Poverty Allevation Through Agriculture Development Potentials and Constraints. a Case of Tomato Farming in Nepal

Background: Two third of Nepalese people (66.6 %) are involved in agriculture exploiting only 21% of cultivable land for their livelihood. Majority of the farm families are semi-literate or illiterate and scattered in rural settlements. An increase in population by 2.2% annually is producing additional labor force in the national labor market. Average size of land holding is small (0.5 ha) fragmented in scattered parcels of three thus limiting agriculture commercialization. Forty five percent of the farmers, having less than 0.5 ha, share only 13% of total land. Owing to modern sophistications and ever-increasing population, meeting peoples increasing and changing needs and aspirations, on one hand, is a major burden to the country. On the other, crop profitability (particularly on cereals) is declining due to aforementioned agri-business related challenges. The consequence is over exploitation of natural and land resources. In Nepal, the process of planned economic development began in 1956. Until the fourth five-year plan period (1970 1975) the major strategy was to build economic and social infrastructures; some concrete achievements were made in that direction. The fifth five year plan (1975-1980) adopted a new approach to setting objectives, such as increasing the production of mass oriented goods, ensuring the maximum utilization of the workforce, and the promotion of regional balance and integration. Although a major portion of public sector expenditure was spent on transport, communications, electricity and industrial development, the country continued to rely on agricultural production. At present also the emphasis has been given on making a prosperous Nepal through bringing revolution and radical change in agriculture sector. For this government has been allocating huge portion of the total annual budget for agricultural sector development. Despite the priority given to agricultural sector and huge money doled out in

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the sector for the last many years, the countrys rural poverty and backwardness have worsened over the years. But still agriculture is the principal source of food, income, and employment for the majority, particularly the poorest. Growth in agriculture is, therefore, crucial for reducing poverty. However, agriculture is largely based on low-value cereals and subsistence production, with a mere 13 percent of output traded in markets. The sector??™s current 40 percent share in national GDP is declining, although there is considerable scope for increasing productivity and value-added. The central challenge for rural development in Nepal is to shift from subsistence to a commercial economy in an environment characterized by widespread and day-to-day insecurity and violence. For this the agricultural sector should be commercialized. Fresh seasonal and off-seasonal vegetables have been categorized as high value crops and promotion of commercial production of fresh vegetables are essential for increasing the income of farmers, providing them with employment opportunities including the women farmers, and enhancing their accessibility to food security. Hence, in Nepal vegetables are specific agricultural commodity promotion of which could significantly drive rural growth in some market accessible areas. The Agriculture Perspective Plan (APP) has also designated vegetable crops as one of the priority crops for Nepals agriculture development. Thus, efforts need be made to undertake all the necessary measures to develop the crop commercially benefiting the producers at large. Tomato (Solanum lycopersicum, syn. Lycopersicon lycopersicum) is one of the important high value vegetable species that has been cultivated in Nepal for ages. Tomatoes are herbaceous, warm season crop and are sensitive to frost. They are usually cultivated in subtropical and warm temperate climatic regimes and thrive well in temperatures 10oC to 30oC.

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Optimum range of temperature is 21o-24oC and temperatures below 16oC and above 27oC are not desirable. Temperature affects germination, crop standing and ultimately affects yield, quality and price. The required temperature regime exists in different agro-climatic regions of Nepal at different times of the year and almost year-round production is possible in different geographical regions of the country. Tomato farming is possible up to the height of 2740 meter above the sea level.

Tomato Farming in Nepal In Nepal the tomatoes have been cultivated in a land that ranges from low land Terai to high hills. According to an old data published by Ministry of agriculture and cooperatives (in 2063 B.S), tomatoes have been cultivated in 190,000 hectare (ha) land and the total production was 2,183,000 metric tons. In reference with this data the total production of tomato per hectare land is 11.5 metric ton. The total contribution of vegetables farming in agricultural GDP is 65%. Potato farming occupies the largest vegetable cultivated land whereas tomato occupies significant position. Tomatoes come in a number of varieties with highly standardized cultivation practices. Each variety has its own shape, color, size, timing of cultivation, duration of harvesting, yield, disease resistance, etc. Abinash and Allrounder are the most popular and highly cultivated varities in Nepal. Abinash has a good yield but the fruits are soft and difficult to transport. Allrounder is a hybrid variety and is gaining popularity because the fruits are firm and can be transported easily. Besides these varieties Srijana, Dhanalakshmi and Indra are other popular Nepali varieties. Trishul, an Indian variety is also getting popular in Nepal.

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Tomato farming in some of the Hill districts and Terai districts is emerging as a highly profitable and potential enterprise and more and more farmers are attracted towards commercial cultivation of tomato. Tomato cultivation has proved to have a high potential for employment generation at local level in general and for female farmers and rural poor in particular. Despite these encouraging trends, the market is experiencing typical constraints of a growing and immature market. Also there are many constraints with its farming. This paper presents the potentiality, benefits and constraints of tomato farming in our country. Also some recommendations for its high quality production and proper market management & market expansion are suggested.

Production and Trade of tomato Almost all of the Terai and lower parts of Hill districts are climatically suitable for tomato cultivation. However the cost of cultivation is higher in the Hills than in Terai, but the benefits are also higher in the Hills.

Cost-Benefit Analysis of Tomato Farming in Hill Districts: Labor and other arrangement for farming comprises the largest cost component (50% of the total cost) indicating that tomato production in the Hills is indeed labor intensive. The only mechanized operation is spraying insecticides and occasional sprinkler or drip irrigation. The next largest cost component indicated as ???others??? in Figure (next page) includes costs for spraying insecticides and for staking the plants. Each individual tomato plant is staked with bamboo strips or sticks collected from the forests. As the plant population is 16,000 to 20,000 per per hectare, an equal number of stakes is also required. The next highest share of the cost

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goes for organic manure (13%). The cost of chemical fertilizers is only 3% of the total cost whereas pesticides consume 6%. Eight percent of the total cost goes for seeds. The hybrid seeds are very costly. The seed of Abinash variety, for instance, costs Rs. 1 Lakh per kg and Allrounder costs Rs. 65,000. The seed rate is about 120 grams per ha.

LABOUR 50%
Land Preparation: 16% Land Leveling & OM Application 8% Chemical Fertilizer Application 8% Transplanting 16% Weeding & Staking 24% Pesticide Irrigation Applicationon 4% 8% Harvesting 16%

INPUTS 30% Seed 8% Organic Matter 13% Chemical Fertilizer 3% Pesticide 6%

OTHER COST 30% STAKING 5O% SPRAYER HIRE 50%

(Source: Ministry of Agriculture and Cooperatives/ Department of Agriculture, October 2008)

The weeding and staking take up the largest share of labor in tomato cultivation. The staking operation seems to be the most costly operation in this regard as the cost of the stakes and labor required for staking each individual plant are both fairly high. Moreover, the stakes need to be replaced after two years. Land preparation, transplanting, and harvesting operations use more or less equal proportions of labor (16% each) and land leveling, manure application, and irrigation consume 8% each of labor cost. According to the research carried out by Ministry of Agriculture and Cooperatives in October 2008, the total cost of tomato cultivation in Hill district for 1 hectare is found to be around Rs. 162,540. The research also found out that the total production is 36000 kg per hectare. Assuming Rs. 12 as the average market price of tomato throughout the year total value
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of the production is estimated to be Rs. 432,000. The net profit per hectare is calculated to be Rs. 269,460. The financial analysis of tomato cultivation shows benefit cost ratios of 2.66 for hill districts. Cost-Benefit Analysis of Tomato Farming in Terai Districts: Like in the Hills, labor costs the most in Terai as well, but its share at 39% of the total cost is slightly less than that for the Hills. Tractor and sprayer rental, listed under the ???others??? category is the next highest cost component. Seeds take up 15% and pesticides consume 11% of the cost. Although considerably lesser amount of organic fertilizer is used in Terai than in the Hills, it still comprises a significant proportion of the cost at 12% whereas the cost for chemical fertilizers represents only 5%. The pie-chart below shows the cost components for cultivation of tomato in Terai.

Cost Components of Tomato Production in Terai

Chemical Fertilizer5% Organic Manure 12%

Pesticides 11% Labor 39%

Seeds 15% Others 18%

(Source: Ministry of Agriculture and Cooperatives/ Department of Agriculture, October 2008)

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According to the research carried out by Ministry of Agriculture and Cooperatives in October 2008, the total cost of tomato cultivation in Hill district for 1 hectare is found to be around Rs. 86,783. The research also found out that the total production is 36000 kg per hectare. Assuming Rs. 5 as the average market price of tomato throughout the year total value of the production is estimated to be Rs. 180,000. The net profit per hectare is calculated to be Rs. 93,217. The financial analysis of tomato cultivation shows benefit cost ratios of 2.07 for Terai districts.

Analysis: A SWOT analysis for the production of tomato in Nepal is summarized in points below: A. Strengths: ? Many potential areas of Hills and Terai districts are suitable for commercial scale quality production of tomato round the year. ? Tomato has comparative advantage over other cereals and cash crops. Tomatoes are consumed often at regular basis at home, restaurants, hotels, etc. comparative to other cereals and cash crops. ? In recent years, rural and semi-urban communities are highly attracted by the increasing prospect of main and off-season tomato farming and its increasing demand. ? Tomatoes have high local demand. According to the statistics record of Kalimati Fruits and Vegetable Management Committee, still 40% of the total market demand in Kathmandu for tomato is occupied by the tomatoes imported from India. ? High demand for off season (from May to November) particularly during rainy seasons is fulfilled by import from India.

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?

Farmers are getting quite significant technical support from District Agricultural Development Office.

?

Tomato farming requires a low initial investment compared with other high value cash and cereals crop.

?

There is a growing demand of organic tomato in the market. Organic tomato farming is possible in most of the rural areas.

Weakness: ? Rural Farmers have lack of technical knowledge regarding the use of fertilizer, plant protection, seed germination, etc for the commercial quality scale production practices. Still there is a lack of new technology for tomato farming, harvesting, post harvest handling technology, grading and packaging. ? ? ? Excessive use of pesticides. High pest and disease attack There is a difficulty in getting quality seeds. Most of the farmers are facing problems with the low quality hybrid seeds from India. Sometimes they have to face the problems with mixed seeds. ? ? There is insufficient infrastructure, roads, electricity, irrigation and institutional credit. Porter transport cost from farm to road head/collection centre is very high, especially in Hill districts. ? ? Shortage of skilled labors. The input price is very high and difficult so it is very hard to compare to comparatively cheaper Indian and Chinese tomatoes.

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?

Local farmers are not well-informed about the market price so they have to sell their tomatoes to the dealers at very low price. In some cases dealers compel the local farmers to sell their product at unjustifiable price.

? ? ?

High seasonal prices variation Wastage in transportation. Lack of appropriate storage facilities

Opportunities: ? ? ? ? ? Production area can be increased by more than 2 to 3 times Large scale demand from city areas of Nepal, West Bengal and Northern Bihar of India. High demand for processed products such as paste, puree, ketchup, etc. Highly attractive price in India (specially for off-season tomato from hill districts) Government has designated tomato as a high value crop and provides support for its commercialization ? ? ? ? ? NGOs are also providing support for commercialization Potential for employment of women Potential for economic upliftment of small and marginal land holders Potential to employ large number of people Higher yield through adoption of hybrid seed variety like Avinash & Allrounder and by adopting improve production technology ? The demand for organic tomato is increasing.

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Threats ? ? ? ? ? ? ? ? Political instability Very high tax imposed by DDC Tax and threats from so many groups (mostly political sister organizations) Frequent blockades and strikes Increasing price of inputs in Nepal Intense competition from highly subsidized Indian farmers for main season production Large scale commercial production in India and China Dependence on India for inputs (especially hybrid seed, fertilizer, plant protection chemicals and micro nutrients) ? Threats from many new diseases, harmful pests, etc.

Recommendation: ? Farmers should be encouraged to do commercial tomato farming. They should be well informed about the existing market value, demand and benefits of tomato farming. ? ? ? Ensuring the availability of quality hybrid seeds, fertilizers and plant protection chemical Subsidy for inputs, especially fertilizers, seed, sprayers Training to producers and traders on cultivation practices, use of pesticides and fertilizers, grading and packaging, and marketing ? ? Support for nursery bed preparation (greenhouse equipment) Government and other responsible concern institution should focus on introducing new technology ? ? Poor farmers should be provided with financial support at the initial phase. Proper market regulation by the responsible body.
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Conclusion: Cultivation of tomatoes in most of the Hill and Terai districts appear to have great potential and the cultivation is growing in terms of area expansion, value addition and market expansion. Moreover, tomato farming in the Hill districts is emerging as a highly profitable enterprise and more and more farmers are attracted towards commercial cultivation of tomato. Tomato cultivation has proved to have a high potential for employment generation at local level in general and for women and rural poor in particular. Despite these encouraging trends, the market is experiencing typical constraints of a growing and immature market. The commercial tomato farming with a proper technical & financial support to poor farmers along with effective market management will surely add up to boost the economy.

References: Government of Nepal, 2008. Tomato Product chain Study, Ministry of Agriculture and Cooperatives, Department of Agriculture, Kathmandu

Ghimire, Shreeram, ???Environmental Concern in Nepalese Agriculture??™,The Journal of Agriculture and Environment,9:218 (2008)

Karkee,Madhav, ???Nepal economic growth accessment: Agriculture??™, Report,USAID,2008

Nepal: Priorities for Agriculture and Rural Development.
http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/EXTSAREGTOPAGRI/0,,conte ntMDK:20273771~menuPK:548215~pagePK:34004173~piPK:34003707~theSitePK:452766,00.html

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