatness and
lousiness. Reelers bid the price for cocoons as per their perception of quality, especially renditta.
They have developed an uncanny skill over the years of experience to judge the cocoons by visual
observation and feel. Hence, complaints of under-pricing of their lots are commonly heard from
farmers. This is attributed to collusion among reelers, which cannot be completely ruled out, and
raw deal meted out to them in Karnataka markets. As such there is not any pricing mechanism
based on scientific cocoon testing. Farmers, even when conscious of the importance of quality in
pricing of cocoons, are not willing to invest in separate sheds and hygienic rearing practices.
Monthly weighted average prices of mulberry reeling cocoons in some major cocoon markets in
Andhra Pradesh and Karnataka are furnished in Annexure 12 and Annexure 13,
respectively.

26

Table 2.8 Growth rates in quantity of cocoon arrival, average price and value
Exponential Growth rate up to 2003-04 (%)
Market
Hanuman Junction

Starting year for Cocoon quantity

growth rate
-2.64
1994-95

Ramanagaram

Prices

Value
1.98

-0.71

1993-94

-5.09

1.17

-3.31

Madanapalli

-do-

-3.24

2.23

-1.09

Palamaneru

-do-

5.82

2.14

8.17

Kadiri

1996-97

2.60

0.18

2.11

Dharmavaram

1993-94

1.96

1.92

3.91

Hindupur

1999-00

-8.41

-0.80

-8.97

Correlation among the monthly prices across markets show that Rayalaseema markets are well
integrated as they show high degree of positive correlation. Hanuman Junction market prices are
moving independently and are lower compared to other markets, perhaps, as discussed elsewhere
in this report, due to low quality cocoons transacted there.
Table 2.9. Correlation matrix of prices across markets
Madanapalli
Hindupur
Madanapalli
Palamaneru

0.93

Palamaneru

Hanuman Junction

0.89

0.23

0.96

0.11
-0.07

It may be seen from Annexure-13 (prices from Karnataka markets are taken for comparison of
CB and BV prices as our BV cocoons are traded there) that the weighted average prices of CB
cocoons increased during 2000-01 and 2001-02 in comparison to 1999-2000, which started
gradually receding from 2001-02. On the other hand, the prices recorded a sharp decline during
2002-03 in comparison to its previous year. The extent of fall ranged from 8.5% during the
month of April to as high as 48.7% during December. A perusal of the prices of bivoltine
cocoons also depicted a similar trend. However, the price fall in bivoltine races was more drastic
in comparison to the CB cocoons. For example, the per cent price fall ranged from 18.2% during
March to as high as 51.7% during November. In view of this, the price difference between these
two types of cocoons became gradually narrowing down from a level of Rs.41 to 78 per kg of
cocoons during 2000-01 to as low as Rs.17 to 30 during 2002-03. While the price data for 200304 are not available, it was gathered during the field level discussions that the gap has further
narrowed down during 2003-04 (Figure 5).

27

Figure 5. BV and CB prices over three years

250

200

150

BV Prices

100

CB Prices
50

8)

# !

Status of Reeling sector

Data with regard to NFTSC-wise production of raw silk during 2003-04 are furnished in
Annexure 14 and the production in the Government silk reeling units is furnished in Annexure15. It may be seen there from that the total production of raw silk in the state during the year was
330.69 MT by reeling 2740.33 MT of cocoons, at an average renditta of 8.3. Only about 10.2%
of the total estimated production of 26930 MT of cocoons during the year was processed within
the state.
Reeling is the weakest link in the sericulture value chain. There are three levels of technology
used for reeling viz. charka, cottage basin and multi-end reeling. Charka is the most traditional
one while multi-end reeling is state of the art technology. The charkas are hand operated as well
as motorised. Reelers in the state have been using even motorised charkas for dupion silk with a
little modification of the gearwheel. Even fine quality silk is reeled on charkas which fetches
good price. Surprisingly, cottage basins are rarely seen in the traditional reeling clusters in
Ananthapur and Chittoor, barring a few units in Hindupur. In contrast, many cottage basins are
in operation in Karnataka.
Choice of appropriate technology is very crucial for the survival of the reeling sector. In the
recent past, DoS was promoting multi-end reeling units (MERU). These units are highly capital
intensive. They are best suited for reeling bivoltine and good quality cross breed cocoons to get
high quality raw silk of uniform thickness. The output per day from one basin is 1.0 kg raw silk.
It needs trained skilled labour for reeling. It was confirmed from the field visits that many reelers
are facing the problem of capital erosion due to continuous falling of silk prices. They reported
that in a competitive scenario they are bidding higher prices for cocoons in spite of lower silk
prices to stay in business.

28

Of the 36 MERUs established under CDP programme in the state, only 4 are working at present
and all others are defunct. They were hardly run for a few months spread over 2 to 3 years. The
working ones are located in Hindupur and Kadiri areas. The main problems expressed by the
unit owners are shortage of working capital, non-availability of quality cocoons giving a renditta
of about 6.5 and below regularly in adequate quantities, improper location of the units with regard
to nearness to major cocoon market (e.g., the units established in Nalgonda district shall have to
depend on Chittoor, Anantapur and Bangalore markets for adequate supply of quality cocoons
which are very far away from Nalgonda, requiring huge cost for conveyance, transport and other
expenses), market problems for sale of silk, shortage of skilled workers, etc. Though these
reasons are appealing, the real reasons for failure of MERUs are different. (i) whichever reeling
units survived are in traditional reeling clusters where reeling culture is there. Beneficiaries in
Nalgonda districts reported that they wanted to start twisting unit about which they have better
knowledge by being in the weaving business. Couple of them are running twisting units even as
the reeling unit is shut down, (ii) the beneficiaries assumed for all practical purposes that
leaving their 10% contribution towards margin, the remaining capital investment is a free
subsidy, which need not be repaid, (iii) the beneficiaries are not entrepreneurs as they took up the
activity without understanding but due to extension efforts by DoS officials, involvement of
capital subsidy, cash incentive available under CBP for reeling BV silk and future expectations
from the DoS. These beneficiaries were not exposed to the technology through training, etc.,
before taking up the investment, (iv) the beneficiaries have availed huge amounts as working
capital loans and utilised full amount. While some portion of it was locked up in business, the
remaining has been diverted to other purposes, such as purchase of twisting unit, meeting family
needs, etc. Thus, healthy recycling of working capital has not taken place, (v) raw silk could not
be marketed effectively as they were able to reel and offer only small quantities (non-marketable
lots) that did not lend them comfortable bargaining power, and (vi) of late, the quality of multiend reeled silk is not well appreciated in the market with higher prices, in comparison to the silk
reeled on cottage basins. During the field study it was observed that a well established reeler in
Ramanagaram has stopped production on his multi-end reeling unit, though he is fully utilizing
the capacity of his cottage basins, mainly due to higher cost of production on MERU, which is
not compensated by higher silk price. Due to small scale of operations on account of shortage of
raw material and/or working capital, the staying power of the reeler is low and has to resort to
distress sales. In this respect he is not different from small time charka reelers.
In all the reeling clusters visited, the problem of availability of quality cocoons (if not bivoltine)
was reported. The programme of bivoltine production has not produced enough quantity to feed
the existing MERUs. Firstly, the farmers after taking the incentives, discontinued rearing
bivoltines due to comparatively more risks associated in rearing BV races in comparison to
rearing cross breed races. Second, those who are rearing BVs are doing so for one or two crops
in a year (rearing CBs during other crops) and hence round the year availability of BV cocoons is
a problem. Thirdly, with limited number of reelers, that too mainly charka reelers, participating
in the state cocoon markets, there is little appreciation of the quality aspects of BV cocoons and
hence price offered is not encouraging enough. Farmers having access to Ramanagaram market
and staying power are able to continue and benefit from BV rearing.

29

With the increasing demand for dupion silk, its production has been on a rise in the recent years.
Since reeling of dupion silk consumes double, urinated, uzi infested and other types of defective
and inferior quality cocoons, generally small level charka operators with low means of finance
are taking up this activity. Further, due to growing export market for the dupion dress material
and its finished products, there is ready market for the dupion silk. Proddutur in Cuddapah district
is the largest market for dupion silk, where it is twisted and woven. Thus, encouraging this
sector is also essential keeping in view better utilization of defective and inferior quality cocoons.
By 1999, it was reported that 778 reeling units of varying technology were in place in the state.
Of these, hardly 40 per cent were active (Table 2.10). As per the survey of AP Industrial and
Technical Consultancy Ltd. (APITCO) in that year, hardly 6 per cent were functioning.
Table 2.10. Status of reeling units by 1999
Units established

Type of reeling unit

Charkas

Active

Sick

% Sick to total

729

291

438

60

Cottage basins

22

13

59

Filature

27

23

85

778

304

474

61

Total

Source: Status report on Silk Reeling and Twisting units in Andhra Pradesh, 1999, prepared by APITCO for SDC

As per the data received from district offices of Department about 5,000 reeling basins were
established till date of which hardly 16 per cent are functioning.
Table 2.11. Status of reeling units based on feedback from districts (2003-04)
Type of reeling units Units
Charkas

No. of
basins

1198

4452

Cottage basins

26

156

Filature/MERU

47

472

1271

5080

Total

Nonfunctional
Units
968
(80.8)
20
(76.9)
39
(83.0)
1033
(81.3)

NonFunctional
Functional
functional
units
basins
basins
3705
230
747
(83.2)
(19.2)
(16.8)
120
6
36
(76.9)
(23.1)
(23.1)
412
8
60
(87.1)
(17.0)
(12.9)
4272
238
808
(84.1)
(18.7)
(15.9)

Note: figures in brackets are percentages to total.

Twisting Sector
Table 2.12 shows the number of twisting units in different districts in the state in 1999. Hardly 3
districts were having twisting units, of which Ananthapur tops the list with 32 out of 36 units
established in the state. About two-fifths of the units were sick.

30

Table 2.12. Status of Twisting Units during 1999

Established

District
Ananthapur

Active

sick

%sick

32

19

13

40.6

Nalgonda

Kurnool

33.3

36

22

14

38.9

State

By 2004, the number of twisting units went up to 274, of which 57 per cent are defunct (Table
2.13). The activity has also spread to 6 districts from 3 in 1999.
Table 2.13. Status of twisting units as per data from districts, 2004
District

Established Active Sick %

sick

Chittoor

22

14

Total Defunct active %

Remarks
no. of spindles spindles defunct
spindles
spindles
54.5 30600
18600 12000
60.8 30600 spindles of
which 12000 working
36.4
5280
1920
3360
36.4 Average 240 spindles

East
Godavari

50.0

470

270

200

Nalgonda

50.0

1120

560

560

Kurnool

75.0

1440

1080

360

Guntur

22

22 100.0

3080

3080

41990

25510

Ananthapur

State

220

274

100 120

118 156

56.9

16480

57.4 installed cap. 470

spindles-200 working
at Samalkot
50.0 560 spindles working
75.0 1440 spindles of which
360 working
100.0 3080 spindles
60.8

Weaving Sector
Silk weaving sector is a very crucial link in the supply chain as it is one step below the ultimate
consumer. India is known for its woven silk sarees with or without zari. The important weaving
clusters in the state are located in Dharmavaram, Rayadurg and Mudireddipally (Anantapur
district), Pochampally (Nalgonda district), Peddapuram and Samalkot (East Godavari district),
Gadwal and Narayanpet (Mahabubnagar district) and Venkatagiri (Nellore district). During the
present study, we visited weaving clusters of Pochampally, Mudireddypalli, Dharmavaram,
Neerugattuvaripalli, Gadwal, Kothakota, Narayanpet and Peddapuram. Sarees are the common
products in all these clusters. The designs, colour range, use of zari bring the distinction across
the sarees woven in different clusters. While the sarees made in Peddapuram are plain, those
from Dharmavaram have complicated zari designs. Gadwal sarees stand alone as they use pure
zari with interlocked borders. Dhotis and shirtings are also woven in Peddapuram. The process
and problems of the weaving sector are discussed below.

a) Production organisation related

Most of the weavers are working under master weavers who supply raw material, specify design
and take back the finished product. Weavers get only wages. While the weavers do the hard
work, higher margins are enjoyed by master weavers. If weavers can purchase raw material,

31

weave and sell the finished product they may get higher margins. But there are certain problems
in this. One can weave 4 to 5 sarees during a month with elaborate design as in Pochampally,
Dharmavaram, etc., while a maximum of 10 sarees per month can be woven in Narayanpet or
Gadwal. The small volumes when taken to market or to a trader cannot fetch good price and
sales promotion cannot be undertaken by small producers. Arranging finances for working
capital is a problem especially when finished product has to be offered on credit, while the raw
material is not available on credit from SERIFED or any other government agency. Hence, it was
thought that organising them into co-operative fold could possibly help the weavers to circumvent
some of the problems. There are 324 silk handloom weavers co-operative societies in the state.
But, most of them are defunct. Some of them are not really working on cooperative principles
as traders or master weavers sponsored them. Alternatively, weavers can be motivated to form
Self Help Groups (SHGs) and work together to take the benefits of higher return. As SHG
movement is very popular in the state, banks may meet credit needs of weavers readily.
Main problems faced by the weavers societies are :
1.
2.
3.
4.

accumulated losses for many societies,

inadequate working capital to supply raw material to members,
delayed payments by APCO,
Selling only to APCO and did not develop own market channels.

b) Raw material related

Weavers are getting raw material from Bangalore. Even when the silk is available locally, they
are not keen to purchase from there, as they do not get it on credit. Further, as most of them are
going to Bangalore for selling sarees, they find it convenient to purchase raw silk from there,
where they also get choice of shops.
Master weavers dominate the weaving sector and they need raw material in bulk quantities, which
cannot be sourced from local market.

c) Technology related
Silk weavers are using pit looms in all the clusters. They, in general wanted to shift to frame
looms as it is risky to work with pit looms in rainy season as scorpion and snakes may enter the
pits and bite. However, they hesitate to go for frame looms as they are expensive. Departments
efforts, along with DRDA, to promote frame looms through subsidy did not succeed. The cost of
frame loom is Rs.15000 and own contribution would be Rs. 6,600. Weavers in Pochampally find
it costly. One weaver manufactured low-cost frame looms on his own, using locally available
material costing below Rs.5000 including dobby (useful for border design). As the weavers are
otherwise willing to go for frame looms but for cost, DoS may sponsor low-cost frame looms
manufacture by local weavers/artisans.
Weavers in Narayanpet and Gadwal are of the view that they cannot use frame looms for silk
saree weaving. They are well aware of the technology, as in these clusters cotton sarees are
woven on frame looms.

32

d) Brand identity related

Different silk weaving clusters have maintained traditional brand identity for most years.
However, in recent times the designs are being imitated by other weavers elsewhere and dilution
of standards also has taken place. To entice consumers with lower prices, certain changes are
being brought out in the raw material used. For example, Gadwal sarees are known for the use
pure zari. But, nowadays, weavers are forced to use silk fast or half fine zari, which slashes the
saree price up to Rs1000, to compete with the weavers from other regions producing Gadwal-type
sarees. Certification may help solve this problem. Modalities of certification may have to be
worked out in consultation with CSB.

e) Marketing related
Co-operative Societies are depending exclusively on Government agencies like APCO,
Handloom House for sale of their products. All the societies, in unison, expressed that their
problems are on account of APCO not placing orders for their products. Though they are not
barred from selling in the open market, they are not doing so for fear of market risk related to
credit sales and their recovery. All along they depended on government agencies without
developing their own market channels. However, there is a good market for silk products, as
reflected by the successful operations of master weavers. Details of weavers societies visited are
given in the table below.
Table 2.14. Particulars of Silk Handloom Weaves Cooperative Societies visited
Society
Dhanalakshmi
SWCS ltd.,
Gattuppal, Nalgonda
dt.,

Madanapalli SWCS,
Madanapalli,
Chittoor dt., 1991-92
Pochampally
HLWCS, 1955
Chowdeswari
women SWCS,
Madanapalli,
Chittoor dt.,1991-92
Gandhinagar SWCS,
Dharmavaram,
Ananthapur dt., 1977

Members
(Active
members)
277
(220)

Services
offered

Product range

Undyed
raw silk

sarees -semi-kathan,
kathan, spun silk

100
(nil)

830
(400)

Warp,
weft, dyes,
zari
Inactive

sarees

100
(60)
229
(85)

Raw silk,
Zari,
designs
cards,
looms and
appliances

Sarees

Sarees, pavadas,
dhotis, special polyster
mixed dupattas for
Tirumala Tirupati
Devasthanam.

Problems/Remarks
Sell to APCO on 12% margin.
Problems like: Delayed payments by
APCO; Lack of indents from APCO/
Handloom House; Non-availability of
raw silk from local markets on credit;
Disparities in benefits as applicable to
cotton vs. silk societies.
Defunct. Founded by a non-weaver for
first 5 years and lent to non-weavers too.
In losses. Sell at 12% margin to APCO.
Raw material purchased from Bangalore
on 1 month credit.

Under special officer as elections

are due for last 3 years.

Amount blocked with debtors to

whom sarees were sold on credit.

No enhancement of W/C in recent

period.

Market is not there as APCO is not

giving orders.

33

Society
Peddapuram cotton
and SHWCS,
Peddapuram, East
Godavari dt. (not
under DoS), 1931.

Sri Gandhi SHWCS,

Peddapuram,
E.G.Dt, 1978
Gandhi cotton and
silk HWCS,
Peddapuram,
E.G.Dt., 1975.

Members
(Active
members)
320
(85)

47
(40)

Services
offered

Product range

Dyed raw
silk

Plain sarees in
different colours,
dhotis with borders,
shirting material

Inactive

Sarees, dhotis,
shirtings

Dyed silk,
zari

Plain sarees dhotis,

shirtings

Problems/Remarks

APCO is not placing orders.

Marketing is done through
participation in exhibitions.

Value addition done by making

ready made cotton shirts.

Improved border design of

dhotis and added value.
Defunct for past 5 years.
Poor quality control.
No APCO orders.

APCO keeps high margins and

responsible for lowering demand.

Credit sales are not permitted by

govt. as it is risky.

APCO is not procuring.

34

3F

3D

8H

8H D

he demand for sericulture activity is a derived demand as it emanates from the demand
for finished silk fabric from the consumers. This link is all the same more important
because of high value of the silk fabric and silk goods. There are two market segments for silk
goods domestic and export sectors. Idea about domestic demand pattern can be obtained from
the annual surveys of the Textile Committee, Ministry of Textiles, Government of India.
Information about export market can be obtained from foreign trade statistics. Both the sources
are used for the present chapter. This chapter presents domestic demand, export and import
scenario and projections of future demand for raw silk derived from demand for fabric.
/# !

#/

The latest survey of Textile Committee covered 11,860 households spread in 112 urban and 211
rural areas across the country. The survey brought out that the per capita purchase of silk in the
year 2002 declined drastically by about 52% to 0.13 meter compared to 0.27 meter purchased in
2001. The consumption of synthetic blends grew faster compared to cotton (Table 3.1).
Consumption of silk declined at 1.09 per cent per annum and the share of silk in total fabric
consummation also declined. Closer examination, however, revealed that but for steep decline in
2002, the consumption of silk in both absolute and relative terms increased annually at 6.28 and
2.57 per cent, respectively. The declining trend in the year 2002 can be due to general drought
condition in the country and related slump in demand for non-farm outputs such as silk.
Table 3.1 Consumption of silk, cotton and synthetic blend fabric in India
Year
Silk
1995
1996
1997
1998
1999
2000
2001
2002
Exponential
growth rate per
annum (%)

Per capita consumption of fabric (meters)/annum

Cotton
synthetic+ blend
Total cloth

0.19
0.21
0.25
0.26
0.22
0.31
0.27
0.13
-1.09
(6.28)*

7.02
6.93
7.07
6.39
7.06
7.11
7.45
7.77
1.43

7.41
8.00
9.64
9.42
9.06
10.31
10.84
10.98
5.42

14.62
15.14
16.96
16.07
16.34
17.73
18.56
18.88
3.58

% of silk to
total
consumption
1.3
1.4
1.5
1.6
1.3
1.7
1.5
0.7
-4.54
(2.57)*

* Growth upto 2001.

In monetary terms, an average Indian spent Rs 122.38 in 2001 on silk fabric which declined to
Rs.71.50 in 2002, compared to Rs.41.65 in 1995, thus, registering annual compound growth of a

35

wee bit below 12 per cent (Table 3.2 & Figure 6). The growth is higher than that for cotton and
synthetic blends.
Table 3.2. Expenditure on different types of fabrics vis--vis income per capita

(Rs)
Year
1995
1996
1997
1998
1999
2000
2001
2002
Exponential growth
rate per annum (%)

Per capita annual income

(PCI)
Nominal
Real
8070
8857
10149
8489
11564
9007
12707
9244
14396
9650
15625
10071
16563
10313
17947
10774
10.54
4.10

Per capita expenditure on silk and other garments

per annum
Silk
Cotton
Synthetic+Blend
41.65
198.92
410.82
49.12
227.21
460.82
71.57
265.76
551.57
87.50
249.39
547.81
78.95
288.89
578.75
107.96
300.70
601.39
122.38
307.35
528.43
71.50
353.02
682.43
11.94
7.46
5.57

The implicit prices per saree-length (5 m) and the indices are given in Table 3.3. The silk saree
prices increased at above 13 per cent per annum double the rate at which cotton fabric prices or
general price index have grown between 1995 and 2002. Synthetic fabric prices remained more
or less static all through.
Table 3.3. Trends in implicit unit prices and indices for different fabric materials
Unit prices for saree-length (5m)
Year
1995
1996
1997
1998
1999
2000
2001
2002
Exponential
growth rate per
annum (%)

Silk
1096
1170
1431
1683
1794
1741
2266
2750
-

cotton
142
164
188
195
205
211
206
227
-

Implicit price index

synthetic+ General price

blend
index
277
100.0
288
108.9
286
117.0
291
125.2
319
135.9
292
141.4
244
146.3
311
151.8
6.19

Silk
100.0
106.7
130.6
153.5
163.7
158.9
206.8
250.9
13.18

Cotton
100.0
115.7
132.7
137.7
144.4
149.3
145.6
160.3
5.95

Synthetic
+ blend
100.0
103.9
103.2
104.9
115.2
105.2
87.9
112.1
0.14

Incidentally, the urban-rural divide widened over time in terms of per capita spending on silk
purchases. An average urbanite spent about six times more on silk purchases compared to his
rural counterpart in 1990. By 2001, the urban consumers expenditure on silk fabric was twelve
fold higher as compared to an average rural consumer. Even in 2002, when per capita
consumption registered steep decline, urban to rural expenditure ratio remained above 9 (Table
3.4, Figure 7 and Figure 8). Another trend of significance is that the per capita purchase of silk by
urban consumer is more stable compared to his rural counterpart.

36

Figure 6. Trends in per capita income (nominal) and expenditure on

silk, cotton and synthetic blends (Rs)
800

1 9000

700

600
1 5000
500

400

1 3000

300
1 1 000
200

per capita incom e

per capita expenditure

1 7000

9000
1 00

0
1 995

7000
1 996

1 997

1 998

1 999

2000

2001

2002

2003

year
Silk
synthetic+blend

cotton
per capita income

Table 3.4. Urban- rural divide in annual per capita consumption of silk vs. other fabric
types
Year
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002

Per capita purchase of silk (metres)

All
Urban
Rural
Urban to
India
rural ratio
0.19
0.47
0.09
5.2
0.20
0.44
0.12
3.7
0.11
0.31
0.04
7.8
0.17
0.47
0.07
6.7
0.17
0.46
0.09
5.1
0.19
0.45
0.11
4.1
0.21
0.34
0.17
2.0
0.25
0.56
0.15
3.7
0.26
0.75
0.09
8.3
0.22
0.52
0.12
4.3
0.31
0.72
0.17
4.2
0.27
0.80
0.09
8.9
0.13
0.35
0.04
8.8

Per capita expenditure on silk purchase (Rs.)

All India
Urban
Rural
Urban to
rural ratio
27.83
74.54
11.62
6.4
39.25
87.04
22.70
3.8
20.61
57.08
7.99
7.1
41.37
115.56
15.67
7.4
42.68
113.00
16.67
6.8
41.65
110.87
17.69
6.3
49.12
98.68
31.96
3.1
71.57
173.29
36.35
4.8
87.50
272.46
23.46
11.6
78.95
188.47
41.03
4.6
107.96
282.29
47.60
5.9
122.38
385.43
31.25
12.3
71.50
200.73
21.74
9.2

Middle-income group earning between Rs 35000 and Rs 100000 per annum accounted for about
three-fifths of silk, both in physical and monetary terms (Table 3.5).

37

Table 3.5. Distribution of consumption of silk among income groups in India

Income (Rs)
<35000
35000 to 100000
>100000
Total

Quantity (lakh metres)

360
1380
650
2390

% to total
15.1
57.7
27.2
100.0

Value (Rs. lakh)

86650
392830
194660
674140

% to total
12.9
58.3
28.9
100.0

Figure 7. Trend in consumption of silk (metres per capita) in rural and urban areas
0 .9 0
0 .8 0

Urban

0 .7 0
0 .6 0

y = 0.0196x - 38.532

0 .5 0
0 .4 0

India

0 .3 0
y = 0.0064x - 12.642

Rural

0 .2 0
0 .1 0
y = 0.0014x - 2.7476

0 .0 0
1990

1992

1994

1996

1998

2000

2002

2004

Note: y = consumption of silk (metres) and x =Year ;

Growth per Year : Urban - 0.0196 m; Rural 0.0014 m; India 0.0064 m

Silk is more popular among the South Indian consumers (Table 3.6). This region accounts for 37
per cent of quantity purchased and 53 per cent of value.
Table 3.6. Region-wise distribution of silk consumption
Region

North
South
East
West
All India

Silk
consumption
per capita
(metres)
0.15
0.38
0.24
0.24
0.25

expenditure
per capita
(Rs)
41.15
155.51
51.27
38.34
71.57

Aggregate
quantity (lakh
meters)
420
880
570
520
2390

% to total

17.6
36.8
23.8
21.8
100.0

Aggregate Value
(Rs.lakh)
110690
358080
123730
81640
674140

% to total

16.4
53.1
18.4
12.1
100

38

Figure 8. Trend in expenditure on silk (Rs. per capita) in rural and urban areas
450.00
Urban
400.00
350.00
300.00
y = 2 0 .6 0 4 x - 4 0 9 6 0

250.00

Trend line

200.00
India

150.00
y = 6 .9 1 9 6 x - 1 3 7 5 0

100.00

Rural

50.00
y = 2 .0 3 4 2 x - 4 0 3 5 .3

0.00
1990

1992

1994

1996

1998

2000

2002

2004

Note:
y = expenditure on silk (Rs) and x =Year; Per capita yearly increase in consumption of silk in Rupees
Urban Rs.20.60 ; Rural Rs.2.03 ; India Rs.6.92

The price trends coupled with those of per capita income explain the temporal variation in silk
consumption as reflected in demand function given below (Table 3.7).
Table 3.7. Parameters of consumption (revealed demand) function for silk fabric
Parameter
Constant
Standard Error of Y-Estimated
R Squared
No. of Observations
Degrees of Freedom
X Coefficient(s)
Standard Error of Coefficient
t- value
Elasticity

per capita income('

000) (nominal)
0.027621
0.008025
3.441815
1.377279

Coefficient
0.170032
0.04062
0.564159
13
10
Price of silk Rs/m
-0.000892
0.000308
-2.895954
-1.229179

The results indicate that with one per cent increase in price of silk, the consumption declines by
1.23 per cent and vice versa. The demand for silk fabric is highly elastic, i.e. any change in price
brings about proportionally higher change in silk demand. Further, the demand for silk fabric is
positively income elastic such that improvement in income increases silk consumption more than
proportionately. In other words, price is an important parameter that determines purchase of silk.
This partly explains why market is flushed with cheaper sarees and other items made using silk
mixed with cotton/ synthetic fibre, cheaper zari, art silk which are fast moving items finding
favour with middle class. Private outlets perhaps understood this and are loading lower margins

39

on low-end sarees and are trying to offset lower margins through selling high-end sarees with
larger margins. This is possible without much loss of sales as the demand for high-end sarees
would be relatively inelastic as they are compulsively purchased for ceremonies like wedding.
They also follow strategies like festival discounts and offering range of silk-like products. Even
weavers have understood the market and are producing to suit consumers budget. For example,
Gadwal sarees are traditionally known for the interlocked borders and pure zari. This makes
Gadwal silk saree in the starting range to be priced at about Rs.3000 at the weaver level. To
penetrate into the market, some weavers have started using tested zari (half fine or silk fast types)
that costs less than 1/5th of the cost of pure zari. This brought down the cost of the saree by
about Rs.600 to Rs.800. Further, cotton or synthetic fibre is used for weft along with silk warp.
This brought the price range to even Rs. 1400- Rs.1500. In the market Gadwal-type sarees are
sold even for Rs.700 to Rs.800 by diluting standards. This has eroded the reputation of Gadwal
as a brand. Similar erosion in the reputation has taken place in case of other popular silk brands
like Narayanpet, Dharmavaram, Kanchi, etc., with the availability of imitation sarees that an
ordinary consumer can hardly differentiate. Even his faintest sense of differentiation is often
blurred, as he is enticed in the garb of discount or clearance sales.

#6

3#! )

China has been the undisputed leader in silk production and its share in World exports. India, in
spite of being second largest producer, shares only 1/5 th of the Worlds production of raw silk
(Table 3.8). Incidentally, hardly any major new producer has emerged in the World silk market.
This may be on account of two factors namely the price and the quality. While the raw silk price
in the International market are at their lowest in twenty years, the demand for quality raw silk is
soaring high due to modernisation of textile machinery that works at higher speeds.
Table 3.8. Production of raw silk in different countries (tonnes)
Year
China
India
Japan
Brazil
Uzbek.
Vietnam
Thailand
Iran/
Turkey
S.Korea
N.Korea
Others
Total

2000
60000
15857
557
1389
1100
955

1250
81108

1999
55990
13944
649
1554
923
780
1000
22

1998
49430
14000
1080
1821
1500
862
900
400

1997
56117
14048
1920
2120
2000
843
1039
500

1996
59000
12927
2580
2270
2500
1500
1144
600

1995
77900
12884
3240
2468
1320
2100
1313
750

1994
72000
13200
3900
2520
1800
NA
1377
396

1993
69300
13200
4200
2340
1800
NA
1229
427

1992
54480
12600
5100
2280
2160
NA
1589
423

50
150
1250
76312

146
150
1438
71727

146
200
1666
79590

146
360
2165
85192

346
600
2217
105388

491
1200
3504
100388

840
1200
2801
97337

910
1200
1677
82419

40

The countries participating in the international silk trade can be classified into four types
as below:
Category
Mainly Raw Silk Producers
Raw Silk Producers and Manufacturers of
Processed Silk Goods

Silk Converting Countries using imported raw

silk
Countries which neither produce raw silk nor
process it, i.e. pure consumers

Countries
Vietnam
Brazil, China, India, Japan, Republic of
Korea, The Commonwealth of
Independent States, Thailand,
Bangladesh, Armenia, Bulgaria, Egypt,
Nigeria, Uganda, etc.
France, Germany, Italy, Switzerland and
United Kingdom.
Australia, certain European countries,
New Zealand, Canada, the United States
and most of Africa and Latin America.

Two groups of products are traded internationally:

(i) Raw silk, silk waste, silk yarn and create fabric which need further processing
(ii) Finished silk fabric, readymade garments, made up goods, interior decoration items,
etc.
Hongkong and China, taken together, are the Worlds largest converter of silk fabric into
industrially processed garments.
The situation in India is completely different. Here almost all the raw silk produced is consumed
domestically and there has been a wide gap between supply and demand of raw silk, which
necessitated imports of silk yarn, primarily from China. As of today, many of Indias leading
exporters of silk goods depend entirely on imports for their raw material. Thus, we have two
segments within the Indian Silk Industry, one depending on the domestic supply of raw material,
which is not adequate for its needs, and the other export oriented segment, which totally depends
on imports for its raw material needs. It is intriguing to note that while on one hand studies
indicate that there is excess demand over supply of raw silk in the country and hence imports are
necessary, but at the same time imports of raw silk are ascribed as reasons for falling domestic
raw silk prices. One possible reason may be while the official estimates of the imports may be
less than the demand-supply gap, the annual imports including those channelled through nonofficial sources might be very large.
India has a major strength in export trade compared to other countries, i.e., our product range
includes the handloom silk fabric with designs exclusive to our country. Table 3.9 gives trends
in silk exports vs. textile exports during last six years. It is reassuring to note that silk export
earnings grew at 19 per cent, much faster than textile as well as over all export earnings.
Product category-wise export earnings data (Table 3.10) show that value of exports of mulberry
silk items went up by a little below Rs.600 crore from Rs.1485 crore in 1999-2000 to Rs. 2053
crore in 2002-03.

41

Table 3.9. Indias total exports and share of textiles and silk exports
Year

1997-98
1998-99
1999-00
2000-01
2001-02
2002-03

(Value : Rs Crore)
Total
%
Total
%
% share Silk
%
Silk export
exports increase textiles increase of textile export increase earnings as % of
earnings
over
over
export
to total earnings over
Textile
Total
(incl. preceding earnings preceding export
preceding exports export
Reyear
year
earnings
year
earnings earnings
exports)
130101
9.5
38851
11.1
29.9
1060
7.8
2.7
0.8
7.4
44537
14.6
31.9
1251
18.0
2.8
0.9
139753
14.2
48812
9.6
30.6
1756
40.4
3.6
1.1
159561
203571
27.6
55242
13.2
27.1
2422
38.0
4.4
1.2
209018
2.7
57193
3.5
27.4
2360
-2.6
4.1
1.1
255137
22.1
57384
0.4
22.5
2294
-2.8
4.0
0.9

Exponential
growth rate per
14.8
annum (%)
Source: CSB, Bangalore

8.4

19.0

9.9

3.7

Table 3.10. Product category-wise exports of mulberry silk goods

Particulars
Qty.
MT

1999-2000
Val.
Mn.
Rs Cr

US$

Qty.
MT

A. Mulberry
silk goods

2622 580.15 133.83

Dress
material
Readymade 2355 373.74 86.22
garments
1.7 145.43 33.55
Carperts
(lakh sq
mts.)
847 210.55 48.57
Sarees
92.6 21.36
Scarves/Sto 243
les
432 83.17 19.18
Others*
Total of
mulberry
silk goods

1485.64

% of
mulberry
silk
products to
total
Raw silk &
silk yarn #
Silk waste

Grand Total

168
1491

Qty.
MT

2001-02
Val.
Rs Cr
Mn.
US$

Qty.
MT

2002-03
Val.
Rs Cr
Mn.
US$

3641

820.65 179.65 3445

721.78 151.51 4184

850.16 175.69

4381

642.83 140.72 3445

588.08 123.44 5028

527.2 108.95

1.37

110.88

24.27

2.45

172.27

36.16

1.53

96.13

19.87

1432
216

333.23
111.72

72.95 1280
24.46 168

305.79
87.02

64.19 1392
18.27 434

348.87
94.56

72.1
19.54

644

342.71

84.63

B. Total silk
goods

2000-01
Val.
Rs Cr
Mn.
US$

121.7

26.65

2141.01

468.7

757

88.40

1701.92

392.60

20.45

4.72

172

33.18

7.65

1880

1755.55

404.97

516.97

14.99

3.28

45.49

24.65
418.22

730

84.44

2361.50

2421.98

117.45
1992.39

525

9.96 1469
530.21

135.74

28.05

2052.66

424.19

89.48

2272.55

477.03

50.43

10.58

279

36.58

7.68

935

2359.56

495.29

2250.41

465.06

27.88

5.76

15.76

3.26

2294.05

474.08

* Others include Ties, Handkerchiefs, Curtains, etc.

# Raw silk and silk yarn includes Dupion yarn, spun silk yarn and noil yarn and cocoons (both mulberry and nonmulberry).
Source : Monthly Statistics of Foreign Trade of India, DGCI&S, Kolkata.

42

U.S.A is the numero uno among countries that contribute to our silk export earnings (Table 3.11
& Figure 3.4 and 3.5). While several measures have been initiated over time to promote the
exports, the export strategy for silk goods should aim at: (1) new countries (2) expanding within
existing countries. For example, though U.S market offers excellent opportunities for our silk
products, the emphasis has been on the New York market till date. Tapping the e-commerce
channels and using the network of NRIs can be important market strategies. More importantly,
the creativity and quality should not be forgotten. We also have another advantage of being the
exclusive source country for all the four types of silk, including the Eri silk known as vegetarian
silk.
Table 3.11. Country-wise silk export earnings
Country

1999-00
2000-01
2001-02
2002-03
Mn.
%
Rs.Cr Mn.
%
Rs. Cr Mn.
% Rs. Cr Mn. %share
US$
share
US$ share
US$ share
US$
136 33.7
867 190 35.8
681 143 28.9
677 140
29.5
591
176
41 10.0
185
41
7.6
166
35
7.0
180
37
7.8
106
24
6.0
150
33
6.2
193
40
8.2
177
37
7.7

Rs. Cr

U.S.A.
U.K.
Hong
Kong
U.A.E.
German
P. Rep.
Italy
France
Spain
Saudi
Arabia
Singapore
Others
TOTAL

60
165

14
38

3.4
9.4

88
218

19
48

3.6
9.0

104
159

22
33

4.4
6.7

135
130

28
27

5.9
5.7

128
81
45
19

29
19
10
4

7.3
4.6
2.6
1.1

171
94
78
26

38
21
17
6

7.1
3.9
3.2
1.1

114
98
64
48

24
20
14
10

4.9
4.1
2.7
2.0

116
93
70
64

24
19
14
13

5.1
4.1
3.0
2.8

8
2.1
80 19.8
405 100.0

65
480
2422

14
2.7
105 19.8
530 100.0

71
661
2360

15
3.0
139 28.0
495 100.0

61
590
2294

13
122
474

2.6
25.7
100.0

36
347
1756

Figure 9. Country-wise shares in Indias

export earnings, 1999-00

Figure 10. Country-wise shares in silk

Indias silk export earnings, 2002-03

Others (20%)
Singapore ...

Others
25%

U.S.A.
29%

U.S.A. 34%

Saudi Arabi...
Spain (3%)

Singapore
3%
Saudi Arabia
3%

France (5%)
Italy (7%)
U.K. (10%)
German P....
Hong Kong...
U.A.E. (3%)

Spain
3%
France
4%

U.K.
8%

Italy
German P. Rep.
5%
6%

Hong Kong
8%
U.A.E.
6%

43

As we mentioned earlier, India is dependent on imports to meet its domestic demand for silk.
Also it is a large importer of silk yarn and fabrics. Leading exporters of the country are entirely
dependent on imports for their raw materials for converting into high quality, lighter weight
clothing such as blouses, shirts, dresses, sarees etc. Hence, Government of India has allowed
imports of raw silk and silk yarn into the country. Import of raw silk, silk yarn and fabrics and
country-wise raw silk imports statistics are given in Tables 3.12 and 3.13, respectively.
Table 3.12. Import statistics

Unit

Qty
MT

1999-00
Value
Rs.
Mn
Cr
US$
412.74
95.21

Qty
MT

2000-01
Value
Rs.
Mn.
Cr
US$
475.15
104.01

Qty
MT

2001-02
Value
Rs.Cr
Mn.
US$
624.73
131.14

Qty
MT

2002-03
Value
Rs.Cr
Mn.
US$
647.15
133.74

Raw
Silk

5018

Silk
Yarn*

722

43.67

10.07

1312

72.27

15.60

1206

83.68

15.72

1638

147.40

30.46

Silk
Fabrics

435

33.75

7.79

839

27.04

6.14

1682

111.84

25.32

3285

212.78

43.97

6175

490.16

113.07

6864

574.46

125.76

9696

820.25

172.18

13977

1007.34

208.17

Total

4713

6808

9054

* Includes cocoon and silkwaste

Source : Monthly Statistics of Foreign Trade of India, DGCI&S, Kolkata.

Table 3.13. Countrywise import of raw silk

Country

China P.
Rep.
China
Taipei
(Taiwan)
Brazil
Korea Rep.
Hongkong
Switzerland
Uzbekistan
U.S.A.
Singapore
Russia
Others
Total

1999-00
2000-01
2001-02
Value
Qty.
Value
Qty.
Value
Rs. Cr Mn. MT Rs. Cr Mn.
MT
Rs. Cr Mn.
US$
US$
US$
4581 378.42 87.29 4333 438.18 95.92 6317 584.13 122.61

Qty.
MT

24

1.93

0.45

144

14.59

3.19

64

107
9.67 2.23
23
2.28 0.50
46
3.46 0.80
28
2.63 0.58
202 14.68 3.39 105
9.42 2.06
2
0.17 0.04
1
0.10 0.02
11
0.78 0.18
3
0.36 0.08
18
1.46 0.34
17
1.55 0.34
4
0.37 0.09
3
0.34 0.07
3
0.27 0.06
1
0.04 0.01
20
1.53 0.34
55
5.66 1.24
5018 412.74 95.21 4713 475.15 104.01

63
13
28
79
117
3
1
3
120
6808

6.67

1.40

6.82
1.43
1.31
0.27
2.59
0.54
7.22
1.52
7.84
1.65
3.06
0.64
0.07
0.01
2.13
0.45
2.89
0.61
624.73 131.14

2002-03
Value
Rs. Cr Mn.
US$
7214 516.29 106.69

Qty.
MT

70

5.35

1.11

148
7.69
1.59
16
1.11
0.23
3
1.92
0.40
1493 110.61 22.86
32
2.00
0.41
5
0.35
0.07
4
0.23
0.05
69
1.6
0.33
9054 647.15 133.74

Source: Directorate General of Commercial Intelligence & Statistics, Kolkata.

44

Long-term trend in imports during 1980-81 to 2002-03 is given in Table 3.14.

Table 3.14. Secular trend in raw silk* production and imports

(Tonnes)
year

Raw silk
production
5041
1980-81
12560
1990-91
15857
2000-01
17351
2001-02
16319
2002-03
Exponential Growth rates (%)
10.38
1980-81-1989-90
2.51
1990-91-1999-00
2.50
1990-91-2002-03

Import
319
1598
4713
6808
9054
14.61
6.65
9.70

* Includes non-mulberry silk.

Source: CSB, Bangalore.

#/

2# !

Per capita silk fabric consumption is projected for the years 2004-05 to 2011-12 (Table 3.15).
The projection is ultimately made in terms of mulberry area in hectares, which is given in Chapter
V. In this section, raw silk demand is estimated based on certain assumptions as indicated
below:
1.
2.
3.
4.
5.

The per capita consumption is likely to grow as per the past trend during 1990s.
The ratio of urban to rural population is likely to remain the same.
The population is projected at an exponential rate of 1.8 per cent per annum.
Raw silk per one metre fabric is 100 gm.
Import levels are projected using past trend.

Table 3.15. Demand projection for silk, based on trends in per capita silk consumption
Year
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12

Per capita silk Population

Silk cloth
consumption (projected)
Mts.
Crore
Lakh mts
0.26
110.3
2840
0.26
112.3
2970
0.27
114.3
3120
0.28
116.4
3260
0.29
118.5
3420
0.30
120.6
3580
0.31
122.8
3750
0.31
125.0
3930

Raw silk
Lakh kgs
284.0
297.5
311.6
326.5
342.0
358.3
375.3
393.2

Raw silk
imports
Lakh kgs
72.4
75.5
78.9
85.6
94.1
101.7
107.2
111.2

Silk production
needed
Lakh kgs
211.5
222.0
232.7
240.9
247.9
256.6
268.2
281.9

It is expected that by the end of XI Plan, demand for silk cloth would be 3930 lakh metre, which
requires domestic raw silk production of 282 lakh kg after netting out the expected raw silk
imports of 111 lakh kg.

45

The foregoing discussion was around domestic and export demand for silk and silk products.
Two important developments may impinge on the future demand for silk. They are, one,
phasing out of quotas under multi-fibre agreement (MFA) from 01 January 2005 and the other is
launching of silk mark scheme.

Implications of Multi-Fiber Agreement

An important feature of the Uruguay Round negotiations was the agreement by the developed
countries to abolish the Multi - Fibre Agreement (MFA) quotas that have restricted exports of
textile and clothing products from developing countries for close to 40 years. This iniquitous
system of quotas has violated all the fundamental principles of the multilateral trading system,
and discriminated against the poorest countries and those seeking to move up from reliance on
commodity trade towards an emphasis on manufactures. Quota abolition will create opportunities
for developing countries, but will also expose them to additional competition from other,
formerly restrained, exporters.
As far as India is concerned, to put in an optimistic note, it has the potential to benefit
substantially from the abolition of quotas in terms of market access, employment and output
growth, and productivity gains. Policy constraints need to be eased for another and even more
immediate reason - the threat of increased imports arising from the removal of domestic import
restrictions with effect from April 2001. To cap it, the Indian textile industry need to be
competitively priced with higher quality against the cushion which it was enjoying for years with
low quality and strong domestic demand.
One of the important steps to be taken by us in the wake of opening of the textile sector is to
protect our brands and maintaining quality. We may have to protect our sector under the
provisions of Geographical Indications of Goods (Registration and Protection) Act, 1999. This,
besides boosting exports, may also prevent unauthorised use of our traditional designs and trade
names. A small step is taken in this direction in Pochampally cluster (see Box 3.1). Another
step is to implement silk mark scheme, which can give stamp of quality that boosts consumers
confidence in the purity and quality of silk goods they are purchasing. Thus, the silk mark
scheme, launched in 2004, may boost demand for silk goods both in domestic and foreign
markets (details of the scheme are given in Box 3.2).

46

Box 3.1. Building brand image of Pochampally handloom products

NABARD launched the cluster development programme in Pochampally handloom silk on 25 July 2003
under National Programme for Rural Industrialisation of Government of India to make the products of
Pochampally cluster as a globally preferred tie and dye textiles. Since then, to protect and spread the
brand image of Pochampally handloom silk, various initiatives are being taken by NABARD.
To create awareness about the best dyeing practices, NABARD, in association with Textile Committee,
organised a workshop at Pochampally on 3 November 2003. The Textile Committee decided to offer
testing facilities (to ensure the quality of dyes, etc.) to the weavers of Pochampally at a 40% discount on
their normal charges.
To enable the weavers to understand the issues and the implications of IPR, NABARD conducted a
workshop in association with Andhra Pradesh Technology Development and Promotion Centre and Textile
Committee.
NABARD financially supports for registration of products of Pochampally Handloom Silk Cluster under
the Geographical Indications of Goods (Registration and Protection) Act, 1999. NABARD has engaged the
professional services of Andhra Pradesh Technology Development and Promotion Centre (APTDC) to
register the products of Pochampally under the above act.
The above mentioned act which was passed in the Parliament in December 1999 and which came into
effect from 15 September 2003, may benefit the Pochampally weavers in many ways such as:
* Provision of legal protection to Geographical Indications in India that in turn may boost exports.
* Prevention of unauthorized use of the name of Pochampally ikat
* Prevention of unauthorized copying of the designs of the traditional weavers by mills and power looms.
* Popularisation of brand image of Pochampally products.
Thus the above benefits may reach around 18,000 weaver households in Nalgonda district where there are
nearly 40 villages under the Pochampally cluster.

Box 3.2. Silk Mark Scheme: Out of the cocoon at last!

The Silk Mark Organisation of India (SMOI), a registered body sponsored by Central Silk Board (CSB),
Ministry of Textiles, launched Silk Mark Scheme in early 2004 with twin objectives consumer protection
and brand promotion of Indian silk. Silk Mark is the worlds first exclusive logo for silk. SMOI will
operate the Silk Mark scheme. The Silk Mark logo is a registered trademark under the Trade Mark
Authority of India. The logo is the artistic depiction of silk moth emerging from its cocoon and transformed
from pupae to a butterfly. The logo, therefore, represents nature.
What is Silk Mark?
Silk Mark is a symbol ensuring a quality benchmark for silk. It would be a hallmark for products made
from pure and new silk. Silk Mark logo will be prominently displayed and affixed to products qualifying
certain standards. Authorised users of Silk Mark would be allowed to use the Silk Mark logo in the
products containing 100% natural silk. This ensures that a Silk Mark product contains pure silk in warp
and weft in its base fabric but allowing ornamental zari/thread work in pallu, body or border as extra warp
or weft at loom stage or after loom. Products with zari used along with warp and/or weft will also qualify
for Silk Marking.
Silk Mark covers all silk products - primary, intermediate and finished silk products viz. Raw silk, Silk
yarns, Silk fabrics, Silk sarees, Silk made-ups, Silk garments and Silk carpets.
Authorised/Bonafide Users of Silk Mark

47

Silk manufacturers, wholesalers, retailers and exporters of repute, who fulfil certain minimum standards in
their raw material, supply chain and sourcing of finished or semi-finished products, can become an
Authorised User of Silk Mark.
Anyone who wishes to become a bonafide user of Silk Mark should first become a member of SMOI. Any
member can become an Authorised User by registering their name and by executing a user agreement with
the SMOI. They can use the SM logo in their business premises for publicity as also in their products for
sale.
Likely Benefits for Indian Silk
The Silk Mark would play a multi-dimensional role in the overall promotion of Indian Silk by helping to
identify pure silk products and market Indian silk in the domestic and international markets.
Indian Silk, for the first time, is acquiring a logo in the form of Silk Mark for its brand promotion. This has
added significance in the present global silk scenario where no silk mark logo is available elsewhere with
any of the silk producing nations or at the international level. Hence it could building brand loyalty among
the consumers in the world arena.

48

F D

FI

C
F *
3 8

n the light of the discussion in the previous chapters, any practicable project for developing
the sericulture sector needs to be based on well-thought out strategies and such strategies in
turn work well only under salubrious and responsive policy climate. In the present chapter some
of the issues observed during the field visits and study of the available information having
relevance for devising strategy are discussed.

(#

'

) !'#

! $ !"

For historical reasons, the activity started and flourished in parts of Karnataka bordering Andhra
Pradesh. From there it spread into the bordering districts of Ananthapur and Chittoor of Andhra
Pradesh. Even today, the activity is virtually concentrated in these two districts only, even as it
has spread, thanks to the efforts of the DoS, over all the 22 districts in the state over time. But the
instability in the area in all the districts is high and large extent of mulberry fields has been
uprooted and more so in non-traditional districts i.e., other than Ananthapur and Chittoor. Even
in districts which recorded several hundreds of acres under mulberry, the area dwindled down to
mere two-digit numbers. Detailed account of these trends was already given in earlier sections.
The activity is widespread in Ananthapur and Chittoor districts due to their proximity to the
Karnataka where the activity is taken up on a larger scale. The Ramanagaram and Bangalore
Cocoon markets provide the benchmark for the cocoon prices in the southern states and absorb
maximum proportion of cocoons produced in the neighbouring states. The districts in the state
are arranged according to the radial distances from Anantapur / Chittoor. Districts on different
distance contours, their combined share in mulberry area, cocoon production along with average
level of productivity are shown in Table 4.1. Districts arranged according to their contours are
shown in the Figure 4.1.
Table 4.1. Contours of sericulture activity in the Andhra Pradesh
Contour Districts on the contour
No.
0
1
2
3
4
5
6
State

Chittoor, Anantapur
Nellore, Cuddapah, Kurnool
Prakasam, Mahabubnagar
Guntur, Rangareddy, Medak, Nalgonda
West Godavari, Krishna, Nizamabad,
khammam, Karimnagar, Warangal
East Godavari, Adilabad
Srikakulam, Vizianagaram, Visakhapatnam

Mulberry Cocoon Productivity Rank based

area (% to production (kg/ha)
on
total) (% to total)
productivity
83.65
87.34
931
1
11.45
9.23
719
3
2.28
1.49
582
5
0.75
0.59
699
4
1.19
0.33
0.35
100.00

0.96
0.18
0.22
100.00

724
477
555
892

2
7
6

49

) (

# -A;A

'

! $ !"

# '

Srikakulam(27/1001)
Vizianagaram(40/270)
Visakhapatnam(40/540)

Adilabad(20/455)

Nizamabad(6/43)

Karimnagar(80/691)

Medak(46/1180)

East

W arangal(40/763)
Mahabubnagar(575/518)

Godavari
(80/482)

Rangareddy
(42/488)
Khammam(38/1166)

Kurnool
(3030/690)

Nalgonda(41/618)
B W est Godavari

Anantapur

(13213/931)

(146/475)

Krishna

(52/1200)

Cuddapah

(400/931)

Guntur(100/600)
Nellore

(60 /750)

B Prakasam(120/887)

Chittoor
(12283 /931)

Note : The first set of figures presented in the parentheses represent the area under mulberry cultivation
in the district, while the second set of figures represent productivity of cocoon.

The development of sericulture activity is stronger in the districts falling on the contours nearer to
Anantapur / Chittoor districts. Farther the districts are from this hub of activity, weaker is the
development of the activity in terms of area as well as production of cocoons. This geographical
spread suggests that the strategy for development of sericulture should be such that the districts

50

on the lower contours should be given priority and the development efforts should spread from
lower to higher contours. Presently, in many a non-traditional district, the activity is found spread
randomly across and even single digit area is recorded in some mandals. Hence, adoption of
cluster approach through nucleus village concept could be the appropriate strategy. Further,
sericulture need not be spread in all the districts alike. In Telangana districts, Eri or Tasar1 culture
may be popularised depending on the suitability and as per the plan/strategy of the Government
Department already in vogue.
The geographical spread of the activity and its concentration is virtually dependent on the
presence of strong reeling base and strategic location of cocoon markets for the reelers to
participate. In view of the presence of good market network and a comparatively stronger reeling
base in Chittoor and Anantapur districts, coupled with nearness to several cocoon markets in
Karnataka, the farm sector activity has all along been stronger in these districts. On the other
hand, in respect of contour 1 districts of Nellore, Cuddapah and Kurnool districts sizable acreage
under mulberry still exists in view of their nearness to cocoon markets located in Chittoor and
Anantapur districts.
A notable observation has been that in spite of recording an estimated production of more than
2500 MT of cocoon by the 3 districts in contour 1 during 2003-04, virtually insignificant
quantity of cocoons was transacted in all the 5 market centres located in these districts put
together during the past 3 years (99.62 MT during 2001-02, 13.78 MT during 2002-03and as little
as 0.25 MT during 2003-04). This indicates that a mere existence of cocoon market nearby cannot
act as a driving force for the development of farm sector but is decided by the presence of
adequate reeling capacity and the participation of sizable reelers in the cocoon markets. Similarly,
in the 9 non-traditional districts in Coastal Andhra put together, while the total production of
cocoons during 2003-04 could be to an extent of about 441.33 MT, only 57.41 MT was transacted
in all the 10 markets located in this region. Thus, 87% of cocoon production was sold in farthest
markets of Chittoor and Anantapur districts since there has been virtually no reeling base in
Coastal Andhra. This could be the major factor for large scale uprooting of mulberry gardens in
this region. In view of higher expenses associated with transportation and marketing, only
medium and large farmers who could harvest sizable quantity of cocoon in a crop could afford to
sell their cocoons in distant markets and continue the activity. These observations strongly
suggest that the efforts of the Department in promoting mulberry in these districts might not
sustain in a longer run as long as reeling sector does not make its strong presence in this region.
Similar strategy holds good in the districts of Telangana region also. In view of these factors, it is
*

Andhra Pradesh also produces tasar and eri silks, besides mulberry silk. Tasar rearing is concentrated in the forest
areas of Adilabad, Karimnagar, Warangal, East Godavari and Khammam districts by the tribal. The production of tasar
reeling cocoons increased 10-fold between 1999-2000 and 2002-03 (from 0.02 lakh kahans to 0.21 lakh kahans). Tasar
silk production increased by 21-fold during this period (from 1.0 MT to 21.0 MT). Tasar weaving is concentrated
mainly in Mahabubnagar, Karimnagar and Adilabad districts. At present there are about 150 looms involved in Tasar
weaving, of which Edapally in Karimnagar district has the maximum number of looms (63 nos.). The state is also
promoting ericulture jointly with Central Silk Board, Ministry of Textiles, GOI. The Project, the first outside the
Northeast India, will have an outlay of Rs. 3.71 crore. It aims at harnessing the existing castor and tapioca plantations
for the development of ericulture industry in the State. The programme has potential in Mahabubnagar, Nalgonda,
Medak, Ranga Reddy and Anantapur (castor) and East Godavari (tapioca).

51

suggested that the Department might not consider all the districts simultaneously for promotion of
farm sector but should prioritise and concentrate only in selected districts/regions. In districts like
Guntur, Krishna, East and West Godavari, DoS may think of promoting/encouraging corporate
farms of 25-acres with in-house reeling capacity (10-basin improved cottage basin units) and
twisting unit (composite unit). Accordingly, the following strategy has been suggested for
different districts/regions
Contour
No.
0

Districts on the contour

Nellore, Cuddapah, Kurnool

Prakasam, Mahabubnagar
and Khammam

Guntur, Rangareddy,
Medak, Nalgonda

West Godavari, Krishna,

Nizamabad, Karimnagar
and Warangal

East Godavari, Adilabad

Srikakulam, Vizianagaram,
Visakhapatnam

Chittoor, Anantapur

Strategy
Bringing acreage back to previous level. Expanding
post-cocoon sector. Low-investment reeling options,
such as improved cottage basin, should be promoted.
Planned annual area increment 1000 ha/district.
Area expansion is possible and potential increases with
the expanding reeling capacity in zero contour districts.
Simultaneously, post-cocoon activity should be
popularized.
Planned annual area increment 150
ha/district, but, for Nellore 100 ha.
Promote mulberry in Prakasam (planned annual area
increment 50 ha) and ericulture in Mahabubnagar and
Khammam districts.
Guntur has a range of commercial crops and may not
need much attention on mulberry. However, increment
of 40 ha/year and encouraging of composite units
planned. Promote ericulture in other districts.
Mulberry in West Godavari and Krishna districts and
ericulture in the other. Popularise rearing-cum-reeling
units, which eases out problem of non-availability of
market for cocoons.
Planned increment 60
ha/year/district. Encourage composite units.
Concentrate on Tasar culture, which is already gaining
popularity, especially in tribal areas.
Planned
increment 60 ha/year in East Godavari. Encourage
composite units and small-scale rearing-cum- reeling
units.
Potential exists. Mulberry can fit well in this less
developed area with much poverty and unemployment.
Planned incremental area 20 ha/district/year.
No
known commercial crops are grown here. However, in
view of the poor reeling base, strategy should be to
promote and integrate rearing-cum-reeling units.
Separate training centre for rearing and reeling may be
needed here that can cover other coastal districts also.

# !

Sericulture has been a small farmers activity all along as the rearing of silk worms is highly
labour intensive and requires a quality labour input which only family labour can offer. Further,
the scarcity of irrigation water also acts as a constraint for expanding area under mulberry. This

52

is especially so in the traditional districts of Anantapur and Chittoor. While it was observed that
farmers are having mulberry garden of about half an acre in Anantapur and Chittoor districts, in
non-traditional districts like Nalgonda, farmers having even up to 10 acres were found. A few
technological developments in the mulberry cultivation and silkworm rearing have shifted
suitability of the activity against small farmers. First the leaf rearing system practiced earlier is
slowly giving way to shoot rearing system. The later system is less labour intensive and hence,
even large farmers can also take up rearing activity without hiring many workers.
Second, separate rearing sheds are being promoted for various advantages they offer.
Availability of land and financial resources being the main constraint, small farmers may not be
able to take up the new technology. Further, fixed investments on separate rearing sheds and
rearing equipment will not be viable with the small-scale operations. Third, with the introduction
of bivoltine races (BV) and V1 variety of mulberry, it was sought to improve the productivity and
quality of cocoons for making international quality silk. The rearing of BV silk worms is more
risky and, hence, requires intensive care and attention. Even some large farmers are not very keen
in rearing BV races, let alone the small farmers. To make adoption of BV successful, there
should be perceptible price differential between BV and CB cocoons. Earlier, BV cocoons
commanded a price higher by as much as Rs100 per kg. During last couple of years, however,
the price differential is mere Rs 5 to Rs 20. This is not inducing the farmers to go for BV races.
For this, reelers who can appreciate the quality of BV should participate in bidding in large
numbers. Further, weavers, the penultimate link in the supply chain, are using charka-reeled silk
from CBs and improved races even for warp. China silk, anyhow, is available at cheaper prices
for warp purposes. Many people expressed that Indian silk has better dyeing quality and best
suited for handlooms. Also, domestic customers prefer cloth made out of it. Weavers mainly
cater to domestic demand, which is stable and is not demanding in terms of quality of silk used.
Thus, from the demand side also there is not much push for the high quality silk from BV. In
view of these, while it is advisable to produce export quality silk in the long run, priority has to be
given for strengthening the sector for catering to domestic market.
Introduction of V-1 mulberry variety is an important landmark as it yields around 60 tonnes of
leaf/ ha. However, its promotion among the farmers meets with resistance, as it involves
uprooting of the present plantation. Many farmers in the Ananthapur, Chittoor areas are having
local or mixed plantations and M5 variety. However, they are replacing existing varieties with V1 in phases. In non- traditional district, however, the V-1 variety is introduced afresh, and hence
the adoption rate is better.
Many farmers are rearing the silk worms within their residential accommodation and are not
having separate sheds. Interactions with the farmers revealed that many of these farmers are not
able to produce good quality cocoons due to Uzi fly infestation. While separate rearing sheds
have to be promoted, the land and credit constraints and lack of willingness of farmers for
investing in shed come in the way. DoS is promoting sheds under CDP with subsidy support.
However, subsidies are mostly going to the farmers who can afford a shed. The strategy should,
hence, be to promote the concept of separate sheds across the farmers and target the resourcepoor for giving subsidy.

53

In view of the above, the following line of strategy for farm sector is recommended and the
present project report is prepared keeping this in view.
Minimum Farm Size: Adoption of 8-10 crop cycles per year (by dividing the available mulberry
area into two plots and following alternate harvesting of leaves), instead of the widely prevalent
system of taking 4-5 crops a year, shall have to be encouraged which will result in regular income
generation to the rearer. In addition, this system will further improve the economics of the
activity due to lesser investment required on the rearing house (as the bed area requirement is
reduced to half) and rearing equipment. Regularity in crop harvests (one crop for every 35 days)
and its supply to the markets not only minimises the seasonal fluctuations in the cocoon
availability to the rearers but also the prices of cocoons, to the advantage of both the rearers and
the reelers. However, considering the harvest of cocoons per crop would be only half of that
realised under 4-5 crop cycle system, new plantations with less than one acre area under mulberry
should not be encouraged in the Contour -0 and 1 districts. On the other hand, in respect of the
other districts located in Contours-2 and above, only those farmers who can bring a minimum of
2-acre area under mulberry should be encouraged. This would result in sizeable harvest per crop,
which would help the farmer to carry his produce even to the distant markets located in Chittoor
and Anantapur districts or even to Karnataka markets, if there is a significant price advantage.
Promotion of Mulberry Plantations with V-1 : To make mulberry cultivation and rearing more
financially viable at the level of rearers even under the scenario of reducing prices of reeling
cocoons, there is an implicit need to improve the productivity of cocoons per unit area.
Promoting new plantations with improved varieties such as V-1, which has very high yield
potential of up to 60 MT per hectare and suitable for shoot rearing technology, should be an
important strategy. While the Department of Sericulture has already identified this as a strategy,
much progress still has to be made in this direction, as present area under this variety is about 89% only. Hence, it is suggested that all new plantations promoted henceforth under assured
irrigation should be of V-1 only. In addition to the new plantations, adequate scope exists for
replacement of old and senile mulberry gardens with V-1 variety. Considering that mulberry
gardens in Andhra Pradesh are predominantly under irrigation and the economic life of mulberry
garden of the existing varieties is around 12-15 years, it is estimated that about 7-8% of the
existing plantations are replanted every year, which could be covered with V-1 variety. Only
gradual replacement is recommended instead of wholesale replacement over a short span of time.
Otherwise, it would result in mono-cropping with a single variety which is risky and detrimental
to the sericulture sector. Even through gradual replacement, by the end of XI Plan, the area under
V-1 would reach over 78 per cent.
Kissan Nurseries: Saplings of V-1 variety are in great demand and fetch good returns to the
nursery growers. Hence, kissan nurseries for raising saplings by the farmers on a large scale and
supplying to the needy farmers may be promoted. It is a viable commercial proposition as about
1.50 lakh saplings, valued at Re 1per sapling, can be obtained from a nursery area of 1.00 acre,
twice a year during February and July (assuming 80 per cent survival rate and 5 per cent margin
for damaged and weak ones).

54

Promotion of Mulberry Gardens under Drip Irrigation : The state, and more specifically the
districts of Rayalaseema, is drought-prone and continued drought over last three years or so has
resulted in uprooting of large areas of mulberry. Hence, installation of drip irrigation system,
which ensures effective utilization of available ground water resources and results in saving of
water up to 40% over the conventional furrow irrigation, in new as well as existing mulberry
gardens should be given considerable importance and should be viewed as a goal oriented
approach. The financial assistance available to the farmers through the Centrally Sponsored CDP
Scheme of CSB and under AP Micro Irrigation Project should be effectively utilised for the
promotion of large scale adoption of this technology at the ground level.
Promotion of Bivoltine Rearing Technology : Considering the yield potential and better cocoon
quality of bivoltine races which can produce gradable silk of 2A to 3A quality, promotion of
rearing bivoltine silkworm races should be one of the important strategies of the Department. It
has often been stated that regular non-availability of bivoltine cocoons in adequate quantities
within the state has been one of the major problems of multi-end reeling units. While the
Department has rightly identified this as one of the programme goals for future, the progress
made till date has not been significant. Keeping this in view, a goal oriented strategy shall have
to be adopted so as to increase the proportion of bivoltine cocoons in the total production of
cocoons, at least to meet the raw material demand for the existing and proposed filature reeling
units. Cash incentive Rs.10/kg cocoons may be offered for three years to encourage rearing of
BV.
Propagation of Improved Rearing Technology: The technological advances made in the past
few years with regard to silkworm rearing, such as rearing in separate sheds isolated from the
dwelling houses, adoption of shoot feeding system, etc., have undoubtedly resulted in improved
production and productivity of quality cocoons. Hence, any improvements in the productivity
and quality of cocoons, consequently resulting in improved renditta, is possible only with
adoption of improved rearing conditions.
Promotion of Chawki Rearing Centres (CRCs): Young worms in the I and II instars are highly
susceptible to infections and are more vulnerable to adverse weather conditions. Therefore,
specialised rearing of young age (chawki) worms ensures a healthy batch. Such worms
remaining disease free, ultimately give successful cocoon crops. Further, small-scale silkworm
rearers cannot afford the equipment necessary to provide the ideal conditions for young age
worms. In order to overcome these difficulties, specialised CRCs are being promoted by the
DoS, as also by the private agencies. There are also such units established through grower
cooperatives. These vigorous and healthy worms help farmers to get good cocoon crops. As the
farmers have now realised the advantages of buying chawki worms, there is ample scope for
entrepreneurs to set up exclusive CRCs in prominent sericulture areas.

55

8)

# !

##

C !5

The highlights of analysis of reeling sector are:

i.
ii.
iii.
iv.
v.
vi.

Reeling is the weakest link in the sericulture value chain. There are three levels
of technology used for reeling, viz, charka, cottage basin and multi-end reeling.
Cottage basins are rarely seen in the traditional reeling clusters in Ananthapur
and Chittoor, barring a few units in Hindupur.
Choice of appropriate technology is very crucial for the survival of the reeling
sector.
Undisputedly the Multi-end Reeling Unit (MERU) is the most capital-intensive
alternative.
Many reelers are facing the problem of capital erosion due to continuous falling
of silk prices.
Only 4 out of 36 MERU installed in the state are working at present and all
others are defunct, the main problems being shortage of working capital, shortage
of raw material, long distance from the cocoon market, market problems for sale
of silk, shortage of skilled workers, etc.

We came across a success story of Mr.Ahmed of Hindupur, owner of a MERU, which brings out
a few key factors for successful running of a MERU. He has repaid all his loans and is not
seeking fresh working capital loan, as he wants to depend on his own financial resources.
We can conclude from his example that a MERU can be successful provided it fulfils the
following conditions.
1. The location should be nearer to the source of perishable raw material, i.e., cocoons.
2. The entrepreneur should have reeling background and should have reeling skills and then
only he can train and manage his labourers. Supervision should be done by self.
3. Entrepreneur should have more equity participation. Excess dependence on loans is
upsetting the balance due to heavy interest burden, as the margins are low and volatile.
Good working capital management is a must.
4. Entrepreneur should know the market well.
5. He should be able to keep stock of cocoons and silk for longer time and should be able to
sell silk on credit.
6. He should take up the enterprise with interest and not with an eye on incentive.
7. Consistent quality of silk should be ensured.
8. Should be able to achieve production efficiency within a few weeks i.e., should be able to
achieve lower renditta of at least 6.5 to 7 for CSR hybrids (BV) and 7 to 8 for CB.
DoS installed MERUs in various places for training purpose. Due to losses, many of them were
closed down. A couple of them were offered on lease to private parties but without much success.
DoS have offered on lease on very liberal terms and lease amount also was very low at Rs 1000
per month. Reelers who operated MERU of the DoS expressed problem of water quality, shortage
of working capital as reasons for discontinuation of the reeling activity. No reeler is coming
forward to take MERU in other locations such as Kuppam. From our enquiries in the state and

56

feedback given by ace reelers in Ramanagaram, we conclude that MERUs have not found
acceptability with the reelers. They were all along used to charka reeling and hence, not able to
appreciate the sophistication. That too, when the technological superiority is not reflected in
increased silk price realisation in the market.
In view of the above, we are not recommending new MERUs in the plan. Instead, improved
cottage basins with jettebout and boiler are preferred as near-perfect substitutes for MERU and
hence, included in the plan. However, we recommend revival of existing MERUs.
Wherever situation warrants, such as in Nalgonda district where regular availability of quality
cocoons in adequate quantities is a serious problem, even they may be relocated in areas having
adequate supply of quality cocoons. The DoS may also explore the possibility of identifying
potential new entrepreneurs who might be willing to takeover these machineries if necessary by
relocating them in the most suitable districts by amicably settling the dues to the financers (bank /
CSB).
In respect of all the MERU (the relocated as well as existing sick units in the traditional districts
of Chittoor and Anantapur) efforts may be made to revive them, for which the following package
of measures is suggested:
1.

Arrange fresh working capital and handhold these units for the initial 3-year period. As
all the sick reeling units are defaulters to the banks, fresh sanction of the required
working capital by these banks could be a remote reality. Hence, we suggest
involvement of another agency, like SERIFED. The working capital assistance may be
provided by the agency in kind (not in cash !) by reimbursing the cost of cocoons
purchased by these units in the cocoon markets against the bidding slip and recover in
suitable instalments. It may be made mandatory to sell/pledge the silk in the local
exchange operated by SERIFED. After each working cycle (say, of 15 days) when the
reeler brings the out put to the SERIFED for sale/pledge, 3 % of the sale proceeds may be
withheld for amortising the working capital support given by SERIFED. The balance is
paid to reeler in cash after retaining the amount required for working capital support in
kind towards cocoon purchased for next cycle. The revival package can be phased out
over three years.
2. Provide a cash incentive of Rs.50 per kg of silk (BV or improved CBs) sold in the
exchange initially for one year (which may continued for another 1-2 years of the revival
package, if warranted). The SERIFED may purchase the silk at a quality-linked price.
Bangalore Silk Exchange prices may be treated as a benchmark for this purpose.
3. An MOU may be entered into between the reeler and SERIFED spelling out the
expectations and commitments from both the parties.
For example, SERIFED support to a 10-basin MERU works out as follows:
Working capital need for cocoons, 15-day cycle
(i.e. to be reimbursed by SERIFED as W/C loan)

= Rs.1,46,000

Sale value of silk produced in one cycle

(silk price @Rs.1200/kg)

= Rs.1,80,000

Amount to be withheld (3% of sale value by SERIFED towards

amortisation of Rs.1,46,000 loan

= Rs.5400

57

Balance to be paid to reeler (Rs.1,80,000 - Rs.5,400)

Of which,
to be paid in kind (retained by SERIFED to be
paid to reeler for purchase of cocoons)
To be paid in cash towards other production costs on accouunt of labour,
power,etc. and his own maintainance (Rs.1,74,600-1,46,000)

= Rs.1,74,600
= Rs.1,46,000
= Rs.28,600

Thus, the working capital support extended by SERIFED can be totally amortised in less than 2
years (even assuming production and price fluctuations).
However, most reelers have defaulted to the banks/CSB who have financed term loan and/or
working capital, due to the reasons already discussed in the earlier chapter. As these defaults are
not wilful, the banks/CSB also may be involved in the revival efforts. Banks may review the
units on a case-by-case basis and negotiate appropriate action in consultation with DoS/CSB and
reelers. Banks may reschedule the loans in tune with the revival measures as suggested above.
In East Godavari district, a couple of farmers have been reeling their own cocoons and selling
raw silk. They are doing this to circumvent the problem of market access for cocoons. A few
more farmers are showing interest in such integrated activity. This can be promoted as one of the
models. Instead of charka, 2 or 4 basin cottage basins may be encouraged which is similar to the
model followed in Thailand. Even processing pupae for human consumption, poultry feed, fish
feed may also be explored. Pupae have demand in China and Hong Kong, which may be
explored.
Some charka reelers in Ananthapur and Chittoor districts are having twisting units attached to
their reeling units. A few more expressed their desire to have their own twisting units in
conjunction with their reeling units. They are right now selling raw silk at around Rs.1000,
which gets sold after twisting at around Rs.1300. Depending on the nature and the degree of
twisting and the type of yarn (weft or warp), the job charges levied by the twisters range from Rs.
100 to Rs. 200 per kg of raw silk, of which about 50% would be net margin. Some of the
discerning reelers want to integrate reeling and twisting units to reap higher margins. This can
also be promoted as a model.
Twisting is done on two types of arrangements. Some twisters are purchasing raw material,
twisting it and selling twisted yarn. They are bearing the price differential risk. Such twisters are
far few in number these days due to high volatility of silk prices in the wake of cheaper China silk
imports. Nowadays twisters prefer twisting on job work basis, the raw silk being supplied by the
reelers, weavers or traders. This is no-risk-fixed-return strategy adopted by twisters. However,
many twisting units are not able to run to their full capacity, as most of the local weavers are
purchasing loom-ready yarn from Bangalore.

58

) !'#

! "

Generally, individual sericulturists take up mulberry cultivation and rearing of silk worms. Under
bivoltine programme being promoted by DoS, a few sericulturists are encouraged to form
productivity clubs and are given common Chawki Rearing Centres.
Reelers also have been operating individually in an oligopoly market. While it is reported that
they often collude to suppress the price of the cocoons, there is not much community feeling
among them. They all expressed that whatever assistance is to be given has to go to individual
reelers and they cannot operate as a society and do not want to stand guarantee to others. As they
do not realise the importance of organising themselves into a group, services of NGOs may be
utilised (one NGO, Rural and Environmental Development Society (REDS), is working with
reelers in Kadiri) for organising reelers so that they can avoid unhealthy competition.
Many weavers work under a trader or master weaver. They get raw material from traders/master
weavers and weave as per the design and specifications given by the latter. The finished product
is given back to the trader/master weavers, who will have his own marketing strategy. Thus, the
weaver earns only wages in the process.
Some weavers work independently buying raw
material, weaving and selling the finished produce to the shopkeepers or traders.
Still some
weavers are organised into co-operative societies. These societies are mostly defunct and are
heavily depending on Government market outlets, such as APCO. Several of these societies work
in master weaver or trader weaver framework and are namesake societies formed for getting
certain benefits, such as Market Development Assistance. The district official of DoS is incharge of these co-operative societies. Presently, at district level, these co-operative societies are
being allocated to designated DoS officials for closer supervision and monitoring.
#)

In the previous sections, we have observed that farm and non-farm sectors have been functioning
in their own spheres and not much integration of these two sectors has taken place. Of late, the
advantages of such linkages between farm and non-farm sectors are being tapped in agriculture
through contract farming, which is seen as '
Farming of Tomorrow'
.
Contract farming refers to the production and supply of agricultural produce under contracts
made prior to the harvest. The essence is that a commitment made by the producer to supply an
agricultural commodity of specified quality and quantity at a fixed time to a specified buyer who
commits to buy the same. Thus, pre-agreed price, quality, quantity and time are the four basic
elements of contract.

Types of Contract Farming

Three types of contracts are possible, as given under:
i.

Procurement contracts, under which only sale and purchase conditions are
specified,

59

ii.
iii.

Partial contracts, where some of the inputs are supplied by the contracting firm
and the produce is bought at the pre-agreed price.
Total contracts, where the contracting firm supplies and manages all the inputs
and the farmer becomes only a supplier of land and labour.

Advantages of Contract Farming

The advantages of contract farming, in general for various products, could accrue in several ways.
i.

ii.
iii.

iv.
v.

It envisages that farmers enter into a forward contract with the Processor or
Exporter to supply the produce at pre-determined price, quantity and quality and
the buying company also provides necessary inputs and technology to the
farmers so as to ensure a steady supply of the quality produce for processing /
exporting.
It helps the small farmers to participate in the production of high value crops like
fruits, vegetables, flowers, etc., and benefit from market-led growth.
While in some cases of contract farming, the farmer assumes the production
related risk and transfers price risk to the company, under certain conditions,
even the produce risk is also taken care of by the company.
Risk of non-availability of raw material is reduced with assured quality support
from the farmers.
Small and marginal farmers may no longer be competitive without access to
modern technologies and support. Contract farming provides this support to
these farmers.

Contract Farming and the Indian Experience

In India, contract farming of different types is already in practice for certain commercial crops
like sugarcane, coffee, tea, cotton, etc., fruits and vegetables. In India, contract farming has
effectively began with the coming of Pepsi Foods Limited in 1989 by installing a processing plant
in Hoshiarpur district of Punjab. Pepsico followed the contract method for getting tomato for the
processing unit. The evolution of contract farming for tomato has been followed by the same
company for cultivation of food grains (Basmati rice), Spices (Chilli) and Oilseeds (Groundnut),
Safflower in Madhya Pradesh, Oil Palm in Andhra Pradesh, Seed production contracts for hybrid
seed companies, etc., which helped the growers to realise better returns for their produce. Amul
and the National Dairy Development Board for milk procurement, Sugarcane Cooperatives in
Maharashtra., are some more success stories of contract farming. The Pepsico model of contract
farming was considered a success in terms of diversifying cultivation and improving income of
farmers. Other companies, which came into this scenario, are Hindustan Levers Limited, ITC
Agro, Nijjer Agro Foods Limited. Procurement contracts are seen with the tea companies in
Eastern and North-eastern India where the large estates having processing facilities enter into
procurement contracts with small tea growers who do not have processing factory but supply only
green leaves.

60

The experience of various contract systems has been a mixed one. Recently, there has been
growing dissatisfaction among the farming community affected by these contracts, especially as
lower market prices in the open markets have led the companies to effectively reduce the farm out
prices through a variety of measures such as quality control. On the other hand, there were
instances where the farmers broke the contracts by selling their output in the open markets, when
the prices were higher than the contractual prices. Thus, there have been instances of violation of
contractual terms by both the parties. Therefore, the main problem of contract farming is the
enforceability of the contract. Any attempts by a government to intervene in the system would,
however, only strip off the very essence of contract farming.

Scope of Contract Farming in Sericulture

Any scope for contract farming in sericulture sector prima facie appears to exist in two possible
models:
Here, the possibility exists only when the reeler operates on a large scale with the adoption of
multi end reeling technology. In this model, it is expected that the reeler undertakes reeling of
only bivoltine cocoons, adopting the bivoltine silk reeling technology developed by the Central
Silk Technological Research Institute (CSTRI) of the Central Silk Board, so as to produce
gradable silk for catering to the domestic market. Assuming an average renditta of 7, a
production rate of 1.0 kg per basin per shift, single shift per day and 300 working days in a year,
for a unit with 20 basins the annual production of raw silk would be 6000 kg, consuming 42000
kg of cocoons. Considering an average farm size of 2 acres per the selected farmer who could
rear an average of 10 crops of 200 dfls each in a year, with an average productivity of 55 kg of
reeling cocoons per 100 dfls, the reeler is expected to enter into a contract with about 40 rearers
of bivoltine races. Further, to achieve regular and constant supply of bivoltine cocoons so as to
meet his reeling requirement and his capacity to hold the stock of raw material (cocoons), he is
expected to prepare a meticulous plan of brushing for each selected farmer. In this model,
considering his capacity, the reeler is not expected to provide any material inputs, technological
support, facilitate for acquiring financial assistance from the banking sector, etc. Thus, the
relationship between the farmer and the reeler exists only as a mere seller-buyer contract.
Under this model, the user industry may provide the technology package for mulberry plantation
and rearing activities, supply all the essential material inputs such as agri inputs, dfls / chawki
worms of the desired race, arrange for mass disinfestation of rearing houses, control of diseases
of the silkworms during rearing, facilitate for financing by the banking institutions, etc. In turn,
the user industry would buy back the entire volume of cocoons at a price, based on the empirical
formula derived by the CSTRI through a non-destructive method (based on the actual assessment
of defective cocoon percentage and the shell ratio percentage) for approximating the renditta of
the cocoons. However, considering the financial resources coupled with managerial skills
required for implementation, this model could be possible only with the entry of large scale
operators on a corporate scale with a vision to produce further downstream / value added products
such as twisted yarn, fabric, etc., for domestic or export purposes.

61

How far the above models could be successful ?

An analysis of the above possible models, based on the field level interactions, indicated that
none of these models could be successful in the present scenario of Indian silk industry. For
example, in the Model-A, it requires an absolute critical planning of the brushing at the level of
each of the selected farmers by the reeling unit, which could be difficult for an individual or a
group of individuals. Improper planning could lead to longer holding period for the cocoons,
requiring additional infrastructure for stifling, storage, etc. Further, it could also require a
substantial working capital, which further adds to the cost of production and affects the working
results of the unit.
In a situation where adequate raw material (cocoons) of various qualities and races is available in
various markets, the reeler does not find any difficulty in procuring the quantity and quality of
cocoons which he desires and capable of holding depending on his financial capabilities. Further,
the prices of both raw material and the immediate output (raw silk) have been so volatile and
continuously declining for the past few years, fixing a contract price would be nearly impossible
to the satisfaction of both rearer and reeler. For example, the ready reckoner prepared by the
CSTRI based on the empirical model worked out by them assesses only the renditta of the
cocoons. But, the cost of cocoons shall have to be worked out based on the market prices of raw
silk of the immediate previous day. Thus, there cannot be a pre-agreed price that can be used for
considerable length of time, say, a month or a season, as prices of cocoons and silk vary on daily
basis. Hence, there is no scope for relationship or contract between the two parties. When the
farmer is not aware of the price at which he is expected to sell his produce, he might not be
inclined to sell his produce to any particular reeler and, instead, he prefers competitive bidding
for his cocoons, which he is already enjoying at present in cocoon markets. It is observed that the
farmers who produce quality cocoons in considerable quantities always enquire the market prices
of the previous day at various major market centres in Andhra Pradesh and Karnataka, based on
which he decides the appropriate market for his cocoons on the next day. Considering this, it
appears rather difficult for the farmer to honour the contract.
Thus, contract farming in its true sense may not be possible. However, a limited type of linkage
between rearer and reeler, especially owning MERU, is possible since non-availability of regular
and adequate quantity of quality bivoltine / cross breed cocoons was reported to be one of the
major problems. Though they reeled small quantities of cocoons whenever they were available in
the markets, the activity could not be continued on a sustainable basis as they were unable to
provide continuous job to the workers but were to pay salaries every month. At the same time,
they were unable to source cocoons from the Ramanagaram market, though nearby, as the reelers
from other than Karnataka state are not allowed to participate in the cocoon markets of
Karnataka.
It has often been stated that the quality of cocoons produced in Andhra Pradesh is better than that
of cocoons from Karnataka. Thus, due to the presence of more number of reelers in Karnataka, in
comparison to Andhra Pradesh, both demand and price for the cocoons are obviously a bit higher
in Karnataka, thereby encouraging our rearers to market quality cocoons in those markets. As a
result, only medium and low quality cocoons are brought to the States markets. It was observed

62

during the studies that almost all the rearers of bivoltine cocoons in Chittoor and Anantapur
districts market their cocoons in Karnataka only. It could be argued that non-availability of
demand for quality cocoons in Andhra Pradesh (as the reeling sector in the State is predominantly
charka oriented, which consumes average quality cocoons) is the prime reason for this marketing
behaviour. If it were so, any improvement in the demand for quality cocoons internally could,
therefore, lead to arrival of good quality cocoons in the states markets. However, till this
situation could stabilize, necessary links between the producers and consumers of quality cocoons
within the state shall have to be developed.
Keeping the above factors in view, it is suggested that the production of bivoltine cocoons,
especially those covered under the Bivoltine Nucleus Village programme, could be linked to the
demand for the quality cocoons from the reelers of MERUs / improved cottage basins. As both
these sectors are under the direct supervision of DoS through their On Farm and Non-Farm TSCs,
respectively, the Department staff may work hand in hand to assess both production and demand
for the bivoltine cocoons. Thus, the DoS could act as a facilitator in this link. The staff of
NFTSC in a district/division, depending on the number of such reeling units operating in the area,
may assess fortnightly/monthly cocoon requirement. Based on this assessed demand, the staff of
On Farm TSC in the division may prepare an appropriate brushing plan for the bivoltine races in
respect of the selected rearers. The transaction price for cocoons may be fixed linking it to the
expected renditta based on actual sample assessment and the empirical formula developed by
CSTRI. By offering a competitive price to his produce, which may not be much in difference
with that he could expect in a Karnataka market, and linked to its quality, a rearer could be
willing to offer his produce to a given reeler. Thus, in a real sense, it is not a contractual system
of transaction but would develop a healthy linkage between the producer and user of raw
material. However, the possibility of written bipartite agreement between the two parties may be
explored.

63

F *

MF

he project targets have been worked out keeping in view the overall goals for the sector,
based on the present status of various key elements of sericulture sector in the State.

'"

2# !

Projection of Cocoon Demand

Per capita silk fabric consumption and the demanded raw silk production in the country (keeping
in view the population growth and anticipated imports) are projected for the years 2004-05 to
2011-12 in the earlier chapter. The demanded raw silk production at the country level is
converted into total cocoon production needed in the country. Based on the present share of the
State in the countrys cocoon production, the demanded annual cocoon production in the State is
assessed during the project period. Due emphasis is laid for increasing the share of bivoltine
cocoons in the total cocoon production and the projections are worked out accordingly, as per the
following assumptions.

Renditta of 9 up to 2007-08 (end of X Five Year Plan) and 8 during the XI Plan
Period.
Share of AP in all India cocoon production is considered at 31.5% based on the
performance during 2002-03.
Share of BV cocoons to total quantity of cocoons is envisaged to be 15 per cent
by the end of XI Plan gradually going up from the present level of about 2.5%.

Based on the above, the projected cocoon demand is presented in Table 5.1.
Table 5.1. Demand projection for silk and cocoons
(Tonnes)
Year
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12

Silk production Cocoon production Share of AP in BV production BV cocoons to the total

need
production
cocoon production (%)
2.50
21150
190380
59971
1499
3.75
22000
199760
62925
2360
5.00
23270
209460
65979
3299
7.00
24090
192710
60704
4249
9.00
24790
198300
62464
5622
11.00
25660
205270
64660
7113
13.00
26820
214530
67576
8785
15.00
28190
225550
71048
10657

64

Projection of Mulberry area

The projected area under mulberry that would be needed to achieve the demanded cocoon
production as above is estimated based on the present and projected levels of cocoon productivity
per unit area. The current level of cocoon productivity is considered as 930 kg/ha for CB races
and 1200 kg/ha for bivoltine races. Assuming an annual incremental productivity of 50 kg/ha for
both the type of races, the area required under CB and BV rearing is assessed.
However, as the current area under mulberry is reassessed at around 30,000 ha at the end of 200304, the required area is projected and presented based on this reassessed area (Table 5.2). As per
the estimates, the area can be targeted to reach 51,192 ha by the end of 2011-12. Thus, there
remains a gap between demand-based area required and possible area under mulberry in the state.
The gap can be almost bridged by the beginning of XII Plan. Afterwards, the area and
productivity growth can enhance our share in countrys silk production.
Table 5.2. Projection of mulberry area required meeting silk demand

(ha)
Year

Total area required as per demand for silk fabric

Total

BV

CB

Projection based on
actual area as per
our assessment

Gap between
requirement and
projected

%BV

X Plan
2004-05

64122

1249

62873

1.9

32292

-31830

2005-06

63690

1888

61802

3.0

34992

-28697

2006-07

63392

2538

60854

4.0

37692

-25700

2007-08

55420

3148

52273

5.7

40392

-15028

2008-09

54318

4016

50302

7.4

43092

-11226

2009-10

53674

4905

48769

9.1

45792

-7882

2010-11

53654

5857

47798

10.9

48492

-5162

2011-12

54056

6876

47180

12.7

51192

-2864

XI Plan

Table 5.3 gives estimated area to be brought under V1. The needs of both new and replanting of
mulberry plantations are taken into account as per the strategy indicated in chapter IV.
Table 5.3. District-wise area expansion programme for V-1

(ha)
District

2003-04 area as per

our assessment

Area under V-1 variety

Chittoor

Replacement of New plantation Total additional

existing plantation
under Varea under Vwith V-1 /annum
1/annum
1/annum
12283
819
1000
1819

Anantapur

13213

881

1000

1881

3030

202

150

352

Kurnool

65

District

Area under V-1 variety

2003-04 area as per

our assessment

Replacement of New plantation Total additional

existing plantation
under Varea under Vwith V-1 /annum
1/annum
1/annum
27
150
177
400

Cuddapah
Nellore

60

100

104

Mahabubnagar

22

120

50

58

Medak

46

Ranga Reddy

42

100

40

47

41

40

147

10

60

70

Krishna

52

30

33

Khammam

38

Karimnagar

80

East Godavari

80

60

65

Adilabad

20

Srikakulam

27

20

22

Visakhapatnam

40

20

23

Vizianagaram

40

20

23

29928

1995

2700

4695

Prakasam

Guntur
Nalgonda
Nizamabad
Warangal
West Godavari

Andhra Pradesh

Projected Cocoon and Silk Production

Estimates of cocoon and silk production based on area projections made as above are presented in
Table 5.4. By the terminal year of XI Plan period, the cocoon production is likely to reach
around 67300 tonnes and the silk production to 8400 tonnes.

Table 5.4. Projected Cocoon and Silk Production Path

Year

Projected area (ha)

Expected cocoon production

(tonnes)

Cocoon
Gap in
requirement
cocoon
(based on production
demand
(%)
projections)
(tonnes)

Silk
production
projected
(tonnes)

CB

BV

Total

CB

BV

Total

X Plan
2004-05

31663

629

32292

29447

755

30202

59971

50

3356

2005-06

33955

1037

34992

33276

1296

34572

62925

45

3841

2006-07

36183

1509

37692

37269

1962

39230

65979

41

4359

XI Plan
2007-08

38098

2294

40392

41146

3097

44243

60704

27

5530

66

Year

Projected area (ha)

Expected cocoon production

(tonnes)

Cocoon
Gap in
requirement
cocoon
(based on production
demand
(%)
projections)
(tonnes)
62464
21

Silk
production
projected
(tonnes)

CB

BV

Total

CB

BV

Total

2008-09

39906

3186

43092

45094

4460

49554

2009-10

41607

4185

45792

49097

6068

55165

64660

15

6896

2010-11

43199

5293

48492

53135

7940

61074

67576

10

7634

2011-12

44681

6511

51192

57191

10093

67284

71048

8410

6194

Table 5.5 gives an assessment of number of dfls required to support the projected cocoon
production, assuming an average brushing of 2500 dfls per ha of mulberry area for both BV and
CB races. The estimated need is many times higher than the current level of production of 142
lakh dfls in both Government and private grainages existing in the State. The number of
sericulturists reported to be 1.15 lakh earlier must have dwindled down to around 80,000 as at
present. The number of rearing houses is estimated assuming that additional area brought under
mulberry consists of 1-acre farm model in Contour 0 and 1 districts and 2-acre model in others.
Considering the need for adoption of improved technology package for increased productivity
and quality of cocoons, rearing in separate rearing houses shall have to be made mandatory. It is,
therefore, estimated that a total of about 6000 new sheds are likely to be added every year. It is
proposed that annually 7 per cent of the existing area under mulberry (assuming 15 years as the
economic life of mulberry garden) shall have to be uprooted, which could be replanted with V1
variety. All such farmers going for replanting are suggested to rear in separate sheds only.
However, considering that about 22.5% of the existing sericulturists already have separate rearing
houses as of today, the additional demand for separate sheds is assessed and presented in Table
5.5. Thus, by the end of XI Plan, about 81 per cent of the sericulturists will have separate rearing
shed.
Table 5.5. Estimated requirement of dfls and rearing sheds
Year

DFLs required (lakh nos.)

CB

BV

No of
Rearing Sheds % farmers having
Sericulturists
(No.)
separate sheds

Total

2003-04 (actual)

141.7

115565

26000

22.5

X Plan
2004-05

791.6

15.7

807.3

80730

35749

44.3

2005-06

848.9

25.9

874.8

87480

45499

52.0

2006-07

904.6

37.7

942.3

94230

55248

58.6

2007-08

952.5

57.4

1009.8

100980

64997

64.4

2008-09

997.7

79.6

1077.3

107730

74746

69.4

2009-10

1040.2

104.6

1144.8

114480

84496

73.8

2010-11

1080.0

132.3

1212.3

121230

94245

77.7

2011-12

1117.0

162.8

1279.8

127980

103994

81.3

XI Plan

67

Estimation of reeling capacity

Based on the above projection of BV and CB cocoons, the total reeling capacity needed to
convert the entire cocoon production into raw silk and the feasible capacity based on ground
level conditions have been assessed under the following assumptions:
i.

ii.

iii.

iv.

All BV cocoons will be reeled exclusively on multi-end machines (MERUs) or

improved cottage basins (equipped with boiler and jettebouts). No fresh MERUs
are recommended. Only the existing ones are planned to be revived over the
remaining three years of X Plan. Thus, only the existing MERUs will continue in
XI Plan period also.
Entire BV production will be reeled by MERU and improved cottage basins.
The desired capacity of improved cottage basins is proposed to be included in the
plan. For the current year i.e., 2004-05, only 100 basins are proposed.
The number of cottage basins required are calculated assuming that 10 per cent
of CB cocoons will be of superior quality to be earmarked to cottage basins
during X Plan and the proportion would gradually increase during XI Plan to 25
per cent.
Going by practical considerations, feasible number of cottage basins is worked
out assuming the proportion of CB cocoons to be reeled to increase from 1 per
cent during 2004--05 to 25 per cent by 2011-12. The projected proportion is
given below.
Year
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12

v.

vi.

vii.

% CB cocoons to
be reeled by
cottage basins
1.0
5.0
7.5
10.0
12.5
15.0
20.0
25.0

As charkas are the resource-poor reelers choice, their number will be large.
However, speaking on practical terms, it may not be feasible to increase charkas
on a large scale. Hence, an increment of 500 charka basins is proposed as feasible
every year during XI Plan. The revival of existing charkas is expected to be faster
and thus, by the end of X Plan the reeling capacity under charkas is planned to be
3500 basins.
Renditta of 9, 8, 7.5 and 6.5 is assumed for charkas, cottage basins, improved
cottage basins and multi-end units. The silk output per basin is assumed @ 1.5,
0.96 and 1 kg, respectively, for charkas, cottage basins and multi-end reeling
units.
In a year, the units are assumed to run for 300 working days in one shift of 8
hours working.

68

Table 5.6. Reeling basins required and feasible

By the
Charkas Charka % charkas Cottage Cottage Improved Improved Multi-end Total basins Total
end of the needed feasible feasible to basin basins cottage
cottage
basins to be
needed
basins
year
needed needed feasible basins
basins
revived
feasible
needed for feasible for
BV
BV
X Plan

2004-05
2005-06
2006-07
XI Plan

2007-08
2008-09
2009-10
2010-11

7198

1000

14

1278

128

286

100

7805

2000

26

8512

3500

41

1444

722

438

438

1618

1213

581

581

9144

4000

44

2232

1786

1107

1107

70

8832

1298

180

9867

3340

362*

11073

5656

362

12845

7255
9046

9743

4500

46

2936

2447

1738

1738

362

14778

10304

5000

49

3729

3196

2483

2483

362

16878 11041

10496

5500

52

4612

4612

3349

3349

362

18819 13823

10591 6000
57 6206 6206
4346
4346
362
21504 16913
2011-12
Note: Presently, 747 charkas, 36 basins of cottage basins units and 60 basins of MERU/filature units are functional.
* Based on the units located in Chittoor, Anantapur and Nalgonda districts.

Given the present level of estimated cocoon production, about 9000-basin reeling capacity is
necessary to reel the cocoons completely within the state (Table 5.6). By the end of X Plan, we
may envisage 5656 basins (including revivals), of which, 3500 are charkas, 1233 cottage basins
(basic model), 581 improved cottage basins and 362 multi-end basins. Charkas, cottage basins,
improved cottage basins and multi-ends to be installed/revived by end of XI Plan are 6000, 6206,
4346 and 362, respectively, totalling to 16913 basins.
With the existing functional reeling capacity of 747 charkas, 36 cottage basins and 60 multiend/filature basins, it is possible to reel 3225 tonnes of cocoons per year. This forms 11 per cent
of cocoons produced. The reeling capacity envisaged by the end of X Plan will still be
inadequate as it can reel 48 per cent of the estimated cocoon production. By the end of XI Plan
the reeling capacity would be adequate to reel 72 per cent of production (Table 5.7).
Table 5.7. Cocoons to be consumed by reeling basins proposed
Years
Charka units
2003-04 (existing)

Cocoon consumption (tonnes)

Cottage
Improved Multi-end
basin units cottage basin reeling
units
units

3025

83

X Plan
2004-05
2005-06
2006-07

4050
8100
14175

294
1664
2795

XI Plan
2007-08
2008-09
2009-10
2010-11
2011-12

16200
18225
20250
22275
24300

4115
5637
7364
10627
14298

% Cocoon
production that
can be reeled

Total

117

3225

11

216
945
1256

137
351
706

4697
11060
18932

16
32
48

2391
3754
5362
7234
9387

706
706
706
706
706

23412
28322
33683
40842
48690

53
57
61
67
72

69

Projections in terms of reeling units are given in Table 5.8. A total of 1500 units of 4-charkas,
1034 units of 6-basin cottage basins, 435 units of 10-basin improved cottage basins to be installed
by the terminal year of XI Plan. Additional reeling units required are given in Table 5.9.
Table 5.8. Cumulative number of reeling units to be installed/revived
By the end of

Charkas (4charka units)

Cottage
basin units
(6-basin)

Improved cottage
basin (10-basin)

MERU

Total no. of
units

X Plan
2004-05

250

21

10

288

2005-06

500

120

44

18

682

2006-07

875

202

58

39

1174

2007-08

1000

298

111

39

1448

2008-09

1125

408

174

39

1746

2009-10

1250

533

248

39

2070

2010-11

1375

769

335

39

2518

2011-12

1500

1034

435

39

3008

XI Plan

Table 5.9. Additional reeling units to be installed

During the year
Existing
2004-05
2005-06

Charkas (4-charka Cottage basin units Improved cottage

Total no. of units
units)
(6-basin)
basin (10-basin)
1113
26
0
1139
*
10
10
*

94

34

128

2006-07

82

14

96

2007-08

96

53

149

2008-09

12

110

63

185

2009-10

125

125

74

324

2010-11

125

236

87

448

2011-12

125

265

100

490

* Revival of existing sick units only is considered.

The silk production from the reeling units to be installed/revived is estimated and presented in
Table 5.10. From the present level of 364 tonnes silk from existing reeling capacity, the
production is likely to increase to about 5847 tonnes of silk by the terminal year of XI Plan.

70

Table 5.10. Silk production path from the proposed reeling capacity

(tonnes)
Year

2003-04
(existing)
X Plan

From
Charka
units

From
Total CB
From
From
Total BV
Cottage
silk
improved multi-end
silk
basin production Cottage
units
production
basin units
units
336
10
346
18
18

2004-05

450

37

487

29

2005-06

900

208

1108

2006-07

1575

349

2007-08

1800

2008-09

21

Total silk
production
364

50 (9.28)

537

126

54 180 (13.99)

1288

1924

167

109 276 (12.54)

2200

514

2314

319

109 427 (15.59)

2742

2025

705

2730

501

109 609 (18.24)

3339

2009-10

2250

921

3171

715

109 824 (20.62)

3994

2010-11

2475

1328

3803

965

109 1073 (22.01)

4876

2011-12

2700

1787

4487

1252

109 1360 (23.26)

5847

XI Plan

Assuming an average output of 30 g per spindle, the twisting capacity required to twist the likely
production of raw silk would be 0.6 lakh spindles in 2004-05, which steeply increases to about
6.5 lakh spindles by 2011-12 (Table 5.11). However, on practical considerations, it is proposed
to start with 17887 spindles in 2004-05, which would suffice for twisting 30 per cent of silk
production. The proportion is targeted to increase by 5 per cent points every year and reach 60
per cent by 2011-12.
Table 5.11. Projected twisting capacity requirement
Year

Twisting
% Silk that
Twisting
capacity can be twisted
capacity
needed
feasible (No.
(No. of
of spindles)
spindles)
15000*
2003-04 (existing)
X Plan
2004-05
2005-06
2006-07
XI Plan
2007-08
2008-09
2009-10
2010-11
2011-12

Silk that
No. of
Additional
can be Twisting units twisting units
twisted required# (200 (200-spindles)
(tonne)
spindleto be installed #
capacity)
135
75

59623
143115
244490

30.0
30.0
35.0

17887
42935
85571

161
386
770

89
215
428

40
213

304637

40.0

121855

1097

609

181

166936

1502

835

225

221896

1997

1109

275

298007
389826

2682
3508

1490
1949

381
459

370970

45.0

443791

50.0

541830
649710

60.0

55.0

* These are the number of functional spindles in Chittoor and Ananthapur districts.
# About 20000 defunct spindles in the above districts were reckoned with while assessing additional units
required.

71

2# !

Financial outlay projections for bringing area under V-1 as per annual physical programme
planned (as given in Table 5.3) are given in Table 5.12.
Annual financial requirement for bringing planned area under V-1 is about Rs.10505 lakh (needs
of replanting existing gardens is Rs.4464 lakh and new plantation is Rs.6041 lakh). Financial
need for establishing kissan nurseries is Rs. 308 lakh. This could be met through short term crop
loans.
Table 5.12. Annual Financial outlay needed for mulberry plantation with V-1 and for Kissan
Nursery

(Rs.lakh)
District

For V-1 mulberry plantation

Replacement
of existing
plantation

New
plantation

For kissan nursery

Total for
plantation

Chittoor

2210.97

2700.00

4910.97

saplings
required
(lakh
@0.125
lakh/ha)
227.36

Anantapur

2378.42

2700.00

5078.42

545.40

405.00

Cuddapah

72.00

Nellore

Units
required

Financial
outlay

189

119.36

235.11

196

123.43

950.40

44.00

37

23.10

405.00

477.00

22.08

18

11.59

10.85

270.00

280.85

13.00

11

6.83

17.90

111.88

129.78

7.25

3.81

Medak

Ranga Reddy

14.92

89.50

104.42

5.83

3.06

Nalgonda

Nizamabad

Warangal

21.85

134.25

156.10

8.72

4.58

7.76

67.13

74.88

4.18

2.20

Khammam

Karimnagar

11.93

134.25

146.18

8.17

4.29

Srikakulam

3.99

44.75

48.74

2.72

1.43

Visakhapatnam

5.97

44.75

50.72

2.83

1.49

Vizianagaram

5.97

44.75

50.72

2.83

1.49

4464.19

6041.25

10505.44

586.90

489

308.12

Kurnool

Mahabubnagar
Prakasam

Guntur

West Godavari
Krishna

East Godavari
Adilabad

State

72

Investment cost required for setting up of various types/capacities of reeling and twisting units,
together with assessment of working capital and economics, are worked out as detailed project
models and are presented in Volume-II of the Report. A summary of the same is given below.
Rs.lakh
Capital Cost Working Capital
Charkha 4 basin unit

0.60
0.65

1.03

Cottage basin - basic model

6-basin

2.86

Cottage basin - improved model 10-basin

MERU

10-basin

Twisting

200 spindles

1.08

5.61

1.44

3.54

The financial requirement for establishing reeling and twisting capacity projected earlier is given
Table 5.13. Total outlay over the plan horizon is likely to be Rs.5722 lakh and Rs.6280 lakh for
installing additional reeling and twisting units, respectively.
Table 5.13. Projection of financial outlay for installing reeling and twisting capacity

(Rs. lakh)
Year

For reeling units

Charkas

Improved
Cottage basin
units (6-basin) cottage basins
(10-basins)

Total for
reeling units

For twisting Total outlay for

units
reeling &
twisting units

2004-05

0.00

0.00

56.10

56.10

0.00

56.10

2005-06

0.00

268.84

190.74

459.58

140.44

600.02

2006-07

0.00

234.52

78.54

313.06

754.67

1067.73

2007-08

0.00

274.56

297.33

571.89

642.22

1214.11

2008-09

12.36

314.60

353.43

680.39

797.94

1478.33

2009-10

128.75

357.50

415.14

901.39

972.78

1874.17

2010-11

128.75

674.96

488.07

1291.78

1347.17

2638.95

2011-12

128.75

757.90

561.00

1447.65

1625.20

3072.85

Total

398.61

2882.88

2440.35

5721.84

6280.42

12002.26

Table 5.14 gives an estimate of working capital limits needed for the reeling units. The working
capital requirement increases from a moderate Rs.185 lakh in 2004-05 to Rs.2098 lakh in 201112.

73

Table 5.14. Working capital needs of reeling units.

(Rs. Lakh)
Year

Charkas (4
charka units)

Cottage basin units Improved cottage

basin (10-basin)
(6-basin)

MERU

Total no. of
units

2004-05

150.00

13.65

10.80

10.08

184.53

2005-06

300.00

78.00

47.52

25.92

451.44

2006-07

525.00

131.30

62.64

56.16

775.10

2007-08

600.00

193.70

119.88

56.16

969.74

2008-09

675.00

265.20

187.92

56.16

1184.28

2009-10

750.00

346.45

267.84

56.16

1420.45

2010-11

825.00

499.85

361.80

56.16

1742.81

2011-12

900.00

672.10

469.80

56.16

2098.06

Location of Reeling and Twisting Units

There are several cocoon markets in the State where there were practically no transactions in the
past 3 years. It, therefore, suggests that mere existence of cocoon markets nearby could not act as
a driving force for the development of sericulture sector as long as there is no integration of farm
and non-farm sectors, especially reeling sub-sector. In view of this, it is suggested that the nonfarm sector may be developed on a cluster basis, comprising of a few contiguous districts, where
cocoon production is sizeable, with one district as the major hub district, where the market(s) is
(are) already developed and the non-farm sector activities are already in place. Accordingly, the
existing cocoon markets in the main hub district within the cluster may be strengthened. For e.g.,
the three North Coastal districts of Srikakulam, Visakhapatnam and Vizianagaram may be
grouped into one cluster, developing either Srikakulam or Visakhapatnam as the main hub
district. There are 5 cocoon markets already located in these three districts, of which the major
one or two markets in the selected hub district may be strengthened so that a significant portion of
the cocoons produced in these cluster districts could be transacted only in this/these markets. The
reeling and twisting units are suggested to be encouraged only in this hub district.
Based on this concept, all the districts, where farm and reeling sectors are to be developed in an
integrated approach, are grouped into 4 clusters. Keeping in view the estimated cocoon
production and present status of the reeling units in each cluster, the following physical
programme is envisaged for promotion of new reeling basins (Table 5.15). Considering the
diversity of technology options available within the reeling sector, the projections are made
hereunder only with regard to the total number of basins that could be developed. The type of
units to be promoted (charka, cottage basins, improved cottage basins, etc.), would be ultimately
decided by the quality of cocoons available in the cluster, investment capacity of the
beneficiaries, etc.,

74

Table 5.15

Districts in
the cluster
Hub district
Year
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Total

Cluster-wise location of proposed new reeling basins

Cluster-1

Cluster-2

Cluster-3

Cluster-4

Srikakulam,
Visakhapatnam
and
Vizianagaram
Srikakulam /
Visakhapatnam

EG, WG,
Krishna and
Guntur

Cuddapah,
Nellore and
Chittoor

Prakasam,
Kurnool and
Anantapur

Krishna

Chittoor

Anantapur

20
36
48
42
34
36
38
42
296

No. of reeling basins

0
44
60
96
120
140
124
132
716

Total
40
500
316
580
722
1,090
1,576
1,756
6,580

40
324
208
388
462
724
1,048
1,160
4,354

100
904
632
1,106
1,338
1,990
2,786
3,090
11,946

Adopting the above approach, the new twisting units may also be planned/supported cluster-wise,
commensurate with the progress achieved in the reeling capacity.

75

MF

F *

3F8

n the earlier chapter, physical and financial projections are made in respect of various
activities related to farm and non-farm sectors of sericulture. We further observed that to
achieve these project targets, substantial capital formation is required. The financial
institutions, therefore, shall have to play a key role in realizing the project goals through
dispensation of required credit. It is in this context, various project/cost models for the
activities are prepared that could be used as guidelines by the banks for financing through
project approach. Various model projects are worked out in detail and presented in Part II of
the report.

'/# !

Considering the need for large-scale multiplication of quality saplings of high yielding
mulberry varieties, a project model has been prepared for the production of saplings from
hardwood cuttings in one acre of nursery area. Due to its short-term nature, the activity
requires only short-term loan. The details are furnished in Model-1.

'/# !

//#

' 53

# ! #

With the objective of encouraging the use of scientifically grown chawki worms by the
sericulturists for improved productivity, two models for establishment of commercial CRCs
are prepared, for the production of CSR bivoltines (Model-2) and improved cross breed
(Model-3) races, each with a capacity to produce 2500 dfls per crop and 32 crops per year.
!

( !

" !#/

The approved unit cost for drip irrigation system under Andhra Pradesh Micro Irrigation
Project for a unit area of one hectare with 12 mm laterals is Rs. 45700, of which subsidy is
available to an extent of 50%. The detailed break up of the cost is presented in Model-4.

"

!$ !

35

The following project models are prepared with regard to mulberry cultivation and silkworm
rearing.
Model-5: 1.0 ac mulberry garden with V-1 variety and rearing of 10 crops in a year with BV
races
Model-6: 1.0 ac mulberry garden with V-1 variety and rearing of 5 crops in a year with BV
races
Model-7: 2.0 ac mulberry garden with V-1 variety and rearing of 10 crops in a year with BV
races

76

Model-8: 1.0-ac mulberry garden with V-1 variety and rearing of 10 crops in a year with CB
races
Model-9: 1.0-ac mulberry garden with V-1 variety and rearing of 5 crops in a year with CB
races
Model-10: 1.0- ac mulberry garden with other improved varieties like M-5 and rearing of 10
crops in a year with CB races
All these models are tested for their financial viability and were found to be viable and
bankable. The average productivity (kg/100 dfls) and the sale price of cocoons assumed in
these models and the observed financial indicators viz. Benefit Cost Ratio (BCR) and the
Internal Rate of Return (IRR) are summarized below (Table- 6.1). Based on these indicators,
an attempt was made to assess Break-Even Price (BEP) of the cocoons under various growing
scenarios so as to understand the extent of price fall that could be absorbed by the rearer
below which level he would incur losses. In this exercise, the BEP is worked out as the price
at which the net present worth (NPW, which is the difference between the net present value of
benefits and the net present value of costs) at 15% discounting is zero or very near to zero. In
other words, it is the price at which the benefit cost ratio (BCR) is or very near to 1.00 at 15%
discounting. However, considering the gap between the estimated potential productivity under
ideal conditions and that assumed in the present models on a conservative side, it is expected
that the level of improved technology absorption at the rearer level can further improve
cocoon productivity and thereby the income from the activity. Thus, a rearer who adopted the
package could withstand a further price fall without incurring losses. The impact of this
increased productivity (assumed at 5% and 10% increase over the present average) on the
shift pattern of break-even prices of cocoons has also been assessed and presented (Table6.1).
Table 6.1. Farm Models and Break-Even Prices under Various Scenarios
Parameter
Weighted average productivity
of cocoons (kg/100 dfls)
Weighted average cocoon sale
price (Rs/kg)
BEP under above assumptions
(Rs/kg)
BEP with improved productivity
a) With 5% increase
b) With 10% increase

Model-5

Model- Model-7 Model-8 Model- Model-10

6
9
58
58
58
53
53
53

144

144

144

120

120

120

97

107

82

96

97

102

92
88

102
97

78
74

91
87

93
89

97
93

The above assessment indicates that at the current level of average productivity, the breakeven price of cocoons is around Rs. 100, which is exactly in conformity with the expression
made by some progressive farmers during the field studies. However, a farmer adopting 2
acre farm model with V-1 variety and rearing 10 crops per year with bivoltine races (Model6) is found to have considerable price advantage over other farmers to the extent up to Rs.
25/kg, because of better economies of scale of his operations. With a 5% further
improvement in the productivity level over the assumed ones, the break-even price could
come down by about Rs.5/kg to a level of Rs. 95/kg and with 10% increase a rearer could

77

further absorb a price fall up to a level of Rs. 90/kg. Under these situations, the farmer
adopting Model-6 would have a further cushion of about Rs.15-20/kg of cocoons in
comparison to other farmers. The above results clearly indicate that promotion and adoption
of appropriate technology package would have a bearing on the cost of production of cocoons
to a significant extent. In view of this, the Department should explore to promote only those
models by adoption of which, a rearer is comparatively better placed even under further
falling of cocoon prices. It is needless to emphasize that lower the BEP of cocoons, stronger
is the non-farm sector of sericulture industry, especially under the regime of falling prices of
international silk prices.
##

# !

Project models are worked out for various levels of technology of reeling viz. (i) Charka, (ii)
cottage basins with basic machinery (iii) cottage basins fitted with jettebout along with other
machinery like cocoon drier, boiler, closed re-reeling unit for uniform drying (termed as
improved cottage basins in this report), and (iii) multi-end reeling machines. The models are
also worked out for various capacities / scenarios as under:
Model-11: Twin charka (motorised) unit
Model-12: Twin charka Dupion silk reeling unit (motorised)
Model-13: 4-charka unit (motorised) unit
Model-14: 6-basin cottage basin unit with basic machinery
Model-15: 6-basin improved cottage basin unit
Model-16: 10-basin improved cottage basin unit
Model-17: 6-basin multi-end reeling unit (New)
Model-18: 10-basin multi-end reeling unit (New)
Model-19: Economics of a revived multi-end reeling unit (6 basin capacity)
Model-20: Economics of a revived multi-end reeling unit (10 basin capacity)
It is assumed that depending on the reeling technology, appropriate type and quality of
cocoons are used for optimisation of profits. Accordingly, various techno-financial
parameters like renditta, cocoon price, raw silk price, etc., have been assumed and worked
out. All the above models are subjected for their financial viability and bankability. It was
observed that establishing new multi-end reeling units in the present scenario is not
financially viable due to the following main reasons:

Non-availability of quality bivoltine cocoons giving a renditta of 6.5 and below

or so regularly in adequate quantities, as a result of which cocoons of both
bivoltine and cross breeds are being used and the average renditta works to about
7.5.
The quality of silk reeled on multi-end machine is not being well appreciated in
the markets with better prices offered to the reelers in comparison to the silk
reeled on cottage basins.

Accordingly, when the project viability was subjected with the parameters of a renditta of 7.5
and the prevailing silk price of Rs. 1200/kg, establishing a new 6 basin unit was found to

78

yield a return of (-) 6.26% (Model-17), while it is (+) 6.94% for a new 10 basin unit (Model18). These returns are far lower than the minimum expected return of 15% for any project.
However, the returns were found to improve to (+) 17.45% for a 6 basin unit and to (+) 34.5%
for a 10 basin unit, if cash incentive of Rs. 100/kg of silk reeled is provided to the reelers, as
applicable under CDP scheme of GOI. It is considered that the incentive should act only as
an encouragement to a reeler for adoption of best available reeling technology that is highly
capital intensive but not act as a price support measure in a longer run. Further, improved
cottage basins are now available with jettebout and other accessories fitted to the reeling
machine for reeling uniform grade silk. These improved cottage basins are provided with
other essential equipment like hot air drier, boiler, closed type re-reeling machine, etc., for
obtaining uniform denier silk without gum spots, etc. As the quality of raw silk could be
nearer to the multi-end reeled silk, there might not be practically any difference in the price
between these two types of silk. Due to lesser capital investment required for the improved
cottage basins, in comparison to the multi-end reeling units, the project returns were much
better with the same production and sale price parameters viz. 37.45% and 63.90%
respectively for a 6 basin (Model-15) and 10 basin (Model-16) unit. In view of the above, we
suggest large-scale promotion of improved cottage basins and no new unit of multi-end
reeling technology may be encouraged.
However, 36 multi-end reeling units have already been established in the state with assistance
under CDP, of which only 4 are presently functional. The remaining units have been closed
down, as the reelers could not operate successfully for various reasons, including continued
financial losses incurred. As considerable financial investment has already been made on
these units, we consider that all efforts should be made to revive these sick units. These units
require only adequate working capital for operation, as already discussed in the earlier
chapters. In the absence of continued supply of quality cocoons with an average renditta of
6.5, these units are expected to reel out only the best available quality cocoons, with an
average renditta of around 7.5 only. At the prevailing price of about Rs. 1200/kg of raw silk
of this quality, both the 6 and 10 basin units could be revived with annual cash surplus. The
projected economics of the revived units of 6 and 10 basin units are presented in Models 18
and 19, respectively. However, as the surplus in respect of 6 basin units is not adequate
enough for the reeler to get motivated for the revival (the annual cash surplus was about
Rs.0.65 lakh per annum), it is suggested that some cash incentive, say @ Rs. 50/kg, may be
extended against his production only as a short term measure till adequate regular supply of
quality cocoons with renditta of less than 7.5 could be ensured or the silk prices show an
upward trend, making the operation more viable and sustainable.
##

(8

/8!5

It was observed during the field studies that twisted silk has a better and ready market than the
raw silk. Some reelers have been supplying only twisted yarn directly to the weavers, after
arranging their raw silk twisted on job work basis on a tie up with some twisting units. Thus,
majority of the existing twisting units are working on job work basis. We, therefore, suggest
that integration of reeling with matching twisting capacities would be more viable and is a
practical solution to encourage value addition to the raw silk produced within the state.
Accordingly, some models are worked out in this direction, as indicated below, and their
detailed economics are presented in Part-II of the Report.

79

Model 21: Integration of 4-charka unit with 160-spindle twisting to produce charka weft
yarn
Model 22: Integration of 6-basin cottage basin (with basic machinery) with 200-spindle
twisting to
produce both weft and warp yarns.
Model 23 : Integration of 6-basin improved cottage basin with 240-spindle twisting to
produce warp yarn.
All the above models were found to be financially viable and bankable.

!5

Considering the scope for establishing more number of twisting units commensurate with the
increase in the reeling capacity, we worked out the following project models, assuming that
these units operate on a job work basis. Further, the warp yarn-producing units can supply
ready warps of the required length also, which is presently being sourced from Karnataka.
Model 24: Twisting unit with 200-spindles to produce charka weft yarn
Model 25: Twisting unit with 200-spindles to produce weft and warp yarn
Model 26: Twisting unit with 240-spindles to produce warp yarn
(#8

##

(8

/8!5

In view of the plan of DoS to encourage formation of Mutually Aided Co-operative Societies
(MACS) that may establish large-scale reeling-cum-twisting units, the following integrated
models are prepared.
Model 27: 24-basin improved cottage basin reeling-cum- twisting (480-spindle) for warp and
weft yarns.
Model 28: 48-basin improved cottage basin reeling-cum-twisting (960-spindle) for warp and
weft yarns.
All the above models were found to be financially viable and bankable. It may, however, be
pointed out that though all the project models in the non-farm sector (except multi-end reeling
units) are financially viable with a sizable return at the prevalent prices of cocoons and silk,
with a view to withstanding any further eventual variations in the prices of cocoons and silk
in future, all efforts should be made to keep both the investment cost and operational cost at
optimum levels. For example, the cost on the work shed, building, etc., may be optimised by
constructing low cost structures, wherever possible, or by taking up the activity in
own/rented/ long-term leased premises.

80

F3

CF

F *

MF

inancial projections presented in Chapter V demand credit support on a massive scale.

Chapter VI details out possible models of farm and non-farm sector activities, which
can be encouraged. Role of financial institutions becomes crucial in this context. In this
chapter, we detail out the scope for credit flow to different activities. But, the present level of
credit support to this sector is not commensurate with its needs. There are many problems
faced by financial agencies as well as borrowers. These problems are also discussed in this
chapter.
#

##

# !

Sericulture industry, by very nature of its composition, has credit needs diverse in kind as
well as degree. Credit needs of certain activities in the value chain fall under farm sector and
others into non-farm sector categories and as such credit policy parameters governing the
lending within the same sector are different. Further, weavers form yet another activity sphere
for lending in view of their complex problems of organization and choked channels of
lending. Different segments in the sericulture sector and activities that need credit support are
given in the activity-credit need matrix as given below.
Table 7.1. Activity-credit need matrix for sericulture sector
Activity
Kissan Nursery

Items of expenditure/ investment

Establishment of clonal nurseries and
multiplication of sapling- includes
land preparation, seed cuttings,
planting, after care, marketing, etc.

Commercial
Chawki Rearing
Centres (CRCs)

Chawki garden, rearing house,

equipment and operational costs

Commercial
Private Grainages
(LSPs)
Mulberry
cultivation &
Silkworm Rearing

Civil structures, plant and machinery,

laboratory equipment, etc.

Reeling

Shed/building, reeling machinery,

equipment, water source, raw material
(cocoons) and other operational
expenses.
Shed/building, Twisting machinery,
warping machine

Twisting

i) Establishing and maintaining

mulberry garden land preparation,
labour, manures and fertilisers, etc.
ii) Infrastructure for rearing - shed,
equipment, rearing bed, operational
expenses.

Nature of credit needs

Activity short-term in nature and 1 or 2
multiplications can be taken up in a
year. Needs short term loan. However,
term loan may also be required, if land
development , irrigation infrastructure,
etc., are also to be supported.
Term loan for establishment of chawki
garden, creation of rearing
infrastructure, capitalised working
expenses.
Term loan for civil structures, plant and
machinery, other infrastructure, W/C
margin capitalised for first year.
i) Investment credit for establishing the
garden, land development, irrigation
infrastructure, working capital
component needed.
ii) Investment credit for shed, rack and
equipment, working capital capitalised.

Investment credit for shed and

machinery and working capital for
operation.
Investment credit for shed and
machinery. Working capital for silk and

81

Activity

Items of expenditure/ investment

Weaving

Work shed, loom, tools and

implements, raw material (silk, zari,
cotton, etc.) and other operational
expenses

Nature of credit needs

operations. No need of W/C for nontrading, job work based units.
Investment credit for loom, working
capital for raw material and other
operational expenses.

As per the projections in Chapter V, summary of investment needs of the sericulture sector
are given in Table 7.2.
Table 7.2. Summary projections of financial outlay required for different activities

(Rs. lakh)
Year

Kissan
Reeling units
New &
Twisting
Replanting Nursery Investment Working units*
with V-1
capital

2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Total

10505.44 308.12
10505.44 308.12
10505.44 308.12
10505.44 308.12
10505.44 308.12
10505.44 308.12
10505.44 308.12
10505.44 308.12
84042.52 2464.96

56.10
459.58
313.06
571.89
680.39
901.39
1291.78
1447.65
5721.84

184.53

451.44
775.10
969.74
1184.28
1420.45
1742.81
2098.06
8434.37

0.00
140.44
754.67
642.22
797.94
972.78
1347.17
1625.20
6280.42

Total
financial
outlay
10561.54
11105.46
11573.17
11719.55
11983.77
12379.61
13144.39
13578.29
96044.78

Short term / Estimated

Working
term
capital
credit
needs
492.65 7921.16
759.56 8329.10
1083.22 8679.88
1277.86 8789.66
1492.40 8987.83
1728.57 9284.71
2050.93 9858.29
2406.18 10183.72
10899.33 72033.59

* Working capital needs are not assessed as most of them are operating on job work basis.

Total outlay for the all the activities projected worked out to Rs.10562 lakh during 2004-05
and reached Rs.13578 lakh by the terminal year of XI Plan. Credit needs, assuming margin of
25 per cent, work out to Rs.7921 lakh and Rs.10184 lakh during these years.

#6

(#/# !

For all the above activities of the industry, credit is availed from both institutional and noninstitutional sources. However, a comprehensive scenario with regard to flow of institutional
credit to the sector could not be presented due to deficiencies in the data reporting system.
Credit extended to sericulture activities is reported variously under agricultural crop loans,
plantation and horticulture, non-farm sectors, etc. Thus, data on institutional credit flow to
sericulture are hardly available. Whatever data available are for farm sector only. And,
inconsistency in available data is yet another problem. Our efforts to obtain credit flow data
from State Level Bankers Committee (SLBC), Lead District Managers (LDMs) and District
Development Managers (DDMs) of NABARD did not yield much result. Data available on
NABARD refinance to farm sector activities are given in Table 6.1.

82

Table 7.2. NABARD refinance to sericulture sector (Farm Sector)

(Rs.lakh)
Year
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04

NABARD
Refinance

763.75
832.49
801.68
1000.89
435.16
123.59
43.53

Source: State Focus Paper 2004-05, NABARD, Hyderabad.

District-wise data on NABARD refinance for last three years, given in Table 6.2, show that
the refinance availed across many districts is very insignificant. Even in case of Ananthapur
and Chittoor Districts, the refinance flow came down drastically to an insignificant level in
2003-04.
Table 7.3. District-wise NABARD Refinance to Sericulture (farm sector)
(Rs. lakh)
District

Amount of refinance
2001-02

Karimnagar
E.Godavari
Krishna
Guntur
Chittoor
Cuddapah
Ananthapur
Kurnool
Adilabad
W.Godavari
Khammam
Mahabubnagar
Total

2002-03
0.58
1.12
0.61
3.92
263.82
111.81
52.09
1.21
0.00
0.00
0.00
0.00
435.16

2003-04
0.00
0.00
0.00
0.00
60.66
21.01
41.39
0.54
0.61
0.46
0.00
0.00
123.59

0.27
0.00
0.00
0.00
12.40
0.16
28.94
0.11
0.00
0.00
1.38
0.27
43.53

Field studies also revealed serious credit related problems in the sector. While bankers
expressed their willingness to finance farm sector activities, in reality, the credit does not
seem to flow in good measure. This may partly be due to low paid out costs on account of
maximum use of family labour both in mulberry cultivation and silkworm rearing. In
mulberry cultivation and silkworm rearing, investment requirements are partly met by subsidy
given under CDP. The eligible items of subsidy are planting material of high yielding
varieties, rearing shed, rack system, CRCs, supply of disinfectants, plastic/rotary mountages
and drip irrigation system.
Though unit cost of a 40X20 shed is Rs.1.00 lakh, many farmers are spending even up to
Rs.2 to Rs.3 lakh on the building as they are constructing multipurpose buildings for rearing
as well as residing. They are mainly investing from their own savings. On the other hand,
some farmers have gone for low cost local wood for racks and thatched roof for minimising
cost.

83

Under non-farm sector, subsidy is extended for setting up of MERUs to the extent of 50 % of
plant and machinery (under X Plan), 35 per cent is the share of CSB and 15 per cent is that of
State Government. Also, CSB extended interest-free loan during IX Plan to the extent of 60%
of the cost of plant and machinery. Interest subsidy to the tune of 50 per cent was also
extended by CSB on working capital loans under IX Plan. For this purpose, CSB deposited
half of the working capital limit (subject to max. of Rs.3 lakh) sanctioned by the bank with
the bank.
Reelers face the main problem relating to credit availability. In all the reeling clusters visited,
reelers have reported shortage of working capital and non-availability of credit from banks.
Some of the reelers have not repaid the bank loans taken earlier. Due to this banks are not
willing to give further loans to even those who do not have any dues. This needs to be taken
up at the appropriate forum as these were not group loans and still genuine reelers are
suffering for want of credit. Though many reelers are not willing to talk about their past
loans, some reelers expressed hope to repay even the past dues if government can help them
at this juncture. Quite a good number of these reelers, once enjoyed countrywide reputation,
now stand testimony to the adverse impact of global changes on the domestic reeling industry.
Our enquiry into the possibilities of organising reelers into Self Help Groups revealed that
reelers across the clusters are not in favour of groups as they feel reeling is the individual
activity and they did not want to stand guarantee to anybody. It is clear they do not have
much idea of what it means to be in a group. They may need sensitisation on advantages of
forming an effective group.
Reelers in different clusters were rehabilitated in charka complexes built for them by DoS.
While the department has provided all the facilities all the reelers in these complexes are not
pursuing the activity. Situation of some of the complexes is still bad. They are further
demanding patta for the lands. They want pattas for offering the land as security for
obtaining bank loans. Though this argument is intuitively appealing, DoS should not give
patta to the reelers in any complex, as the risk of sale of land is very high in view of the nonfunctioning of many units. Further, anybody not pursuing the activity should not be allowed
to continue in the complex. In fact, instances where allotment was made even to non-reelers
were brought to our notice in some complexes. Also, reelers may be accommodated in
housing schemes available. Concessions in housing schemes may be given not to anybody
and everybody but to reelers with proven track record. A pension scheme for the crippled and
the old may be thought of.
Reelers in Kadiri expressed that their bad days started after shifting to charka complex. In
fact, it coincided with the sudden fall in silk prices, which never recovered to the threshold
levels. Reelers demand a package for reviving their units. Their demands as per the
memorandum submitted by Ananthapur District Silk reelers, Twisters and Weavers
Productivity Club (Kadiri), Ananthapur district, are as listed below:
1. incentive of Rs.10/kg of cocoons purchased between 1990 and 2004 to the reelers
2. free power to units below 5 h.p. capacity and concession in tariff for 5 to 25 h.p.
units
3. waiver of loans along with normal and penal interest
4. Enactment of Silk Act to protect reelers from middlemen
5. issue of fresh loans after waiving earlier dues
6. immunity from legal action from bankers

84

While some of the above demands are apparently untenable, the suffering faced due to
continuous decline in silk prices has to be addressed to.
Credit to twisting units is wrought with similar problems of defaults. Some of the reelers who
want to establish twisting in conjunction with their reeling units are facing problems. The
problem is more when they want to take second hand machines. Banks may consider giving
loans in such situations on the strength of the reeling unit and the personal reputation of the
reeler.
Finance to weavers is a complex issue in itself. Weavers organised into cooperative societies
are getting credit limits from District Co-operative Central Banks (DCCBs). Of late, many
societies became ineligible for fresh working capital limits due to their overdue position. Even
societies that have won awards for their performance earlier have become defunct and hence,
ineligible for fresh borrowing. On the other hand, DCCBs, which have been purveying credit
to weavers societies, are in problems too due to defunct societies and mounting overdues.
APCOB, in the current year, has allowed the ineligible societies to draw fresh limits up to 90
per cent of the amount credited by them to their loan account. Had this amount been adjusted
against interest dues as per normal circumstances, the societies would not have any access to
fresh funds.

85

F8 F
F* 8

,
D CF

F *

I
MF

his chapter deals with the implementation aspects of the project with special reference to
types of institutions needed for reviving the sector and role of the existing institutions,
monitoring and evaluation mechanism required during the project implementation.
/

#/# ! !

!! !

Sericulture sector due to its range of diverse activities need institutional support in equal
diversity. Right now, Department of Sericulture, SERIFED, credit institutions, APCO, etc. are
involved in the sector. There should be co-ordination among these agencies under the aegis of
DoS. In fact, it would add additional impetus to the sector, if a separate ministry were carved for
the sericulture sector. The said ministry should be responsible for all the activities in sericulturefarm or non-farm. This would help build linkages between farm and non-farm sectors and brings
in greater accountability. Similarly, a separate non-farm sector wing should be there with
adequate field support across the districts.
Additional effort needed to impart training to farmers, prospective entrepreneurs for taking NFS
activities, existing entrepreneurs and staff of the department on continuing basis. One
Further, the discussion in earlier chapters leads to a conclusion that the sector is in a trap. Unless
an external force is applied in the shape of government intervention for a specified period, it
cannot be revived. The situation is summarised below.
1.
2.
3.
4.
5.

Area under mulberry shrunk due to low cocoon prices and drought
Cocoon production declined
Should lead to high cocoon prices, but did not happen so.
Silk prices are low and falling due to cheaper imports (external factor).
Reelers incurred losses due to fall of silk prices on day-to-day basis below their
expectations with which they bid the cocoon prices. Hence, they did not operate on the
scale that would otherwise happen with lower cocoon prices.
6. Reelers incurred losses due to falling silk prices on day-to-day basis.
7. Reeling units closed.
8. This led to lower demand for cocoons and lower cocoon prices.
The situation possibly warrants stability in silk prices to revive reeling activity, which revives the
other sub-sectors of the industry. In what is given below, we discussed role of institutions like
SERIFED, need for new agencies for suggesting minimum support prices for silk and aspects to
be taken care during implementation.

SERIFED
Brief account of role played by DoS was given Chapter II. Another, agency having close ties
with the sector since 1975 i.e., even prior to forming separate department for sericulture, is

86

SERIFED (The Federation of Sericulturists and Silk Weavers Cooperative Societies Limited,
Hyderabad). Its activities are given in Box 8.1. Its main objective is developing sericulture and
silk industry in the state with the help of its member societies and members. The Chairman,
appointed by Government of Andhra Pradesh in ministers rank, heads it. Commissioner of
Sericulture is its ex-officio MD. Examining its mandate and structure, there is no doubt that
SERIFED can play a crucial role in the all round development of the sector in close coordination
with DoS. However, SERIFED could not become a force to reckon within the sericulture sector
in the state.
Three observations on the SERIFED are warranted in this context. First, it lacks focus. It has
taken too many tasks for itself. Its membership consisted of individuals as well as societies, thus,
lacking the character of neither a co-operative society nor a federation. (Of late, it stopped
admitting individuals as members). Though its promises to do many things for its members with
their involvement, member participation is hardly there. It has done many things starting from
leaf supply to running show rooms, but sequentially one at a time. Second, it was not headed by
(going by the earlier appointments) a person involved in and connected to sericulture. Third, it
had to bear the brunt of falling silk prices on the advent of liberalisation.
SERIFED needs revamping and refocusing. Since, farmers are in need of pledge system for silk,
it can be restructured to perform exchange and pledge system functions. As discussed earlier
(Chapter IV) it can help in revival of multi-end reeling units.

Minimum support price

There is a need for stabilising silk prices by ensuring reasonable prices for silk. And, there is a
need for an agency, on the lines of Commission for Agricultural Costs and Prices, which can help
stabilise prices. If silk prices can be pegged at reasonable levels, cocoon prices may
automatically attain stability. The agency should assess cost of reeling and minimum price an
average reeler should get to be able to enjoy normal profits. The cocoon price to be used for
calculating this silk price should be the minimum price based on actual cost of production of
cocoons. The agency should collect information on regular basis and recommend minimum silk
price applicable for every fortnight in advance for different quality categories of silk. The agency
can be attached to DoS and should have representatives of farmers, reelers apart from experts.
Box 8.1. Activities of Serifed
SERIFED, established in February 1975 under the Andhra Pradesh Cooperative Societies Act, 1964, has the objective
of developing sericulture and silk industry in the state with the help of its member societies and members. It took up
many an operation in addition to the silk yarn trading and operating silk yarn pledge system.
*
*
*
*
*

Production / purchase / supply of mulberry leaf, disease free layings, reeling cocoons, etc.
Established a grainage in Nalgonda during 1990-92 with a production capacity of 10 lakh dfls with financial
assistance from NCDC, which was subsequently closed down during 1993 due to administrative reasons.
Established 3 silk reeling units at Hyderabad, Hanuman Junction in Krishna district and Peddapuram in East
Godavari district during 1975, 1977 and 1989, respectively, which were closed down during 1994-95 due to
poor arrival of cocoons.
Established silk reeling and twisting units at Rayachoti, Piler, Chandragiri and Madakasira. It also taken
over the Departmental twisting units at Pargi, Penukonda, Anantapur and Atmakur to impart training to the
educated unemployed youth. However, all these units were closed down during 1992 due to labour unrest.
Set up a training centre at Dharmavaram for imparting training on charka reeling

87

*
*
*

Purchased confiscated China silk yarn from Customs Department and supplied to the member silk weaver
cooperative societies, as requested by them, during 1989-90.
Established a sales emporium in Hyderabad during 1984, which was closed down during 2000-01, due to
poor sales.
Activities of the Federation at present are silk yarn trading, silk yarn pledge system and sale of fabrics.

In October 1981, SERIFED had opened a Silk Exchange at Dharmavaram, on the pattern of Karnataka Silk Exchange,
to bring reelers and twisters/weavers on to a common platform and relieve them from the clutches of middlemen and to
provide stable price for silk yarn. This was without any statutory support. Initially, Government Silk Reeling units
were disposing of their yarn in this Silk Exchange to encourage silk auctions. Presently, SERIFED is buying and
selling both raw and twisted silk yarn. While it retains a small margin on the sales, it collects a commission of 1% on
the value of the transactions from the buyers. Besides this activity, the federation is also running silk yarn sales centres
at seven places where silk weavers are concentrated. However, the federation incurred heavy losses during 1992-93
due to steep fall in the prices of silk yarn.
SERIFED introduced issue of loans to the reelers / twisters on pledging their yarn, so that he can sell his yarn when he
gets a favourable price. However, the federation received a major setback in this operation during 1992 when the yarn
pledged by the reelers and availed advance of 75% of the value of the yarn pledged, did not turn up to redeem their
stocks when the prices of silk yarn fell down very steeply. In view of this, the federation had to purchase the pledged
yarn at heavy losses to avoid quality deterioration.
SERIFED has been supplying silk and cotton fabrics at wholesale prices to the exporters, silk dupattas and other
fabricks to Tirumala Tirupati Devasthanams and other temples. It is also making efforts for retail sales of silk sarees
and material through various national handloom expos / exhibitions.

Another agency should be there to conduct market support and buffer stock operations like
purchasing silk at the minimum support prices and releasing stock in cases of shortage in the
market. By this weavers interest also will be protected. SERIFED by virtue of its longstanding
presence may be given this responsibility. The purchase of silk should be only at minimum
support price and any loss that may occur to SERIFED should be met by the market fees and
other government support.

The following points also need attention during implementation of the programme.
1. The present project approach revolves around area development concept derived from
demand point of view. The central theme of the approach is to integrate various farm and
non-farm activities. The demand for cocoons, the ultimate output of the farm sector, is
derived from its downstream activities in the non-farm sector comprising reeling, twisting
and weaving, which in turn is decided by the ultimate demand for fabric. Thus, only a
strong non-farm sector can induce farmers to go for expansion of mulberry area.
2. Promotion of mulberry cultivation, especially in the non-traditional districts, should be
taken up on a cluster approach with strict implementation of Nucleus Village concept, be
for BV or CB races, for concentration of efforts and effective monitoring by the
Department.
3. It is essential to pay special focus for successful and healthy growth of non-farm sector.
Considering this, it is suggested that for the development of non-farm sector activities
also a cluster approach needs to be adopted, which may comprise a few contiguous
districts with a properly identified hub very nearer to the major cocoon market centre in
the cluster.

88

4. At the grass root levels there is a general feeling among reelers, twisters and weavers that
the Department could not pay the much needed attention to this all important non-farm
sector development in comparison to farm sector activities. In fact, the Department
appears preoccupied with expansion of mulberry area and the needed attention could not
be focused on non-farm sector activities, as may be evident from the closure of a
substantial number of reeling and twisting units. Therefore, it is suggested that a separate
wing for non-farm sector promotion with adequate technical staff should be put in place
in the identified non-farm clusters. The wing should be headed by separate DDS/ADS.
5. DoS and SERIFED should promote brands such as Pochampally, Gadwal, Narayanpet,
Peddapuram, etc. These brands are quite popular and due to imitations in recent years
they lost identity and credibility. Consumer should be educated about the silk,
specialities of products from different places, prevailing price ranges, imitations, etc., to
help them to appreciate quality products. Possibility of introducing mandatory
certification and enforcement, through an agency identified for the purpose, under the
newly introduced silk mark should be examined.
6. Considering that promotion of farm sector activities may be concentrated only in the
most suitable districts, integrating with the infrastructure support and nearness to the nonfarm cluster, the Department may consider appropriate redeployment of the staff. Staff
should be adequately trained especially in extension techniques.
7. While indicative targets are necessary for monitoring the progress, excessive stress on
target achievements has proved to be counter-productive. A system of incentives may be
planned to encourage performance. At the same time, there should be verification of the
information reported and disincentives for wrong reporting should overweigh the
incentives for achievements.
8. Participants in the sericulture activities now are going by consideration such as subsidies
etc. and very few are entering the sector looking at it as an enterprise. At present, of the
36 entrepreneurs selected for MERUs financed under CDP, only 4 are continuing
production to a certain extent, while the rest are closed down. Seeing the large-scale
failures will deter any prospective entrepreneur, while a successful entrepreneur himself
becomes a publicity icon. Hence, selection of entrepreneurs should be done with care.
9. DoS may prepare and disseminate brochures and other publicity material and
telecast/broadcast sponsored programmes to publicise different opportunities in the
sericulture industry. Booklets on project ideas and models can be prepared and made
available through media, employment exchanges, DICs, DRDA, educational institutions,
industrial exhibitions, etc.
10. All these need lot of manpower. DoS may use services from other agencies involved in
the sector for specific tasks. It can also plan to outsource on need basis. One more
alternative is engaging agri-clinics, farmers, NGOs, productivity clubs, etc. in extension
and other works on commission basis.

89

11. Mobility of the field staff is must in implementing and monitoring of any project of the
present type. For this DoS may offer motor cycles at 50% grant and 50% loan or own
contribution and pay Rs.1000 towards fuel expenses.
12. One training institute for training entrepreneurs may be started in North Coastal Andhra
Pradesh.
13. Credit availability has been a major constraint in the development of sericulture sector.
DoS may co-ordinate with SLBC and NABARD for credit planning and credit flow.
Bankers may need sensitisation, especially on non-farm sector activities.
14. Wherever possible user charges may be collected so that users can appreciate the value of
the services offered by DoS.

#$

Monitoring is a periodic review and surveillance by the DoS at every level of implementation of
an activity to ensure that input deliveries, work schedules, targeted outputs and other required
actions are proceeding according to the plan.

Management information system (MIS)

Effective management information system is an essential component of monitoring. For a good
MIS, the content and its flow are important. Modern information and communication
technologies (ICT) come in handy for an effective MIS as they facilitate fast processing of largescale information and its instant transmission over space. DoS have very good system of
communication through mobile phones and e-mails. It could take advantage of the IT and CT for
effective functioning. Thus, DoS is fulfilling the necessary condition for effective monitoring of
the project. As far as the content is concerned, DoS is calling for detailed monthly returns
covering various details both TSC-wise and mandal-wise. They call for the following monthly
returns from each AD.
1. Mandal-wise performance report covering key indicators such as mulberry acreage
target and achievement, uprooted area, cumulative acreage, brushing of CB DFLs-target
and achievement, DFLs brushed for the crop harvested, harvesting of CB cocoons- target
and achievement, average yield, average brushing per acre, average cocoon yield per
acre, etc.
2. TSC-wise, variety-wise, mandal-wise mulberry plantation covering aspects like no. of
villages, variety-wise area till the beginning of the month, no. of acres added during the
reporting month, acreage added during the year and cumulative acreage.
3. Abstract for completed crop for the division as a whole and then consolidated at district
level covering number of mandals, villages, farmers covered, DFLs brushed, quantity of
cocoons harvested, cocoon productivity, etc.

90

4. Checklist for the Division as a whole and then consolidated at district level indicating
targets and achievements with remarks covering various items in both farm sector and
non-farm sector programmes.
5. Apart from these, three proformae, viz. F.F-I, F.F-II and F.F-III containing farmer-wise
information are filled by all TSCs in-charge and transmitted in electronic form. These
returns are very exhaustive and the information obtained through them will be sufficient
for monitoring. However, in spite of such a comprehensive MIS, there has been a
significant inconsistency in the data furnished by the district and state level offices. This
has to be looked into and a fresh reassessment of the district level status of sericulture
sector as a whole has to be made, which will act as the base data for drawing appropriate
future strategies.

Organisational structure needed for monitoring and evaluation

Two levels of monitoring system should be there.
Project direction and review team (PDRT) headed by Commissioner. Additional Director and
officers-in-charge of on-farm and non-farm sectors at HO level and regional heads should be
members in it. The team should review the progress of the project in the light of external
environment and should consider mid-season corrections in the project parameters, policy
changes needed from time to time. The review can be on quarterly basis.
Project implementation team (PIT) at district levels headed by Zonal head and represented by
district- in-charge( DDS/ADS). They have to review the project progress and sort out any
practical problems. The team should consider the potential in realistic sense and report to PDRT
any infrastructure and policy support needed by the field force. PIT should have adequate
delegation of powers for quick decision-making. The review can be on monthly basis.
Evaluation is done normally at the end of the project. Hence, it should be done during the XII
Plan period. But given the rolling nature of the plan, interim evaluations can be done. One such
evaluation can be planned in the beginning of the X Plan. Second one in the middle of the XI
Plan. Terminal evaluation can be taken up in the beginning of XII Plan. Evaluation may be done
by external agencies.

91

F 8 I F

o far in the previous chapters, we have made several proposals for integrating and
strengthening sericulture sector covering farm as well as non-farm sectors. Needless to
say, a project of this magnitude requires huge funds to be committed both in public and
private sectors. Assuming that the project goes ahead as planned, the likely benefits thereof by
the end of XI Plan and funds required for project implementation are summarised below.

5'

! !'#

2# !

' #$#

" !'# #

Mulberry area would be 51200 ha, growing at an annualised rate of 8.36%.

More than 3/4th (78%) of the above mulberry area would be under V-1.

About 81% of the sericulturists would be adopting improved technology package of

rearing.

Average cocoon productivity would increase by 46%, from the present level of 900 kg/ha
to 1314 kg/ha.

The extent of bivoltine cocoon production in the total production would be 15%.

12.7% of the total mulberry area would be utilized for rearing bivoltines.

While the rearing activity and cocoon production are concentrated in all the 13 districts of
Coastal Andhra and Rayalaseema regions, a strong non-farm sector would be developed
around only 4 hub districts, two each in Coastal Andhra (Visakhapatnam/Vizianagaram
and Krishna) and Rayalaseema (Chittoor and Anantapur) regions.

With the proposed installation of an additional 11946 reeling basins, in addition to the
revival of existing ones, about 72% of the cocoons could be reeled within the state, from
the present level of only about 11%.

The entire production of bivoltine cocoons would be taken care of by the revived multiend reeling units and newly promoted improved cottage basins.

One-fourth of the total cocoon production is expected to be of good quality giving better
renditta, which will be adequately taken care of by the cottage basin reeling technology,
leaving moderate quality cocoons to be consumed by the charka sector, i.e., cocoon
quality linked reeling technology would be in place.

The internal raw silk production increases by more than 16 fold (from the present level of
only 364 MT to 5847 MT, of which BV silk production would be 23.3% (1360 MT).

By increasing the twisting capacity to about 3.90 lakh spindles, 60% of the raw silk
produced within the State could be value added further.

92

Implementation of the total programme demands a capital formation of Rs. 840.43 crore
in the farm sector and Rs.120.02 crore in the non-farm sector.

The project is expected to create full time employment to about 3.08 lakh persons, in
addition to creating about 3600 professional entrepreneurs in the reeling and twisting
sectors and promoting about 48000 additional farmers as new generation sericulturists.

#D

!'#
!'#

2# ! /

#/# ! !

Summary statement showing fund requirement under public and private sectors
Sl. No.
1

Particulars of
investment
Establishing V-1
plantations &
rearing

V1-Nurseries

Chawki rearing
centers (CRCs)

-Capacity 0.80
lakh DFLs/year
-Outlay Rs.3.58
lakh - 50: 50 in
public & private
sectors

Incentive on BV
cocoons to farmers

@10/kg BV
cocoons sold in
AP markets by our
farmers for 3
years
- Promotion of
CBU & ICBU,
Charkas, reelingcum-twisting
units, etc. (for
additional units)

Reeling & twisting

sector- expansion

Reeling sector revival

Major
assumptions
Replacing the
existing varieties
(2000 ha) & new
planting
(2700 ha).
489 acres- 50% in
public & 50% in
private sector

Year
8 years
(@Rs.
10505.44
lakh/year)

Investment required (Rs. Lakh)

Public
Private
Total
84043.52
84043.52

8 years
(@Rs.
308.12
lakh/year)
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
I year

1232.48

1232.48

2464.96

35.80 (10)
25.06 (7)
28.64 (8)
46.54 (13)
50.12 (14)
46.54 (13)
50.12 (14)
57.28 (16)
76.00

35.80 (10)
21.48 (6)
25.06 (7)
42.96 (12)
50.12 (14)
42.96 (12)
50.12 (14)
53.70 (15)
-

71.60 (20)
46.54 (13)
53.70 (15)
89.50 (25)
100.24 (28)
89.50 (25)
100.24 (28)
110.98(31)
76.00

II Year

130.00

130.00

III year

196.00

196.00

2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2004-05
MERU

-W/C support in
kind through
SERIFED
Charka
(cocoons)
-MOUs to be
2005-06
signed among
MERU
reelers, SERIFED
Charka
& DoS

56.10
600.02
1067.73
1214.11
1478.33
1874.17
2638.95
3072.85

56.10
600.02
1067.73
1214.11
1478.33
1874.17
2638.95
3072.85

9.80

9.80

50.00

50.00

25.20

25.20

100.00

100.00

93

Sl. No.

Particulars of
investment

Strengthening
SERIFED

Training, educating
consumers,
entrepreneurs, etc.

Monitoring &
evaluation, etc

TOTAL

Major
Year
assumptions
-362 MERU
2006-07
basins @Rs.0.14
MERU
lakh/basin for 3
Charka
years
-50% of charkas to 2007-08
MERU
be covered on
Charka
group basis @ Rs.
0.10 lakh/charka 2008-09
for 3 years
MERU
Charka
Cleansing balance
sheet
Revolving fund
for revival of
MERU/Charkas
(see S.No. 6 above
for year-wise
break-up)
Pledge and MSP
operations
-Establishment of
training institute
in North coastal
Andhra
Aggregate
-Training in FS &
for the
NFS activities
entire plan
-sensitising
horizon
bankers &
coordination
-Educational
material
-Regular
One-time
monitoring with
for vehicle
mobility to field
support
staff
(50% from
DoS &
50% from
staff
member)
Per year @
1000/month
for fuel
-2 mid-term
Aggregate
evaluations & 1
for the
terminal
entire
evaluation
project
period

Investment required (Rs. Lakh)

Public
Private
Total
50.70
175.00

50.70
175.00

40.90
150.00

40.90
150.00

25.40
125.00
200.00

25.40
125.00
200.00

752.00

752.00

100.00

100.00

30.00

30.00

15.00

15.00

10.00

10.00

15.00

15.00

12.00

12.00

11.00

11.00

3871.58

97600.46 101472.04

The above estimates are tentative and may need ratification/revision, depending on periodic
reviews during the course of the project.

94