Chilli is a spicy fruit used in culinary preparations. It is mostly added as an ingredient in foods to make it spicy. As per the latest data, India tops the list in chilli production followed by China, Peru, Spain and Mexico. Indian chillies are known for their pungency and colour, especially the ones grown in Guntur district of Andhra Pradesh.

There is demand for chilli both in the retail market and also in the processed food industry. Whilst there are several varieties of chilli which are grown and consumed across the country, one of the most popularly consumed chilli is the Guntur Red Chilli. Market demand for chilli is perennial due to continuous consumption by the consumers. A considerable volume of chilli is also exported from our country.

The crop cycle is short, taking about 4 to 5 months from sowing to sale of harvest. They are mostly cultivated between November and March. Typically, small and marginal farmers cultivate chilli over a small area of land (less than 1 acre). This limits their ability to take advantage of the price realisation for red chilli over other MSP crops cultivated over the same portion of land.

We are currently working with a farmer producer organisation (FPO) in Maharashtra, helping their farmer members to cultivate residue free, G4 Variety Chilli, which will be sold in both domestic and international markets. In that region, the lowest procurement price of red chilli at the wholesale market witnessed during the past 10 years was close to Rs. 150 per kg and the highest price was well over Rs 220 per kg.

The average output per acre for red chilli is close to 2,000 kgs making a clear case of Rs 3 lakh in earnings.

One of the key interventions from our end has been to protect the downside price risk of the farmers who have borrowed monies from the bank to adopt chilli cultivation for the first time. Our FPO partner has offered a minimum support price of Rs 100 per kg as the purchase price for the chilli so that the farmers will earn around Rs 2 lakh even if the market price drops below Rs 100 per kg.

We expect to expand this chilli cultivation programme backed by banking finance and forward linkage partners across different locations in Maharashtra, Madhya Pradesh, and Odisha in this year.

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