Koshi tea farmers see higher profits in organic-certified production

According to the study, farmers in Koshi Province earn an average profit of Rs 30 per kilogram from orthodox tea. This data comes from a study conducted by Nepal Rastra Bank, which examined the contribution of orthodox tea produced in Koshi to the national economy, as well as its potential and challenges in domestic and international markets.

The analysis reveals various findings based on the income and expenditure details obtained from the sampled farmers during Nepal Rastra Bank’s field survey. The average cost per kilogram for organic-certified farmers is Rs 45.16, while for uncertified farmers, it is significantly lower at Rs 24.72. In terms of income, organic-certified farmers earn an average of Rs 75.52 per kilogram, compared to Rs 48.44 for uncertified farmers. When considering household income, the average for organic-certified farmers is Rs 13,991, whereas uncertified farmers have an average household income of Rs 10,575.

Finally, the profit per kilogram is higher for organic-certified farmers, with an average of Rs 30, while uncertified farmers earn an average profit of Rs 24 per kilogram. In Koshi Province, a total of 100 orthodox tea processing industries are operating, comprising 21 organic-certified and 79 organic-uncertified industries.

In the fiscal year 2022/23, 78,38,946 kilograms of processed orthodox tea were produced. Among these, the share of organic-certified and uncertified orthodox tea was 11.9% and 88.1%, respectively. The total investment in 84 orthodox tea industries participating in the study was Rs 368.74 million. Of this, 36.4% was from loans, while 63.6% was from equity capital. Only two industries had foreign investment.