S7.3 Maize Value Chains in Nepal

Maize Value Chains in Nepal

D.B.Gurung*, D.B.KC**., G.O.Ferrara**., N.Gadal**., S.Pokhrel***., K.B.Koirala**.,

B.B.Hamal***., Y.R.Pandey* and R. R. Puri**

* Nepal Agricultural Research Council

***Department of Agriculture, DoA

**CIMMYT, South Asia Regional Office

1

Background

• Maize second important food crop in Nepal

• Staple food for hill people (>14 million people &)

44 districts food deficit )

• Very important for food security

• Contributes 2.5% in GDP, 7.5% in AGDP and 26%

to the total edible food production

• Average per capita consumption is 45.5

kg/calorie/year (it is more in hills-- vital for

survival)

Area, Production and Productivity of Maize

in Nepal 2010

3

Total production 1.85 million t

Average productivity 2.12 t ha-1

Ecological Belts

(Districts)

Area

(876,000 ha)

Share on Total

Prodn

(1855000 mt)

Mountain (16) 20% 9.8%

Hill (39) 70% 70.1%

Terai (20) 10% 20.1%

Total (75) 100% 100.0%

Area under maize, by

growing season (2010)

Maize area by OPVs

and Hybrid (2010)

Hybrids

• Winter and spring in Terai

• Summer in valley and Hills

OPVs 95%

Hybrid 5%

Spring 14%

Winter 12%

Summer 74%

5

86 87

99

14 13

1 0

20

40

60

80

100

120

Mountain Hills Terai

Improved

Local

Area (%) of local and improved maize varieties in eco-zones of

Nepal, 2010.

0

5

10

15

20

25

2

86

7

23

High Hill Mid Hill Terai Denotified Total

Varietal Options for Different Environments (No)

Utilization of Maize

7

Human food 86%

Poultry feed 13%

Industrial

1%

Ecological

Belts

(Districts)

Production

(mmt) Yield

(t/ha)

Food Feed Indust

rial

Uses

Mountain

(16)

0.18 2.0

96% 4% -

Hill (39) 1.30 2.2

95% 5% -

Terai (20) 0.38

2.3

10% 80% 10%

• Grits, Chapati, Dhindo similar to Ugali, boiled, roasted and soup.

• Popped maize is very popular for snacks, mostly in hills and

rural areas.

Grits of both white and yellow types

• OPVs are more common for making grits

• Flour recovery is more in OPVs (45% White and 40% Yellow)

Value added maize products

Cornflakes Popped corn

8

Common Maize Value Chains in Nepal

• Maize seed value chain

• Maize food value chain

• Maize feed value chain

• Maize industrial value chain

9

Hills • Limited numbers of value chain

actors in grain marketing

• Rural traders collect maize from

large and small holder farmers

and supply to the local traders

• Value addition by traders is less

than 20%

• Actors mainly perform drying of

grains and bulk packaging in

sacks

Terai Many actors are involved in

Terai (input supply,

production, processing and

marketing etc.)

10

Maize Value Chain Actors

Total maize demand and its share in value

chain in Nepal, 2010

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Total Quantity: 2.21 mmt (Production-1.86 mmt;

Import-0.35 mmt)

Food

1.69 mmt (76.74%)

Feed

0.44 mmt (19.77%)

Industry

0.05 mmt (2.33%)

Seed

0.03 mmt (1.16%)

Seed, Fertilizer, Pesticides,

Importer (Fertilizer, Chemicals)

Input Supply Technology Source Seed

(BS/FS)

NGOs, INGOs, NARC DOA

Pvt. Sector, Agrovets

Producer/Processing/Quality Control

Consumer/Grower

Support

Trading, and Processing

SQCC,

RSTL, INGOs, NGOs, Agrovets, Fis, Pvt Sector

Agrovets

2040 t

Maize Seed Value Chain

Individual/Private Sector 96.4%

Public Sector 3.6%

Cooperatives 1360 t

Pvt. Labs, Private sectors,

MoAC,

FIS, Pvt.

Sectors

Rs. 40/kg

Rs. 40/Kg

17,000 t

12920 t 1088 t

Rs. 47/kg

Agrovet 190.4 t

Rs. 47/kg

190.4 t

Rs. 55/kg

Seed Company 82 t

82 t

Rs. 52/kg

Seed Company

680 t

Rs.

40/kg Rs.

40/kg

2040 t 680 t

Rs. 49/kg

Rs. 48/kg

Rs. 47/kg

Producer/Processing , packaging

Consumers Enabling Environment

Trading

Agrovets, Fis, Pvt Sector,

Maize Food Value Chain

Individual Farmer (30%)

Private Sector (70%)

Rs 14/Kg

Fis, Private sectors. Wholesalers

304.2 tt

Retailers 279.8 tt



Input Supply

Technology Seed



1690 tt

1386 tt

Rs 14/Kg

Rs 15-16/Kg

280 tt 24 tt

Rs 15-16/Kg

Rs 18-20/Kg



Seed & Technology

Input Supply

Materials

Technology Improved Seed , Agrovets



Production

Consumer Enabling Environment

15%

Processing


Maize Feed Value Chain

Individual Farmer Private Sector

Rs 17-19 /Kg

Marketing, Processing, Packaging


308 tt

FIs, Pvt. Sectors, Nepal Electricity Authority 132 tt

Dealers (100%) Retailers

Rs. 17-19/Kg

Marketing

440 tt

308 tt

Rs.30 /Kg

Rs. 32/Kg

Rs. 33/Kg

Rs.21 /Kg

85%

Rs 32/Kg



Seed & Technology

Input Supply

Materials

Technology Improved Seed , Agrovets



Production

Consumer Enabling Environment

10%

Processing


Maize Industry Value Chain

Individual Farmer Private Sector

Rs 17-19 /Kg

Marketing, Processing, Packaging


35 tt

Fis, Pvt. Sectors, Nepal Electricity Authority 15 tt

Dealers (100%) Retailers

Rs. 17-19/Kg

Marketing

50 tt

35 tt

Rs.135 /Kg

Rs. 148/Kg

Rs. 168/Kg

Rs.21 /Kg

90%

Rs 168/Kg

Constraints in Maize Value Chains

Functions Constraints 1. Input supply level Unorganized traders, Govt policies not sufficiently conducive,

quality is always questionable and curtailing

2. Producer level Unavailability of required quantities of production inputs,

increasing high cost of inputs and less aware about quality of

inputs and technologies

Lack of supportive policies ( subsidy and crop insurance)

3. Processing level Poor infrastructures and costly, Private sectors not very

interested to invest in agriculture, lack of supportive polices (

exemption of taxes for machineries)

4. Service provider level Less funding in agriculture (3.15% of the total budget),

Services are more supply demand and weak linkages and

coordination among service providers

5. Consumer level Poor marketing information , knowledge gap, weak

implementation consumer protection Act. No contract law in

the country for seed production, processing and marketing.

Not adequate education and awareness about consumption

of good and services

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Way Forward

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Functions Suggestions/Recommendations 1. Input supply

• Quality products

• Timely delivery services

• Quality control mechanism

• Friendly policies for market actors

2. Producer level • Subsidy on inputs

• Provision of crop insurance

• Soft loan and Credits

• Capacity building

• Contract system for assured marketing

• Responsive extension services

• Timely and efficient delivery services

• Mechanization and subsidy on farm equipments and

tools

• Market information on time

• Promotion of hybrid maize varieties in Terai during

winter and summer in the hills to increase maize

production and to substitute the import

Way Forward………

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Functions Suggestions/Recommendations 3. Processing

• Support in developing infrastructures both at

community level and private sectors

• Credits and exemption of taxes on equipment and

machineries

• Decentralized quality control system and establish

equipped labs

4. Consumer level • Effective implementation of consumer protection ACT.

• Formulation and implementation of Contract law

• Conduct awareness and promotional activities of

goods

• Good product price through efficient and effective

value chain system

• Access to market information system through media

and communication

There should be functional linkages and sharing of information among the value

chain actors is crucial for effective marketing system of maize and maize products.

In addition Enabling environment is essential to facilitate the value chain system.

Thank you

S7.3 Maize Value Chains in Nepal

Education

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