Are Lentil (Lens culinaris) Farms Productive, Profitable, and Efficient in Resource Allocation? A Cross‐Sectional Study From Nepal

Abstract

ABSTRACTThe study was based on primary data from 473 lentil farmers selected randomly to analyze productivity, profitability, efficiency, and sensitivity of lentil farms in Nepal. Methods like benefit–cost, break‐even, margin safety, and sensitivity analysis, scaling technique, Cobb–Douglas type of production function, and stochastic frontier were adopted to derive farm economics, allocative, and cost efficiency levels. With average productivity of 672 kg/ha, lentil farmers in the study area were earning about 41% profit as of gross return with a profitability index of 0.78. About 45% margin of safety and estimates of benefit–cost ratio above one on all sensitivity measures is indicative of low risk and robust enterprise. Resources allocated in lentil production were found inefficient, and to achieve maximum return, expenses on land preparation, seed, nutrient, and plant protection cum irrigation should be increased by 27.6%, 80%, 33.1%, and 97%, respectively. Similarly, expenses on labor and harvesting activities need to be decreased by 30.1% and 23.6%. Labor cost and seed cost were the most important variables, and a 1% increase would surge the total production costs by 0.42% and 0.19%, respectively. The cost efficiency was estimated as 1.137 mean value, meaning that over 13.7% of the costs in lentil farms is wasted while comparing best‐practiced farm. Only about 48% of farms is fairly efficient at efficiency levels 1.0 to 1.09, but the majority is inefficient, which needs to minimize the waste of resources. Although suffering from climatic risks and production‐related problems, lentil enterprise is profitable, less risky, less sensitive, and fairly to inefficient in resource use. Wise attention is need on the part of farm management and resource utilization. Farmers are suggested to maintain farm size around 0.5 ha or below 1 ha, use only improved varietal seed, cut labor expenses with the use of machinery, and perform adequate tillage during sowing followed by effective disease management practices.