Economic efficiency of contractual vegetable seed production in the Eastern Hills of Nepal

Date

2-1998

Abstract

This study examined the profitability, efficiency, and labor employment pattern in contractual vegetable seed production in the Eastern Hills of Nepal. It used primary data collected for a period of July 1996 to June 1997. A modified translog frontier production function was used to derive the efficiency measures. Simple linear regression models were used to evaluate the determinants of production efficiency and labor employment.

This study found that no net profit was obtained from vegetable seed production in the Koshi Hills as a whole. Seed production was affected not only by higher returns but also by greater employment opportunity and higher cash incomes.

The measured mean technical, allocative, and economic efficiencies in production were 89.68, 71.98, and 64.29 percent, respectively. It shows that production can be increased by improving the efficiency, thereby reducinh per unit cost of seed. Farmers' education and experience significantly improved efficiency.

Production in more remote districts like Bhojpur and Tehrathum was significantly lower than that in Dhankuta which has better access to roads and markets. It was also related to the findings that farmers who visit technical information centers more frequently were technically more efficient than others. Moreover, farms farther from the source of inputs were technically less efficient. Because vegetable seed production is purely a market-oriented program, these findings point to the need to review the policy of encouraging vegetable seed production in remote areas.

The study found that many farmers did not practice crop rotation. In view of it's requirement in seed certification, importance in soil fertility management and environmental protection, strict monitoring of farmer compliance must be done.

Households headed by women were technically more efficient. Women must be askd to play bigger role in vegetable seed production.

Labor employment in the production of competing crops showed a complementary relationship between female and male labor. This implies that the study area is mainly characterized by subsistence farming. The labor employment ratio between competing crop and vegetable production was 1:1.63 and 1:5.33 for family and hired labor, respectively. This reflects the role of vegetable seed production in helping to alleviate under-and unemployment problems in the rural area.

For the program to run smoothly, both seed producers and traders should honor the contract. There were, however, frequent violations of the terms of the contract. One way to avoid such events would be enforce the law.

Document Type

Dissertation

Degree

Master of Science in Agricultural Economics

College

Graduate School (GS)

Adviser/Committee Chair

Agnes C. Rola

Committee Member

Roberto F. Rañola, Jr., Ben S. Malayang III, Tirso B. Paris, Jr.

Language

English

Location

UPLB Main Library Special Collections Section (USCS)

Call Number

LG 996 1998 A14 T43

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