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A supply chain approach to study efficiency and sustainability in the Nepalese tea industry

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A supply chain approach to study efficiency and sustainability in the Nepalese tea industry

Globalization and market liberalization has opened attractive opportunities for the emerging economies to internationalize their agricultural products in the global market. The economy of many developing countries, especially in South Asia, highly depends on agriculture. In context of Nepal, huge population living in southeastern and other rural areas of the country directly or indirectly depends on tea farming for their livelihood. Tea is one of the potential export commodity of Nepal, which is highly demanded in the international markets. With the opportunities on internationalizing agricultural products in developed markets, emerging countries usually face challenges and difficulties in meeting international quality standard requirements. Thus, implementation of sustainable supply chain management in agriculture sector has become an essential factor to maintain efficiency and create effective value adding activities throughout the upstream and downstream supply chain. The purpose of this thesis report is to analyze the current supply chain practices of the commodity tea in Nepal and identify the key players along the supply chain, presenting all the general value chain activities involved in the industry. The study aims to categorize the bottlenecks of the economic leakage in final tea market, seek for the possible ways of strengthening efficiency and suggest on implementing sustainable supply chain management approaches to achieve competitive advantages in the international markets. After the review of relevant literature on value chain and supply chain, the thesis adopted supply chain management theories as a framework for analyzing the value creating process, and activities involved in agro-supply chain processes. In relation to the various aspects of global supply chain theories the research intends to highlight the common global sustainable agro-supply chain barriers, determine the major factors that constraints against tea supply in Nepal and suggest the best possible ways of executing viable agro-supply chain practices. The study adopted a qualitative research design in which document analysis and interviews were used as data collection methods. The interviews conducted with stakeholders involved in the Nepalese tea industry revealed several interesting facts and exposed different aspects of tea supply chain practices in the country. Analysis of data collected reveal number of issues such as, poor government policy and support, and absence of other basic facilities, as major constraints to the growth of the industry. The study concludes that, with an improvement in the accessibility to basic infrastructural facilities, maintenance of healthy relation with different stakeholders throughout the supply chain, and the implementation of sustainable agricultural production policies, the Nepalese tea supply-chain would be efficient enough to launch the country’s tea industry as major player in the global tea market.

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