Production Economics, Marketing Efficiency, and Value Chain Analysis of Potato(Solanum tuberosum L.) in Dadeldhura District, Nepal

Abstract

Potato (Solanum tuberosum L.) is an important staple and cash crop in Nepal, yet limited empirical evidence exists on its production economics, marketing efficiency, and value chain performance in Far-Western hill districts. This study analyzed the profitability, marketing efficiency, and value chain dynamics of potato production in Dadeldhura district, Nepal, using primary data collected in 2018 from 60 potato-growing households and key market actors through semi-structured questionnaires. Cost–benefit analysis, market margin analysis, Cobb–Douglas production function, and value chain analysis were employed to assess production and marketing performance. The average potato productivity was 19.53 t ha⁻¹, while the total production cost and gross return were NRs 311,859.53 ha⁻¹ and NRs 661,142.20 ha⁻¹, respectively, resulting in a benefit–cost ratio of 2.12. Moreover, labor (β = 0.403), farmyard manure (β = 0.406), and chemical fertilizers (β = 0.575) had significant positive effects on potato production. Similarly, four marketing channels were identified, among which the Producers–Collectors–Wholesalers–Retailers–Consumers channel handled 59.74% of total potato sales but recorded the lowest producer’s share (74.8%) and the highest market margin (NRs 11.32 kg⁻¹). In contrast, direct producer-to-consumer marketing provided a 100% producer’s share and the highest marketing efficiency. Furthermore, major constraints included price fluctuation, lack of mechanization, pest and disease incidence, inadequate storage facilities, and high middlemen margins. The findings highlight the importance of improving market coordination, strengthening producer organizations, expanding storage infrastructure, and promoting direct marketing systems to enhance producer returns and support sustainable potato commercialization in Nepal.