VALUE CHAIN ANALYSIS OF ORTHODOX TEA IN ILAM DISTRICT OF NEPAL

Abstract

Despite of the high rate of the orthodox tea, the net margin is still below the satisfactory level. Thus the present research was conducted to analyze the value chain of orthodox tea in Ilam district of Nepal. A total of 160 samples were collected, 80 each from organic and conventional tea growing area. Similarly, 4 tea processing factories and 5 local traders were selected purposely. The major functions involved in the orthodox tea value chain were supplying of the inputs, production, transportation/collection, processing, blending and packaging, exporting and domestic trading. Agro vets and input suppliers supplied required inputs such as saplings, fertilizers and pesticides etc. to the farmers and tea estates. The production of green tea leaves would undergo transportation and collection which was conducted by farmers, tea estates, co-operatives and brokers. Processing, blending and packaging functions were carried out either by tea companies or tea processing factories. Exportation was conducted by tea factories or trading companies whereas domestic trading was conducted by tea factories, wholesaler and retailers. Low farm gate price, high cost of labor and inputs were the major production problems whereas fluctuation in price and lack of marketing information were the major marketing problems from the study.