Thesis Abstract of AGS Students

Assessment of apple production systems in Bhutan

Jigme Wangdi (1995)

Apple is an important cash crop in the temperate region of Bhutan. To utilize the national land resources productively, the Bhutanese Ministry of Agriculture has promoted horticultural development programme with an emphasis in apple production. Apple cultivation in Bhutan has rapidly increased, especially in the region where the climatic conditions are more favorable for production.

This study attempted to assess the profitability of apple production by looking, at its cost structures and revenue streams over its fruitful years. Apple production and marketing constraints, and the effects on social and environment were also examined.

The benefit-cost analysis was a tool used in this study. The capital productivity was assessed by looking at the net present value, benefit-cost ratio and the internal rate of return. Sensitivity analysis was conducted by considering two possible uncertainties; variations in yields and variation in market price. A lower discount rate was also tried to see the effects on profitability for different farm sizes.

The results of the benefit-cost analysis at 14% discount rate showed that apple production was economically viable. The small, medium and large farms had a positive net present values of Nu. 17,304.25, Nu. 11,586.13 and Nu. 5,931.10 respectively. The benefit-cost ratios were more than one for all farm sizes. The internal rate of returns were 20.1%, 16.9% and 15.0% for small, medium and large farms respectively. The sensitivity analysis of yield showed that apple production was still profitable at 10% increase or decrease in yield. At lower market price only the small farms were able to break even while both medium and large farms had negative net present worth and benefit-cost ratio below one.

In terms of differences between production sites, it was found that the two sites, Thimphu and Paro had similar infrastructural facilities. With similar climatic conditions and market, significant differences were not observed between the sites both in costs and returns.

An average yield was found to be 2.5 tons per acre which was low as compared to the yield obtained in other apple growing countries. The harvesting and post-harvest activities, were all done by middlemen by selling the fruits on trees to prebloom contractors before maturity. Thus the exact market value of the fruit produced was not known to farmers.

Pests and diseases were found to be the major constraints in apple production. Land, labor, capital and technology were not percieved as the main problem by the growers. Intercropping within the apple orchards is a common practice throughout the study area. Social problems related to apple production were not known or insignificant. Environmental problems were reported but it is not related to apple production.

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