VALUE CHAIN ANALYSIS OF VEGETABLES IN KATHMANDU VALLEY: A CASE OF TOMATO

VALUE CHAIN ANALYSIS OF VEGETABLES IN
KATHMANDU VALLEY: A CASE OF TOMATO
Basudev Sharma
PU Registration No.: 020-3-3-08719-2016
Thesis submitted to
Purbanchal University
Faculty of Science and Technology
Himalayan College of Agricultural Sciences and Technology
Kathmandu, Nepal
December 2021

VALUE CHAIN ANALYSIS OF VEGETABLES IN
KATHMANDU VALLEY: A CASE OF TOMATO
Basudev Sharma
PU Registration No.: 020-3-3-08719-2016
Thesis Submitted to
Faculty of Science and Technology
Himalayan College of Agricultural Sciences and Technology
Kathmandu, Nepal
In partial fulfillment of the requirements for the degree of Master of Science in
Agriculture (Agribusiness Management)
December 2021

i
ACKNOWLEDGEMENT
This study would not have been possible without the support of many people. First, I
would like to thank my adviser, Dr. Raj Kumar Adhikari, Adjunct Professor of
Himalayan College of Agricultural Sciences, and Technology (HICAST), for his
continuous support from the very beginning to final report preparation. He has been
supported me not only as a thesis advisor but also as an ideal teacher, mentor, and
offered advice and encouragement with a perfect blend of insight and humor. Also,
thanks to Dr. Binayak Prasad Rajbhandari, Chairperson of HICAST for his guidance
and support.
I would also like to show gratitude to Dr. Bishnu P. Bhattarari, Dr. K.B. Shrestha
(Principal, HICAST), Mrs. Puja Shrestha (Examination Section, HICAST), and other
personalities of HICAST for providing the favorable academic environments and
supports during this study.
Mostly I have indebted to those farmers, output traders, and input traders of
Kathmandu, Lalitpur, and Bhaktapur district who provided me with important
information during the field survey, despite their hectic schedule. Special thanks go to
my friend Mr. Melsan Shrestha for his kind support and cooperation in analyzing the
data. Also, I thank Mr. Krishna Bhadra Adhikari, Mr. Buddhi Prasad Shrestha, and Mr.
Rabi Kumar KC of Agriculture Knowledge Centre (AKC), Lalitpur for sharing useful
information including the list of commercial farmers and traders which help me to select
respondents for the field survey.
Finally, I would like to express my heartfelt gratitude to all those who contributed
directly and indirectly to the field study and preparation of this thesis. I acknowledge
various authors and publishers through which I got an idea for research and analysis.
However, I sincerely apologize if I missed out on appreciating someone.
At the last, but not least, I would like to convey my heartfelt thanks to my beloved wife
Sabita Oli, and son Arbin Paudel for their continuous support and invaluable sacrifice
in every perspective to cooperate with me during my study, my field survey, and writing
the final report.
Basudev Sharma

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ABSTRACT
This study was designed to analyze the value chain of vegetables, with special
consideration of tomatoes, in Kathmandu valley. 62 farmers, 27 output traders, and 18
input suppliers were randomly selected to collect relevant information. Analyzed the
data using descriptive and inferential statistics. Among the five marketing channels, the
channel, "Producer-Collectors-Wholesaler-Retailers/veg mart-Consumer, has
captured a large portion (40%) of the marketing, and the marketing channel,
"Producers to the Consumer," occupied the least (5%) of the marketing share. The yield
of the tomato was found highest in Lalitpur (60.5 mt/ha) district, followed by the
Bhaktapur (58.7 mt/ha) and Kathmandu (57.4 mt/ha) districts. The overall benefit-cost
ratio of tomato cultivation was found 4.9 but the benefit-cost ratio was highest in the
Lalitpur district (6.0), followed by Bhaktapur (5.3) and Kathmandu (4.0) districts. The
marketing margin of the tomato in the study area was estimated at 49.33 rupees with
50.72% producer's share. The postharvest loss of the tomato from producer to
wholesaler was highest in the Lalitpur district (9%), followed by Kathmandu (7%) and
Bhaktapur (4%). In the case of problems on the value chain of the tomato, the problems
on marketing were the main issue facing the producers, followed by problems related
to agriculture inputs and lack of technical know-how & support. Other problems were
limited financial capacity, lack of labor, disease, insect pests, and difficulty in leasing
land. The finding of this study indicates that the enablers and service providers of the
value chain should also focus on the input and output traders as well to enhance their
business skills to develop the value chain of the tomato in the study area. Similarly, the
farmers should increase the inputs cost of pesticides, irrigation, grading, and
packaging of the tomato to increase their annual income, and the government should
emphasize value chain governance and create value chain platforms to bring solidarity
and trust among the entire chain actors.
Keywords: Vegetable, Value chain, marketing margin, market channel, producer share,
tomato

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ACKNOWLEDGEMENT............................................................................................i
ABSTRACT..................................................................................................................ii
TABLE OF CONTENTS........................................................................................... III
LIST OF TABLES .....................................................................................................vii
LIST OF FIGURES ..................................................................................................viii
ACRONYMS...............................................................................................................ix
CHAPTER-1 INTRODUCTION................................................................................1
1.1 Background............................................................................................................................... 1
1.2 Introduction and Scope of vegetable Cultivation................................................................... 4
1.3 Government Initiatives............................................................................................................. 4
1.4 Statement of the Problem......................................................................................................... 6
1.5 Justification of the Study.......................................................................................................... 7
1.6 Objectives ................................................................................................................................. 8
1.6.1 General objective..........................................................................................................8
1.6.2 Specific objectives........................................................................................................8
1.7 Scope of the Study.................................................................................................................... 8
1.8 Limitations of the Study........................................................................................................... 9
CHAPTER-2 LITERATURE REVIEW .................................................................10
2.1 Background............................................................................................................................. 10
2.1.1 Value chain................................................................................................................. 10
2.1.2 Agricultural marketing.............................................................................................. 11
2.1.3 Marketing chain ......................................................................................................... 12
2.1.4 Supply chain............................................................................................................... 12
2.1.5 Margin......................................................................................................................... 12
2.1.6 Marketed surplus........................................................................................................ 13
2.1.7 Marketing Efficiency................................................................................................. 13
2.2 Vegetable Production and marketing situation analysis...................................................... 14

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2.3 Mapping the value chain of vegetables showing the trade link among the various actors 15
2.4 Value addition and competitive advantage of vegetables.................................................... 18
2.5 Agriculture value chain development in Nepal.................................................................... 19
2.6 Situation of Organic Vegetable Farming in Kathmandu Valley......................................... 20
2.7 Policy and Institutions related to Commercial Vegetables.................................................. 21
2.7.1 Agri Business Promotion Policy 2063..................................................................... 21
2.7.2 National Agriculture Policy 2061 ............................................................................ 21
2.7.3 Agriculture Development Strategy (ADS) 2014.................................................... 22
2.7.4 Nepal Agricultural Research Council (NARC)...................................................... 23
2.7.5 Agriculture Knowledge Centre (AKC) ................................................................... 24
2.7.6 Agriculture Section at Municipality level ............................................................... 24
CHAPTER-3 RESEARCH DESIGN AND METHODOLOGY ...........................25
3.1 Selection of study area........................................................................................................... 25
3.2 Selection Vegetable growers................................................................................................. 25
3.3 Selection of wholesaler & retailer......................................................................................... 26
3.4 Selection of Input traders....................................................................................................... 26
3.5 Sources of Information........................................................................................................... 26
3.6 Methods of data collection..................................................................................................... 27
3.7 Sampling design, sampling methods and sample size......................................................... 27
3.8 Techniques of data analysis................................................................................................... 28
3.8.1 Value Chain Mapping............................................................................................... 28
3.8.2 Cost of production ..................................................................................................... 29
3.8.3 Techniques & Formula used to analyze the data.................................................... 29
3.9. Description of the Study Area.............................................................................................. 30
3.9.1 Kathmandu District.................................................................................................... 31
3.9.2 Lalitpur District.......................................................................................................... 31
3.9.3 Bhaktapur District...................................................................................................... 32
3.9.4 Fresh vegetable production scenario........................................................................ 32

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3.9.5 Vegetable production status of Kathmandu Valley................................................ 34
3.9.6 Status of tomato production in Kathmandu Valley................................................ 35
CHAPTER-4 RESULTS AND DISCUSSION ........................................................37
4.1 Major pocket areas with the volume of crops ...................................................................... 37
4.1.1 Vegetable pocket areas and volume of production in Kathmandu Valley........ 37
4.1.2 Tomato production status in Kathmandu Valley.................................................... 38
4.2 Tomato Trading Trend in Kalimati Market by Year (Kg).................................................. 39
4.2.1 Tomato Sources for Trading in Kalimati Market................................................... 40
4.3 Descriptive analysis................................................................................................................ 41
4.3.1 Socio-demographic characteristics of respondent households ........................... 42
4.3.2 Farm characteristics of the respondent’s household ............................................ 44
4.3.3 Trend of vegetable cultivation in the study areas ................................................... 46
4.4 Value chain analysis of tomato in the study area................................................................. 47
4.4.1 Major value chain actors in the tomato value chain in the study area.................. 47
4.4.2 Value chain map...................................................................................................... 51
4.4.3 Marketing Channels................................................................................................... 54
4.4.4 Practices to add value to tomato............................................................................. 56
4.4.5 Postharvest loss........................................................................................................ 56
4.5 SWOT analysis....................................................................................................................... 57
4.6 Problems faced by the producers on production and marketing of tomato........................ 59
4.7 Access and use of business development services............................................................... 59
4.7.1 Source of finance:.................................................................................................... 59
4.8 Source of technical information and business skills:........................................................... 61
4.8.1 Source of technical information for producers..................................................... 61
4.8.2 Source of business skills for input and output traders.......................................... 62
4.9 Economic analysis.................................................................................................................. 63
4.9.1 Area, production, productivity, income, gross margin, and B:C ratio............... 63
4.9.2 Comparison of Tomato Economic Variables among the three districts............ 65

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4.9.3 Marketing margin and producer share .................................................................. 66
4.9.4 Resource productivity of tomato production........................................................ 67
CHAPTER-5 SUMMARY ........................................................................................70
CHAPTER-6 CONCLUSION AND RECOMMENDATION ...............................72
6.1 Conclusions ................................................................................................................... 72
6.2 Recommendations......................................................................................................... 73
REFERENCES...........................................................................................................75
APPENDICES............................................................................................................80
1. Questionnaires used in Field Survey....................................................................................... 80
2. Agriculture Wholesale & Retail Market in Kathmandu Valley............................................ 91
3. Photographs of Field Survey ................................................................................................... 93
CURRICULUM VITAE............................................................................................96

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LIST OF TABLES
1: Sample size distribution by district in the study area ............................................28
2: Area, Production and Yield of green fresh vegetables in Kathmandu valley by year...34
3: Area, Production and Yield of tomato in Kathmandu valley by year....................35
4: Major vegetable pocket areas with the volume of production (FY 2076/77)........37
5: Area, Production and Yield of Tomato in Kathmandu valley by year ..................38
6: Tomato Trading Trend in Kalimati Market (kg) by year.......................................39
7: Tomato sales in Kaliamti Market by source and year (Kg)...................................40
8: Gender of the producers.........................................................................................42
9: Age and experience of the producers.....................................................................42
10: Training status of the producers.............................................................................43
11: Land holding of the producers and its cultivation status .......................................45
12: Registration status of the farm...............................................................................45
13: Farmers groups in Kathmandu valley....................................................................48
14: Value chain map of tomato in the study area........................................................54
15: Postharvest losses of tomato production in the study area ....................................57
16: SWOT analysis related to the production of tomato..............................................57
17: SWOT analysis related to post-harvest of tomato .................................................58
18: SWOT analysis related to marketing of tomato.....................................................58
19: Problems on production and marketing of tomato.................................................59
20: Source of finance of the value chain actors ...........................................................60
21: Level of the satisfaction of the producers about the loan receive and interest rate........61
22: Availability of the relevant technical information and satisfaction level ..............62
23: Source of business skill for input and output traders.............................................62
24: Problems related to business..................................................................................63
25: Economic Variables of Tomato in Kathmandu Valley..........................................64
26: Comparison of Tomato Economic Variables among the three districts ................65
27: Marketing margin and producer share...................................................................66
28: Description of variables used in the resource productivity of tomato production.67
29: Result of the resource productivity of tomato production .....................................68

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LIST OF FIGURES
1: Map of the study area.............................................................................................25
2: Area (ha) and production (mt) of vegetables in Nepal since last 10 years ............33
3: Indian and Domestic Share of Tomato Trading in Kalimati Market.....................40
4: Education status of the producers ..........................................................................43
5: Types of training received by the producers..........................................................44
6: Types of farms .......................................................................................................46
7: Trend of vegetable cultivation in the study areas (Ropani) ...................................46
8: Input suppliers of Kathmandu Valley....................................................................48
9: Value chain map of tomato in Kathmandu Valley.................................................53
10: Per centage of farmers practicing value addition practices of the vegetable.........56
11: Source for the technical information to the producers...........................................61
12: Marketing share among the three actors................................................................66

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ACRONYMS
ADBL Agricultural Development Bank Limited
AEC Agro-Enterprise Center
AITC Agriculture Information and Training Center
AKC Agriculture Knowledge Centre
CBO Community Based Organization
CBS Central Bureau of Statistics
FAO Food and Agriculture Organization of United Nations
FGs Farmers Groups
FNCCI Federation of Nepal Chamber of Commerce
FYM Farmyard Manure
GDP Gross Domestic Product
Ha Hector
HH Household Head
HICAST Himalayan College of Agricultural Sciences and Technology
INGO International Non-Governmental Organization
Kg Kilogram
MDD Market Development Directorate
MoALD Ministry of Agriculture and Livestock Development
MoF Ministry of Finance
NARC Nepal Agricultural Research Council
NGO Non-Governmental Organization
NRs Nepalese Rupees
PACT Project for Agriculture Commercialization and Trade
PMAMP Prime minister Agriculture Modernization project
VADP Value Chain Development Program
VC Value Chain
VCA Value Chain Analysis
WTO World Trade Organization

1
CHAPTER-1
INTRODUCTION
1.1 Background
Nepal is a landlocked agricultural country located between China and India. It has an
area of 147,181 square kilometers and a population of 28 million with a growth rate of
1.35% (CBS, 2016). Regarding the fact that agriculture in Nepal contributes to one-
third of the GDP and provides employment opportunities to almost two-thirds of the
population (MoF, 2017), it is an important economic activity in Nepal.
Nepal is a developing country with an agricultural economy. Farming is the main
economic activity, where two-thirds of the total population is engaged in agriculture.
The agriculture sector accounts for 27.6% of Nepal's gross domestic product (GDP)
(AITC, 2020). A high proportion of households in Nepal depend on agriculture to
generate livelihood. As an important sector of the economy, vegetable production plays
a significant role in determining the economic conditions for farmers. Vegetable crops
are efficient to generate cash even from a small plot of land in a short period and help
farmers improve their livelihood. The value of vegetable production equals or even
surpasses the value of cereal production. Vegetables have higher commercialization
rates and a high cost–benefit ratio than cereal crops. Vegetable cultivation presumably
supports livelihood primarily through food provision, income generation, and
employment because vegetables are preferred cash crops.
In Nepal, agriculture is the main contributing sector of the national economy. It is the
primary source of food, income, and employment for most of the population. The
involvement of the population in the agricultural sector is gradually declining due to
the increasing use of technology and professionalism in agriculture and the expansion
of the service sector. According to the Report on the Nepal Labor Force Survey of
2017/18 (CBS, 2019), 60.4 per cent of the population was engaged in the agriculture
sector. One in every five people who had jobs in Nepal, were employed in agriculture,

2
the biggest employing industry. Trade industry had the second largest share of
employment (17.5 percent), followed by construction (13.8 percent). The informal
sector had a bigger share of 62.2 percent. The contribution of the agricultural sector
(agriculture, forest, and fisheries) in total Gross Domestic Product was estimated to be
27.6 per cent in the fiscal year 2019/20, which was 37.1 per cent in the FY 2010/11.
The average annual growth rate of agriculture in the last decade was 3.2 per cent.
Production of the agriculture sector was increased by 5.1 per cent in the fiscal year
2018/19, whereas it is estimated to grow by 2.6 per cent in the fiscal year 2019/20. The
gross value added of the agriculture and non-agriculture sector in the fiscal year
2019/20 is estimated to be 2.6 per cent and 2.3 per cent, respectively. Such growth rates
were 5.1 per cent and 7.4 per cent in the last fiscal year. ( (MoF, 2020). The shares of
agriculture and non-agriculture sectors to GDP are estimated to remain at 27.60 per cent
and 72.4 per cent, respectively, in the fiscal year 2019/20 (MoF, 2020). The share of
the agriculture sector in GDP has been in a declining trend in the last 15 years. Such
share was 34.3 per cent on average during the period from FY 2002/03 to FY 2006/07
and declined to 34.1 per cent in the next consecutive five years (FY 2007/08-FY
2011/12). It was declined further to 31.4 per cent in the subsequent five years' period
from FY 2012/13 to FY 20016/17 (MoF, 2017).
Nepalese economy is in the stage of structural transformation due to decreasing share
of agriculture sector against gradual increment in the share of the non-agriculture sector
in GDP. Considering this fact, the Government of Nepal has implemented the twenty-
year long-term plan in the agricultural sector called Agriculture Development Strategy
(ADS) in 2015 for agriculture transformation (MoALD, 2015). Prime Minister
Agriculture Modernization Project (PMAMP) is also implementing by the Ministry of
Agriculture since last 2016 fully with an internal budget focusing on modernization and
mechanization in agriculture for commercial production. Under the Prime Minister
Agriculture Modernization Project (PMAMP), the small-scale production (Pockets)
program is implemented at the local level, and business production centers (Blocks) are
currently being implemented at the provincial level. Commercial Production and

3
Processing Center (Zone) and Large Commercial Agricultural Production and
Industrial Center (Super Zone) are being implemented at the federal level (PMAMP,
2020).
Despite the Nepal government has given high priority to the agricultural sector, and
huge money has been invested in this sector for many years, the country's rural poverty
and backwardness have worsened. Continuation of conventional subsistence type of
agriculture, big gap between haves and have-nots, poor rural infrastructures, inadequate
technological extension and marketing support and services, lack of production inputs
in terms of quantity, quality and timely, unorganized institutions of producers and other
related stakeholders with weak linkage among them, land scarcity relative to population
growth (per capita availability 0.7 ha in 2016) (CBS, 2016), all have played a vital role
to accentuate rural poverty continuously resulting in the problem of food security,
under-employment, poverty, and malnutrition. Now the government has emphasized
making "Prosperous Nepal, Happy Nepali" through bringing revolution and radical
change in the economic sector, including the agriculture sector. For this, the policy of
transforming subsistence agriculture into commercial agriculture has been put forth as
the fundamental basis for the country's economic development. Commercialization,
modernization, and mechanization of agriculture are understood to provide many
farming communities with a respectable occupation and dependable employment
opportunities. The radically modified agriculture is supposed to bring positive change
in people's living standards, and thus, the country will make economic development in
a leaping-frog way.
Vegetable crops provide ample opportunities for income generation. Kathmandu valley
(Kathmandu, Lalitpur, Bhaktapur) is one of the major vegetables producing areas of
Nepal, which supply the needs of the urban population of the valley. Though cultivable
land is decreasing day by day in this area due to urbanization, farmers have adopted
new technology to produce more from limited available land. Land under vegetables in
these districts reported in 2020 is 8471 hectares with an annual production of 165518
metric tons (MoALD, 2020). The average productivity of the vegetable in these districts

4
is 19.54 mt. per hectare. Due to the problem of small farm size, less focus on the market
demanded production, and low market linkage, farmers are unable to have access to
profitable markets for their produce. Most of the produce of vegetables is consumed
without undergoing much value addition.
1.2 Introduction and Scope of vegetable Cultivation
Vegetables are those annuals, biennials, and perennials of which different parts mature,
immature, succulent roots, stems, immature flower parts, leaves, seeds, or fruits are
eaten. These are those herbaceous plants of which some plant portion is eaten either
cooked or raw during the principal part of a meal. The importance of vegetables in the
human diet has been well known since time immemorial as they supply all main
components of the human diet. Vegetable contains carbohydrate, protein, minerals, and
vitamins and possesses medicinal properties. Thus, vegetables play a vital role in the
balanced diet of the human being. According to human dietitians, about 300 gm
vegetables per capita per day are required.
Nepal has tremendous potential for growing vegetables because of its high productivity
and profitability as compared to other cereals crops. Comparatively, vegetables are
short duration. Therefore, a greater number of crops can be taken from a unit area in a
year. Most of the parts of Nepal are hilly areas. Therefore, the sloppy land of the hill is
more suited to cultivate the vegetables in the rainy season, which favors getting more
comparative advantage. Vegetables are well suited for different cropping systems, viz.,
crop rotation, intercropping, multiple cropping, mixed and companion cropping.
Vegetable cultivation is labor-intensive; therefore, it provides more farm employment
to rural women and children. The enterprise also makes more effective use of land and
labor.
1.3 Government Initiatives
The development of the large production pockets as per the quality and quantity
demanded by the market and emphasizing the production of those agricultural

5
commodities which has a higher comparative advantage is the main Agricultural policy
of the Nepal Government. Promotion of the high-value vegetable production pockets
in the hills and linking them to markets is the main strategy of the government. Based
on this strategy, programs have been implemented in different districts of Nepal for a
long time.
Prime Minister Agriculture Modernization Project (PMAMP) is the largest existing
project under the Ministry of Agriculture and Livestock Development, which is the only
project of the Government of Nepal formulated by the internal vision, internal
investment, and internal institutional human resources. The project duration is 10 years,
starting from FY 2073 to 2082. The estimated cost of the project is NPR 130 billion.
The project has four components; a small commercial agriculture production center
(pocket) development program, commercial agriculture production center (block)
development program, commercial agriculture production, and processing center
(zone) development program, and large commercial agriculture production and
industrial center (super zone) development. Currently, the project has 6742 pockets,
1227 blocks, 179 zones, and 16 super zones throughout the country. The pocket and
block development programs are being implemented by the Ministry of Land Reform,
Agriculture and Co-operatives of respective provinces through its satellite offices,
Agriculture Knowledge Centre (AKC). However, the zones and super zone
development programs are being implemented by 58 Project implementation Unit
(PIU) across the country. One of the main goals of this project is to promote the
commercialization of agriculture through the development of infrastructure and
technology. The project was introduced to transform the country's agricultural sector
from subsistence farming to commercial farming. (PMAMP, 2020)
Financial institutions like different commercial banks, microfinance, and cooperatives
have been working as premier credit institutions for a long time, supplying agricultural
credit to the farmer in the country. The credit flow to the agriculture sector has also
increased now due to the government policy that every financial institution must be

6
disbursed at least 15% of the total investment to the agriculture sector and should
provide a 5% subsidy in the total interest rate.
1.4 Statement of the Problem
Nepal is a developing country with an agricultural economy. Farming is the main
economic activity, where two-third of the total population are engaged in agriculture.
The agriculture sector accounts 27.6% of gross domestic product (GDP) in Nepal. A
high proportion of households in Nepal depend on agriculture for the generation of
livelihood. As an important sector of the economy, vegetable production plays a
significant role in determining the economic conditions for farmers. Vegetable crops
are efficient to generate cash even from a small plot of land in a short period of time
and helps farmers to improve their livelihood. Vegetables have higher
commercialization rates and high cost–benefit ratio compared with cereal crops.
Vegetable cultivation presumably supports livelihood primarily through food
provision, income generation, and employment because vegetables are preferred cash
crops. (CASA, 2020)
Even in the highly urbanized Kathmandu Valley, large tracts of land outside the central
city areas are devoted to farming. The number of vegetable farmers is increasing day
by day as a result of the high demand for vegetables in urban areas. Because of the great
demand for perishable commodities such as vegetables, most farmers around urban and
peri-urban areas are moving towards the commercial production of vegetables. In the
urban fringes, vegetable farming has emerged as a productive enterprise for cash
generation and self-employment. The vegetables produced by farmers in urban and
peri-urban areas also include organic vegetables, which are consumed in Kathmandu.
The vegetable products from peri-urban areas has supplemented to fulfill the growing
demand of urban population in the valley. On the other hand, peri-urban agriculture in
the valley is facing a crucial challenge as a result of rapid and haphazard urbanization.
Cultivated land is the land use type that is most affected by the dramatic growth of

7
urban areas. However, there is a need to improve farming practices through the
development of agricultural infrastructure in peri-urban areas (Rai, 2019).
Cultivation of vegetables allows productive employment as the labor/land ratio is high.
Depending on the crop, production of horticulture crops requires at least twice the labor
and up to five times the labor days per hectare as compared to cereal. Increasing
horticultural productions thus contribute to the commercialization of the rural economy
and create many off-farm jobs. Abundant intake of fruit and vegetables is clearly a
positive solution for problems of poor diet quality in the developing world like Nepal.
Vegetables are relatively cheap sources of essential micronutrients that can prevent
several micronutrient deficiency diseases. Marketing and consumption have to be
addressed to improve the poor feeding behaviour and benefit advantages from
consumption of the crop problems associated with production. Value chain analysis is
a better approach for studies of such type. Analysis of the system in terms of vegetable
market structure, conduct and performance, taking into account product and location
specificity, identifying the bottlenecks and coming up with specific workable solutions.
Vegetable production in Kathmandu valley is subsistence (rooftop farming) to
commercial type. Majority of the vegetable producers have now started commercial
level of production with advanced technology. Population density has been increasing
in the Kathmandu valley. Agricultural markets are also expanding from public market
Kalimati to private market Balkhu, Baneshwor, and other places which are the
advantageous to produce off-season vegetables and supply to such markets.
1.5 Justification of the Study
Vegetable’s farming, especially tomato cultivation in plastic tunnel, is increasing in and
around the Kathmandu valley to fulfill the increasing demand. Even in the highly
urbanized Kathmandu Valley, large tracts of land outside the central city areas are
devoted to farming. The number of vegetable farmers is increasing day by day due to
the high demand for vegetables in urban areas. Because of the great demand for

8
vegetables, most farmers around urban and peri-urban areas are moving towards the
commercial production of vegetables. Among all vegetable crops, tomato is the most
demanding and most consuming vegetable. So, it is chosen for the study. Population of
Kathmandu valley is growing day by day and vegetables demand is also increasing
simultaneously. So, this study was narrowed down to concentrate on the production in
three districts of Kathmandu valley. For specific analysis special focus have been given
to tomato, which is ranked high by the value chain player based on production,
consumption, and market demand. Moreover, tomatoes accounted for the major
proportion of vegetable production and passed through several marketing stages.
Different market levels, the capacity of actors, market direction, price discovery and
buying and selling strategies, and traders’ behaviour in the whole marketing process
has been seen there.
1.6 Objectives
1.6.1 General objective
• To analyze the value chain of vegetables in Kathmandu valley
1.6.2 Specific objectives
1. To identify the major pocket areas with the volume of vegetable crops
2. To draw the value chain map of selected vegetables
3. To compare the cost and margin of tomato value chain actors,
4. To identify Strengths, Opportunities, Weakness and Threats (SWOT) of
value chain of tomato, and
5. To analyze the access and use of business development services
1.7 Scope of the Study
The primary significance of the study is to all actors in the marketing system. Analysis
of the whole system and clearly identifying the present situation constraints and

9
opportunities has been benefited policy makers, planners and implementers in
indicating the area of advantage for what could be done to improve vegetable
marketing. Apart from this, there are some studies on the vegetable marketing system
but limited to a smaller part of the district with few objectives. Hence, this study was
supposed to partially fill the gap. The other benefit that could be anticipated is its
significance as a source for further studies.
1.8 Limitations of the Study
Because of limited time and doing this especially for academic study purposes, this
study has been conducted within Kathmandu valley. So, farmers or traders from other
than the valley have been excluded from the study. Most of the farmers and/or traders
as well, they did not use to keep up data systematically, so they provided it extracting
from the records or memorizing by their own mind, which could not give an exact
result.

10
CHAPTER-2
LITERATURE REVIEW
2.1 Background
This part is intended to critically review the literature of the past research work in
relevance to the present study objective so that theoretical views and empirical evidence
of the reviews enables a better understanding of the subject.
2.1.1 Value chain
Value chain refers to the functional activities of a business that add value to its
customers. This concept was created around 1985 by Michael Porter which consists of
primary activities and support activities, all of which add value to the products or
services offered by the business. Ideally, the company’s products pass through the
activities of the value chain and along the way, each activity adds value to the products.
A value chain is a combination of the systems a company or organization uses to make
money. That is, a value chain is made up of various subsystems that are used to create
products or services. This includes the process from start to finish (Porter, 1985).
All organizations consist of activities that link together to develop the value of the
business, and together these activities form the organization’s value chain. Such
activities may include purchasing activities, manufacturing the products, distribution
and marketing of the company’s products and activities. A value chain is a set of
activities that a firm operating in a specific industry performs to deliver a valuable
product or service for the market. (Wikipedia, 2018).
A value chain (VC) is a chain of value-creating activities which are not isolated from
one another. Rather, one activity often affects the cost or performance of the others. It
is a sequence of productive processes from the provision of specific inputs for a
particular product to primary production, transformation, marketing and distribution,
and final consumption. (Zamora, 2016)

11
Value chain means the sequence of related business activities (functions) from the
provision of specific inputs for a particular product to primary production,
transformation, and marketing and up to final consumption (Ms Pramila Acharya Rijal,
2013).
Miller and Jones explained that the concept of agricultural value chain includes the full
range of activities and participants involved in moving agricultural products from input
suppliers to farmers’ fields and ultimately to consumers. Each stakeholder in the chain
has a link to the next in order to form a viable chain.
It has been argued that linking of farmers to the markets through efficient value chains
would reduce the use of intermediaries in the chain and strengthen the value-adding
activities by better technology and inputs, upgraded infrastructure, processing and
exports.
A value chain is not an object that you can see. Rather, a value chain is simply a useful
way of understanding how the world of producing, buying and selling things works.
(Cuddeford, 2013)
2.1.2 Agricultural marketing
Agricultural Marketing is defined as agriculturally oriented marketing. It embraces all
operations and institutions involved in moving farm products from farm to consumers
(Pritchard, 1969).
Marketing is the activity of identifying and satisfying the needs and wants of customers
in a profitable way. Agricultural Marketing is the study of all the activities, agencies,
and policies involved in the procurement of farm inputs by the farmers and the
movement of agricultural products from the farm to the consumers.

12
2.1.3 Marketing chain
A marketing chain is a path one good follow from their source of original production
to ultimate destination for final use. Functions conducted in a marketing chain have
three things in common; they use up scarce resources, they can be performed better
through specialization, and they can be shifted among channel members.
A chain is a type of marketing in which several marketers focus on one goal. For
example, they create a site and everyone puts a product in it, and by distributing the site
link, all products are displayed for one product. In the marketing stage, each marketer
can only introduce his product, but by giving the site link, all products are actually
introduced, and this is in the interest of the whole campaign. (Alexander, 2019)
2.1.4 Supply chain
A supply chain is the network of all the individuals, organizations, resources, activities
and technology involved in the creation and sale of a product. A supply chain
encompasses everything from the delivery of source materials from the supplier to the
manufacturer through to its eventual delivery to the end user. The supply chain segment
involved with getting the finished product from the manufacturer to the consumer is
known as the distribution channel. (Lutkevich, 2018)
2.1.5 Margin
It can be defined as the difference between prices paid for a commodity (e.g., bread) by
consumers at a retail level and prices received by farmers when they sell their
commodity (e.g. wheat) to assemblers or other first handlers. Measured in this form,
the margins reflect the number of services added to a commodity once it leaves the farm
and sits on a shelf in a retail outlet in a form that is acceptable, useful, and appealing to
consumers.

13
When companies buy a product to act as a distributor or retailer, they must sell the
product at a higher price than that at which they purchased it. In such situations, the
marketing margin of a product is the difference between what a company pays for the
product and what it charges for the product. (Kimmons, Ronald, 2018)
2.1.6 Marketed surplus
The marketed surplus is the quantity of products that the producer farmer actually sells
in the market, irrespective of the needs for family use, farm needs, and other payments,
is referred to as marketed surplus. The marketed surplus can be greater than, equal to,
or less than the marketable surplus. (Epoch, 2021)
Marketable surplus refers to the difference between the total output produced by a
farmer and his on farm consumption. In other words, it is that portion of the total output
that the farmer sells in the market.
2.1.7 Marketing Efficiency
Market efficiency is a relatively broad term and can refer to any metric that measures
information dispersion in a market. An efficient market is one where all information is
transmitted perfectly (everyone receives the information), completely (everyone
receives the entire information), instantly (everyone receives the information at once),
and for no cost (everyone receives the information for free). (CFI, n.d.)
Marketing efficiency is the ratio of market output (satisfaction to the consumer) to
market input (cost resources used in marketing). A higher value of this ratio indicates
improved marketing efficiency. If the marketing function changes occur with the
reduction in the marketing cost without reducing consumer’s satisfaction indicates
improvement in the marketing efficiency (Acharya et al., 2010).

14
2.2 Vegetable Production and marketing situation analysis
Nepal’s demand for vegetables is increasing due to population growth, economic
progress, and increased spending power from income growth and migrant remittances.
Also, the emerging middle class is demanding fresher, healthier and processed foods.
Per-capita vegetable consumption has increased to 114 kg per year from 60 kg over the
last two decades. Vegetable farming is appealing because it ensures cash revenue within
a short period of time, even from small plots of land. There are an estimated 3,243,521
households involved in vegetable cultivation, of which 17% are women-headed
households. According to the National Sample Census of Agriculture 2011/12, most
farmers (97%) cultivate vegetables on their own land, while the remainder cultivate on
rented land. Furthermore, around 78% of households cultivate on less than one hectare
of land, with higher proportions (53%) cultivating on land ranging in size from 0.2 to
0.5 hectare. Some 27.4% cultivate on 0.5 to 1 hectare.
In terms of cultivated area and volume of production, the top five vegetable crops are,
cauliflower, cabbage, onions, radishes and tomatoes. Some of the major commercial
vegetable growing areas of Nepal lie close to the Kathmandu Valley, as it has the
highest consumer population. In order of production volume, they are Kavre, Dhading,
Bhaktapur, Lalitpur, Makwanpur, Kathmandu, Nuwakot, Sindupalchok, Gorkha,
Dolakha and Rasuwa. (CASA, 2020)
Yeray Saavedra, Sichan Shrestha, and Thomas Tichar reported that in Nepal, per capita
intake of fruits was estimated to be 68 gm/day in 2017, and that of vegetables, 214
gm/day in the same year, for a combined intake of 282 gm/day. This represents a gap
of 30% with respect to the minimum recommended intake of 400 gm of fruit (100 gm)
and vegetables (300 gm) per day (Yeray Saavedra, Sichan Shrestha, Thomas Tichar,
October, 2021).
Singh et al. (2005) suggested an appropriate policy framework for increasing the
production of off-season vegetables. They added, “It is imperative to take steps in

15
augmenting irrigation potential through the implementation of different water
harvesting and water conservation projects. It is also imperative to ascertain and
maintain the quality of various inputs used in off-season vegetable cultivation,
particularly that of seed. Standardization of the grades and packing materials and timely
availability of transport to distant markets are suggested. There is a need for strict
implementation of market regulations which is expected for the improvement of
producers' share by curbing the tendency of various market intermediaries in resorting
to different malpractices.
Kaur and Gupta (2008) focused on the emerging scenario of fruits and vegetables,
seasonal variability, pre- and post-harvest losses, and market infrastructure to improve
the marketing and production process of fruit and vegetable. They concluded that in the
market infrastructure, low-capacity utilization is due to the fact that majority of the
fruits and vegetable units are in home and cottage sectors which are plagued by the
technological backwardness and lack of adequate funds for modernization
Mangan et al. (2008) explained that to successfully introduce the crops like jilo, maxixe,
taioba, abobora and okra into the marketplace, it is critical to devote resources to
promotion and marketing. In spite of their popularity among Brazilians, these vegetable
crops are not normally found in the market, so it is necessary to let the community know
that they are available and in what locations. The opportunity to export agricultural
products to the USA is a growing opportunity for farmers in Brazil. To gain access to
this market (big market), it is important to understand the distribution system used for
fresh produce in those markets.
2.3 Mapping the value chain of vegetables showing the trade link among the
various actors
Adeyokumnu (1973) suggested that high marketing margins are sometimes regarded as
evidence of inefficiency, and the middlemen are often blamed for earning excessive
profits. This is not always so. However, an increase in absolute margin is not clearly an

16
indicator of efficiency or inefficiency of the marketing system. It may mean that returns
to factor inputs have increased rather than that the inputs are being wastefully utilized.
Then again, the increase in margins may be due to an improvement in the services
performed or the utilities created for the consumers.
Toaha (1974), in a study on marketing efficiency of vegetables in Pakistan, concluded
that there is a low producer’s share in the consumer’s rupee, high price fluctuation and
extensive malpractice due to lack of effective market legislation and non-regulated
markets that largely favoured the traders. The gross margins were estimated only by
taking the differences between prices paid by consumers and prices paid to producers
by the primary traders. Such analysis does not reveal the net margins obtained by the
different market intermediaries.
In the estimation and utilization of marketing margins possible problems that can arise
are because of non-homogeneity of commodity with resulting variation in quality for a
particular commodity and non-standardization of quantity measure, the lag in time
between the different processes involved in marketing between wholesale and retail,
during which effective price changes could have taken place; the price used for
estimating the margins may also contain elements of trend, cycle, and seasonal and
irregular variations, so that correct estimates of value (form, time, place and possession
utilities) added to commodities during marketing may be difficult to estimate
(Adekanye, 1982).
Deconstructing market margins is a more time-consuming exercise when compared to
the analysis of marketing margins (Holtzman, 1986). The data on marketing costs are
needed to disaggregate the gross marketing margin of an enterprise at different
marketing stages. This provides us information on the costs of particular marketing
functions, which can be compared with costs incurred by other enterprises to assess the
operational efficiency (Scarborough and Kydd, 1992).

17
Devaraid (1998) concluded that the potato producers got the net price of 48.57, 51.15
and 52.32 per cent of the consumers’ rupees in channels I, II and III, respectively. In
channel III, representing a distant market (Banglore), the producer’s share in
consumers' rupees was the highest. Hence selling of produce at the distant market was
found to be more profitable to the farmers. The producers’ net price could be further
increased by taking suitable measures by the government, viz. a) providing cold
storage; b) present system of commission charges being collected from producers
should be stopped, and c) providing support price facilities.
Bokelmann and Lentz (2000) study relevant theoretical approaches and the results of
an explorative investigation to find out conditions for cooperative coordination of the
supply chain for vegetables. Two fundamental directions that fresh vegetable suppliers
can go in order to stay competitive are: offering products that fulfil special requirements
of consumers or consumer segments; and gaining an advantage by means of better
supply performance compared to competitors.
Zaibet et al. (2005) aimed to develop a methodology to categorize and measure
transactions costs by analyzing traders’ perceptions and attitudes toward regulatory
measures and other market activities. Results showed that the changing nature of the
import calendar as well as the import license procedure represents significant elements
of uncertainty that raise the importers' search and monitoring costs. It is suggested that
the conversion of these non-tariff barriers into tariffs along World Trade Organization
rules would reduce market uncertainty and increase market efficiency.
Zulfiqar et al. (2005) revealed from the data analysis that the producer gets only up to
37, 45 and 40 per cent, on average, of the consumers’ rupee for tomato, potato and
onion, respectively. In the case of tomatoes, the margin acquired by the wholesaler and
retailer was 23 and 18 per cent, respectively. In the case of potatoes, the margin shared
by the intermediaries was 19 and 18 per cent, respectively. In the case of onions, the
margin shared by the same intermediaries was 21 and 20 per cent, respectively. The
average physical losses of the vegetable crops were reported as 22, 12 and 9 per cent

18
for tomato, potato and onion, respectively. It is difficult to assess whether the large
marketing mark-ups reported for the different vegetable crops are necessarily
exploitative. The intermediaries are providing additional services at each stage and
carrying significant risks, particularly in the case of tomatoes. They recommended for
improving the functioning of vegetable markets in terms of improved marketing
margins for growers and reduced physical losses. These include proper physical
marketing facilities, adequate storage facilities, strictly enforced grading and
standardization, availability of processing facilities, marketing credit and free flow of
market information. Khan et al. (2005) found that the difference in marketing margins
for various vegetables is due to high marketing and picking costs. They also observed
that the vegetable having highest marketing margins have lowest net margin of
wholesalers and retailers.
2.4 Value addition and competitive advantage of vegetables
Junqueira et al. (2000) reported that poor profits and even complete production loss can
be caused by insufficient market understanding. Authors also suggested some ways to
add convenience and service are discussed with the aim of creating opportunities to
increase profitability to the Brazilian horticultural industry, which is responding to
changing consumer preferences with an increasing level of dietary health awareness.
Non-traditional vegetables, frozen vegetables, fresh-cut vegetables, canned vegetables
and organic vegetables are considered.
Riedel (2009) reported that European producers of fresh vegetables are under pressure
to improve their performance and increase their competitiveness. Competitive
advantage can be gained through innovation and by using unique resources stemming
from the cooperation between producers and complementary actors in local clusters.
However, locally clustered producers do not sell to open markets but need access to
value chains governed by lead firms, the large European retail chains, which set the
rules and conditions of participation.

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2.5 Agriculture value chain development in Nepal
Agriculture value chain development approach is a recent concept in Nepalese
agriculture. Our first comprehensive agriculture development plan Agriculture
Perspective Plan (APP, 1995-2015) has focused on commercialization of agriculture
but did not focus on system perspective. However, different I/NGOs have piloted a
number of value chain development projects since last decade. Replicating the lessons
learned from those initiatives, there are many agriculture development related projects
being implemented in the country. Project for Agriculture Commercialization and
Trade (PACT), RISMFP and HVAP are some of them. These projects aim to increase
the competitiveness of smallholder farmers and the agribusiness sector in selected
commodity value chains in the country. High-Value Agriculture Project (HVAP), High
Mountain Agribusiness and Livelihood Improvement (HIMALI) Project, Nepal
Agriculture and Food Security Project (NAFSP) and several regional level agricultural
development projects were helping farmers in livelihoods development activities
(ABPMDD, 2016). Government of Nepal has recently endorsed the Agriculture
Development Strategy (ADS) which has also taken Value Chain Development Program
(VCDP) as major aims strategy at developing prioritized value chains (initially only 5
such value chains have been proposed - vegetables, lentils, maize, dairy, and tea)
through comprehensive and integrated measures along the value chain that result in
strengthened value chain linkages, increased public-private partnership (PPP)
investment and value added with sector impact, and benefits to the poor. Differently
from other on-going or past value chain interventions in Nepal. The VADEP will have
the following innovative features: (i) will be looking at and developing all the stages of
the value chain, from seeds to final products, from production to processing, from
market infrastructure to access roads and connectivity, from postharvest technology to
quality assurance and exports; (ii) will be based on associations of farmers, traders,
processors, input providers and other value chain stakeholders in order to strengthen
the linkages and ensure effective investment; (iii) will aim at replication and linkages
beyond the district and achieve national impact; and (iv) will work not only with one

20
district or department but across districts, departments, and value chain actors
(MoALD, 2015).
2.6 Situation of Organic Vegetable Farming in Kathmandu Valley
Organic farming is an integrated farming system which involved technical aspects (soil,
agronomy, and weed and pest management) and economic aspects (input, output and
marketing) as well as human health (Bhatta, 2009). There exists good opportunity for
organic farming in the urban and peri-urban areas of the valley as most of the affluent
consumers have been agglomerated around cities and cities are the popular destinations
for the tourists. Some specialized markets have started selling organic products in the
valley and some are willing to start selling organic products.
Increasing use of agro-chemicals, higher production cost and deteriorating ecosystem
health have advocated the need to change traditional and external input use agriculture
towards safe and sustainable organic production. Despite many farmers have been
involved in organic production, their way of managing organic farm may not justify
organic standards. Organic vegetables are either home delivered and/or sold to the
specialized niche markets. All domestic organic products reach to consumers without
labeling. Most of the organic consumers are willing to pay more for labeled organic
vegetables. Currently organic farmers rely only on consumers' willingness to pay more
to obtain a compensation for lower yields. Some of the organic vegetable markets in
Kathmandu Valley are The Organic Village, Bhatbhateni Supermarket, Sale-ways
Supermarket and Summit Hotel. Organic vegetable production in the valley has been
started by the farmers themselves without government intervention. Commercial
farmers themselves have now starting Farmers Market as well in different places of the
Kathmandu valley. But the average Nepalese consumer is price-oriented and thus not
prepared to pay a higher price for the organic product. The organic sector is in
embryonic stage while extension services are relatively hibernated resulting in lower-
than-expected yields, especially during the initial years of production. Many producers

21
start producing organically on a ‘trial and error’ basis and adjust their farming methods
every season until they reach an acceptable and stable level of output.
2.7 Policy and Institutions related to Commercial Vegetables
2.7.1 Agri Business Promotion Policy 2063
The Agri Business Promotion Policy highlights the diversification, commercialization
and promotion of agriculture sector with private sector involvement in commercial
farming. It emphasizes that the living standard of the farmer would not improve unless
the agriculture sector is transformed from subsistence level to commercial farming. The
policy aims to reduce poverty by encouraging production of market-oriented and
competitive agro-products. It realizes the need of promoting internal and external
markets. This policy was prepared in the spirit of National Agriculture Policy 2061
emphasizing business service centers establishment for quality agriculture inputs and
services. Partnership between the private sector and Government has been emphasized
for the export of quality goods. In the context of Nepal’s entry into the WTO,
developing market network is its priority. The policy considers infrastructure
development as a cornerstone for commercialization and has envisaged promotion of
partnership approach between Government and the private sector. The policy ensures
special programmes for the poor, women and Dalits for establishing agricultural
entrepreneurs. (MoAC, 2063)
2.7.2 National Agriculture Policy 2061
The National Agriculture Policy, 2061 follows an objective of creating enabling
environment for agriculture-led rural development. It emphasizes competitiveness of
agriculture sector encouraging farmers to go for commercial production. The policy
divides farmers into two groups, small and big ones and aims to provide more resources
to the small farmers. Those owning less than four hectares of land are labeled as
resource poor farmers. They enjoy government assistance provision to boost their

22
productivity. The policy aims at increasing productivity and promoting natural
resources to utilize them in the interest of farmers. (MoALD, 2061)
The long-term vision of the agriculture sector is to bring improvement in the living
standards through sustainable agricultural development by transforming subsistence
agricultural system into a commercial and competitive agricultural system. The policy
aims at achieving high and sustainable economic growth through commercial
agriculture system contributing to food security and poverty reduction. It emphasizes,
increased agricultural production and productivity, making agriculture competitive in
regional and world markets with commercial agriculture system, and conserving,
promoting and utilizing natural resources, environment and bio-diversity.
2.7.3 Agriculture Development Strategy (ADS) 2014
The Agriculture Development Strategy (ADS) is a national sectoral strategy of Nepal
for the period 2015-2035. The overall objective of the ADS includes five dimensions
of increased food and nutrition security, poverty reduction, competitiveness, higher and
more equitable income of rural households, and strengthened farmers’ rights.
In the area of food security, the document provides that all outcomes, outputs, and
activities of the ADS will contribute to improve food and nutrition security either
directly or indirectly. It targets increasing the volume of food production in Nepal in a
sustainable way through higher productivity and sustainable use of natural resources;
reducing vulnerability of farmers through improved food/feed/seed reserves, improved
preparedness and response to emergencies, and climate smart agricultural practices;
increasing income of farmers; improving access to markets; reducing post-harvest
losses; improving food safety; relying upon trade for a more diversified diet;
accelerating the growth of micro, small, and medium agro-enterprises including those
headed by women, youth, disadvantaged groups, and individuals based in
disadvantaged regions.

23
Further, according to the Strategy, in order to achieve the vision, the ADS will
accelerate agricultural sector growth through four strategic components including
governance, productivity, profitable commercialization, and competitiveness while
promoting inclusiveness (both social and geographic), sustainability (both natural
resources and economic), development of private sector and cooperative sector, and
connectivity to market infrastructure (e.g. agricultural roads, collection centers, packing
houses, market centers).
The ADS will be monitored regularly, professionally, and in a participative manner.
Monitoring division and units will be strengthened at the Ministry of Agricultural
Development and department levels and will be provided support and capacity building
by the ADS Implementation Support Unit. Regular policy monitoring will be carried
out by Policy and International Cooperation coordination Division. Monitoring of the
ADS will go beyond inputs and output monitoring and include outcomes and impact
monitoring according to the targets and design monitoring framework of the ADS
programs. (MoALD, 2015)
2.7.4 Nepal Agricultural Research Council (NARC)
Nepal Agricultural Research Council (NARC) was established in 1991 to conduct the
different aspects of agriculture researches for uplift the economic level of Nepalese
people. It is an autonomous organization under Nepal Agricultural Research Council
Act-1991. Besides the commodity-based research it has mandate to identify the existing
problems in agriculture & find out the solution, and to assist government in formulation
of agricultural policies and strategies. NARC has performing different functions and
responsibilities to obtain its objectives. Research on different agricultural commodities
to identify the best varieties and technology is the main function. This is the main
institution mandated for technology generation, varietal improvement, source seed
production and carry socio economic research for policy support.

24
2.7.5 Agriculture Knowledge Centre (AKC)
Before federalism, the District Agriculture Development Offices (DADOs) in 75
districts, one in each, were the functional body for agriculture extension. The seven
provinces were then structured on 20th September 2015. It was not until the Falgun of
2074 BS when the provincial Ministry of Land Management, Agriculture and Co-
operatives has formed. The existing DADOs was then replaced with the Agriculture
Knowledge Centres (AKC). AKCs works under the Directorate of Agriculture
Development in each province. Unlike DADOs a single ACK is shared by up to three
districts. Kathmandu valley also has only one AKC for three districts. One AKC in
Kathmandu valley with limited extension staff has delivering agriculture technology to
the farmers and, most of the program has focused for producers rather than traders.
2.7.6 Agriculture Section at Municipality level
Three tiers of agricultural extension services at local, provincial, and federal levels
started after federalization of the country. New constitution of Nepal has provided
authority or rights to the local level to implement the different activities for local
development. So, Municipality itself is a local level government. Each municipality
has agriculture section which provide extension services to the local farmers.
Agriculture extension is the process of providing the information about new or
improved technologies to farmers to enable them to improve their farming.
Municipalities have proving new technology to the farmers with subsidized improved
seeds and saplings. Commercial vegetables farmers have getting price subsidies in
agricultural machinery as well. Although the new system has given important
responsibilities to the agriculture section at the municipality level, it has not been
completed properly due to lack of technical manpower.

25
CHAPTER-3
RESEARCH DESIGN AND METHODOLOGY
3.1 Selection of study area
The research was concentrated in the three districts of Kathmandu valley, i.e.,
Kathmandu, Lalitpur and Bhaktapur. These areas have more importance which can
easily supply vegetables as per valley demand. Prime Minister Agriculture
Modernization Project (PMAMP) has also given high priority to produce vegetables
from Bhaktapur and established vegetable zone in Bhaktapur district. The researcher
had identified the commercial vegetable growing areas within these districts with the
help of Agriculture Knowledge Centre (AKC), Lalitpur.
Figure 1: Map of the study area
3.2 Selection Vegetable growers
A list of commercial vegetable growers was obtained from Agriculture Knowledge
Centre (AKC). A total of 62 vegetable growers, 26 from Kathmandu and 18 from
Lalitpur, and the rest from the Bhaktapur district were selected randomly.

26
3.3 Selection of wholesaler & retailer
Since there is no wholesale vegetable market in Lalitpur and Bhaktapur districts,
wholesalers were selected from the Kathmandu district alone. A list of vegetable
wholesalers was obtained from Kalimati Fruits and Vegetables Market and Balkhu
Vegetables and Fruits Wholesale Market. Five wholesalers from each market were
randomly selected.
Similarly, 17 retailers, 5 each from Dhumbarai and Bhaktapur vegetable market and 7
from Lagankhel retailer vegetable market, were also selected for this study with the
help of traders list obtained from Agriculture Knowledge Centre (AKC) Lalitpur.
Information regarding the retail agriculture market was also obtained from AKC
Lalitpur.
3.4 Selection of Input traders
A list of input traders was obtained from Agriculture Knowledge Centre (AKC)
Lalitpur. 18 input traders, 6 from each district of Kathmandu, Lalitpur and Bhaktapur,
were selected randomly for the value chain study.
3.5 Sources of Information
Primary and secondary sources of information were used to collect the data. Primary
information was collected directly from respondents. The data collected through
primary sources was land holding, farm size, farm gate price, cost of production,
packaging, transportation, marketing system, marketing constraints etc.
The secondary data source was also used for the study purpose. Secondary data was
obtained through Kalimati Market, Balkhu Market, other wholesale & retail markets of
the valley, MoALD, VDC, Internet, and other reports & publications on vegetable
production and marketing.

27
3.6 Methods of data collection
• Primary data were collected through personal interviews using a semi-
structured and pre-tested interview schedule.
• Both open-ended and close-ended questions were included in the interview
schedule.
• Secondary data were collected by reviewing different publications from
different institutions.
• Focus Group Discussions (FGDs) and Key Informants Interview (KII) were
carried out to collect the relevant information.
• Key Informants Interview was carried out with the selected leader farmers,
traders, vendors, intermediaries and related persons of the study. A well-
developed checklist was used during the interview.
• Focused group discussion (FGD) was conducted to supplement and
triangulate information gathered from the household interviews and other
sources. One FGD was also organized. It was conducted with the selected
farmers and traders of the study area of the respective municipality.
• Information regarding the policies and problems were collected through
government officials of the Kalimati market, MoALD, VDD, etc.
3.7 Sampling design, sampling methods and sample size
A list of vegetable producers was compiled from the Annual Statistical Book of
Agriculture Knowledge Centre (AKC) Lalitpur. Total of 62 vegetable farmers, 27
vegetable traders (10 wholeslers and 17 retailers), and 18 input suppliers were selected
purposively from the list. A simple random selection technique was adopted to select
the respondents. Among the output traders, 5 each from Kalimati, Balkhu, Dhumbarai
and Bhaktapur and 7 from Lagankhel market were selected and interviewed to collect
primary information. Key informants’ interviews with other stakeholders such as AKC,
financial institutions, input suppliers were also conducted. KII respondents were
selected using purposive random sampling methodology.

28
Table 1: Sample size distribution by district in the study area
District Producers
Output
Traders
Wholesalers Retailers
Input
Suppliers
Kathmandu 26 15 10 5 6
Lalitpur 18 7 0 7 6
Bhaktapur 18 5 0 5 6
Total 62 27 10 17 18
3.8 Techniques of data analysis
3.8.1 Value Chain Mapping
Value chain analysis systematically maps the different actors participating in the
production, distribution, marketing and sales of the particular product (or products). It
can play a key role in identifying the distribution of benefits among the actors in the
chain, examining the role of upgrading within the chain and highlighting the role of
governance in the value chain (FAO, 2008). The value chain study was conducted using
the value chain concept. The value chain approach is mainly a descriptive tool to look
at the interactions between different actors and the most accurate way of understanding
the distribution of earning or the value added to a subsequent actor of the chain. A value
chain map allows one to depict all activities, actors, and relationships among segments
of the chain and the interactions between producers and intermediaries (FIAS, 2007).
The value chain map can be visualized either sideways or up or downwards (ADB,
2008). For consistency, value chain maps are presented horizontally throughout this
study. Vegetable value chain mapping was done by constructing a tree of input and
output relationship which includes the following general accounting activities:
• Technical structure, actors, and interrelationships of different actors in the value
chain process
• Actors in the whole value chain of vegetable production & marketing.

29
• Gross output values of each participant, and
• Selling methods, activities, and destination of sales.
3.8.2 Cost of production
The cost of production was estimated considering only the variable cost items. Variable
costs were farm expenditure on seed, seedling, labor, organic manures and fertilizers,
pesticides, insecticides, etc. The total variable cost of production was calculated by
adding all the expenditures on variable inputs.
3.8.3 Techniques & Formula used to analyze the data
Following techniques and formula was used to analyze the collected data.
Farmer’s share in consumer’s price =
Farm Gate Price
Retail Price
Wholesaler’s share in consumer’s price =
Wholesaler's Market Margin
Retail Price
Retailer’s share in consumer’s price =
Retailer's Market Margin
Retail Price
Gross Margin (GM) = GR-VC
Where, GM= Gross margin,
GR= Gross revenue,
VC= Variable costs
Marketing Margin (MM) = Pr - Pf
Where Pr = Retailer’s price,
Pf = Farm gate price Producer’s share
Producer’s Share (PS) = (Pf/Pr)* 100
Where, Pf = Farm gate price (Producer price)
Pr = Retailer’s price
Value Share (VS) = (AV/FRP)*100
Where, VS = Value Share, AV = Added value,

30
FRP = Final Retail Price
The information collected from the field survey were coded first and entered into the
computer. Data entry and analysis was done by using computer software, Microsoft
Excel and SPSS. Both descriptive and analytical methods were used. Furthermore, the
data were analyzed by using correlation analysis, simple linear regression, and other
econometric models. Simple graphs, Pie-chart, line graphs, bar diagrams, flow charts,
maps and photos were also used to present and analyze the collected data.
3.9. Description of the Study Area
Kathmandu is the capital city of Nepal and is located in the central part of the country.
Kathmandu valley is of strategic importance as it is centrally located between China
and India, and its urban settlements of Kathmandu, Lalitpur, and Bhaktapur became
early trade centres. These settlements continued as economically and politically
important towns for hundreds of years. Because of its livelihood options, Kathmandu
valley is one of the most popular destinations for migrants from different parts of Nepal.
Kathmandu valley covers an area of 569.80 sq km and includes three districts:
Kathmandu, Bhaktapur, and Lalitpur. Bagmati is the major river ﬂowing through
Kathmandu valley. Kalimati Fruits and Vegetables Market was the ﬁrst organized
wholesale market in Nepal; retailers, institutional consumers, and other bulk consumers
procure their supplies at this market. In recent years, Balkhu vegetable market has
become another asset for vegetable farmers for marketing. As the urban population
increases, other private vegetable markets are also establishing around the ring road to
fetch quality and fresh green vegetables. Vegetable production is an age-old traditional
farming practice near the water resources in Kathmandu valley, and it has the highest
vegetable productivity per unit area in Nepal. The study focuses on commercial tomato
farmers and output and input traders of three districts of Kathmandu valley.

31
3.9.1 Kathmandu District
Kathmandu District covers an area of 413.69 sq km, and is the most densely populated
district of Nepal with 1,081,845 inhabitants in 2001 and 1,744,240 in 2011 (61.23%
increase). Out of which 913,001 are male and 831,239 females in 436,355 households.
The districts headquarter is Kathmandu Metropolitan City, also the capital of Nepal.
This is one of the highly populated district and population growth is increasing with
urbanization. Nowadays, urbanization has encroached on agricultural land with
concrete buildings and productive land is on the decline. Only 212 sq km cultivable
area is available for agriculture out of total area. Farmers in the district have now started
commercial agriculture to get more produce from the declining land. Hitech
technologies, hybrid seeds, modern machineries, and market facilities are easily
available for commercial farmers. Output traders and input suppliers are giving services
to the farmers at their doorstep. The biggest agriculture market of the country, Kalimati
Fruits and Vegetable Wholesale Market and Balkhu Vegetable Wholesale Market are
located in this district.
Organic agriculture farming is also increasing day by day in Kathmandu. The interest
in organic agriculture in cities like Kathmandu is growing as there is the positive impact
of organic agriculture in the mind of people. Adoption of organic agriculture leads to
an increased engagement in farming which can trigger greater opportunities for rural
employment and economic upliftment.
3.9.2 Lalitpur District
Lalitpur is one of the three districts of the Kathmandu Valley. It is surrounded by Kavre
in the east, Kathmandu in the west, Bhaktapur & Kathmandu in the North, and
Makwanpur in the south. Lalitpur District covers an area of 396.84 sq km out of which
only 153 sq km is suitable for agriculture. This area of land is also declining every year
with urbanization. As of population census 2011 the population of Lalitpur district is
466,784. The population is heavily concentrated on the valley floors, resulting in very
intensive land use. Vegetable farming is very intensified and characterized by
commercial farming. Population density is increases day by day with urbanization and

32
demand of fresh vegetables is also increases simultaneously. Nowadays, commercial
farmers are entering the agriculture sector with modern technologies to supply quality
agricultural products as per market demand. Annual report of AKC, Lalitpur reported
that, 39 agrovets and 72 cooperatives are serving to the farmers in Lalitpur district as
input suppliers. Paddy, maize, wheat, millet are the main cereal crops of this district.
Many farmers are now adopting offseason vegetable farming for better income.
Lagankhel agriculture retail market is one of the public agriculture markets in Lalitpur
district, which provides marketing services to the consumers. Private sector agriculture
markets are also establishing these days in different parts of the urban area of Lalitpur
district to fulfill the consumer demand.
3.9.3 Bhaktapur District
Bhaktapur district occupies an area of 119 square kilometres with its population of
3,04,651, out of which 1,54,884(50.83 %) are males and 1,54,767(49.17%) are females.
The average number of family members is 4.44, and the population density is 2,650 per
square kilometers.
Bhaktapur is a good marketplace for vegetables. The place is more popular for the
production of vegetables like pumpkin, cucumber, beans, peas, and cauliflower. It also
grows the grains and fruits like paddy, wheat, corn, pulse, millet, citrus, guava, pears,
junar, and haluwabed. Out of 11,900 hectares of land in Bhaktapur, 11,106 hectares of
land is suitable for agriculture, but only 8,077 hectares has been cultivated. 2,620
hectares of land is irrigated round the year, whereas the land that has a partial irrigation
facility is about 3,271 hectares. The land without an irrigation facility is about 2,186
hectares. Madhyapur Thimi, Bageshwori, Jhaukhel, Duwakot, Sipadol and Dadhikot
are considered pocket areas for commercial vegetable production. Nagarkot, Sudal and
Nangkhel have developed their image for organic agriculture.
3.9.4 Fresh vegetable production scenario
According to the World Health Organization (WHO), a mature person should consume
daily 400 grams of vegetables (excluding potatoes) to live a healthy life. Similarly, the

33
Government of Nepal suggests a daily intake of 375 grams of vegetables (excluding
potatoes). However, insufficient access to the market and seasonal fluctuation of
available vegetable makes it difficult to intake a sufficient number of vegetables for the
consumers. Nowadays, new commercial farmers are entering fresh vegetable
production with innovative ideas. So, productivity and production are also increasing
simultaneously. There is a limited number of small-scale farmers who practice
commercial vegetable production in Nepal. It is not enough to address the demand of
the consumer. Main fresh vegetables can be grown in Nepal all-round the year using
diversified agro-climatical regions of the country. Figure 2 given below show the area
and production of vegetables in Nepal since last 10 years.
Figure 2: Area (ha) and production (mt) of vegetables in Nepal since last 10 years
Source: Statistical Information on Nepalese Agriculture, (2019/20), Ministry of
Agriculture and Livestock Development, Statistics and Analysis Section, Kathmandu,
Nepal, 2021
0 1000000 2000000 3000000 4000000 5000000
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
244102
245037
246392
254932
266937
280807
277393
286864
297195
281132
3203563
3298816
3301684
3421035
3580085
3929034
3749802
3958230
4271270
3962383
Production (Mt) Area (Hector)

34
3.9.5 Vegetable production status of Kathmandu Valley
Since the population has been increasing with urbanization in Kathmandu valley, the
demand of fresh vegetable is also increasing simultaneously. Majority of the vegetable
producers of Kathmandu valley have now started commercial level of production with
advanced technology to fulfill the increasing demand. However, rooftop farming
(Kaushi Kheti) is also supplying fresh vegetable to the housewives of the valley. Figure
3 given below shows the production trend and Table 3 given below shows the area,
production and yield of vegetables in Kathmandu valley.
Table 2: Area, Production and Yield of fresh vegetables in Kathmandu valley by year
Area in Hectare, Production in Metric Tons, Yield in Metric Tons/Hectare
District
Fiscal
Year
2071/72 2072/73 2073/74 2074/75 2075/76 2076/77
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Bhaktapur
Area 3229 4264.2 3134 3257.81 3221.00 3253.00
Production 50666 63558.3 56666 58554.75 58422.00 58552.00
Yield 15.69 14.91 18.08 17.97 18.14 18.00
Lalitpur
Area 2427 2415 3111 3126.053 3132 3123
Production 47920 51619 49020 49510.2 49794 49510
Yield 19.74 21.37 15.76 15.84 15.90 15.85
Kathmandu
Area 2115 1920 2120 2140.65 2093 2095
Production 54563 40760 54596 55242.96 51772 57456
Yield 25.80 21.23 25.75 25.81 24.74 27.43
Total
Area 7771 8599.2 8365 8524.511 8446 8471
Production 153149 155937.3 160282 163307.9 159988 165518
Yield 19.71 18.13 19.16 19.16 18.94 19.54
Source: Statistical Information on Nepalese Agriculture, (2014/15 to 2019/20)

35
3.9.6 Status of tomato production in Kathmandu Valley
The cultivated tomato (Lycopersicon esculentum, Mill) is the most important and
widely grown vegetable in the world. It is widely accepted and commonly used in a
variety of dishes as raw, cooked or processed products. It is reported that it is originated
in Peru, Ecuador and the Andes range of Bolivia. In Kathmandu valley, it is cultivated
in two growing seasons-spring and rainy. Rainy season tomato is a quite remunerative
enterprise to the hill farmers because the supply from the Terai districts is constrained
by high temperature, low fruit set and flowering, and bacterial wilt etc. The publications
"Statistical Information on Nepalese Agriculture", periodically published by the
Ministry of Agriculture and Livestock Development, has mentioned the following
statistics regarding tomato production in Kathmandu Valley.
Table 3: Area, Production and Yield of tomato in Kathmandu valley by year
District
Fiscal
Year
2071/72 2072/73 2073/74 2074/75 2075/76 2076/77
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Bhaktapur
Area 155 169.9 170 176 165 176
Production 6000 5372 4372 4569 4195 4569
Yield 38.71 31.62 25.72 25.95 25.42 25.96
Lalitpur
Area 148 148.5 180 181 184 181
Production 4440 4455 4620 4666 4191 4666
Yield 30.00 30.00 25.67 25.79 22.78 25.78
Kathmandu
Area 210 210 210 211 212 211
Production 20250 8250 20250 20453 10259 20453
Yield 96.43 39.29 96.43 96.91 48.39 96.93
Total
Area 513 528.4 560 568 561 568
Production 30690 18077 29242 29688 18645 29688
Yield 59.82 34.21 52.22 52.27 33.24 52.27

36
If we compare tomato crops with total vegetables in terms of area and production, we
will find that tomatoes have constituted 7 per cent in the area and 8 per cent in total
production of vegetables. Tomato comes in fourth and fifth position in terms of
production and area coverage.
Although I have collected above data from MoALD as secondary source, it is found
that the yield of tomato in Kathmandu district on 2019/20 was very high (96.93 mt/ha)
as compared to yield of Bagmati province (19.78 mt/ha) and national average on same
fiscal year (19.03 mt/ha). This may be because of most of the farmers of the Kathmandu
district are engaged in commercial farming and many of them use hybrid seeds like
Sirjana, so the productivity of tomatoes in this district has found high than other areas.

37
CHAPTER-4
RESULTS AND DISCUSSION
Vegetable farmers, output traders, inputs traders and related stockholders were the
target respondents of this research and information was collected from them
accordingly. Information on marketing channels, marketing margin and share, mode of
selling, price behaviour was collected and analyzed for the result. Information on
marketing practices (Grading, Packaging, Labeling and Transportation) was also
collected and analyzed for the best recommendation. Further, information on the
agricultural inputs trading system was collected and analyzed. Collected information
was analyzed with the help of SPSS and excel sheet, and findings are presented as
follows using different descriptive and inferential tools.
4.1 Major pocket areas with the volume of crops
4.1.1 Vegetable pocket areas and volume of production in Kathmandu Valley
Table 4: Major vegetable pocket areas with the volume of production (FY 2076/77)
Production: mt/year
Kathmandu (57456) Lalitpur (49510) Bhaktapur (58552)
Pocket Area Production Pocket Area Production Pocket Area Production
Kageshwori 5740.00 Dhapakhel 5840.00 Bhaktapur 14540.00
Budhanilakantha 8515.00 Harisiddi 6445.00 Madhyapur Thimi 11625.00
Tokha 8625.00 Khokana 3950.00 Suryabinayak 15075.00
Tarakeshwor 8550.00 Godawari 7425.00 Changunarayan 14050.00
Nagarjun 5640.00 Mahalaxmi 9900.00 Others 3262.00
Chandragiri 8720.00 Mahankal 3450.00
Kirtipur 5260.00 Konjyosom 3850.00
Others 6406.00 Others 8650.00
Note: - The figure above in the parenthesis indicate the total vegetable production of
that district.
Source: Agriculture Statistical Book (Kathmandu, Lalitpur, Bhaktapur), 2077/78,
Agriculture Knowledge Centre, Lalitpur

38
4.1.2 Tomato production status in Kathmandu Valley
Table 5: Area, Production and Yield of Tomato in Kathmandu valley by year
District
Fiscal
Year
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Bhaktapur
Area 155 169.9 170 176 165 176
Production 6000 5372 4372 4569 4195 4569
Yield 38.71 31.62 25.72 25.95 25.42 25.96
Lalitpur
Area 148 148.5 180 181 184 181
Production 4440 4455 4620 4666 4191 4666
Yield 30.00 30.00 25.67 25.79 22.78 25.78
Kathmandu
Area 210 210 210 211 212 211
Production 20250 8250 20250 20453 10259 20453
Yield 96.43 39.29 96.43 96.91 48.39 96.93
Total
Area 513 528.4 560 568 561 568
Production 30690 18077 29242 29688 18645 29688
Yield 59.82 34.21 52.22 52.27 33.24 52.27
Out of the three districts of Kathmandu Valley, most of the farmers in the Kathmandu
district have adopted commercial farming with hybrid seeds & modern technology.
They have a plastic tunnel and drip irrigation system for tomato cultivation, which can
give better harvest even in unfavorable weather conditions. So, the total production of
tomatoes is also higher in the Kathmandu district as compared to other districts because
of high productivity.

39
4.2 Tomato Trading Trend in Kalimati Market by Year (Kg)
Data provided by Kalimati Fruits and Vegetable Market shows that nearly half of the
vegetables and other edibles sold at the Kalimati Fruits and Vegetables Market are
imported from other countries, especially from India. Nepali production is not sufficient
to supply the market demand as demand is growing day by day with population growth.
So, domestic supplies alone can't fulfill the market demand of fresh vegetables. Tomato
trading data received from Kalimati Fruits and Vegetable Wholesale Market depicted
those Indian tomatoes have a large share in the Nepali market specially in Kalimati.
Indian tomato has occupied about 27% of market share in volume on 2077 which was
only about 17% on 2072. The marketing share of the Indian tomatoes in Kalimati
market on 2074 was highest till date which was about 44% of total trading volume of
that year. Table 6 below and figure 3 shows the Indian and Nepali tomato share and
trading trend in Kalimati market by year.
Table 6: Tomato Trading Trend in Kalimati Market (kg) by year
Year Source Tomato Big Tomato Small Total Percentage
2072
Nepal 66890 18601552 18668442 83.55
India 1291039 2384357 3675396 16.45
2073
Nepal 1679790 18182847 19862637 67.28
India 3190056 6468880 9658936 32.72
2074
Nepal 447052 11844796 12291848 56.16
India 627425 8968805 9596230 43.84
2075
Nepal 722015 15029215 15751230 59.30
India 818980 9991036 10810016 40.70
2076
Nepal 578877 20839096.5 21417973.5 61.62
India 1252984 12089986 13342970 38.38
2077
Nepal 214019 18544364 18758383 73.44
India 444631 6339139 6783770 26.56
Source: Kalimati Fruits and Vegetable Wholesale Market, Kathmandu (2072 to 2077)

40
Figure 3: Indian and Domestic Share of Tomato Trading in Kalimati Market
4.2.1 Tomato Sources for Trading in Kalimati Market
The agricultural fertile land of Kathmandu is being encroached by built up spaces. It is
estimated that around 50 to 60% of total demand of vegetables in Kathmandu is fulfilled
by vegetable production in hilly areas (Kavre, Dhading, Bhaktapur, Lalitpur,
Makwanpur, Kathmandu, Nuwakot, Sindhupalchok, Gorkha, Dolakha, Rasuwa etc.),
while remaining demands are sourced from Terai region, India and China (RECPHEC,
2016). Table 7 below shows the tomato sales in Kalimati market by sources and year.
Table 7: Tomato sales in Kaliamti Market by source and year (Kg)
SN Sources 2072 2073 2074 2075 2076 2077
1 Bara 526225 0 0 228525 96045 40975
2 Bhaktapur 174150 190065 27700 123805 623997 373841
3 Chitwan 693640 1746010 646680 1040450 1175804 2297286
4 Dhading 3202902 4345295 2651070 3422475 3430175 3218895
5 Dolakha 9250 8675 45000 12000 12200 12805
83.55%
16.45%
67.28%
32.72%
56.16%
43.84%
59.30%
40.70%
61.62%
38.38%
73.44%
26.56%
0.00% 20.00% 40.00% 60.00% 80.00% 100.00%
Nepal
India
Nepal
India
Nepal
India
Nepal
India
Nepal
India
Nepal
India
2072
2073
2074
2075
2076
2077

41
SN Sources 2072 2073 2074 2075 2076 2077
6 Gorkha 39500 166640 113500 218600 303825 226465
7 Jhapa 0 228675 123475 48900 35940 30155
8 Kathmandu 1813905 1505065 601296 1412492 4467862 3004764
9 Kavre 4782805 4818530 3883500 4426498 4494626 3895988
10 Lalitpur 235090 231125 18725 132325 1004800 788725
11 Makwanpur 245800 183656 109365 110855 92763 80877
12 Morang 0 0 0 0 179175 179650
13 Nawalparasi 0 7750 0 21625 85950 115525
14 Nuwakot 98175 182075 42927 104050 149729 74540
15 Parsa 373850 272560 238725 306875 188630 195690
16 Ramechhap 0 0 0 2105 7000 8450
17 Rautahat 372075 0 0 0 0 0
18 Rupandehi 0 0 0 34900 144190 0
19 Sarlahi 6005800 5888391 3743185 3968865 4671138 3892727
20 Sindhuli 0 0 0 0 18550 19425
21 Sindhupalchhock 76275 60775 46700 135885 131150 132424
22 Siraha 0 0 0 0 37600 3500
23 Sunsari 19000 0 0 0 66825 163426
24 Tanahun 0 27350 0 0 0 2250
25 India 3675396 9658936 9596230 10810016 13342970 6783770
26 China 0 0 0 7000 0 0
27 Other 137460 789255 469783 355498 392927 286205
Total 22481298 30310828 22357861 26923744 35153871 25151598
Source: Kalimati Fruits and Vegetable Wholesale Market, Kathmandu (2072 to 2077)
4.3 Descriptive analysis
Under descriptive analysis, variables were analyzed through mean, frequency, per cent,
standard deviation, minimum and maximum

42
4.3.1 Socio-demographic characteristics of respondent households
The socio-demographic characteristics of the respondents, such as gender, age, years of
experience in vegetable farming and their education status analyzed in this section.
The data showed that about 63 per cent of the responding producers were male, and
about 37 per cent were female. In the case of years of experience in vegetable farming,
the minimum years of experience found were one year, and the maximum was 40 years,
where the average was about 8 years. Similarly, the minimum and maximum age of the
producers was 22 and 68 years, respectively, with a mean age of about 39.5 years.
Table 8: Gender of the producers
Variables Frequency Percent Valid Percent Cumulative Percent
Male 39 62.9 62.9 62.9
Female 23 37.1 37.1 100.0
Total 62 100.0 100.0
(Source: Field Survey, 2020)
Table 9: Age and experience of the producers
Variables N Minimum Maximum Mean Std. Deviation
Age 62 22.00 68.00 39.46 9.33
Experience 62 1.00 40.00 8.08 7.66
The majority of the producers in the study area were literate (80%), whereas 20 per cent
had not received any formal education. Among the respondents, 24 per cent have
completed SLC or SEE, 32 per cent have completed their intermediate level of
education, 16 per cent have completed bachelor, and the rest 8 per cent have completed

43
masters level education. The figure 4 below depicts the education status of the
responding producers.
Figure 4: Education status of the producers
Out of the total responding producers, about 42 per cent reported that they had received
at least one training related to the vegetable subsector. Among them, a majority, 81 per
cent had received 12 per cent had received JTA training, 81 training on vegetable
production. Similarly, 12 per cent had received training of JTA, 23 per cent received
training on insect pest management, 25 per cent received leader farmer training, and 12
per cent had received GAP training. Table 10 depicts the training status of the
producers, and figure 5 present types of training they received.
Table 10: Training status of the producers
Training received Frequency Per cent Valid Per cent Cumulative Per cent
Received 26 41.9 41.9 41.9
Not Received 36 58.1 58.1 100.0
Total 62 100.0 100.0
Literate
20%
SLC SEE
24%
IA +2
32%
Bachelor
16%
Master Degree
8%

44
Figure 5: Types of training received by the producers
4.3.2 Farm characteristics of the respondent’s household
4.3.2.1 Landholding and type
The data depicts that among the 62 producers, only 17 own their land. The average of
the own land of the producers is about 31 ropani. In contrast, 54 producers among the
62 rented land for vegetable farming. The average of the rented land is 23 ropani. The
producers own about 30 per cent of the total land, and 70 per cent is rented. Whereas
about 80 per cent of the total land is being cultivated. The table 11 presents the
landholding of the producers and its cultivation status
12%
81%
23%
15%
12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
JTA Training Vegetable
Production
Training
Disease & Insect
Management
Training
Leader Farmer
Training
GAP Training
Percentage
of
training
reeceiving
producers
Types of training

45
Table 11: Land holding of the producers and its cultivation status
Variables
Frequencies Per
cent
Minimum
(N=62)
Maximum
(N=62)
Sum
(N=62)
Mean
(N=62)
Std.
Deviation
Own land (Ropani) 17 29.63 1.00 430.00 523.00 30.76 102.97
Rented land (Ropani) 54 70.37 1.50 125.00 1242.00 23.00 26.21
Total land (Ropani) 62 100.00 2.00 430.00 1765.00 28.46 57.60
Cultivated land
(Ropani)
62 79.83 1.00 250.00 1409.00 22.72 36.07
4.3.2.2 Types of farms and its registration status
Out of the total responding households, 73 per cent were registered individual farms,
16 per cent were smallholders' individual farms, three per cent were own cooperative
farms, and the rest were company registered farms. In the case of the registration status
of the farm, 85.5 per cent of the responded reported that they had registered their farm.
While the rest, about 14.5 per cent has not registered it. Figure 6 shows the types of
farms, and table 13 presents the registration status of the farm.
Table 12: Registration status of the farm
Registration
status Frequency Per cent Valid Per cent Cumulative Per cent
Registered 53 85.5 85.5 85.5
Not Registered 9 14.5 14.5 100.0
Total 62 100.0 100.0

46
Figure 6: Types of farms
4.3.3 Trend of vegetable cultivation in the study areas
The study shows that the area under vegetable cultivation has increased in all three
districts, Kathmandu, Bhaktapur and Lalitpur, over 2015/16 to 2020/21 with a similar
pattern. Similarly, the cumulative area in the three districts has also increased with a
similar growth rate. From 2017/18, the area under vegetable cultivation has increased
significantly. Figure 7 presents the growth rate of the area under vegetable cultivation
in the study area.
Figure 7: Trend of vegetable cultivation in the study areas (Ropani)
Source: Field Survey, 2020
Smallholder
individual
16%
Registered
individual firm
73%
Company
8%
Cooperative
farm
3%
468
553.5 671.5
1084
1349.5
1415.5
0
500
1000
1500
2000
2500
3000
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
Kathmandu Lalitpur Bhaktapur Total

47
4.4 Value chain analysis of tomato in the study area
4.4.1 Major value chain actors in the tomato value chain in the study area
The value chain describes the full range of activities that firms, and workers perform to
bring a product from its beginning to end-use and beyond. This includes activities such
as design, production, marketing, distribution, and support to the final consumer. The
activities that comprise a value chain can be contained within a single firm or divided
among different firms. The vegetable value chain in general is composed of actors
involved in vegetable production, trading, transporting, retailing, and processing. This
study examined the value chain, including the linkages and relationships between
actors, especially the relation between the farmers and middlemen, producers,
transporters, wholesalers, retailers and consumers, and the whole range of activities
required to produce vegetables, especially tomato from farm to the final market.
4.4.1.1 Input Suppliers
The persons or vendors who supply different types of vegetable seed, manure,
equipment, and packaging materials to other vendors or directly to the farmers are
called input suppliers. 187 Agrovets and 176 cooperatives were found in the study area
for this service. They have provided inputs to the farmers along with technical services.
Generally, technicians from AKC and the agriculture section of the concerned
municipality are responsible for providing technical advisory services to the producers.
However, the input suppliers also found providing technical guidance to the farmers in
the study area. Figure 8 below shows the input traders of Kathmandu valley.

48
Figure 8: Input suppliers of Kathmandu Valley
Source: Agriculture Knowledge Centre, Lalitpur
4.4.1.2 Vegetable Farmers
A farmer is defined as a person who takes responsibility and decides in the production
process. Commercial vegetable farming is increasing in Kathmandu valley nowadays
with the increasing demand for vegetable. Most farmers have formed groups and
affiliated in Agriculture Knowledge Centre (AKC). AKC has recorded following
farmer groups of Kathmandu valley.
Table 13: Farmers groups in Kathmandu valley
SN District
Number of
Group
Group
Members
Group
%age
Member
%age
1 Kathmandu 57 1097 9.58 8.40
2 Lalitpur 329 7252 55.29 55.52
3 Bhaktapur 209 4714 35.13 36.09
Total 595 13063 100 100
Source: Agriculture Statistical Book (Kathmandu, Lalitpur, Bhaktapur), 2077/78,
Agriculture Knowledge Centre, Lalitpur
103
39
45
50
72
54
0
20
40
60
80
100
120
Kathmandu Lalitpur Bhaktapur
Agrovets Cooperatives

49
Out of the total farmer groups in the Kathmandu valley, 55.29 per cent of groups were
found in Lalitpur district, whereas only 9.58 per cent of farmer groups were found in
the Kathmandu district. This observation showed that a small number of farmers had
adopted agriculture occupation in the Kathmandu district because of increasing
urbanization and decreasing cultivable land. But on the other hand, the production of
tomatoes in the Kathmandu district is higher than in other districts in the Kathmandu
valley.
4.4.1.3 The middlemen or commission agent
A middleman is a person who gathers various quantities of produce from different
producers and sells them to large-scale traders, retailers, processors, or even exporters.
The middleman is specialized in marketing a product. The commissioned agent (also
called dalal) is the link between the producer and the wholesaler or retailer, or
consumer. S/h is the only legally recognizes seller. S/he looks for buyers, negotiates
appropriate prices, sells the products say tomatoes, collects the money and hands it over
to the farmer. For her/his services, s/he receives a commission, which is a fixed amount,
on each basket of products (tomatoes) sold.
4.4.1.4 Wholesalers
They are known for purchasing large amounts of products with better financial and
information capacity. They buy the product at the farm gate, from assemblers and/or
roadside with a larger volume than any other marketing actors. They relatively spend
their full time in wholesale buying throughout the year in and out of the district. The
traders trading their business at Kalimati and Balkhu vegetable market are the
wholesalers in this study. Wholesalers are mainly involved in buying vegetables from
collectors and producers in larger volume than any other actors and supplying them to
exporters, retailers and consumers. They also store products, usually for a maximum of
three days. Wholesalers at different levels operating in tomato marketing concentrate
the various markets purchase and play a significant role in price formation at a local

50
level. They provide price information and advance payments for selected reliable
clients (producers, retailers, and collectors).
4.4.1.5 Retailers
Retailers sell small quantities of tomato products either directly to an individual,
household, or to the institutional consumers. This function is undertaken by a wide
range of actors, depending on the point of sale along the supply chain. These may
include traders at various levels (roadside and marketplaces), grocery and
supermarkets. These are known for their limited capacity of purchasing and handling
products and low financial and information capacity. Besides this, these are the ultimate
actors in the market chain that purchase and deliver products to consumers. They are
the last link between producers and consumers. They mostly buy from wholesalers and
sell to urban consumers. Retailer involvement in the chain includes buying vegetables,
transport to retail shops, grading, displaying and selling to consumers. Lagankhel
vegetable market, Bhaktapur vegetable market and Dhumbarai vegetable market have
been selling vegetables to the consumers through retailers.
4.4.1.6 Consumers
Consumers are those purchasing the products for consumption. This study was
conducted to analyze the value chain of fresh tomato, generate important information
useful to strengthen the tomato value chain, generate important information useful to
strengthen the tomato value chain and provide guidelines for strengthening
interventions and relationships between the different actors. Also, the study tries to
determine tomato marketing costs, value-added and profit margin distribution along the
value chain that will improve tomato marketing system, as well as generate valuable
information to policymakers in public and private sectors to take actions and make
interventions to improve the market performance and provide supporting policies,
which could help to improve the tomato value chain in Kathmandu valley.

51
4.4.2 Value chain map
Value chain analysis systematically maps the actors participating in the production,
distribution, marketing and sales of the particular product. The value chain comprises
three components: functions, actors, and enabling environment. The functions include
the process with which the products are delivered from their origin to the end-users.
Actors were involved in the transfer of products and enabling environment to indicate
the rules and regulations, infrastructures and regulatory bodies that were in favour of
business enabling. The value chain analysis helps examine the existing structure,
coordination, and combination of value chain components and way out to strengthen
further. Applying value chain analysis to tomato production and marketing systems has
the advantage that it emphasizes the importance of the farmers who produce the
tomatoes. Farmers who buy the seeds and other input for their tomato production may
be the first operators in a larger product value chain. The commercial tomato production
connects the product value chain. Well established product value chains often request
quality production and are very powerful in pulling tomato value chains. Like the
vegetable value chains, tomato value chains are more supply-driven value chains that
are development-oriented. A tomato value chain covers the process of activities from
using hybrid seeds to the marketing or distribution of a certain varieties to farmers.
Vegetable value chain analysis identifies the operators and service providers and their
activities in the vegetable chain. In this research, value chain analysis is conducted for
assessing different actors along with their functions, relationships, marketing cost,
margin, price spread in the fresh vegetables.
Mapping a chain means creating a visual representation of the connections between
businesses in value chains as well as other market players. In its simplest form it is
merely a flow diagram (i.e. illustrating the core transactions of value chains). More
sophisticated versions show that some enterprises differ in size and that some
connections are more important than others; and they help to identify bottlenecks and
leverage points. Value chain maps help to get a quick grasp of complicated realities,

52
also illustrating, for example, how core transactions in value chains are connected with
the market players in the immediate and wider business environment.
Value chain mapping is a process that identifies the main activities associated with a
company's service or product line and is often used in corporate strategy in order to
identify performance improvement opportunities. Once the value chain is mapped
according to significant inputs and outputs and the nodes represent entities with the
same general impacts, it then is used to identify the main environmental, social and
economic impacts generated as a result of the business.
The value chain map comprises of a whole range of actors beginning from the input
suppliers to the final consumers. The flow of various products through several chain
actors is represented by different arrows in the map, based on the information received
from the field survey. Input suppliers were supplying the necessary inputs like seed,
fertilizers, plant protection chemicals, farm equipment etc. to the farmers. Producers
were involved in the whole process of vegetable production, management, and selling
the products directly to consumers or to the other traders, who may be local collectors,
wholesalers, retailers, or consumers. Commercial farmers directly sold their products
to the wholesale market, whereas small farmers were sold their products to the local
vendors. From the wholesale market, vegetables were sold to other wholesalers or local
vendors or retailers and finally reached the consumers.
The enabler includes all chain-specific actors providing regular support services in a
value chain. Functions at the enabler level include policy research and technology
development, promotional services, and other support service providers. Agriculture
Service Centers of the municipality are working to develop and disseminate different
technologies to the farmers for vegetable cultivation. AKC has encouraged farmers to
go commercially vegetable production by providing subsidies in inputs. Different
commercial Banks, Microfinance institutions, and co-operatives assist farmers by
providing vegetable cultivation and marketing loans. Figure 9 shows the value chain
map of vegetables in Kathmandu valley.

53
Figure 9: Value chain map of tomato in Kathmandu Valley
Different actors, enablers and their functions and tasks are presented in the value chain
map of tomato given above. Five different channels of the value chain were found in
Kathmandu valley for tomato production and trading.
Different functions and activities done by actors and enablers were input supply,
production, collection, wholesaling, retailing and finally getting to the consumer. Input
supply function was done by agro-vets providing seeds, AKC, and PMAMP.
Production function was carried out by local producers, farmers and INGOs projects.
Federation of vegetable traders, cooperatives, banks and credit institutions were
responsible for the providing technical and financial support in the value chain.
Following different value actors were found in a different channel with their share in
the tomato value chain.

54
Table 14: Value chain map of tomato in the study area
Channel-I Channel-II Channel-III Channel-IV Channel-V
Agro-vets,
Cooperatives
Agro-vets,
Cooperatives
Agro-vets,
Cooperatives
Agro-vets,
Cooperatives
Agro-vets,
Cooperatives
Commercial
Farmers, Small
Farmer
Commercial
Farmers Small
Farmer
Commercial
Farmers Small
Farmer
Commercial
Farmers Small
Farmer
Commercial
Farmers Small
Farmer
Consumer
Retailers in
Local Level,
Veg Mart
Local Vendors,
Commission
Agent, Collectors
Wholesaler of
Kalimati &
Balkhu Vege
Market
Wholesaler of
Kalimati &
Balkhu Veg
Market
Consumer
Wholesaler of
Kalimati & Balkhu
Veg Market
Retailers in
Local Level,
Veg Mart
Cycle Vendor
Retailers in Local
Level, Veg Mart
Consumer Consumer
Consumer
5% 15% 40% 30% 10%
4.4.3 Marketing Channels
Marketing channel is the route through which the commodity is transferred from the
production point to consumption point. The marketing is a system, which involves wide
range of activities, firms and mechanism of delivery goods from one hand to other
hands. Understanding of this system is essentially important for the identification of
bottlenecks within the system with view of providing efficient services in continuum of
production-consumption chain. Marketing system creates time, space, and form utilities
of farm produce for the consumers. Marketing system operates to transports products
to where consumer wishes to make delivery of it, at time they find more convenient and
in the form of desirable. These function and values of farm products for consumer and

55
reflected in marketing margin. If these marketing functions are performed in an efficient
way, there are low marketing costs resulting into lower marketing margin and higher
producers share on consumer rupee. Thus, the price farmers receive and quantities they
can sell are very much dependent upon the performance of functionaries in marketing
chain. As marketing margins provides an indication for the efficiency existing
marketing system consideration of it in economic analysis of marketing system of crops
enterprises is sensible. The market margins, also known as retail-farm-gate margin, are
the different between the retail price of a product and price received by farmers for its
agricultural product (Colman and Young, 1995).
Different types of marketing channels were found for tomato marketing in Kathmandu
valley. The most common channels were observed:
• Channel-I:- Farmers - Consumers (5%)
• Channel-II:- Farmers - Retailers - Consumers (15%)
• Channel-III:- Farmers - Local Collector- Wholesalers - Retailers - Consumers
(40%)
• Channel-IV:- Farmers - Wholesalers - Retailers - Consumers (30%)
• Channel-V:- Farmers - Local Collector - Wholesalers - Retailers (Cycle) -
Consumers (10%)
Five different channels were found in Kathmandu valley for vegetable marketing. In
channel I, farmers have sold their products direct to the consumers, and producers can
get maximum marketing share. In the second channel, retailers have acted as bridging
agents between farmers and consumers. So, the consumer must pay more, but the
farmer gets less margin. 3rd
and 5th
channels have the same number of intermediaries.
But the role of retailer in the 5th
channel has done by cycle vendor. The fourth marketing
channel looks like an ideal channel, where all major actors are playing a role in the
marketing process.

56
4.4.4 Practices to add value to tomato
Among the responding producers, the majority, 100 per cent, reported that they were
engaged in packaging tomato to add value to their product. Similarly, about 90 per cent
were involved in off seasonal tomato production and 50 per cent had diversified their
farm product. About 52 per cent were involved in grading, and 31 per cent in the
cleaning of their product before selling. Whereas only about two per cent were
practicing moisture keeping and none of them involved processing their product.
Figure 10 reveals the value addition practices of the producers in the study area.
Figure 10: Per centage of farmers practicing value addition practices of the vegetable
(Source: Field survey, 2020)
4.4.5 Postharvest loss
Loss after harvesting the tomato was found at both the farmers level and higher
marketing chain. At the farmers level, after harvesting until the products reach the
market, the post-harvest loss rate is about 7 per cent. Similarly, the post-harvest loss
during wholesaling and retailing of the product was found at about 17 per cent. The
total value for the post-harvest loss of the tomato was about 24 per cent of the total
production. Table 15 presents details about the postharvest losses.
0%
20%
40%
60%
80%
100%
Diversified
Production
Offseason
Production
Cleaning Moisture
Keeping
Packaging Grading Processing
Series1 50% 90% 31% 2% 100% 53% 0%
Percentage
of
producers

57
Table 15: Postharvest losses of tomato production in the study area
Marketing chain N Minimum Maximum Mean Unit
Farmers to wholesaler 62 0.0 50.0 6.89 %
Wholesaler and retailer to consumer 27 13.3 19.2 16.86 %
Total 23.75 %
4.5 SWOT analysis
Strength, Weakness, Opportunity, and Threat (SWOT) analysis of tomato at a different
level including production, post-harvest and marketing were done, following are the
consequences depicted in Table 16, Table 17 and Table 18.
a. Production
Table 16: SWOT analysis related to the production of tomato
Strength Weakness
• Availability of hybrid seeds
• Multiple harvest gives more yield
• Better income than cereal crops
• Diversification of market
• Limited access to finance
• Losses during pre-harvest of the tomato
• Lack in long term land leasing
• Limited knowledge of pest management
Opportunities Threats
• Demand increases with population
• New niche market for specific product
• Increasing online marketing
• Transportation facility easily available
• Hitech technology available in the country
• Appearance of new pest & diseases
• Less availability of farm labor
• Unstable political situation
• Urbanization of cultivable land

58
b. Postharvest
Table 17: SWOT analysis related to post-harvest of tomato
Strength Weakness
• High demand for the value-added
tomato products in the market
• Easily availability of packaging
materials
• Loss & damage during postharvest handling
• High transportation cost
• Lack of proper handling facilities including
cold storage
• Establishing agro (vegetable-based)
industry
• Value addition get more price
• Highly perishable in nature
• Storage & processing problem
• Absence of cold chain,
c. Marketing
Table 18: SWOT analysis related to marketing of tomato
Strength Weakness
• Easy accessibility to market
• Availability of local level market
• Emerging new private vegetable market
• Offseason products get more price
• Increasing market demand
• Less bargaining power of producers
• Price instability & high market margin
• Lack of proper marketing information
• Dependency on local collectors
• Poor value chain governance and weak
trust among the entire chain actors
• Group or cooperative marketing
• Offseason demand increasing
• Market demand increases day by day
• Agricultural markets operated by the
private sector in different parts of the urban
areas
• Unable to meet the quality & volume
production at a place
• Physical losses during transportation
• Political instability
• Pandemic situation like covid

59
4.6 Problems faced by the producers on production and marketing of tomato
Problems related to the production and marketing of tomatoes from the producer’s
perspective were ranked by using the forced ranking method. Among different
problems related to the value chain problem of the marketing ranked first followed by
agricultural inputs related problems, lack of technical knowhow and supports, less
investment capacity, lack of labor force, insect pest and disease infestation, land leasing
problem and problem related to road and transportation respectively. Table 19 shows
the average score of the problem with their ranking.
Table 19: Problems on production and marketing of tomato
Problem Average score Rank
Problem of market access 0.79 I
Agriculture inputs problem 0.73 II
Technical support from enablers 0.58 III
Financial problem 0.58 IV
Labor problem 0.40 V
Disease insect pest 0.27 VI
Land leasing problem 0.26 VII
Road & transport 0.08 VIII
4.7 Access and use of business development services
4.7.1 Source of finance:
The survey recognized the source of the fiancé for all the value chain actors, i.e.,
producers, output traders (wholesalers and retailers) and input traders. The primary
source of investment of producers and output traders was self-investment. About 66 per
cent of the producer and about 96 per cent of the output traders had invested themselves.
However, only 28 per cent of the input traders had financed themselves for their

60
business. The second important financial source for the producer was a bank loan.
About 42 per cent of the producers reported having access to a loan for financing their
business. In contrast, about 11 per cent of the output traders had taken loans for their
business.
In contrast, none of the input traders had taken loans from a bank. For the producer, the
cooperative is the third-largest source of the fiancé. About 40 per cent of the producer
had utilized finance from the cooperative. Whereas all the output traders, i.e., 100
percent, had taken loans from cooperatives. However, none of the input traders had
taken loans from the cooperatives. All the categories of the actors had borrowed money
from friends and relatives to invest in their business. The percentage of producers,
output and input traders borrowing money was 23, 18 and 100, respectively. However,
only the producer (2%) had taken a loan from microfinance.
Table 20: Source of finance of the value chain actors
Source of finance Producer (N=62) Output traders(N=27) Input traders (N= 18))
Bank Loan 26 (42) 3(11) -
Cooperatives 25(40) 27(100) -
Self-Investment 41(66) 27(100) 5(28)
Friends & Relatives 14(23) 5(18) 18(100)
Micro Finance 1(2) - -
Traders Buyers 3(5) - -
Figures in parenthesizes are a percentage
Among the producers, about 40 per cent said that they were satisfied with the among of
loan they received from different financial sources. Whereas the rest, about 60 per cent
of the producers, replied that they were not satisfied. In the case of the loan's interest
rate, about 11 per cent reported that they were satisfied, and the majority, about 65 per
cent, reported that they were not satisfied. Whereas about 24 per cent of the producers
said, the interest rate was fair.

61
Table 21: Satisfaction level of the producers about the loan receive and interest rate
Variables Frequency Per cent
Valid Per
cent
Cumulative Per
cent
Satisfaction
with the loan
Yes 25 40.3 40.3 40.3
No 37 59.7 59.7 100.0
Total 62 100.0 100.0
Satisfaction
with the
interest
Yes 7 11.3 11.3 11.3
No 40 64.5 64.5 75.8
Fair 15 24.2 24.2 100.0
Total 62 100.0 100.0
4.8 Source of technical information and business skills:
4.8.1 Source of technical information for producers
The highest per cent of the responding producers (70%) reported receiving technical
information from the internet. Similarly, the Agriculture Knowledge Centers was the
second-highest source of technical information (60%) to the farmers, followed by books
and newspapers. However, an equal proportion of the producers (42%) shared that
Local Resource Persons and radio/TV was their source for the technical information.
Figure 11: Source for the technical information to the producers
(Source: Field survey, 2020)
0
20
40
60
80
AKC Internet Books &
News
Paper
LRP Radio
TV
NGOs
60
70
48 42 42
8
percentage
of
the
respondent

62
Regarding the availability of the required information, about 52 per cent of the
respondent shared that they are as per their requirement. However, the rest, 48 per cent
denied it. Further, about 60 per cent of the respondents were satisfied with the
information and its source, while 40 per cent were unsatisfied.
Table 22: Availability of the relevant technical information and satisfaction level
Variables
Frequency
(N=62)
Per cent
Valid Per
cent
Cumulative Per
cent
Availability of
the information
Yes 32 51.6 51.6 51.6
No 30 48.4 48.4 100.0
Total 62 100.0 100.0
Satisfied with the
information
Yes 37 59.7 59.7 59.7
No 25 40.3 40.3 100.0
Total 62 100.0 100.0
4.8.2 Source of business skills for input and output traders
Regarding the source of business skills of input traders and output traders, 100 per cent
of the input traders said that they gained skills from the other input traders and
publications. Similarly, all the output traders (100%) reported that they gained skills
independently. However, neither of them reported that they got any business skills from
other enablers such as AKC, FNCCI, NGOs and LRPs. This shows that the enabling
environments were focused only on the tomato value chain producers to enhance their
business and technical skills.
Table 23: Source of business skill for input and output traders
Source of business skills Input traders Output traders
Own experience 0 27 (100)
Publications 18 (100) 0
Other Suppliers 18(100) 0

63
Source of business skills Input traders Output traders
AKC 0 0
NGOs 0 0
FNCCI 0 0
LRP 0 0
The problem related to business was ranked using a forced ranking method based on
the perception of input traders. Among the identified problems, centralized service
provider ranked first for difficulty in accessing technical and financial services,
followed by the lack of training, poor services of the financial institutions, high-interest
rate, poor market linkage, difficulty in processing loans, poor trust among the financial
institutions, lack of collator and lack of knowledge on the process of getting a loan.
Table 24: Problems related to business
Problems Average Score Ranking
Centralized Service Provider 0.88 I
Training 0.81 II
Getting Services 0.67 III
High Interest 0.48 IV
Market Linkage 0.46 V
Process of getting Loan 0.45 VII
Trust in Business 0.38 VIII
Collator 0.29 IX
How to get Loan 0.14 X
4.9 Economic analysis
4.9.1 Area, production, productivity, income, gross margin, and B:C ratio
This section considered area, production, productivity, post-harvest loss, income, unit
cost of production, gross margin, and B/C ratio of the study area.

64
The mean tomato cultivation area per household in the study area was 0.8 ha, where the
mean production per household was 39 mt., with the mean productivity (yield) 59 mt.
per hectare. Nevertheless, there is a loss in the yield after harvesting the product. The
average post-harvest loss from production to wholesaling is about 6.9 per cent of the
production.
A household invested an average of Rs. 5,00,650 for tomato production and marketing,
where an average cost for a ropani of land was Rs. 49156. Similarly, the farmers
reported Rs 50 on average for selling a Kg of the tomato with an annual average income
of Rs 17,02,967 and average income from a ropani of land Rs. 6,80,288. Whereas the
profit (gross margin) was Rs 5,36,595 per ropani and per Kg cost of production was Rs
14 rupees. The average benefit-cost ratio of tomato production was 4.9 with a minimum
value of 0.23 and a maximum of 14.3, which shows that the tomato sub-sector is
profitable. Table 25 below shows the details about the economic variables of the tomato
value chain.
Table 25: Economic Variables of Tomato in Kathmandu Valley
Economic variables N Minimum Maximum Mean
Std.
Deviation
Unit
Tomato cultivation
area
62 .04 8.90 .8094 1.28
Ha
Total production 62 .70 200.00 39.31 44.78 Mt.
Yield 62 15.44 140.40 58.63 27.30 mt./ha
Total loss 62 .00 10000.00 1720.16 2148.60 Rs.
Per hectare loss 62 .00 14.04 3.44 3.23 mt./ha
Loss percentage 62 .00 50.00 6.89 8.32
Total cost 62 4065.00 3056550.00 283899.78 500650.66 Rs
Per hectare cost 62 1139250.00 6107775.00 2227242.50 761923.87 Rs/ha
Cost per kg 62 3.17 73.88 14.11 11.711 Rs/Kg
Total income 62 28000.00 9900000.00 1702967.74 1916799.84 Rs

65
Economic variables N Minimum Maximum Mean
Std.
Deviation
Unit
Per hectare income 62 128841.06 8087253.99 2798860.65 1588518.94 Rs/ha
Price 62 25.00 100.00 50.29 16.05 Rs/Kg
Gross margin 62 -2913319.20 6004053.99 571618.15 1640447.91 Rs/ha
B:C 62 .23 14.29 4.9447 3.01425
4.9.2 Comparison of Tomato Economic Variables among the three districts
The productivity of the tomato (yield) was found more in Lalitpur (90 mt/ha) district,
followed by the Bhaktapur (58 mt/ha) and Kathmandu (57 mt/ha) district. Whereas the
percentage loss of the total product from production to wholesaling was more in the
Bhaktapur district (8%) followed by Kathmandu (7%) and Lalitpur (6%). Similarly, the
benefit-cost ratio of tomato production is also more in the Lalitpur district (6.0),
followed by Bhaktapur (5.3) and Kathmandu (4.0). The gross margin also followed the
same pattern of benefit-cost ratio. The gross margin of the tomato (in Lalitpur district
is Rs 11,60,058 per ha followed by and Kathmandu (Rs. 10,62,340/ha) and Bhaktapur
(8,07,793 /ha).
Table 26: Comparison of Tomato Economic Variables among the three districts
District
Yield
(mt/ha) Percentage loss
Gross margin
(Rs/ha) B_C
Bhaktapur Mean 58.72 8.42 807793.37 5.01
N 18 18 18 18
Std. Deviation 29.41 11.92 1511044.62 2.14
Kathmandu Mean 57.44 6.76 10,62,340.50 4.78
N 26 26 26 26
Std. Deviation 28.093 7.84 1537365.06 3.27
Lalitpur Mean 60.25 5.56 1160058.80 5.10
N 18 18 18 18
Std. Deviation 25.38 3.42 1724258.04 3.48

66
District
Yield
(mt/ha) Percentage loss
Gross margin
(Rs/ha) B_C
Total Mean 58.63 6.89 571618.15 4.94
N 62 62 62 62
Std. Deviation 27.30 8.32 1640447.91 3.01
4.9.3 Marketing margin and producer share
The marketing margin of the tomato in the study area was estimated at 49.82 rupees.
Similarly, the producer’s share of the retail price was about 51 per cent. The producer’s
shares were highest among the actors of the tomato value chain, i.e., producers,
wholesalers, and retailers. The share of the wholesalers and retailers on the retail price
was estimated at 13 per cent and 36 per cent. The table 27 provides information about
market margins and producer’s share. Further, the graph in figure 12 provides
information about the market share among the three actors.
Table 27: Marketing margin and producer share
Cost
(NRs/Kg)
Farmgate price
(NRs/Kg)
Wholesale price
(NRs/Kg)
Retailing price
(NRs/Kg)
Marketing margin
(NRs/Kg)
Producer s’
share (%)
14.11 50.29 63.57 100.11 49.82 50.72
Figure 12: Marketing share among the three actors
Source: Field survey, 2020)
Producer s’
share
51%
Wholesaler's
share
13%
Retailer's share
36%

67
4.9.4 Resource productivity of tomato production
A linear regression model was used to determine the resource productivity of tomato
production. The variables used in the resource productivity are described in table 28.
Table 28: Description of variables used in the resource productivity of tomato
production
Variables N Minimum Maximum Mean
Std.
Deviation
Dependent variable
Total income from tomato 62 28000.00 9900000.00 1702967.74 1916799.84
Independent variables
Total cost for seed 62 450.00 75000.00 10142.17 15825.72
Total cost for chemical
fertilizers
62 .00 75000.00 12829.33 17696.33
Total cost for organic
fertilizers
62 .00 225000.00 33916.93 49847.77
Total cost for machinery 62 30.00 37500.00 5162.78 7506.66
Total cost for pesticides 62 .00 300000.00 21237.70 43806.26
Total cost for staking_ 62 90.00 75000.00 7517.63 10990.72
Total cost for labor 62 1200.00 1350000.00 95816.53 188973.97
Total cost for irrigation 62 .00 86250.00 8161.69 13338.68
Total cost for land rent 62 .00 637500.00 71574.19 113472.14
Total cost for grading 62 .00 187500.00 15593.95 37321.85
Total cost for packaging 62 .00 69000.00 4548.38 11743.92
Total cost for transportation 62 .00 225000.00 15585.48 35469.14
Total cost for tax 62 .00 22500.00 630.12 2929.42
The total cost for pesticides, irrigation, grading, packaging, transportation, and tax are
statistically significant among the variables. The costs for pesticides and irrigation are

68
significant at a 10% significance level. Similarly, the cost for grading, packaging, and
transportation is significant at a 5% level of significance. In comparison, the cost for
tax is significant at a 1% level of significance. The result shows that one unit (Rs.)
increase in the price for pesticides increases the income from tomatoes by about 27
units (Rs).
Similarly, per unit irrigation, grading, and packaging for the tomato production
increased the income by 39, 62 and 89 units, respectively. In contrast, the cost for
transportation and tax are negatively correlated with the total income from tomato
production. Per unit increase in cost for these variables, the total income decreases by
65 and 688 units.
The model is significant at a 1% significance level with R2
0.788 and adjusted R2
0.733,
respectively. Table 29 shows the result of the regression analysis
Table 29: Result of the resource productivity of tomato production
Variables
Unstandardized
Coefficients
Standardized
Coefficients T Sig.
95.0% Confidence
Interval for B
B Std. Error Beta
Lower
Bound
Upper
Bound
(Constant) 673290.509 175037.531 3.847 .000 321353.966 1025227.053
Total cost for seed 4.001 35.186 .033 .114 .910 -66.745 74.747
Total cost for
chemical fertilizers
39.944 25.586 .369 1.561 .125 -11.500 91.387
Total cost for
organic fertilizers
-7.064 13.932 -.184 -.507 .614 -35.077 20.948
Total cost for
machinery
-99.382 81.078 -.389 -.226 .226 -262.399 63.636
Total cost for
pesticides
27.371* 16.008 .626 1.710 .094 -4.814 59.557
Total cost for
staking_
13.838 37.106 .079 .373 .711 -60.769 88.445

69
Variables
Unstandardized
Coefficients
Standardized
Coefficients T Sig.
95.0% Confidence
Interval for B
B Std. Error Beta
Lower
Bound
Upper
Bound
Total cost for labor .426 5.222 .042 .082 .935 -10.074 10.927
Total cost for
irrigation
39.248* 18.494 .273 2.122 .039 2.063 76.433
Total cost for land
rent
3.572 8.360 .211 .427 .671 -13.236 20.380
Total cost for
grading
62.319** 17.255 1.213 3.612 .001 27.626 97.012
Total cost for
packaging
89.183** 32.481 .546 2.746 .008 23.876 154.491
Total cost for
transportation
-65.223** 19.666 -1.207 -.317 .002 -104.765 -25.682
Total cost for tax -688.342*** 135.835 -1.052 -.068 .000 -961.456 -415.229
Note: ***, ** and *indicate significant at 1%, 5% and 10% level, respectively
Model Summary
R R Square Adjusted R Square Std. Error of the Estimate
.888 .788 .731 994713.905
ANOVA
Model Sum of Squares df Mean Square F Sig.
1 Regression 176627543758044.720 13 13586734135234.209 13.732 .000
Residual 47493876177439.190 48 989455753696.650
Total 224121419935483.900 61

70
CHAPTER-5
SUMMARY
Commercial vegetable farming in Kathmandu valley has been growing for the last
couple of years because of a growing population. Private sectors vegetable markets are
also substantially expanded in and around the densely populated area of Kathmandu
valley to fulfil the increasing demand. So, the scope of vegetable farming is still high
in the Kathmandu valley. The increasing in-migration trend to the Kathmandu valley
creates more vegetable demand which ultimately creates a favourable condition for
more production.
The primary actors for tomato cultivation and marketing are farmers, collectors,
wholesalers, retailers and consumers. These actors are found to be involved in the
transaction of vegetables from five different marketing channels. Due to the
perishability of vegetables, especially tomato, majority of the farmers directly sell their
products to local contractors as the area lacks a collection and storage centre. While
passing the vegetable from producers to consumers, the market margin is differing at
each level. The retail price or consumer price is almost double of farm gate price. As
the number of marketing agents increase, the producers share decreases, so price control
between links of market channel should be justified to make it sound.
As of record from AKC Lalitpur, 103 agro-vets of Kathmandu district, 39 of Lalitpur
district, and 45 of Bhaktapur district have been supplying agricultural inputs to the
farmers of Kathmandu valley. Similarly, 50 cooperatives of Kathmandu, 74 of Lalitpur
and 54 of Bhaktapur district have been supplying agricultural inputs to the farmers of
Kathmandu valley. They used to provide both the agricultural inputs and technical
know-how to the farmers.
Agricultural Knowledge Centre, Agriculture Section of the local municipality, NGOs,
local resource person were the major sources of technical information for the farmers.

71
Besides, farmers used to get knowledge from agro-vets, collection centres, etc. Further,
they used to get vegetable market information through direct contact with the traders.
Farmers’ share in consumer’s price was found different in different marketing channels.
In the first channel (farmers-consumers), the share of farmers to consumers’ price was
a hundred per cent. Farmers then shared a higher percentage in the channel II from the
selling of vegetables. Wholesalers of the channel -IV (farmers-Wholesaler- consumers)
shared the highest per cent by the sale of tomatoes. But, in the sales of tomatoes, the
whole sellers of all three channels shared the same percentage. Retailer’s margin also
had a various level of share. The highest percentage share for retailer was in the channel
- V [farmers-collection centre-wholesalers-retailers (cycle)-consumers] by the sales of
tomato.
It was found that the mean tomato cultivation area per household in the study area was
1.13 hector where the mean production per household was 39 mt, with the mean
productivity (yield) 58.63 mt/ha. A household invested an average of Rs. 2,83,899.78
for tomato production and marketing, where an average cost for a hectare of land was
Rs. 22,27,242. Farmers of the study area have reported that they got on an average Rs
50 for selling a kg of tomato with an annual average income of Rs 17,02,967 and
average income from a hectare of land Rs. 27,98,860.65. The yield of the tomato was
found more in Lalitpur (60.5 mt/ha) district, followed by the Bhaktapur (58.7 mt/ha)
and Kathmandu (57.4 mt/ha) district. Whereas the percentage loss of the total product
was more in the Bhaktapur district (8%) followed by Kathmandu (7%) and Lalitpur
(6%). Similarly, the benefit-cost ratio of tomato production is also more in the Lalitpur
district (6.0), followed by Bhaktapur (5.3) and Kathmandu (4.0). The marketing margin
of the tomato in the study area was estimated at 49.33 rupees with 50.71% producer's
share.

72
CHAPTER-6
CONCLUSION AND RECOMMENDATION
6.1 Conclusions
The main objective of this research was to analyze the value chain of tomatoes in the
Kathmandu valley of Nepal. The specific objectives included studying the status of
vegetable production and marketing; mapping the value chain showing the trade link
among the various actors, detecting the key constraints opportunities of the market-
oriented value chain; and suggesting suitable measures to enhance the value chain and
competitiveness in vegetable marketing.
A very wide number of respondents at all stages of the market channel were
interviewed. The analysis was made with the help of econometric and statistical tools.
A total of 62 farmers, 18 input suppliers, 27 vegetable traders were interviewed. Rapid
market appraisal with focus group discussion, value chain actors meeting, marketing
planning committee meeting and discussion with key informant was conducted.
Secondary data based on production and marketing was also collected.
Some of the genuine problems related to production system such as diseases and pests
severities, unavailability of good quality of seed and fertilizer in the input market hinder
vegetable farmers from realizing optimum crop productivity. Likewise, marketing
related problems such as poor market access, lack of transportation, low price of output
and inadequate government support for price determination, poor availability of price
information to farmers compared to traders contribute to market imperfectness. Both
the types of problems justified areas for policy marker, development actors and
researchers to promote the production and marketing of vegetables in Kathmandu
valley.
This study indicated that tomatoes were sold at a higher price by local vendors. There
is a great role of enablers to make the value chain function effectively. Agriculture

73
Knowledge Centre, NGOs, AIC, agricultural cooperatives, district cooperative,
Vegetables Traders Association, and financial institutions were playing enabling roles.
It was found that the mean tomato cultivation area per household in the study area was
1.13 hector where the mean production per household was 39 mt, with the mean
productivity (yield) 58.63 mt/ha. A household invested an average of Rs. 2,83,899.78
for tomato production and marketing, where an average cost for a hectare of land was
Rs. 22,27,242. Farmers of the study area have reported that they got on an average Rs
50 for selling a kg of tomato with an annual average income of Rs 17,02,967 and
average income from a hectare of land Rs. 27,98,860.65. The yield of the tomato was
found more in Lalitpur (60.5 mt/ha) district, followed by the Bhaktapur (58.7 mt/ha)
and Kathmandu (57.4 mt/ha) district. Whereas the percentage loss of the total product
was more in the Bhaktapur district (8%) followed by Kathmandu (7%) and Lalitpur
(6%). Similarly, the benefit-cost ratio of tomato production is also more in the Lalitpur
district (6.0), followed by Bhaktapur (5.3) and Kathmandu (4.0). The marketing margin
of the tomato in the study area was estimated at 49.33 rupees with 50.71% producer's
share.
6.2 Recommendations
The study has drawn the following recommendation to develop the value chain of
tomatoes in the study area.
• After identifying value chain actors, the government should emphasize value
chain governance through creating value chain interactive platforms to bring
solidarity and trust among the entire chain actors.
• The enablers and service providers of the value chain should focus on the input
and output traders to enhance their business skills to develop the value chain of the
tomato in the study area.
• Farmers should increase their investment in irrigation, grading, and packaging
of the tomato to increase their annual income from the tomato production.

74
Although, investment in pesticides is also found positively correlated in income,
but it should be minimized to get healthy products.
• Creating excellent and smooth linkage and interaction between producers and
the rest of the chain actors by using information sharing mechanism like mobile
applications, and establishing better forward -backward linkages.
• Information networks should be adequately developed. So, every farmer could
know the market condition, current prices, and possible future prices of
marketable products.
• Research should focus to reduce the cost of production by increasing production
efficiencies.

75
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80
APPENDICES
1. Questionnaires used in Field Survey
Himalayan College of Science and Technology (HICAST)
Kathmandu, Nepal
Value Chain Analysis of Vegetables in Kathmandu Valley
1. Interview schedule
Advisor: Dr. Raj Kumar Adhikari Investigator: Basudev Sharma
1.1 Interview schedule for input suppliers Recording Date:
1) Suppliers basic information
Name: Address:
Age: Qualification:
Experience in this business:
Firm Name: Registration: Yes/No
Training:
a)
b)
c)
2) What agricultural inputs are you selling now?
a) Seeds b) Fertilizers c) Organic manures
d) Pesticides e) Veterinary medicines
f) Agricultural Equipment g) All of the above
3) Where do you purchase the supplies? Please specify?
Local Market Central Market Abroad Market
4) What are the sources of finance for your business?
Bank loan Own Income Borrowing in the village
5) What are the sources of business skill?

81
AKC NGOs Books and publications
Linked supply chain player Local Resource person
6) What are the constraints for your business (Rank 1-8 where 1 is top most
constraint)?
Low knowledge about the source of loan for business
Less knowledge about the process for bank loan
Difficult and lengthy process for getting loan in bank
Problem of showing pledge in the bank
High interest rate for village loan
Less availability of training for skill
Agribusiness gets less opportunity of services as than other business
Service providers are Centralized in headquarter
Poor market linkage
Difficult to build trust in business
7) What are the opportunities for you?
There are many sources for financial support
There are skill providing service providers in the district
Different distributer companies are attracting
Farming scale as well as demand for the input is increasing
Supply chain is improving as compare to surrounding district

82
8) What do you do for the addition of value on selling product in your shop or agro
vet?
Small packaging
Well labeling
Embedding technical support
9) Annual volume of transaction:
SN Inputs Unit Quantity Remrks
1
2
3
4
5
6
7
8
9
10
10) Share of service or transaction in vegetable value chain: ………%
11) On an average, how many farmers do you serve? ……… farmers from ……….
KM radius
SN District
No of Farmers Remarks
Season I Season II Season III Season IV
1 Kathmandu
2 Lalitpur
3 Bhaktapur
4 Out of Valley

83
Kathmandu, Nepal
1.2 Interview schedule for Output trader Recording Date:
1) Traders characters
Name: Age: Address:
Qualification:
Experience in this business:
Training:
a)
b)
c)
Type of business:
a) Collector b) Commission agent c) Wholesaler d)
Retailer
2) Which vegetables are you selling now?
3) What is your per day selling capacity (Kg.)?
4) With which vegetable, the district vegetable have to compete and from where those
vegetables are imported?
Vegetable Imported Area Vegetable Imported Area

84
5) Which vegetables in which month bears highest price in the market?
Month Vegetable Month Vegetable
Baishakh-Jestha Kartik-Mansir
Jestha-Asar Mansir-Paush
Asar-Shrawan Paush-Magh
Shrawan-Bhadra Magh-Fagun
Bhadra-Aswin Fagun-Chaitra
Aswin-Kartik Chaitra-Baishakh
6) What do you do for the addition of value on selling product in your shop?
Cleaning Grading Packaging Processing None of above
7) What are the constraints do you facing during trading agricultural products? List
a)
b)
c)
8) Which market channel do you follow?
Farmers-Collection centers-Wholesalers-Retailers-Consumers
Farmers-Collection centers-Wholesalers-Retailers(Indian)-Consumers
Farmers-Collection centers-Retailers-Consumers
Farmers-Collection centers- Wholesalers-Retailers-Consumers
Farmers-Wholesalers-Retailers-Consumers
Farmers-Retailers-Consumers
Farmers-Consumers
9) What is marketing cost of one-kilogram product of major vegetables?
Vegetables Weighing
Transportation
and
Management
Packaging
Load-
unload
Tax
and
others
Total
Cost
Tomato
Cauliflower
Cabbage

85
10) What is buying price, loss, margin and selling price of one-kilogram product
of major vegetables?
Vegetables Buying price Loss Margin Selling price
Tomato
Cauliflower
Cabbage
11) What are the sources of market information for products availability and price?
Landline phone Mobile phone F.M. Radio
News paper Direct contact Websites
12) What special business skills do you have and what are the sources of those
business skill?
Special business skill:-
Source of this business skill
Agriculture Knowledge Center Own experience
NGOs FNCCI District cooperative
Linked supply chain player Local Resource person
Bank loan Own Income Borrowing
Group/cooperative saving Subsidy

86
Kathmandu, Nepal
1.3 Interview schedule for vegetable producers Date of Interview:
1) Producer characteristics
Name: Age: Address:
Qualification: Experience in this farming:
Land holding: ………………….ropani
Land ownership: Own…………ropani, Rented in:……………….ropani
Average area under vegetable cultivation: ……………………..ropani
2) Trend of vegetable cultivation in last 5 years
Year 2076 2075 2074 2073 2072 2071
Area for vegetable (ropani)
3) Are you registered farm: Yes/No
If yes: name of firm: ………………………. registration year: ……………..
4) Do you have any training related to your farm activities?
a)
b)
c)
5) What type of farm do you have?
a) Smallholder individual b) Registered individual firm
c) Corporate farm d) Cooperative farm
6) What are the major sources of income for your family?
Vegetable Livestock Employment Skill selling
Foreign employment Business Wages
Agri- product selling (Except vegetable) House rent and others

87
7) What is overall Average annual income and Expenditure status?
Sources of Income Amount (Rs.) Expenditure heading Amount (Rs.)
8) What are the major vegetables you grow for market purpose?
9) What is per ropani (500 sq.m.) production cost of major vegetables? Detail Cost
of production ...
Vegetables
Inputs
Unit
Tomato Cauliflower Cabbage
Quantity Amount Quantity Amount Quantity Amount
Seed/Seedling
Chemicals
Fertilizer
Organic
Fertilizer
Machinery
used
Pesticides
Staking &
others
Labor
Irrigation
Harvesting
Total
10) What is per ropani (500 sq.m.) postproduction cost of major vegetables?
Vegetables
Grading/
Sorting
Packaging Transportation
Tax and
other charges
Total
Tomato
Cauliflower
Cabbage

88
11) What is the average annual production & loss status of major vegetables?
Vegetables
Average Annual
Production (Kg)
Average Annual
Loss (Kg)
Average Annual
Loss %
Tomato
Cauliflower
Cabbage
Bank loan Cooperative Friends & Relatives
Micro-finance Traders/Buyers Own Income
13) Are you satisfied with on services related to access to fiancé
Availability: Yes / No why: ……………………………………
Interest rate: Yes/Fair/No why: ……………………………………
Other: ………………………………………………
14) What are the sources of technical information and how much %age information do
you have getting from them?
Agricultural Knowledge Center NGOs Local resource person
Radio Books and news paper None of the above
15) Are you satisfied with on services related to technical services?
Yes/No ............
Availability: Yes / No Why: ……………………………………
Effectiveness:
16) What are the sources of market information?
Landline phone Mobile phone F.M. Radio
News paper Direct contact Websites None of the above
Are you satisfied with on MIS ? Yes/No
Why: ……………………………………

89
17) What are the existing practices to add value on vegetables?
Diversification in production Offseason production
Cleaning Moisture keeping Packaging
Grading Processing None of the above
18) Where do you sell your vegetables?
Farm gate retail [……….%]
Farm gate – to collectors [……….%]
Local collection centre (cooperative/group/collector/commission agent/wholesaler) [....%]
Vegetable market ………. (to commission agent/wholesaler/retailer) [……….%]
Directly selling in retail in cities [……….%]
19) Which market channel do you follow?
Farmers-Collection centers-Apex body-Retailers-Consumers
Farmers-Collection centers- Wholesalers-Retailers-Consumers
Farmers-Wholesalers-Retailers-Consumers
Farmers-Retailers-Consumers
Farmers-Consumers
20) What are the constraints do you facing during producing agricultural products?
List any five.
a)
b)
c)
d)
e)

90
Kathmandu, Nepal
2. Semi structured schedule for discussion with different Value chain players
2.1. Meeting with Vegetable Marketing and Planning cum Hat Bazaar Committee
- Discussion about current vegetable marketing mechanism.
- Discussion about trade linkage among different vegetable value chain
actors.
- Discussion on strategy for the sustainable development of vegetable value
chain.
2.2. Meeting with value chain actors and service providers
- Identification of most attractive vegetables through attractive matrix
method.
- Identification of vegetable marketing channels in the district.
- Identification of constraints and opportunities and its ranking.
2.3. Meeting with Farmers Groups
- Identification of constraints and opportunities and its ranking.
2.4. Visiting the district level Government and Non-Government Offices for
discussion on overall topic related matters.
- Province level Agriculture Ministry
- Agriculture Knowledge Center
- PMAMP
- District Coordination Committee
- NGO/INGO ……………….........
- Any other related stakeholders

91
2. Agriculture Wholesale & Retail Market in Kathmandu Valley
SN
Name of
Agriculture
Market
Market
Managed &
Operated by
Address Contact Person
Contact
Number
1
Kalimati
Fruits and
Vegetables
Wholesale
Market
Kalimati Fruits
and Vegetable
Market
Development
Board
Kathmandu-13,
Kalimati
Binaya Shrestha 9843137765
2
Balkhu
Agriculture &
Vegetable
Market
Surya Kamal Pvt
Ltd
Kathmandu-14,
Balkhu
Ram Krishna
Kunwar
9851045591
9851209191
3
Gwarkho
Vegetable
Market
Gwarkho
Vegetable &
Fruits Market
Pvt Ltd
Imadol,
Lalitpur
Umesh Rijal 9841261257
4
Fruit
Wholesale
Market,
Kuleshwor
Fruit Wholesaler
Committee
Kathmandu-14,
Kuleshwor
Mahesh Khadka 9849748141
5
Manohara
Agriculture
Market
Manohara
Agriculture
Market Pvt Ltd
Kathmandu-32,
Jadibuti
Maheshwor
Koirala
9843661990
6
Harit
Community
Agriculture
Market
Harit
Community
Agriculture
Cooperative
Kathmandu-32,
Tinkune
Komal Baral 9851123078
7
Harit
Community
Agriculture
Market
Harit
Community
Agriculture
Cooperative
Samakhusi,
Kathmandu
Komal Baral 9851123078
8
Balaju
Agriculture
Market
Kalimati Fruits
and Vegetable
Market
Development
Board
Kathmandu-16,
Balaju
Keshav Prasad
Bhattarai
9849186800
9
Annapurna
Vegetable &
Fruits Market
Annapurna
Multipurpose
Agriculture
Cooperative Ltd
Madhyapur
Thimi-3,
Gatthaghar
Lal Bahadur
Rokaya
9851101789
10
Dhumbarai
Vegetable &
Fruit Market
Dhumbarai
Vegetable &
Fruit Sales
Centre
Kathmandu-4,
Dhumbarai
CK Lopchan 9851144213
11
Ichchhumati
Vegetable
Market
Samaj Kalyan
Parishad
Kathmandu-28,
Bhrikutimandap
Rajkumar Lama 9841421704

92
SN
Name of
Agriculture
Market
Market
Managed &
Operated by
Address Contact Person
Contact
Number
12
Naxal
Vegetable &
Fruit Market
Naxal Vegetable
& Fruits Market
Management
Committee
Kathmandu-1,
Naxal
Sunil Lama 9841596907
13
Chabhil
Vegetable
Market
Chandra
Binayak Park
Management
Committee
Kathmandu-7,
Chabhil
Ajab Shrestha 9841443320
14
Lagankhel
Vegetable &
Fruit Market
Vegetable &
Fruit
Management
Committee
Lalitpur-5
Krishna Pd
Sanjel
9851074076
Source: Agriculture Knowledge Centre (AKC), Lalitpur

93
3. Photographs of Field Survey
Interviewing with Farmer at Kirtipur, Kathmandu
Interviewing with Farmer at Lamatar, Lalitpur

94
Interviewing with Input Trader at Kalimati, Kathmandu
Interviewing with Input Trader at Kalimati, Kathmandu

95
Balkhu Vegetables Wholesale Market, Kathmandu
Kalimati Fruits and Vegetables Wholesale Market, Kathmandu

96
CURRICULUM VITAE
Personal Information
Name Basudev Sharma
Sex Male
Date of Birth 2020-01-07 BS, (1963-04-20 AD)
Citizenship Nepalese
Father’s Name Damodar Paudel
Marital status Married
Permanent Address Kirtipur-4, Kathmandu, Nepal
PAN Number 100517703
Cell phone Number 9855068311
Email Address basudevsp@gmail.com
Academic Information
Level Board/University Year Percentage Division Major Subjects
M.Sc.Ag.
(ABM)
PU, HICAST,
Kathmandu, Nepal
2021 A
Agri-Business
Marketing, Applied
Agri-Business
Economics etc
B.Sc.Ag.
TU, IAAS,
Rampur, Nepal
1990 63.10 Second
Plant Science,
Agri-Economics
I.Sc.Ag.
TU, IAAS,
Rampur, Nepal
1985 56.40 Second
Plant Science, Farm
Management
SLC SLC Board, Nepal 1980 60.44 First
Math, Economics,
English, Science
Language Able to read, write and speak Nepali (Native), English, and Hindi
Travel Almost major parts of Nepal, Thailand, and India.

97
Skill
 Computer skill of Typing Nepali, Unicode, and English with basic computer
knowledge of MS Office.
 Business plan formulation & Project designing skills with basic computer
excel knowledge.
 Driving skill with Motorcycle & Car (AB) driving licence
 Training, Coordination & Management
Experience
 Worked as a Social Mobilizer in different NGOs & INGOs from 1990 to
1996.
 Worked as a Technical Officer in Entomology Division of Nepal Agriculture
Research Council (NARC) from 1996 N0vember to 1997 November (one year).
 Worked as a Planning Officer (Gazetted 3rd
Class) under Government of
Nepal, Ministry of Agriculture and Cooperative, since 1997 December to
2013 (16 years) with different responsibilities.
 Worked as a Senior Monitoring & Evaluation Officer (Regional Chief) in
the Office of Project Implementation & Support Team (PRIST), Central
Region of Project for Agriculture Commercialization & Trade (PACT) under
Ministry of Agriculture from 2014 to 2017 (3 years) with the special
responsibility of foreign grant management.
 Worked as a Senior Agricultural Economist in different offices under the
Ministry of Agriculture & Livestock Development from 2017 to 2021 (4 years).
 Actively participated in different workshops, seminars, and training
organized by various offices of Gos, NGOs, and INGOs.
 Participating in Program Planning to develop Agriculture Program for
District as well as central level every year and coordinate all field staff to
implement these programs.

98
Training
 Participated in various Agricultural Planning and Monitoring related
training during government service period from 1997 to 2021.
 “Basic Computer Training” (Computer Fundamental, MS Office &
Installation) on January 13 to February 24, 2003, organized by Nepal
Irrigation Sector Project (NISP) under Department of Agriculture and
training provided by APTECH COMPUTER EDUCATION,
Hariharbhawan, Lalitpur Nepal.
 Computer Training on “Statistical Package for Social Sciences
(SPSS)” on 2nd
to 13th
May 2003 jointly organized by Regional
Agriculture Directorate (RAD), Pokhara and Local Initiatives for
Biodiversity, Research and Development (LI-BIRD) with the financial
support of Nepal Irrigation Sector Project (NISP).
 Received 3 days training course each on "Crop & Livestock Insurance
Agent" and "Agriculture Loss Assessment (Surveyor)" from
Insurance Committee, Lalitpur, Nepal on 2021 December.
Referees
1. Dr. Binayak P. Rajbhandari
Executive Chairman, HICAST
Kalanki, Kathmandu, Nepal
Cell: 9851013564
2. Dr. Raj K. Adhikari
Adjunct Professor/Advisor, HICAST
Kalanki, Kathmandu, Nepal
Cell: 9851085907
I do solemnly affirm that the information contains therein is correct and accurate to the
best of my knowledge and belief.

VALUE CHAIN ANALYSIS OF VEGETABLES IN KATHMANDU VALLEY: A CASE OF TOMATO

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