Maize occupies an average of 25 percent of the area under food crops in Nepal. In terms of production, maize alone contributes 26 percent of the total edible food grain production in the country .The domestic retail price of maize increased from Rs 4150 per ton in 1987/88 to Rs 10585 per ton in 1999/00 recording an average annual growth rate of almost 8 percent. However, converted to dollar equivalent the maize price in Nepal actually decreased by an annual average rate of 0.97 percent. The domestic price remained between the world reference prices under importable and exportable hypotheses. On the production side, there is a comparative advantage in producing maize in the country , as the resource cost ratio was less than one, during the last 12 years. The incentive to the producer is measured in terms of nominal and effective protection coefficients. Both of these coefficients always remained less than one during the last 12 years, indicating that Nepalese farmers are not being provided with effective incentives. In effect they are getting lower prices than the price that would prevail if maize was imported from the International market.

English

0304|AGRIS 0201|AL-Economics Program|R01PROCE

Juan Carlos Mendieta

CIMMYT Staff Publications Collection