Value chain dynamics and trade performance of lentil (Lens culinaris) in Nepal

Based on primary data of 473 lentil farmers and 155 lentil traders selected randomly, the study was designed to analyze lentils farm profitability, efficiency, commodity value chain, market structure and marketing efficiency. Also, secondary data pertaining for 30 years was used to analyze lentil export performance and competitiveness. On average lentils farmers were earning about 40% profit as of gross return with benefit-cost ratio 1.78. Resources allocated in lentil production were found inefficient and to achieve maximum return, expenses on land preparation, seed, nutrient, plant protection cum irrigation should be increased by 27.6%, 80.8%, 33.1% and 97.9% respectively whereas; expenses on labor and harvest and post-harvest activities should be decreased by 30.1% and 23.6%. The model estimated the mean technical efficiency percentage estimated by the model for the pooled sample is 61.5% with range between 23.0% and to the maximum of 89.9%. Most frequently and largest volume transacted marketing channel for lentil was via producer-local collector-processor-wholesaler-retailer-consumer accounting 44.56%. The highest profit share (36.02%) was obtained by processors followed by producers (30.85%). Highest proportion of value addition was done by processors (37.59%) followed by producers (32.36%), large collectors (10.92%), local collectors (10.87%), retailers (10.25%) and wholesalers (5.80%). The price spread of overall lentil value chain was 42.13% (67.11 NRs/kg) with 57.87% of farmers share with marketing efficiency 2.60. The study resulted product unavailability and capital shortage were the major barrier to entry. Whereas, price fluctuation and unavailability of quality lentil were the major marketing constraints. The result further revealed that the export growth of lentil from Nepal during 30 years is very poor and nominal (1.44) whereas; growth in import is very high with higher instability showing high economic risks and deficit situation in the country. Reveled comparative advantage, reveled symmetric comparative advantage and export performance ratio results indicates higher competitiveness of Nepal in the export of lentil and can be benefited with higher comparative advantage. Trade specialization index value suggest that even though the country’s performance fluctuated over the years, it remains in the stage of import substitution declining from growth stage and have witnessed positive direction to revive and regain the lentil export performance from Nepal.