VALUE CHAIN ANALYSIS OF VEGETABLES IN KATHMANDU VALLEY: A CASE OF TOMATO

VALUE CHAIN ANALYSIS OF VEGETABLES IN
KATHMANDU VALLEY: A CASE OF TOMATO
Basudev Sharma
PU Registration No.: 020-3-3-08719-2016
Thesis submitted to
Purbanchal University
Faculty of Science and Technology
Himalayan College of Agricultural Sciences and Technology
Kathmandu, Nepal
December 2021

VALUE CHAIN ANALYSIS OF VEGETABLES IN
KATHMANDU VALLEY: A CASE OF TOMATO
Basudev Sharma
PU Registration No.: 020-3-3-08719-2016
Thesis Submitted to
Purbanchal University
Faculty of Science and Technology
Himalayan College of Agricultural Sciences and Technology
Kathmandu, Nepal
In partial fulfillment of the requirements for the degree of Master of Science in
Agriculture (Agribusiness Management)
December 2021

i
ACKNOWLEDGEMENT
This study would not have been possible without the support of many people. First, I
would like to thank my adviser, Dr. Raj Kumar Adhikari, Adjunct Professor of
Himalayan College of Agricultural Sciences, and Technology (HICAST), for his
continuous support from the very beginning to final report preparation. He has been
supported me not only as a thesis advisor but also as an ideal teacher, mentor, and
offered advice and encouragement with a perfect blend of insight and humor. Also,
thanks to Dr. Binayak Prasad Rajbhandari, Chairperson of HICAST for his guidance
and support.
I would also like to show gratitude to Dr. Bishnu P. Bhattarari, Dr. K.B. Shrestha
(Principal, HICAST), Mrs. Puja Shrestha (Examination Section, HICAST), and other
personalities of HICAST for providing the favorable academic environments and
supports during this study.
Mostly I have indebted to those farmers, output traders, and input traders of
Kathmandu, Lalitpur, and Bhaktapur district who provided me with important
information during the field survey, despite their hectic schedule. Special thanks go to
my friend Mr. Melsan Shrestha for his kind support and cooperation in analyzing the
data. Also, I thank Mr. Krishna Bhadra Adhikari, Mr. Buddhi Prasad Shrestha, and Mr.
Rabi Kumar KC of Agriculture Knowledge Centre (AKC), Lalitpur for sharing useful
information including the list of commercial farmers and traders which help me to select
respondents for the field survey.
Finally, I would like to express my heartfelt gratitude to all those who contributed
directly and indirectly to the field study and preparation of this thesis. I acknowledge
various authors and publishers through which I got an idea for research and analysis.
However, I sincerely apologize if I missed out on appreciating someone.
At the last, but not least, I would like to convey my heartfelt thanks to my beloved wife
Sabita Oli, and son Arbin Paudel for their continuous support and invaluable sacrifice
in every perspective to cooperate with me during my study, my field survey, and writing
the final report.
Basudev Sharma

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ABSTRACT
This study was designed to analyze the value chain of vegetables, with special
consideration of tomatoes, in Kathmandu valley. 62 farmers, 27 output traders, and 18
input suppliers were randomly selected to collect relevant information. Analyzed the
data using descriptive and inferential statistics. Among the five marketing channels, the
channel, "Producer-Collectors-Wholesaler-Retailers/veg mart-Consumer, has
captured a large portion (40%) of the marketing, and the marketing channel,
"Producers to the Consumer," occupied the least (5%) of the marketing share. The yield
of the tomato was found highest in Lalitpur (60.5 mt/ha) district, followed by the
Bhaktapur (58.7 mt/ha) and Kathmandu (57.4 mt/ha) districts. The overall benefit-cost
ratio of tomato cultivation was found 4.9 but the benefit-cost ratio was highest in the
Lalitpur district (6.0), followed by Bhaktapur (5.3) and Kathmandu (4.0) districts. The
marketing margin of the tomato in the study area was estimated at 49.33 rupees with
50.72% producer's share. The postharvest loss of the tomato from producer to
wholesaler was highest in the Lalitpur district (9%), followed by Kathmandu (7%) and
Bhaktapur (4%). In the case of problems on the value chain of the tomato, the problems
on marketing were the main issue facing the producers, followed by problems related
to agriculture inputs and lack of technical know-how & support. Other problems were
limited financial capacity, lack of labor, disease, insect pests, and difficulty in leasing
land. The finding of this study indicates that the enablers and service providers of the
value chain should also focus on the input and output traders as well to enhance their
business skills to develop the value chain of the tomato in the study area. Similarly, the
farmers should increase the inputs cost of pesticides, irrigation, grading, and
packaging of the tomato to increase their annual income, and the government should
emphasize value chain governance and create value chain platforms to bring solidarity
and trust among the entire chain actors.
Keywords: Vegetable, Value chain, marketing margin, market channel, producer share,
tomato

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ACKNOWLEDGEMENT............................................................................................i
ABSTRACT..................................................................................................................ii
TABLE OF CONTENTS........................................................................................... III
LIST OF TABLES .....................................................................................................vii
LIST OF FIGURES ..................................................................................................viii
ACRONYMS...............................................................................................................ix
CHAPTER-1 INTRODUCTION................................................................................1
1.1 Background............................................................................................................................... 1
1.2 Introduction and Scope of vegetable Cultivation................................................................... 4
1.3 Government Initiatives............................................................................................................. 4
1.4 Statement of the Problem......................................................................................................... 6
1.5 Justification of the Study.......................................................................................................... 7
1.6 Objectives ................................................................................................................................. 8
1.6.1 General objective..........................................................................................................8
1.6.2 Specific objectives........................................................................................................8
1.7 Scope of the Study.................................................................................................................... 8
1.8 Limitations of the Study........................................................................................................... 9
CHAPTER-2 LITERATURE REVIEW .................................................................10
2.1 Background............................................................................................................................. 10
2.1.1 Value chain................................................................................................................. 10
2.1.2 Agricultural marketing.............................................................................................. 11
2.1.3 Marketing chain ......................................................................................................... 12
2.1.4 Supply chain............................................................................................................... 12
2.1.5 Margin......................................................................................................................... 12
2.1.6 Marketed surplus........................................................................................................ 13
2.1.7 Marketing Efficiency................................................................................................. 13
2.2 Vegetable Production and marketing situation analysis...................................................... 14

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2.3 Mapping the value chain of vegetables showing the trade link among the various actors 15
2.4 Value addition and competitive advantage of vegetables.................................................... 18
2.5 Agriculture value chain development in Nepal.................................................................... 19
2.6 Situation of Organic Vegetable Farming in Kathmandu Valley......................................... 20
2.7 Policy and Institutions related to Commercial Vegetables.................................................. 21
2.7.1 Agri Business Promotion Policy 2063..................................................................... 21
2.7.2 National Agriculture Policy 2061 ............................................................................ 21
2.7.3 Agriculture Development Strategy (ADS) 2014.................................................... 22
2.7.4 Nepal Agricultural Research Council (NARC)...................................................... 23
2.7.5 Agriculture Knowledge Centre (AKC) ................................................................... 24
2.7.6 Agriculture Section at Municipality level ............................................................... 24
CHAPTER-3 RESEARCH DESIGN AND METHODOLOGY ...........................25
3.1 Selection of study area........................................................................................................... 25
3.2 Selection Vegetable growers................................................................................................. 25
3.3 Selection of wholesaler & retailer......................................................................................... 26
3.4 Selection of Input traders....................................................................................................... 26
3.5 Sources of Information........................................................................................................... 26
3.6 Methods of data collection..................................................................................................... 27
3.7 Sampling design, sampling methods and sample size......................................................... 27
3.8 Techniques of data analysis................................................................................................... 28
3.8.1 Value Chain Mapping............................................................................................... 28
3.8.2 Cost of production ..................................................................................................... 29
3.8.3 Techniques & Formula used to analyze the data.................................................... 29
3.9. Description of the Study Area.............................................................................................. 30
3.9.1 Kathmandu District.................................................................................................... 31
3.9.2 Lalitpur District.......................................................................................................... 31
3.9.3 Bhaktapur District...................................................................................................... 32
3.9.4 Fresh vegetable production scenario........................................................................ 32

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3.9.5 Vegetable production status of Kathmandu Valley................................................ 34
3.9.6 Status of tomato production in Kathmandu Valley................................................ 35
CHAPTER-4 RESULTS AND DISCUSSION ........................................................37
4.1 Major pocket areas with the volume of crops ...................................................................... 37
4.1.1 Vegetable pocket areas and volume of production in Kathmandu Valley........ 37
4.1.2 Tomato production status in Kathmandu Valley.................................................... 38
4.2 Tomato Trading Trend in Kalimati Market by Year (Kg).................................................. 39
4.2.1 Tomato Sources for Trading in Kalimati Market................................................... 40
4.3 Descriptive analysis................................................................................................................ 41
4.3.1 Socio-demographic characteristics of respondent households ........................... 42
4.3.2 Farm characteristics of the respondent’s household ............................................ 44
4.3.3 Trend of vegetable cultivation in the study areas ................................................... 46
4.4 Value chain analysis of tomato in the study area................................................................. 47
4.4.1 Major value chain actors in the tomato value chain in the study area.................. 47
4.4.2 Value chain map...................................................................................................... 51
4.4.3 Marketing Channels................................................................................................... 54
4.4.4 Practices to add value to tomato............................................................................. 56
4.4.5 Postharvest loss........................................................................................................ 56
4.5 SWOT analysis....................................................................................................................... 57
4.6 Problems faced by the producers on production and marketing of tomato........................ 59
4.7 Access and use of business development services............................................................... 59
4.7.1 Source of finance:.................................................................................................... 59
4.8 Source of technical information and business skills:........................................................... 61
4.8.1 Source of technical information for producers..................................................... 61
4.8.2 Source of business skills for input and output traders.......................................... 62
4.9 Economic analysis.................................................................................................................. 63
4.9.1 Area, production, productivity, income, gross margin, and B:C ratio............... 63
4.9.2 Comparison of Tomato Economic Variables among the three districts............ 65

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4.9.3 Marketing margin and producer share .................................................................. 66
4.9.4 Resource productivity of tomato production........................................................ 67
CHAPTER-5 SUMMARY ........................................................................................70
CHAPTER-6 CONCLUSION AND RECOMMENDATION ...............................72
6.1 Conclusions ................................................................................................................... 72
6.2 Recommendations......................................................................................................... 73
REFERENCES...........................................................................................................75
APPENDICES............................................................................................................80
1. Questionnaires used in Field Survey....................................................................................... 80
2. Agriculture Wholesale & Retail Market in Kathmandu Valley............................................ 91
3. Photographs of Field Survey ................................................................................................... 93
CURRICULUM VITAE............................................................................................96

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LIST OF TABLES
1: Sample size distribution by district in the study area ............................................28
2: Area, Production and Yield of green fresh vegetables in Kathmandu valley by year...34
3: Area, Production and Yield of tomato in Kathmandu valley by year....................35
4: Major vegetable pocket areas with the volume of production (FY 2076/77)........37
5: Area, Production and Yield of Tomato in Kathmandu valley by year ..................38
6: Tomato Trading Trend in Kalimati Market (kg) by year.......................................39
7: Tomato sales in Kaliamti Market by source and year (Kg)...................................40
8: Gender of the producers.........................................................................................42
9: Age and experience of the producers.....................................................................42
10: Training status of the producers.............................................................................43
11: Land holding of the producers and its cultivation status .......................................45
12: Registration status of the farm...............................................................................45
13: Farmers groups in Kathmandu valley....................................................................48
14: Value chain map of tomato in the study area........................................................54
15: Postharvest losses of tomato production in the study area ....................................57
16: SWOT analysis related to the production of tomato..............................................57
17: SWOT analysis related to post-harvest of tomato .................................................58
18: SWOT analysis related to marketing of tomato.....................................................58
19: Problems on production and marketing of tomato.................................................59
20: Source of finance of the value chain actors ...........................................................60
21: Level of the satisfaction of the producers about the loan receive and interest rate........61
22: Availability of the relevant technical information and satisfaction level ..............62
23: Source of business skill for input and output traders.............................................62
24: Problems related to business..................................................................................63
25: Economic Variables of Tomato in Kathmandu Valley..........................................64
26: Comparison of Tomato Economic Variables among the three districts ................65
27: Marketing margin and producer share...................................................................66
28: Description of variables used in the resource productivity of tomato production.67
29: Result of the resource productivity of tomato production .....................................68

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LIST OF FIGURES
1: Map of the study area.............................................................................................25
2: Area (ha) and production (mt) of vegetables in Nepal since last 10 years ............33
3: Indian and Domestic Share of Tomato Trading in Kalimati Market.....................40
4: Education status of the producers ..........................................................................43
5: Types of training received by the producers..........................................................44
6: Types of farms .......................................................................................................46
7: Trend of vegetable cultivation in the study areas (Ropani) ...................................46
8: Input suppliers of Kathmandu Valley....................................................................48
9: Value chain map of tomato in Kathmandu Valley.................................................53
10: Per centage of farmers practicing value addition practices of the vegetable.........56
11: Source for the technical information to the producers...........................................61
12: Marketing share among the three actors................................................................66

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ACRONYMS
ADBL Agricultural Development Bank Limited
AEC Agro-Enterprise Center
AITC Agriculture Information and Training Center
AKC Agriculture Knowledge Centre
CBO Community Based Organization
CBS Central Bureau of Statistics
FAO Food and Agriculture Organization of United Nations
FGs Farmers Groups
FNCCI Federation of Nepal Chamber of Commerce
FYM Farmyard Manure
GDP Gross Domestic Product
Ha Hector
HH Household Head
HICAST Himalayan College of Agricultural Sciences and Technology
INGO International Non-Governmental Organization
Kg Kilogram
MDD Market Development Directorate
MoALD Ministry of Agriculture and Livestock Development
MoF Ministry of Finance
NARC Nepal Agricultural Research Council
NGO Non-Governmental Organization
NRs Nepalese Rupees
PACT Project for Agriculture Commercialization and Trade
PMAMP Prime minister Agriculture Modernization project
VADP Value Chain Development Program
VC Value Chain
VCA Value Chain Analysis
WTO World Trade Organization

1
CHAPTER-1
INTRODUCTION
1.1 Background
Nepal is a landlocked agricultural country located between China and India. It has an
area of 147,181 square kilometers and a population of 28 million with a growth rate of
1.35% (CBS, 2016). Regarding the fact that agriculture in Nepal contributes to one-
third of the GDP and provides employment opportunities to almost two-thirds of the
population (MoF, 2017), it is an important economic activity in Nepal.
Nepal is a developing country with an agricultural economy. Farming is the main
economic activity, where two-thirds of the total population is engaged in agriculture.
The agriculture sector accounts for 27.6% of Nepal's gross domestic product (GDP)
(AITC, 2020). A high proportion of households in Nepal depend on agriculture to
generate livelihood. As an important sector of the economy, vegetable production plays
a significant role in determining the economic conditions for farmers. Vegetable crops
are efficient to generate cash even from a small plot of land in a short period and help
farmers improve their livelihood. The value of vegetable production equals or even
surpasses the value of cereal production. Vegetables have higher commercialization
rates and a high cost–benefit ratio than cereal crops. Vegetable cultivation presumably
supports livelihood primarily through food provision, income generation, and
employment because vegetables are preferred cash crops.
In Nepal, agriculture is the main contributing sector of the national economy. It is the
primary source of food, income, and employment for most of the population. The
involvement of the population in the agricultural sector is gradually declining due to
the increasing use of technology and professionalism in agriculture and the expansion
of the service sector. According to the Report on the Nepal Labor Force Survey of
2017/18 (CBS, 2019), 60.4 per cent of the population was engaged in the agriculture
sector. One in every five people who had jobs in Nepal, were employed in agriculture,

2
the biggest employing industry. Trade industry had the second largest share of
employment (17.5 percent), followed by construction (13.8 percent). The informal
sector had a bigger share of 62.2 percent. The contribution of the agricultural sector
(agriculture, forest, and fisheries) in total Gross Domestic Product was estimated to be
27.6 per cent in the fiscal year 2019/20, which was 37.1 per cent in the FY 2010/11.
The average annual growth rate of agriculture in the last decade was 3.2 per cent.
Production of the agriculture sector was increased by 5.1 per cent in the fiscal year
2018/19, whereas it is estimated to grow by 2.6 per cent in the fiscal year 2019/20. The
gross value added of the agriculture and non-agriculture sector in the fiscal year
2019/20 is estimated to be 2.6 per cent and 2.3 per cent, respectively. Such growth rates
were 5.1 per cent and 7.4 per cent in the last fiscal year. ( (MoF, 2020). The shares of
agriculture and non-agriculture sectors to GDP are estimated to remain at 27.60 per cent
and 72.4 per cent, respectively, in the fiscal year 2019/20 (MoF, 2020). The share of
the agriculture sector in GDP has been in a declining trend in the last 15 years. Such
share was 34.3 per cent on average during the period from FY 2002/03 to FY 2006/07
and declined to 34.1 per cent in the next consecutive five years (FY 2007/08-FY
2011/12). It was declined further to 31.4 per cent in the subsequent five years' period
from FY 2012/13 to FY 20016/17 (MoF, 2017).
Nepalese economy is in the stage of structural transformation due to decreasing share
of agriculture sector against gradual increment in the share of the non-agriculture sector
in GDP. Considering this fact, the Government of Nepal has implemented the twenty-
year long-term plan in the agricultural sector called Agriculture Development Strategy
(ADS) in 2015 for agriculture transformation (MoALD, 2015). Prime Minister
Agriculture Modernization Project (PMAMP) is also implementing by the Ministry of
Agriculture since last 2016 fully with an internal budget focusing on modernization and
mechanization in agriculture for commercial production. Under the Prime Minister
Agriculture Modernization Project (PMAMP), the small-scale production (Pockets)
program is implemented at the local level, and business production centers (Blocks) are
currently being implemented at the provincial level. Commercial Production and

3
Processing Center (Zone) and Large Commercial Agricultural Production and
Industrial Center (Super Zone) are being implemented at the federal level (PMAMP,
2020).
Despite the Nepal government has given high priority to the agricultural sector, and
huge money has been invested in this sector for many years, the country's rural poverty
and backwardness have worsened. Continuation of conventional subsistence type of
agriculture, big gap between haves and have-nots, poor rural infrastructures, inadequate
technological extension and marketing support and services, lack of production inputs
in terms of quantity, quality and timely, unorganized institutions of producers and other
related stakeholders with weak linkage among them, land scarcity relative to population
growth (per capita availability 0.7 ha in 2016) (CBS, 2016), all have played a vital role
to accentuate rural poverty continuously resulting in the problem of food security,
under-employment, poverty, and malnutrition. Now the government has emphasized
making "Prosperous Nepal, Happy Nepali" through bringing revolution and radical
change in the economic sector, including the agriculture sector. For this, the policy of
transforming subsistence agriculture into commercial agriculture has been put forth as
the fundamental basis for the country's economic development. Commercialization,
modernization, and mechanization of agriculture are understood to provide many
farming communities with a respectable occupation and dependable employment
opportunities. The radically modified agriculture is supposed to bring positive change
in people's living standards, and thus, the country will make economic development in
a leaping-frog way.
Vegetable crops provide ample opportunities for income generation. Kathmandu valley
(Kathmandu, Lalitpur, Bhaktapur) is one of the major vegetables producing areas of
Nepal, which supply the needs of the urban population of the valley. Though cultivable
land is decreasing day by day in this area due to urbanization, farmers have adopted
new technology to produce more from limited available land. Land under vegetables in
these districts reported in 2020 is 8471 hectares with an annual production of 165518
metric tons (MoALD, 2020). The average productivity of the vegetable in these districts

4
is 19.54 mt. per hectare. Due to the problem of small farm size, less focus on the market
demanded production, and low market linkage, farmers are unable to have access to
profitable markets for their produce. Most of the produce of vegetables is consumed
without undergoing much value addition.
1.2 Introduction and Scope of vegetable Cultivation
Vegetables are those annuals, biennials, and perennials of which different parts mature,
immature, succulent roots, stems, immature flower parts, leaves, seeds, or fruits are
eaten. These are those herbaceous plants of which some plant portion is eaten either
cooked or raw during the principal part of a meal. The importance of vegetables in the
human diet has been well known since time immemorial as they supply all main
components of the human diet. Vegetable contains carbohydrate, protein, minerals, and
vitamins and possesses medicinal properties. Thus, vegetables play a vital role in the
balanced diet of the human being. According to human dietitians, about 300 gm
vegetables per capita per day are required.
Nepal has tremendous potential for growing vegetables because of its high productivity
and profitability as compared to other cereals crops. Comparatively, vegetables are
short duration. Therefore, a greater number of crops can be taken from a unit area in a
year. Most of the parts of Nepal are hilly areas. Therefore, the sloppy land of the hill is
more suited to cultivate the vegetables in the rainy season, which favors getting more
comparative advantage. Vegetables are well suited for different cropping systems, viz.,
crop rotation, intercropping, multiple cropping, mixed and companion cropping.
Vegetable cultivation is labor-intensive; therefore, it provides more farm employment
to rural women and children. The enterprise also makes more effective use of land and
labor.
1.3 Government Initiatives
The development of the large production pockets as per the quality and quantity
demanded by the market and emphasizing the production of those agricultural

5
commodities which has a higher comparative advantage is the main Agricultural policy
of the Nepal Government. Promotion of the high-value vegetable production pockets
in the hills and linking them to markets is the main strategy of the government. Based
on this strategy, programs have been implemented in different districts of Nepal for a
long time.
Prime Minister Agriculture Modernization Project (PMAMP) is the largest existing
project under the Ministry of Agriculture and Livestock Development, which is the only
project of the Government of Nepal formulated by the internal vision, internal
investment, and internal institutional human resources. The project duration is 10 years,
starting from FY 2073 to 2082. The estimated cost of the project is NPR 130 billion.
The project has four components; a small commercial agriculture production center
(pocket) development program, commercial agriculture production center (block)
development program, commercial agriculture production, and processing center
(zone) development program, and large commercial agriculture production and
industrial center (super zone) development. Currently, the project has 6742 pockets,
1227 blocks, 179 zones, and 16 super zones throughout the country. The pocket and
block development programs are being implemented by the Ministry of Land Reform,
Agriculture and Co-operatives of respective provinces through its satellite offices,
Agriculture Knowledge Centre (AKC). However, the zones and super zone
development programs are being implemented by 58 Project implementation Unit
(PIU) across the country. One of the main goals of this project is to promote the
commercialization of agriculture through the development of infrastructure and
technology. The project was introduced to transform the country's agricultural sector
from subsistence farming to commercial farming. (PMAMP, 2020)
Financial institutions like different commercial banks, microfinance, and cooperatives
have been working as premier credit institutions for a long time, supplying agricultural
credit to the farmer in the country. The credit flow to the agriculture sector has also
increased now due to the government policy that every financial institution must be

6
disbursed at least 15% of the total investment to the agriculture sector and should
provide a 5% subsidy in the total interest rate.
1.4 Statement of the Problem
Nepal is a developing country with an agricultural economy. Farming is the main
economic activity, where two-third of the total population are engaged in agriculture.
The agriculture sector accounts 27.6% of gross domestic product (GDP) in Nepal. A
high proportion of households in Nepal depend on agriculture for the generation of
livelihood. As an important sector of the economy, vegetable production plays a
significant role in determining the economic conditions for farmers. Vegetable crops
are efficient to generate cash even from a small plot of land in a short period of time
and helps farmers to improve their livelihood. Vegetables have higher
commercialization rates and high cost–benefit ratio compared with cereal crops.
Vegetable cultivation presumably supports livelihood primarily through food
provision, income generation, and employment because vegetables are preferred cash
crops. (CASA, 2020)
Even in the highly urbanized Kathmandu Valley, large tracts of land outside the central
city areas are devoted to farming. The number of vegetable farmers is increasing day
by day as a result of the high demand for vegetables in urban areas. Because of the great
demand for perishable commodities such as vegetables, most farmers around urban and
peri-urban areas are moving towards the commercial production of vegetables. In the
urban fringes, vegetable farming has emerged as a productive enterprise for cash
generation and self-employment. The vegetables produced by farmers in urban and
peri-urban areas also include organic vegetables, which are consumed in Kathmandu.
The vegetable products from peri-urban areas has supplemented to fulfill the growing
demand of urban population in the valley. On the other hand, peri-urban agriculture in
the valley is facing a crucial challenge as a result of rapid and haphazard urbanization.
Cultivated land is the land use type that is most affected by the dramatic growth of

7
urban areas. However, there is a need to improve farming practices through the
development of agricultural infrastructure in peri-urban areas (Rai, 2019).
Cultivation of vegetables allows productive employment as the labor/land ratio is high.
Depending on the crop, production of horticulture crops requires at least twice the labor
and up to five times the labor days per hectare as compared to cereal. Increasing
horticultural productions thus contribute to the commercialization of the rural economy
and create many off-farm jobs. Abundant intake of fruit and vegetables is clearly a
positive solution for problems of poor diet quality in the developing world like Nepal.
Vegetables are relatively cheap sources of essential micronutrients that can prevent
several micronutrient deficiency diseases. Marketing and consumption have to be
addressed to improve the poor feeding behaviour and benefit advantages from
consumption of the crop problems associated with production. Value chain analysis is
a better approach for studies of such type. Analysis of the system in terms of vegetable
market structure, conduct and performance, taking into account product and location
specificity, identifying the bottlenecks and coming up with specific workable solutions.
Vegetable production in Kathmandu valley is subsistence (rooftop farming) to
commercial type. Majority of the vegetable producers have now started commercial
level of production with advanced technology. Population density has been increasing
in the Kathmandu valley. Agricultural markets are also expanding from public market
Kalimati to private market Balkhu, Baneshwor, and other places which are the
advantageous to produce off-season vegetables and supply to such markets.
1.5 Justification of the Study
Vegetable’s farming, especially tomato cultivation in plastic tunnel, is increasing in and
around the Kathmandu valley to fulfill the increasing demand. Even in the highly
urbanized Kathmandu Valley, large tracts of land outside the central city areas are
devoted to farming. The number of vegetable farmers is increasing day by day due to
the high demand for vegetables in urban areas. Because of the great demand for

8
vegetables, most farmers around urban and peri-urban areas are moving towards the
commercial production of vegetables. Among all vegetable crops, tomato is the most
demanding and most consuming vegetable. So, it is chosen for the study. Population of
Kathmandu valley is growing day by day and vegetables demand is also increasing
simultaneously. So, this study was narrowed down to concentrate on the production in
three districts of Kathmandu valley. For specific analysis special focus have been given
to tomato, which is ranked high by the value chain player based on production,
consumption, and market demand. Moreover, tomatoes accounted for the major
proportion of vegetable production and passed through several marketing stages.
Different market levels, the capacity of actors, market direction, price discovery and
buying and selling strategies, and traders’ behaviour in the whole marketing process
has been seen there.
1.6 Objectives
1.6.1 General objective
• To analyze the value chain of vegetables in Kathmandu valley
1.6.2 Specific objectives
1. To identify the major pocket areas with the volume of vegetable crops
2. To draw the value chain map of selected vegetables
3. To compare the cost and margin of tomato value chain actors,
4. To identify Strengths, Opportunities, Weakness and Threats (SWOT) of
value chain of tomato, and
5. To analyze the access and use of business development services
1.7 Scope of the Study
The primary significance of the study is to all actors in the marketing system. Analysis
of the whole system and clearly identifying the present situation constraints and

9
opportunities has been benefited policy makers, planners and implementers in
indicating the area of advantage for what could be done to improve vegetable
marketing. Apart from this, there are some studies on the vegetable marketing system
but limited to a smaller part of the district with few objectives. Hence, this study was
supposed to partially fill the gap. The other benefit that could be anticipated is its
significance as a source for further studies.
1.8 Limitations of the Study
Because of limited time and doing this especially for academic study purposes, this
study has been conducted within Kathmandu valley. So, farmers or traders from other
than the valley have been excluded from the study. Most of the farmers and/or traders
as well, they did not use to keep up data systematically, so they provided it extracting
from the records or memorizing by their own mind, which could not give an exact
result.

10
CHAPTER-2
LITERATURE REVIEW
2.1 Background
This part is intended to critically review the literature of the past research work in
relevance to the present study objective so that theoretical views and empirical evidence
of the reviews enables a better understanding of the subject.
2.1.1 Value chain
Value chain refers to the functional activities of a business that add value to its
customers. This concept was created around 1985 by Michael Porter which consists of
primary activities and support activities, all of which add value to the products or
services offered by the business. Ideally, the company’s products pass through the
activities of the value chain and along the way, each activity adds value to the products.
A value chain is a combination of the systems a company or organization uses to make
money. That is, a value chain is made up of various subsystems that are used to create
products or services. This includes the process from start to finish (Porter, 1985).
All organizations consist of activities that link together to develop the value of the
business, and together these activities form the organization’s value chain. Such
activities may include purchasing activities, manufacturing the products, distribution
and marketing of the company’s products and activities. A value chain is a set of
activities that a firm operating in a specific industry performs to deliver a valuable
product or service for the market. (Wikipedia, 2018).
A value chain (VC) is a chain of value-creating activities which are not isolated from
one another. Rather, one activity often affects the cost or performance of the others. It
is a sequence of productive processes from the provision of specific inputs for a
particular product to primary production, transformation, marketing and distribution,
and final consumption. (Zamora, 2016)

11
Value chain means the sequence of related business activities (functions) from the
provision of specific inputs for a particular product to primary production,
transformation, and marketing and up to final consumption (Ms Pramila Acharya Rijal,
2013).
Miller and Jones explained that the concept of agricultural value chain includes the full
range of activities and participants involved in moving agricultural products from input
suppliers to farmers’ fields and ultimately to consumers. Each stakeholder in the chain
has a link to the next in order to form a viable chain.
It has been argued that linking of farmers to the markets through efficient value chains
would reduce the use of intermediaries in the chain and strengthen the value-adding
activities by better technology and inputs, upgraded infrastructure, processing and
exports.
A value chain is not an object that you can see. Rather, a value chain is simply a useful
way of understanding how the world of producing, buying and selling things works.
(Cuddeford, 2013)
2.1.2 Agricultural marketing
Agricultural Marketing is defined as agriculturally oriented marketing. It embraces all
operations and institutions involved in moving farm products from farm to consumers
(Pritchard, 1969).
Marketing is the activity of identifying and satisfying the needs and wants of customers
in a profitable way. Agricultural Marketing is the study of all the activities, agencies,
and policies involved in the procurement of farm inputs by the farmers and the
movement of agricultural products from the farm to the consumers.

12
2.1.3 Marketing chain
A marketing chain is a path one good follow from their source of original production
to ultimate destination for final use. Functions conducted in a marketing chain have
three things in common; they use up scarce resources, they can be performed better
through specialization, and they can be shifted among channel members.
A chain is a type of marketing in which several marketers focus on one goal. For
example, they create a site and everyone puts a product in it, and by distributing the site
link, all products are displayed for one product. In the marketing stage, each marketer
can only introduce his product, but by giving the site link, all products are actually
introduced, and this is in the interest of the whole campaign. (Alexander, 2019)
2.1.4 Supply chain
A supply chain is the network of all the individuals, organizations, resources, activities
and technology involved in the creation and sale of a product. A supply chain
encompasses everything from the delivery of source materials from the supplier to the
manufacturer through to its eventual delivery to the end user. The supply chain segment
involved with getting the finished product from the manufacturer to the consumer is
known as the distribution channel. (Lutkevich, 2018)
2.1.5 Margin
It can be defined as the difference between prices paid for a commodity (e.g., bread) by
consumers at a retail level and prices received by farmers when they sell their
commodity (e.g. wheat) to assemblers or other first handlers. Measured in this form,
the margins reflect the number of services added to a commodity once it leaves the farm
and sits on a shelf in a retail outlet in a form that is acceptable, useful, and appealing to
consumers.

13
When companies buy a product to act as a distributor or retailer, they must sell the
product at a higher price than that at which they purchased it. In such situations, the
marketing margin of a product is the difference between what a company pays for the
product and what it charges for the product. (Kimmons, Ronald, 2018)
2.1.6 Marketed surplus
The marketed surplus is the quantity of products that the producer farmer actually sells
in the market, irrespective of the needs for family use, farm needs, and other payments,
is referred to as marketed surplus. The marketed surplus can be greater than, equal to,
or less than the marketable surplus. (Epoch, 2021)
Marketable surplus refers to the difference between the total output produced by a
farmer and his on farm consumption. In other words, it is that portion of the total output
that the farmer sells in the market.
2.1.7 Marketing Efficiency
Market efficiency is a relatively broad term and can refer to any metric that measures
information dispersion in a market. An efficient market is one where all information is
transmitted perfectly (everyone receives the information), completely (everyone
receives the entire information), instantly (everyone receives the information at once),
and for no cost (everyone receives the information for free). (CFI, n.d.)
Marketing efficiency is the ratio of market output (satisfaction to the consumer) to
market input (cost resources used in marketing). A higher value of this ratio indicates
improved marketing efficiency. If the marketing function changes occur with the
reduction in the marketing cost without reducing consumer’s satisfaction indicates
improvement in the marketing efficiency (Acharya et al., 2010).

14
2.2 Vegetable Production and marketing situation analysis
Nepal’s demand for vegetables is increasing due to population growth, economic
progress, and increased spending power from income growth and migrant remittances.
Also, the emerging middle class is demanding fresher, healthier and processed foods.
Per-capita vegetable consumption has increased to 114 kg per year from 60 kg over the
last two decades. Vegetable farming is appealing because it ensures cash revenue within
a short period of time, even from small plots of land. There are an estimated 3,243,521
households involved in vegetable cultivation, of which 17% are women-headed
households. According to the National Sample Census of Agriculture 2011/12, most
farmers (97%) cultivate vegetables on their own land, while the remainder cultivate on
rented land. Furthermore, around 78% of households cultivate on less than one hectare
of land, with higher proportions (53%) cultivating on land ranging in size from 0.2 to
0.5 hectare. Some 27.4% cultivate on 0.5 to 1 hectare.
In terms of cultivated area and volume of production, the top five vegetable crops are,
cauliflower, cabbage, onions, radishes and tomatoes. Some of the major commercial
vegetable growing areas of Nepal lie close to the Kathmandu Valley, as it has the
highest consumer population. In order of production volume, they are Kavre, Dhading,
Bhaktapur, Lalitpur, Makwanpur, Kathmandu, Nuwakot, Sindupalchok, Gorkha,
Dolakha and Rasuwa. (CASA, 2020)
Yeray Saavedra, Sichan Shrestha, and Thomas Tichar reported that in Nepal, per capita
intake of fruits was estimated to be 68 gm/day in 2017, and that of vegetables, 214
gm/day in the same year, for a combined intake of 282 gm/day. This represents a gap
of 30% with respect to the minimum recommended intake of 400 gm of fruit (100 gm)
and vegetables (300 gm) per day (Yeray Saavedra, Sichan Shrestha, Thomas Tichar,
October, 2021).
Singh et al. (2005) suggested an appropriate policy framework for increasing the
production of off-season vegetables. They added, “It is imperative to take steps in

15
augmenting irrigation potential through the implementation of different water
harvesting and water conservation projects. It is also imperative to ascertain and
maintain the quality of various inputs used in off-season vegetable cultivation,
particularly that of seed. Standardization of the grades and packing materials and timely
availability of transport to distant markets are suggested. There is a need for strict
implementation of market regulations which is expected for the improvement of
producers' share by curbing the tendency of various market intermediaries in resorting
to different malpractices.
Kaur and Gupta (2008) focused on the emerging scenario of fruits and vegetables,
seasonal variability, pre- and post-harvest losses, and market infrastructure to improve
the marketing and production process of fruit and vegetable. They concluded that in the
market infrastructure, low-capacity utilization is due to the fact that majority of the
fruits and vegetable units are in home and cottage sectors which are plagued by the
technological backwardness and lack of adequate funds for modernization
Mangan et al. (2008) explained that to successfully introduce the crops like jilo, maxixe,
taioba, abobora and okra into the marketplace, it is critical to devote resources to
promotion and marketing. In spite of their popularity among Brazilians, these vegetable
crops are not normally found in the market, so it is necessary to let the community know
that they are available and in what locations. The opportunity to export agricultural
products to the USA is a growing opportunity for farmers in Brazil. To gain access to
this market (big market), it is important to understand the distribution system used for
fresh produce in those markets.
2.3 Mapping the value chain of vegetables showing the trade link among the
various actors
Adeyokumnu (1973) suggested that high marketing margins are sometimes regarded as
evidence of inefficiency, and the middlemen are often blamed for earning excessive
profits. This is not always so. However, an increase in absolute margin is not clearly an

16
indicator of efficiency or inefficiency of the marketing system. It may mean that returns
to factor inputs have increased rather than that the inputs are being wastefully utilized.
Then again, the increase in margins may be due to an improvement in the services
performed or the utilities created for the consumers.
Toaha (1974), in a study on marketing efficiency of vegetables in Pakistan, concluded
that there is a low producer’s share in the consumer’s rupee, high price fluctuation and
extensive malpractice due to lack of effective market legislation and non-regulated
markets that largely favoured the traders. The gross margins were estimated only by
taking the differences between prices paid by consumers and prices paid to producers
by the primary traders. Such analysis does not reveal the net margins obtained by the
different market intermediaries.
In the estimation and utilization of marketing margins possible problems that can arise
are because of non-homogeneity of commodity with resulting variation in quality for a
particular commodity and non-standardization of quantity measure, the lag in time
between the different processes involved in marketing between wholesale and retail,
during which effective price changes could have taken place; the price used for
estimating the margins may also contain elements of trend, cycle, and seasonal and
irregular variations, so that correct estimates of value (form, time, place and possession
utilities) added to commodities during marketing may be difficult to estimate
(Adekanye, 1982).
Deconstructing market margins is a more time-consuming exercise when compared to
the analysis of marketing margins (Holtzman, 1986). The data on marketing costs are
needed to disaggregate the gross marketing margin of an enterprise at different
marketing stages. This provides us information on the costs of particular marketing
functions, which can be compared with costs incurred by other enterprises to assess the
operational efficiency (Scarborough and Kydd, 1992).

17
Devaraid (1998) concluded that the potato producers got the net price of 48.57, 51.15
and 52.32 per cent of the consumers’ rupees in channels I, II and III, respectively. In
channel III, representing a distant market (Banglore), the producer’s share in
consumers' rupees was the highest. Hence selling of produce at the distant market was
found to be more profitable to the farmers. The producers’ net price could be further
increased by taking suitable measures by the government, viz. a) providing cold
storage; b) present system of commission charges being collected from producers
should be stopped, and c) providing support price facilities.
Bokelmann and Lentz (2000) study relevant theoretical approaches and the results of
an explorative investigation to find out conditions for cooperative coordination of the
supply chain for vegetables. Two fundamental directions that fresh vegetable suppliers
can go in order to stay competitive are: offering products that fulfil special requirements
of consumers or consumer segments; and gaining an advantage by means of better
supply performance compared to competitors.
Zaibet et al. (2005) aimed to develop a methodology to categorize and measure
transactions costs by analyzing traders’ perceptions and attitudes toward regulatory
measures and other market activities. Results showed that the changing nature of the
import calendar as well as the import license procedure represents significant elements
of uncertainty that raise the importers' search and monitoring costs. It is suggested that
the conversion of these non-tariff barriers into tariffs along World Trade Organization
rules would reduce market uncertainty and increase market efficiency.
Zulfiqar et al. (2005) revealed from the data analysis that the producer gets only up to
37, 45 and 40 per cent, on average, of the consumers’ rupee for tomato, potato and
onion, respectively. In the case of tomatoes, the margin acquired by the wholesaler and
retailer was 23 and 18 per cent, respectively. In the case of potatoes, the margin shared
by the intermediaries was 19 and 18 per cent, respectively. In the case of onions, the
margin shared by the same intermediaries was 21 and 20 per cent, respectively. The
average physical losses of the vegetable crops were reported as 22, 12 and 9 per cent

18
for tomato, potato and onion, respectively. It is difficult to assess whether the large
marketing mark-ups reported for the different vegetable crops are necessarily
exploitative. The intermediaries are providing additional services at each stage and
carrying significant risks, particularly in the case of tomatoes. They recommended for
improving the functioning of vegetable markets in terms of improved marketing
margins for growers and reduced physical losses. These include proper physical
marketing facilities, adequate storage facilities, strictly enforced grading and
standardization, availability of processing facilities, marketing credit and free flow of
market information. Khan et al. (2005) found that the difference in marketing margins
for various vegetables is due to high marketing and picking costs. They also observed
that the vegetable having highest marketing margins have lowest net margin of
wholesalers and retailers.
2.4 Value addition and competitive advantage of vegetables
Junqueira et al. (2000) reported that poor profits and even complete production loss can
be caused by insufficient market understanding. Authors also suggested some ways to
add convenience and service are discussed with the aim of creating opportunities to
increase profitability to the Brazilian horticultural industry, which is responding to
changing consumer preferences with an increasing level of dietary health awareness.
Non-traditional vegetables, frozen vegetables, fresh-cut vegetables, canned vegetables
and organic vegetables are considered.
Riedel (2009) reported that European producers of fresh vegetables are under pressure
to improve their performance and increase their competitiveness. Competitive
advantage can be gained through innovation and by using unique resources stemming
from the cooperation between producers and complementary actors in local clusters.
However, locally clustered producers do not sell to open markets but need access to
value chains governed by lead firms, the large European retail chains, which set the
rules and conditions of participation.

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2.5 Agriculture value chain development in Nepal
Agriculture value chain development approach is a recent concept in Nepalese
agriculture. Our first comprehensive agriculture development plan Agriculture
Perspective Plan (APP, 1995-2015) has focused on commercialization of agriculture
but did not focus on system perspective. However, different I/NGOs have piloted a
number of value chain development projects since last decade. Replicating the lessons
learned from those initiatives, there are many agriculture development related projects
being implemented in the country. Project for Agriculture Commercialization and
Trade (PACT), RISMFP and HVAP are some of them. These projects aim to increase
the competitiveness of smallholder farmers and the agribusiness sector in selected
commodity value chains in the country. High-Value Agriculture Project (HVAP), High
Mountain Agribusiness and Livelihood Improvement (HIMALI) Project, Nepal
Agriculture and Food Security Project (NAFSP) and several regional level agricultural
development projects were helping farmers in livelihoods development activities
(ABPMDD, 2016). Government of Nepal has recently endorsed the Agriculture
Development Strategy (ADS) which has also taken Value Chain Development Program
(VCDP) as major aims strategy at developing prioritized value chains (initially only 5
such value chains have been proposed - vegetables, lentils, maize, dairy, and tea)
through comprehensive and integrated measures along the value chain that result in
strengthened value chain linkages, increased public-private partnership (PPP)
investment and value added with sector impact, and benefits to the poor. Differently
from other on-going or past value chain interventions in Nepal. The VADEP will have
the following innovative features: (i) will be looking at and developing all the stages of
the value chain, from seeds to final products, from production to processing, from
market infrastructure to access roads and connectivity, from postharvest technology to
quality assurance and exports; (ii) will be based on associations of farmers, traders,
processors, input providers and other value chain stakeholders in order to strengthen
the linkages and ensure effective investment; (iii) will aim at replication and linkages
beyond the district and achieve national impact; and (iv) will work not only with one

20
district or department but across districts, departments, and value chain actors
(MoALD, 2015).
2.6 Situation of Organic Vegetable Farming in Kathmandu Valley
Organic farming is an integrated farming system which involved technical aspects (soil,
agronomy, and weed and pest management) and economic aspects (input, output and
marketing) as well as human health (Bhatta, 2009). There exists good opportunity for
organic farming in the urban and peri-urban areas of the valley as most of the affluent
consumers have been agglomerated around cities and cities are the popular destinations
for the tourists. Some specialized markets have started selling organic products in the
valley and some are willing to start selling organic products.
Increasing use of agro-chemicals, higher production cost and deteriorating ecosystem
health have advocated the need to change traditional and external input use agriculture
towards safe and sustainable organic production. Despite many farmers have been
involved in organic production, their way of managing organic farm may not justify
organic standards. Organic vegetables are either home delivered and/or sold to the
specialized niche markets. All domestic organic products reach to consumers without
labeling. Most of the organic consumers are willing to pay more for labeled organic
vegetables. Currently organic farmers rely only on consumers' willingness to pay more
to obtain a compensation for lower yields. Some of the organic vegetable markets in
Kathmandu Valley are The Organic Village, Bhatbhateni Supermarket, Sale-ways
Supermarket and Summit Hotel. Organic vegetable production in the valley has been
started by the farmers themselves without government intervention. Commercial
farmers themselves have now starting Farmers Market as well in different places of the
Kathmandu valley. But the average Nepalese consumer is price-oriented and thus not
prepared to pay a higher price for the organic product. The organic sector is in
embryonic stage while extension services are relatively hibernated resulting in lower-
than-expected yields, especially during the initial years of production. Many producers

21
start producing organically on a ‘trial and error’ basis and adjust their farming methods
every season until they reach an acceptable and stable level of output.
2.7 Policy and Institutions related to Commercial Vegetables
2.7.1 Agri Business Promotion Policy 2063
The Agri Business Promotion Policy highlights the diversification, commercialization
and promotion of agriculture sector with private sector involvement in commercial
farming. It emphasizes that the living standard of the farmer would not improve unless
the agriculture sector is transformed from subsistence level to commercial farming. The
policy aims to reduce poverty by encouraging production of market-oriented and
competitive agro-products. It realizes the need of promoting internal and external
markets. This policy was prepared in the spirit of National Agriculture Policy 2061
emphasizing business service centers establishment for quality agriculture inputs and
services. Partnership between the private sector and Government has been emphasized
for the export of quality goods. In the context of Nepal’s entry into the WTO,
developing market network is its priority. The policy considers infrastructure
development as a cornerstone for commercialization and has envisaged promotion of
partnership approach between Government and the private sector. The policy ensures
special programmes for the poor, women and Dalits for establishing agricultural
entrepreneurs. (MoAC, 2063)
2.7.2 National Agriculture Policy 2061
The National Agriculture Policy, 2061 follows an objective of creating enabling
environment for agriculture-led rural development. It emphasizes competitiveness of
agriculture sector encouraging farmers to go for commercial production. The policy
divides farmers into two groups, small and big ones and aims to provide more resources
to the small farmers. Those owning less than four hectares of land are labeled as
resource poor farmers. They enjoy government assistance provision to boost their

22
productivity. The policy aims at increasing productivity and promoting natural
resources to utilize them in the interest of farmers. (MoALD, 2061)
The long-term vision of the agriculture sector is to bring improvement in the living
standards through sustainable agricultural development by transforming subsistence
agricultural system into a commercial and competitive agricultural system. The policy
aims at achieving high and sustainable economic growth through commercial
agriculture system contributing to food security and poverty reduction. It emphasizes,
increased agricultural production and productivity, making agriculture competitive in
regional and world markets with commercial agriculture system, and conserving,
promoting and utilizing natural resources, environment and bio-diversity.
2.7.3 Agriculture Development Strategy (ADS) 2014
The Agriculture Development Strategy (ADS) is a national sectoral strategy of Nepal
for the period 2015-2035. The overall objective of the ADS includes five dimensions
of increased food and nutrition security, poverty reduction, competitiveness, higher and
more equitable income of rural households, and strengthened farmers’ rights.
In the area of food security, the document provides that all outcomes, outputs, and
activities of the ADS will contribute to improve food and nutrition security either
directly or indirectly. It targets increasing the volume of food production in Nepal in a
sustainable way through higher productivity and sustainable use of natural resources;
reducing vulnerability of farmers through improved food/feed/seed reserves, improved
preparedness and response to emergencies, and climate smart agricultural practices;
increasing income of farmers; improving access to markets; reducing post-harvest
losses; improving food safety; relying upon trade for a more diversified diet;
accelerating the growth of micro, small, and medium agro-enterprises including those
headed by women, youth, disadvantaged groups, and individuals based in
disadvantaged regions.

23
Further, according to the Strategy, in order to achieve the vision, the ADS will
accelerate agricultural sector growth through four strategic components including
governance, productivity, profitable commercialization, and competitiveness while
promoting inclusiveness (both social and geographic), sustainability (both natural
resources and economic), development of private sector and cooperative sector, and
connectivity to market infrastructure (e.g. agricultural roads, collection centers, packing
houses, market centers).
The ADS will be monitored regularly, professionally, and in a participative manner.
Monitoring division and units will be strengthened at the Ministry of Agricultural
Development and department levels and will be provided support and capacity building
by the ADS Implementation Support Unit. Regular policy monitoring will be carried
out by Policy and International Cooperation coordination Division. Monitoring of the
ADS will go beyond inputs and output monitoring and include outcomes and impact
monitoring according to the targets and design monitoring framework of the ADS
programs. (MoALD, 2015)
2.7.4 Nepal Agricultural Research Council (NARC)
Nepal Agricultural Research Council (NARC) was established in 1991 to conduct the
different aspects of agriculture researches for uplift the economic level of Nepalese
people. It is an autonomous organization under Nepal Agricultural Research Council
Act-1991. Besides the commodity-based research it has mandate to identify the existing
problems in agriculture & find out the solution, and to assist government in formulation
of agricultural policies and strategies. NARC has performing different functions and
responsibilities to obtain its objectives. Research on different agricultural commodities
to identify the best varieties and technology is the main function. This is the main
institution mandated for technology generation, varietal improvement, source seed
production and carry socio economic research for policy support.

24
2.7.5 Agriculture Knowledge Centre (AKC)
Before federalism, the District Agriculture Development Offices (DADOs) in 75
districts, one in each, were the functional body for agriculture extension. The seven
provinces were then structured on 20th September 2015. It was not until the Falgun of
2074 BS when the provincial Ministry of Land Management, Agriculture and Co-
operatives has formed. The existing DADOs was then replaced with the Agriculture
Knowledge Centres (AKC). AKCs works under the Directorate of Agriculture
Development in each province. Unlike DADOs a single ACK is shared by up to three
districts. Kathmandu valley also has only one AKC for three districts. One AKC in
Kathmandu valley with limited extension staff has delivering agriculture technology to
the farmers and, most of the program has focused for producers rather than traders.
2.7.6 Agriculture Section at Municipality level
Three tiers of agricultural extension services at local, provincial, and federal levels
started after federalization of the country. New constitution of Nepal has provided
authority or rights to the local level to implement the different activities for local
development. So, Municipality itself is a local level government. Each municipality
has agriculture section which provide extension services to the local farmers.
Agriculture extension is the process of providing the information about new or
improved technologies to farmers to enable them to improve their farming.
Municipalities have proving new technology to the farmers with subsidized improved
seeds and saplings. Commercial vegetables farmers have getting price subsidies in
agricultural machinery as well. Although the new system has given important
responsibilities to the agriculture section at the municipality level, it has not been
completed properly due to lack of technical manpower.

25
CHAPTER-3
RESEARCH DESIGN AND METHODOLOGY
3.1 Selection of study area
The research was concentrated in the three districts of Kathmandu valley, i.e.,
Kathmandu, Lalitpur and Bhaktapur. These areas have more importance which can
easily supply vegetables as per valley demand. Prime Minister Agriculture
Modernization Project (PMAMP) has also given high priority to produce vegetables
from Bhaktapur and established vegetable zone in Bhaktapur district. The researcher
had identified the commercial vegetable growing areas within these districts with the
help of Agriculture Knowledge Centre (AKC), Lalitpur.
Figure 1: Map of the study area
3.2 Selection Vegetable growers
A list of commercial vegetable growers was obtained from Agriculture Knowledge
Centre (AKC). A total of 62 vegetable growers, 26 from Kathmandu and 18 from
Lalitpur, and the rest from the Bhaktapur district were selected randomly.

26
3.3 Selection of wholesaler & retailer
Since there is no wholesale vegetable market in Lalitpur and Bhaktapur districts,
wholesalers were selected from the Kathmandu district alone. A list of vegetable
wholesalers was obtained from Kalimati Fruits and Vegetables Market and Balkhu
Vegetables and Fruits Wholesale Market. Five wholesalers from each market were
randomly selected.
Similarly, 17 retailers, 5 each from Dhumbarai and Bhaktapur vegetable market and 7
from Lagankhel retailer vegetable market, were also selected for this study with the
help of traders list obtained from Agriculture Knowledge Centre (AKC) Lalitpur.
Information regarding the retail agriculture market was also obtained from AKC
Lalitpur.
3.4 Selection of Input traders
A list of input traders was obtained from Agriculture Knowledge Centre (AKC)
Lalitpur. 18 input traders, 6 from each district of Kathmandu, Lalitpur and Bhaktapur,
were selected randomly for the value chain study.
3.5 Sources of Information
Primary and secondary sources of information were used to collect the data. Primary
information was collected directly from respondents. The data collected through
primary sources was land holding, farm size, farm gate price, cost of production,
packaging, transportation, marketing system, marketing constraints etc.
The secondary data source was also used for the study purpose. Secondary data was
obtained through Kalimati Market, Balkhu Market, other wholesale & retail markets of
the valley, MoALD, VDC, Internet, and other reports & publications on vegetable
production and marketing.

27
3.6 Methods of data collection
• Primary data were collected through personal interviews using a semi-
structured and pre-tested interview schedule.
• Both open-ended and close-ended questions were included in the interview
schedule.
• Secondary data were collected by reviewing different publications from
different institutions.
• Focus Group Discussions (FGDs) and Key Informants Interview (KII) were
carried out to collect the relevant information.
• Key Informants Interview was carried out with the selected leader farmers,
traders, vendors, intermediaries and related persons of the study. A well-
developed checklist was used during the interview.
• Focused group discussion (FGD) was conducted to supplement and
triangulate information gathered from the household interviews and other
sources. One FGD was also organized. It was conducted with the selected
farmers and traders of the study area of the respective municipality.
• Information regarding the policies and problems were collected through
government officials of the Kalimati market, MoALD, VDD, etc.
3.7 Sampling design, sampling methods and sample size
A list of vegetable producers was compiled from the Annual Statistical Book of
Agriculture Knowledge Centre (AKC) Lalitpur. Total of 62 vegetable farmers, 27
vegetable traders (10 wholeslers and 17 retailers), and 18 input suppliers were selected
purposively from the list. A simple random selection technique was adopted to select
the respondents. Among the output traders, 5 each from Kalimati, Balkhu, Dhumbarai
and Bhaktapur and 7 from Lagankhel market were selected and interviewed to collect
primary information. Key informants’ interviews with other stakeholders such as AKC,
financial institutions, input suppliers were also conducted. KII respondents were
selected using purposive random sampling methodology.

28
Table 1: Sample size distribution by district in the study area
District Producers
Output
Traders
Wholesalers Retailers
Input
Suppliers
Kathmandu 26 15 10 5 6
Lalitpur 18 7 0 7 6
Bhaktapur 18 5 0 5 6
Total 62 27 10 17 18
3.8 Techniques of data analysis
3.8.1 Value Chain Mapping
Value chain analysis systematically maps the different actors participating in the
production, distribution, marketing and sales of the particular product (or products). It
can play a key role in identifying the distribution of benefits among the actors in the
chain, examining the role of upgrading within the chain and highlighting the role of
governance in the value chain (FAO, 2008). The value chain study was conducted using
the value chain concept. The value chain approach is mainly a descriptive tool to look
at the interactions between different actors and the most accurate way of understanding
the distribution of earning or the value added to a subsequent actor of the chain. A value
chain map allows one to depict all activities, actors, and relationships among segments
of the chain and the interactions between producers and intermediaries (FIAS, 2007).
The value chain map can be visualized either sideways or up or downwards (ADB,
2008). For consistency, value chain maps are presented horizontally throughout this
study. Vegetable value chain mapping was done by constructing a tree of input and
output relationship which includes the following general accounting activities:
• Technical structure, actors, and interrelationships of different actors in the value
chain process
• Actors in the whole value chain of vegetable production & marketing.

29
• Gross output values of each participant, and
• Selling methods, activities, and destination of sales.
3.8.2 Cost of production
The cost of production was estimated considering only the variable cost items. Variable
costs were farm expenditure on seed, seedling, labor, organic manures and fertilizers,
pesticides, insecticides, etc. The total variable cost of production was calculated by
adding all the expenditures on variable inputs.
3.8.3 Techniques & Formula used to analyze the data
Following techniques and formula was used to analyze the collected data.
Farmer’s share in consumer’s price =
Farm Gate Price
Retail Price
Wholesaler’s share in consumer’s price =
Wholesaler's Market Margin
Retail Price
Retailer’s share in consumer’s price =
Retailer's Market Margin
Retail Price
Gross Margin (GM) = GR-VC
Where, GM= Gross margin,
GR= Gross revenue,
VC= Variable costs
Marketing Margin (MM) = Pr - Pf
Where Pr = Retailer’s price,
Pf = Farm gate price Producer’s share
Producer’s Share (PS) = (Pf/Pr)* 100
Where, Pf = Farm gate price (Producer price)
Pr = Retailer’s price
Value Share (VS) = (AV/FRP)*100
Where, VS = Value Share, AV = Added value,

30
FRP = Final Retail Price
The information collected from the field survey were coded first and entered into the
computer. Data entry and analysis was done by using computer software, Microsoft
Excel and SPSS. Both descriptive and analytical methods were used. Furthermore, the
data were analyzed by using correlation analysis, simple linear regression, and other
econometric models. Simple graphs, Pie-chart, line graphs, bar diagrams, flow charts,
maps and photos were also used to present and analyze the collected data.
3.9. Description of the Study Area
Kathmandu is the capital city of Nepal and is located in the central part of the country.
Kathmandu valley is of strategic importance as it is centrally located between China
and India, and its urban settlements of Kathmandu, Lalitpur, and Bhaktapur became
early trade centres. These settlements continued as economically and politically
important towns for hundreds of years. Because of its livelihood options, Kathmandu
valley is one of the most popular destinations for migrants from different parts of Nepal.
Kathmandu valley covers an area of 569.80 sq km and includes three districts:
Kathmandu, Bhaktapur, and Lalitpur. Bagmati is the major river ﬂowing through
Kathmandu valley. Kalimati Fruits and Vegetables Market was the ﬁrst organized
wholesale market in Nepal; retailers, institutional consumers, and other bulk consumers
procure their supplies at this market. In recent years, Balkhu vegetable market has
become another asset for vegetable farmers for marketing. As the urban population
increases, other private vegetable markets are also establishing around the ring road to
fetch quality and fresh green vegetables. Vegetable production is an age-old traditional
farming practice near the water resources in Kathmandu valley, and it has the highest
vegetable productivity per unit area in Nepal. The study focuses on commercial tomato
farmers and output and input traders of three districts of Kathmandu valley.

31
3.9.1 Kathmandu District
Kathmandu District covers an area of 413.69 sq km, and is the most densely populated
district of Nepal with 1,081,845 inhabitants in 2001 and 1,744,240 in 2011 (61.23%
increase). Out of which 913,001 are male and 831,239 females in 436,355 households.
The districts headquarter is Kathmandu Metropolitan City, also the capital of Nepal.
This is one of the highly populated district and population growth is increasing with
urbanization. Nowadays, urbanization has encroached on agricultural land with
concrete buildings and productive land is on the decline. Only 212 sq km cultivable
area is available for agriculture out of total area. Farmers in the district have now started
commercial agriculture to get more produce from the declining land. Hitech
technologies, hybrid seeds, modern machineries, and market facilities are easily
available for commercial farmers. Output traders and input suppliers are giving services
to the farmers at their doorstep. The biggest agriculture market of the country, Kalimati
Fruits and Vegetable Wholesale Market and Balkhu Vegetable Wholesale Market are
located in this district.
Organic agriculture farming is also increasing day by day in Kathmandu. The interest
in organic agriculture in cities like Kathmandu is growing as there is the positive impact
of organic agriculture in the mind of people. Adoption of organic agriculture leads to
an increased engagement in farming which can trigger greater opportunities for rural
employment and economic upliftment.
3.9.2 Lalitpur District
Lalitpur is one of the three districts of the Kathmandu Valley. It is surrounded by Kavre
in the east, Kathmandu in the west, Bhaktapur & Kathmandu in the North, and
Makwanpur in the south. Lalitpur District covers an area of 396.84 sq km out of which
only 153 sq km is suitable for agriculture. This area of land is also declining every year
with urbanization. As of population census 2011 the population of Lalitpur district is
466,784. The population is heavily concentrated on the valley floors, resulting in very
intensive land use. Vegetable farming is very intensified and characterized by
commercial farming. Population density is increases day by day with urbanization and

32
demand of fresh vegetables is also increases simultaneously. Nowadays, commercial
farmers are entering the agriculture sector with modern technologies to supply quality
agricultural products as per market demand. Annual report of AKC, Lalitpur reported
that, 39 agrovets and 72 cooperatives are serving to the farmers in Lalitpur district as
input suppliers. Paddy, maize, wheat, millet are the main cereal crops of this district.
Many farmers are now adopting offseason vegetable farming for better income.
Lagankhel agriculture retail market is one of the public agriculture markets in Lalitpur
district, which provides marketing services to the consumers. Private sector agriculture
markets are also establishing these days in different parts of the urban area of Lalitpur
district to fulfill the consumer demand.
3.9.3 Bhaktapur District
Bhaktapur district occupies an area of 119 square kilometres with its population of
3,04,651, out of which 1,54,884(50.83 %) are males and 1,54,767(49.17%) are females.
The average number of family members is 4.44, and the population density is 2,650 per
square kilometers.
Bhaktapur is a good marketplace for vegetables. The place is more popular for the
production of vegetables like pumpkin, cucumber, beans, peas, and cauliflower. It also
grows the grains and fruits like paddy, wheat, corn, pulse, millet, citrus, guava, pears,
junar, and haluwabed. Out of 11,900 hectares of land in Bhaktapur, 11,106 hectares of
land is suitable for agriculture, but only 8,077 hectares has been cultivated. 2,620
hectares of land is irrigated round the year, whereas the land that has a partial irrigation
facility is about 3,271 hectares. The land without an irrigation facility is about 2,186
hectares. Madhyapur Thimi, Bageshwori, Jhaukhel, Duwakot, Sipadol and Dadhikot
are considered pocket areas for commercial vegetable production. Nagarkot, Sudal and
Nangkhel have developed their image for organic agriculture.
3.9.4 Fresh vegetable production scenario
According to the World Health Organization (WHO), a mature person should consume
daily 400 grams of vegetables (excluding potatoes) to live a healthy life. Similarly, the

33
Government of Nepal suggests a daily intake of 375 grams of vegetables (excluding
potatoes). However, insufficient access to the market and seasonal fluctuation of
available vegetable makes it difficult to intake a sufficient number of vegetables for the
consumers. Nowadays, new commercial farmers are entering fresh vegetable
production with innovative ideas. So, productivity and production are also increasing
simultaneously. There is a limited number of small-scale farmers who practice
commercial vegetable production in Nepal. It is not enough to address the demand of
the consumer. Main fresh vegetables can be grown in Nepal all-round the year using
diversified agro-climatical regions of the country. Figure 2 given below show the area
and production of vegetables in Nepal since last 10 years.
Figure 2: Area (ha) and production (mt) of vegetables in Nepal since last 10 years
Source: Statistical Information on Nepalese Agriculture, (2019/20), Ministry of
Agriculture and Livestock Development, Statistics and Analysis Section, Kathmandu,
Nepal, 2021
0 1000000 2000000 3000000 4000000 5000000
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
244102
245037
246392
254932
266937
280807
277393
286864
297195
281132
3203563
3298816
3301684
3421035
3580085
3929034
3749802
3958230
4271270
3962383
Production (Mt) Area (Hector)

34
3.9.5 Vegetable production status of Kathmandu Valley
Since the population has been increasing with urbanization in Kathmandu valley, the
demand of fresh vegetable is also increasing simultaneously. Majority of the vegetable
producers of Kathmandu valley have now started commercial level of production with
advanced technology to fulfill the increasing demand. However, rooftop farming
(Kaushi Kheti) is also supplying fresh vegetable to the housewives of the valley. Figure
3 given below shows the production trend and Table 3 given below shows the area,
production and yield of vegetables in Kathmandu valley.
Table 2: Area, Production and Yield of fresh vegetables in Kathmandu valley by year
Area in Hectare, Production in Metric Tons, Yield in Metric Tons/Hectare
District
Fiscal
Year
2071/72 2072/73 2073/74 2074/75 2075/76 2076/77
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Bhaktapur
Area 3229 4264.2 3134 3257.81 3221.00 3253.00
Production 50666 63558.3 56666 58554.75 58422.00 58552.00
Yield 15.69 14.91 18.08 17.97 18.14 18.00
Lalitpur
Area 2427 2415 3111 3126.053 3132 3123
Production 47920 51619 49020 49510.2 49794 49510
Yield 19.74 21.37 15.76 15.84 15.90 15.85
Kathmandu
Area 2115 1920 2120 2140.65 2093 2095
Production 54563 40760 54596 55242.96 51772 57456
Yield 25.80 21.23 25.75 25.81 24.74 27.43
Total
Area 7771 8599.2 8365 8524.511 8446 8471
Production 153149 155937.3 160282 163307.9 159988 165518
Yield 19.71 18.13 19.16 19.16 18.94 19.54
Source: Statistical Information on Nepalese Agriculture, (2014/15 to 2019/20)

35
3.9.6 Status of tomato production in Kathmandu Valley
The cultivated tomato (Lycopersicon esculentum, Mill) is the most important and
widely grown vegetable in the world. It is widely accepted and commonly used in a
variety of dishes as raw, cooked or processed products. It is reported that it is originated
in Peru, Ecuador and the Andes range of Bolivia. In Kathmandu valley, it is cultivated
in two growing seasons-spring and rainy. Rainy season tomato is a quite remunerative
enterprise to the hill farmers because the supply from the Terai districts is constrained
by high temperature, low fruit set and flowering, and bacterial wilt etc. The publications
"Statistical Information on Nepalese Agriculture", periodically published by the
Ministry of Agriculture and Livestock Development, has mentioned the following
statistics regarding tomato production in Kathmandu Valley.
Table 3: Area, Production and Yield of tomato in Kathmandu valley by year
District
Fiscal
Year
2071/72 2072/73 2073/74 2074/75 2075/76 2076/77
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Bhaktapur
Area 155 169.9 170 176 165 176
Production 6000 5372 4372 4569 4195 4569
Yield 38.71 31.62 25.72 25.95 25.42 25.96
Lalitpur
Area 148 148.5 180 181 184 181
Production 4440 4455 4620 4666 4191 4666
Yield 30.00 30.00 25.67 25.79 22.78 25.78
Kathmandu
Area 210 210 210 211 212 211
Production 20250 8250 20250 20453 10259 20453
Yield 96.43 39.29 96.43 96.91 48.39 96.93
Total
Area 513 528.4 560 568 561 568
Production 30690 18077 29242 29688 18645 29688
Yield 59.82 34.21 52.22 52.27 33.24 52.27

36
If we compare tomato crops with total vegetables in terms of area and production, we
will find that tomatoes have constituted 7 per cent in the area and 8 per cent in total
production of vegetables. Tomato comes in fourth and fifth position in terms of
production and area coverage.
Although I have collected above data from MoALD as secondary source, it is found
that the yield of tomato in Kathmandu district on 2019/20 was very high (96.93 mt/ha)
as compared to yield of Bagmati province (19.78 mt/ha) and national average on same
fiscal year (19.03 mt/ha). This may be because of most of the farmers of the Kathmandu
district are engaged in commercial farming and many of them use hybrid seeds like
Sirjana, so the productivity of tomatoes in this district has found high than other areas.

37
CHAPTER-4
RESULTS AND DISCUSSION
Vegetable farmers, output traders, inputs traders and related stockholders were the
target respondents of this research and information was collected from them
accordingly. Information on marketing channels, marketing margin and share, mode of
selling, price behaviour was collected and analyzed for the result. Information on
marketing practices (Grading, Packaging, Labeling and Transportation) was also
collected and analyzed for the best recommendation. Further, information on the
agricultural inputs trading system was collected and analyzed. Collected information
was analyzed with the help of SPSS and excel sheet, and findings are presented as
follows using different descriptive and inferential tools.
4.1 Major pocket areas with the volume of crops
4.1.1 Vegetable pocket areas and volume of production in Kathmandu Valley
Table 4: Major vegetable pocket areas with the volume of production (FY 2076/77)
Production: mt/year
Kathmandu (57456) Lalitpur (49510) Bhaktapur (58552)
Pocket Area Production Pocket Area Production Pocket Area Production
Kageshwori 5740.00 Dhapakhel 5840.00 Bhaktapur 14540.00
Budhanilakantha 8515.00 Harisiddi 6445.00 Madhyapur Thimi 11625.00
Tokha 8625.00 Khokana 3950.00 Suryabinayak 15075.00
Tarakeshwor 8550.00 Godawari 7425.00 Changunarayan 14050.00
Nagarjun 5640.00 Mahalaxmi 9900.00 Others 3262.00
Chandragiri 8720.00 Mahankal 3450.00
Kirtipur 5260.00 Konjyosom 3850.00
Others 6406.00 Others 8650.00
Note: - The figure above in the parenthesis indicate the total vegetable production of
that district.
Source: Agriculture Statistical Book (Kathmandu, Lalitpur, Bhaktapur), 2077/78,
Agriculture Knowledge Centre, Lalitpur

38
4.1.2 Tomato production status in Kathmandu Valley
Table 5: Area, Production and Yield of Tomato in Kathmandu valley by year
District
Fiscal
Year
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Bhaktapur
Area 155 169.9 170 176 165 176
Production 6000 5372 4372 4569 4195 4569
Yield 38.71 31.62 25.72 25.95 25.42 25.96
Lalitpur
Area 148 148.5 180 181 184 181
Production 4440 4455 4620 4666 4191 4666
Yield 30.00 30.00 25.67 25.79 22.78 25.78
Kathmandu
Area 210 210 210 211 212 211
Production 20250 8250 20250 20453 10259 20453
Yield 96.43 39.29 96.43 96.91 48.39 96.93
Total
Area 513 528.4 560 568 561 568
Production 30690 18077 29242 29688 18645 29688
Yield 59.82 34.21 52.22 52.27 33.24 52.27
Out of the three districts of Kathmandu Valley, most of the farmers in the Kathmandu
district have adopted commercial farming with hybrid seeds & modern technology.
They have a plastic tunnel and drip irrigation system for tomato cultivation, which can
give better harvest even in unfavorable weather conditions. So, the total production of
tomatoes is also higher in the Kathmandu district as compared to other districts because
of high productivity.

39
4.2 Tomato Trading Trend in Kalimati Market by Year (Kg)
Data provided by Kalimati Fruits and Vegetable Market shows that nearly half of the
vegetables and other edibles sold at the Kalimati Fruits and Vegetables Market are
imported from other countries, especially from India. Nepali production is not sufficient
to supply the market demand as demand is growing day by day with population growth.
So, domestic supplies alone can't fulfill the market demand of fresh vegetables. Tomato
trading data received from Kalimati Fruits and Vegetable Wholesale Market depicted
those Indian tomatoes have a large share in the Nepali market specially in Kalimati.
Indian tomato has occupied about 27% of market share in volume on 2077 which was
only about 17% on 2072. The marketing share of the Indian tomatoes in Kalimati
market on 2074 was highest till date which was about 44% of total trading volume of
that year. Table 6 below and figure 3 shows the Indian and Nepali tomato share and
trading trend in Kalimati market by year.
Table 6: Tomato Trading Trend in Kalimati Market (kg) by year
Year Source Tomato Big Tomato Small Total Percentage
2072
Nepal 66890 18601552 18668442 83.55
India 1291039 2384357 3675396 16.45
2073
Nepal 1679790 18182847 19862637 67.28
India 3190056 6468880 9658936 32.72
2074
Nepal 447052 11844796 12291848 56.16
India 627425 8968805 9596230 43.84
2075
Nepal 722015 15029215 15751230 59.30
India 818980 9991036 10810016 40.70
2076
Nepal 578877 20839096.5 21417973.5 61.62
India 1252984 12089986 13342970 38.38
2077
Nepal 214019 18544364 18758383 73.44
India 444631 6339139 6783770 26.56
Source: Kalimati Fruits and Vegetable Wholesale Market, Kathmandu (2072 to 2077)

40
Figure 3: Indian and Domestic Share of Tomato Trading in Kalimati Market
4.2.1 Tomato Sources for Trading in Kalimati Market
The agricultural fertile land of Kathmandu is being encroached by built up spaces. It is
estimated that around 50 to 60% of total demand of vegetables in Kathmandu is fulfilled
by vegetable production in hilly areas (Kavre, Dhading, Bhaktapur, Lalitpur,
Makwanpur, Kathmandu, Nuwakot, Sindhupalchok, Gorkha, Dolakha, Rasuwa etc.),
while remaining demands are sourced from Terai region, India and China (RECPHEC,
2016). Table 7 below shows the tomato sales in Kalimati market by sources and year.
Table 7: Tomato sales in Kaliamti Market by source and year (Kg)
SN Sources 2072 2073 2074 2075 2076 2077
1 Bara 526225 0 0 228525 96045 40975
2 Bhaktapur 174150 190065 27700 123805 623997 373841
3 Chitwan 693640 1746010 646680 1040450 1175804 2297286
4 Dhading 3202902 4345295 2651070 3422475 3430175 3218895
5 Dolakha 9250 8675 45000 12000 12200 12805
83.55%
16.45%
67.28%
32.72%
56.16%
43.84%
59.30%
40.70%
61.62%
38.38%
73.44%
26.56%
0.00% 20.00% 40.00% 60.00% 80.00% 100.00%
Nepal
India
Nepal
India
Nepal
India
Nepal
India
Nepal
India
Nepal
India
2072
2073
2074
2075
2076
2077

41
SN Sources 2072 2073 2074 2075 2076 2077
6 Gorkha 39500 166640 113500 218600 303825 226465
7 Jhapa 0 228675 123475 48900 35940 30155
8 Kathmandu 1813905 1505065 601296 1412492 4467862 3004764
9 Kavre 4782805 4818530 3883500 4426498 4494626 3895988
10 Lalitpur 235090 231125 18725 132325 1004800 788725
11 Makwanpur 245800 183656 109365 110855 92763 80877
12 Morang 0 0 0 0 179175 179650
13 Nawalparasi 0 7750 0 21625 85950 115525
14 Nuwakot 98175 182075 42927 104050 149729 74540
15 Parsa 373850 272560 238725 306875 188630 195690
16 Ramechhap 0 0 0 2105 7000 8450
17 Rautahat 372075 0 0 0 0 0
18 Rupandehi 0 0 0 34900 144190 0
19 Sarlahi 6005800 5888391 3743185 3968865 4671138 3892727
20 Sindhuli 0 0 0 0 18550 19425
21 Sindhupalchhock 76275 60775 46700 135885 131150 132424
22 Siraha 0 0 0 0 37600 3500
23 Sunsari 19000 0 0 0 66825 163426
24 Tanahun 0 27350 0 0 0 2250
25 India 3675396 9658936 9596230 10810016 13342970 6783770
26 China 0 0 0 7000 0 0
27 Other 137460 789255 469783 355498 392927 286205
Total 22481298 30310828 22357861 26923744 35153871 25151598
Source: Kalimati Fruits and Vegetable Wholesale Market, Kathmandu (2072 to 2077)
4.3 Descriptive analysis
Under descriptive analysis, variables were analyzed through mean, frequency, per cent,
standard deviation, minimum and maximum

42
4.3.1 Socio-demographic characteristics of respondent households
The socio-demographic characteristics of the respondents, such as gender, age, years of
experience in vegetable farming and their education status analyzed in this section.
The data showed that about 63 per cent of the responding producers were male, and
about 37 per cent were female. In the case of years of experience in vegetable farming,
the minimum years of experience found were one year, and the maximum was 40 years,
where the average was about 8 years. Similarly, the minimum and maximum age of the
producers was 22 and 68 years, respectively, with a mean age of about 39.5 years.
Table 8: Gender of the producers
Variables Frequency Percent Valid Percent Cumulative Percent
Male 39 62.9 62.9 62.9
Female 23 37.1 37.1 100.0
Total 62 100.0 100.0
(Source: Field Survey, 2020)
Table 9: Age and experience of the producers
Variables N Minimum Maximum Mean Std. Deviation
Age 62 22.00 68.00 39.46 9.33
Experience 62 1.00 40.00 8.08 7.66
The majority of the producers in the study area were literate (80%), whereas 20 per cent
had not received any formal education. Among the respondents, 24 per cent have
completed SLC or SEE, 32 per cent have completed their intermediate level of
education, 16 per cent have completed bachelor, and the rest 8 per cent have completed

43
masters level education. The figure 4 below depicts the education status of the
responding producers.
Figure 4: Education status of the producers
Out of the total responding producers, about 42 per cent reported that they had received
at least one training related to the vegetable subsector. Among them, a majority, 81 per
cent had received 12 per cent had received JTA training, 81 training on vegetable
production. Similarly, 12 per cent had received training of JTA, 23 per cent received
training on insect pest management, 25 per cent received leader farmer training, and 12
per cent had received GAP training. Table 10 depicts the training status of the
producers, and figure 5 present types of training they received.
Table 10: Training status of the producers
Training received Frequency Per cent Valid Per cent Cumulative Per cent
Received 26 41.9 41.9 41.9
Not Received 36 58.1 58.1 100.0
Total 62 100.0 100.0
Literate
20%
SLC SEE
24%
IA +2
32%
Bachelor
16%
Master Degree
8%

44
Figure 5: Types of training received by the producers
4.3.2 Farm characteristics of the respondent’s household
4.3.2.1 Landholding and type
The data depicts that among the 62 producers, only 17 own their land. The average of
the own land of the producers is about 31 ropani. In contrast, 54 producers among the
62 rented land for vegetable farming. The average of the rented land is 23 ropani. The
producers own about 30 per cent of the total land, and 70 per cent is rented. Whereas
about 80 per cent of the total land is being cultivated. The table 11 presents the
landholding of the producers and its cultivation status
12%
81%
23%
15%
12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
JTA Training Vegetable
Production
Training
Disease & Insect
Management
Training
Leader Farmer
Training
GAP Training
Percentage
of
training
reeceiving
producers
Types of training

45
Table 11: Land holding of the producers and its cultivation status
Variables
Frequencies Per
cent
Minimum
(N=62)
Maximum
(N=62)
Sum
(N=62)
Mean
(N=62)
Std.
Deviation
Own land (Ropani) 17 29.63 1.00 430.00 523.00 30.76 102.97
Rented land (Ropani) 54 70.37 1.50 125.00 1242.00 23.00 26.21
Total land (Ropani) 62 100.00 2.00 430.00 1765.00 28.46 57.60
Cultivated land
(Ropani)
62 79.83 1.00 250.00 1409.00 22.72 36.07
4.3.2.2 Types of farms and its registration status
Out of the total responding households, 73 per cent were registered individual farms,
16 per cent were smallholders' individual farms, three per cent were own cooperative
farms, and the rest were company registered farms. In the case of the registration status
of the farm, 85.5 per cent of the responded reported that they had registered their farm.
While the rest, about 14.5 per cent has not registered it. Figure 6 shows the types of
farms, and table 13 presents the registration status of the farm.
Table 12: Registration status of the farm
Registration
status Frequency Per cent Valid Per cent Cumulative Per cent
Registered 53 85.5 85.5 85.5
Not Registered 9 14.5 14.5 100.0
Total 62 100.0 100.0

VALUE CHAIN ANALYSIS OF VEGETABLES IN KATHMANDU VALLEY: A CASE OF TOMATO

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VALUE CHAIN ANALYSIS OF VEGETABLES IN KATHMANDU VALLEY: A CASE OF TOMATO