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Abstract Background Seed sector in Nepal has high comparative advantage, and the Government of Nepal has also emphasized to develop and strengthen seed supply system in Nepal. However, it has been facing different types of limitations and risks at different levels of the vegetable seeds system in Nepal. Therefore, this paper analyzes overall existing vegetable seeds production environment, its marketing practice and perception of seed producers and users in Nepal. Methods Using simple random sampling technique, a total of 275 seed producers and seed users were selected for the study purpose from four districts. Among them, 175 seed producers were from Rukum and Kavre; 100 seed users were from Rupandehi and Palpa. In addition, 75 seed companies/agro-vets/cooperatives/traders/service providers were selected purposely from all study districts. Indexing techniques, Chi-square test and willingness to pay using direct survey method were used to analyze the data. Results It was estimated that on average about 10–20% losses were observed in vegetable seeds from farm to wholesale due to poor drying, management and storage practices. The unfavorable environment immediately after harvesting and need to dry several times were ranked as first drying and storage problems, respectively. From the analysis, it was found that selection criteria for hybrid and open-pollinated were found significantly different among fresh vegetable growers. The reasons for choosing hybrids were due to their higher production, attractive fruits and more profit. The study reveals the mismatch between seed production and variety demanded by the fresh growers. Moreover, results on tendency of farmers to change preferred varieties and their willingness to pay additional price for high-quality vegetable seeds indicate the market potential for expansion of quality seed in the future. Conclusion It seems that the promotion of new post-harvest technologies to maintain dry chain throughout the vegetable seeds system that can provide higher return to the farmers would be easily accepted by the respondents. Therefore, the advantage of microclimatic diversity in hilly areas of Nepal and the seed grower’s willingness to maintain good-quality seeds can be utilized to produce huge amount of seeds for the fulfillment of national demand in the plain areas as well as export, especially in SAARC countries. |