: 
i
Technical Session 7: Maize value chains and post-harvest management
Or_7.01: Maize value chains in Nepal
Dil Bahadur Gurung1, Dilli Bahadur KC2, G. Ortiz Ferrara2, N. Gadal2, Suroj Pokhrel3, Dila Ram Bhandari4, K.
B. Koirala5, Bala Ram Bhandari1and Mahendra Tripathi1
National Maize Research Program, Nepal Agricultural Research Council (NARC), Nepal
CIMMYT South Asia Regional Office, P.O. Box 5186, Kathmandu, Nepal
3
Department of Agriculture, Ministry of Agriculture and Cooperatives, Nepal
4
Seed Quality Control Center, Ministry of Agriculture and Cooperatives, Nepal
5
Hill Crops Research Program, Nepal Agricultural Research Council (NARC), Nepal
Author for correspondence: [email protected]
1
2
Maize is an important food crop in Nepalese agriculture
contributing 26% of the total edible food production and
providing 436 kcal/capita/day of the total energy intake in
the daily diet. It is grown in 875,660 ha and producing 1.93
million mt with average productivity of 2.2 t ha-1. Average
per capita consumption of maize is 45.5 kg/capita/year,
which is even more in the hills, where maize is vital for
survival. Mid hills represents more than 70% of area and
production, where as high hills occupies 20% of area and
produces 9.78% of total production, and Terai occupies 10%
area contributing 20.12% to national maize production. It
shows how important the maize crop is for mid hill people
and its contribution to food security and livelihood options.
Maize is commonly grown in three seasons: summer, spring
and winter. Area under summer maize is about 73.9%
whereas spring and winter maize occupied 14.2% and
11.9%, respectively.
value addition by traders is less than 20% in grains and they
simply perform drying and bulk packaging in jute or plastic
bags. However, many actors are involved in Terai such as
input supply, production, processing and marketing. The
main actors engaged in bringing out the maize from farm
to the fork are input suppliers, producers, processors, sellers
and consumers.
Majority of maize farmers (>95%) are small land
holders (<0.5 ha) but they produce more than 80% of total
production. In most of the cases, small holder’s inputs are
farm saved seeds, farm yard manures, compost, and family
labor, which is not reflected in the cost of production.
Annual Seed Replacement Rate (SRR) is 11.88%, more than
88% farmers used farm saved seeds and apply minimum
amount of fertilizers and pesticides in maize production at
national level. Small holders sell their surplus grains to the
rural traders since they are constraints by not having even
very simple things like corn shelling machines, drying and
storage facilities. The contribution of large and commercial
farmers is about 20% in total maize production. They use
improved seeds of both OPVs and hybrids with required
inputs and owned tractors, seed drills. corn shellers, seed
drying and storage facilities. Their production largely goes
for feeds/ industrial uses and sales through agents, traders to
feed industries.
More than 95% maize area is occupied by Open
Pollinated Varieties (OPVs). Area under hybrid maize is
less than 4% which is mostly grown during winter season
mainly in Terai districts, Tars and lower valleys of some
hilly districts. More than 86% of maize production is used
for human consumption, 12.8% for poultry feeds, and the
rest for industrial and other purposes. Since many mid
hill districts are food deficit, limited amount of subsidized
food grains are supplied by Nepal Food Corporation (NFC)
which is not sufficient to meet the demand. In this context,
almost all quantity of the maize produced in the mid (1.3
million mt) and high hills (0.18 million mt) directly utilizes
in human consumption and a very little portion is fed to
animals. However, more than 80% Terai production (0.38
million mt) is being utilized for poultry and animal feeds
and remaining 20% is used as industrial (10%) and human
consumption (10%).
More than 300 District Seed Self-sufficiency Program
(DISSPRO) groups and 174 Community Based Seed
Production (CBSP) groups are producing maize seeds of
different OPVs. These groups are more functional in remote
hill districts which increased the access of improved seeds
to the resource poor farmers. Significant amount of quality
seeds are being produced and sold by these groups where
seed companies are not established. Seed companies are
mainly located in Terai and in accessible. The CBSPs and
DISSPRO groups are selling their seeds to the seed traders,
cooperatives and I/NGOs and Government organizations
with truthful labels. Agro-vets and seed companies are the
main input suppliers for seed production.
Maize is being utilized for food, feed and fodder
by subsistence farmers as being the multifaceted crop
and integral part of hill farming system. Large volume of
produced grain is used in home consumption. Not many
value chain actors are involved in grain marketing in the
mid hills. Rural traders collect surplus maize from large and
small holder farmers and supply it to the local traders. The
Seeds meeting the required standards are collected,
dried, processed, packaged, labeled and sold to agro-vets.
471
Book of Extended Summaries for the Eleventh Asian Maize Conference
Seed companies sell 80% of their seeds to agro-vets, 10%
to cooperatives, 5% to DADOs, 3% to I/NGOs and 2% to
farmers. In addition to their own production, some seed
companies and cooperatives also buy seed produced by
CBSP groups. Farmers sell their seeds at NRs 40 (US$ 0.53)
kg-1 and end users have to pay NRs 55 (US$ 0.73) kg-1. The
value addition to the seeds by the seed companies is 27.0%.
In general seed price is fixed by the district level seed
coordination committee. However, negotiation between
sellers and buyers is more prevalent.
In cornflakes industries, millers buy maize at NRs 17.41
(US$ 0.23) kg-1 from the farmers/agents. Three kilogram of
maize is required to make 1 kg corn flakes. It costs NRs 52
(US$ 0.69) to buy 3 kg of maize. The cost of raw cornflakes
is NRs 115 (US$ 1.53) kg-1 excluding transport, packaging
and payable taxes. The actual price of marketable cornflakes
is NRs 125.33 (US$ 1.67) kg-1. Miller sells cornflakes to the
dealer at NRs 135 kg-1 (US$ 1.80) and retailers get at NRs
148.50 (US$ 1.98) kg-1. The consumer price is NRs 168
(US$ 2.24) kg-1. Miller gets profit of NRs 10 (US$ 0.13)
kg-1 of cornflakes, which is 8.6%. The value added to the
raw cornflakes is NRs 63 (US$ 0.84) kg-1, which is 121%
and dealer gets 30% profit from the retailers who gets 16.2%
profits from the dealers. In total about 39.75% profit can be
obtained by selling 1 kg of cornflake.
There are two kinds of traders involved in maize grain
marketing in Nepal. Rural traders are buyers of surplus
maize grains from the small and medium sized farmers.
They also act as middlemen for urban traders, millers and
feed industries. Urban traders collect large volume of maize
grains through rural traders. In some cases, an agreement
is made between producers and traders to ensure grain
collection as per agreement. This type of practice is common
between growers and feed industries in winter hybrid maize
growing areas.
Limited and irregular access of improved seeds and
quality fertilizers specifically to the small holders in the
remote villages is the main constraint for maize production.
Most of the farmers are not aware about information on
crop management aspects particularly balances use of
fertilizers and maintaining optimum plant population per
hectare. Youth muscle drain along with poor mechanization
in Nepalese agriculture has increased the production cost.
Post harvest handling of produced seed is difficult and
costly due to conventional infrastructural facilities as well as
poorly developed marketing channels and insecure markets
across the mid hills are major constraints. Quality of grains
is difficult to maintain by traders due to weakly developed
and poor infrastructural facilities for safe and long term
storage. Seasonal and insufficient production of maize
grains at national level cannot fulfill the industrial demand
of the country. Industries have to depend on import for raw
materials which is costly than local production.
Green cobs are used as roasted and boiled. Popped
maize is very popular item preferred by all sections of
people for snacks. Maize is mainly consumed in the form
of grits like as rice, bread as chapati prepared from the flour
and processed products like confectionaries. OPVs are more
common for making grits and flour with recovery of 45%
and 40%, respectively. Grits of both white and yellow color
are preferred. Maize grain is purchased at NRs 17-19 (US$
0.23-0.25) kg-1 and grits are sold at NRs 45 (US$ 0.6) kg-1 to
end users adding value by 57.2% by millers and only 0.13%
by wholesalers and retailers.
Maize is the major ingredient for poultry feeds
containing about 60-65% of total feed. Growing poultry
industries are demanding more grains every year. Present
production is not sufficient to meet the demand of feed
industries and being imported to meet the demand. However,
hybrid maize grown in Terai under maize mission program
has reduced import to some extent.
Optimum exploitations of CBSP, DISSPRO groups
with providing proper training and developing assured
marketing channels can help increase maize production
in Nepal. Large numbers of I/NGOs working at different
areas can contribute in capacity building of seed producer
groups and dissemination of quality seeds. Use of suitable
modern mechanical tools along with appropriate package of
practices can help to reduce production cost and drudgery,
and increase profit per unit area per unit time. There is great
potentiality to compete with international products through
improving production quality. Cultivation of hybrid maize
varieties in Terai during winter season could be one of the
potential options to substitute import. As of now there are
limited hybrid varieties available and the farmers in hybrid
growing areas are dependent on the multi- national seed
companies, which are not sustainable and dependable in
the long run. Focus should be given on development of
hybrid maize varieties under national research system and
technology dissemination in a wider scale.
Feed industries are collecting maize grains from traders
(50%), cooperatives (35%) and individual farmers (15%).
The grains are dried, cleaned, processed, packaged and is
provided to the wholesalers. Most of the pelleted feed is
used for broiler ration and more than 80% mass feeds fed for
layers. The share of pelleted, mass, and homemade feeds is
60, 20 and 20%, respectively. Feed industries buy maize at
NRs 17-19 (US$ 0.23-0.25) kg-1. The wholesaler sells feed
at NRs 32 (US$ 0.43) kg-1 and retailer sells at NRs 33 (US$
0.44) kg-1. Feed industries provide NRs 1.80 (US$ 0.024)
kg-1 commission to wholesalers and similarly, wholesaler
provides some commission to the retailers. Feed industries
add the value of feed by 73.9%.
472