The study was conducted in Bijapur district of Karnataka with an overall objective of studying economics of jaggery production. The study was based on the data collected from 80 processors spread over 10 villages in two taluks of Bijapur district. Financial and functional analysis were employed to a jaggery processing unit with a capacity of one ton per day was around Rs. 97,000. The investment . on processing shed, land and cane crusher shared as much as 70 per cent of the total investment. The share of raw material in total cost was estimated to be 87.67 per cent. While, the percentage of fixed cost to the total cost was only 1.47. The returns from jaggery processing unit per year was around Rs. 13 lakhs with a net margin of about Rs. 7, 935. A processing unit should crush 70 tons of jaggery to reach the Break Even Level of out-put. Positive NPV and IRR greater than 100 per cent indicated the economic viability of jaggery processing units in the study area.