Logistic Value Chain Analysis as an Approach to Modelling Tomato Supply Chain: Structural Market Evidence from Bharatpur Metropolitan City, Chitwan, Nepal

Abstract

Logistics value chain is a complex process where demand uncertainty, price fluctuation, and supply management turn decisive for profitable returns. Tomato supply chain in Chitwan district of Nepal, due to disorganized marketing channel, was in the condition of disruption. Keeping this point in view, a study was undertaken to study about the approaches to understand how supply chain could be modified through improved value chain performance. A total of 180 respondents were interviewed, including farmers, traders, processors, distributors, and the consumers and the data was analyzed using both descriptive and analytical statistics. The results revealed that the B/C ratio and break-even price was 2.07 and NRs. 58235 (1 NRs. =0.0085 US$) respectively, indicating that tomato is a profitable enterprise. Value chain analysis was performed by following the components designed by Porter. The result further revealed that wholesalers were the most benefited actors along the chain. Farmers were observed to add the maximum value to the product. Several constraints were reported to weaken the marketing channel; price fluctuation, lack of marketing information, wholesaler’s dominancy over retailers, and faulty marketing system being the major problems. It is recommended that the government and concerned stakeholders need to focus on formulating the policies regarding marketing channel, determining floor and ceiling price for tomato, and encourage the actors to perform value-addition activities so that consumers can get the maximum utility.