Betel - Economics

Economics

Betel leaves are cultivated throughout southeast Asia. The leaves grow on betel vines, and the average size of vine plots range from 0.5 to 50 decimals (1 decimal = 0.01 acre).

Malaysian farmers cultivate four types of betel plants: sirih India, sirih Melayu, sirih Cina and sirih Udang. The harvest is then sold in bundles of 10 leaves, each bundle costing in 2011 between RM 0.30 to 0.50 ($0.10 to $0.15 per leaf).

In Sri Lanka, betel is grown all over the country but the commercial production of betel, with bigger leaves with dark green colour combined with thickness, known as “kalu bulath” is confined to a few districts such as Kurunagala, Gampaha, Kegalle, Kalutara and Colombo. These are sold at a whole seller lots of 1000 leaves. In a report published by the United Nations Food and Agriculture Organization (FAO), a successful betel farm in Sri Lanka can provide a supplemental income to a farmer by providing six days of work every six months and net income when the leaf prices are attractive. The FAO study found the successful farm’s yield to be 18,000 leaves per 150 square feet (14 m2). The additional salary and income to the Sri Lankan betel grower, assuming he or she provides all needed labor and keeps all net profit, to be SL Rs. 1635 per 150 square feet (14 m2) of betel farm every 6 months ($90 per decimal per year, or $9000 per acre per year). If the farmer hires outside labor to tend the betel vines, and harvest the crop, the FAO found the net income to the betel farm owner to be SL Rs. 735 per 150 square feet (14 m2) of betel farm every 6 months ($40 per decimal per year, or $4000 per acre per year). According to FAO, the market prices for betel leaves vary with wet and dry season in Sri Lanka, and in 2010 averaged SL Rs. 200-400 per 1000 leaves ($1.82 to $3.64 per 1000 leaves). The FAO study assumes no losses from erratic weather, and no losses during storage and transportation of perishable betel leaves. These losses are usually between 35% to 70%.

In Bangladesh, betel leaf farming yields vary by region and vine variety. In one region where betel leaf cultivation is the main source of income for farmers, a total of 2,825 hectares of land is dedicated to betel vine farming. The average production cost for these betel farms in Bangladesh are about Tk 300,000 per hectare ($4000 per hectare, $16 per decimal), and the farm owners can earn a profit of over Tk 100,000 per hectare ($1334 per hectare, $5.34 per decimal).

In India, a 2006 research reported betel vines being cultivated on about 55000 hectares of farmland, with an annual production worth of about IN Rs. 9000 million ($200 million total, averaging $1455 per acre). The betel farming industry, the report claims, supports about 400,000 - 500,000 agricultural families.

A March 2011 report claims that betel farming is on a decline in India. While in ideal conditions, some farms may gross annual incomes after expenses of over IN Rs. 26,000 per 10 decimal farm ($5,780 per acre), a betel farm income is highly erratic from year to year, because of rainfall patterns, temperature, and spoilage rates of 35% to 70% during transport over poor infrastructure. Simultaneously, the demand for betel leaves has been dropping in India because of contagious acceptance of gutkha (chewing tobacco) by consumers over betel leaf-based ‘‘paan’’ preparation; the report cites betel leaf trading has dropped by 65% from 2000 to 2010, and created an over supply. As a result, the report claims Indian farmers do not find betel farming lucrative anymore.