South Asian Journal of Social Studies and Economics

2(3): 1-7, 2018; Article no.SAJSSE.46189

Analysis of Socio-economic Factors and Profitability

of Hybrid Maize Production in Eastern Terai of Nepal
Surya Prasad Adhikari1*, Keshav Prasad Shrestha1 and Shukra Raj Shrestha2
1
Socioeconomics and Agricultural Research Policy Division, Khumaltar, Lalitpur, Nepal.
2
Regional Agricultural Research Station, Tarahara, Sunsari, Nepal.

Authors’ contributions

This work was carried out in collaboration between all authors. Author SPA designed the study,
collected the data, performed statistical analysis and drafted manuscript. Author KPS managed
literature searches and edited the paper. Author SRS collected the data and edited paper.
All authors read and approved the final manuscript.

Article Information

DOI: 10.9734/SAJSSE/2018/v2i326570
Editor(s):
(1) Dr. John M. Polimeni, Associate Professor, Department of Economics, Albany College of Pharmacy and Health Sciences,
Albany, USA.
Reviewers:
(1) Yubing Fan, USA.
(2) Haruna Abdulai, Savanna Agricultural Reseach Institute, Ghana.
(3) Ume, I. Smiles, Federal College of Agriculture Ishiagu, Nigeria
Complete Peer review History: http://prh.sdiarticle3.com/review-history/28159

Received 09 October 2018

Original Research Article Accepted 27 December 2018
Published 05 January 2019

ABSTRACT
The study was conducted to analyze the socioeconomic factors and profitability of hybrid maize
production in eastern Nepal. A household survey was conducted from March to April, 2017 in two
districts Morang and Sunsari to collect information on socioeconomic characteristics and
economics of maize production. The Structured questionnaire was administered to 98 randomly
selected households from two districts i.e. 41 from Morang and 57 from Sunsari district. Descriptive
and statistical tools including multiple regression model were used to analyze the data. The
multiple regression model showed that larger the maize area, higher the education of household
head and households who received maize farming related training were significant and positive
towards maize output. Farmers of Morang district have higher maize production than Sunsari
district. The benefit-cost ratio (1.7) indicates that hybrid maize farming was profitable with
productivity of 6.9 ton per hectare. Despite the importance of maize crop to household income,
many constraints were reported in its productivity including lack of irrigation, a high cost of inputs
and the incidence of pests and diseases. Ensuring access to irrigation, training on maize farming,
mechanization and efficient extension services were recommended to increase hybrid maize
production in eastern Nepal.
_____________________________________________________________________________________________________

*Corresponding author: Email: adhikarisurya56@gmail.com;

 Adhikari et al.; SAJSSE, 2(3): 1-7, 2018; Article no.SAJSSE.46189

Keywords: Factors; household; hybrid; regression; socioeconomic.

1. INTRODUCTION labor input cost and type of season and inverse

relationship between the output of maize and
Maize is the second most important cereal crop farm size, years of experience and sex of
in Nepal, after rice and is also the staple food for respondents [9]. The study found that Maize
hills people [1]. It is cultivated in 900,288 farming was profitable in the study area with
hectares of land, which is about 29% of the total gross margin and net returns of N2637.80 and
cultivated area of 3.09 million ha. The total N2141.00 respectively [9]. Awotide et al. [10]
production of maize is about 2.3 million tonnes. also found that farm size, labor input and seed
Its average productivity is 2.5t/ha [1]. The input influenced maize production. Olwande et al.
productivity of maize in the country is almost [11] in Kenya reported that age, education,
stagnant, while the demand for maize is credit, distant to fertilizer market significantly
increasing in Nepal because of the emerging influenced maize production by smallholder
poultry industry [2]. It is reported that the demand farmers. The main objective of this study was to
for maize has been growing by 5 % over the last determine the significant relationship between
decade [3]. In order to meet the growing demand farmers’ socioeconomic characteristics and
for maize resulting from increasing population maize output. While making a production
and expansion of feed industries in Nepal, maize decision, farmers consider costs of production
production has to be significantly improved, so and yield which ultimately affect the rate of
suitable areas for production and new varieties or adoption and sustainability of any crop. So,
improved varieties are required to meet this the profitability study on hybrid maize farming
demand. However, the average productivity of gives valuable information regarding farm
maize in Nepal is less compared to neighbouring management. Identification of socioeconomic
countries [4]. To increase the maize production factors that influence maize production is very
and productivity, cultivation of hybrid maize is important for policy makers, researchers and
one of the best alternatives. A current market extension agents so that they can make
requirement of maize grains is partly fulfilled by appropriate planning and strategy to increase the
growing hybrids in winter at terai and inner terai hybrid maize productivity in eastern Nepal. Thus,
[5]. Hybrid maize after rice is being popular this study aims to identify the profitability and
among the farmers of eastern terai. socioeconomic factors that influence hybrid
maize production in eastern Nepal.
Various factors are responsible with the low
productivity of maize crop in Nepal. The slow and 2. METHODOLOGY
limited adoption of production related to the
application of a lower level of fertilizers, The data used in this study was based on the
inappropriate seed rate, and lack of irrigation farm level study of hybrid maize farmers in
facilities [6]. Socioeconomic characteristics of Morang and Sunsari district, province no.1 of
farmers are important factors influencing maize Nepal. The main crops cultivated in these
production. The most important variables districts are; paddy, maize, wheat, sugarcane,
included in this category are age, education, vegetables and potato. Major population depend
household size, farm size, livestock number, on agricultural activities whether they are
membership, training and extension contact. The cultivating their own land and share cropping.
increased yield in maize production in Nigeria Peoples also depending on wage labor,
was associated with an expanded land area. business, service and foreign services. These
Furthermore, the study reported that the net districts are the major hybrid maize production
return from maize production increased by 2.1 district in eastern Nepal. The study areas were
percent for every 10 percent improvement in selected purposively based on hybrid maize
extension services [7]. A study in Nigeria found production and with the consultation of District
that a 10 percent increase in membership of Agriculture offices. Random sampling was used
social organization increased net earnings from to select the households from two districts. 41
maize farming by 10.4 percent [7]. A study found households from Morang and 57 households
that education, family size and farm size from Sunsari were selected randomly from the
significantly influenced the profitability of farm list of hybrid maize growers in the selected
products [8]. Olujenyo in 2008 reported that villages. A total of 98 households were surveyed
positive relationship between the total output of from March to April 2017 for the study. A
maize production and age, education, labor, non- comprehensive and structured questionnaire was

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used to collect data from hybrid maize growers. 3. RESULTS AND DISCUSSION
The data collection involved a household survey,
using a structured questionnaire. Face to face 3.1 Descriptive Statistics of Hybrid Maize
interviews were conducted with 98 farmers to Farmers
collect information on socio-economic
information, farming practices, cost of cultivation,
Descriptive statistics for the surveyed farmers
return from the maize crop and problems
are presented in Table 1. The average maize
associated with hybrid maize production. In
output was 6899 kg/ha, in which the productivity
addition, key informants and focus group
of Morang district was two times higher than the
discussions were conducted in each location.
Sunsari district, which is also significant at 1%
After the data collection, it was coded and
level. The average education of household head
entered in excel and analyzed in STATA 15.
was statistically higher in Morang as compared to
Collected data were analyzed with descriptive
Sunsari. The average farm size of sample
and quantitative methods.
farmers was 0.98 ha, and 0.62 ha is allocated to
2.1 Multiple Regression Model hybrid maize production on the average. Both
farm size and total maize area were higher in
We use the multiple regression model to Morang district as compared to Sunsari. About
estimate the socioeconomic factors that influence 21% of farmers received hybrid maize related
hybrid maize production. training, whereas about 26% of farmers were the
member in the agricultural related organization.
LnY= f(LnMaize area, LnTotal landholding, About 44% of farmers received training in
Education, Age, Family size, Training, Morang district, whereas, in Sunsari only 5% of
Membership, District dummy) farmers received training.

LnProduction = α0 + βiXi + ei 3.2 Identification of Socioeconomic

Factors Influencing Hybrid Maize
Where;
Output
LnProdcution = Hybrid maize production (in
natural log form) This analysis focused on the identification of
α0 = Constant factors that determine hybrid maize production in
βi = Coefficient eastern Nepal. A multiple regression model was
Xi = Explanatory variables adopted for the analysis. To achieve normality
ei = Error term and homogeneity of the error term, the
dependent variable production and independent
2.2 Analysis of the Profitability of Hybrid variables total landholdings and maize area were
Maize Production transformed to log form. Based on the analysis,
the coefficient of determination (R2) was 75%.
Profitability (net income) was estimated by This shows that about 75% of the variance in the
deducting total cost from gross income. maize output was influenced by the explanatory
variables included in the model. The F- statistics
Net Income = Gross Income − Total Cost (32.78) shows the stability of the overall
The gross income was calculated by multiplying regression equation and significant at 1% level.
the average yield with the price of the given The Breush-Pagan test for heteroscedasticity
product. Gross Income = Yield of the Product * showed a constant variance of error and model
Price of the Product has no heteroscedasticity. The mean Variance
Inflation Factor (VIF) was 1.81 and none of the
Total cost = Cost on Tractor for tillage + seed variables had VIF higher than 2. It indicates that
cost + Planting cost +Chemical fertilizers cost + there was no multicollinearity between
Farm Yard Manure cost + Cost on weeding + independent variables.
Cost on Pesticides + Cost on irrigation +
Harvesting cost + Threshing cost The regression coefficient of the maize area was
Benefit-cost ratio is the ratio of gross return and positive and statistically significant related to
total variable cost. maize production. Cultivation of large farm sizes
makes it more economical for farmers to apply
B/C ratio = Gross return (NRs.) / Total variable inputs and more commercialization of farm. This
cost (NRs.) is similar with Feder et al. [12] that says farmers

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 Adhikari et al.; SAJSSE, 2(3): 1-7, 2018; Article no.SAJSSE.46189

with bigger land holding size are assumed to compared to less educated farmers. Education
have the ability to purchase improved enhances the ability of decision makers by
technologies and the capacity to bear the risk if enabling the farmers to think critically and use
the technology fails. Similarly, Julius and Nmadu information sources efficiently. Farmers with
in Nigeria found that maize cultivated area was more education should be aware of more
significant and positively related to maize output sources of information, and more efficient in
[13]. evaluating and interpreting information about
innovations than those with less education [14].
The total landholding was positively signed but Similarly, Urassa, J. K. [15] in Tanzania also
not statistically significant. The coefficient of found that education level had statistically impact
education of household head was positive and on maize yield. Education may reflect greater
statistically significant at 10% level. This awareness of good farming practices, e.g.
indicates that educated farmers have more skills application of fertilizers, pesticides.
and knowledge about hybrid maize farming as

Table 1. Socioeconomic characteristics of maize farmers

Continuous Variables Total Morang Sunsari t-value

(N=98) (N=41) (N=57)
Production (Kg/ha) 6899.00 9683.00 4897.00 0.00***
Age of the household head (years) 47.43 45.73 48.6 0.24
Education of household head (Years) 6.31 7.58 5.40 0.00***
Family size (Number) 5.81 6.24 5.5 0.02**
Total land (ha) 0.98 1.53 0.60 0.00***
Total Maize area (ha) 0.62 0.84 0.46 0.00***
Categorical variables Chi2- value
Training (Yes =1) 21 (21.43) 18 (43.90) 3 (5.26) 0.00***
Membership (Yes =1) 26 (26.53) 9 (21.95) 17(29.82)) 0.38
Source: Field survey, 2017
Note: * significant at 10% level, ** significant at 5% and *** significant at 1%

Table 2. Regression result of socio-economic factors that influence maize production

Variables Coefficient Standard error p- value

Maize area (ha) 2.17* 1.25 0.09
Total land (ha) -0.04 0.04 0.35
Education of HH (Years) 0.01* 0.00 0.09
Age of HH (Years) -0.00 0.00 0.22
Family members (No.) 0.00 0.02 0.82
Training received (1=Yes) 0.19** 0.07 0.01
Membership (1=Yes) 0.01 0.06 0.93
District (1=Morang) 0.59*** 0.06 0.00
Constant 8.46*** 0.15 0.00
Other statistics
Number of observation 98
R-square 0.75
Adjusted R- square 0.72
F value (8,89) 32.78
2 2
Heteroscedasticity chi (1) =1.03 prob > chi = 0.31 (constant variance)
Variance Inflation factor (VIF) 1.81 (mean vif) : no muticollinearity
Model has no omitted variable (ovtest): F (3, 86)= 1.20 prob >F = 0.31
Note: * significant at 10% level, ** significant at 5% and *** significant at 1%

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Regarding household characteristics, there were Per hectare cost of seed was about NRs. 12244
no statistically significant of age, family size and which constituted about 15% of the total cost. All
membership on yields of maize production. The of the surveyed households adopting hybrid
coefficient of the training was positive and maize seed imported from India. To substitute
statistically significant at 5% level of significance. the import from India, Nepal should focus on
This implies that there is a positive relationship hybrid maize development and its extension.
between training received and maize output. Almost all the farmers used chemical fertilizers
The dummy variable district is significant at 1% such as Urea, DAP (Di-Ammonium Phosphate),
level of significance. The result showed that Potash. Some of the farmers in Morang district
Morang district farmers produced 58.6% more also used micronutrients like calcium, boron and
production than Sunsari farmers in one hectare sulfur for production. Farmers expensed about
of land. This may be the reason that Morang 19% of total cost for inorganic fertilizers. Farmers
district farmers were more educated, they also used FYM for maize production which
cultivated maize in a larger area and they also constituted about 5% of total cost. Per hectare
received more training related to maize costs of irrigation was about NRs. 4800, which
production. accounted for about 6% of total cost. Almost all
of the farmers used thresher for threshing maize
3.3 Profitability Estimation of Maize grain. The average threshing cost per hectare
Production was about NRs. 5000. Similarly, few farmers
applied pesticide to their crops, which constituted
3.3.1 Cost of production about 2% of the total variable cost of production.

Farmers expensed highest resources in human 3.4 Returns from Hybrid Maize
labor for hybrid maize production. It was required Production
for different farm operations such as land
preparation, seed planting, fertilizer application, The table revealed that the gross margin analysis
weeding, threshing, transportation, cleaning etc. from maize production in eastern Nepal. Farmers
The cost of human labor in the production of in the study area were involved in hybrid maize
maize per hectare was estimated about farming on an average of 0.62 ha of land with per
Nepalese Rupee (NRs.) 27050. Human labor hectare production as 6899 kg. The farm gate
cost accounted for about 32.5% of the total price of maize was NRs. 20 per kg. The average
variable cost in maize production. It indicates that per hectare, price of maize by-product is
hybrid maize production required more labor. To NRs.2600. The average gross return and total
reduce labor cost, there should be focused on cost of maize production were NRs. 140600 and
mechanization in maize farming. Farmers NRs. 83301 respectively. Per hectare gross
expensed about 15% in tillage cost. In the study margin of maize production was about NRs.
area, all the farmers used tractor for tillage 57299. The benefit-cost ratio (BCR) was found to
operation. Farmers performed 2 to 4 tillage be 1.69. This implies that the hybrid maize
operations for maize production. For the farming was highly profitable, therefore it has a
reduction in tillage cost, there should be focused significant contribution to the income of the
on resource conservation agriculture. farmers.

Table 3. Average cost of production

Items of cost Mean Percent of total cost

Seed (NRs./ha.) 12,244 14.69
Tillage (NRs./ha.) 12,288 14.75
Chemical Fertilizers (NRs./ha.) 15,910 19.01
FYM (NRs./ha.) 3,892 4.67
Human labour (NRs./ha) 27050 32.47
Pesticide cost (NRs./ha.) 1,987 2.39
Irrigation (NRs./ha.) 4,875 5.85
Threshing (NRs./ha.) 5,055 6.09
Total cost (NRs./ha.) 83301 100.00
Source: Field survey, 2017

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Table 4. Average return in maize production ratio of 1.69. Farmers faced the lack of irrigation
was the major problem followed by high seed
Measuring Criteria Average value cost.
Main product value (NRs./ha) 138000
By-product value (NRs./ha) 2600 The finding suggests that a higher level of
Gross return (NRs/ha) 140600 education level and training on hybrid maize
Total cost (NRs/ha) 83301 farming could help to better production. Higher
Gross Margin (NRs/ha) 57299 yield could be achieved through the larger area
BCR 1.69 of maize farming through commercialization.
Source: Field survey, 2017 Farmers expensed more than 32% in labor cost.
The government could promote mechanization in
3.5 Major Problems in Hybrid Maize maize farming to reduce the cost of cultivation.
Farming All of the farmers used hybrid maize imported
from India, they expensed more than 15% in the
Table 5 presents the problems associated with seed of total cost of production. Nepal
hybrid maize farming. Although hybrid maize was government should focus on hybrid maize variety
observed to be a profitable crop, there exist development and its extension to substitute the
many problems. Farmers perceived that lack of import.
irrigation was the major problem followed by high
seed cost. About 38% of farmers faced irrigation ACKNOWLEDGEMENT
constraints in maize farming. Similarly, high
input cost, high labor cost, market-related The author would like to thank Nepal Agricultural
problem and infestation of disease and pest were Research Council for financial support to carry
third, fourth, fifth and sixth problems respectively. out this study in eastern terai region of Nepal.
Farmers considered high seed, inputs and labor The authors extend sincere gratitude to the
costs as compared to grain prices. Dawait et al. farmers of Morang and Sunsari district of Nepal.
[16] in Ethiopia also found high input cost in
maize farming. COMPETING INTERESTS
Table 5. Problems associated with hybrid
maize farming Authors have declared that no competing
interests exist.
Problems Frequency Percent
Lack of Irrigation 38 38.77 REFERENCES
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