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Cost, Return, and Profitability of Vegetable Seed Production in Western Rukum, Nepal

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Cost, Return, and Profitability of Vegetable Seed Production in Western Rukum, Nepal International Journal of Agricultural Economics 2020; 5(5): 172-180 http://www.sciencepublishinggroup.com/j/ijae doi: 10.11648/j.ijae.20200505.14 ISSN: 2575-3851 (Print); ISSN: 2575-3843 (Online) Cost, Return, and Profitability of Vegetable Seed Production in Western Rukum, Nepal Melsan Shrestha 1, Shiva Chandra Dhakal 2, * 1United Mission to Nepal, Kathmandu, Nepal 2Department of Agricultural Economics and Agribusiness Management, Agriculture and Forestry University, Rampur, Chitwan, Nepal Email address: *Corresponding author To cite this article: Melsan Shrestha, Shiva Chandra Dhakal. Cost, Return, and Profitability of Vegetable Seed Production in Western Rukum, Nepal. International Journal of Agricultural Economics . Vol. 5, No. 5, 2020, pp. 172-180. doi: 10.11648/j.ijae.20200505.14 Received : August 20, 2020; Accepted : September 3, 2020; Published : September 17, 2020 Abstract: Vegetable seeds are high-value and low-volume products, and one of the promising sub-sectors for improving agricultural production, poverty reduction, and food security in Nepal. It is an extremely prioritized sector for uplifting livelihood of rural people. Due to an increase in the area under vegetable production for both the main and offseason, and replacement of locally produced seeds by the improved varieties, there is an increase in the vegetable seed demand. Nevertheless, only 50% of the national demand for vegetable seeds was met by domestic production. Western Rukum has long been known as the area with the most potential for vegetable seed production in Nepal. In this regard, this study was executed to assess the cost, return, and profitability of major vegetable seed production in the district. Altogether 201 sample households were selected using simple random sampling in 2017. The primary data were collected from household survey using a pre- tested semi-structured survey schedule and verified from a focus group discussion. The study showed that 13 types of vegetable seeds had been producing in the study area. Among them, onion seed, cauliflower seed, radish seed, and pea seed were primarily grown. The research revealed that all the major four vegetable seeds were profitable subsectors, where, cauliflower was the most profitable vegetable seed crop with B:C 1.78, followed closely by onion seed (1.68), radish seed (1.52), and pea seed (1.27). In contrast, the onion seed had the highest gross margin (NPR.121,682) per ha followed closely by cauliflower seed (NPR.117,136), radish seed (NPR.47,640), and pea seed (NPR.27,131). There is an opportunity to meet national demand, and to boost the local economy by promoting vegetable seed enterprises in the study area. The concerned stakeholders and policymakers need to focus on enhancing market linkage and farmers' technical know-how to promote vegetable seed production. Keywords: Vegetable Seed, Cost, Income, Profitability, Nepal Vegetable seeds are high-value and low-volume products, 1. Introduction and one of the promising sub-sectors for improving Nepal is principally an agrarian country. The agriculture agricultural production, poverty reduction, and food security sector accounts for 29.37% of national GDP and is the main in Nepal [10]. It is an extremely prioritized sector for rural income source for a majority (65.7%) of the population [8, economy enhancement [17]. Due to the increasing area under 12]. In this regard, vegetable production is one of the major fresh vegetable production, demand for vegetable seed is also subsectors, which accounts for 9.7% of the Agriculture Gross increasing per year [15]. The total seed production of Domestic Product (AGDP) in Nepal [1]. Both the area and vegetables in Nepal has increased dramatically from 9 Mt in production of vegetables in Nepal has increased since 2002 1975 to 1127 Mt in 2015. This remarkable change in the to 2014 [11]. Nevertheless, in Nepal, only 50% of the vegetable seed sector was due to the increased involvement national demand for vegetable seed was met by domestic of the private sector. Similarly, seed requirement also has production over the last decade [9]. significantly increased from 293 Mt to 2382 Mt in the same period. This increment was due to an increase in the area International Journal of Agricultural Economics 2020; 5(5): 172-180 173 under vegetable production for both the main season and off- markets of vegetable seeds [6]. In these contexts, this study season as well as due to the replacement of locally produced was conducted to assess the cost, return, and profitability of seeds by the improved varieties. However, the rate of vegetable seed production in the district. increment of seed production was slower in comparison to the increment of seed requirement. As a result, the gap was 2. Materials and Methods increasing [3]. In Rukum district, which is currently divided into Eastern 2.1. Selection of the Study Area Rukum and Western Rukum, the vegetable seed growing area falls under the Western Rukum. This district has long been This study was conducted in the Western Rukum district of known as the area with the most potential for vegetable seed Nepal. The district was the highest contributor to vegetable production in Nepal [16]. Rukum district produced 62 Mt seed production among all the districts in Nepal [10]; For this vegetable seed in 2014, 62 Mt in 2015, and 110 Mt in 2016 reason, it was selected purposively for the study. Among the [5], which shows the increasing trend. Western Rukum six local governments in the district, two urban produced 9.75% of the total national vegetable seed municipalities namely Musikot and Chaurjahari; and two production in 2016, ranking the first among the 77 districts of rural municipalities namely Sani Bheri and Triveni were Nepal [16]. The diverse agro-climate from warm sub-tropical identified as key vegetable seed production areas by District to cool temperate Himalayan range poses immense scope of Agriculture Development Office, Rukum [4]. Hence, within growing various vegetable seed in Rukum [13]. Thus, the the district, all these four municipalities were purposively district has a great opportunity not only to meet the selected for the study. increasing domestic demand but also to expand export Figure 1. Map showing the study area of research in Western Rukum district of Nepal. 2.2. Study Population, Sample Size, and Sampling Frame ranked by using a matrix ranking method in a focus group discussion, and four topmost ranked vegetable seed namely All the vegetable seed growing farmers of the study area onion seed, radish seed, cauliflower seed, and pea seed were were considered as the study population. In the study area, selected for the study purpose. 1010 vegetable seed producers were associated with 44 farmers groups [16]. A sample size of 201 was deemed 2.4. Cost of Production adequate for the study. From each of the four municipalities, among the total of 201 households participating, 72 in The cost of production of four vegetable seeds was studied by Musikot municipality, 96 in Chaujaharai municipality, 17 in considering the variable cost incurred in vegetable seed Saniveri rural municipality, and 16 in Triveni rural production. The variable costs were the expenses incurred for municipality was considered based on proportional to the size labour, seed, chemical fertilizers, organic manures, pesticides, of the vegetable seed growers in those municipalities. The and other (irrigation, packaging, harvesting, and marketing samples were selected by using simple random sampling materials) cost. The total variable cost of production was technique. Following, household survey was conducted to calculated by summing up all expenditures on variable inputs. collect primary data using personal interview schedule. 2.5. Gross Margin Analysis 2.3. Selection of Vegetable Crops Gross margin, for seed production, was calculated by Altogether 13 several types of vegetable crops had been differencing gross return and the variable cost incurred. It is the growing in the district for seed production. All of them were simple and quick method of analysing farm business for 174 Melsan Shrestha and Shiva Chandra Dhakal: Cost, Return, and Profitability of Vegetable Seed Production in Western Rukum, Nepal profitability. The gross margin of the major vegetable seed explanatory variables X1, X2, X3, X4, X5, and X6, produced in the study area was calculated by using the formula: respectively [14]. Gross margin=Gross Return (GR) – Total Variable Cost (TVC). 3. Results and Discussion Where, 3.1. Socio-economic Characteristics of Respondent GR=∑(Pi×Qi) Households Qi=quantity of vegetable seed sold (kg) In the study area, about 86% of household heads were Pi=price of vegetable seed (NPR /kg) found male, whereas the female-headed households were Total variable cost (TVC)=summation of cost of all only about 14%. variable cost [2]. The mean age of the household head was 48.3 years with a 2.6. Benefit-cost Analysis minimum of 22 and a maximum of 80 years. While, the average schooling years of the household head was 5.0 year, The undiscounted benefit-cost analysis was calculated by and on an average 3.95 members of a household had taken using the formula: any formal education. Likewise, about 93% of the households were primarily Gross Return Benefit cost ratio B: C engaged in agriculture; for the remaining 7%, agriculture was Total Variable Cost only a minor occupation for the household. The average For calculating gross return, income from the sale of family size was 6.0. Similarly, among the household vegetable seed was accounted. Whereas, the cost of members, 3.9 were an economically active member of the production was calculated by summing all the variable costs age category in between 15 to 59 years. Whereas, the incurred in the production process [7]. dependency ratio which is the ratio of the dependent population of the age group below 15 years and above 59 2.7.
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