This presentation is the output of study on the production and economics of potato in Achham district of Nepal in 2019.

1. An Economic Analysis of Potato
Production in Achham District of
Nepal
Sushil Chandra Sapkota
Agri-Intern (AFU), PMAMP, PIU,
Potato Zone, Achham

2. Researcher
Sushil Chandra Sapkota
Exam Roll No. 409
Supervising Committee
Asst. Prof. Pradeep Raj Rokaya, PhD
Major Supervisor
Agriculture Extension Officer(MoALD) Mr. Krishna Dhital
Member Supervisor
Agriculture Officer Mr. Chhapendra Prasad Sharma
Site Supervisor

3. Outline of Presentation
 Introduction
 Statement of problem
 Rationale of the study
 Objectives
 Literature review
 Methodology
 Results and Discussions
 Summary and Conclusions
 Suggestions
 Acknowledgement
 Glimpses of study

4. • Potato (Solanum tuberosum); a herbaceous annual crop of solanaceae family
Ranking world’s fourth most important crop, after maize, wheat and rice (Food and Agriculture
Organization(FAO), United Nations(UN), 2016);
-Fifth-most important staple crop in Nepal after rice, wheat, maize and millet (Khatri & Dhital, 2015)
• A major staple food, grown in all agro- ecological zones (100-4000 masl) of Nepal (Pradhananga &
Eiphinstone, 1997)
• Important food crop of Achham, assists in economy and livelihood (DADO, Achham, 2016/17)
• National production and productivity in the year 2017/18 was 2,881,829 tons and 14.769 t/ha respectively
(Krishi diary , 2076)
• Achham: total area under potato cultivation- 424 ha: Winter 170 ha- production 1584 tons and
productivity 9.32 t/ha
Summer: 254 ha- production 2248 tons and productivity 8.85 t/ha (DADO, Achham, 2016/17)
Introduction

5. Statement of problem
• Lower production and productivity of potato in Achham compared with
national average (DADO, Achham, 2016/17) : 9.085 t/ha against national
average 14.76 t/ha
• No adoption of improved production practices
• Lack of input materials like seed, fertilizer, irrigation, machinery, etc.
• Inadequate market facility and linkages
Rationale of the study
• Agro-climatic suitability of the production
• Lack of scientific research on the assessment of economics of potato
production in Achham
Statement of Problem and Rationale of the Study

6. General Objective
• To assess and analyze the economics of potato production in Achham district
Specific Objectives
• To find out the production and productivity of potato in Achham district
• To determine the Benefit Cost ratio (B:C) of potato production of study site
• To estimate the return to scale of potato production in the site of study
• To know about the production practices of potato in Achham
Objectives

7. Sources:
Various publications like journal articles, books, reports of different organizations, publications
of DADO, Achham, publications of Ministry of Agriculture and Livestock Development,
webpages, etc.
Literature review covers:
• Origin and introduction of potato
• Background of Achham district
• Potato production trend (World, Nepal & Achham)
• Economics of potato production
Literature Review

8. Methodology
Study site:
Figure 1. Map of Achham district
Mellekh Rural Municipality
Ramaroshan Rural
Municipality
Sanphebagar
Municipality
Bannigadhi jayagadh
rural Municipality
Mangalsen
Municipality

9. Sample and Sampling:
• 90 respondent farmers registered in Potato zone, selected purposively;
• 18 from each local level under zone command area
• Selected by Simple Random Sampling techniques
• Respondent households were categorized into small scale and large scale farm
holders based on the average of land holding size
Methodology

10. Data Collection Techniques:
Primary
• Household survey
• FGDs
• KIIs
• Direct observation
Secondary
• Publications review: journal articles, Annual book of DADO, Achham,
MoALD’s publications, reports of NGOs, INGOs, websites,..
Methodology

11. Data analysis tools:
• SPSS 25.0
• Microsoft Excel 2016
• STATA 12.1
Variables recorded and analyzed:
• Socio-demographic: Age, sex, household size, dependency ratio,
education status, occupation, land holding, etc.
• Economic: Production, Productivity, Cost, Income, Gross margin, B:C
ratio
• Function used: Cobb Douglas Production Function; input-income
relationship, return to scale
Methodology

12. Variables Mean (N=90) Small Scale
(n=54)
Large Scale
(n=36)
Mean
difference
t-value
Age of respondent (years) 37.79 (9.57) 37.61 (10.75) 39.56 (9.08) -1.944 -0.893
Household size 7.53 (2.90) 7.57 (3.31) 7.64 (2.34) -0.065 -0.109
Male members in HH 3.82 (1.85) 4 (2.10) 3.69 (1.53) -0.305 0.750
Female members in HH 3.71 (1.49) 3.57 (1.65) 3.94 (1.22) -0.370 -1.222
Economically active
members
3.93 (1.65) 3.85 (1.80) 4.05 (1.39) -0.204 -0.603
Economically active male
members
1.89 (0.88) 1.83 (0.91) 1.97 (0.84) -0.139 -0.732
Economically active female
members
2.07 (0.95) 2.06 (1.07) 2.08 (0.73) -0.028 -0.146
Dependency ratio 1.05 (0.62) 1.11 (0.71) 0.95 (0.43) 0.167 1.383
Area under potato
cultivation (ha)
0.081 (0.058) 0.04 (0.02) 0.14 (0.04) -0.103*** -14.152
Results and Discussions
Note. The figures in parenthesis resemble standard deviation
*** indicates significance at 1% level
Table 1 Socio-demographic Characteristics (Continuous Variables) of Respondents by Farm Category

13. 64
33
31
26
21
5
0
10
20
30
40
50
60
70
OVERALL SMALL SCALE LARGE SCALE
Male
Female
Results and Discussions
Figure 2. Frequency distribution of respondents by gender

14. Results and Discussions
11%
6%
14%
12%
17%
8%
13%
17%
8%
32%
28%
42%
23% 24%
22%
8%
9%
6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Overall Small scale Large scale
Illiterate Primary(upto grade 5) Lower secondary(6-8 grade)
Secondary (9-10) Higher secondary(11-12) University level
Figure 3. Distribution of respondents by level of education

15. Results and Discussions
85
2 3
49
2 3
36
0 0
0
10
20
30
40
50
60
70
80
90
Agriculture only Business and Agriculture Teaching and Agriculture
Total Small holder Large holder
Figure 4. Distribution of respondents by the source of household income

16. Table 2 Respondents Distribution by Land Type, Status of Irrigation and Method of Irrigation
Variable Small scale (n=54) Large scale(n=36) Overall (N=90) Chi-square value
Land type
Bari 29 28 57 (63.34) 7.379**
Khet 11 1 12 (13.33)
Both 14 7 21 (23.33)
Status of Irrigation
Irrigated 29 13 42 (46.67) 3.480
Non-irrigated 18 19 37 (41.11)
Both irrigated and non -
irrigated
7 4 11 (12.22)
Method of Irrigation
Flooding 26 14 40 (44.45) 7.314*
Sprinkler 7 2 9 (10.00)
Flooding and Sprinkler 4 0 4 (4.44)
Rainfed based 17 20 37 (41.11)
Results and Discussions
Note. The figures in parenthesis resemble percentage
**, * indicate significance at 5% and 10% level respectively.

17. Results and Discussions
22%
58%
20%
Winter
Summer
Both winter and
summer
Figure 5. Distribution of respondents by potato growing seasons

18. Results and Discussions
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Manually only Using manual and bullock labour
11%
89%
15%
85%
0%
100%
PERCENTAGE
METHOD OF FIELD PREPARATION
Total (N=90) Small scale farm (n=54) Large scale farm (n=36)
Figure 6. Distribution of respondents by method of field preparation

19. Table 3 Field Preparation and Planting Methods Adopted by Respondents by Farm Category
Variable Frequency(N=90) Small scale
(n=54)
Large scale
(n=36)
Chi-square value
Method of field
preparation
Manually only 10 (11.11) 8 0 5.854**
Using manual and
bullock labour
80 (88.89) 46 36
Method of Planting
Ridge planting 16 (17.78) 10 6 0.745
Furrow planting 73 (81.11) 43 30
Both 1 (1.11) 1 0
Results and Discussions
Note. The figures in parenthesis resemble percentage
** indicates significance at 5% level

20. Results and Discussions
Figure 7. Distribution of respondents by source of nutrient use
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total (N=90) Small scale (n=54) Large scale (n=36)
84%
80%
89%
16%
20%
11%
FYM only Chemical fertillizers along with FYM

21. Results and Discussions
Total (N=90)
Small scale (n=54)
Large scale farm (n=36)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Spreading
openly on
the floor of
upper stair
of house
Storage in
bamboo
basket
Storage in
sac after
removal of
field heat
No storage
13%
76%
8% 3%
19%
70%
9%
2%
6%
83%
6% 6%
Percentage
Method of storage
Total (N=90) Small scale (n=54) Large scale farm (n=36)
Figure 8. Distribution of respondents by method of storage of marketable potato

22. Results and Discussions
100% 100% 100%
0% 0% 0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total (N=90) Small scale (n=54) Large scale farm (n=36)
Percentage
Store house need
Yes
No
Figure 9. Distribution of respondents by need of store house need

23. Results and Discussions
24%
20%
31%
76%
80%
69%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Total (N=90) Small scale farm (n=54) Large scale farm (n=36)
PERCENTAGE
TRAINING STATUS
Yes
No
Figure 10. Distribution of respondents by the status of training

24. Table 4 Inputs Used for Potato Production by Farm Category
Inputs Small scale
farm
Large scale
farm
Mean Mean
difference
t-value
Human labour
(mandays/ha)
516.80 (307.77) 328.46 (126.45) 441.46 (266.84) 188.34*** 4.023
Seed (Kg/ha) 1183.28 (456.04) 1404.82 (450.15) 1271.90 (464.17) -221.53** -2.269
Manure
(doko/ha)
657.85 (170.06) 727.69 (206.70) 685.79 (187.64) -69.84* -1.683
Bullock labour
(days/ha)
18.03 (2.36) 31.07 (18.50) 25.85 (15.73) -13.04*** -5.116
Fertilizer
(Kg/ha)
31.28 (78.13) 10.96 (26.91) 23.15 (63.41) 20.31* 1.760
Note. Values in parentheses indicate standard deviation
***, ** and * Significant at 1%, 5% and 10% levels, respectively
Results and Discussions

25. Table 5 Cost of Production by Farm Category
Cost items Small scale farm Large scale
farm
Mean Mean difference t-value
Human labour cost
(NRs./ha)
180,880.438
(107,719.680)
114,962.407
(43,906.668)
154,513.226
(93,395.134)
65918.031*** 4.023
Seed cost (NRs./ha) 65,814.484
(27,222.162)
71,774.924
(23,523.551)
68,198.659
(25,836.637)
-5960.439 -1.073
Manure cost
(NRs./ha)
16,446.386
(4,251.593)
18,192.465
(5,167.536)
17,144.817
(4,691.020)
-1746.079* -1.683
Bullock labour cost
(NRs./ha)
5,409.588
(710.550)
9,321.026
(5,550.876)
7,756.4551
(4,718.104)
-3911.438*** -5.116
Fertilizer and
Pesticide cost
(NRs./ha)
1,178.203
(3,052.905)
372.208 (910.515) 855.805
(2456.407)
805.994* 1.822
Land rent
(NRs./ha)
7,641.667
(2303.508)
8,078.333
(1,880.529)
7,816.333
(22,144.023)
-436.667 -0.946
Total variable cost
(NRs./ha)
281,282.204
(132,629.628)
218,789.927
(52,106.925)
256,285.293
(111,762.515)
62492.277*** 3.120
Note. Values in parentheses indicate standard deviation
*** and * Significant at 1% and 10% levels respectively
Results and Discussions

26. Table 6 Production, Productivity, Profit and Benefit Cost Ratio Analysis of Potato by Farm Category
Items Small scale farm Large scale
farm
Total Mean difference t-value
Production (kg/HH) 408.70 (254.566) 1729.86 (960.0) 937.17 (908.094) -1321.157*** -8.070
Yield (t/ha) 12.551(8.184) 11.891(5.191) 12.287 (7.113) 0.660 0.468
Price of
yield(NRs./kg)
30.37 (3.34) 30.28 (3.95) 30.33 (3.579) 0.093 0.120
Gross revenue
(NRs./ha)
382,483.601
(253,132.193)
359,735.723
(155,284.008)
373,384.449
(218,553.973)
22747.878 0.528
Total variable cost
(NRs./ha)
281,282.204
(132,629.628)
218,789.927
(52,106.925)
256,285.293
(111762.515)
62492.277*** 3.120
Gross margin
(NRs./ha)
101,201.397
(182,864.979)
140,945.796
(136,912.742)
117,099.156
(166,338.528)
-39744.399 -1.112
Benefit cost ratio 1.352 (0.475) 1.644 (0.569) 1.469 (0.531) -0.291*** -2.632
Results and Discussions
Note. Values in parentheses indicate standard deviation
*** indicates significant at 1%, level

27. Table 7 Production Function Analysis of Potato Production
Explanatory variables Coefficient Standard error t-value P > |t|
Human labour cost (NRs./ha) 0.163* 0.981 1.66 0.100
Seed cost (NRs./ha) 0.759*** 0.135 5.64 0.000
Manure cost (NRs./ha) 0.311* 0.168 1.86 0.067
Bullock labour cost (NRs./ha) -0.20** 0.095 -2.15 0.035
Constant -1.864 1.698 -1.10 0.275
R² 0.5356
Adjusted R² 0.5138
F-value 24.51***
Return to scale 1.433
Results and Discussions
Note. *, ** and *** indicate significance at 10%, 5% and 1% level respectively

28. Summary &Conclusions
• The average age of about 38 years with household size of 7.53
members was found among the 90 respondents of which 71% were
male and 29% female
• The dependency ratio and land holding under potato cultivation
were found to be 1.05 and 0.081 ha respectively
• Majority of respondents were literate, almost 90%, with major
source of household income being agriculture
• Major inputs: human labour, seed, bullock labour and FYM
• Total cost of production was NRs. 256,285.293 per hectare
• Average household production: 937.17 kg and average
productivity:12.287 t/ha
• The total average gross return of NRs. 373,384.449/ ha

29. • Total average gross margin of NRs. 117,099.156/ha
• The total average B:C ratio of 1.47 was obtained
• The Cobb Douglas production function regression analysis result:
R² = 52% , the data showed positively significant relation of total
income with human labour, seed cost and manure cost at 10%,
1% and 10% level respectively
There appeared significant negative relation of total income with
bullock labour at 5% level
The sum of the regression coefficients i.e. return to scale value
was 1.433
• Easy access and efficient use of inputs such as irrigation, seed,
fertilizer, etc. could increase the production and income
Summary &Conclusions

30. • There should be adequate extension works like trainings and
workshops to enhance the farmers’ knowledge on advanced
production and processing activities
• There should be provision of inputs such as seeds, machinery
equipment, irrigation and fertilizers to the farmers in time and in
sufficient quantity
• For the market promotion, potato product based processing
industries should be prioritized at local level
Suggestions

31. • AFU
• PMAMP
• PMAMP, PIU, Potato Zone, Achham
• Supervising committee
• My parents, friends and all the supportive hands
Acknowledgement

32. Glimpses of study

33. Glimpses of study

34. Thank You!!