Supply chain analysis of Large Cardamom in Eastern Nepal

Keshav Prasad Shrestha1*, Punya Prasad Regmi2, Krishna Prasad Pant3, Gopal Bahadur KC4, Yama Raj Pandey5

1PhD Scholar, Tribhuvan University, Kathmandu, Nepal
2Major advisor of the Advisory Committee, Vice Chancellor, Agriculture and Forestry University, Nepal
3Member of Advisory Committee/Faculty, School of Arts, Kathmandu University, Kathmandu, Nepal
4Member of Advisory Committee/Professor, Tribhuvan University, Kathmandu, Nepal
5Member of Advisory Committee/Principal Scientist, Nepal Agricultural Research Council, Nepal

(Manuscript received 25 October 2021; accepted for publication 3 June 2022)

Abstract. The study was conducted to analyze growth rates and financial profitability of supply chain actors of Large Cardamom based on a sample survey of randomly selected 90 farmers, 10 input suppliers, and 15 traders. Secondary data of area and production were obtained from Ministry of Agriculture and Livestock Development whereas price information was acquired from the Federation of Large Cardamom Entreprenuers of Nepal. The area, production and productivity of Large Cardamom in Ilam district was found in decreasing trend. Market data analysis showed that the price was drastically fluctuating but the compound annual growth rate was significantly increasing by 4.48%. Financial analysis indicated that the enterprise with a project life of 10 years was viable and highly profitable with benefit cost ratio of 3.14, payback period 4.09 years, internal rate of return 81.4%, and net present value of NPR 3.58 million per hectare. Four major supply chain actors were involved. The profit margin was found the highest for the producers (45.68%) followed by regional level traders (28.42%), district level traders (16.36%) and least for the village level traders (9.54%). Traditional driers were still used for curing the capsules with a compromise to the quality of the product. The producers were not found doing value addition activities, whereas tail removing, grading, and packaging were done by regional level traders. Training the farmers on value addition and providing them market information can help to scale up large cardamom production enterprises.