The Relative Efficiency of Organic Farming in Nepal

Working Paper 107-16

This study compares the productivity and profitability of organic and conventional farming for five crops (tea, coffee, rice, maize and cauliflower) in five different districts in Nepal.We find that organic farmers generally have a larger number of cattle and land holdings, but are not very different from conventional farmers in terms of education and household size. In terms of crop productivity, conventional yields are statistically higher than organic yields for two crops, tea and rice, and conventional profits in rice are also higher. Two crops, organic maize and coffee, show negative profits in both conventional and organic systems. However, net revenues are higher in organic maize and coffee relative to their conventional counterparts because of lower costs. In general, conventional crops are more costly to produce than organics. Organic farms face many more policy barriers than conventionally cropped farms. In this context, technological options such as suitable seed varieties, bio-fertilizers, vermi-compost, and improved farm yard manure would improve organic crop productivity. A shortage of organic manure could be overcome by promoting farm livestock enterprises.