Value Chain analysis of turmeric (Curcuma longa) in Eastern Nepal

A study on value chain analysis of turmeric (Curcuma longa) was conducted in December, 2010. Forty turmeric producing farmers were selected randomly from the list of District Agriculture Development Office, Sunsari. Similarly, 25 traders, wholesalers and retailers from Sunsari and Biratnagar were selected purposively. The study revealed that more than 38 percent of the cost goes to the labor as all the operation was labor intensive. There were no formal institutions involved in the promotion of turmeric in the study area and hence local seeds were used since time immemorial. Majority of the farmers practiced mother rhizome retrieval and this practice contributed to reduce the cost of production. The average cost of production was NRs 63 per kg for dry turmeric (Sutho). At the producer level, grading, cleaning and Sutho making were the major value addition activities, where the marketing margin was NRs 129 per kg Sutho. At the processor level, milling and packaging were the major value addition activities, where marketing margin was NRs 65 per kg turmeric powder. Around 2 percent of the total production was used for seed and 2 percent was used for powder making for their own use and rest of the production was sold to collectors. Collectors directly sell 50 percent of the product to the retailers, 16 percent to mill and 5 percent to spice industry (Masala Udyog). The production side actors are typically interested in access to capital (credit/loans) and technical inputs, market assurances (price and quantity) and higher prices from the market actors. The market actors expect for sharing risks and inputs, quality and quantity assurances and market lead price fixing from the production side actors. These divergent areas of interest often result in conflict of interest and thus loss of trust. SWOT analysis was carried out, constraints were identified, and interventions were proposed.