A comparative study of economic returns, input efficiency, and challenges in local and improved rice cultivation in the western Terai region of Nepal

Abstract Rice ( Oryza sativa L.) is the main cereal crop in Nepal. It is the staple food and an important part of the national economy. Farmers grow improved, hybrid, and local rice varieties, often prioritizing production over profitability and input use efficiency. Research and policies have primarily supported the development of improved varieties, overlooking the potential of local cultivars. Therefore, this study aimed to identify the most profitable rice varieties, assess input use efficiency, and analyze production challenges by surveying 169 rice‐growing farmers (99 improved rice and 70 local rice) in the western Terai region of Nepal. Profitability analysis revealed that local rice has a higher benefit–cost ratio (2.82) than improved rice (1.99), highlighting its socioeconomic significance. The input use efficiency analysis revealed that seed, machinery, fertilizer, and pesticide were underutilized, whereas labor was overused in local rice cultivation. While, improved rice cultivation underutilizes seed and machinery but overuses labor, fertilizer, and pesticide, underscoring the inefficient use of capital in rice cultivation. Major production challenges in local rice cultivation include pests, diseases, high input costs, limited credit access, and poor irrigation, whereas high fertilizer and machinery costs, inadequate irrigation, and credit facilities constrain improved rice growers. So, promoting local rice cultivation with efficient input management could increase the income level of rice‐growing farmers. In addition, policymakers and research institutions should prioritize farm mechanization, quality seeds, credit facilities, irrigation systems, and subsidies for fertilizer to support profitable and sustainable rice production in Nepal.