This study was conducted in 2020 to determine the profitability and productivity of organic turmeric production in the Surkhet district of Mid-western Nepal. Face-to-face interviews were conducted with 60 farmers and two focus group discussions were held in four different communities. Turmeric is commonly utilized among Nepalese households in the preparation of curries and is considered one of Nepal’s top five major spice crops. Despite being one of the top five-spice crops, Nepal’s dependency on imported turmeric has been growing every year to meet domestic demand due to the gradual decline in domestic production. The simple descriptive and statistical tools including the Cobb-Douglas production function and benefit-cost analysis were used to analyze the result. The benefit-cost ratio was found to be 1.20, indicating that organic turmeric production was a low profitability sub-sector with a productivity of only 9.06 metric tons per hectare. The Cobb- Douglas production function showed that the cost on seed had a non-significant effect on gross returns and other costs like human labour cost, organic manure cost, ploughing cost, and other costs (agriculture equipment, thread, sack/doko, and rhizome treatment) were found statistically significant. Return to scale was calculated using the Cobb- Douglas production function and it was found to be 0.363, indicating that a 10% increase in the cost of production increases the rate of return by 3.63%, which is a diminishing rate of return. As a result, replacing human labour with agricultural machinery, lowering seed costs, and ensuring appropriate market prices are required to boost the productivity and profitability of organic turmeric production in the research area.
The benefit-cost ratio was found to be (1.20), indicating that organic turmeric production was a low profitability subsector with a productivity of only 9.06 Metric tons per hectare.
The return to scale was found to be 0.363, indicating that a 10% increase in the cost of production increases the rate of return by 3.63%, which is a diminishing rate of return.
The highest cost was covered by seed rhizome (50%).
The majority of the turmeric farmers in the study area were still cultivating turmeric using traditional methods.
All of the producers employed organic input (seed, manure) that was readily available in the area, resulting in 100% organic turmeric.
Turmeric is regarded as an important spice crop among Nepalese households and is commonly used in the preparation of curries. It contains a yellow-colored matter named curcumin that is usually applied to coloring foods. Fresh turmeric Kapurkot-1 has a curcumin content of 4.89 percent and aromatic oils of 6.65 percent (
Despite the overall growth in the turmeric sector, the production and marketing situation of turmeric is miserable due to a lack of technical knowledge and insufficient supply of inputs during sowing as well as poor handling after the harvest, which has led to a lower yield of quality turmeric. Due to the traditional agricultural practice of turmeric production, farmers cannot get a good price, which has resulted in high production costs. Similarly, some government interventions, such as taxation, have discouraged farmers from producing turmeric. Farmers are discouraged from producing turmeric because of the low market price, high seed cost, and price fluctuation, resulting in a low benefit-cost ratio. Turmeric is primarily sold through a middleman on a commission basis, which has reduced the farm gate price of turmeric. The farmer’s main concern is the occurrence of disease during field production as well as during storage. Turmeric growers receive a lower price due to haphazard price-fixing, and land fragmentation affects small holdings of land, resulting in lower turmeric production.
This study would be useful in focusing on collective marketing and market information systems to reduce the involvement of large intermediaries and achieve higher economic returns for farmers. Turmeric farmers would benefit from information on field preparation costs, labour costs, and input requirements for turmeric cultivation. The study’s findings would help the concerned authority deal with the existing problems and develop effective solutions to mitigate these constraints, thereby promoting turmeric production and commercialization. The study’s findings would also help farmers make decisions about farm planning and enterprise selection.
Organic turmeric production is one of the major traditional farm activities within the mid-western region, Nepal. Surkhet district is a part of Province No. 6 within the Inner-Terai valley located in the Bheri Zone of Nepal. It has a mild climate with hot summers and cold rainy winters. The district was purposefully selected because it is famous for productive land and is one of the leading turmericproducing districts of the country. The Surkhet district of Nepal favours turmeric production in terms of physical, biological, and atmospheric conditions. Hence, four municipalities namely: Bheriganga, Barahtal, Lekbeshi, and Gurbhakot Municipality were randomly selected. A total of 60 households, 15 from each municipality were randomly selected from the study area.
FGD was conducted to supplement and triangulate the information obtained from the household survey. Two FGD was organized in four municipalities. The secondary data were collected from the various web, published articles, national reports and publications, various books, reports of different NGOs and INGOs, etc. The gathered data were coded, entered, and interpreted by utilizing SPSS and MSExcel computer software. The simple descriptive and statistical tools including the Cobb-Douglas production function and benefit-cost analysis were used to find out the result.
The total variable cost of organic turmeric production was calculated by estimating all variable inputs such as seed, organic manure, other costs, human labour, and bullock ploughing at current market prices.
Total variable cost = C seed + C organic manure + C ploughing + C labour + C other
Where, C seed = Cost on seed (NRs. / ropani), C organic manure = Cost on organic manure (NRs. / ropani), C ploughing = cost on ploughing by pair of a bullock (NRs. / ropani), C labour = cost on human labour (NRs. / ropani), C others = cost on agriculture equipment, sack/doko, thread, and rhizome treatment (NRs. / ropani). Similarly, the gross return was calculated as the total quantity of fresh turmeric produced × average price of fresh turmeric. The undiscounted benefit-cost ratio (BCR) was calculated by the following method.
Gross margin is an estimation of the difference between gross returns and variable costs. It was calculated using the formula below:
To estimate the contribution of different variable inputs on turmeric production, the general form of Cobb-Douglas production function was used. The model used for estimating regression coefficients of turmeric production in the study area was computed by the following formula:
Where,
Above model can be expressed in log linear form as follows:
Where
The term Return to scale refers to the change in output as input change by the same proportions. It was determined by summing up the regression coefficients of respective inputs from the Cobb Douglas Production Function (CDPF) regression analysis.
Distribution based on turmeric cultivated area and productivity in Surkhet district, Nepal is presented in
Distribution based on turmeric cultivated area and productivity in Surkhet district, Nepal
Share of different cost factors in organic turmeric production/ ropani in Surkhet district, Nepal
Share of different cost factor in organic turmeric production per ropani in Surkhet district, Nepal
Most of the turmeric producers in the surveyed area were growing turmeric by traditional agricultural practices in which agricultural knowledge obtained from their ancestors was used. They don’t use any chemical fertilizers and they don’t even properly water their crops. For this study, the cost of production was calculated based on household interviews and focus group discussions done with farmers from four municipalities of the Surkhet district selected for the study.
The major cost of production included human labour, seed, manure, ploughing, and other costs. The highest cost was found to be covered by seed rhizome (50 %). However, according to studies by (
Labour costs include human labour costs and ploughing costs. Labour was primarily used for land preparation, ploughing, planting, organic manure application, mulch collection and application, weeding, irrigation, harvesting, cleaning, grading, and transportation/marketing. This shows that the production of turmeric in the study area is labourintensive. Human labour was measured on mandays, that is, 8 hours of work per person per day. Generally, the average wage rate for human labour varies from ₹ 500-700 depending upon the area. Land preparation was carried out with a labour force of 0.51 persons per day. Ploughing was done by 0.27 pair bullocks per day. During ploughing, turmeric producers often use bullocks. In the case that the turmeric producers don’t have their bullocks or have a deficiency of them, they often rent bullocks from others. The charge of a pair of bullocks per day is normally ₹ 1000 to 1200. FYM placement and plantation were done with a labour force of 1.45 persons per day. The collection and placement of mulching were carried out with a labour force of 1.49 persons per day. The collection of mulch is carried out from the surrounding areas, farms, or nearby forests, and the cost mainly includes the labour cost of transporting it and placing it into the field. Weeding and irrigation were done with a labour force of 0.25 persons per day. Harvesting was carried out with a labour force of 1.3 persons per day. Transportation/marketing cost is also incorporated in labour cost as farmers usually have to take their produce up to road head. Therefore, planting a turmeric plant requires 5 human labours and 0.27 pairs of bullocks per ropani. However, due to the active seasonal migration of workers overseas, there is a shortage of labour and the wage rate also is increasing day by day. As a result, efforts should be undertaken in the research area to introduce labour-saving strategies.
The study found that the use of inputs such as fertilizers and machinery is negligible. A similar result was observed by (
Cost and Return Analysis of turmeric production based on production attributes in Surkhet district, Nepal
The study showed that gross return and profit were estimated at NRs.13008.5 and NRs.2151.73 per ropani respectively. The output-input ratio (without land rent) of fresh turmeric was 1.20. The low BC ratio was due to the high cost of the purchased seed. It implied that when 1 rupee spent on turmeric production, it would lead to the economic returns of ₹ 1.20 in turmeric cultivation.
The estimated value of the coefficients and related statistics of the Cobb-Douglas production function is shown in
The study revealed that a 10 % increase in seed cost decreases the rate of return by 0.21%, a 10% increase in labour cost increases the rate of return by 1.96%, a 10%increase in manure cost increases the rate of return by 0.62%, 10% increase in ploughing costs increases the rate of return by 0.62% and 10% increase in other cost increases the rate of return by 0.63%. R squared value was tabulated to be 0.56, and the return to scale was found to be 0.363. It signifies that a 10% increase in the cost of production increases the rate of return by 3.63%, which is a diminishing rate of return.
Production function analysis of turmeric production in Surkhet district, Nepal
From the regression analysis of Cobb-Douglas Production Function (CDPF), the sum of the coefficient was computed to be 0.363 which signifies the decreasing return to scale in the production of turmeric in the study area.
The majority of the turmeric producers in the study area were still cultivating turmeric using traditional methods. The seed cost was found the highest contributor (50 %) to the total production cost of turmeric followed by human labour cost (28 %), organic manure cost (15 %), other costs (4.2%), and ploughing cost (2.8 %). Seed accounts for the highest share among the total costs because farmers rarely use chemical fertilizers, irrigation, and pesticides in turmeric. All the farmers used locally available organic input (seed, manure) and thus, the produced turmeric is purely organic. Organic manures are used for soil management; whereas mulching applications were integrated for weed management, moisture conservation, and nutrient retention as well. Seed, human labour, and organic manure were the three major inputs and, in most cases, are owned by the farmers themselves. The study showed that the farmers could earn an average gross margin of about NRs. 2151.73 from cultivating turmeric in 1 ropani of land area. The output-input ratio (without land rent) of fresh turmeric was 1.20. It implied that when 1 rupee was spent on turmeric production, it would lead to the returns of ₹ 1.20 in turmeric cultivation. The low BC ratio was due to the high cost of the purchased seed. It can be inferred that turmeric was a less profitable sub-sector in the study area. Several problems like the high cost of seed, the unavailability of labour, and low market price are the major bottlenecks that have deprived farmers of gaining maximum profit in turmeric farming as compared to other crops in the study area. Therefore, government intervention should be enhanced to reduce seed costs and make sure the reasonable market price of turmeric. Besides this, there is a tremendous need to introduce labour-saving techniques to maximize the productivity and profitability of organic turmeric production in the study area.