Dynamics and Economic Analysis of Sugarcane Production in Eastern Plains of Nepal

Abstract

The area of sugarcane (Saccharum officinarum L.) production in the Eastern Plains of Nepal is decreasing every year due to several factors, including increasing cost of cultivation, lower yield, lower and delay payment, insect and diseases problems. A study was conducted to analyze the productivity and profitability of sugarcane production in this region, where, a randomly selected 80 sugarcane farmers from Sunsari and Morang districts were administered with the questionnaire to collect data between 2017 and 2018. Results of the study revealed that farmers were male dominant (67.50%) with average landholdings of 1.30 hectares (ha). The dominant age group in the farming community was 51 to 60 years and 58.75% of farmers had a primary level of education. The sugarcane production in the study area was profitable with benefit and cost ratio (B/C) 1.38 and 1.34 for main and ratoon crops, respectively. The net income was NRs. 91369.70 and NRs. 36065.00 for main and ratoon crops, respectively. The coefficient of multiple determinations (R2) was 0.79, which means that variations in the explanatory variable explained 79.80% of the variation in the dependent variable. Lower productivity, unscientific price fixation, and delay payment of the sugarcane by the sugar mills were the major problems found in the study area. Labor expenses constitute half of the total cost of cultivation, so mechanizations are needed to lower the cost and increase the profit. Co-coordination among different stakeholders, including the government entity, is required for scientific pricing and sustainable production of sugarcane.