value chain/ market analysis of the orthodox tea sub ... - Nepal Trade

Annex 17: Estimate of loss/gain when converting to organic productionOrganic conversionEstimated Calculation Conventional 1st year2ndyear3rdyear CertifiedDecline in Productivity* 0% 35% 30% 25% 20%Production per hectare 5,500 3,575 3,850 4,125 4,125Price(NPR)/kg 23 35 35 40 45Total sales (NPR) (A) per hectare 126,500 125,125 134,750 165,000 185,625Estimated COP (NPR)/kg 19.55 36 35 34 34Total expenses(NPR)/ha 107,525 128,700 134,750 140,250 140,250Cost of certification(NPR)/ha ** 0 2,500 2,500 2,500 1,250Additional overheads(NPR) 0 2,400 2,400 2,400 2,400Total cost (NPR) (B) 107,525 133,600 139,650 145,150 143,900Change in sales revenue (NPR)(A-B) 18,975 (8,475) (4,900) 19,850 41,725Source: Field survey 2011 and SNV report* Estimated productivity during conventional farming calculated at 5500 kg/ha and during organic conversioncalculated at around 3500 kg/ha**Estimated certification cost of NPR 0.5 million each year for 200 ha land; afterwards approximate certification costNPR.0.25 million /yr Estimated on basis of requirement of five extra staffs @ NRs. 8000/person for internal management.Value Chain/Market Analysis- Orthodox Tea 68