An Economic Analysis of Potato Production in AchhaM District of Nepal

Abstract

The objective of this study was to assess the production and economics of potato in Achham district, Nepal. Sampling was conducted among the total of 90 registered farmers by simple random sampling method. The respondents were categorized into small and large scale farm holders based on the mean of the land holding under potato cultivation. The data were analyzed using SPSS, Stata and Microsoft excel. Cobb Douglas production function was used to find out the technological relationship between inputs used and output produced and to estimate and analyze the return to scale. The result of sociodemographic characters showed that the average household size, dependency ratio and area under potato cultivation was 7.53, 1.05 and 0.081 ha respectively. About 58% of respondents were growing potato in summer season. Human labor was the major input followed by seed, manure and bullock labor in both large and small farms. The production per household (kg), productivity (mt/ha) and price of yield (NRs. /kg) were 937.17, 12.287 and 30.33 respectively and there was significant difference in production (kg) per household between small scale farms (408.70) and large scale farms (1729.86). The total average cost, gross revenue and gross margin per hectare were estimated as NRs. 256,285.293, NRs. 373384.449 and NRs. 117099.156 respectively. The findings showed significant difference of variable cost between small and large scale farm which was due to the significant difference in use of inputs i.e. human and bullock labor mainly. Despite of adoption of improved potato production practices in most farms the average benefit cost ratio was 1.47. From the analysis of Cobb Douglas production function the inputs; human labor, seed and manure had positive relationship with income while bullock labor use had negative relation with the total income. The return to scale value was computed to be 1.033 indicating increasing return to scale in potato production in Achham district. Therefore, the findings suggest that, the production and income can be maximized if existing problems of irrigation, insect-pests, storage and marketing are solved and the inputs are made available in time and used properly. Keywords: Potato, Production, Cost, Economics, Production function