ADB Grant to Spur Agribusiness, Higher Incomes in Nepal's Mountain Districts | Asian Development Bank

ADB Grant to Spur Agribusiness, Higher Incomes in Nepal's Mountain Districts

News Release | 28 March 2011

MANILA, PHILIPPINES - The Asian Development Bank (ADB) is to help thousands of poor households in remote mountainous areas of Nepal gain more income from the production and sale of valuable agricultural produce.

A grant of $20 million from ADB's concessional Asian Development Fund for the High Mountain Agribusiness and Livelihood Improvement Project will be provided to small farmers and rural enterprises to help them increase the value and salability of their goods. The initiative is expected to generate new jobs for an estimated 7,500 people, directly benefiting about 5,000 households in 10 districts across four development regions.

"The goal is to make mountain agribusinesses more commercially viable and to take advantage of improving rural infrastructure, as well as rising private sector interest in their goods," said Hans Woldring, Agriculture and Natural Resources Economist with the ADB.

Agriculture employs about two-thirds of Nepal's population and contributes over a third of the country's gross domestic product. Despite the sector's importance, growth has been constrained by farmers' limited access to services, marketing, and employment opportunities. The country is a net food importer. At the same time, there is rising private sector demand for many mountain products such as wool, seeds, off-season vegetables and medicinal plant products.

By supporting activities such as improved processing, packaging, distribution and marketing, the project will help agribusinesses add quality and value to their goods, increase investment opportunities and links with the private sector, and boost off-farm employment. It will be especially beneficial for women as many farm households are headed by them, and they are heavily involved in small rural enterprises engaged in producing high-value items from local materials.

The Government of Nepal will provide over $4.5 million equivalent, while beneficiaries sponsoring private sector investments in the industry will extend over $5.7 million equivalent, for a total project cost of over $30.2 million. The Ministry of Agriculture and Cooperatives is the executing agency for the project which has an expected completion date of April 2017.