Determinants of maize seed income and adoption of foundation seed production: evidence from Palpa District of Nepal

Abstract Background Maize is the second most important staple crop in terms of area and production in Nepal. The production and yield of maize are low in Nepal as compared to other similar agro-climatic regions. Seed is considered as a vital input in production. The yield of maize can be increased by using improved seeds and technologies. Farmers were generating good income being involved in foundation seed production as compared to certified seed. The maize seed sector in Nepal is handicapped by low domestic research and production capacity, which results in the poor supply of breeder and foundation seed for its multiplication. Hence, this study is aimed to investigate determinants of income from maize seed and adoption of foundation seed production in Palpa District of Nepal. Methods Palpa District of Nepal was selected for the study because of its high contribution on maize seed production. The sample size was determined using the software Raosoft. A total of 182 samples were selected using simple random sampling technique. Descriptive statistics, probit model, income regression model and the instrumental variable model were used to analyze data. Results The per hectare income from foundation seed production was higher than that from certified seed by NRs. 51,541. The study revealed that schooling year of household head, family type, active members, farm category, total income from maize seed production and training received had statistically significant effect on the adoption of foundation seed production. It was found that income increased by about 44% for the households producing foundation seed as compared to certified seed. This higher income is mainly driven by the higher yield as well as the higher price of the foundation seed. The study revealed that increase in area under maize seed by one hectare would increase the income by 242%. A result of the instrumental variable model showed that foundation seed production and extension services received do not affect significantly on maize seed income. Conclusion This study identified that foundation seed production was profitable farm business in Palpa District of Nepal. However, very few farmers adopted such technology due to lack of proper training and extension services. Farmers should focus to increase area under foundation seed production to achieve higher returns.