APPENDIX-5 AGRICULTURAL DEVELOPMENT CHAPTER 1 INTRODUCTION...........................................................................................5-1 CHAPTER 2 PERFORMANCE REVIEW OF AGRICULTURAL SECTOR .....................5-1 2.1 Overview.................................................................................................................5-1 2.2 Agriculture in Eastern Terai Area...........................................................................5-2 2.3 Related Project/Program.........................................................................................5-3 2.4 Sector Performance Review and Lessons...............................................................5-4 CHAPTER 3 THE STUDY AREA........................................................................................5-5 3.1 Survey Methodology..............................................................................................5-5 3.2 Present Condition of Farming.................................................................................5-6 3.3 Concerned Government Offices and Activities ....................................................5-15 CHAPTER 4 COMMAND AREA IN THE SMIP ..............................................................5-16 4.1 Present Condition of Farming...............................................................................5-16 4.2 Lessons from the Experiences in the Command Area of SMIP ...........................5-18 CHAPTER 5 DEVELOPMENT CONSTRAINTS AND POTENTIALS...........................5-19 5.1 Development Constraints......................................................................................5-20 5.2 Development Potentials........................................................................................5-21 CHAPTER 6 DEVELOPMENT PLAN ..............................................................................5-22 6.1 Development Strategy and Framework ................................................................5-22 6.2 Development Plan.................................................................................................5-22 6.3 Project Benefit......................................................................................................5-31 6.4 Risks .....................................................................................................................5-31 ATTACHMENTS 1 PRESENT/PROPOSED CROPPING PATTERN................................5-32 ATTACHMENTS 2 CEREAL REQUIREMENT FOR THE STUDY AREA .....................5-33 ATTACHMENTS 3 THE RESULTS OF SOIL ANALYSIS................................................5-34 REFERENCE........................................................................................................................5-35 The Feasibility Study on the Sunsari River Irrigation Project CHAPTER 1 INTRODUCTION This APPENDIX-5, AGRICULTURAL DEVELOPMENT, discusses about agricultural development plan together with the associated issues. In the compilation of this Annex, inputs have been received from concerned officers such as Eastern Regional Agriculture Directorate (ERAD), Sunsari District Agricultural Development Office (Sunsari DADO), Sunsari-Morang Irrigation Project Office (SMIP), as well as field observations and field surveys together with findings and results from other Annexes. This Annex consists of, aside from this CHAPTER 1 INTRODUCTION, five chapters; namely, CHAPTER 2 PERFORMANCE REVIEW OF AGRICULTURAL SECTOR, CHAPTER 3 THE STUDY AREA, CHAPTER 4 COMMAND AREA IN THE SMIP, CHAPTER 5 DEVELOPMENT CONSTRAINS AND POTENTIALS, CHAPTER 6 DEVELOPMENT PLAN. CHAPTER 2 gives an overview of agricultural sector in this Country as well as in Eastern Terai Area in order to make clear where we should place the Study area in agricultural sector. In CHAPTER 3, present situation in the Study area is discussed such as land use, production and productivity, farm management and marketing etc. CHAPTER 4 mentions of the impact of SMIP based on the performances in the command area. Following that, CHAPTER 5 details constrains and potentials for further development. Based on the constrains and potentials identified in CHAPTER 5, agriculture development plan is discussed in CHAPTER 6 which focuses on basic strategy and framework, land use, cropping pattern, supporting service and marketing aspects etc. CHAPTER 2 PERFORMANCE REVIEW OF AGRICULTUREAL SECTOR 2.1 Overview Agriculture is a dominant sector in Nepal, accounting for about 40 percent of GDP and for about 80 percent of total employment (see Table 2.1.1). The position of the agricultural sector in Nepalese economy is dropping gradually over the year along with the development of secondary and tertiary industries, however, annual growth rate of GDP of the agricultural sector is rising bullishly although there are some negative growth years due to erratic climate. Table 2.1.1 A Position of Agriculture Sector in Nepalese Economy Fiscal Year Description 1990/91 2000/01* GDP at current price (million US$)* 3,226 5,397 - Agricultural sector 1,538 (47.7%) 1,960 (36.3%) Annual Growth Rate (%) 6.44 5.87 - Agricultural sector 2.15 3.99 GDP per capita (US$)* 183 243 Economically active population 7,339,586 - - Agricultural sector 5,952,047 (81.1%) - Annual Population Growth Rate 2.3% (1981-1991) 2.1% (1991-2001) Source: Statistical Year Book of Nepal (2001) *: Preliminary estimate **: Exchange rate; 36.0 Rs/US$ (1990/91), 73.7 Rs/US$ (2000/01) JICA 5-1 SCI The Feasibility Study on the Sunsari River Irrigation Project Though agricultural sector is a backbone of the Nepalese economy, constant food security in the Country as a whole has not been achieved. In 1998/99, there was around 1.86 million MT (equivalent to 88 kg per capita) deficit of food grains including rice, maize, wheat, millet and barley. In general, food deficit exists in the Hills and the Mountains while surplus food grains are produced in the Terai. In consideration of the present situation mentioned above, HMGN gives high priority to the agricultural sector for national development policy. Agricultural Perspective Plan (APP) as a long-term plan for agriculture development was formulated in cooperation with Asian Development Bank (ADB). Total amount of investment is estimated around 700 million US$ within twenty years (1994/95-2014/15). APP intends to transform the subsistence-based agriculture into a modern and diversified sector through introducing commercial farming and promoting agro-based enterprises that contributes to make opportunity for employment, to uplift farmers’ living standard and to narrow regional imbalance. The Ninth Plan (1997-2002), the national development plan, has been prepared in line with the policy of APP. The following national development plan, covering 2003 - 2008, which is preparing at present seems to follow the policy of The Ninth Plan. 2.2 Agriculture in Eastern Terai Area Nepal is generally divided into three ecological zone; the Mountains, the Hills and the Terai mentioned in Section 2.1. Similarly, the Country can be sub-divided into five administrative regions; namely, Eastern Development Region, Central Development Region, West Development Region, Mid-western Development Region and Far-western Development Region. The Terai, being an expansion of the Gangetic plains of India, forms a low flat land. Forty percent of its land is suitable for cultivation. Fertile land permits the cultivation of a wide variety of crops such as paddy, wheat, vegetables, sugarcane, tobacco and other crops. This region plays an important role in food supply for the nation. Especially, Eastern Terai Area which consists of five districts is a representative base area of food grains production although land area contributes only five percent of total land of this Country. Average production of paddy in the last decade occupies 26.2% of the total production in Nepal while area planted occupies 24.9 % (see in Table 2.2.1). Agricultural products such as food grains and perishables are distributed not only to neighboring cities but also to the Hills including Kathmandu and the Mountains. Biratnagar ranked as the second biggest city in Nepal is a gateway of border-trade with India. Various agricultural products and inputs are flowing via Biratnagar and then are distributed to the Country SCI 5-2 JICA The Feasibility Study on the Sunsari River Irrigation Project Table 2.2.1 Production of the Major Crops* Nepal Eastern Terai Area Crop Area Planted Production Area Planted Production (ha) (MT) (ha) (MT) 362,989 901,039 Paddy 1,456,584 3,437,886 (24.9%) (26.2%) 75,804 123,601 Wheat 629,735 950,614 (12.0%) (13.0%) 9,412 86,272 Potato 100,994 889,312 (9.3%) (9.7%) 18,564 10,181 Oilseeds 174,028 106,078 (10.7%) (9.6%) 2,245 2,034 Tobacco 6,147 6,147 (36.5%) (37.0%) 4,247 133,668 Sugarcane 44,255 1,375,939 (9.6%) (9.7%) Source: Statistical Year Book of Nepal (2001) *: These data are the mean values from 1990/91 to 1999/2000 2.3 Related Project/Program Nepal has received many aids from donor countries and international agencies for long time. For the past thirty years, over thirty projects/programs related to the agricultural sector have been implemented under international cooperation. Summary of on-going projects/programs related to agricultural sector except irrigation scheme is briefly described below. 2.3.1 Agricultural Extension and Research Program (1) Lending Agency: World Bank (WB) (2) Implementing Agency: Ministry of Agriculture and Cooperatives (MOAC) (3) Project Cost: 30.5 millions US$ (4) Approval Date: 26/08/1997 (5)