Nepal : Commercial Agriculture Development

Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Agricultural production - Agriculture research and application - Agro-industry, marketing, and trade - Rural market infrastructure

The Project will reduce poverty in the rural communities of 11 EDR districts through equitable and sustainable commercialization of agriculture. The project outcome will be improved efficiency of production, marketing, and processing of HVCs such as vegetables, fruits, tea, and spices in the EDR.

The project outputs include (i) increased public and private investment in commercial agriculture, (ii) inclusion of poor and semicommercial stakeholders in commercial agriculture, (iii) timely availability of market information to farmers, and (iv) enhanced capacity of project partners in supporting farmers.

The Project builds on existing initiatives; responds to the needs of stakeholders; and ensures fairer benefits to poor disadvantaged communities and women. The Project is timely and based on sound experience; its design is consistent with ADB?s strategic focus under the CSP to (i) increase agricultural productivity (ii) increase agricultural income and employment opportunities for rural people, and (iii) increase commercialization of agriculture.

ADB?s 2005?2009 country strategy and program (CSP) for Nepal links future ADB assistance to results sought by the Government to deal with the underlying causes and possible long-term effects of the recent conflict. Broad-based and inclusive social and economic development to achieve a steady decline in poverty is the adopted strategy. The results are in line with the objectives of the Government?s poverty reduction strategy (Tenth Five-Year Plan), which is built on four pillars: (i) broad-based and higher economic growth, (ii) social development, (iii) targeted programs for socially excluded groups, and (iv) good governance. The main thrusts of the CSP are (i) promoting greater development balance in different regions; (ii) improving access of the poor to basic services, opportunities for social advancement, and participation in the development process; and (iii) addressing the needs of disadvantaged ethnic groups, castes, and women. In project design, the CSP requires (i) simple design, (ii) service delivery through local stakeholders, (iii) demand-driven assistance, (iv) results-focused support, (v) flexible implementation modalities, (vi) community participation with social inclusion in overall project implementation, and (vii) greater transparency and accountability. These requirements guided design of the Project and are incorporated in its framework.

Reduced poverty in the rural communities of 11 districts in the Eastern Development Region (EDR) of Nepal

through equitable and sustainable commercialization of agriculture

The area covered by HVCs has increased by additional 21,599 ha to that of 154,740 ha in 2006 due project intervention alone, and the production of HVCs has increased by 52% (205502 mt) compared with 135,000 mt in 2006. In terms of monetary value, HVC production has increased by 42% (NRs 13,902 million from NRs 9,803 million in 2006) among the beneficiaries as a result of the project interventions. The infrastructure subprojects supported through the commercial agriculture fund (CAF) for farm-to-market roads (71 km) and collection centers and market sheds (serving 1,165 ha HVC production area) have contributed to enhanced market accessibility of the target communities, while irrigation subprojects have helped bring new areas (1200 ha) under HVCs production. Similarly, the non-infrastructure subprojects supported under CAF, which include production and processing of HVC, seed production and marketing, packaging and processing, and compost production and inclusive development activities (for semi-commercial and subsistence stakeholders) have also contributed to the increased cropped area under HVCs. The marketed volume of HVCs has increased by 75% per farm household and to 13,159 kg from 7534 kg in the baseline data of project intervention areas. The export volume of selected HVCs (Large cardamom, fresh vegetables, Ginger and Tea) has increased by 26% (13901 MT) in 2012 as compared with 2006/7.

The Project has placed due priority in balanced use of fertilizers. The non-infrastructure SPs has also contributed to increased organic fertilizer production (vermin-compost) and utilization in fruits, vegetables and tea. This has resulted in the adoption of sustainable soil management practice and contributed to the production of better quality HVCs.

The support provided through component 1 activities has resulted in increased public, private and community investment in commercial agriculture. Against the actual total CAF investment of NRs. 354 million, the local government has funded NRs. 33 million, and the private investment has reached NRs. 218 million. Furthermore, the communities have contributed NRs. 26 million in the development of market infrastructure. The completed SPs are directly as well as indirectly contributing towards sustainable and equitable commercialization of agriculture in the Project area. Besides, those SPs have helped improve the value chain of targeted HVC.

1. Increased public and private investment in commercial agriculture

1.1 Establishment of the commercial agriculture alliance (CAA)

1.2 Community-based market infrastructure investments

1.3 Noninfrastructure investments add value to agriculture products

2. Inclusion of poor and semi-commercial stakeholders in commercial agriculture

2.1 Development of subsistence stakeholders

2.2 Enhancement of semicommercial stakeholders

2.3 Promotion of social inclusiveness among commercial stakeholders

3. Timely availability of market information to farmers

4. Enhanced capacity of project partners in supporting farmers

- CAA has 532 active members

- Membership comprises farmer group 55%, co-operative 28%, traders 10%, and processors 7%.

- Six annual general meeting held, regular district meetings are being held.

- 76 market infrastructure subprojects approved and agreements signed between DDC and concerned user groups, all completed. Of the 76 subprojects, farm to market roads are 22, market shed 23, collection centers 17, storage/go down 3, small irrigation 9 and other 2.

- 100% of the completed market infrastructures are being managed by communities.

322 non-infrastructure subprojects approved, of which, 319 sub-projects are completed and 3 dropped.

- 77% of sub-projects include HVC promotion.

- 11% of sub-projects include quality control.

- One percent of sub-projects include equipment for product testing.

- 11% of sub-projects include agro-processing technology, equipment and machinery.

- CAA members participated in promotional activities such as observation visits -9 (Palpa 1 visit on commercial vegetable farming; Darjeeling 1 on tea; Dhupgadi (India) 1 on tomato and chilly farming; Pusha (India) 1 on honey production/marketing; Ludhiyana (India) 1 on national level agri fair; Bhagalpur (India) 1 on state level agri fair; Thailand 1 on OVOP and cooperative marketing), Bangalore International Agri fair-1, Chandigarh Agri fair-1, Pusa/Delhi Agri fair-1

General members participated in the fairs on agri-business organized in Siraha, Morang and Panchthar. One event of Trade Expo (Birat expo 2011) organized

Project organized an orientation program to CAA members on intellectual property right protection

- CAA members have been provided 3 events of skill based promotional training on home processing, branding and labelling

- 5 promotional activities and one national level workshop have been organised for HVCs promotion and industry networking. These include: tea farmers/processors/traders visit to India (April 2010), workshop on honey and visit to different markets for Producers (2010), one workshop on potato, chilli and tomato among different stakeholders (2010)

- Contract signed with 11 NGOs for development of subsistence stakeholders in 11 districts.

- A total 902 group formed and mobilized

- 165 HVC production pockets and 35 marketing points identified by the partner NGOs.

- NGOs and PMU assisted 23,379 households in implementing income generating activities.

- 902 farmer groups formed and mobilized.

- 5,684 landless people identified, organized into groups, and provided training.

- 378 groups adopting small scale commercial activities.

- Contract signed with 11 partner NGOs for promotion of semi-commercial stakeholders in 11 districts.

- 255 groups formed and mobilized

- 255 farmer groups (Semi and Other Stakeholders) graduate as marketing entities.

- Efforts have been made to affiliate 81 marketing groups and other agribusiness stakeholders with existing associations of key HVCs like ginger, cardamom and tea in project districts

- 57 cooperatives graduate as marketing entities.

- 81 quality improvement groups established comprising of 1704 households

- 15 groups comprising 375 households formed, capacitated and mobilized in improving post-production and quality improvements.

- 15 training events organized in post-harvest, value addition and quality improvement.

- 31 farmer groups/cooperatives received CAA Membership.

- 22 NGOs as service providers contracted as per demand

- 17 other service providers (training and logistics providers) shortlisted

- 749 commercial stakeholders oriented in gender, social mobilization, inclusion, and environment management.

- 21 group/cooperative based market information system (GMIS) established and functional.

- 21 group/cooperatives assisted in operating and maintaining the market information system.

- Consolidated district data systemized, integrated with centralized system and disseminated through AMIS website www.amis.gov.np, monthly bulletins, daily price e-bulletin, FMs Radios, SMS mobile phone service, Monthly TV program, weekly FM Radio, AMIS centre at APMCs-3 and DCCIs-4, GMIS Centers-17 and scrolling price notice board-2

- 43 project standardization training completed.

- 136 basic marketing development training completed.

- 39 training to partner NGO staff completed.

- 50 training to DADO staff completed.

- 90 events (24 training to CAA staff + 66 events to members completed).

No major issues were noted during the implementation. However, the following issues need attention:

- There is a growing concern among the CAA stakeholders about its long term sustainability. None of the Project related documents speaks about the operational modalities of CAA after the Project completion. So, these concern need to be addressed

- Continuation of market information system established by the Project even after the closure of the project

- Linking farmers' primary institutions (groups and cooperatives) with private sector/agribusinesses and service providers to facilitate increased value addition and achieving greater role in respective value chains

The Project has no negative impact on indigenous people. The Project has been addressing the issues of social and economic exclusion through its component 2: inclusive development of stakeholders, which assists disadvantaged people and poor subsistence farmers to develop and participate in income-generating agricultural activities. Social Development Specialist at PMU has been assisting in ensuring the equitable distribution of project resources and equal access to project activities and structures. The associated JFPR grant targets and benefits the most disadvantaged people by focusing on building their capacity and on income generation opportunities through a specialized package of targeted support to ensure their participation.

The Project has made a considerable progress in achieving the targets. Out of 274 CAA members, women comprise 48%, dalit 6%, janajati 41%, and others4 53%, which meets the GAP target. Of the total CAA members, farmer groups are 47%, cooperatives 32%, traders 11%, and processors 10%. Out of the total farmer groups, women only groups are 12%, while women only cooperatives are 20%. Rest of the farmer groups and cooperatives has women and men members. The traders (16) and processors (13) are mostly male groups. Of the total 25,144 subsistence and semi-commercial members, women are in high numbers 66% subsistence and 51% semi-commercial. Similarly, representation of dalit (26%) and janajati (53%) are also high in subsistence groups. The Project has institutionalized the systemic collection of disaggregated data from the field to centre, and proper formats have been used for periodic monitoring and reporting.