Profitability Analysis of Vegetable Production along
Dumre-Besishahar road Corridors

Durga Prasad Acharya, Ram Chandra Bastakoti, Krishna Lal Poudel, Dr. Shanta Man Shakya

Aiming to exploit the opportunities of integrating agricultural production systems at the Dumre-Besishahar road head areas with external market outlets FORWARD had designed a project on "Vegetable production and marketing systems along the Dumre-Besishahar road-head areas" for three years starting from 1999 to 2002 with the financial support of Hill Agriculture Research Project. The project aimed to establish an effective market oriented vegetable production plan for both summer and winter season vegetables alongside a profitability analysis. Eleven different vegetables were included as researchable crops in the project for production trial in the farmers' field condition to study the social and economic aspects of the production. The results of the profitability analysis showed that the gross benefit, gross margins and B/C ratio of the cucumber was the highest (Gross benefit =25574.8, Gross margin = 19691.7, B/C ratio = 4.3) followed by cauliflower, cabbage, brinjal, bitter gourd, pea, okra and pole bean among the studied eleven vegetables. Radish and asparagus bean produced negative gross margin value (radish: GM = -957.4, B/C ratio = 0.8; asparagus bean: GM = -1453.6 and B/C ratio = 0.6). The average cost of production for cucumber was Rs 3.49/kg. The cost of production for cabbage is more or less similar with the cucumber amounting to Rs 3.71 per kilogram. For brinjal, it accounts Rs. 5.44 Rs/kg. To the context of cost of production per kilogram for other crops, ranking was as follows in ascending scenario; cauliflower (Rs 7.01), okra (Rs 9.61), bitter gourd (Rs 11.11), pea (Rs 11.43), pole bean (Rs 12.6) and radish (Rs 23.8). The highest average cost was recorded in the production process of asparagus bean, which was mainly attributed by the lowest yield combined with poor quality production due to severe infestation of insect pests and diseases. The average price of almost all of the vegetables except radish and asparagus bean is higher than the cost of production leading to the enterprises towards profit. In some of the vegetables like cucumber, the average price that farmers received is almost three times higher than cost of production implying cucumber as the most profitable crop along Dumre-Besishahar road corridor. The price received by the farmers for cauliflower and cabbage is also attractive which is sufficient to cover the average cost of production. Regarding the rest five crops, the minimum price received during the sale, sometimes, is not sufficient to cover even the cost of production (pole bean, brinjal, pea, bitter gourd and okra). Nevertheless the average price of these crops, was mostly higher than the average costs of production implying that there is scope for getting better margins. Moreover, off-season production through adjusting the supply of existing produce can catch remarkably higher prices. With respect to the radish and asparagus bean, due to the negative gross margins and B/C ratio, their commercial production in the areas is very risky with higher chances of maximum losses. For the radish and tomato, it is further recommended for the production research in the uplands to test their performances again targeting to planting time with several wilt and rainfall resistant varieties at different elevations. The area holds the strong potential for commercialised production of certain vegetables for which there is the dire need of strengthening and scaling up production through group approach by mobilizing and empowerment of the farmers for the development of their own self-reliant organization.