DefinePK

Abstract

Rice is Nepal's principal food crop. However, domestic rice production remains insufficient, resulting in significant imports. This study employed a Structure-Conduct-Performance (SCP) framework to analyze the rice value chain in the Terai belt, using primary data collected from 360 producers, 90 traders, and 30 key informants across Jhapa, Rupandehi, and Kailali districts, selected through a simple random sampling technique. Analytical tools included the calculation of the Herfindahl Index, marketing efficiency, price spread, Gini index, and marketing margin. The Herfindahl Index (0.262) and Lerner Index (0.71) indicate moderate to high market concentration and near-monopoly behavior, with wholesalers exercising strong price control. The study's findings indicate that producers have limited influence on the market, and the market exhibits a non-competitive structure. Marketing efficiency was low (0.58), and price spread was high (41.40%), reflecting marketing inefficiencies. The Gini index (0.75) shows significant income inequality among paddy producers. Large processors in the rice value chain were observed to capture a disproportionate share of profits. Furthermore, rice production was found to be profitable in the study area, warranting an increase in the area under rice cultivation. Strategic interventions, such as implementing Minimum Support Prices (MSP), reducing marketing margins, and strengthening value chain governance, are recommended. Government regulation is necessary, particularly in the processing. The study suggests a coordinated value chain structure, private sector involvement, increased investment in production, embedded service provision, and adoption of improved technology among producers and concerned stakeholders in the rice value chain of Terai belt for a competitive, efficient, and equitable rice market to ensure a sufficient domestic supply.