Value Chain Analysis of Potato in Ilam District, Nepal

Abstract

The purpose of the study was to analyze the value chain of potato in the Ilam district. Potato is one of the major stable food and source of income for the majority rural farmers of the Ilam district. Using random sampling techniques, data were collected using semi-structured household survey with 165 respondents, 50 traders, input and service providers and along with 5 focus group discussion. Data were analyzed using SPSS and excel software. Results of the compound annual growth analysis showed that area, production and productivity is increasing significantly by 8.12, 2.87 and 2.79% respectively over 19 years in the country and 3.78, 2.84, and 3.55 respectively in the Ilam district. The farmers are generally growing local variety however; they also grow some improved varieties. The benefit cost ratio of local varieties is very low (0.68) whereas for improved varieties higher (1.73). Farmers do not adopt the grading and packaging which is generally done by the traders. The import of potato sharply increasing over the years which was 46,097 t worth of NPR 35.74 million in 2008/09 and reached to 249,368 t worth of NPR 531.25 million in 2016/17 which is 14.86 fold increases in value within 8 years. The value chain analysis reveals that, the margin received by the farmers is 27% of the retail price whereas traders and wholesalers deals in big quantities and extract substantial margin. The major constraints of potato production are diseases accompanied by weak availability of seed, high production cost, decreasing labor availability, and weak backward and forward linkage. Therefore, findings suggest that, government and developing agencies should support farmers organizations for the adoption of new variety, involve in quality seed production, integrated management of diseases, reduce cost of production, develop agricultural marketing infrastructures to boost up the production and make market access to the farmers.