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Abstract

This research established a complete framework for tomato value chain (TVC) analysis, thereby facilitating the modeling of the supply chain. Tomato supply chain in Chitwan district of Nepal, due to disorganized marketing channel is facing enormous barriers and obstacles. The central aim of this paper is to investigate the market structure and analyze the value chain so as to prioritize the most effective approach to modify the supply chain. Bharatpur metropolitan city of Chitwan district of Nepal was selected as our study area due to high involvement of potential farmers in tomato sector. A total of 180 respondents were interviewed, including farmers, traders, processors, distributors, and consumers and the data were analyzed using both descriptive and analytical statistics. The study was based on redesigning Porter's value chain for tomato production, processing, and marketing, which can be applied in strengthening the supply chain network. As an economic approach, profitability analysis (B:C ratio, breakeven point), degree of value addition, margin distribution, and price spread were analyzed. Likert-scaling technique was applied for determining the problems in tomato sector. Value addition was found to substantially contribute to effective supply chain management in agricultural sector. The results revealed that the B/C ratio and break-even price were 2.07 and NRs. 58235 (1 NRs. =0.0085 US$) respectively, indicating that tomato is a profitable enterprise. The evidence 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.