Profitability and Resource Use Efficiency of Rice Production in Chitwan District, Nepal

Abstract

Rice is a primary staple food of Nepalese people. The study aims to investigate the profitability scenario of rice farming along with resource use pattern of farmers within the study area. Multistage sampling technique was employed to obtain the sample for the study. The primary data was obtained from 150 randomly selected respondents using the semi structured questionnaire. Data were analyzed using both the descriptive and inferential statistics. We employed the Cobb Douglas production function model to analyze the resource use efficiency. The positive gross margin (NRs. 39,693.66) and benefit-cost ratio (1.26) showed that rice production was a profitable enterprise, with average productivity of 4.65 mt/ha. The return to scale was found 0.563, which signifies that the production function exhibits diminishing returns to scale. The analysis of resource use efficiency indicated that inputs in rice production were not optimally utilized. Inputs such as seeds and chemical fertilizers were underutilized, whereas machine labor, human labor, organic manure, and pesticides cum irrigation were overutilized. To attain optimal resource allocation, it is imperative to reduce the costs of inputs such as machine labor, human labor, organic manure, and pesticide cum irrigation by 19.267%, 186.995%, 15.818%, and 4.193%, respectively, while the costs of seed and chemical fertilizer need to be increased by 51.476% and 22.915%, respectively. The results obtained from the study can significantly enhance the profitability and optimize the level of resource use in rice production by providing a crucial policy framework that can strengthen the level of domestic rice production. It necessitates the requirement of further research on analyzing the limiting factors that precludes the efficient resource use.