Profitability, marketing, and resource use efficiency of ginger production in Rukum west, Nepal

Abstract

The study was designed to investigate the profitability, marketing, and resource use efficiency of ginger production in Rukum west. The sample size of 62 ginger-growing farmers out of 187 farmers was determined using slovin’s formula. In addition, 20 traders from two major market hubs Simrutu and Jhulneta were interviewed. The pre-tested semi-structured interview schedule was administered to interview a randomly selected sample size. Data were analyzed using descriptive and statistical tools, including the Cobb-Douglas production function. Result showed that the average area under ginger cultivation was 0.14 ha. A major portion (46.56%) of the cost was found to be incurred by the seed alone in ginger cultivation. The benefit-cost ratio (2.02) indicates that ginger production enterprise was profitable. The productivity of ginger in the study area was estimated to be 11.39 Mt/ha, while per kg cost of production was found to be (NRs 35.67 = USD 0.30). Most of the gross income (78.85%) was found to be contributed by fresh ginger. Similarly, gross margin, market margin, and producer’s share were found to be 21.16, 33.33, and 62.97%, respectively, for 1 kg of ginger. The indexing technique identified high-cost with low-quality seed and price instability as the major problems associated with the production and marketing of ginger, respectively. Cobb-Douglas production function estimated the value of return to scale at 0.889, implying that ginger production exhibited decreasing returns to scale. A study on resource allocative efficiency revealed that farm yard manure and total labor were underutilized resources while seed rhizome was overutilized resource. Thus, for optimal allocation of resources, expenditure on farm yard manure and total labor need to be increased by 87.374% and 39.908%, respectively. The study concluded that an effort should be made to bridge the gap between optimal resource utilization and current practices. For this, it is prime important to interconnect the combined efforts of ginger growers, provincial government, or any developing partners.