Production efficiency of banana cultivation in Chitwan District, Nepal

Abstract

Banana is a high-value commercial summer fruit growing in Nepal. The study was conducted to examine the profitability and resource use efficiency in banana production in the Chitwan district. Categorization of banana farmers was done according to the farm size as small-scale and large-scale farmers. A total of 80 banana farmers were randomly selected, including 45 small-scale and 35 large-scale farmers. Results revealed that the average cost of production of bananas per Kattha per year was NPR 11,769.85 and the gross benefit was NPR 15,470.687 per Kattha per year. Similarly, the overall BC ratio was 1.37 showing a profitable farming business with the significant economy of scale. The return to scale was 0.699 showing a decreasing return to scale. In production function analysis, the cost of land preparation, fertilizer, manure, pesticides, and insurance premium were positively significant and micronutrient cost was negatively significant to gross returns from banana farming. All the resources were found overutilized except insurance premiums. This showed that lowering the cost of overutilized resources and increasing the insurance premium can help to maximize profit in the long run in banana farming.