Organic turmeric production is one of the major traditional farm activities within the mid-western region, Nepal. Surkhet district is a part of Province No. 6 within the Inner-Terai valley located in the Bheri Zone of Nepal. It has a mild climate with hot summers and cold rainy winters. The district was purposefully selected because it is famous for productive land and is one of the leading turmericproducing districts of the country. The Surkhet district of Nepal favours turmeric production in terms of physical, biological, and atmospheric conditions. Hence, four municipalities namely: Bheriganga, Barahtal, Lekbeshi, and Gurbhakot Municipality were randomly selected. A total of 60 households, 15 from each municipality were randomly selected from the study area.

FGD was conducted to supplement and triangulate the information obtained from the household survey. Two FGD was organized in four municipalities. The secondary data were collected from the various web, published articles, national reports and publications, various books, reports of different NGOs and INGOs, etc. The gathered data were coded, entered, and interpreted by utilizing SPSS and MSExcel computer software. The simple descriptive and statistical tools including the Cobb-Douglas production function and benefit-cost analysis were used to find out the result.

The total variable cost of organic turmeric production was calculated by estimating all variable inputs such as seed, organic manure, other costs, human labour, and bullock ploughing at current market prices.

Total variable cost = C seed + C organic manure + C ploughing + C labour + C other

Where, C seed = Cost on seed (NRs. / ropani), C organic manure = Cost on organic manure (NRs. / ropani), C ploughing = cost on ploughing by pair of a bullock (NRs. / ropani), C labour = cost on human labour (NRs. / ropani), C others = cost on agriculture equipment, sack/doko, thread, and rhizome treatment (NRs. / ropani). Similarly, the gross return was calculated as the total quantity of fresh turmeric produced × average price of fresh turmeric. The undiscounted benefit-cost ratio (BCR) was calculated by the following method.

Benefit cost ratio (BCR) = Gross return (NRs. / ropani)/ Total variable cost (NRs. /ropani)

Gross margin is an estimation of the difference between gross returns and variable costs. It was calculated using the formula below:

Gross Margin (NRs. /ropani) = Gross return (NRs. / ropani) – Total variable cost (NRs. / ropani).

To estimate the contribution of different variable inputs on turmeric production, the general form of Cobb-Douglas production function was used. The model used for estimating regression coefficients of turmeric production in the study area was computed by the following formula: Yt=aX1b1X2b2X3b3X4b4X5b5eu

Where, Y_t = Gross return of turmeric (NRs. / ropani), X₁ = Cost on sources of seed (NRs. / ropani), X₂ = cost on labour (NRs. / ropani), X₃ = cost on organic manure (NRs. / ropani), X₄ = cost on other (NRs. / ropani), X₅ = cost on ploughing, e = Base of natural logarithm, u = Random disturbance term, a = constant, and^b₁,^b₂,^b₃,^b₄ and^b₅ are coefficient of respective variables.

Above model can be expressed in log linear form as follows: lnYt=lna+b1lnX1+b2lnX2+b3lnX3+b4lnX4+b5lnX5+u

Where ln = natural logarithm, a = constant and u is random disturbance.

The term Return to scale refers to the change in output as input change by the same proportions. It was determined by summing up the regression coefficients of respective inputs from the Cobb Douglas Production Function (CDPF) regression analysis.

Distribution based on turmeric cultivated area and productivity in Surkhet district, Nepal is presented in Table 1 which revealed that the average productivity of turmeric in the study area was 9.06 Mt/ha which was found to be less than that of the national average productivity of 9.79 Mt /ha (Krishi Dairy, 2074). Among 60 households interviewed, the average total landholding per farmer was found around 12.5 ropani with an average size of the plot allocated for turmeric farming was around 2.28 ropani.

Most of the turmeric producers in the surveyed area were growing turmeric by traditional agricultural practices in which agricultural knowledge obtained from their ancestors was used. They don’t use any chemical fertilizers and they don’t even properly water their crops. For this study, the cost of production was calculated based on household interviews and focus group discussions done with farmers from four municipalities of the Surkhet district selected for the study.

The major cost of production included human labour, seed, manure, ploughing, and other costs. The highest cost was found to be covered by seed rhizome (50 %). However, according to studies by (Chhetri et al. 2019), (HVAP 2011), and (Timsina et al. 2011), 31.37%, 31%, and 11.17%, respectively, go to purchasing seed. The difference in seed cost may be due to the different annual seed price rates. The cost-share accounted for human labour, organic manure, other costs (doko/sack, agriculture equipment, thread, rhizome treatment), and ploughing costs were 28%, 15%, 4.2%, and 2.8% respectively in the study area. The pesticides, machinery, chemical fertilizer, and herbicides were found to be used in a negligible quantity and are not mentioned in the cost. Loss of about 2-3% of the total production during harvesting, post-harvest storage, and transportation was reported. The same loss percentage was reported in the study by (HVAP, 2011).

Labour costs include human labour costs and ploughing costs. Labour was primarily used for land preparation, ploughing, planting, organic manure application, mulch collection and application, weeding, irrigation, harvesting, cleaning, grading, and transportation/marketing. This shows that the production of turmeric in the study area is labourintensive. Human labour was measured on mandays, that is, 8 hours of work per person per day. Generally, the average wage rate for human labour varies from ₹ 500-700 depending upon the area. Land preparation was carried out with a labour force of 0.51 persons per day. Ploughing was done by 0.27 pair bullocks per day. During ploughing, turmeric producers often use bullocks. In the case that the turmeric producers don’t have their bullocks or have a deficiency of them, they often rent bullocks from others. The charge of a pair of bullocks per day is normally ₹ 1000 to 1200. FYM placement and plantation were done with a labour force of 1.45 persons per day. The collection and placement of mulching were carried out with a labour force of 1.49 persons per day. The collection of mulch is carried out from the surrounding areas, farms, or nearby forests, and the cost mainly includes the labour cost of transporting it and placing it into the field. Weeding and irrigation were done with a labour force of 0.25 persons per day. Harvesting was carried out with a labour force of 1.3 persons per day. Transportation/marketing cost is also incorporated in labour cost as farmers usually have to take their produce up to road head. Therefore, planting a turmeric plant requires 5 human labours and 0.27 pairs of bullocks per ropani. However, due to the active seasonal migration of workers overseas, there is a shortage of labour and the wage rate also is increasing day by day. As a result, efforts should be undertaken in the research area to introduce labour-saving strategies.

The study found that the use of inputs such as fertilizers and machinery is negligible. A similar result was observed by (Sahoo et al. 2017). They only use organic manures within the range of 30-60 doko per ropani, and the turmeric produced is purely organic. The average price of each doko manure ranges from 30-50 rupees, depending on the region. Improved seeds are also rarely used, and most farmers rely on locally available seeds (rhizomes) in quantities ranging from 1 – 1.5 quintals per ropani. The higher rhizome requirements are due to the fact that they plant with medium-sized rhizomes. Normally the average seed price per kg varies from NRs. 45-60 depending on the region. Mulch is collected for free from the neighborhood, the farm, and the nearby forest. Thus, the entire local seed (11.5 quintal) and FYM (30-60 doko) were required per ropani of turmeric cultivation. Therefore, there is no need to raise awareness about the use of organic inputs among farmers, and farmers already know how to use organic inputs. However, the high cost of seeds and the inability to obtain sufficient quantities of high-quality seeds have hindered turmeric farmer’s willingness to commercialize them. As a result, in promising turmeric areas, efforts should be undertaken to select and further produce enhanced rhizome seeds from native kinds with high curcumin concentration. The details of each cost are summarized above and listed in Table 2.

The study showed that gross return and profit were estimated at NRs.13008.5 and NRs.2151.73 per ropani respectively. The output-input ratio (without land rent) of fresh turmeric was 1.20. The low BC ratio was due to the high cost of the purchased seed. It implied that when 1 rupee spent on turmeric production, it would lead to the economic returns of ₹ 1.20 in turmeric cultivation.

The estimated value of the coefficients and related statistics of the Cobb-Douglas production function is shown in table 4. Out of five independent variables included in the regression analysis, the cost of human labour, organic manure, ploughing cost, and other costs were found significant at 1% and 5% level of significance, respectively. Among five independent variables input in regression analysis, seed cost was found non-significant in turmeric production in the study area.

The study revealed that a 10 % increase in seed cost decreases the rate of return by 0.21%, a 10% increase in labour cost increases the rate of return by 1.96%, a 10%increase in manure cost increases the rate of return by 0.62%, 10% increase in ploughing costs increases the rate of return by 0.62% and 10% increase in other cost increases the rate of return by 0.63%. R squared value was tabulated to be 0.56, and the return to scale was found to be 0.363. It signifies that a 10% increase in the cost of production increases the rate of return by 3.63%, which is a diminishing rate of return.

From the regression analysis of Cobb-Douglas Production Function (CDPF), the sum of the coefficient was computed to be 0.363 which signifies the decreasing return to scale in the production of turmeric in the study area.