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Nepal: Food Safety and Agriculture Commercialization Program

Sovereign (Public) Project | 48218-010 Status: Active

The program is aligned with ADB's Strategy 2030, specifically the operational priorities on promoting rural development and food security and strengthening governance and institutional capacity. Moreover, the government's 14th periodic plan (FY2016/2017 FY2018/2019), 15th five-year plan (FY2019/2020 FY2023/2024), and Envisioning Nepal 2030 have highlighted the modernization and commercialization of agriculture sector as a national development priority in the country's aspiration to attain middle-income status by 2030. The ADB-assisted Agriculture Development Strategy (ADS), 2015 -2035 provides the government''s 20-year strategic direction for the agriculture sector in Nepal, with a vision for a self-reliant, sustainable, competitive, and inclusive agriculture sector.

 
Project Name Food Safety and Agriculture Commercialization Program
Project Number 48218-010
Country Nepal
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3847-NEP: Food Safety and Agriculture Commercialization Program
concessional ordinary capital resources lending / Asian Development Fund US$ 50.00 million
TA 9842-NEP: Supporting the Food Safety and Agriculture Commercialization Program
Technical Assistance Special Fund US$ 500,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector

Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The program is aligned with ADB's Strategy 2030, specifically the operational priorities on promoting rural development and food security and strengthening governance and institutional capacity. Moreover, the government's 14th periodic plan (FY2016/2017 FY2018/2019), 15th five-year plan (FY2019/2020 FY2023/2024), and Envisioning Nepal 2030 have highlighted the modernization and commercialization of agriculture sector as a national development priority in the country's aspiration to attain middle-income status by 2030. The ADB-assisted Agriculture Development Strategy (ADS), 2015 -2035 provides the government''s 20-year strategic direction for the agriculture sector in Nepal, with a vision for a self-reliant, sustainable, competitive, and inclusive agriculture sector. The program aligns well with the four ADS outcomes: (i) improved governance, with measures such as improving the credibility of policy commitment; (ii) higher productivity, with activities for improving quality and availability of key inputs and extension services; (iii) profitable commercialization, with measures such as improving value-chain linkages; and (iv) increased competitiveness through increase in agricultural exports, and food safety and security, among others.
Project Rationale and Linkage to Country/Regional Strategy Weak food quality testing and monitoring system is affecting trade and public health. Despite its membership of the World Trade Organization, Nepal has not been able to adopt all international standards on sanitary and phytosanitary measures due to the lack of adequate resources. India is a major trade partner but the plant quarantine laboratories at check-posts bordering India do not satisfy the prerequisites for mutual recognition agreement with India, which impedes exports. Exporters face significant delays because they are subject to multiple tests on both sides of the border. On similar lines, the three central veterinary laboratories, and food safety laboratories under the Ministry of Agriculture and Livestock Development (MOALD) lack sufficient resources and international accreditation. The program will support the government in completing pre-requisites for international certification in select testing units among these laboratories. Among policy and regulatory interventions, a new Pesticide Management Bill will replace the old Pesticide Management Act 1991 to further expand the definition of pesticides and regulate their production, sale, storage, and transportation, and effective surveillance for discouraging the overuse of harmful chemicals by farmers.
Impact

Profitable commercialization and competitiveness accelerated in the agriculture sector (Agriculture Development Strategy, 2015 2035)

Agricultural trade balance improved (Agriculture Development Strategy, 2015 2035)

Project Outcome
Description of Outcome Nepal's food safety compliance and uptake for agriculture commercialization improved
Progress Toward Outcome

Project became effective as of 18 December 2019. The first tranche of $25 million was released upon program effectiveness with a value date of 20 December 2019. The second installment of $25 million will be released upon satisfactorily meeting the remaining 12 policy actions.

The envisaged program effect is to contribute to the improvement of Nepal's food safety and compliance and uptake for agricultural commercialization. The envisaged reform areas are: (i) Reform Area 1: Food safety and quality monitoring systems improved, (ii) Reform area 2: Agriculture commercialization promoted, and (iii) Reform Area 3: Institutional capacity strengthened.

Capacity Building and Advisory Support Consultant (the Consultant) which comprises 2 international and eleven national consultants, has already been mobilized April 2020. Due to increasing number of COVID 19 cases, interaction with the stakeholders including field activities are difficult at the moment and some of the policy documents are still yet to be approved by the parliament.

Implementation Progress
Description of Project Outputs

Food safety and quality monitoring systems improved

Agriculture commercialization promoted

Institutional capacity strengthened

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

Reform Area 1: Food safety and quality monitoring systems improved.

- First draft of Pesticide Management Regulation has been discussed with key stakeholders on July 2020 and has been shared with the high-level committee chaired by Secretary, MOALD. TA consultants' support is required for the preparation of draft pesticide management regulation and also in preparing standards and for registration and monitoring guidelines and standards for biopesticide, chemical pesticide, indigenous homemade pesticide, plant quarantine operational guidelines, and preparation of national standard for phytosanitary measures (NSPM)

- Cabinet has not endorsed the MRL for 10 fruits and vegetables. Work has not been initiated on additional 10 fruits/vegetables to be notified on the WTO notification submission system. The Cabinet needs to approve publishing in gazette. TA resources were discussed and agreed to support DFTQC to commence work setting MRL for additional 10 fruits and vegetables and food items for WTO notification. Work is expected to be completed by end of Feb 2021.

- Cauliflower and tomato selected for pesticide residue test. Test protocols and surveillance plan is to be prepared by February 2021 and pilot needs to be completed by May 2021.

- Upgrading existing food safety laboratories under the Department of Food Technology and Quality Control (DFTQC) is under discussion.

- Gap analysis completed for prerequisites of ISO/IEC 17025 certification for molecular unit in the Central Animal and Poultry Disease Investigation Laboratory which needs to be confirmed with DFTQC. Various training needs have been identified. Training plan will be submitted by the consultant after discussing with the Animal and Poultry Disease Investigation Laboratory. Certified Reference Material (CRM) of seed virus of new castle disease and PPR virus needs to procure. Further discussion with laboratory is going on how to acquire these. The prerequisites expected to be completed by May 2021.

Reform Area 2: Agriculture commercialization promoted.

-Consultant has initiated work on preparing operational guidelines for custom hiring center. Business plans being prepared for apple and citrus. Final draft will be produced by end August 2020 and shared with key stakeholders for feedback and finalization by end October 2020.

Reform Area 3: Institutional capacity strengthened:

- The gender-and socially inclusive provincial strategic investment plan is delayed due to travel restrictions to Gandaki Province. The draft will be produced by end February 2021 and to be finalized by end May 2021.

- To strengthen institutional capacity to implement gender-sensitive and socially inclusive agri-business reforms, ) Gandaki MOLMAC has designated a focal person to oversee mainstreaming of gender equality and social inclusion practices in Gandaki MOLMAC operations. Work initiated on preparation of training manual collection and review of documents, preparation of contents of the training manual. ADS orientation in Gandaki Province completed.

Geographical Location Nation-wide, Kathmandu
Safeguard Categories
Environment C
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 not applicable
Procurement not applicable
Responsible ADB Officer Rana, Arun S.
Responsible ADB Department South Asia Department
Responsible ADB Division Nepal Resident Mission
Executing Agencies
International Economic Cooperation Coordination Division, Ministry of Finance
[email protected]
Singha Durbar
Ministry of Agriculture and Livestock Development
[email protected]
Singha Durbar
Timetable
Concept Clearance 09 Jul 2019
Fact Finding 08 Jul 2019 to 12 Jul 2019
MRM 15 Aug 2019
Approval 31 Oct 2019
Last Review Mission -
Last PDS Update 02 Dec 2020

Loan 3847-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
31 Oct 2019 10 Dec 2019 18 Dec 2019 31 May 2021 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 50.00 Cumulative Contract Awards
ADB 50.00 31 Oct 2019 25.00 0.00 50%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 31 Oct 2019 25.00 0.00 50%

TA 9842-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
31 Oct 2019 28 Nov 2019 28 Nov 2019 30 Jun 2021 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
500,000.00 0.00 0.00 0.00 0.00 0.00 500,000.00 31 Oct 2019 148,238.00

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

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None currently available.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tenders

Tender Title Type Status Posting Date Deadline
Capacity Building and Advisory Support Consultant Firm - Consulting Closed 05 Oct 2019 26 Oct 2019

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.