Includes bibliographical references.

The state of Meghalaya has variation in the species composition due to difference in temperature, rainfall and soil which gives rise to a unique lichen species called Parmotrema perlatum, also known as stone flower (Hale,1961). It is typically found growing on trees, walls and other stone surfaces which is collected by scraping the surface it's grown on and it is particularly prevalent in mountainous and forested areas. It is a spice, which was collected by the indigenous people of the forest, then brought to the market. This group of people lacks knowledge about the price and high value of the product. Both local and urban marketplaces sell stone flowers, although their markets' reach was distinct. The real benefits of the collectors at the local level were unknown as there was no empirical study that has been conducted on the economic aspect of stone flower. Therefore, under this backdrop the following objectives has been formulated viz (1) To estimate the costs and return incurred in collection of stone flower and (2) To study the marketing pattern of stone flower collection in Meghalaya. Stone flower in Meghalaya was usually collected in the months of April-September, with the onset of monsoon in state. As the intensity of rainfall increases there was an increment in quantity of harvested produce per month. The total quantity disposed was found to be 159.32 kg per year. The total cost incurred in the whole process was found to be `20580 for total quantity of 159.32 kg, where total fixed cost was 95.28 percent of the total cost and total variable cost was 4.71 percent of the total cost. The grossreturn calculated per year was `39890 and net return per year was `19250 for quantity of 159.32 kg of stone flower. There were three major intermediaries through which Stone flower was disposed by the collectors to two markets namely Mawiong Regulated market and Shillong market. The quantity disposed by the collectors was highest to the traders followed by village merchant and wholesalers in both the markets. There were three marketing channels identified in both the markets. In Mawiong market, channel-l was found to be most efficient channel, followed by channel-II and channel-III. The channel-I consists of Collector → Village merchant → Processors. The least efficient channel was channel-III, which consists of Collector → Traders → Processors. In the Shillong market the most efficient channel was channel-I which consists of Collector→Village merchant →Trader → Processors. The least efficient channel was channel-III, which consists of Collector → Traders → Processors. Thus, it can be concluded that collectors were mostly benefitted when their produce was sold to village merchant. Hence, the channel must be strengthened through technical mechanisms of marketing.