International Journal of Agriculture Extension and Social Development

author(s)
Katkuri SS, Hile RB, and Choudhary S

abstract
Spice processing constitutes a significant segment of the agro-industrial sector by facilitating value addition, improving market linkage and enhancing farm-based incomes. The present study evaluates the cost composition, profitability and operational constraints of spice powder processing using a case study of Srivari Spices and Foods Private Limited, functioning in Telangana and Andhra Pradesh. The enterprise follows a dual marketing strategy involving direct-to-consumer sales through retail networks alongside business-to-business supply channels, with chilli, turmeric and coriander powders forming the principal products. The analysis shows that the unit made a total capital investment of ?646.79 lakhs, with a major share allocated to plant and machinery, highlighting the capital-intensive nature of the processing activity. Cost assessment for the year 2023–24 indicates that depreciation on processing equipment and labour expenses were the dominant components of fixed and operating costs, respectively. The firm processed over 8.12 lakh kilograms of output during the study period. Among the products, chilli powder recorded the highest production cost as well as the highest net return per kilogram, driven by strong market demand and comparatively stable raw material supply. Turmeric and coriander powders also yielded positive returns, with benefit–cost ratios greater than one. Break-even analysis revealed that actual production volumes exceeded break-even levels for all major spice powders, confirming economic feasibility. Nevertheless, the unit faced challenges such as raw material price volatility, quality inconsistency, technological limitations and storage-related issues. Addressing these constraints through technological upgrading, improved quality management and efficient sourcing is essential for enhancing long-term competitiveness