Comparative Economic Efficiency of Modern and Traditional Redgram Processing Mills in Karnataka

Background: The study is conducted with keeping the objective of economics efficiency of modernized and traditional redgram processing mills.

Methods: To analyse the objective the business ratios, Break-Even ratio, and financial feasibility ratio like NPV, BCR and IRR techniques are worked out.

Result: The benefit cost ratio worked to be 1.13 for modern dal mills and 1.06 for traditional dal mills. The internal rate of returns is very high at 33.22 per cent in modern dal mills compared to traditional dal mills (16.48%). The quantity of output required to achieve break-even point were 10,863 and 9,136 quintals of output (dal) in modern and traditional dal mills respectively and have produced more than the break-even volume of output, indicating both were running under profitable lines. Estimated values of NPV, BCR, IRR and PBP indicated that, irrespective size of the dal mills, investment in redgram milling units was economically feasible and financial sound. The magnitude of financial feasibility analysis indicated the priority to be assigned for investment in modern redgram processing units.

Application: The present losses can be minimized by adopting improved machineries and equipments including Buller and Sortex grading machines to increase recovery percentage and produce better quality dal for enjoying larger profit through economics of large scale production.