Benefit Cost Analysis of Small Farm Machineries Used for Rice Cultivation in Nepal

Abstract

A study was conducted in Jhapa, Sunsari and Bardiya district of Nepal to assess the benefit cost (BCA) analysis of small farm machineries (transplanter, reaper and power tiller) used for rice cultivation. Out of total respondents of 274 under mechanized farm category selected using Raosoft Software of sample size determination, 74% reaper owner (20), 67% power tiller owner (20) and 100% transplanter owner (09) were selected for analyzing benefit cost analysis using simple random sampling. BCA analysis showed that the NPV, B/C ratio, IRR and Payback Period of investing in transplanter were NRs 452743.62, 1.61, 24% and 2.75 years at 12% discount rate respectively. Similarly, NPV, B/C ratio, IRR and Payback period for reaper and power tiller were NRs 422541.93, 2.89, 123% and 1.14 years and NRs 619,719.34, 2.32, 65% and 1.46 years at 12% of discount rate respectively. The investment on reaper and power tiller would be profitable for their higher Benefit Cost ratio and IRR, and lower payback period. The results of sensitivity analysis showed that investments in reaper and power tiller would be profitable even if decrease in benefit or increase in cost or decrease in benefit and increase in cost by 20% is considered. However, in case of transplanter, the IRR would be less than the discount rate when benefit decreases by 20% and cost increases by 20%. Due to high investment at the initial stage, the payback period was longer and IRR was also less than 30% per annum in transplanter which indicated that investment would not be made for transplanter unless price of transplanter is lowered through regulation of price and provision of subsidy. It is suggested to motivate farmers for adoption of small farm machineries in rice cultivation through provision of differentiated rates of subsidy and technical capacity build up.

The impact of transplants machine on acceleration of innovations adoption in rice cultivation in Lampung Province

“…Another problem face to adoption of transplanter is the price of transplanter is relatively expensive so it is not affordable for individual farmers furthermore an analysis showed that benefit reduction or increase in cost of transplanters can be a reason for entrepreneur to be away from adopting transplanters because its profit is not as their expectation [18]. Rice transplanter machine technology also need some suitable requirement both a technical side or land area as well as socio-cultural or customs [19].…”

Validity and Reliability of the Adoption Questionnaire of Agricultural Mechanization in the Food Estate Area of Central Kalimantan Indonesia

“…However, the use of rice transplanters is still rarely used by farmers. The use of rice transplanters is not very profitable due to the expensive machine prices and the benefits that do not meet expectations [15].Studies related to the adoption of agricultural mechanization in Indonesia have not shown evidence of validity and reliability testing for the questionnaire used in measuring the adoption of agricultural mechanization. [16,17,18].…”