Biophysical and socio-economic characterization of cereal production systems of Central Nepal

Abstract

The domestic food security of Nepal is critically depended on the sustainability of the cereal production systems of Central Nepal Terai region, as the major share of nation's cereal production comes from the agro-ecological regions of this belt. The present study focusses on the biophysical and socio-economic characterization of the cereal producing farm households in this region, with special attention on the economics of crop production, and the potentials of conservation agriculture (CA) technologies. The empirical part is based on a comprehensive baseline household survey (324 households), conducted among the cereal farmers, following a cluster sampling procedure across the Terai region. Primary data required for the study was collected from the sampled households through personal interviews using a comprehensive and pre-tested questionnaire. In order to obtain a complete picture of the farm-household activities and decisionmaking process, the sample households were categorized in to three more or less identical-sized, mutually-exclusive groups: small (lowest 33%with respect to scale of operation), medium (middle 33%) and large (upper 33%) farmers. The study area is dominated by small and marginal farmers, with the average size of land cultivated being 2.25 acres (0.91 ha). The mean acreage under cultivation by a large farmer is 6-times greater than that of a small farmer, showing a high inequality in distribution of land cultivated (with Gini coefficient of 0.47) existing across the farmer households. At the same time, a higher percentage of smallholders are sharing out their land, while sharing-in is done mostly by large landholders. During the Kharif (rainy) season, about 79% of the cultivated land is under rice open pollinated varieties (OPVs), while another 17% is under hybrid rice production. Wheat is a major crop of the second season (winter/Rabi), cultivated on 50% of the area by about 84% of households. The share of cultivated land under wheat is significantly higher among small farmers, while large farmers diversify the system with non-cereal crops during this season. Maize is cultivated in 9% of land during this season by about 20% of the sample farmers, and hybrid seed adoption is relatively high compared to the other two cereals. During the third season (spring/summer), land is mostly kept fallow (80%), mainly due to limited irrigation facilities, with maize being the only major crop: about 17% of the cultivable area is under spring maize cultivation, mainly with local open pollinated varieties (OPVs). The small and medium farmers are the ones mainly engaged in spring maize production. The most important source of irrigation in the study area is diesel tube-wells, providing 41% of the total irrigation water. Most small farmers purchase irrigation water from the diesel wells, whereas large scale farmers obtain water from their own wells. Purchasing water from the tube-wells causes significant cost increase for cereal production for the small farms. Canal water is the second most important source of irrigation. Cereal varietal diversity is limited in Nepal Terai area. The three most important varieties account for 56% of the rice, 97% of the wheat and 81% of the Rabi and spring maize acreage. The cereal production is also found highly labour intensive: 40% of the total paid-out cost is employed for hiring out human labour in rice, 25% in wheat and 26 (45)% in Rabi (spring) maize. Rice is the most profitable cereal crop in Nepal Terai, with benefit-cost (BC) ratio of 1.42 over the paid-out costs. The BC ratio for wheat is 1.38, and lower for maize (1.10 for Rabi and 0.97 for spring maize). Nevertheless, rice production is more labour intensive than the other two cereals, and unit area under rice cultivation requires 50% more variable cost than for wheat production, mostly to hire labour. Small-scale farmers obtain relatively higher profits from rice cultivation. However, no significant relationship between scale of operation and profitability is observed for both wheat and maize. Most of the cereal produce is used for home consumption. Only 28% of the rice, 25% of the wheat and 65% (46%) of the Rabi (spring) maize grains are marketed in the study area. Two out of three households keep large and small ruminants. Although the percentage share of livestock in household income is only about 6%, the sector's indirect contribution to rural livelihoods and crop production is highly significant. Rice straw is the main source of dry matter in animal feed, followed by collected green grass, wheat straw and concentrate. Small farmers depend mainly on collected grass, while large farmers depend more on wheat straw. The total milk produced per household per day is about 6.6 litres, of which about 48% is used for household consumption, and 44% sold raw. The average number of tillage for rice, wheat and maize is more than three, and only a marginal share of farmers are adopting zero tillage (ZT) wheat. Custom hiring of agricultural machineries is common, except for self-owning large farmers. The study examines the awareness and adoption status of various resource conserving and yield enhancing technologies in the study area. Products of hybridization (rice and maize hybrids) are the most popular technologies as more than 75% of the respondent households are aware of them with 20-30% having adopted them. Seed treatment, relay cropping, bed planting and direct seeding in rice are the technologies moderately familiar, but rarely adopted. Most of the farmers get information on these resource conserving technologies (RCTs) from progressive farmers. Results indicate that even among those farmers, who are familiar with the technology, awareness on the impact of CA technology on irrigation, cost, yield and profitability is extremely limited. Farmers are highly unaware of the impacts of bed planting (94%), quality protein maize (QPM) (92-95%), ZT (80-85%) and rotavator (86-89%) on farm profitability. Novel technology diffusion techniques and more emphasis on solving constraints faced by small and marginal farmers in obtaining information on farming are expected to accelerate the technology diffusion and enhance cereal productivity in the study area. In trying to understand the critical importance of value chains in increasing farm profitability and income, the study also examined the existing marketing channels for inputs (seeds, agro-chemicals and fertilizers) and outputs in the study area. Private dealers are the main suppliers of rice, wheat and maize seeds. Co-operatives also take up the role of seed providers in case of rice, although they mostly cater to the needs of medium- and large farmers. Small farmers depend mostly on private dealers within their villages, whereas large farmers depend on dealers located in the district headquarters to obtain modern seed varieties. The private dealers are also the major providers of fertilizers. The largest share of cereal produced is purchased by village- and district-level traders. The village traders are highly important for the small farmers: more than 90% of marketed rice, wheat and OPV maize are purchased by the village level traders. Linking cereal farmers with input/output markets effectively, especially for smallholders, may be considered as a major challenge in increasing farm income of Nepal.