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Capital Budgeting Analysis of Organic Coffee Production in Gulmi District of Nepal

Author

Listed:
  • Poudel, Krishna Lal
  • Nepal, Arati Poudel
  • Dhungana, Bhima
  • Sugimoto, Yasuhiro
  • Yamamoto, Naoyuki
  • Nishiwaki, Aya

Abstract

This research paper was written to an objective of examining the present condition of organic coffee farming in the rural mid-hill region of Nepal in the background of financial viability. Nepal could avail competitive advantage from organic coffee by creating niche markets. The financial indicators showed economic profit and sustainable venture in income generation to the rural marginal people. The financial indicators administered were Benefit-Cost ratio (B/C), Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PP) and the value were 2.12 (at 12% opportunity cost of capital), 67763.58 ,43.47 % and 6 year respectively. This was the economically very sound business scenario. Sensitivity analysis to predict the evolution of the aforementioned indicators under various circumstances subjected to variability in output and input price was done. Marketing channel was very short and having only two routes. Marketing margin was Rs. 225 and producers share was found 50% .Farmers were experiencing soil conservation, better health and better livelihood.

Suggested Citation

  • Poudel, Krishna Lal & Nepal, Arati Poudel & Dhungana, Bhima & Sugimoto, Yasuhiro & Yamamoto, Naoyuki & Nishiwaki, Aya, 2009. "Capital Budgeting Analysis of Organic Coffee Production in Gulmi District of Nepal," 2009 Conference, August 16-22, 2009, Beijing, China 51559, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:51559
    DOI: 10.22004/ag.econ.51559
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    Cited by:

    1. Sharma, Sujeeta & Dhakal, Chandra Kant & Ghimire, Binod & Rijal, Anuja, 2016. "Economic Significance of Coffee ( Coffee Arabica ) Production in Parbat District of Nepal," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 6(2), June.
    2. Kefale, Tigist & Ayalew, Zemen & Birhanie, Zewdu & Wubetie, Biruk Yazie & Baributsa, Dieudonne, 2022. "Cost-benefit analysis of Purdue Improved Crop Storage bags for maize storage among smallholder farmers in northwest Ethiopia," African Journal of Food, Agriculture, Nutrition and Development (AJFAND), African Journal of Food, Agriculture, Nutrition and Development (AJFAND), vol. 22(09).
    3. Pravin Poudel & Ajit Khanal & Thaneshwar Bhandari, 2021. "Financial Appraisal Of Coffee Growers And Traders In Kaski, Gandaki Province, Nepal," Food & Agribusiness Management (FABM), Zibeline International Publishing, vol. 2(1), pages 35-41, March.
    4. Evelyne Sissinto Gbenou & Ygué Patrice Adégbola & Pélagie Manhoussi Hessavi & Segla Roch Cedrique Zossou & Gauthier Biaou, 2021. "On-Farm Assessment of Maize Storage and Conservation Technologies in the Central and Northern Republic of Benin," Agriculture, MDPI, vol. 11(1), pages 1-14, January.

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