Nepal: Raising Incomes of Small and Medium Farmers Project

Sovereign Project | 38423-022 Status: Active

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.

Project Details

Project Officer
Rana, Arun S. South Asia Department Request for information
  • Nepal
  • Grant
  • Agriculture, natural resources and rural development
Project Name Raising Incomes of Small and Medium Farmers Project
Project Number 38423-022
Country Nepal
Project Status Active
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)
concessional ordinary capital resources lending / 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

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

HVC being produced in additional 7,219 ha; and participating farmers producing HVCs 0.302 ha on average. 73,657 mt of vegetables, fruits, seed, spices, and honey produced. Out of the total, value added in 16,353 mt of HVCs. Cash income of participating women projected to increase to NRs 98,396 per annum from high value crop sale compared to baseline NRs 10,270 from High value crops.

Out of the total awarded SPs, 162 are cooperatives, 169 are farmers groups, 104 are agri-entrepreneurs, & 1 is market committee. Of the total, 119 SPs are completed and 317 are under implementation.

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)

Output 1:

Over 1,715 supply agreements signed between primary producers and post-harvest VC actors (traders and processors) facilitated by the DCCI. However, only 436 have been approved.

2 pilot and 5 general calls covering all project districts conducted. A total of 990 grant applications/business plans received. 436 AGF subprojects awarded till date.

Proposal under 5th call being administered and 103 proposals are at the final stage of evaluation.

Out of 436 AGF sub projects, 162 subprojects awarded to Cooperatives, 169 to DGMs, 104 to Entrepreneurs and 1 to Market Committee. 19 subprojects awarded to cooperatives for post-harvest value addition activities. 68 SPs awarded for post-harvest operation/value chain infrastructure. 68 medium sized enterprises supported. 13 female owned enterprises supported. A total of 12,343 members of 113 farmer groups supported in HVC production, including land lease to fulfill respective supply agreement between FGs and HVC traders/buyers.

Output 2:

1,956 junior staff and officers from DOA, DADO, RADs and resource/training centers trained/strengthened. Women participation is 86% in groups and 55% in cooperatives. 590 farmers groups involved in HVC production with supply agreements. Female occupy 55% in executive committee member and 51% in key decision making positions in cooperatives. Over 90% of the approved applications being disbursed within 30 working days. 69 DP, IP and women headed groups with 4,264 member farmers producing HVC with grant support. 121 cooperatives supported in improving their financial system and governance. Potential entities for using alternative energy is being explored.

Output 3:

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 committees 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 27 May to 17 June 2016.

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 Staff

Responsible ADB Officer Rana, Arun S.
Responsible ADB Department South Asia Department
Responsible ADB Division Nepal Resident Mission
Executing Agencies
Ministry of Agricultural Development
Singha Durbar,
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 27 Mar 2017

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 19.26 0.00 96%
Counterpart 5.33 Cumulative Disbursements
Cofinancing 0.00 24 Nov 2010 13.91 0.00 69%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Evaluation Documents See also: Independent Evaluation

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