Onion Industry

Journal of Agribusiness in Developing and Emerging Economies
Achieving strategic fit in onion seed supply chain

Krishna P. Timsina, Ram C. Bastakoti, Ganesh P. Shivakoti,
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Achieving strategic fit in onion Onion seed

supply chain
seed supply chain
Krishna P. Timsina
Nepal Agricultural Research Council (NARC), Kathmandu, Nepal and 127
School of Environment, Resources and Development,
Asian Institute of Technology (AIT), Bangkok, Thailand Received 8 March 2014
Ram C. Bastakoti Revised 4 November 2014
9 January 2015
International Water Management Institute, Kathmandu, Nepal, and Accepted 26 March 2015
Ganesh P. Shivakoti
Agricultural Systems and Engineering,
Asian Institute of Technology (AIT), Bangkok, Thailand
Abstract
Purpose – The analysis focuses on the perspective of overall strategic fit in the supply chain of onion
seed in Nepal. The purpose of this paper is to analyze current status of onion seed sector in Nepal from
the perspective of selected functional strategies that fit in supply chain, and also identifies how various
actors involved coordinate among each other.
Design/methodology/approach – The integrated approach has been used. It is an actor-oriented
approach used to trace product flows. Supply chains generally include several actors for the onion
seeds supply chain in Nepal, all those actors may or may not be applicable. However, initial approach
would be to first look for these actors then subsequently identify existing supply and its actors. Some
traditional methods of product and market analysis isolate operational costs along various stages of
production. But, this paper used more comprehensive methodology that has taken into account an
entire spectrum of associated activities and inputs.
Findings – Result revealed that the market actors of supply chain are taking significant benefit of
value addition due to more investment in value creation. Vertical coordination is completely absent and
the existence of horizontal coordination is in fragile form. The functional strategies in the upstream as
well as the market side are not properly matching with the preference of the downstream actors of
supply chain. It is suggested that the supply chain activities should work with different functional
strategies such as proper drying and storage of seed and production of preferred varieties to satisfy the
need of end consumers.
Research limitations/implications – It covers a single crop.
Originality/value – The findings and methodological discussions aim at providing practical
guidance for supply chain researchers on how to analyze the strategic fit in supply chain.
Keywords Rural economies, Supply chain management, Cooperative marketing
Paper type Research paper
1. Introduction
Supply chain is a coordinated system of organizations, people, activities, information
and resources involved in moving a product or service in physical or virtual manner
from sources to customers. Supply chain can also be viewed as a network of several
actors involving in a variety of stages (Matopoulos et al., 2007; Chopra and Meindl,
2012). Likewise, value chain is a very closely related concept that refers to the Journal of Agribusiness in
Developing and Emerging
combination of generic value-added activities that work together to provide value to Economies
customers (Pandey and Tewari, 2010). Value chain is a shift in way of thinking from Vol. 6 No. 2, 2016
pp. 127-149
producer focused approach to a consumer targeted approach (Collins, 2009; Fearne, © Emerald Group Publishing Limited
2044-0839
2009). Efficient value chain management is required in value addition of vegetables and DOI 10.1108/JADEE-03-2014-0012
JADEE fruits while bringing it to the market (Reddy et al., 2010). Value does not necessarily
6,2 include dollar value only. There could be value in information exchange, in building
networks and in learning new processes (AFC, 2004). The value coalition model
recognizes that value is often created by the simultaneous interaction of several
stakeholders (Reddy, 2013).
The lack of value-based outlook in the past development efforts of Nepal has
128 resulted in lack of response to market needs or oversupply problem (Adhikari et al.,
2012). Past studies related to value chain and supply chain analysis for different
vegetables, fruits and cash crops in Nepal has ignored the consumers’ perspective in
the analysis (e.g. Timsina et al., 2012a, b; Shrestha et al., 2012; Chapagain et al., 2011;
FBC, 2008). When the agri-food supply chain is more responsive to end users it turns
into more effective and competitive chain (Soosay et al., 2012; Trienekens, 2011). While
studying the supply chain of tomato in Nepal, Adhikari et al. (2012) reported the
mismatch between consumers’ expectations such as fresh, traceable, organic and
pesticide free tomato product and existing supply chain. Little value addition was
observed after production stage of chain that left the untapped potentiality of product
differentiation. However, during differentiated products introduced in the market, it is
necessary to enhance the capacity of producers organizations to control supply and
cover the fixed costs when fixed costs of marketing increase and expected market size
falls (Lence et al., 2007). Relationship among involved actors is crucial in achieving the
supply chain goals (Beamon, 1998).
Supply chain performance depends on coordination among the components and the
actors. This coordination requires that each stage of supply chain take into account the
effects of its actions on other stages (Chopra and Meindl, 2012). Some coordination
mechanisms could help improve the supply chain performance (Arshinder and
Deshmukh, 2008). One important issue in supply chain is to achieve a strategic fit
between overall supply chain strategy and functional strategies involved in the process
(Chopra and Meindl, 2012). Strategic fit requires that both the competitive and supply
chain strategies of a company have aligned goals. It refers to consistency between
customer priorities of competitive strategy and supply chain capabilities specified by
the supply chain strategy (Chopra and Meindl, 2012). With this background, this paper
focuses on existing onion seed sector in Nepal to unravel the issues associated with the
coordination among supply chain actors and how the various actors work together to
make supply chain more effective.
Until mid-1980s, more than 90 percent of Nepal’s vegetable seed requirement was
met by informal sources, i.e., own production and farmer-to-farmer exchange. But
during last four decades the commercial seed sector has grown rapidly. From 1974/
1975 to 2010/2011, Nepal’s formal seed production has increased at the rate of 19.79
percent per annum and reached 1,265 metric tons (mt) whereas the requirement has
grown by 5.26 percent per annum and reached 2026 mt (VDD, 2011). The gap between
requirement and production is still large and is fulfilled by import from other countries.
It is estimated that around 7,000 Nepalese farmers are involved in producing vegetable
seeds, which is about 0.2 percent of total farmers engaged in agriculture (SCPL, 2011;
MoAD, 2012). Many areas of mid-western, far-western and central hills are the current
main pockets of vegetable seeds production (VDD, 2011).
Although onion (Allium cepa) seeds have been produced in many parts of Nepal, its
commercial production is confined only in few areas. The Government of Nepal (GoN)
also initiated Mission Onion Program, which has triggered increased production of
onion seeds in Nepal. The costs of onions as both vegetable and seed have fluctuated
greatly in the past few years; the main reason being dependency on supply from India Onion seed
and its larger influence on overall supply of onion in Nepalese market. With the supply chain
increasing trend of onion cultivation in Nepal there is an increasing demand for onion
seeds. In year 2011/2012, total onion seeds required for an area of 20,080 hectare (ha)
was 200.8 mt (VDD, 2011), the major portion of which was fulfilled by imported seed.
Despite government’s emphasis to achieve self-sustenance, only 10 percent of total
onion demand is produced within country (SCPL, 2011). 129
Many parts of the Nepal have shown potential to produce onion seeds. But,
because of the poorly developed supply chain, Nepalese farmers are not yet able to
tap this potential. In this context, this paper tries to analyze the current status of the
onion seed sector with the perspective of its overall strategic fit in the supply chain in
Nepal. The paper analyzes the various functional strategies to achieve the overall
supply chain strategy and how various actors involved in the supply chain
coordinate among each other.
2. Theoretical framework
Supply chain consists of the parties involved, directly or indirectly, in fulfilling a
customer request. It includes several actors: manufacturer and suppliers, transporters,
warehouses, retailers, and customers (Chopra and Meindl, 2012). Beamon (1998) defined
supply chain as a set of relationships among suppliers, manufacturers, distributors,
and retailers that facilitates transformation of raw materials into final products.
Although the supply chain is comprised of a number of business components, the chain
itself could be viewed as a single entity. To generate more profit in dynamic
environment, supply and value chain must be synchronized for the flows of supply
with the flows of value from customers in the form of rapidly shifting tastes,
preferences, and demand (Feller et al., 2006; Hunka et al., 2011).
Supply chain is generally complex and characterized by numerous activities spread
over multiple functions and organizations, which pose interesting challenges for
effective coordination. Supply chain members must work toward a unified system and
coordinate with each other to meet these challenges (Malone and Crowston, 1994;
Arshinder and Deshmukh, 2008). Difficulties in coordination and independent working
of the members lead to poor performance of the overall supply chain. Coordination
among the chain actors is necessary to enhance the efficiency in the chain (Timsina
et al., 2012a; Shrestha et al., 2012). New marketing initiatives are necessary to
strengthen the backward and forward linkages to overcome the inefficiencies in
existing chain. Mangala and Chengappa (2008) suggested establishing backward
linkages with farmers to continuous supply of fresh vegetables in the retail chain that
ensure the income to farmers. This modality helps to change existing farming and
marketing practices in the food retail chains. Moreover, it reduces the transaction cost
and marketing risk of farmers through reducing the number of chain actors.
Farmer organization and collective action are often seen as key factors in enhancing
farmers’ access to markets (Hellin et al., 2009). Collective action initiatives are very
much necessary for the development of a robust marketing channel. It contributes in
pooling resources, realizing scale economies, sharing information, and developing a
community-based incentive structure (Gruere et al., 2009). Markelova et al. (2009)
reported that collective action can bring advantages for smallholder marketing.
Kruijssen et al. (2009) indicated many positive outcomes of collective action such as
access to markets and resources, increased bargaining power, risk reduction,
economies of scale, and control of supply. Performance measures of the supply chain
JADEE coordination can be enhanced by using different mechanisms such as joint decision
6,2 making, information sharing, information technology, and supply chain contracts
(Arshinder and Deshmukh, 2008).
Perishability and seasonability nature of the produce make the agri-food supply
chain different than other supply chain (Van der Vorst, 2000). Likewise, high cost of
production, low productivity and large post-harvest losses has made the fruits and
130 vegetables supply chain more inefficient in India (Mittal, 2007). Reddy et al. (2010)
found lower number of actors in modern retailing chain compared to traditional
retailing in Andhra Pradesh, India. However, they also reported that different demand
and supply side factors determined the emergence of modern and traditional retailing.
There was inverse relationship between the number of actors involved in the chain and
their income shares on consumer prices, which suggests the consolidation of supply
chain and adopt the direct market models to solve this problem (Dastagiri and
Immanuelraj, 2012). Wang et al. (2014) carried out study on economic impact of
vegetable marketing and contracts in Vietnam and reported the significant positive
impact on farmers’ income through direct sales to consumers than sales to collectors and
contractors. Traditionally, practitioners and researchers have limited their analyses and
scope to individual stages within the larger chain, but have recently identified a need for
a more integrated approach. Therefore, this study has used such integrated approach.
Supply chains generally include following actors: input suppliers, producers, processors,
distributors, brokers, wholesalers, retailers and consumers. In addition, it could also
include research and development organizations including government agencies.
In onion seed supply chain of Nepal all these actors may not be applicable. However,
initially we try to look for these actors and then subsequently identify existing supply
chain and actors involved. Traditional methods of product and market analysis isolate
operational costs along various stages of production. But, this study used more
comprehensive methodology that has taken into account an entire spectrum of
associated activities and inputs. A conceptual framework has been proposed to
organize the analysis (Figure 1).
According to the proposed conceptual framework, the overall onion seed supply chain
is divided into two major parts; upstream and downstream, for this study. The upstream
Upstream Downstream
Functional strategies
Functions Functions
Strategic fit in supply
Supply Chain
Outcome
Actors
chain
Supply Chain Stages
Figure 1.
Conceptual
framework to
analyze strategic fit Operating Contexts
in supply chain Information, planning, activity integration
part includes activities, functions, and chain actors from pre-production of onion seed up Onion seed
to marketing; whereas downstream part includes the activities, functions, and actors supply chain
involved during marketing of onion seeds including analysis of customers’ perspective.
We analyzed different operating contexts such as sources of information, activity
planning and integration, coordination among the actors for undertaking different
functional strategies such as bulk collection and collective marketing, contract farming,
seed quality improvement, value addition, and supply of farmers preferred varieties to 131
achieve the strategic fit of onion seed supply chain in Nepal. Moreover, we also examined
the end users’ willingness to pay for quality onion seed.
3. Methodology
3.1 Sampling and data collection
3.1.1 Sampling. Rukum district was selected purposely for the study due to its
potentiality for onion seed production. This district is situated in Rapti zone
(comprising of Rukum, Dang, Salyan, Rolpa, and Pyuthan districts) of Nepal, which is
the largest annual vegetable seeds producing zone that contributes about 26 percent of
total seeds production in Nepal (VDD, 2010). Among the districts in the zone, Rukum is
the major seed producing district where more than 30 vegetable seed producers’ groups
and six cooperatives are working actively. Rukum district is famous for onion seed
production, where more than 75 percent of the total vegetable seeds production area is
being used for onion seed production. Rukum district alone contributes about
90 percent of total onion seed production in the country (DADO, 2011a).
Within the Rukum district, the cooperatives involved in seed production were
selected. The 400 cooperative members involved in onion seed production were listed
as the target population from which a random sampling was done for 55 onion growers.
Likewise, Rupandehi district was purposely selected for the study of end users of
onion seed. It is one of the eight Terai districts where the Mission Onion Program was
initiated by the GoN in the year 2007/2008 Despite the GoN emphasized to increase
local production, the import of dry onions has been doubled from 5.9 to 10.68 million kg
in the year 2001 and 2009, respectively. Statistics show that 90 percent demand of onion
in the urban areas was met through imported onion. In order to increase the onion
production in the country to end dependence on the India, the government has initiated
a Mission Onion Program in 2007/2008. The main objective of the Mission Onion
Program was to replace import by increasing land devoted to onion cultivation from
15,062 to 27,292 ha across the country by 2011/2012. This program was conducted
through District Agriculture Development Offices (DADO) using group approach.
In all, 50 percent subsidy was provided in seeds and other agricultural inputs. Similarly,
US$227 was deposited in the account of farmers group for the use of pesticides.
Moreover, different capacity building trainings were designed for the programs (DoAE,
2008; Republica, 2009; MoAC/DoA/AICC, 2011). In Rupandehi district, around
20 percent of the total vegetable production area has been used for onion production
(VDD, 2011; DADO, 2011b). Many non-government organizations (NGOs)/INGOs have
been involved in the production of vegetables in the district. The International
Development Enterprise Nepal has initiated a project entitled Market Access for Small
Farmers (MASF) in this district to link up the small farmers to the market for the
marketing of their produced vegetables. We selected MASF formed cooperative
purposely and listed its 390 members as target population. From the list, we randomly
selected 60 vegetable growers.
JADEE For the study of the total supply chain, we selected traders, agro-vets, cooperatives,
6,2 and seed companies involved in onion seed business from all three districts of
Kathmandu Valley. The valley is one of the biggest markets for onion seed from the
point of view of seed marketing. A large number of agro-vets, biggest importers, seed
companies, and different service providers are working based in valley.
As described above, the study focused at three levels: first, at the field level which
132 includes seed producers, local level traders and agro-vets, and cooperatives; second, at
the district level which includes district level agro-vets, traders, and service providers;
and third, at the central level which includes national-level seed companies, large agro-
vets and national-level service providers including research organizations. The details
of sampling are given in Table I.
3.1.2 Data collection of key supply chain actors. Both quantitative and qualitative
data were collected from the primary and secondary sources. The necessary data were
collected using the following techniques.
Household-level survey. A set of structured questionnaire was prepared to capture

the information regarding socio-economic and demographic features of household,
onion seed production, post-harvest operation, and its uses. Pre-testing was done to
increase the validity, relevancy as well as reliability of the questionnaire. Based on the
feedbacks from the pre-testing, the questionnaire was revised and finalized.
Traders’ survey. Different traders including seed companies, agro-vets, and
individual seed traders were interviewed using semi-structured questionnaire and
checklists. In case of seed companies and agro-vets, surveys were conducted with
owner. Similarly, surveys were done with individual traders directly involved in
buying and selling of onion seed.
Key informants interview. It was done to collect information from key personnel
who are concerned with onion seed production and marketing as well as inputs
suppliers and service providers. The key informants included were: officials from
Department of Agriculture, Nepal Agricultural Research Council (NARC), Vegetable
Development Directorate (VDD), Seed Quality Control Centre (SQCC), seed companies,
apex marketing associations and Center for Agricultural Policy Research, Extension
and Development (CEAPRED). During selection of the key informants, discussion was
made with the head of the institutions to select the appropriate person. The position of
key informants was from operational to top level based on their knowledge on onion
seed sector in Nepal.
Target
District population Sample Category Sampling techniques
Rukum 400 55 Seed producers Purposely and simple

random sampling
15 Cooperatives, traders, agro-vets and Purposive
service providers
Rupandehi 390 60 Veg. growers Purposely and simple
Table I. random sampling
Sampling of the 10 Cooperatives, agro-vets and service Purposely
onion seed providers
producers, traders Kathmandu 15 Seed company, cooperatives, agro-vets Purposely
and growers and service providers
Focus group discussion (FGD). Altogether three FGDs were conducted comprising 1 Onion seed
each with onion seed producers, seed companies and agro-vets at central level and seed supply chain
users. Each FGD included 6-12 personnel as participants, which were having similar
interest. The discussions included seed production and marketing issues, cost of
cultivation, identifying needs, priorities, and potentialities of quality vegetable seed
production and marketing.
133
3.2 Tools and techniques of data analysis
The analysis included calculation of gross margin, producers’ share, supply chain
performance and value addition at different stages of onion seed supply chain. For the
multiple comparison of gross margin among different crops, post hoc test of ANOVA
was used. χ2 test was used to see the association among different variables.
4. Results
4.1 Upstream functions in supply chain: producing quality onion seeds ensuring
profitability
4.1.1 Onion seeds production environment. The average farm size (own land holding) of
the sampled farmers was 0.3 ha. The average area used for vegetable seed production
was 0.071 ha/household. Specifically, the average area used for onion seed
production was 0.060 ha/household (Table II). Farmers have been using lowland
(irrigated and bunded land in Nepal known as Khet land) as well as upland (un-irrigated
and un-bunded land in Nepal known as Bari land ) for onion seed production.
The average area of lowland and upland used for onion seed production was 0.055 and
0.052 ha, respectively. Farmers are using only one variety of onion (Red Creole) for
commercial seed production, although there are practices of source seed production for
two onion varieties (Red Creole and Agri-found Dark Red) in Nepal.
On an average, sampled farmers allocate 25 percent of their farm for vegetable seed
production. Rest of the farmland was allocated for cultivating other crops. Out of the
total area allocated for vegetable seed production, 84 percent was allocated for onion
seed production. The cropping pattern in upland area was mainly dominated by maize,
and included other crops like legumes, vegetables and vegetable seeds. In the lowland
area, the cropping pattern was mainly dominiated by rice, and included other crops like
wheat, maize, and vegetable seeds.
Results indicated that during 2007-2011 the area under onion seed production has an
increasing trend, but the production of onion seed has a decreasing trend. Result
showed that 73 percent of the respondents reported the increase in the area for onion
seed production; only 9 percent of them reported a decrease. In case of production,
96 percent of the respondents included in the survey reported the decrease in onion
seed yield (mt/ha) over 2007-2011. The average reduced yield was 0.05 mt/ha and in
Particulars Area (ha)

Table II.
Average area used for vegetable seed production 0.071 Area under
Average area used for onion seed production 0.060 vegetable seed
Average lowland used for onion seed production 0.055 production and
Average upland used for onion seed production 0.052 area allocated for
Source: Field Survey (2012) onion seed
JADEE total about 2 mt yield was lost in the study area, which is worth around US$19,319. The
6,2 incidence of diseases like purple blotch and root rot in onion could be the main reason
behind decrease in production in the last five years. However, due to more profit from
onion seeds, farmers are still cultivating onion seeds in larger areas despite the
decreasing production.
4.1.2 Economics of onion seed production. The average cost of source seed per farm
134 was found to be US$43, which is 19 percent of the total cost of production. The cost of
source seed includes labor cost and other cost required for onion set production (set of
onion produced from source seed, which is used for commercial onion seed production).
Labor cost constitutes 41 percent of the total cost of production. Among the total labor
used, 66 percent of the labor was from own household. The average onion seed
production per farm was 40 kg. The net income was US$164 per farm.
The calculation of the cost of production included all the variable and fixed costs
including family labor, land rent, and all inputs used from farmer’s own house. It is
estimated that the cost of labor accounts for about 32-35 percent of the cost of
production of onion seed. It excludes the labor cost used for onion set production, which
was already included in the cost of seed. As the production of onion seed is very labor
intensive, any increase in labor cost will automatically impact the cost of production of
onion seed (Table III).
Gross margin of onion was compared with major cereal crops cultivated in the study
area (Table IV). Results showed that the highest gross margin per farm was obtained
Particulars Per farm Per ha
Average cost of source seed (US$) 43 723.84

Average own labor used (No.) 18 294.90
Average outside labor used (No.) 12 196.60
Average labor cost (US$) 93 1,563.86
a
Average other cost (US$) 92 1,554.03
Total cost of production (US$) 229 3,841.96
Average onion seed production (Kg) 40 682.20
Table III. Total income from onion seed (US$) 392 6,589.45
Cost of production Net income from onion seed (US$) 164 2,747.48
and net income from Note: aAverage other cost includes the fertilizer cost, pesticide cost, land rent and farm equipment
commercial onion depreciation cost
seed production Source: Field Survey (2012)
Total variable cost/ Total income/ Gross margin/ Gross margin/

Crops Farm (US$) Farm (US$) Farm (US$) ha (US$)
Maize 54 82 29 211
Rice 98 157 59 443
Wheat 50 134 84 576
Table IV. Onion seed 148 392 244 4,108***
Comparison of gross Note: ***Means gross margin of onion with different crops were found significant difference at
margin of onion with 1 percent level of significance ( p o0.01)
major cereal crops Source: Field Survey (2012)
from onion seed (US$244), followed by wheat (US$84), rice (US$59), and maize (US$29). Onion seed
Income from the byproduct of major cereals was also included in the calculation. Even supply chain
though its production cost is higher (US$148/farm) compared to the other crops, income
from onion seed was found to be the highest. Analysis using ANOVA showed that
there is significant difference ( p o 0.01) in gross margin among different crops. The
post hoc test result indicated that gross margin of onion seed is significantly higher
( p o 0.01) than gross margin of all cereals. In order to achieve the potential of high 135
investment-high return principle, farmers should have the capacity to invest in
cultivation and other post-harvest activities. The functional strategies at this stage of
supply chain could be to focus on building farmers’ capacity to invest.
4.1.3 Good quality seed through appropriate post-harvest handling. From the overall
supply chain perspective, the functional strategy at this stage should be to provide good
quality seeds to the further stages. All respondents in the study area were found to clean
the seeds with water and dry in sun after harvesting. But, nobody in the study area knew
about hermetic (air proof) storage. Results revealed that only five respondents have
knowledge on safe moisture percentage, but none of the farmers were found doing
moisture test after harvest and before selling. Sometimes, companies like Chaudhary
Group (CG), Sean Seed and Service Center (SSSC) and Nemacol Cooperative in
Kathmandu carried out moisture test before buying onion seed from farmers/traders.
Companies do not prefer seed with high-moisture content or at least pay less in such
instances. For example, in case of seed with more than 8 percent moisture content, the CG
reduces the price of seed by US$0.01 per kg of seed as a labor cost to maintain the quality
of seed, at the same time minimizes the economic losses of high-moisture content.
4.2 Actors involved in onion seed supply chain and their roles
Several actors are involved at different stages of onion seed supply chain in Nepal. The
following sub-sections provide an overview of the actors from the input stage until
reaching the seed to the ultimate users.
4.2.1 Technology providers through research and development. NARC, VDD, and
their associated farm centers are responsible for the maintenance and development of
onion seed. Under National Seed Board, SQCC is responsible for ensuring the quality of
seed produced. NARC, VDD, and the horticulture farms maintain breeder seeds. Then,
they produce source seeds that are used by farmers to multiply and produce
commercial onion seeds. But, none of the private companies/organizations have yet
been involved in maintenance and development of onion seed varieties in Nepal.
Additionally, some I/NGOs such as CEAPRED, Swiss Development Center, and Center
for International Studies and Cooperation – Nepal are involved in providing support
and facilitation for research and development of onion seed in Nepal.
4.2.2 Inputs suppliers. The χ2 analysis indicates that there is significant difference
(χ (3) ¼ 166.9, p o 0.01) in sources and types of inputs used for onion seed production
2
in Rupandehi district (Figure 2). Most of the onion seed growers (98 percent) use source
seed taken from Horticulture Research Farm, Musikot, Rukum. They change the seed
every year.
Most of the seed companies such as CG Seeds and SSSC send pesticides to the local
traders for distribution to the farmers during crop growing time and they cut the price of
pesticides during seed selling time. This also motivates to sell the seed to the local traders.
None of the cooperatives have been working for distribution of any agricultural inputs.
JADEE Government Non-government
6,2 Private/Agro-vet/traders More than one place
2 4
Sources of Inputs (%)
136 56
95
98 94
13
22
5 9
Figure 2. 2
Details of source of Seed Fertilizer Pesticides Other inputs
inputs received by Input Types
respondents
Source: Field Survey (2012)
4.2.3 Seed producers. In Rukum district, there are around 32 vegetable seed producers’
groups and nine cooperatives. Among the nine cooperatives, six (that include around 400
farmers) are actively involved in onion seed production. Recently, it has been seen that a
representative from the farmers’ groups or one of the farmers himself is the local seed
trader or collector for that particular area. Vegetable seed cooperatives in Rukum are also
trying to act as middlemen linking producers and private seed firms or distributors.
Informal contract with local traders (80 percent of the total seed production) was the
common practice in the study area. About 10 percent of the farmers were also
producing commercial seeds through informal contract with seed companies. However,
some farmers (10 percent), who did not have any idea about the market, traders, and
companies were producing seed in their own way, and selling it to market after harvest.
4.2.4 Local seed traders. They are the key actors for procurement and selling of the
seed outside the production district. In Rukum district, around 15 traders are involved
in onion seed procurement and distribution. Until five years ago, they used to procure
seed in Rukum and sell at Kathmandu and other marketing hubs at the price of
distributors (seed companies, agro-vets). But nowadays they first collect the seed,
calculate the total production in the district and compare with their collection.
Then they negotiate for the price at Kathmandu with seed companies and agro-vets.
They have been creating strong horizontal coordination among the traders involved in
supply chain of onion seed for price negotiation with seed companies and agro-vets.
Most of the traders were farmers and members of the cooperatives. However, they
were not interested to sell seed via cooperatives due to the suspicion of getting lower
margin from seed selling. During the lean period of production, they were also
collecting the seed without considering the quality standards. Two types of practices of
payment exist for onion seed. One is immediately after procurement and another is
after selling it at Kathmandu. In second type of practice, traders provided additional
amount of US$0.6/kg to the farmers.
4.2.5 Seed distributors and agro-vets. The supply chain channels from seed Onion seed
distributors onwards are often not linear, with multiple actors involved in multiple supply chain
activities. Seed wholesalers and agro-vets are found toward the end of the supply chain,
supplying directly to the consumers. They act like retailers but can also be seen acting
like trade intermediaries toward the source of production. Private seed firms or
entrepreneurs use seed wholesalers and agro-vets to distribute their collected,
processed, and packed seeds to the end users in market. Some seed distributors also 137
import seeds from other countries and supply it to the market.
Agro-vets are either wholesalers or retailers selling vegetable seeds including onion
and other farm products/inputs directly to the farmers. The importance of agro-vets
and seed distributors remains not only in their service of providing seeds but also being
source of information about quality seeds and reference point for recommending
farmers of seeds and agricultural inputs. Agro-vets are seen to help bridge the technical
gap between the products and the farmers.
4.3 Production and flow of onion seeds from Rukum

Result revealed that 50 percent of the total onion seed produced in Rukum district was
sold to Kathmandu followed by Pokhara (35 percent), Gorkha and Chitwan (10 percent),
and Dang, Pyuthan and Butwal (5 percent). Among the total amount brought into
Kathmandu valley from Rukum, 90 percent was further processed, packed and
redistributed in the Eastern (Okhaldunga) to the Western region of Nepal (Dadeldhura)
via dealers/agents of private firms or entrepreneurs of Kathmandu. The remaining
10 percent was distributed in Kavre and Dhading districts directly by traders. Like in
Kavre and Dhading, traders directly sold the seeds in Baglung (5 percent) and Trisuli
(10 percent), Gorkha (5 percent), and Chitwan (5 percent). Only 5 percent of the total
production reached Dang, Pyuthan, and Butwal, as there is more demand of Indian
onion seeds. Most of the onion seed produced in Rukum district (except being brought
into Kathmandu and Pokhara Valley) was sold to the farmers.
Most of the traders claimed that they were getting lower price and delayed payment
from Kathmandu as compared to the other places and hence it is not their most
preferred market. But due to market saturation with small quantities in other areas,
they have to rely on Kathmandu for a good market. The details are given in Figure 3.
Onion seed production in Rukum (100%)
Kathmandu Area Gorkha and Chitwan Dang, Pyuthan and Pokhara Area
(50%) Area (10%) Butwal Area (5%) (35%)
Dhading (5%) Chitwan (5%) Trisuli (10%)
Kavre (5%) Gorkha (5%) Baglung (5%)
Kathmandu Valley (40%)

Figure 3.
Pokhara Valley (20%) Flow of onion
seed from Rukum
From East to West Nepal and Kathmandu valley Pokhara and nearby districts to different
market outlets
Source: Field Survey (2012)
JADEE 4.4 Value chain stages and activities: resulting value addition in different stages
6,2 Onion seed supply chain in Nepal includes various stages and activities. Observation
showed that same actor was playing different roles in different stages of value chain.
There are instances when some value-chain stages, such as assembly and processing
are bypassed by the farm production stage to be directly sold to retailers as indicated
by the arrow (Figure 4). There are events when the farm production stage directly sells
138 to the processing stage, thus bypassing assembly stage or local traders. However, it is
seen that the majority of the transaction and volume would be through the value stages
indicated in Figure 4, prior to being sold at the retail level.
The analysis of value additions and margins at different stages revealed that the
margins are highest in logistics stage or the distributers/retail end of the onion seed
supply chain. It also needs to be noted that the margins at the production stage can
vary from US$4.19 to US$6.77/kg depending on the channel used for the supply of seed
(Table V). It is estimated that 62 percent of the added value is generated by the market,
leaving only 38 percent to the production side. These figures indicate that the market
side of the supply chain is taking significant benefit of the value addition. But they
were also investing money for the value creation.
Two types of channels exist in the study area. In the first channel, farmers were directly
selling their seed to the local traders. They were paid in cash; sometimes US$0.6/kg
additional price if payment is delayed. In this type of channel, farmers were getting only
about 35 percent share of the retail price, which also included the cost of production of
Activities
Involved
Stages
Value
Actors
Provide source seeds DADO, Chapa Horticulture farm,
Technical inputs Musikot
Input supply Private Firms via traders, Agro-vets
Agro inputs (fertilisers, pesticides
Labor NGO/INGOs (CEAPRED, UMN, etc.)
Farmers
Farm Farmers from Producer

Production of commercial seeds Groups/Coops, Traders
Production
Seed collection
Preliminary grading/pricing Local Seed Traders
Bulk Packaging Producer/Cooperative
Assembly Transportation
Payment to seed producers
Storing/Grading/Separation/drying
Packaging Private Firms/Cooperative/
Truthful labeling Entrepreneurs
Processing Pricing
Figure 4.
Value stages
and activities
Wholesaler/Distributors
of the onion seed Distribution
Agro-vets
supply chain Logistics Retail
Retailers
onion seed. In this type of channel, most of the traders also provided some loan and inputs Onion seed
to the farmers and informally agreed to provide the produced seed to traders based on the supply chain
market price. But, most often they do not know the actual market price of onion seed at that
time at the potential market area as all the information was controlled by major traders in
the Rukum district. After assembling onion seed by traders, they pack it in jute bags and
supply to the processors. Traders were taking a net margin of 8 percent of the retail price.
Then the processors create additional value of seed by drying, packaging, and labeling 139
activities and sell it to the distributor or retailer.
On an average, 15 percent of the losses including physical, processing, and moisture
losses were observed in the study area. The transportation cost up to processing
activities was also included in processing cost. The logistics cost includes the
transportation cost after processing, distribution, and retailing cost of the onion seed.
The wholesale and retail stages had 10 and 35 percent margin of retail price.
In the second type of channel, farmers were selling via cooperative as a collective
action. This channel is also exactly same after assembling stages, when processors get
onion seed from cooperative. The main difference in this channel is that, cooperative was
collecting onion seed collectively and sold it to the seed companies/processors instead of
involvement of traders in assembling the products. This type of channel shows that
producers are directly linked to value chain and contributing collectively to facilitate
better functioning of the chain. From such collective action farmers were getting more
margins than the previous channel. They were getting 58 percent share of the retail price
whereas the share was only 35 percent in the previous channel. There might be curiosity
about how the farmers are getting more shares only after small change in channel. But, it
was an interesting fact that cooperative initiated the collective action and decided to take
only US$0.1-0.2 per Kg of onion seed and assembly cost up to Kathmandu from the
farmers and return the whole money received from Kathmandu to the farmers. However,
in the previous channel traders consumed the entire margin.
The second type of channel discussed above is just emerging in Rukum district and
is not common yet as the supply chain is still dominated by local traders. The initiation
of cooperatives for marketing of onion seed is really appreciable in the study area.
However, the sustainability of the marketing is questionable from the existing service
providing modality as the financial status of the cooperatives is very weak. Various
challenges exist in sustainable marketing of onion seed as most of the local
traders have strong linkage with some firms and entrepreneurs in Kathmandu. So,
cooperatives should think about the regular supply of quality seeds to distributor and
agriculture inputs to farmers for ensuring sustainable marketing of onion seed,
otherwise it will be a distant reality to the cooperatives (Table VI).
Farm production Assembly Processing

Value stages (US$) (US$) (US$) Logistics (US$)
b
Costs 5.64 6.70 -10.89 17 17.81-22.73
Margins 4.19-6.77 0.11-2.17 3.05 2.65 (wholesale) 5.68-10.03 (retail) Table V.
Cumulative prices 9.83-11.90a 13 20.45 (Wholesale) 20.45 (wholesale) 28.41 (retail) Costs and margins at
Notes: aThis is the price getting by farmers after marketing by cooperative; bbuying price is not different value
included as cooperative paid after marketing and this is the summation of only production cost plus stages: onion seed
assembly cost up to Kathmandu (per kg-size of 10, 100
Source: Field Survey (2012) and 500 gm pack)
JADEE Chain I (common) Chain II (emerging)
6,2 US % share on retail US % share on retail
Description $/kg price $/Kg price
Cost of production 5.636 5.636

Avg. price/kg at Rukum 9.830 34.6 11.898 58
140 Profit to farmers 4.193 6.778
Tax charge by DDC 0.003 0.010 0.000 0.001
Logistics up to selling in Ktm 0.568 2.0 0.568 2.0
Loss (5%)-physical 0.492 1.7 0.492 1.7
Total cost up to Ktm 10.892 1.060
Avg. price/kg at Ktm 13.068 13.068
Margin to traders, cooperatives 2.176 7.7 0.114 0.6
Logistics cost at Ktm (3% of product cost) 0.392 1.4 0.392 1.4
Processing cost/kg 2.013 7.1 2.013 7.1
Processing loss and MC loss (10%) 1.307 4.6 1.307 4.6

Cost to produce processed product 16.780 16.780
Commission (legal and illegal) 1.023 3.6 1.023 3.6
Total cost at Ktm for processed product
including logistic cost 17.802 17.802
Wholesale price at Ktm (packed) 20.455 20.455
Retail price at Ktm (packed) 28.409 28.409
Table VI. Margin to traders/company/coop (processed
Cost and value- product-wholesale) 2.652 9.3 2.652 9.3
added between Logistic cost for retailers 0.568 2.0 0.568 2.0
existing and Margin to traders/company/coop (processed
emerging supply product-retail) 10.039 35.3 10.039 35.3
chain for onion seed Source: Field Survey (2012)
4.5 Relationship between production and market actors of onion seed supply chain
Result revealed that there is often absence of or limited dialogue between market
and production actors. Formal contracts are not in practice; and all relationships
are based on mutual trust. The lack of professionalism in terms of technical
knowledge, production, and processing is hampering the quantity and quality
of production.
Some of the government organizations like DADO of Rukum district, Horticulture
Research Farm (Chapa), Musikot; and non-governmental organizations like
CEAPRED, United Mission to Nepal have been working for the promotion of onion
seeds. CEAPRED has been taking initiative for linking the farmers’ cooperatives to
distributors or seed entrepreneurs. It is also providing small-sized bags for onion seed
storage to minimize the transportation loss. The actors involved in production and
market side have divergent interest areas. The production side actors are typically
interested in access to capital (credit/loans) and technical inputs, market assurances
(price and quantity), and highest prices from the market actors. While, the market
actors expect shared risks and inputs, quality and quantity assurances, and market-
led price fixing from the production side actors. These divergent interest areas often
result in conflict of interest and thus loss of trust.
No vertical supply chain for onion seed was found in the study area. Only horizontal
supply chain was observed and the coordination among the supply chain actors was
found weak.
4.6 Analysis of end users of onion seed Onion seed
In order to get the clearer picture of onion seeds supply chain, the analysis also supply chain
included end users of Rupandehi district. Results revealed that in Rupandehi district
about 19 percent of the total vegetable cultivation area was used for onion
production, which indicated further potential of onion production. The GoN has
initiated the Mission Onion Program with the aim to replace import by increasing
land devoted to onion cultivation. The program is implemented in Rupandehi district 141
as well. As a result the share of onion production area is higher compared to other
vegetables in Rupandehi.
Analysis results showed that about 95 percent of the seeds used in the study area
were open pollinated (OP) varieties. Farmers were using 9 percent unknown varieties.
Among the known varieties, Nasik-53 was ranked first (58 percent), followed by Agri.
Found Dark Red (AFDR) (11.2 percent), Gauti (11.1 percent), Gauran (5.5 percent),
Lanka (3.3 percent), and Red Creole (2 percent). All the respondents have been using
imported varieties of onion from India. Even though 3-5 percent of the onion seed
produced in Rukum reached Butwal (directly from Rukum or via Kathmandu), the RC
variety was not being cultivated in Rupandehi district. The RC seed is distributed in
areas within Lumbini zone and some other district like Pyuthan, Palpa, Dang from
Butwal as it is the major marketing hub for those areas. Farmers were taking the onion
seed based on trust without checking moisture content and germination percentage.
Thus it shows the need to achieve the fit between the functional strategy and overall
supply chain goal.
For example, one reason for the farmers in Rupandehi district preferring to get
onion seed from India is the lower price in comparison to Butwal and
Bahirahawa. Besides the price, other qualities of imported onion seed such as
good-sized bulb, no bolting (flowering) during its production and longer storage
duration also motivated farmers choosing imported seeds. It clearly shows that the
functional strategies in the upstream as well as market side of supply chain for the
domestic onion seed does not match properly with the preference of the downstream
part of supply chain. It should be noted that since the supply chain activities should
work to satisfy the need of end consumers, unless it is achieved the overall supply
chain goal cannot be achieved.
It is reflected in the fact that even the program (such as the Mission Onion
Program) promoted by the GON through the DADO has been distributing onion seed
imported from Indian markets. The varieties such as Nasik-53, Pusa, Gauti, and
Gauran are preferred by the farmers in Rupandehi because of the several reasons
mentioned above. In addition, the reason for not adopting RC seed in Rupandehi
district might also be because it is more suitable for hills rather than Terai. Even in
Rukum district, use of Indian varieties such as Nasik-53, and AFDR (imported from
India) was found common especially in the rainy season. Farmers mostly used those
varieties focusing the offseason fresh onion production for the period of Dashain, the
largest festival of Nepal when consumption of onion is very high. It is found that
the onion seed users were willing to pay 30 percent more price if good quality seed is
available in the market.
The seed policy of Nepal has clear provision specifying that registered and released
varieties should be multiplied and distributed. Only RC variety of onion is registered
and allowed for seed multiplication and distribution in Nepal. Moreover, it is the only
variety produced in commercial scale that is suitable for winter season. But, the
farmer’s preference in the field was different.
JADEE 5. Discussions
6,2 For achieving strategic fit, the upstream part of the supply chain has focused on
producing good quality onion seed and ensuring profitability. Due to more profit than
other cereals, farmers are cultivating onion seed in more areas even though the
production has been found to be decreasing. Incidence of disease has been increasing
day by day. Different studies showed that crop yield reduced due to diseases and other
142 factors (Libery et al., 2013; Babu et al., 1995).
The geographic information systems technology can be used to identify the disease
problems, risk prone areas, and assist in control measures (Wagner, 1999). Libery et al.
(2013) reported that plant diseases are the controllable risk which is rests mainly on the
point of production and can be controlled through different plant protection measures.
Application of suitable fungicides might be one option to control the diseases and
enhance the crop yield (Guzaman-Plazola et al., 2011). It is suggested to limit the use of
synthetic pesticides, and promote the integrated pest management techniques and non-
synthetic methods of pest control which has less hazardous effect (Schreinemachers
et al., 2011). Soil quality recovery and vegetables yield increment can be obtained
through combined use of compost and wood under plastic tunnels (Bonanomia et al.,
2014). The yield management in agriculture can be done through different approaches
such as development of disease tolerant and resistant varieties (eg. Sibiya et al., 2011),
crop rotation or sequence (eg. Jacobsen et al., 2012; Krupinsky et al., 2006), fertilizer
management (eg. Bonanomia et al., 2014), tillage (eg. Verhulst et al., 2011), mulching
(eg. Yaghi et al., 2013). Moreover, the risk in agriculture yield can be managed through
insurance program (eg. Meuwissen et al., 2001). None of the safeguard mechanism has
been developed so far except for application of some fungicides recommended by
Chapa Horticultural Farm in Musikot, Rukum.
This study also showed that a traditional technology (sun drying after dipping in
water and store in jute bag) was used in post-harvest handling of seeds, which was a
potential cause of reduced seed quality. It was reported that a combination of high
temperatures ( W 37°C) during drying of wet seeds could further damage the seeds,
causing reduction in quality of seed lots (Horticulture Collaborative Research Support
Program, 2014a). Nobody in the study area had knowledge of hermetic (air proof)
storage. Only about 5 percent respondents have knowledge on safe moisture
percentage; none of the farmers were doing moisture test after harvest and before
selling. Sometime it is also reported that the germination of onion seed reached down
to zero percentage. Chen et al. (2011) carried out SWOT analysis in supply chain of
Chinese agro- products. They recommend establishing alliance of agricultural
producers to obtain economies of scale through expansion of production scale.
Sharma and Singh (2011) reported that formation of producers cooperative in
Uttarakhand, India and executed necessary functions for managing vegetables
production and marketing were the best option to reduce the post-harvest losses.
NCAP (2010) estimated marketing efficiency of horticultural commodities under
different supply chains in seven states of India. The study focused on price spread,
market margin, and producer share in consumer rupee, and concluded that
cooperative led channel had provided the highest marketing efficiency than
traditional distant market channel. Likewise, the supply chain analysis of cauliflower
and onion in Punjab India showed that 90 percent of these vegetables were sold
through commission agents/wholesale (Sindhu et al., 2010). They suggested
enhancing competition through organized retail chains and modern market system
for increasing the marketing efficiency of vegetables.
Individualist and collective marketing practices exist in the study area. Scholars Onion seed
report that collective actions are key factors in enhancing farmers’ access to markets supply chain
(Gruere et al., 2009; Hellin et al., 2009; Kruijssen et al., 2009; Markelova et al., 2009;
Tomlinson, 2010). It contributes in pooling production resources, realizing scale
economies, sharing information, and developing a community-based incentive
structure. It also brings many positive outcomes such as increased bargaining
power, risk reduction, and control of supply. But, such practices are just emerging in 143
the study area that too only confined for collecting and selling, unable to materialize all
other benefits of collective action. However, the involvement of producers in value
chain could bring positive outcome in future. The initiation of cooperatives for
marketing of onion seed is really appreciable in the study area. However, the
sustainability of the marketing is questionable from the existing service providing
modality as the financial status of the cooperatives is very weak. Assessing the
competitiveness of onion market in India, ISEC (2012) reported that most of the fresh
onion cooperatives and associations were not able to sustain year round expenses due
to their short business span that lasts just about a fortnight or a month. It was
suggested that marketing cooperative and credit cooperative should work hands in
hands to expand the business and increase marketing efficiency to strengthen the
sustainability of the marketing cooperative. In the study area various challenges exist
in sustainable marketing of onion seed as most of the local traders have strong linkage
with some firms and entrepreneurs in Kathmandu. So, cooperatives should think about
the regular supply of quality seeds to distributor and agriculture inputs to farmers for
ensuring sustainable marketing of onion seed, otherwise it will be a distant reality to
the cooperatives. Recently, the USAID funded Horticultural Innovative Lab Project has
been creating awareness to maintain the quality of seeds through proper drying and
storage practices. It has initiated the concept of the “dry chain,” which means “make it
dry and keep it dry” until distributed to the end users (Horticulture Collaborative
Research Support Program, 2014b). Different seed companies such as NAF and Mero
Agrovets have been supplying hermetic plastic bags for seed storage after drying to
maintain the seed quality. It is suggested to dry onion seed at bulk through a collective
approach at the field level as initiated by cooperative in Rukum district, packing it in
hermetic bags and supplying to large agro-vets/seed companies for further processing
and delivery to end users. This modality might be appropriate for maintaining the dry
chain and increasing the sustainability to provide quality onion seed in Nepal.
Vertical supply chain for onion seed did not exist in the study area. Only horizontal
supply chain was found, and the coordination among the supply chain actors was also
weak. Contract farming through vertical coordination can reduce the transaction cost
and enhance the profitability of smallholders as it provides market assurance and
higher price to their high-value commodities (Birthal et al., 2005). Some reported that
the horizontal coordination increases economies of scale in production and marketing
(Mitchell et al., 2009). It was found that there is often absence of or limited dialogue
between the market and production actors. The formal contracts are practically
negligible; all the relationships are based on the mutual trust. There is an informal
nature of relationship among the actors, with general lack of professionalism in terms
of technical knowledge on production and processing, which is hampering quantity
and quality of production. Relational contracting between smallholder farmers and
their buyers was the major chain of organic fresh vegetables supply chain in
Kathmandu District of Nepal, where there was absence of legal systems and effective
standards. Different risk-reward trade-offs were offered by this chain to the
JADEE smallholders (Bhattarai et al., 2013). As Tomlinson (2010) indicated the higher levels
6,2 of (vertical) cooperation between firms over a range of activities induce higher
levels of innovation. In general, it appears that vertical ties are particularly important
for innovation compared to horizontal ties. Involvement of a considerable number of
governmental organizations, NGOs, farmers, traders, cooperatives, and seed companies
in onion seed value chain is highly appreciable. The development agencies are
144 especially important in early stages of farmers’ organizations, but, as the organizations
evolve, linkage with private sector actors is critical (Hellin et al., 2009; Markelova et al.,
2009). NGOs may be well suited for the role of catalyst of collective action for
marketing. Arshinder and Deshmukh (2008) focused that supply chain members must
work toward a unified system and coordinate with each other to meet the challenges.
It is necessary to act in managing dependencies between entities and joint effort of
entities working together toward mutually defined goals. This study suggests that
proper management of dependencies between entities and improvement in
coordination mechanism is necessary to achieve strategic fit in the supply chain.
6. Conclusion and policy implications

This paper makes an important contribution to the knowledge base in achieving
strategic fit in supply chain by identifying functional strategies and coordination in
upstream and downstream part of supply chain in the context of developing economies.
In Nepal, the onion seed enterprise is found to be very profitable compared to other
cereals. However, it requires more investment to get higher returns. To achieve the
potential of high investment-high return principle, farmers should be able to invest in
cultivation and other post-harvest activities. Functional strategies at this stage of
supply chain should focus on building farmers’ capacity to invest.
It is estimated that around 62 percent of the added value is generated by the market,
leaving only around 38 percent to the production side. These figures indicate that the
market side of the supply chain is taking significant benefit of the value addition. But
they were also investing money for the value creation. This study also highlights the
importance of collective action through linking the producers to value chain that can
help generate more profit to the upstream part of the supply chain and lead for market
chain innovation.
From overall supply chain perspective, the functional strategy from upstream part
of supply chain should be to provide good quality seeds in the further stages of seed
supply chain. Such a strategy is not working properly as farmers are not following
appropriate drying and storage technology to maintain the seed quality even though
the end users have willingness to pay 30 percent more price for good quality seed. In
addition, seed quality control mechanism also does not exist, which can contribute
mutual benefit to different actors of supply chain. However, some of the seed
companies are buying good quality seeds and providing payments based on their
quality. The uniqueness of onion seed supply chain is that research institutions
and government organizations are directly involved in source seed production and
distribution of the commercial seed through mission onion program.
Further, there is mismatch across different functions and actors of supply chain.
For example, only one variety of onion is registered and allowed for seed multiplication
and distribution in Nepal whereas farmers’ preference was not confined only to that
single variety. As a result government is also procuring some Indian seed varieties for
distribution. As the aim of supply chain is to satisfy the need of end consumers, the
strategy should be capable of matching their needs.
Based on findings, following suggestions are made: Onion seed
• For matching upstream supply and downstream demand of supply chain, supply chain
government institutions involved in research and technology dissemination
should give priority to the promotion (release and registration) of the varieties
preferred by the farmers rather than focused on seed production of only RC to
expand strategic fit of onion seed supply chain through supplying farmers
preferred varieties, which meet the customers’ need and satisfy the supply 145
chain goal.
• Collective action initiated by local cooperative could be promoted to improve
certain functional strategies such as product assembling in bulk, use of modern
drying and storage techniques, small size packaging, and formal contract with
large agro-vets and seed companies. This helps in maintaining the quality of
onion seed as per end users’ demand by using the concept of dry chain.
Acknowledgment
The authors would like to express sincere thanks to all the farmers, traders, seed
companies and related stakeholders who participated in the Field Survey. This study
was made possible by the generous support of the American people through the United
States Agency for International Development (USAID) under Award No. EPP-A-00-09-
00004 (Horticulture Collaborative Research Support Program Award No. 09-002945-50).
The contents are the responsibility of the authors and do not necessarily reflect the
views of USAID or the US Government.
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Further reading Onion seed
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About the authors 149

Krishna P. Timsina is currently a PhD Scholar at the School of Environment, Resources and
Development, Asian Institute of Technology (AIT), Klong Luang, Pathumthani, Thailand. He
obtained his MSc (Agricultural Economics) Degree in 2005 from the Institute of Agriculture and
Animal Science, Rampur, Chitwan, Nepal. He is also affiliated with Nepal Agricultural Research
Council (NARC) since June 2010. He has interest on different research areas such as value
chain, supply chain, agribusiness management, agricultural policy analysis and consumer
preference analysis. Krishna P. Timsina is the corresponding author and can be contacted at:
krishnatimsina2000@gmail.com
Dr Ram C. Bastakoti is currently working as a Researcher with International Water

Management Institute, Jhamsikhel-3, Lalitpur, Nepal. Prior to joining IWMI Dr Bastakoti was an
Adjunct Faculty at the Asian Institute of Technology. He obtained PhD in Natural Resources
Management in 2010 from the Asian Institute of Technology, Thailand. He has interest in
different research areas such as agribusiness management, supply chain, agricultural and
natural resources economics, water governance and climate change adaptation.
Ganesh P. Shivakoti is a Professor at the School of Environment, Resources and Development,
Asian Institute of Technology (AIT), Klong Luang, Pathumthani, Thailand. He obtained his PhD
(Resource Development) Degree in 1991 from the Michigan State University, East Lansing, USA.
He has interest in different research areas such as environmental and natural resource
management, agriculture sector and policy analysis, trade policies in agribusiness management,
climate change and sustainable development.
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Achieving strategic fit in onion seed supply chain

References: this document contains references to 65 other documents.

Achieving strategic fit in onion Onion seed

Supply Chain Stages

Household-level survey. A set of structured questionnaire was prepared to capture

Rukum 400 55 Seed producers Purposely and simple

Particulars Area (ha)

Particulars Per farm Per ha

Average cost of source seed (US$) 43 723.84

Total variable cost/ Total income/ Gross margin/ Gross margin/

Sources of Inputs (%)

4.3 Production and flow of onion seeds from Rukum

Onion seed production in Rukum (100%)

Dhading (5%) Chitwan (5%) Trisuli (10%)

Kavre (5%) Gorkha (5%) Baglung (5%)

Kathmandu Valley (40%)

Farm Farmers from Producer

Farm production Assembly Processing

Cost of production 5.636 5.636

Processing loss and MC loss (10%) 1.307 4.6 1.307 4.6

6. Conclusion and policy implications

District, DADO, Rupandehi.

Field Crops Research, Vol. 120, pp. 86-93.

About the authors 149

Dr Ram C. Bastakoti is currently working as a Researcher with International Water

1. SathapatyanonJedsadaporn, Jedsadaporn Sathapatyanon, KuwornuJohn K.M., John K.M.

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