Nepal : Nuts and Fruits in Hilly Areas Project

Sovereign Project | 48218-006

The project will increase agricultural income of approximately 40,000 farm households in 100 municipalities in hilly areas of five provinces: Province 1, Bagmati, Gandaki, Karnali and Sudurpashchim. This will be mainly achieved through the development of approximately 10,000 hectares (ha) of climate resilient fruit and nut orchards providing value-addition to the nuts and fruits produced by at least 30,000 farm households. The project will also improve the institutional capacity for managing the nursery and horticulture sector. For about 10,000 smallholder households, who are not capable of investing in fruit and nut orchard development in the project provinces, the project will assist them to improve their vegetable and other nutritious crop production and its marketing.

Project Name
Nuts and Fruits in Hilly Areas Project
Project Number
48218-006
Country / Economy
  • Nepal
Project Status
Active
Project Type / Modality of Assistance
  • Grant
  • Loan
Source of Funding / Amount
Grant 0845-NEP: Nuts and Fruits in Hilly Areas Project
Source Amount
Asian Development Fund US$ 10.00 million
Grant 0846-NEP: Nuts and Fruits in Hilly Areas Project
Source Amount
Global Agriculture and Food Security Program US$ 9.00 million
Grant: Nuts and Fruits in Hilly Areas Project
Source Amount
World Food Programme US$ 3.00 million
Loan 4211-NEP: Nuts and Fruits in Hilly Areas Project
Source Amount
Concessional ordinary capital resources lending US$ 60.00 million
Operational Priorities
  • OP1: Addressing remaining poverty and reducing inequalities
  • OP2: Accelerating progress in gender equality
  • OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
  • OP5: Promoting rural development and food security
  • OP6: Strengthening governance and institutional capacity
  • OP7: Fostering regional cooperation and integration
Sector / Subsector
  • Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Agricultural production - Agro-industry, marketing, and trade

Gender
Effective gender mainstreaming
Description
The project will increase agricultural income of approximately 40,000 farm households in 100 municipalities in hilly areas of five provinces: Province 1, Bagmati, Gandaki, Karnali and Sudurpashchim. This will be mainly achieved through the development of approximately 10,000 hectares (ha) of climate resilient fruit and nut orchards providing value-addition to the nuts and fruits produced by at least 30,000 farm households. The project will also improve the institutional capacity for managing the nursery and horticulture sector. For about 10,000 smallholder households, who are not capable of investing in fruit and nut orchard development in the project provinces, the project will assist them to improve their vegetable and other nutritious crop production and its marketing.
Project Rationale and Linkage to Country/Regional Strategy

Nepal is experiencing a rapid change in its farming systems, particularly in hilly areas that are between 500 and 3,000 meters (m) above sea level. In these areas, agriculture still provides livelihoods to 66% of the population, but the share of agriculture in rural income was merely 11.4% in 2014-2015, and remittance has become the most important source of household income. As outmigration from these areas continuously rises, about 30% of cultivated land has now been abandoned from farming. Also, climate change is shifting crop cultivation altitude, and increasing diseases, insect pests and wet days. Climate vulnerability index is highest in the West, Northwest and Northeast with mountain regions in the Northwest having the lowest adaptation capacity. These land abandonment, outmigration and climate vulnerability result in less livelihood options, further accelerating youth outmigration to urban areas and abroad.

The effective exploration of Nepal's horticulture potential has been constrained by a wide range of factors including: (i) lack of business and marketing channel; (ii) high post-harvest losses up to 40% of production due to poor quality planting materials, poor post-harvest management techniques and inadequate equipment and infrastructure for grading, packaging, and climate-controlled storage; (iii) limited access to loans, particularly the medium term loans required for horticulture production, due to complex loan acquisition and collateral valuation processes; (iv) shortage and high cost of seasonal labor; and (v) steadily declining farm productivity by 20% over the last 15 years.

The declining fruit and nut crop productivity has led to Nepal's orchard productivity falling below the world average in 2017. This is a result of: (i) poor quality planting materials in the absence of nursery regulations such as Nursery Act; (ii) old and senile orchards with limited use of machinery; (iii) small landholding farms, characterized by land fragmentation, with an average size of 0.6 ha; (iv) limited water storage in hilly areas preventing year-round farming; and (v) lack of resilient varieties to climate change induced diseases. Also, female farmers in hilly areas are more likely to face a lack of equitable access to, and control over, productive resources such as land, credit, and technology.

Yet, there are new opportunities emerging for farmers in hilly areas. Nepal's diverse agro-climatic conditions and geophysical locations provide a wide range of opportunities for tropical, sub-tropical and temperate fruit and nut production. Between 2008-2018, both the total area and the volume of fruit production has increased by more than 70%.4 Still, domestic fruit and nut supply is not meeting the fast-growing demand. Fruit and nut demand in Nepal is increasing because of urbanization, rising national wealth, improved knowledge of nutrition and increased tourist flow. Between 2013-2017, nut importation rose by 43% and apple importation rose by 260%. This resulted in a 136% increase in the cost of fruit, nut, and potato importation during the same period.

Higher profits from commercial fruit and nut farming could help retain the younger population. It also offers income generation opportunities for women who are heading households after male outmigration and are disadvantaged in finding off-farm employment. Engagement of women, and excluded and vulnerable groups in less labor-intensive horticulture production, marketing, and processing could help them be economically empowered and socially recognized in the household decision-making process. Through supporting fruit and nut farmers, the project will help the country to meet the horticulture demand, and increase hilly area farmers' income, employment opportunities and climate resilience.

Impact

Livelihoods of rural households improved (Agriculture Development Strategy 2015-2035).

Resilience of farmers to climate change improved (Agriculture Development Strategy 2015-2035).

Project Outcome

Description of Outcome

Beneficiary farmers' agricultural income from climate-resilient horticulture farming increased.

Progress Toward Outcome

Implementation Progress

Description of Project Outputs

Institutional capacity for nursery and horticulture sector management improved.

Production and productivity of project farmers increased.

Value addition to hilly area horticulture produce enhanced.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Bagmati Province, Gandaki Pradesh, Karnali Pradesh, Province 1, Sudurpashchim Pradesh

Safeguard Categories

Environment
B
Involuntary Resettlement
C
Indigenous Peoples
B

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation, and Consultation

During Project Design
During Project Implementation

Business Opportunities

Consulting Services
All consulting services will be carried out using the ADB Procurement Policy (2017, as amended from time to time) and the Procurement Regulations for ADB Borrowers (2017, as amended from time to time).
Procurement
All procurement activities will be undertaken following the ADB Procurement Policy (2017, as amended from time to time) and the Procurement Regulations for ADB Borrowers (2017, as amended from time to time).

Contact

Responsible ADB Officer
Kim, Sunae
Responsible ADB Department
Sectors Group
Responsible ADB Division
Agriculture, Food, Nature, and Rural Development Sector Office (SG-AFNR)
Executing Agencies
Ministry of Agriculture and Livestock Development

Timetable

Concept Clearance
07 Jun 2021
Fact Finding
19 Jul 2021 to 02 Aug 2021
MRM
25 May 2022
Approval
12 Sep 2022
Last Review Mission
-
Last PDS Update
12 Sep 2022

Funding

Grant 0845-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Sep 2022 07 Nov 2022 02 Dec 2022 28 Feb 2030 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 10.00
ADB 10.00
Counterpart 0.00
Cofinancing 0.00
Grant Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.48 0.00 5%
Cumulative Disbursements 06 Jun 2024 0.40 0.00 4%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - Satisfactory

Grant 0846-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Sep 2022 07 Nov 2022 02 Dec 2022 28 Feb 2030 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 9.00
ADB 0.00
Counterpart 0.00
Cofinancing 9.00
Grant Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.00 0.03 0%
Cumulative Disbursements 06 Jun 2024 0.00 0.02 0%

Loan 4211-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Sep 2022 07 Nov 2022 02 Dec 2022 28 Feb 2030 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 74.45
ADB 60.00
Counterpart 14.45
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.14 0.00 0%
Cumulative Disbursements 06 Jun 2024 0.13 0.00 0%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - 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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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.


Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Horticulturist/Post harvest management expert/ Pop develeopment and training of trainers Individual - Consulting Closed
Agriculture Economist/PoP Development and Training of Trainers Individual - Consulting Closed
Horticulturist/Nursery management Expert/PoP Development and Training of Trainers Individual - Consulting Closed
Entomologist/PoP Development and Training of Trainers Individual - Consulting Closed
Plant Pathologist/PoP development and training of trainers Individual - Consulting Closed
Soil Scientist/PoP Development and Training of Trainers Individual - Consulting Closed
Team Leader/Horticulturist/PoP Development and Training of Trainers Individual - Consulting Closed
Farmer Group and Cooperative Facilitation Firm - Consulting Closed
Farmer Group and Cooperative Facilitation Firm - Consulting Closed
Farmer Group and Cooperative Facilitation Firm - Consulting Closed
Farmers Group and Cooperative Facilitation Firm - Consulting Closed
Farmer Group and Cooperative Facilitation Firm - Consulting Closed
Project Implementation Support Consultant Firm - Consulting Closed

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

Title Document Type Document Date
Nuts and Fruits in Hilly Areas Project: Procurement Plan Procurement Plans May 2023