Rajendra Pandit1*, Durga Devkota1, Naba R. Devkota1, Prakash C. Bhattarai2, Hari K. Shrestha3
1Faculty of Agriculture, Agriculture and Forestry University, Rampur, Chitwan, Nepal
2School of Education, Kathmandu University, Hattiban, Lalitpur, Nepal
3Food Research Division, Nepal Agricultural Research Council, Lalitpur, Nepal
(Manuscript received 17 April 2020; accepted for publication 5 June 2020)
Abstract. Rice is a major cereal crop that ensures food security and rural income generation in Nepal. The objectives of this study were to analyse the dynamics of the rice sub-sector from the perspective of production, research investment, and supply chain as expected outcomes are not yet achieved in spite of continuity in priority for research and production investment. Accordingly, this study was done by using secondary data covering 2000 to 2018 combined with a case study. For the case study, Morang, the district with the highest rice production was chosen. A random sample of 144 supply chain actors in which 100 rice producers, 10 collectors, 10 wholesalers, 7 millers, and 17 retailers were chosen from the list of the targeted population in each category. Findings revealed that rice production, productivity, and research investment were increasing at the rate of 1.25, 1.65, and 10.57 percent per annum, respectively. There was a strong positive link between research investment and production. Millers were the main value-adding actor. They have been getting the highest profit margin (31.5%) based on investing more (46.51%) in value-added activities. In contrast, farmers received a relatively low-profit margin (13.9%) with a 1.26 benefit-cost ratio. This was mainly due to the low adoption of improved production technology and weak horizontal coordination of rice producers. The percentage of food surplus households has increased, mainly due to the adoption of rice technologies generated by rice research programs, but this has not well reflected in terms of getting more profit margin by the rice-producing farmers. On the other hand, the research investment in rice was not consistent, and even not adequate for the required technology generation. Therefore, an increased investment could enhance the efficiency of generating technology packages, and implementation of effective extension services targeting the rice-growing farmers through increasing total factor productivity is crucial to increase the profit margin of rice producers. Moreover, with strengthened horizontal coordination among the major actors and with the increased investment in value-added activities in each stage of the supply chain based on consumer demand, increased profit margin for making the rice supply chain sustainable.