Nepal: Raising Incomes of Small and Medium Farmers Project

Sovereign Project | 38423-022


ADB is helping Nepal’s poorest farmers shift to high-value commodities. The project will help reduce market and business risks for small and medium farmers in 10 districts in the less-developed western region of the country. It will build supply chain links to buyers and markets, improve postharvest facilities, and provide agribusiness support.

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Project Name Raising Incomes of Small and Medium Farmers Project
Project Number 38423-022
Country Nepal
Project Status Approved
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0233-NEP: Raising Incomes of Small and Medium Farmers Project (formerly Crop Diversification and Commercialization Project)
Asian Development Fund US$ 20.10 million
Grant: Raising Incomes of Small and Medium Farmers Project (formerly Crop Diversification and Commercialization Project)
Netherlands Fund (with LoA) US$ 490,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change
Sector / Subsector

Agriculture, natural resources and rural development - Agro-industry, marketing, and trade

Gender Equity and Mainstreaming Gender equity

The project will reduce the market and business risks for small and medium farmers who diversify into high-value commodities (HVCs) in 10 districts of Nepal's Mid-Western

Development Region and Far-Western Development Region.

Project Rationale and Linkage to Country/Regional Strategy The project, while complimenting on-going initiatives in the rural sector, including those in irrigation, rural infrastructure, commercial agriculture and rural finance, will continue to facilitate diversification and commercialization of agriculture in regions with highest poverty levels in Nepal. It will also contribute to enhanced food security and poverty reduction by supporting the transition of the rural poor and socially excluded groups from a largely subsistence economy to a commercial one.
Impact Increased profitability of small and medium farmers in 10 project districts
Project Outcome
Description of Outcome Increased production of HVCs by small and medium farmers
Progress Toward Outcome

200 AGF subprojects granted, with 200 supply agreements with the traders.

HVC production made in additional 2,984 ha; and participating farmers producing HVCs on an average in 0.36 ha. Nearly 30,081 metric ton (mt) of vegetables, fruits, seed, spices, and honey produced and value added to 16,353 mt of HVCs.

Implementation Progress
Description of Project Outputs

HVC value chains in the Mid-Western Development Region and the Far-Western Development Region are supplying markets

Business plans for producing and adding value to HVCs in the project regions

Effective project management

Status of Implementation Progress (Outputs, Activities, and Issues)

2 pilot and 3 general calls covering all project districts conducted. A total of 990 grant applications/business plans received. 200 AGF subprojects awarded till date.

The project has targetted to award additional 125 subproject by Dec 2015.

39 subprojects awarded to cooperatives for post harvest value addition activities.

Six subprojects awarded to female owned enterprises.

61 AGF awarded to cooperatives providing input services (4,575 households) for HVC production.

A total of 6,253 member farmer households supported in HVC production, including land lease to fulfil respective supply agreement between FGs and HVC traders/buyers.

88 DP, IP and women headed groups with 2,099 member farmers producing HVC with grant support.

Over 900 supply agreements signed between primary producers and post-harvest VC actors (traders and processors) facilitated by the DCCI (However, only 200 have been approved and 125 AGF proposals are at the final stage of signing agreement).

Service providers assisted in developing over 900 AGF SP proposals/business plans covering all project districts; 75 cooperatives supported in improving their financial system and governance.

AEC contracted for AMIS, short term consultant hired and mobilized for scoping of AMIS and final scoping report has already been produced.

757 junior staff and officers form DOA, DADO, RADs, and resource/training centers strengthened.

88 farmers groups involved in HVC production with supply agreements

Women participation is 86.4% in the groups, and 54.6% in cooperatives.

Female occupy 84% in executive committee member and 81% in key decision making positions in farmer groups, and 43% and 42% in cooperatives.

AGF being disbursed within 30 working days for 90% of the approved proposals.

PMU established in Nepalgunj and fully staffed. Liaison office in Kathmandu established and fully staffed. National Level Service provider contracted, and mobilized.

Two regional level service providers for DGMF contracted, and mobilized.

Ten district level service providers contracted and mobilized.

PPMS established and operational.

Geographical Location Up to 17 districts of the Midwestern and Far Western Development Regions of Nepal
Safeguard Categories
Environment B
Involuntary Resettlement FI
Indigenous Peoples FI
Summary of Environmental and Social Aspects
Environmental Aspects

Raising Incomes of Small and Medium Farmers Project (RISMF) will ensure that:

(i) All investee projects using ADB funds are screened against the Prohibited Investment Activities List (PIAL) of the ADB Safeguard Policy Statement.

(ii) All investee projects using ADB funds with potential significant environmental and/or social impacts are reviewed and evaluated against the safeguard requirements of the ADB Safeguard Policy Statement.

(iii) All investee projects are reviewed and evaluated against the national laws, regulations and standards on environment, health, safety, involuntary resettlement and land acquisition, indigenous peoples, and physical cultural resources.

As provisioned in project document, each business plan include environmental management plan and proposal evaluation committee is carefully review possible environmental impacts of each plan before approving for financing.

Involuntary Resettlement None
Indigenous Peoples None
Stakeholder Communication, Participation, and Consultation
During Project Design Stakeholders such as Ministry of Agriculture Development, Department of Agriculture, Agro-Enterprise Center, Nepal Rastra Bank, District Agricutlure Development Offices, district cooperatives, NGOs, and farmers were consulted during the project preparation.
During Project Implementation Last review mission fielded from 11 December 2014 to 7 January 2015.
Business Opportunities
Consulting Services A number of NCB pakages completed to procure goods/office equipment. No packages for civil works.

National Level Service provider, two regional level service providers for DGMF and ten district level service providers contracted and mobilized.

Consulting packages of onfarm technical support, project management support, and technical support for value chain development recruited and mobilized.

Responsible ADB Officer Govinda P. Gewali
Responsible ADB Department South Asia Department
Responsible ADB Division Nepal Resident Mission
Executing Agencies
Ministry of Agricultural Development
Singha Durbar,Kathmandu, Nepal
Ministry of Agriculture and Cooperatives
Singh Durbar, Kathmandu
Concept Clearance 09 Aug 2010
Fact Finding 11 Aug 2010 to 12 Nov 2010
MRM 29 Apr 2008
Approval 24 Nov 2010
Last Review Mission -
PDS Creation Date 26 Apr 2010
Last PDS Update 18 Sep 2015

Grant 0233-NEP

Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Nov 2010 16 Mar 2011 14 Jun 2011 30 Jun 2018 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 25.43 Cumulative Contract Awards
ADB 20.10 24 Nov 2010 10.84 0.00 54%
Counterpart 5.33 Cumulative Disbursements
Cofinancing 0.00 24 Nov 2010 6.10 0.00 30%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

Evaluation Documents

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