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

Krishna Lal Poudel, Arati Poudel Nepal, Bhima Dhungana, Yasuhiro Sugimoto, Naoyuki Yamamoto and Aya Nishiwaki

No 51559, 2009 Conference, August 16-22, 2009, Beijing, China from International Association of Agricultural Economists

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.

Keywords: Agribusiness; Agricultural Finance; Community/Rural/Urban Development (search for similar items in EconPapers)
Pages: 13
Date: 2009
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae09:51559

DOI: 10.22004/ag.econ.51559

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