CHAP. 3 AGRICULTURE DEVELOPMENT OF OBJECTIVE DISTRICTS
This chapter is organized into seven sections. Section 3.1 provides basic data of the five objective districts. Section 3.2 discusses road conditions of each district. Section 3.3 describes the general situation of each district. Section 3.4 provides district development plans, budgets and priorities. Human resource and administrative structures of the DDC and District Technical Office (DTO) are also discussed in this section. Section 3.5 depicts the districts agriculture development polices and programs. Agricultural production in survey districts are presented in Section 3.6. Section 3.7 depicts agricultural marketing situations in the survey districts.
3.1 Basic Data of the Objective Districts
The basic data of the five Districts such as area, population, literacy rate and poverty incidence are shown in the following Table 3.1:
Table 3.1 Basic Data of the Objective Districts
S urvey Districts No Particulars Unit Kavre- Whol e Ne pal Dolakha Ramechhap Sindhuli Mahottari palanchok 1 Area Sq. Km 2,191 1,546 1,396 2,491 1,002 147,181 2 Population 1000 Nos. 204.2 212.4 385.7 280 553.5 22,736.90 3 Male 1000 Nos. 100 100.8 188.9 139.3 287.9 11,563.90 4 Female 1000 Nos. 104 111.6 196.7 140.5 265.6 11,587.50 5 Sex Ratio % 96 90 96 99 108 100 6 Total Households 1000 Nos. 43.2 40.4 70.5 48.8 94.2 4,174.40 7 Average Household size Nos. 4.73 5.26 5.47 5.74 5.87 5.44 Nos./ Sq. 8 Population density 93 137 276 112 552 157 Km Proportion of urban 9 % 10.7 0 13.7 11.7 4 13.9 population 10 Literacy Rate % 50.6 39 63.7 50.1 34.4 53.7 11 Poverty incidence** % 33.6 48 35.1 60.3 29.1 33.5 Source: CBS, 2001 Census, **- Small Area Estimation, CBS/WB/WFP
3.2 Road Status of Objective Districts
For the purpose of conducting a program formulation survey along Sindhuli Road Corridor, this survey selected five districts, namely Kavrepalanchok, Sindhuli and Mahottari, from among the districts where the Sindhuli Road passes through and two adjoining districts, namely Ramechhap and Dolakha1 (Annex 3.1). Therefore, this chapter presents agriculture related issues of these districts. Table 3.2 below shows the number of VDCs and municipalities in these five districts with strategic roads, and local roads, as well as those with no vehicle-pliable roads.
1 Reasons for including Dolakha district were (a) strategic importance of the district to the Sindhuli Road Corridor development, (b) opportunity to look into the issues of north-south connectivity (Dolakha in the north to Mahottari in the south), (c) opportunity for Ramechhap district for two way connectivity and accessibility through Lamosangu-Jiri road and Sindhuli Road, and (d) other initiatives/projects being undertaken in Dolakha district through JICA support.
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Table 3.2 Road Status in the Objective Districts
No. of VDCs and Municipality VDCs and Municipality with VDCs With no Vehicle -pliable District Strategic Road Local Road VDCs Municipality Total Roads No. % No. % No. % Dolakha 51 1 52 12 23.1 18 34.6 22 42.3 Ramechhap 55 0 55 13 23.6 34 61.8 8 14.5 Kavre 87 3 90 27 30.0 54 60.0 9 10.0 Sindhuli 53 1 54 13 24.1 19 35.2 22 40.7 Mahottari 76 1 77 56 72.7 21 27.3 - - Total 322 6 328 121 30.0 146 44.5 61 18.6 Source: DDC development plans
3.3 Introduction to the Survey Districts
3.3.1 Sindhuli Road Aligned Districts
Kavrepalanchok: The district is located about 30 km east of Kathmandu city in the central hills. It is bordered by Ramechhap and Dolakha to the east, Kathmandu, Lalitpur and Bhaktapur to the west Sindhupalchok to the north, and Makwanpur and Sindhuli to the south. The district has a mixture of ethnic and caste groups of Tamang, Bahun and Chhetris. In 2001, it had a population of 385,672 which is estimated to have reached 434,872 in 2008. Poverty incidence in the district as per “Small Area Estimation of Poverty, Caloric Intake and Malnutrition” (CBS/WFP/World Bank Report, 2006 based on National Living Standard Survey) is 35.1 percent. This is slightly higher than the national poverty incidence average of 30.8 percent. Administratively, the district is divided into three municipalities (Dhulikhel, Banepa and Panauti) and 87 VDCs. Despite the massive rural road construction by the people, 10 percent of the VDCs2 in this district are yet to be connected with rural or SRN. Annex 3.2 shows Kavrepalanchok district along with the existing and planned road networks.
Sindhuli: The political boundary of the Sindhuli Road is somewhat rectangular in shape touching both mid-hill and Tarai districts of Nepal. Among all the districts of Nepal, Sindhuli borders with the highest number of districts. Bordered by Udayapur to the east; Kavre and Makwanpur to the west, Ramechhap, Okhaldhunga and Kavre to the north; and Rautahat, Sarlahi, Mahottari and Dhanusha to the south. The district is situated nearly 408 km east of Kathmandu in terms of the existing road network through the East West Highway (EWH). Sindhuli Road has brought this district closer to Kathmandu city by more than 250 km. Nearly 60 percent of the VDCs within the district have roads, some of which are strategic roads, while others are district or village roads. In 2001 the district had a population of 279,821, which is estimated to have reached 326,534 in 2008. There are a total of 53 VDCs and one municipality (Kamalamai) in the district. In terms of poverty incidence, more number of poor live in this district than rest of Nepal. The incidence of poverty reported in the aforementioned SEA study was 60.3percent in 2003/04, nearly double that of the national average. Annex 3.3 shows Sindhuli district along with the existing and planned road networks.
Mahottari: The district adjoins Dhanusha to the east, Sarlahi to the west, and Sindhuli to the north, and India to the south. It is located at a distance of approximately 430 km southeast of Kathmandu by road. The projected population of the district in 2008 was 648,537 whereas according to the 2001 census, the population of the district was 553,481. The poverty incidence in the district, 29.1 percent is close to the national average of 30.8 percent. The district is divided into one municipality (Jaleshwor) and 76 VDCs. Roads pass through all of the VDCs. However, some roads are seasonal due to the lack of bridges and drainage problems in rainy season. Annex 3.4 shows Mahottari district along with the existing and planned road networks.
2 As this estimation is based on review of available data and information in Kathmandu, it is possible that this number may decrease. This will be triangulated during the field survey.
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3.3.2 Districts Neighboring Sindhuli Road
Ramechhap: The shape of the district is narrower in the north and wider towards the south. The northern elongated portion adjoins Dolakha to the north-west and Solokhumbu along the east and south-east. The wider south portion of the district adjoins Okhaldhunga to the east, Kavre along the west and Sindhuli along the south. The district is located nearly 220 km east of Kathmandu. In 2001, it had a population of 212,408 is estimated to have reached to 231,225 in 2008. The poverty incidence in the district as estimated by the CBS/WFP/World Bank Report, 2006 is 48 percent, which is much higher than the national average. Administratively, the district is divided into 55 VDCs. Annex 3.5 shows Ramechhap district along with the existing and planned road networks.
Dolakha: Dolakha district is located 132 km northeast of Kathmandu. It is bordered by Tibet (China) to the north, Ramechhap district to the south, Ramechhap and Solukhumbu districts to the east, and Sindhupalchok and Kavre districts to the west. The district is overwhelmingly dominated by Chhetri, followed by Tamang, Brahmin, Newar and other castes. The estimated population of the district stood at 217,218 in 39,945 households in 2006. Administratively, the district is divided into 51 VDCs and one municipality (Bhimeshwar). As per the SAE Report 2006, poverty incidence in the district is 33.6 percent against the national average of 33.5 percent. The district has a total of 258 km of road networks (completed and under construction). Annex 3.6 shows Dolakha district along with the existing and planned road networks.
3.4 District Development
3.4.1 Periodic and Annual District Development Plans
The GoN requires each DDC to formulate their respective district development plan based on the country’s development objectives, priorities and policies, as well as the district’s potentialities, priorities and resources, etc. Of the five survey districts, all districts except Sindhuli had prepared their first periodic district development plans (PDDPs) for a period of five years to be implemented during the Tenth Plan Period (2002/03- 2006/07). Annex 3.7 summarizes the PDDPs of the districts including budget estimated for the plan period. However, none of the districts have yet prepared their second PDDPs focused on the current TYIP period. This has happened because the country is now in a transition period and the DDCs have no elected leader. This Government has not been able to hold district-level election, although it was due in 2002. Presently, DDCs are being directed by an all-party district level committee in lieu of the elected members and the DDC being chaired by the Local Development Officer, a civil servant who earlier used to work as the secretary of the DDC but presently shouldering the responsibilities of both the Secretary and the Chairman of the DDC. While the priorities and programs of the districts have not changed after the successful completion of the Constituent Assembly election and proclamation of the republic system of governance, annual programs of the devolved agencies are being formulated as per the guidance received from the respective ministries through NPC. MLD has been guiding the DDCs. Development budget of the district depends on the conditional and non-conditional grants provided by the central government and district revenues. Of the five districts, Mahottari is the most resourceful districts whose annual budget in any year exceeds Rs.1,500 M while those of districts such as Ramechhap and Sindhuli are less than Rs.500 M.
Table 3.3 below shows the government grant available to the DDCs in terms of conditional and non-conditional grants over the fiscal year 2008/09. However, it is only a part of the total district budget. The other part comes to the DDCs from the line ministries for the purpose of routing to their respective devolved district offices. DDCs are not allowed to use those budgets for other purposes. The third and the last part come from the district revenue collected by the DDCs pursuant to the Local Self Governance Act (LSGA) and other appropriate laws of the country.
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Table 3.3 DDCs’ Budget, 2008/09 (2065/66) (Rs. in million) Description Dolakha Ramechhap Kavre Sindhuli Mahottari Sectoral Committees 901.4 474.6 1263.1 926.3 1430.0 96.00% 31.48% 95.68% 87.20% 97.29% Infrastructure and Organization 275.1 88.0 554.0 440.4 622.7 Development 29.30 % 5.84 % 41.97 % 41.46 % 43.55 % Agriculture, Forest and Environment 94.8 69.2 44.1 71.3 730.9 10.10 % 4.59 % 3.34 % 6.71 % 51.11 % Population and Social Development 272.5 230.1 531.1 394.6 48.4 29.02 % 15.26 % 40.23 % 37.15 % 3.39 % Water Resources and Land 259.0 87.3 133.9 20.0 28.0 Management 27.58 % 5.79 % 10.14 % 1.88 % 1.96 % N/I NGOs 37.6 1033.2 57 136 39.9 4.00% 68.52% 4.32% 12.80% 2.71% Total 939.0 1507.8 1320.1 1062.3 1469.9 Source: Annual District Development Plan of each District.
The following Table 3.4 shows the sources of the district budgets in 2007/08
Table 3.4 Sources and Purpose of District Budget in 2007/2008
DDC Budget by Sources (Rs in '000), 2007/08 Share in Total % Districts Central Government Grant Central Internal* Overall Internal DDC VDC Municipality Projects Total G'ment Dolakha 15,524 51,000 6,730 49,095 122,349 19,846 142,195 86.0 14.0 Ramechhap 14,862 55,000 - 85,600 155,462 10,714 166,176 93.6 6.4 Kavre 16,705 87,000 5,558 63,639 172,902 106,945 279,847 61.8 38.2 Sindhuli 14,860 53,000 11,073 40,894 119,827 36,871 156,698 76.5 23.5 Mahottari 16,447 76,000 5,748 36,454 134,649 34,734 169,383 79.5 20.5 Source: Annual Programme , Budget and Progress Report, 2065, Ministry of Local Development Note: * District Revenues and Taxes
Difference in the total budget amounts in Tables 3.3 and 3.4 is due to the following reasons:
(1) 2008/09 budgets are drastically increased because of the Maoist Government. (2) Budgets in Table 3.3 include not only those allocated from MOLD but other line ministries while Table 3.4 is only budgets allocated from MOLD.
3.4.2 Human Resource and Administrative Structures of DDC and DTO
DDC: Established pursuant to the LSGA within the framework of decentralized governance, DDCs and VDCs are autonomous organizations responsible for overall development of their respective districts and villages and coordination of development activities in the district. DDCs and VDCs are formed from the elected and nominated local leaders from their constituencies. The key administrative officer is the local development officer in case of DDCs and VDC secretary in case of VDCs. These officials are provided by the government through the MLD. This means that they operate under the indirect control/command of the MLD. Figure 3.1 below shows decentralized program planning processes adopted by the DDCs. .
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Other Agencies NPC MLD Line LineMinistries Mi i t i
Guideline Guideline Guideline
DDC
LA s & Other Agencies
VDCs Municipalities
WARDS CBOs CBOs
WARDS
Figure 3.1 Decentralized Planning Process
The organizational structure and staffing pattern of a typical DDC is presented in Annex 3.8 and Table 3.5 below. This applies to all the DDCs. However, DDCs are free to appoint additional staff based on the work load but as a temporary arrangement only.
Table 3.5 Staffing Structure of the DDC
No. of S. Designation Level Approved Positions N. GoN DDC Fund 1 Local Development Officer Gazetted II Class 1 2 Planning, Monitoring and Administrative Officer Gazetted IIIClass 1 3 Accounts Officer Gazetted IIIClass 1 4 Program Officer Officer Level VI 4 5 Internal Auditor Officer Level VI 1 6 Accountant Assistant Level V 1 1 7 Nayab Subba (Senior Admin Assistant) Assistant Level V 3 8 Kharidar (Junior Admin Assistant) Assistant Level IV 4 9 Joint Accountant Assistant Level IV 5 10 Computer Operator Assistant Level IV 1 11 Typist Assistant Level IV 2 12 Mukhiya Assistant Level III 2 13 Telephone Operator Assistant Level III 1 14 Driver Assistant Level III 1 15 Tractor Driver Assistant Level 1 16 Peon Assistant Level I 5 17 Helper Assistant Level I 1 18 Cook Assistant Level I 2 19 Sweeper Assistant Level I 1 Total 4 35
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DTO: DOLIDAR under MLD has established DTOs in all the districts. While DOLIDAR is responsible for local roads, DTO, as a devolved organization within the DDC, is responsible for all types of local level infrastructure construction activities in the districts carried out by the DDC. Administratively, it is controlled and supervised by the DDC but the capacity enhancement of the DTO staff and their transfer and other administrative works are carried out by the DOLIDAR which is a department under the MLD.
Annex 3.9 shows the organizational structure of the DTO. Based on the workload of the DTO, DDC might provide additional staff to the DTO as a temporary arrangement. Table 3.6 shows the staffing structure of the DTO in Kavrepalanchok district. This applies to almost all the DTOs with some variation in the number based on the district workload.
Table 3.6 Staffing Structure of the DTO
No. of S. Designation Level Approved Positions N. GoN DDC Fund 1 Divisional Engineer Gazetted II Class 1 2 Engineer Officer Level VI 2 1 3 Accountant Assistant Level V 1 4 Nayab Subba (Senior Admin Assistant) Assistant Level V 1 5 Overseer Assistant Level V 5 1 6 Typist Assistant Level V 1 7 Sub-overseer Assistant Level IV 7 8 Kharidar (Junior Admin Assistant) Assistant Level IV 1 1 9 Technician (Drinking Water and Sanitation) Assistant Level IV 1 10 Technician (Drinking Water and Sanitation) Assistant Level III 1 11 Peon Assistant Level I 2 Total 16 10
3.4.3 Information on Major NGOs and Their Activity Field in the Districts
The Society Registration Act of Nepal has empowered the District Administration Office to register district-level non-profit non-governmental organizations working in the district. Likewise, the Social Welfare Council Act also authorizes the Social Welfare Council to register and give its affiliation to the NGOs. Latest information shows that there are more than 40,000 NGOs in Nepal. But many of them are inactive and many would not know their locations. But many NGOs are efficiently delivering services to the poor and deprived people and working in a professional manner. NGOs’ expertise in social mobilization has been recognized in Nepal. Many NGOs have federated into the National NGO Federation. Each district has district level offices of the NGO federation.
LSGA requires all NGOs, irrespective of their scope and coverage and be they international or national, to get their programs and activities approved by their respective district councils. The DDC is expected to play the role of the district coordinator. Most of the NGOs neither approach the respective DDCs nor get approval for their programs from the respective district council. Among the district-level NGOs which are prominent in every district is the District Chapter of National Federation of the Community Forest Users’ Association and Water Users’ Association (WUA).
Annex 3.10 presents key agriculture sector INGOs/NGOs/COs working in the survey districts.
3.5 District Agriculture Policy and Program
3.5.1 Agriculture Development Plan by DADO
In principle, district level offices are not free to formulate district agriculture development policies and programs. They are required to formulate annual district agriculture plans and budgets based on
3 - 6 the instructions of the NPC channeled through the MOAC, which provides instructions, guidelines and the policy/planning framework of the PDDP. Based on the district feasibilities and potentialities they develop annual plans as per the demand of the ASCs and the VDCs, remaining within the budget ceiling provided by the Ministry of Finance (MOF) and program formulation instructions provided by the MOAC. Therefore, the district agricultural policy is the policy of the Periodic Plan (in the present situation, TYIP) in general and that of the MOAC in particular.
Review of the annual district agricultural programs of the five survey districts reveal that they have been implementing the programs in the following six areas.
• Food security • Agri-business promotion and market development • Rural livelihood support • Seed self-sufficiency • Agriculture technology management and service support • Commercial fruit development
Each of the above six categories of the programs include many projects. But it was observed that a project, for example, a seed-self sufficiency project, in one district, may have been implemented as a part of the food security program, and as a rural livelihood support program in another district. The aforementioned six programs are consistent with the TYIP programs and approaches.
Annex 3.11 presents the annual programs and projects being implemented by DADOs in the survey districts in the current FY 2008/09. The budgets of DADOs in the survey districts for FY 2008/09 are presented below (Table 3.7).
Table 3.7 Budget of DADOs in Survey Districts, 2008/09
District 2008/09 Budget (Rs in ’000) Programme Administration Total Dolakha 4,381 (46.5%) 5,048 (53.5 %) 9,429 Ramechhap 2,765 (28.9%) 6,808 (71.1 %) 9,573 Kavre 2,740 (23.7%) 8,820 (76.3%) 11,560 Sindhuli 1,600 (16.9%) 7,867 (83.1%) 9,467 Mahottari 2,764 (22.6%) 9,479 (77.4%) 12,243 Source: District Development Plans, 2065/66 (2008/09) of concerned districts.
In terms of allocation of the aforementioned budget considering cost per household and per VDC appears inadequate considering district potentialities and poverty situation of the householdsf in the district (Table 3.8).
Table 3.8 Status of District Agriculture Budget per Household and VDC, 2008/09
Total Number Total Program Average Budget per No of Total District of Budget Budget Budget VDC/Municipality VDCs* Households (Rs. in ‘000) (Rs. in‘000) (Rs/HH) Program Total Dolakha 39,945 52 9,429 4,381 236.0 84,250 181,327 Ramechhap 43,964 55 9,573 2,765 217.7 50,272 174,055 Kavre 79,504 90 11,560 2,740 145.4 30,444 128,444 Sindhuli 56,898 54 9,467 1,600 166.4 29,630 175,315 Mahottari 110,412 77 12243 2,764 110.9 35,896 159,000 * Includes municipality (ies) too. Source: Computed from Approved Annual Budget and Programs, 2008/09.
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3.5.2 Human Resource and Administrative Structures of DADO
Of the five survey districts, four districts lie in mountain and mid-hills regions and one district Mahottari, lies in the Tarai region. Therefore, the human resource and administrative structures of Mahottari is slightly different from other four districts. Otherwise, human resource and administrative structures of DADO are almost similar. Subject matter specialists on fishery and Junior Technicians (JTs)/Junior Technical Assistants (JTAs) are available in Mahottari but not in other districts. Table 3.8 presents the human resources in the five survey districts as approved by the GoN in 2003. This table provides approved positions, but the number of actual persons working in the district could be smaller because of transfer, retirement or vacancies. Meanwhile, it should be noted that the number of actual JTs/JTAs in the district would not tally with the figures given in the Table because of the recent decision by the present government to automatically promote, to the next higher level position, all staff who have served a minimum of a certain number of years, as has been provisioned in the recent amendment of the Civil Service Act. This number has been so large that the government has not been able to provide responsibilities commensurate with their promoted positions. The government is now planning to offer voluntary retirement to all those who have completed at least 20 years in permanent positions and have crossed 50 years of age. Field survey in the respective districts will bring out the actual figures. Presently promoted officials are working in their previous positions. Table 3.9 gives details on the human resources of DADOs in survey districts.
Table 3.9 Human Resources of DADOs in Survey Districts
S. Adjoining Districts Road Aligned Districts Designation N. Dolakha Ramechhap Kavre Sindhuli Mahottari 1 Senior Agriculture 1 1 1 1 1 Development Officer 2 Planning, Monitoring, 1 1 1 Evaluation and Market Development Officer 3 Plant Protection Officer 1 1 1 1 1 4 Agriculture Extension 2 1 1 1 1 Officer 5 Crop Development Officer 1 6 Horticulture Development 2 1 1 1 1 Officer 7 Fisheries Development 1 Officer 8 Junior Technician 9 10 12 10 9 9 Junior Technical Assistant 8 14 16 14 12 10 Accountant 1 1 1 1 1 11 Administrative Assistant 1 1 1 1 (Senior) 11 Administrative Assistant 2 - 1 (Junior) 12 Typist/Computer Operator - 1 1 13 Driver - 1 - 1 14 Peon/Runner 11 15 17 15 11 Total 37 46 54 45 44 Source: DADOs
Figure 3.2 below presents the institutional structure/arrangement of agriculture development in the district.
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District Agriculture Develo pment Office
Administration Agricultural Horticulture Plant Planning/ Market Section Extension/ Development Protection Development Crop Section Section Section Section
Agriculture Service Center (ASC)
Figure 3.2 Organizational Structure of DADO, Sindhuli3
Table 3.10 presents a list of service centers and their service coverage by survey district. This shows that each district is divided into four to seven service centers.
Table 3.10 Organization of DADOs and Service Centres in Survey Districts
DADO (District Headquarters) Field DADO Section Service Center (Coverage) Dolakha 1. Plant Protection 1. Jiri (9 VDCs) 2. Agriculture Extension 2. Malukhola (11 VDCs) 3. Horticulture Development 3. Magapauwa (8 VDCs) 4. Administration 4. Singati (19 VDCs) 5. Accounts Office command area: Bhimeshwar Municipality and 4 VDCs Ramechhap 1. Planning, Monitoring, Evaluation and Market 1. Bamati (10 VDCs) Development 2. Dhobi (11 VDCs) 2. Plant Protection 3. Ramechhap (9 VDCs) 3. Agriculture Extension 4. Chisapani (8 VDCs) 4. Horticulture Development 5. Doramba (8 VDCs) 5. Administration 6. Khaniyapani (8 VDCs) 6. Accounts Kavre 1. Planning, Monitoring, Evaluation and Market 1. Bhakundebesi (16 VDCs) Development 2. Mangaltar (15 VDCs) 2. Plant Protection 3. Panchkhal (14 VDCs) 3. Agriculture Extension/Crop Development 4. Dolalghat (18 VDCs) 4. Administration 5. Khopasi (16 VDCs) 5. Accounts 6. Banepa (11 VDCs) Sindhuli 1. Planning 1. Dudhauli (9 VDCs) 2. Plant Protection 2. Dakaha (9 VDCs) 3. Agriculture Extension 3. Basheshwor (8 VDCs) 4. Horticulture Development 4. Bhimsthan (8 VDCs and 5. Administration Ward No. 1 – 8 of Kamalamai 6. Accounts Municipality) 5. Jhangajholi Ratmata (10 VDCs) 6. Kapilakot (8 VDCs) Bhiman Contact Point: Ranibas VDC and Ward No. 9 – 18 of Kamalamai Municipality Mahottari 1. Planning 1. Loharpatti (19 VDCs) 2. Plant Protection 2. Balawa (21 VDCs) 3. Agriculture Extension 3. Gaushala (18 VDCs and Jaleshwar 4. Crop Development Municipality) 5. Horticulture Development 4. Pipra (18 VDCs) 6. Fisheries Development 7. Administration Contact Offices: 8. Accounts Bhangaha and Bardibas Note: Figures in parenthesis show the number of VDCs covered by the service center.
3 Organization of the DADO in other districts is similar except the provision of an additional Fisheries Development Section in Mahottari.
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3.5.3 Institutional Structure/Arrangement of Agricultural Development in the Districts
While the DADO is central to the implementation of agriculture development in the district, this is not the sole authority. There are many other institutions and organizations at the public (government), semi-government, non-governmental and private sectors working in the district for the development of the agricultural sector. As stated earlier, the DADO and DLSO have been devolved to the DDC. This means that the DADO and DLSO are directly responsible to the DDC and the District Council. Apart from the DADO and DLSO, several agencies/organizations are responsible for implementing the different components of the agriculture sector at the district level as shown below in Table 3.11
Table 3.11 Institutions Responsible for Implementing Different Components of the Agriculture in the District
Central SN Organization Type Key function organization 1 DDC Autonomous local Overall responsibility, GoN government/bodies coordination, Supervision, Monitoring etc. 2 DADO Government Crops, cash crops, DOA/MOAC horticulture, fisheries development. small scale farmer managed irrigation 3 DLSO Government Livestock dev DLS/MOAC veterinary services 4 Agriculture Development Public Limited Agricultural credit Central Office Bank (ADB) branch/district office 5 Division Irrigation Office Government Irrigation DOI/MWR 6 Agriculture Inputs Company Public company Distribution of chemical Central Office Ltd/branch office fertilizers 7 Agro-vets Private trader Supply of agro and - veterinary chemicals and seeds 8 Fertilizer dealers Private trader Sale/supply chemical - fertilizers 9 Savings and credit Cooperatives Agriculture credits - cooperatives 10 Agriculture cooperatives Cooperatives Supply of agro and - /farmers cooperatives veterinary chemicals, fertilizer, seeds, and procure agriculture produces 11 Subject specific cooperatives Cooperatives Purchase of fresh milk - such as Milk Producer and milk products from Cooperatives members 12 Producers’ associations such as Private Technical support and - Junar Association in Sindhuli backstopping in the and Ramechhap production and marketing of concerned products and marketing services 13 NGOs(international, national, NGO/CBO Income generating district and community based) activities, social mobilization, technical services etc Source: Prepared by NARMA based on various data of MOAC, MLD, etc.
The aforementioned table reveals that agriculture development is a multi-sector activity and that it is not the sole responsibility of the DADO. To facilitate coordination among the different agencies, avoid duplications and establish harmonies among the different agencies and technical
3 - 10 backstopping, the GoN has formed a District Agriculture Development Committee (DADC) in each of the 75 districts to be chaired by the chairperson of the DDC. The member secretary of this committee is the Chief of the DADO.
3.5.4 Extension Activities by JTs/JTAs in the Districts
In the districts, extension activities are carried out by JTs/JTAs who are fielded at the SCs (see Table 3.10 for service centers in five survey districts) based on the district’s approved annual programs and budget. The key extension activities carried out by JTs/JTAs are as follows.
A. Demonstration • Production demonstration • Result demonstration • Method demonstration of key practices • Mini-kit demonstration
B. Training • District level (subject-specific, production-oriented, marketing, agribusiness) • Service center level • On-the-spot training
C. Supply of production inputs • Fruit saplings • Beekeeping, sericulture-related • Others as per the demand of the farmers/producers
D Service arrangements • Soil and fertilizer testing • Plant protection services • Market facilitation and information, etc. • Small irrigation projects • Cooperatives • Irrigation projects
Above are only examples and are exhaustive. Number and frequency of the services and activities depend on the target and budget available to the service center. Therefore, it has not been possible to depict them here. However, agriculture development programs of the five survey districts being carried out by them in FY 2008/09 are depicted in Annex 3.11.
3.6 Agriculture Production
3.6.1 Tenancy and Land Holding by Land Type
The proportion of landless households in the survey districts varied from 0.1 percent each in Kavre and Ramechhap districts to 1.8 percent in Mahottari district (Table 3.12).
Table 3.12 Proportion of Households with Land in the Survey Districts
Dolakha Ramechhap Kavre Sindhuli Mahottari Holdings No. % No. % No. % No. % No. % Without 231 0.6 44 0.1 33 0.1 70 0.2 1,309 1.8 With 40,165 99.4 38,75699.9 64,537 99.9 46,226 99.8 71,323 98.2 Total 40,396 100.0 38,800 100.0 64,570 100.0 46,296 100.0 72,632 100.0 Source: National Sample Census of Agriculture, Nepal, 2001/02, CBS.
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Table 3.13 presents the distribution of agricultural land holdings. The National Sample Census of Agriculture shows that two-thirds of households across all survey districts own less than 1 ha of land. Very few farmers have more than 5 ha of land. This fragmented and small size of land holding has been a challenge for increasing the productivity of the crops and has also increased the cost of cultivation.
Table 3.13 Distribution of Agricultural Land Holding
Holding Dolakha Ramechhap Kavre Sindhuli Mahottari Size (ha) ha % ha % ha % ha % ha % < 0.1 1,388 3.5 461 1.2 2,059 3.2 2,006 4.3 7,535 10.6 0.1 - 0.2 3,586 8.9 2,500 6.5 4,717 7.3 5,201 11.3 9,270 13.0 0.2 - 0.5 13,967 34.8 10,725 27.7 22,852 35.4 15,323 33.1 17,584 24.7 0.5 - 1.0 13,099 32.6 14,081 36.3 22,553 34.9 14,530 31.4 16,309 22.9 1.0 - 2.0 6,072 15.1 8,400 21.7 9,998 15.5 7,533 16.3 12,099 17.0 2.0 - 3.0 1,735 4.3 1,733 4.5 1,727 2.7 1,096 2.4 4,175 5.9 3.0 - 4.0 289 0.7 680 1.8 332 0.5 350 0.8 1,981 2.8 4.0 - 5.0 29 0.1 88 0.2 266 0.4 47 0.1 778 1.1 5.0 - 10.0 - 0.0 88 0.2 33 0.1 117 0.3 1,380 1.9 10.0 + - 0.0 - - - - 23 0.0 212 0.3 Total 40165 100.0 38756 100.0 64537 100.0 46226 100.0 71323 100.0 Source: National Sample Census of Agriculture, Nepal, 2001/02, CBS.
Land Tenure
In all survey districts, average holding size is small and most of the holdings are owned. Table 3.14 presents the land tenure status in the survey districts. The National Sample Census of Agriculture shows that more than 90 percent of land across all the survey districts is owned by the owners themselves, ranging from 93.3 percent in Mahottari to 99.5 percent in Ramechhap.
Table 3.14 Land Tenure Arrangement in Survey Districts
Land Dolakha Ramechhap Kavre Sindhuli Mahottari Tenure ha % ha % ha % ha % ha % Owned 26,452 96.5 32,248 99.5 42,878 97.0 29,965 98.3 63,325 93.3 Rented 930 3.4 170 0.5 1,326 3.0 309 1.0 4,442 6.5 Other 24 0.1 1 0.0 14 0.0 220 0.7 96 0.1 Total 27,406 100.0 32,419100.0 44,218 100.0 30,494 100.0 67,862 100.0 Source: National Sample Census of Agriculture, Nepal, 2001/02, CBS.
3.6.2 Diversity of Crops According to Climate and Altitude
Table 3.15 presents cropping patterns of survey districts.
Table 3.15 Typical Cropping Patterns Based on the Commercial Crops
Irrigated Partially Irrigated Un-irrigated Dolakha Paddy – Wheat - Maize Paddy – Wheat Maize - Potato Paddy – Tori/Potato - Maize Paddy – Tori/Potato Maize/Millet – Wheat - Barley Paddy – W. Vegetables - Maize Paddy – Maize Maize - Pulses Paddy – Fallow - Maize Paddy – Vegetables Potato - Wheat Paddy – Tori/Wheat - Maize Paddy – Fallow Maize – Vegetables/Tori Ramechhap Paddy – Vegetables - Vegetables Maize - Potato + Peas Vegetables –Vegetables – Vegetables Potato – Potato Potato - Vegetables Paddy – Potato Maize – Potato
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Irrigated Partially Irrigated Un-irrigated Maize + Soybean - Vegetables Paddy - Wheat Kavrepalanchok Paddy – Potato - Vegetables Maize – Wheat - Tori Paddy – Potato - Potato Maize – Potato - Vegetables Paddy – Wheat - Tori Paddy – Wheat - Potato Sindhuli Paddy – Wheat - Maize Maize - Millet Paddy – Musuro - Paddy Maize – Soyabean Paddy – Tori - Paddy Maize – Tori Paddy – Maize Maize - Buckwheat Mahottari Paddy – Wheat - Fallow Paddy – Lentil - Fallow Paddy – Wheat - Lentil Paddy – Khesari - Maize Paddy – Wheat - Dhaincha Paddy – Wheat Paddy – Wheat – Chaite Paddy Paddy – Oilseed Paddy – Lentil - Maize Paddy – Fallow Maize - Wheat Source: Annual Reports of DADOs
As shown in Table 3.16, cereal crops dominate in all survey districts with details in Annex 3.12. Cereal crops occupy more than two-thirds of the cropped area in all survey districts. After cereal crops, the second major crop is cash crops4 followed by pulses and vegetables. Much less portion of area is occupied by fruits in all survey districts.
Table 3.16 Proportion of Cropped Area under Different Crops, 2007/2008
Dolakha Ramechhap Kavre Sindhuli Mahottari Crop ha % ha % ha % ha % ha % Cereals 16,924 73.5 41,78685.2 50,910 69.1 38,965 73.3 71,455 73.4 Cash Crops 2,731 11.9 3,429 7.0 9,615 13.1 7,148 13.4 10,160 10.4 Pulses 1,060 4.6 9151.9 3,200 4.3 2,597 4.9 6,445 6.6 Spices 168 0.7 4170.8 9781.3 5030.9 697 0.7 Citrus 425 1.8 1,0622.2 1,087 1.5 1,541 2.9 0 0.0 Deciduous 223 1.0 2790.6 372 0.5 146 0.3 2 0.0 Tropical 74 0.3 2810.6 4710.6 4050.8 1,893 1.9 Vegetables 1,431 6.2 9001.8 6,903 9.4 1,882 3.5 6,719 6.9 Coffee 0.0 0.0 116 0.2 0.0 0.0 Total 23,036 100.0 49,069100.0 73,652 100.0 53,187 100.0 97,371 100.0 Source: Annual Report of DADO in each District
The main cereal crops grown in the five districts are maize and wheat in Kavre and Dolakha, maize and millet in Sindhuli, paddy and wheat in Mahottari, and paddy and maize in Ramechhap. These crops occupy more than 40 percent of the cropped area. Area under vegetables varied from 1.8 percent in Ramechhap to 9.4 percent in Kavre.
3.6.3 Cultivated Area, Value of Production and Average Production Cost
Land use: Table 3.17 shows that forest dominates the land use pattern in all survey districts except in Mahottari where it is dominated by agriculture (70.2 percent). Forest area in other districts is followed by agriculture.
4 Cash crops designated are potato, oil seeds, jute and sugarcane
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Table 3.17 Land Use Pattern of the Survey Districts (%) Land Use Dolakha Ramechhap Kavre Sindhuli Mahottari Agriculture 26.45 42.20 43.80 23.70 70.20 Pasture 13.77 1.00 2.70 0.60 1.10 Forest 47.37 47.20 52.50 71.90 24.80 Other 12.41 9.60 1.00 3.80 3.90 Total Land 214,287 140,179 140,486 247,709 98,745 Source: IRSC, 2008
Cultivated land: Table 3.18 presents area under cultivated land by survey district. Mahottari district has the largest area of cultivated land (62,944 ha), followed by Ramechhap (40,050 ha), Sindhuli (39,485 ha) and Dolakha (21,012 ha). More than 90 percent of the total agriculture land in Mahottari is cultivated whereas such proportion is slightly more than two-thirds in Ramechhap and Sindhuli.
Table 3.18 Cultivated Land in the Survey Districts
Cultivated land Agricultural land Districts % of (ha) (ha) Agricultural Land Dolakha 56,683 21,012 37.1 Ramechhap 59,180 40,050 67.7 Kavrepalanchok 61,599 36,442 59.2 Sindhuli 58,846 39,485 67.1 Mahottari 69,323 62,944 90.8 Source: IRSC, 2008
3.6.4 Recent Trend in Production of Agriculture and Livestock Produce
This section summarizes recent trends in area, production, yield of the major agriculture produce for the key agricultural commodities. a) Paddy
Area: Table 3.19 presents area under paddy over the last five years. In 2007/08, paddy cultivated area ranged between 46,000 ha in Mahottari to 3,125 ha in Dolakha. During the last five years, the area under paddy decreased in Kavre, Mahottari and Sindhuli districts by 8.65 percent, 2.76 percent and 1.81 percent per year respectively, whereas it increased in Ramechhap and Dolakha districts by 2.12 and 0.13 percent respectively.
Table 3.19 Trend of Paddy Cultivated Area
Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 3,110 3,113 3,115 3,125 3,125 0.13 Ramechhap 7,872 8,673 8,643 8,743 8,743 2.12 Kavre 15,000 11,875 11,105 10,550 10,550 -8.65 Sindhuli 6,400 6,5406,565 6,065 6,065 -1.81 Mahottari 48,284 40,673 44,050 33,499 46,000 -2.76 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: In 2007/08, production of paddy was largest in Mahottari (115,000MT) whereas it was smallest in Sindhuli (11,143MT). Despite the increase of area under paddy in Ramechhap and Dolakha districts, the production of paddy decreased in all survey districts, varying from -7.09 percent in Kavre to -4.9 percent in Mahottari. Table 3.20 provides details.
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Table 3.20 Trend of Paddy Production
Production (mt) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 growth rate (%) Dolakha 7,464 7,9387,235 6,318 6,318 -5.55 Ramechhap 17,010 18,742 14,000 15,757 15,757 -3.38 Kavre 46,900 38,34035,470 33,500 35,845 -7.09 Sindhuli 16,000 16,25214,443 11,143 11,143 -10.74 Mahottari 121,190 104,16598,165 66,998 115,000 -4.90 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Figure 3.3 illustrates paddy cultivation area and production in 2007/08 in the five districts.
Paddy
50.0 140.0 45.0 120.0 40.0 35.0 100.0 30.0 80.0 25.0 20.0 60.0 000 ha 000 Mt 15.0 40.0 10.0 20.0 5.0 0.0 0.0 DRKSM
Area Production Note: D – Dolakha, R – Ramechhap, K – Kavrepalanchok, S – Sindhuli & M – Mahottari
Figure 3.3 Paddy Cultivation Area and Production in 2007/08
Yield: Yield of paddy varied by districts, which ranged from 3,398 kg/ha in Kavre to 1,802 kg/ha in Mahottari. As shown in Table 3.21, yield of paddy increased at the rate of 1.51 percent per annum in Kavre district whereas it declined by 9.09 percent in Sindhuli, 2.46 percent in Mahottari, 1.3 percent in Ramechhap and 5.67 percent in Dolakha.
Table 3.21 Trend of Paddy Yield
Yield (kg/ha) Districts Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 2,400 2,5502,323 2,022 2,022 -5.67 Ramechhap 2,161 2,161 1,620 1,802 1,802 -5.64 Kavre 3,127 3,2293,194 3,175 3,398 1.51 Sindhuli 2,500 2,4852,200 1,837 1,837 -9.09 Mahottari 2,510 2,5612,228 2,000 2,500 -2.46 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. b) Wheat
Area: Table 3.22 presents area under wheat crop over the last five years in five survey districts. Wheat cultivated area ranged between 22,140 ha in Mahottari to 4,603 ha in Dolakha in 2007/08. The area under wheat is increased in Kavre, Mahottari and Ramechhap districts by 2.29 percent, 6.23 percent and 4.89 percent per annum respectively whereas it decreased by 0.42 percent and 0.01 percent per annum in Sindhuli and Dolakha districts.
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Table 3.22 Trend of Wheat Cultivated Area
Area (ha) Annual Growth Districts 2003/04 2004/05 2005/06 2006/07 2007/08 Rate (%) Dolakha 4,605 4,6034,603 4,603 4,603 -0.01 Ramechhap 3,790 4,598 4,798 4,803 4,803 4.89 Kavre 11,500 12,95012,950 12,950 12,950 2.29 Sindhuli 5,700 5,5755,580 5,580 5,580 -0.42 Mahottari 17,600 18,050 18,050 21,037 22,140 6.23 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: In 2007/08, production of wheat was largest in Mahottari (46,494 MT), whereas it was smallest in Dolakha (7,500 MT). Refer to Table 3.23 for details. The production of wheat increased in Mahottari and Ramechhap at the rates of 9.33 and 4.93 percent annually, whereas in Kavre and Dolakha it declined by 7.87 and 2.44 percent respectively.
Table 3.23 Trend of Wheat Production
Production (mMT) Districts Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 8,288 7,8257,825 7,500 7,500 -2.44 Ramechhap 6,650 9,515 10,555 9,080 9,080 4.93 Kavre 30,000 26,00026,000 22,050 22,050 -7.87 Sindhuli 11,250 11,050 13,671 10,930 10,930 -0.66 Mahottari 32,400 32,500 30,500 37,867 46,494 9.33 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Figure 3.4 illustrates wheat cultivation area and production in 2007/08 in the five districts.
Wheat 25.0 50.0 45.0 20.0 40.0 35.0 15.0 30.0 25.0 10.0 20.0 000 ha 000 Mt 15.0 5.0 10.0 5.0 0.0 0.0 DRKSM Area Production Note: D – Dolakha, R – Ramechhap, K – Kavre, S – Sindhuli & M – Mahottari
Figure 3.4 Wheat Cultivation Area and Production in 2007/08
Yield: As shown in Table 3.24, yield of wheat increased at the rates of 2.80 and 0.46 percent per annum in Mahottari and Ramechhap districts respectively, whereas it declined by 0.65 percent in Kavre, 0.26 percent in Sindhuli and 2.44 percent in Dolakha.
Table 3.24 Trend of Wheat Yield
Yield (kg/ha) Districts Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 1,800 1,7001,700 1,629 1,629 -2.44 Ramechhap 1,755 2,069 2,200 1,890 1,890 0.46 Kavre 1,609 2,0082,008 1,703 1,703 -0.65 Sindhuli 1,974 1,9822,450 1,959 1,959 -0.26 Mahottari 1,841 1,8011,690 1,800 2,100 2.80 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
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Cost of production: The cost of production of wheat was not available for the entire survey district. c) Maize
Area: Table 3.25 presents area under maize over the last five years. In 2007/08, maize cultivated area ranged from 23,200 ha in Kavrepalanchok to 2,930 ha in Mahottari. The area under maize decreased by 1.53 percent and 1.89 per year in Kavre, and Mahottari districts per year respectively, whereas it increased in Sindhuli, Ramechhap and Dolakha districts by 2.95, 9.17 and 0.15 percent respectively.
Table 3.25 Trend of Maize Cultivated Area
Area (ha) Districts Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 5,360 5,3705,372 5,390 5,390 0.15 Ramechhap 15,100 20,005 21,502 23,008 23,008 9.17 Kavre 25,000 23,20023,200 23,200 23,200 -1.53 Sindhuli 14,887 15,10215,400 16,500 16,500 2.95 Mahottari 3,250 2,8502,822 2,930 2,930 -1.89 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: In 2007/08, production of maize was largest in Kavre (53,500MT) whereas it was smallest in Mahottari (5,860MT). The production of maize decreased in Kavre by 2.0 percent per year whereas it increased in Sindhuli, Mahottari, Ramechhap and Dolakha districts by 4.64 percent, 0.11 percent, 6.58 percent and 3.10 percent respectively (Table 3.26).
Table 3.26 Trend of Maize Production
Production (MT) Districts Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 9,648 9,934 9,950 10,800 10,800 3.10 Ramechhap 32,090 46,112 40,805 46,016 46,016 6.58 Kavre 59,000 53,40053,500 53,500 53,500 -2.00 Sindhuli 32,007 35,30836,030 38,693 38,693 4.64 Mahottari 5,850 5,8505,644 5,895 5,860 0.11 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Figure 3.5 illustrates wheat cultivation area and production in 2007/08 in the five districts.
Maize
25.0 60.0
50.0 20.0
40.0 15.0 30.0 10.0 000 ha 000 Mt 20.0 5.0 10.0
0.0 0.0 DRKSM
Area Production
Note: D – Dolakha, R – Ramechhap, K – Kavre, S – Sindhuli & M – Mahottari
Figure 3.5 Maize Cultivation Area and Production 2007/08
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Yield: Yield of maize varied by district, ranging from 2,398 kg per ha in Kavre to 2,000 kg per ha in Ramechhap and Mahottari. As shown in Table 3.27, yield of maize increased at the rates of 0.34, 1.72, 1.82 and 2.95 percent per annum in Kavre, Sindhuli and Mahottari and Dolakha districts respectively, whereas it declined by 2.69 percent in Ramechhap.
Table 3.27 Trend of Maize Yield o
Yield (kg/ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 1,800 1,8501,852 2,004 2,004 2.95 Ramechhap 2,125 2,305 1,898 2,000 2,000 -2.69 Kavre 2,360 2,3022,306 2,306 2,398 0.34 Sindhuli 2,150 2,3382,340 2,345 2,345 1.72 Mahottari 1,800 2,0532,000 2,012 2,000 1.82 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Cost of production: The cost of production of the maize was not available for all survey districts. d) Potato
Area: Table 3.28 presents the area under potato cultivation over the last five years. Potato cultivated area ranged from 5,350 ha in Kavre to 1,538 ha in Sindhuli in 2007/08. The area under potato cultivation increased in all five survey districts, and the largest annual growth rate was seen in Sindhuli district (3.99 percent). Likewise, in case of Ramechhap, the cultivated area grew at the rate of 3.63percent. The smallest rate of growth was seen in Dolakha and Kavre (0.00 and 1.37 percent respectively).
Table 3.28 Trend of Potato Cultivated Area
Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 2,445 2,4452,445 2,445 2,445 0.00 Ramechhap 2,665 2,735 3,035 3,040 3,040 3.63 Kavre 5,000 5,0505,050 5,050 5,350 1.37 Sindhuli 1,250 1,5251,528 1,538 1,538 3.99 Mahottari 3,100 3,1003,100 3,100 3,420 2.02 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: In 2007/08, production of potato was largest in Kavre district (94,150MT) whereas it was smallest in Sindhuli (15,950MT). The production of potato increased in all survey districts (Table 3.29). Rate of increase of potato production per annum was highest in Mahottari (8.23 percent), followed by Dolakha (7.90 percent) and Ramechhap (4.44 percent).
Table 3.29 Trend of Potato Production
Production (Mt) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Kavre 92,500 86,15089,150 89,150 94,150 0.70 Sindhuli 14,750 17,52516,544 15,950 15,950 0.51 Mahottari 32,004 32,000 39,500 39,500 43,605 8.23 Ramechhap 26,600 25,248 32,000 30,430 30,430 4.44 Dolakha 20,226 20,226 26,550 26,550 26,550 7.90 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
The cultivated area and production of potato in each district in 2007/08 are illustrated in Figure 3.6 below:
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Potato 6.0 100.0
5.0 80.0
4.0 60.0 3.0
40.0 Mt 000
000 ha 000 2.0
20.0 1.0
- - DRKSM Area Production
Note: D – Dolakha, R – Ramechhap, K – Kavrepalanchok, S – Sindhuli & M – Mahottari
Figure 3.6 Cultivation Area and Production of Potato in Each District (2007/08)
Yield: As shown in Table 3.30, yield of potato increased at the rate of 7.90 percent per annum in Dolakha and 6.17 percent in Mahottari, whereas it declined by 3.63 percent in Sindhuli district.
Table 3.30 Trend of Potato Yield
Yield (kg/ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 8,272 8,272 10,859 10,859 10,859 7.90 Ramechhap 9,981 9,231 10,544 10,010 10,010 0.84 Kavrepalanchok 18,500 17,059 17,653 17,653 17,598 -0.68 Sindhuli 11,800 11,492 10,827 10,371 10,371 -3.63 Mahottari 10,324 10,323 12,742 12,742 12,750 6.17 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Cost of Production: Average annual cost of production of potato (Cardinal) per ha in the case of Kavre district is Rs.144,427.4 and annual gross income is Rs.261,284.8, bringing a net annual profit of Rs.116,857 per ha. Likewise, in the case of Ramechhap district, the total annual cost of production of potato (Janak Dev) per ha is Rs.120,098 and gross income is Rs.310,319, making a net profit of Rs.190,223 per ha annually.
Potato production in Kavre District is larger than in the other 4 districts, and productivity is also highest in Kavre District. However, production cost in Kavre is also high due to higher dosage of chemical fertilizers, and net profit in Kavre is lower than in Ramechhap district. One of the reasons for this gap is that a substantial quantity of potato produced in Ramechhap is seed potato for Tarai and India. Farm gate prices for seed potato are much higher than for potato for consumption. e) Pulses
Area: Table 3.31 compares the area under pulses cultivation over the last five years. Pulses cultivated area ranged from 6,445 ha in Mahottari to 915 ha in Ramechhap in 2007/08. The area under pulse cultivation decreased in two survey districts, namely Kavre and Ramechhap, whereas it increased at the rate of 2.6 in case of Sindhuli district.
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Table 3.31 Trend of Pulses Cultivated Area
Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 1,059 1,0601,060 1,060 1,060 0.02 Ramechhap 1,110 1,110 940 915 915 -5.86 Kavre 4,150 3,2003,200 3,200 3,200 -5.60 Sindhuli 2,185 2,7582,590 2,597 2,597 2.60 Mahottari 6,446 6,4466,446 6,445 6,445 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: In 2007/08, production of pulses was largest in Mahottari district(5,523MT)and smallest in Ramechhap (933MT). The annual growth rate of pulses production was 1.15 percent in the case of Sindhuli and 0.04 percent in Mahottari and this rate in Kavre, Ramechhap and Dolakha districts were -4.56, -2.53 and -0.14 percent respectively. (Table 3.32)
Table 3.32 Trend of Pulses Production
Production (MT) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 984 977977 977 977 -0.14 Ramechhap 1,014 1,014917 933 933 -2.53 Kavre 3,425 2,7652,765 2,765 2,765 -4.56 Sindhuli 2,100 2,7822,373 2,420 2,420 1.15 Mahottari 5,515 5,5155,515 5,523 5,523 0.04 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
The cultivated area and production of pulses in each district in 2007/08 are illustrated in Figure 3.7 below:
Pulses 7.0 6.0
6.0 5.0 5.0 4.0 4.0 3.0 3.0 000 ha 000 Mt 2.0 2.0
1.0 1.0
0.0 0.0
DRKSM Area Production
Note: D – Dolakha, R – Ramechhap, K – Kavrepalanchok, S – Sindhuli & M – Mahottari
Figure 3.7 Cultivation Areas and Production of Pulses in Each District (2007/08)
Yield: As shown in Table 3.33, yield of pulse increased at the rates of 3.06 percent, 0.91 percent and 0.04 percent per annum in Ramechhap, Kavre and Mahottari districts respectively. In the case of Sindhuli and Dolakha, however, yield of pulse, decreased by 1.42 and 0.15 percent respectively.
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Table 3.33 Trend of Pulses Yield
Yield (kg/ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 929 922922 922 922 -0.15 Ramechhap 914 934976 1,020 1,020 3.06 Kavre 825 864864 864 864 0.91 Sindhuli 961 1,009916 932 932 -1.42 Mahottari 856 856856 857 857 0.04 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. f) Vegetables
Area: Table 3.34 shows the area under vegetables over the last five years in survey districts. Vegetable cultivated area ranged between 6,903 ha in Kavre to 900 ha in Ramechhap in 2007/08. In the case of Ramechhap district, the annual rate of decline in cultivated area was 6.19 percent. The area under vegetables increased in Kavre by 5.75 percent in Sindhuli by 2.70 percent and in Dolakha by 2.32 percent.
Table 3.34 Trend of Vegetable Cultivated Area
Area (ha) Districts Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 1,300 1,3751,443 1,437 1,431 2.32 Ramechhap 955 9731,021 540 900 -6.19 Kavre 5,200 5,3505,617 5,194 6,903 5.75 Sindhuli 1,676 1,7451,832 1,857 1,862 2.70 Mahottari 6,360 5,8606,153 6,430 6,719 2.04 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: In 2007/08, production of vegetable was largest in Kavre district (104,035MT) whereas it was smallest in Ramechhap (8,169MT). The production of vegetables decreased in Ramechhap at an annual rate of 1.07 percent (Table 3.35). The highest growth rate of vegetable production among the survey districts was seen in Kavre district at 14.84 percent.
Table 3.35 Trend of Vegetables Production
Production (MT) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 13,000 13,610 14,433 14,208 13,987 1.86 Ramechhap 7,784 7,784 8,254 6,196 8,169 -1.07 Kavre 55,959 60,04863,681 68,418 104,035 14.84 Sindhuli 17,875 18,911 20,054 19,483 18,928 1.41 Mahottari 75,500 64,732 68,645 71,528 74,532 0.68 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
The cultivated area and production of vegetables in each district in 2007/08 are illustrated in Figure 3.8 below
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Vegetables 8.0 120.0 7.0 100.0 6.0 80.0 5.0 4.0 60.0
3.0 000 Mt
000 ha 40.0 2.0 20.0 1.0 - - DRKSM
Area Production
Note: D – Dolakha, R – Ramechhap, K – Kavrepalanchok, S – Sindhuli & M – Mahottari
Figure 3.8 Cultivation Area and Production of Vegetables in Each District (2007/08)
As illustrated above, vegetable cultivation is active in Kavre and Mahottari districts while in the other three districts, namely Dolakha, Ramechhap and Sindhuli, it is not so active. The reason may be that due to transport difficulty, vegetables in these three districts are cultivated for self-consumption and for the local market. On the other hand, vegetable cultivation in Kavre district became popular since Kathmandu market is very close and Sindhuli Road in Kavre district was completed in 2005. In the case of Mahottari, vegetables may be cultivated as second crops after paddy.
Yield: As seen Table3.36, yield of vegetables, which ranged from 15,071kg/ha in Kavre district to 9,077 kg/ha in Ramechhap district. Three out of five survey districts had positive annual growth rates for vegetables, with Kavre having the highest rate at 8.58 percent. In Mahottari district, however, vegetable yield decreased by 1.31 percent per annum.
Table 3.36 Trend of Vegetables Yield
Yield (kg/ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 9,630 9,898 10,002 9,887 9,774 0.28 Ramechhap 8,151 8,000 8,084 11,474 9,077 5.95 Kavre 10,761 11,224 11,337 13,173 15,071 8.58 Sindhuli 10,646 10,83710,947 10,492 10,057 -1.44 Mahottari 11,871 11,046 11,156 11,124 11,093 -1.31 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Cost of Production: Cost of production of vegetable commodities such as tomato, onion and cauliflower were available in survey districts. Average annual cost of production of tomato (CL1131) per ha in Kavre district in 2006/07 was Rs.69,388 and annual gross income was Rs. 183,073, bringing a gross net annual profit of Rs.113,685 per ha.. Likewise, in the case of Sindhuli district, the total annual cost of production of onion (Khumal 4) per ha was Rs.43,254 and the gross income was Rs.179,322, making a net profit of Rs.136,068 per ha annually. g) Oilseeds
Area: For the year 2007/2008, the largest cultivated area of oil seeds among the survey districts was recorded in Sindhuli (5,530 ha) and the smallest in Ramechhap (349 ha). Growth rate of cultivated area was the highest in case of Kavre (8.57 percent) and while lowest in Dolakha, which declined at an annual rate of 2.48 percent (Table 3.37).
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Table 3.37 Trend of Oilseeds Cultivated Area
Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 310 275275 275 275 -2.48 Ramechhap 250 350435 349 349 5.68 Kavre 3,000 3,5403,540 4,240 4,240 8.57 Sindhuli 5,700 5,7105,545 5,530 5,530 -0.93 Mahottari 2,750 2,7502,750 2,500 2,900 0.18 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: In 2007/08, production of oilseeds was largest in Sindhuli district (4,756MT) and the smallest in Dolakha (242MT). The production of oilseeds is decreasing in Dolakha at an annual rate of 3.04 percent. The highest growth rate of oilseed production among the survey districts was found in Kavre district at 9.43 percent. Refer to Table 3.38 for more details.
Table 3.38 Trend of Oilseeds Production
Production (MT) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 280 242242 242 242 -3.04 Ramechhap 120 335309 297 297 11.63 Kavre 3,000 3,0403,040 4,100 4,100 9.43 Sindhuli 4,718 5,0314,436 4,756 4,756 -0.42 Mahottari 2,170 2,1702,170 2,300 2,550 3.92 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Yield: Yield of oilseeds in the five survey districts in 2007/2008 were nearly equal, with Ramechhap having the highest annual growth rate of 8.26 percent followed by Mahottari (3.73 percent). Oilseed yield declined at the rate of 0.52 percent in Dolakha (Table 3.39).
Table 3.39 Trend of Oilseeds Yield
Yield (kg/ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 903 880880 880 880 -0.52 Ramechhap 480 957710 851 851 8.26 Kavre 1,000 859859 967 967 0.45 Sindhuli 828 881800 860 860 0.51 Mahottari 789 789789 920 879 3.73 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. h) Spices
Area: Table 3.40 presents the area under spices cultivation over the last five years. Spice cultivated area ranged from 963 ha in Kavre to 111 ha in Dolakha in 2007/08. The area under spice cultivation increased in four out of five survey districts, 25.91 percent per annum in the case of Ramechhap and 8.14 percent in the case of Sindhuli. In Kavre district, the area under spices cultivation decreased at the rate of 7.48 percent.
Table 3.40 Trend of Spices Cultivated Area
Productive Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 100 NA 91 95 111 1.99 Ramechhap 70 NA 351 373 367 25.91 Kavre 1,278 NA 873963 963 -7.48 Sindhuli 347 NA 328350 503 8.14 Mahottari 632 NA 669697 697 2.53 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
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Production: As seen in Table 3.41, spice production in three out of the five districts increased. The largest production in 2007/2008 was recorded in Sindhuli district (6,015MT) and the lowest in Dolakha district (413MT).
Table 3.41 Trend of Spices Production
Production (MT) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 711 NA 441462 413 -14.05 Ramechhap 466 NA 2,4292,256 2,535 25.86 Kavre 10,913 NA 5,5425,069 5,069 -22.17 Sindhuli 3,325 NA 2,9513,079 6,015 13.35 Mahottari 4,525 NA 4,7834,958 4,958 2.35 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. i) Deciduous (Winter) Fruits
Area: For the year 2007/2008, largest cultivated area of total winter fruits among the survey districts was recorded in Kavre (239ha) followed by Ramechhap (174ha) and Dolakha district (160ha). For four out of the five survey districts, annual growth rate of production area for winter fruits ranged between 0 to 1 percent, with a declining rate of 0.5percent observed in the case of Kavre (0.5 percent) (Table 3.42).
Table 3.42 Trend of Productive Area under Winter Fruits
Productive Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 160 160160 160 160 0.00 Ramechhap 171 172174 174 174 0.46 Kavre 243 243245 239 239 -0.50 Sindhuli 111 111 112 112 112 0.27 Mahottari 1 11 1 1 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: Winter fruits production in four survey districts has increased but at very slow rates of less than 1 percent. Largest production in 2007/2008 was recorded in Kavre district (2,253mt). In Sindhuli, Ramechhap and Dolakha, production was recorded between 1,100 to 1,900 MT (Table 3.43). As Mahottari district lies in Tarai and has a tropical climate, it would not produce winter fruits (temperate fruits).
Table 3.43 Trend of Production of Winter Fruits
Production (Mt) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 1,326 1,3351,317 1,304 1,304 -0.57 Ramechhap 1,538 1,569 1,587 1,583 1,583 0.66 Kavre 2,227 2,2522,262 2,253 2,253 0.24 Sindhuli 1,071 1,0941,101 1,100 1,100 0.59 Mahottari 4 44 4 4 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. i) Pear
Area: Table 3.44 shows the area under pear cultivation over the last five years. Pear cultivated area ranged between 82 ha in Kavre to 31 ha in Dolakha. Annual growth of area under pear cultivation is very small in the survey districts (less than 1 percent).
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Table 3.44 Trend of Productive Area under Pear
Productive Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 31 31 31 31 31 0 Ramechhap 60 60 61 61 61 0.3 Kavre 81 8182 82 82 0.3 Sindhuli 58 58 58 58 58 0 Mahottari 0 0 0 0 0 0 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: In 2007/08, production of pear was largest in Kavre district (1,058 MT) and smallest in Dolakha (366MT). Table 3.45 has more details. The annual rate of growth of production was 1.15 percent in Ramechhap, followed by 0.83 percent in Kavre, 0.66 percent for Sindhuli and 0.49 percent in Dolakha .
Table 3.45 Trend of Pear Production
Production (Mt) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 357 366366 366 366 0.49 Ramechhap 732 756769 769 769 1.15 Kavre 1,021 1,0451,058 1,058 1,058 0.83 Sindhuli 707 731731 731 731 0.66 Mahottari 0 00 0 0 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
k) Tropical (Summer) Fruits
Area: Table 3.46 presents area under tropical fruit over the last five years. Tropical fruits cultivated area ranged between 1,309 ha in Mahottari to 31 ha in Dolakha in 2007/08. The area under tropical fruit increased at the growth rate of 1.15 percent in Mahottari; 0.89 percent in Kavre and 0.87 percent in Sindhuli.
Table 3.46 Trend of Productive Area under Summer Fruits
Productive Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 31 31 31 31 31 0.00 Ramechhap 156 157 159 159 161 0.76 Kavre 276 278 281 283 286 0.89 Sindhuli 248 249 253 253 257 0.87 Mahottari 1,252 1,260 1,280 1,293 1,309 1.15 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: In 2007/08, production of tropical fruits was largest in Mahottari (12,202MT) and the smallest in Dolakha (255MT). The production of tropical fruits increased in all the five districts at an annual growth rate of nearly 1 percent (Table 3.47).
Table 3.47 Trend of Summer Fruits Production
Production (MT) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 249 280 249 280 255 0.46 Ramechhap 1,685 1,764 1,714 1,783 1,732 0.65 Kavre 2,861 3,053 2,903 3,093 2,943 0.69 Sindhuli 2,465 2,654 2,521 2,691 2,555 0.84 Mahottari 11,722 13,476 11,954 13,798 12,202 1.02 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
3 - 25 l) Mango
Area: Table 3.48 presents the area under mango cultivation over the last five years. Mango cultivated area ranged from 909 ha in Mahottari to 16 ha in Dolakha in 2007/08. The area under mango increased at the growth rate of 1.18 percent in Kavre, 1.51 percent in Mahottari and 1.39 percent in Ramechhap.
Table 3.48 Trend of Productive Area under Mango o
Productive Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 16 1616 16 16 0.00 Ramechhap 42 4343 43 45 1.39 Kavre 100 101101 103 105 1.18 Sindhuli 101 101101 101 104 0.59 Mahottari 858 863881 894 909 1.51 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: In 2007/08, production of mango fruits was largest in Mahottari (7,072MT) and smallest in Dolakha (99MT). The production of mango increased in all the five districts at an annual growth rate of nearly 1 percent (Table 3.49).
Table 3.49 Trend of Mango Production
Production (MT) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 92 123 92 123 99 1.32 Ramechhap 294 372 301 370 315 1.21 Kavre 699 884 713 896 735 1.07 Sindhuli 706 884 706 876 720 0.26 Mahottari 6,667 8,388 6,845 8,690 7,072 1.48 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. m) Banana
Area: For the year 2007/2008, the largest cultivated area of banana among the survey districts was recorded in Mahottari (137 ha) and the smallest in Dolakha (2 ha). Given the amount of available information in government statistics, the area of banana cultivation is found to be constant in all five survey districts (Table 3.50). This unusual scenario is likely due to the lack of database updating on the part of the concerned agency.
Table 3.50 Trend of Productive Area under Banana
Productive Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 2 22 2 2 0.00 Ramechhap 21 2121 21 21 0.00 Kavre 28 2828 28 28 0.00 Sindhuli 25 2525 25 25 0.00 Mahottari 137 137137 137 137 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: As seen in Table 3.51, in 2007/08, production of banana was largest in Mahottari district (2,000MT) and the smallest in Dolakha (23MT). As with the case of productive area, the data on the production for the five survey districts have been found to be constant throughout the five years.
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Table3.51 Trend of Banana Production
Production (MT) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 23 2323 23 23 0.00 Ramechhap 298 298298 298 298 0.00 Kavre 396 396396 396 396 0.00 Sindhuli 354 354354 354 354 0.00 Mahottari 2,000 2,0002,000 2,000 2,000 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. n) Citrus Fruits
Area: For the year 2007/2008, the largest cultivated area of citrus fruits among the survey districts was recorded in Ramechhap (1,404 ha) and the smallest in Dolakha (137ha). Area of cultivated land grew annually at the rate of 33.84 percent in Sindhuli, 19.60 percent in Kavre and 11.51 percent in Ramechhap (Table 3.52). In contrast, in Dolakha district, the cultivated area decreased by 5.27 percent annually.
Table 3.52 Trend of Total Productive Area under Citrus
Productive Area (ha) District Annual Growth 2003/04 2004/05 2005/06 2006/07 2007/08 Rate (%) Dolakha 191 204204 212 137 -5.27 Ramechhap 502 831831 847 950 11.51 Kavre 147 532582 611 590 19.60 Sindhuli 124 754754 769 1,404 33.84 Mahottari 0 00 0 0 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: In 2007/08, production of citrus fruits was largest in Sindhuli district (19,336MT) followed by Ramechhap district (13,184MT) whereas it was the smallest in Dolakha, with 1,360MT (Table 3.53).
Table 3.53 Trend of Total Citrus Production
Production (MT) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 1,822 1,9631,968 2,037 1,360 -4.64 Ramechhap 5,514 11,489 11,522 11,750 13,184 14.59 Kavre 1,532 5,9466,550 6,899 7,106 21.58 Sindhuli 1,254 9,0079,032 9,282 19,336 38.03 Mahottari 0 0 0 0 0 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. o) Junar (Sweet Orange)
Area: For the year 2007/2008, the largest cultivated area of Junar among the survey districts was recorded in Sindhuli (1,264 ha), followed by Ramechhap (925 ha). In the cases of Sindhuli, Ramechhap and Kavre, the annual growth rates of cultivated area were 37.97 percent, 27.67 percent and 20.64 percent respectively. Table 3.54 has more details on the production area for Junar.
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Table 3.54 Trend of Productive Area under Junar
Productive Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 24 2525 26 25 1.20 Ramechhap 35 755755 765 925 27.67 Kavre 9 3939 42 43 20.64 Sindhuli 5 683683 691 1,264 37.97 Mahottari 0 00 0 0 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: Like the production area, the annual growth rates of Junar production in Sindhuli, Ramechhap and Kavre are the highest, standing at 41.4 percent, 27.73 percent and 22.33 percent respectively. In terms of volume of production, Sindhuli produced a total of 17,692 MT of Junar in 2007/08 followed by Ramechhap (12,950MT) for the same year (Table 3.55).
Table 3.55 Trend of Junar Production
Production (MT) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 252 268269 277 250 0.19 Ramechhap 396 10,684 10,715 10,882 12,950 27.73 Kavre 101 454455 490 538 22.33 Sindhuli 56 8,2908,314 8,425 17,692 41.39 Mahottari 0 0 0 0 0 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Figure 3.9 illustrates Junar cultivation area and production in 2007/08 in the five districts.
Junar 1.5 21.0
18.0 1.2 15.0
0.9 12.0
9.0
0.6 000 Mt 000 ha 6.0 0.3 3.0
- - DRKSM Area Production
Note: D – Dolakha, R – Ramechhap, K – Kavrepalanchok, S – Sindhuli & M – Mahottari
Figure 3.9 Cultivation Area and Production of Junar in Each District
As illustrated in the above Figure 3.9, Junar production is concentrated in Ramechhap and Sindhuli districts, which have s long history of Junar cultivation including JICA’s Horticulture Development Project and the OVOP program. p) Orange
Area: For the year 2007/2008, the largest cultivated area of orange among the survey districts was recorded in Kavre (495ha), followed by Sindhuli (115ha) and Dolakha district (95 Ha). Annual growth rate of production area of Kavre was 22.17 percent, while in the cases of Ramechhap and Dolakha, it was declined by 67.81 percent and 2.19 percent respectively. Refer to Table 3.56 for more details.
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Table 3.56 Trend of Productive Area under Orange
Productive Area (ha) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 110 120120 125 95 -2.19 Ramechhap 385 52 52 56 8 -67.81 Kavre 101 408458 482 495 22.17 Sindhuli 72 3939 44 115 14.72 Mahottari 0 00 0 0 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Production: Orange production in Ramechhap decreased very rapidly with growth rate of -67.44 per annum (Table 3.57). For Kavre district, annual orange production increased by 23.53 percent followed by Sindhuli district (17.73 percent).
Table3.57 Trend of Orange Production
Production (mt) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 1,056 1,1681,171 1,219 973 -1.03 Ramechhap 4,447 607608 654 98 -67.44 Kavre 1,137 4,7735,374 5,671 6,116 23.53 Sindhuli 806 449450 515 1,418 17.73 Mahottari 0 00 0 0 0.00 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Livestock Numbers a) Cattle
Table 3.58 presents trend in the number of cattle over the last five years. In 2007/08, the number was` the highest in Kavre, followed by Sindhuli and Dolakha, and the lowest in Ramechhap. Cattle number is increasing in all survey districts at average annual growth rates of 0.06 percent to 1.68 percent.
Table 3.58 Trend on Cattle Number
Cattle (No.) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 91,269 91,79791,898 93,114 93,114 0.54 Ramechhap 66,871 66,973 70,782 70,782 70,782 1.68 Kavre 129,467 129,514129,614 134,007 134,007 1.03 Sindhuli 109,893 109,890109,990 110,100 110,100 0.06 Mahottari 80,626 80,612 80,712 80,900 80,900 0.10 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. b) Buffalo
As shown in Table 3.59, the number of buffalo in 2007/08 was the highest in Kavre (130,999), followed by Ramechhap (64,510), Sindhuli (60,682) and Mahottari (45,177). The number of buffalo increased in all the survey districts, with annual growth rates ranging between 2.42 percent in Dolakha and 6.92 percent in Kavre.
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Table 3.59 Trend of Buffalo Number
Buffalo (No.) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 38,931 39,900 49,001 46,721 40,721 2.42 Ramechhap 50,274 64,410 64,538 64,510 64,510 4.63 Kavre 89,479 129,479129,624 130,999 130,999 6.92 Sindhuli 53,114 58,48558,595 60,682 60,682 2.97 Mahottari 41,394 41,434 41,534 45,177 45,177 2.63 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. c) Sheep:
Table 3.60 presents trend on sheep number over the last five years. The number of sheep in 2007/08 was the highest in Dolakha (23,044) and the lowest in Mahottari (618). Over the last five years, the number of sheep increased by 5.76 percent, 4.85 percent and 0.98 percent per annum in Kavre, Mahottari and Ramechhap respectively whereas it declined by 12.26 percent per annum in Sindhuli district.
Table 3.60 Trend on Sheep Number
Sheep (No.) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 23,330 23,25223,352 23,044 23,044 -0.34 Ramechhap 3,134 3,145 3,245 3,242 3,242 0.98 Kavre 3,385 2,2853,533 3,652 3,652 5.76 Sindhuli 2,740 2,3102,394 1,709 1,709 -12.26 Mahottari 524 524624 618 618 4.85 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. d) Goat
As shown in Table 3.61, the number of goat was the highest in Kavre (289,676), followed by Dolakha (178,409) and Sindhuli (114,859). Over the last five years goat is increasing across all survey districts.
Table 3.61 Trend on Goat Number
Goat (No.) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 170,887 174,641 174,743 178,409 178,409 1.07 Ramechhap 59,738 59,870 59,970 59,970 59,970 0.09 Kavre 265,852 285,852285,960 289,676 289,676 1.82 Sindhuli 87,614 92,60092,706 114,859 114,859 7.63 Mahottari 80,286 93,929 103,929 108,510 108,510 7.17 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC. t) Poultry
Table 3.62 presents the trend in poultry over the last five years. In 2007/08, number of poultry was the highest in Kavre, followed by Dolakha, Mahottari and Sindhuli whereas it was the lowest in Ramechhap. Poultry number is increasing in all survey districts except in Sindhuli, where it declined by 0.81 percent per annum.
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Table 3.62 Trend on Poultry Bird Number
Poultry birds (No.) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 345,224 345,227 305,643 358,948 358,948 1.20 Ramechhap 140,324 190,286 190,522 204,518 204,518 7.67 Kavre 660,002 710,954737,833 786,449 786,449 4.46 Sindhuli 315,286 272,344272,126 293,151 293,151 -0.81 Mahottari 249,478 257,578 257,781 299,150 299,150 5.17 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Livestock Products
Milk Production
Buffalo and cow milks are two main categories of milk produced in the survey districts. In 2007/08, Kavre district was the largest producer of milk among the five survey districts (72,100MT/year), followed by Mahottari, which had a total annual production of nearly 20,365MT. The smallest production was reported in Dolakha and Ramechhap. Annual growth rate of milk production was the highest in Kavre (25.5 percent) followed by Ramechhap (4.36 percent) as seen in Table 3.63.
Table 3.63 Total Quantity of Milk Produced in the Survey Districts
Total Milk (MT) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 12,759 12,986 14,868 13,713 13,134 1.09 Ramechhap 13,132 15,985 16,182 16,282 16,382 4.36 Kavre 36,383 17,35748,129 72,130 72,100 25.64 Sindhuli 15,407 16,52316,550 16,960 16,749 1.90 Mahottari 20,750 20,76620,811 20,374 20,365 -0.56 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Of the total milk production in Kavre, 11,500MT is cow milk while the remaining quantity is buffalo milk (Table 3.64). Kavre is the leading supplier of milk to the Kathmandu Valley.
Table 3.64 Quantity of Cow Milk Produced in the Survey Districts
Cow Milk Production (MT) District Annual 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 4,733 4,7604,765 5,050 5,100 2.10 Ramechhap 2,998 3,002 3,173 3,200 3,300 2.56 Kavre 10,382 4,37410,463 11,500 11,500 9.71 Sindhuli 4,374 4,3744,378 4,379 4,600 1.03 Mahottari 4,116 4,115 4,120 4,124 4,115 0.02 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Based on the available data presented in Table 3.65, it is interesting to note that in the year 07/08, quantity of total milk production for Kavrepalanchok increased by nearly two times compared to the 2005/2006. In cases of the other four districts, however, such drastic increase was not observed. Mahottari district had the highest declining percentage of milk production (0.71 percent) among the five survey districts.
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Table 3.65 Quantity of Buffalo Milk Produced in the Survey Districts
Buffalo Milk Production (MT) Annual District 2003/04 2004/05 2005/06 2006/07 2007/08 Growth Rate (%) Dolakha 8,026 8,226 10,103 8,663 8,034 0.53 Ramechhap 10,134 12,983 13,009 13,082 13,082 4.81 Kavre 26,001 12,98337,666 60,630 60,600 29.52 Sindhuli 11,033 12,14912,172 12,581 12,149 2.22 Mahottari 16,634 16,651 16,691 16,250 16,250 -0.71 Source: Various Issues of Statistical Information on Nepalese Agriculture of different years, MoAC.
Figure 3.10 presents the annual production of milk in 2007/08 in the surveyed districts.
Milk production 80.0
60.0
40.0 000 Mt000
20.0
- DRKSM
Note: D – Dolakha, R – Ramechhap, K – Kavrepalanchok, S – Sindhuli & M – Mahottari
Figure 3.10 Milk Production in 2007/08
It is clear that milk production in Kavre district is much larger than the other districts as shown in the above Figure. Milk production in Kavre District increased sharply after the completion of Section IV of the Sindhuli Road in Kavre in the district in 2004/05. Milk production in 2006/07 became almost double that in 2003/04, as shown in Table 3.63.
3.6.5 Identification of Production Pocket Area of Horticultural Crop and Dairy/Meat Farming
Indicative development potential maps of the DTMPs were reviewed to identify existing production pockets of agriculture commodities, including horticultural and agricultural crops. This takes in account both the production pockets of the DADO and DLSO, as well as other upcoming potential VDCs in the districts. Table 3.66 presents the number of VDCs with high agriculture potential or production pockets by commodity and district5. Annex 3.13 (with attachments) presents a list of VDCs in the survey districts by potential commodities. All survey districts have high potential for agriculture and livestock development.
5 As method of preparation is differed upon districts, column not given VDC numbers do not mean that no potential exists.
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Table 3.66 Number of VDCs with High Agriculture Potential by Commodities
Survey Districts Commodity Dolakha Ramechhap Kavre Sindhuli Mahottari Agriculture 26 32 27 Livestock 17 48 14 Horticulture 6 17 6 High Value Crops 11 Maize 14 24 Millet 10 4 Wheat 10 6 Other Cereal 7 Buffalo 5 46 43 Goat 8 12 20 49 Pig 4 13 9 7 Cow/Yak 9 13 Poultry 8 Sheep 4 5 Lentil 10 Mustard Oil 14 Soyabean 5 Junar 26 15 Orange 9 10 6 Survey Districts Commodity Dolakha Ramechhap Kavre Sindhuli Mahottari Pineapple 5 Jackfruit 5 Mango 6 Turmeric 5 14 Ginger 12 28 Cash Crops 12 Potato 8 9 10 Vegetables 10 4 12 Ghee 17 Herbs 9 Tejpat (Cinnamon leaf) 7 Fisheries 12 Tea 7 Spices 6 Apiculture 7 Women Farmer 4 Source: Compiled from District Transport Master Plans of respective districts.
3.7 Agricultural Marketing
There is a dearth of information on situations of agriculture marketing at the district level. Therefore, most of the information will be collected through the market survey and consultations with the district stakeholders.
3.7.1 Post Harvest Handling by Item
In survey districts, post-harvest operations, particularly in the case of fruits and vegetables, are, to a large extent, traditional. Often crops suffer damage to some degree during post-harvest operations such as harvesting, transportation, packaging, and storage. Simple modern practices are emerging in a few places in localized areas. While finding variation by district is often difficult, different practices are followed in different ecological zones. As can be seen in Table 3.67 below, simple forms of grading fruits and packing them in conical bamboo baskets (called doko) for transportation to the market place are the dominant practices. In Sindhuli and Ramechhap, fruits are often packed into dokos and jute bags, with or without the use of cushions of straws and grass. Use of crates is also on the rise in many places in the hills. The form of transport is still on the human
3 - 33 backs where there is no road access, and buses and trucks where roads do exist. In Mahottari, Mango (Mangifera indica) and litchi (Litchi sinensis) are packed in jute bags and in a different type of bamboo baskets (flatter and shallower than doko). Details of post-harvest handling practices by item will be further collected during the field survey.
Table 3.67 Post-harvest Handling Practices
Survey Districts Commodities Dolakha Ramechhap Kavre Sindhuli Mahottari Citrus (Junar Packed in Packed in dokos Packed in dokos with Packed in dokos Not applicable and orange) dokos, often with or without or without cushion with or without damaged in cushion, Often often damaged in cushion, often transportation damaged in transportation, local damaged in local grading transportation grading transportation local grading local grading Ginger Local Local Local processing of Local Not applicable processing of processing of ginger, use of doko for processing of ginger, use of ginger, use of packing ginger, use of doko for doko for doko for packing packing packing Mango Not applicable Not applicable Not applicable Graded according to color and size of the fruits, packed in paper cartoons Source: Based on the review of marketing bulletins produced by the Directorate of Agriculture Marketing and District Reports.
3.7.2 Location and Handling Capacity of Collection Centers/Points by Item
Table 3.68 below presents the locations of key market centers and collection centers by district.
Table 3.68 Key Market Centers by Survey district
Key Districts Key Commodity Nature Market Center Dolakha Manthali, Charikot, Fruits, potato, vegetables Transit Market in the road Dolakha, Singati, Kirnetar, head Gumukhola, Baghkhor, Mulkhola, Mainapokhari, Nayapul Ramechhap Manthali Junar, orange, lemon, maize, District headquarters buckwheat, potato, vegetables market Kavre Banepa All types, particularly cereals, Transit market in the road vegetables and potato head Bhakunde Rice, wheat, maize, coffee, citrus, Transit market in the road potato head
Sindhuli Khurkot Rice and other cereal Village and road head market Bhiman Cereal, pulse Transit market in the road head Sindhuli Bazaar Junar, orange, lemon, maize, District headquarters buckwheat, potato, vegetables market, collection center Ratamata Junar, orange, lemon, maize, rice, Transit market in the road buckwheat, potato, vegetables head Mahottari Bardibas Oilseeds, tomato, cereals, pulses Transit market in the road head Weekly market
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CHAP. 4 HOUSEHOLD SURVEY
This chapter is organized into three sections. Section 4.1 provides the purpose and procedure of the household (HH) survey. Section 4.2 describes the survey respondents. Section 4.3 describes the results and analyses of the survey.
4.1 Survey Method and Procedure
4.1.1 Purpose of Household Survey
The household survey was conducted in order to grasp the current situation of the target Sindhuli Road Corridor areas. The results of the HH survey would be utilized for formulating the development program to match the needs of the beneficiaries.
4.1.2 Target Districts and VDCs
Three districts through which the Sindhuli Road passes and two districts near the Road that could be impacted by its construction were designated as survey districts.
Four VDCs from each of the five districts were selected for conducting the detailed HH, community and market surveys. Of the four VDCs in each district, two are connected to the strategic roads and two are not connected. Map 4.1 below shows survey VDCs in the map of the five survey districts.
Figure 4.1 Map of Survey Districts Showing Sampled VDCs
The total number of samples was set at 800. Target VDCs were designated through discussions among the DDCs and DADO in of the survey districts. In each district, two VDCs along the strategic road network (SRN) and two VDCs along the local road network (LRN) were selected as shown in Table 4.1 below.
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Table 4.1 Name of Survey VDCs by District and Type of Roads Connected Survey VDC/municipality District SRN-connected LRN-connected Dolakha Bhimeshor Municipality Jiri Gairimudi Pawati Ramechhap Tilpung Okhreni Dadhuwa Pakarbas Kavre Mahadevsthan Patlekhet Chalal Ganeshthan Ugra Chandi Nala Sindhuli Ratanchura Kakurthakur Ranibas Kaplikot Mahottari Bardibas Pipara Damhi Madai Pashupatinagar
4.1.3 Duration of the Survey
The survey was conducted over a period of four months, from February 2009 till May 2009.
Figure 4.2 illustrates the working schedule of the survey.
Feb March April May 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th Preparation Design of QA Orientation Verification Transration Field Survey Input Data cleaning Analysis Reporting
Figure 4.2 Working Schedule of the Survey
4.2 Respondents of the Survey
4.2.1 Number of Collected Samples
In principal, 800 samples were targeted for the HH questionnaire survey. However, to secure enough number of samples for analysis, additional samples of about 20 percent (166) were collected. Therefore the total number of samples became 966 as shown in Table 4.2.
Table 4.2 Number of Sample VDCs by District and Road Connection VDCs along SRN road VDCs along LRN road or Total with no road Dolakha 97 101 198 Ramechhap 96 96 192 Kavre 96 96 192 Sindhuli 96 96 192 Mahottari 96 96 192 Total 481 485 966 Source: HH Survey 2009
4.2.2 Characteristics of the Respondents
(1) Ethnic Group and Caste
In Nepal, there are more than 100 ethnic/caste groups with distinct languages and cultures. These diverse ethnic/caste groups are generally arranged into five broad groups: i) Brahmin/Chhetri, (ii) Janajati, (iii) Madhesi, (iv) Dalit, and (iv) others. This categorization was applied to the survey as well.
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Brahmin/Chhetri incorporates the high caste, comprising Brahmin, Thakuri and Chhetri HHs mainly living in the hills and mountains. Janajati is a community which has its own mother tongue and traditional culture. Most of them follow Buddhism or another religion. Historically, many of these Janajati groups used to occupy particular habitats or territories, and thus many of them claim that they are the true “First Settlers” (Adivasi) of Nepal. Madhesi are the people of Hindu origin living in the lowland Tarai, with a distinct hierarchical caste structure within themselves such as (a) Brahmin (Maithili Brahmin, Bhumihar), (b) Chhetri (Rajput), and (c) Vaishya (Yadav, Kayastha, Halwai, Hajam, Sonar, Lohar, Rajbhar), etc.
For the purpose of this study, all Tarai origins caste groups are included in this category, except the “untouchable” caste group1. Dalits are the low-caste and untouchable Hindu groups, such as Kami, Sarki, Damai, Badi and Gaine in the hills and Tatma, Bantar, Musahar, Chamar, Dom and others in the Tarai. The “others” category includes, a small number of religious groups, such as Muslims. Figure 4.3 shows the distribution of respondents by caste group.
100%
80%
60%
40%
20%
0% Dolakha Ramechhap Kavre Sindhuli Mahottari Overall Brahmin/Chhetri 37.9% 37.5% 43.2% 38.0% 15.1% 34.4% Janajati 41.4% 41.7% 39.6% 42.7% 11.5% 35.4% Madhesi 0.0% 0.0% 0.0% 0.0% 45.8% 9.1% Dalit 20.7% 20.8% 17.2% 19.3% 20.3% 19.7% Others 0.0% 0.0% 0.0% 0.0% 7.3% 1.4%
Source: HH Survey 2009 Figure 4.3 Caste of the Respondents
As seen in the above figure, more than one-third of the total HHs surveyed belonged to Janajati (35.4 %) and Brahmin/Chhetri (34.4 %) followed by Dalits (19.7 %), Madhesi (9.1%) and others (1.4%). The Janajati caste dominates the respondents’ categories in Dolakha, Ramechhap and Sindhuli, whereas Brahmin/Chhetri dominated in Kavre, Madhesi in Mahottari.
Since the survey aims to cover the analysis of living conditions of Dalits, 180-200 samples were intentionally collected from the survey districts, to make them statistically significant, that is to say the sampling was not random.
For references, the castes and ethnic compositions of the survey districts is stated as shown in Table 4.3 below.
1 This survey has used the word untouchable solely for the purposes of definition and clarifications. Practices regarding such people’s “untouchability” has been removed from the civil service code a long time ago and the government is committed to halting this practice. Yet, in some, remote rural areas, the practice still exists.
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Table 4.3 Caste and Ethnic Composition of Survey Districts Ethnic/Caste Group Nepal Dolakha Ramechhap Kavre Sindhuli Mahottari 1 Brahmin 13.62 9.20 5.63 23.88 9.12 0.00 2 Chhetri 17.27 28.49 26.44 14.35 14.4 0.00 3 Ethnic (Janajati) 31.77 37.85 55.95 52.68 58.22 2.56 4 Madhesi 8.16 0.00 0.00 0.00 0.00 42.56 5 Dalit 10.47 6.09 7.55 5.54 10.29 13.15 6 Others 18.71 18.37 4.43 3.55 7.97 41.73 Source: District profile of Nepal-2007/08 ISRC
(2) Religion
Table 4.4 provides the distribution of respondents by religion. Hindus comprise the majority with 82.4 percent, followed by Buddhists with 14.6 percent, Christians with 1.6 percent and Muslims with 1.4 percent. More than two-thirds of HHs in the survey districts believes in the Hindu religion, varying from 77.8 percent in Dolakha to 92.2 percent in Mahottari.
Table 4.4 Respondents by Religion Hindu Christian Muslim Buddhist Total District No. % No. % No. % No. % No. % Dolakha 154 77.8% 73.5% 0 0.0% 37 18.7% 198 100.0% Ramechhap 152 79.2% 0 0.0% 0 0.0% 40 20.8% 192 100.0% Kavre 150 78.1% 52.6% 0 0.0% 37 19.3% 192 100.0% Sindhuli 163 84.9% 21.0% 0 0.0% 27 14.1% 192 100.0% Mahottari 177 92.2% 1 0.5% 14 7.3% 0 0.0% 192 100.0% Total 796 82.4% 151.6% 14 1.4% 141 14.6% 966 100.0% Source: JICA Study Team
(3) Conflict-affected Respondents
The survey revealed that all HHs and their members have been affected directly or indirectly by conflicts in their districts, due to incidences such as strikes, road blocks and shops closures, donations and life threats. Therefore, in the survey, only those HHs who have been directly affected by conflicts are to be regarded as conflict-affected HHs. A HH is considered conflict- affected when it has one or more of the following characteristics:
(a) One or more of its members have joined the people’s Liberation Army. (b) A part or whole of its property was seized or hijacked. (c) Any of its members were killed, abducted or physically injured. (d) Any of its members were displaced. (e) Any of its members’ whereabouts are unknown.
When the survey HHs were assessed against the aforementioned criteria, the survey results revealed the highest proportion of HHs affected by conflict are in Ramechhap (13.5%) followed by Kavre (10.9%), Dolakha (10.1%), Sindhuli (9.4%), and the least in Mahottari (2.6%), as shown in Table 4.5.
Table 4.5 Percent of Respondents Directly Affected by Conflict
Conflict- affected HHs Others (Not directly affected by conflicts) District No. % No. % Dolakha 20 10.1 178 89.9 Ramechhap 26 13.5 166 86.5 Kavre 21 10.9 171 89.1 Sindhuli 18 9.4 174 90.6 Mahottari 5 2.6 187 97.4 Overall 90 9.3 876 90.7 Source: HH survey, 2009, JICA Study Team
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(4) Size of Household
The average size of a HH in among the survey districts is 6.7 persons, ranging from 6.3 in Dolakha to 7.0 in Mahottari, as shown in Figure 4.4 below. B2Frequency Dolakha Ramechhap 85 n =198 n =192 68 Xbar=6.3 Xbar=6.9 s =2.45 s =3.22 51
34
17
0 Kavre Sindhuli 85 n =192 n =192 68 Xbar=6.7 Xbar=6.5 s =3.19 s =2.69 51
34
17
0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Mahottari 85 n =192 68 Xbar=7.0 s =2.89 51
34
17 0 Number of HH members 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Source: HH Survey 2009 Figure 4.4 Size of Household by District
Table 4.6 shows the gender and age balance of the HHs. Overall, 51.7percent consists of males with 34.5 percent aged 15 or above and 17.3percent under 15. Likewise, 48.3 percent consists of females with 31.7 percent aged 15 or above and 16.6 percent under 15.
Table 4.6 Gender and Age Balance Male Female District Total 15 and above under 15 15 and above under 15 Dolakha 35.6% 15.0% 33.7% 15.8% 100.0% Ramechhap 33.1% 19.2% 31.1% 16.6% 100.0% Kavre 34.9% 16.0% 34.1% 15.1% 100.0% Sindhuli 32.9% 18.6% 30.7% 17.8% 100.0% Mahottari 35.8% 17.5% 29.0% 17.7% 100.0% Overall 34.5% 17.3% 31.7% 16.6% 100.0% Source: HH survey, 2009, JICA Study Team
(5) Head of Household
HH heads are those persons who usually lead the family2 and make most of the decisions with or without the involvement of other members of the family.
Figure 4.5 presents HH heads by survey district. The survey found that nine-tenths of the HHs is headed by men varying between 95.8 percent in Mahottari to 83.8 percent in Dolakha. Among the survey districts, the largest proportion of women-headed HHs (WHHs) was found in Dolakha (16.2%) and Ramechhap (15.1%) with the smallest in Mahottari (4.2%). The proportion of WHHs is relatively high in the hilly districts. One of the reasons is migration of male members for
2 This survey has used the word “family” and “household” interchangeably.
4 - 5 seasonal work outside the district or abroad. Dolakha Ramechhap Kavre Female 16% 15% 8%
Male 84% 85% 92%
Sindhuli Mahottari Overall
7% 4% 10%
93% 96% 90%
Source: HH survey, 2009, JICA Study Team
Figure 4.5 Gender of Head of Household by District
4.3 Results of the Survey
4.3.1 Tenancy and Land Ownership
(1) Farmland Property Ownership
As shown in Table 4.4 and Figure 4.6 below, 934 respondents accounting for 96.7 percent have their own land, and the average of their land is 0.638 ha. Remarkable characteristics are listed below.
- Average land size in Sindhuli is the smallest with 0.558ha among the five districts. - Average land size in Mahottari is the largest with 0.726ha though the ratio of landless is highest in this district. - 19.3 percent of respondents who answered that their land size was under 0.2 ha, and the majority (26.8%) is between 0.2ha and 0.4ha. - The overall average land size, 0.638 ha, is not represented by the majority of respondents who reported their land size is between 0.2 ha to 0.4 ha. In other words, most of respondents hold less than 0.5 ha.
Table 4.7 Size of Owned Land
Sample Average ％ over 1.2ha over 1.4ha under 1.4ha 8.6% Number (ha) over 1.0ha 3.0% under 0.2ha under 1.2ha Dolakha 195 98.5%0.681 19.3% 7.1%
Ramechhap 190 99.0% 0.600 over 0.8ha under 1.0ha Kavre 188 97.9%0.632 5.8%
Sindhuli 190 99.0%0.558 over 0.6ha Mahottari 171 89.1% 0.726 under 0.8ha 12.2% over 0.2ha over 0.4ha under 0.4ha Overall 934 96.7%0.638 under 0.6ha 26.8% 17.2% Source : HH survey 2009 Source : HH survey 2009
Figure 4.6 Proportion by Land Size
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Table 4.8 indicates the frequency ratio of the respondent HHs regarding the question on land status of irrigation. It is notable that 99 percent of HHs in Mahottari answered that they didn’t have year-round irrigated land but a substantial portion (76%) do have partially irrigated land.
Most of the HHs in the hilly area has no irrigated land. In particular the irrigated land holding ratio in Ramechhap is low, 80 percent don’t have year-round irrigated land and 97 percent have no irrigated land. The size of cultivatable land (including tenanted land) by district is shown in Figure 4.7.
Table 4.8 Land Status of Irrigation
Year round irrigated land Partially irrigated land No irrigated land? District Yes No Total Yes No Total Yes No Total Dolakha 52% 48% 100% 11% 89% 100% 96% 4% 100% Ramechhap 20% 80% 100% 30% 70% 100% 97% 3% 100% Kavre 39% 61% 100% 20% 80% 100% 80% 20% 100% Sindhuli 35% 65% 100% 39% 61% 100% 80% 20% 100% Mahottari 1% 99% 100% 76% 24% 100% 15% 85% 100% Overall 29% 71% 100% 35% 65% 100% 74% 26% 100% Source: HH survey, 2009, JICA Study Team
(2) Renting In and Renting Out of Farm Land
Table 4.9 describes the proportion of renting-in and renting-out in each district, along with their average land sizes. Overall, 25.5 percent of the respondents (246 out of 966) have rented farm-land and 7.5 percent have rented out. Mahottari has the highest rental ratio with 38.0 percent, and Dolakha has the second highest with 28.8 percent. There are not so many respondents who have been renting out their land. The ratio of such respondents in Sindhuli is relatively high with 11.5 percent following by Dolakha with 8.6 percent.
Table 4.9 Renting In and Renting Out District Renting in land Renting out land % of HH renting Average land size % of HH renting out Average land size in land (ha) land (ha) Dolakha 28.8 0.33 8.6 0.78 Ramechhap 22.4 0.29 5.7 0.26 Kavre 19.3 0.31 4.7 0.32 Sindhuli 18.8 0.30 11.5 0.84 Mahottari 38.0 0.79 6.8 0.73 Overall 25.5 0.64 7.5 0.65 Source: HH survey, 2009, JICA Study Team
(3) Status of Cultivatable Agricultural Land
The overall average of land size including both “with rent” and “without rent” is 0.73 ha but still 46.8 percent of respondents hold less than 0.5ha. The largest farm holder, who runs a commercial agricultural farm had 9.20 ha in Kavre.
Figure 4.7 shows the farm land size by district.
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FrequencyC2ab Dolakha Ramechhap 55 n =198 n =192 44 Xbar=0.77 Xbar=0.66 33 s =0.706 s =0.576 22 11 0 Kavre Sindhuli 55 n =192 n =192 44 Xbar=0.68 Xbar=0.61 33 s =0.898 s =0.667 22 11 0 0.00 0.40 0.80 1.20 1.60 2.00 2.40 2.80 Mahottari 55 n =192 44 Xbar=0.95 33 s =0.987 22 11 0 Land size (ha) 0.00 0.40 0.80 1.20 1.60 2.00 2.40 2.80
Source: HH survey, 2009, JICA Study Team
Figure 4.7 Farmland Size per HH by District (ha)
The average land size per HH by irrigation status is described in Table 4.10 below. The worst situation in terms of irrigation is in Ramechhap with 81percent of no irrigated land and second worst is Kavre with 67 percent.
Table 4.10 Land Size per HH by Irrigation Status Year round irrigated Partially irrigated land Un-irrigated land Total cultivatable land District land
ha proportion ha proportion ha proportion ha proportion Dolakha 0.26 34% 0.04 6% 0.46 60% 0.77 100% Ramechhap 0.04 7% 0.08 13% 0.53 81% 0.66 100% Kavre 0.16 23% 0.06 9% 0.46 67% 0.68 100% Sindhuli 0.15 25% 0.18 30% 0.27 45% 0.61 100% Mahottari 0.01 1% 0.87 93% 0.06 7% 0.95 100% Overall 0.13 17% 0.25 34% 0.36 49% 0.73 100% Source: HH survey, 2009, JICA Study Team
In terms of fallow land, 14.3 percent (138 out of 966) of respondents answered that they left their land fallow. The major reasons are “lack of irrigation”, “unprofitability or high cost of cultivation” and “shortage of labors”, as shown in Figure 4.8.
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Frequency 100 93 90 80 70 60 50 46 45 40 30 20 11 10 3 2 1 0 3 0 Others Un- Out Lack of Lack Lack of Lack market Lack of Lack Un- labor input services irrigation technical technical profitable profitable Displaced Displaced cultivation F. memberF. from village from Shortageof migration of of migration avialibility of of avialibility Source: HH survey, 2009, JICA Study Team
Figure 4.8 Reasons for Leaving Land Fallow
4.3.2 Farming Practices
In the survey districts, farmers grow a number of crops and rear livestock depending on climatic conditions, land type, HHs’ opportunities, and available resources. A typical Nepali is a peasant farmer trying to wrest a livelihood from a small, fragmented holding in an over-crowded countryside3. This applies to all survey districts where most farms are small but agriculture is the basis of economic life. Farming practices depend on the type of land; upland or low-land.
Most of the farmers in all survey districts are subsistence farmers. However, a small proportion of farmers have started to carry out agriculture for both self-consumption and market. This reveals a commercialization of agriculture is taking place, albeit slowly.
(1) Cereal crops
Cereals are the main staple food crops in the survey districts. More than 95 percent of the HHs grows cereals in the survey districts, though a large majority grows cereals for self-consumption.
In the hilly districts, almost 90 percent of the farmers grow cereals for self-consumption whereas only two-thirds of HHs in Mahottari, a Tarai district, reported the same. As shown in Table 4.11, a large majority of HHs (84.5%) grow cereals for self-consumption varying from 66.7 percent in Mahottari to 92.2 percent in Ramechhap. Nearly one-tenth (11.0%) of all HHs grow cereals for both self-consumption and sale, which varied from 3.6 percent in Sindhuli to 25.5 percent in Mahottari.
However, discussions with respondents reveal that most of the small farmers sell their produce soon after the harvest. Although most of the farmers were not food sufficient from their produce, they sold their produce during the peak harvest season when the price is generally low. There are several reasons for this such as shortage of cash to grow winter crops, celebration of festivals, particularly Dashain and Tihar, paying debts and fulfillment of other crucial HH needs. While the purpose of farming was self-consumption, evidences revealed they still sold their produce out of necessity.
3 The Atlas of Nepal published by the Modern World, Earthscan Publications Ltd, London, 1991.
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Table 4.11 Percent of HHs Growing Cereals and Purpose Self consumption and District Not growing Self consumption Total sale Dolakha 1.5 89.4 9.1 100.0 Ramechhap 2.6 92.2 5.2 100.0 Kavre 4.2 84.4 11.5 100.0 Sindhuli 6.8 89.6 3.6 100.0 Mahottari 7.8 66.7 25.5 100.0 Overall 4.6 84.5 11.0 100.0 Source: HH survey, 2009, JICA Study Team
(2) Horticulture
(a) Fruits
Overall, 58.2 percent of the HHs in the survey districts does not grow fruits. The percentage of HHs growing fruits was highest in Ramechhap (55.2%), followed by Sindhuli (50.5%), and the lowest in Mahottari (less than 10%), as shown in Table 4.12. HHs growing fruits for both self consumption and sales ranged from 7.3 percent in Kavre to 21.9 percent in Sindhuli.
Even though the HH survey targeted the VDCs producing Junar in Sindhuli intensively, the potential of fruits production in Sindhuli as well as Ramechhap cannot be denied. With a connection to the road network, better accessibility of markets can be anticipated.
Table 4.12 Percent of HHs Growing Fruits and Purpose Not Self Self consumption District Sale only Total growing consumption and sale Dolakha 51.5 31.3 16.2 1.0 100 Ramechhap 44.8 39.1 16.1 0 100 Kavre 64.1 26.0 7.3 2.6 100 Sindhuli 49.5 28.1 21.9 0.5 100 Mahottari 81.3 8.9 7.8 2.1 100 Overall 58.2 26.7 13.9 1.2 100 Source: HH survey, 2009, JICA Study Team
(b) Vegetables
Table 4.13 shows the percentage of HHs cultivating vegetables and the purpose of cultivation. Most of the HHs grows vegetables for self-consumption in the hilly districts except in Kavre, where the proportion of HHs growing vegetables for sale was remarkably high (40.1%). More than 80 percent of HHs produced vegetables only for self-consumption in Dolakha and Ramechhap whereas in Kavre the proportion of HHs growing vegetables for self-consumption and for both (self consumption and sales) were almost equal (44.3% and 37.5%).
In Mahottari, majority of the HHs do not grow vegetables but 24.5 percent HHs said that they grow vegetables for both self-consumption and sale and 6.3 percent for selling in the markets. In total, nearly one-third of the HHs (30.8%) grows vegetables for sale. The farmers in Mahottari seem to be implementing the division of labor in monopolized and/or commercialized agriculture production.
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Table 4.13 Percent of HHs Cultivating Vegetables and Purpose Not Self Self consumption District Sale only Total growing consumption and sale Dolakha 1.0 85.4 11.1 2.5 100.0 Ramechhap 5.2 82.3 12.5 - 100.0 Kavre 15.6 44.3 37.5 2.6 100.0 Sindhuli 24.0 69.8 6.3 - 100.0 Mahottari 54.7 14.6 24.5 6.3 100.0 Overall 20.0 59.4 18.3 2.3 100.0 Source: HH survey, 2009, JICA Study Team
(3) Cash Crops
(a) Potato
Table 4.14 provides details on the HHs growing potatoes for different purposes. In Dolakha, 94.9 percent of the respondents grew potatoes; namely 48.5 percent for self-consumption and 46.4 percent for sale or both. In Kavre 66.7 percent of HHs produce potatoes and 46.9 percent engage in selling them. Dolakha’s potatoes are famous in Nepal for good quality and Dolakha’s seed potatoes are highly demanded by farms at lower elevation including in the Tarai and even in India.
Although the proportion of HHs growing potatoes for self-consumption was highest in Ramechhap (56.8%) followed by Sindhuli (55.7%), they seldom sold potato in the market. On the contrary, 51.6 percent of HHs in Mahottari does not grow potato, but 28.1 percent grow them for self-consumption and sale.
Table 4.14 Percent of HHs Growing Potato and Purpose Not Self Self consumption Districts Sale only Total growing consumption and sale Dolakha 5.1 48.5 40.3 6.1 100 Ramechhap 37.0 56.8 6.3 0 100 Kavre 33.3 19.8 44.8 2.1 100 Sindhuli 41.1 55.7 3.1 0 100 Mahottari 51.6 18.2 28.1 2.1 100 Overall 33.4 39.9 24.6 2.1 100 Source: HH survey, 2009, JICA Study Team
(b) Oil Seeds
Of the five survey districts, the proportion of HHs growing oilseeds was highest in Kavre (75.5%), followed by Ramechhap (43.2%), and lowest in Sindhuli (20.1%), as shown in Table 4.15.
Table 4.15 Percent of HHs Growing Oil Seeds and Purpose Self consumption and Districts Not growing Self consumption Total sale Dolakha 57.6 41.9 0.5 100.0 Ramechhap 56.8 43.2 - 100.0 Kavre 24.5 75.5 - 100.0 Sindhuli 79.2 19.3 1.6 100.0 Mahottari 71.9 23.4 4.7 100.0 Overall 58.0 40.7 1.3 100.0 Source: HH survey, 2009, JICA Study Team
(c) Industrial crops
More than 95 percent of all surveyed HHs do not grow industrial crops4. Among the districts that
4 Sericulture and sugarcane are examples of industrial crops.
4 - 11 grow such crops, nearly 100 percent of the HHs grows them for self-consumption only. In case of Ramechhap a very few percent (0.5%) grow industrial crops for self consumption and sale while 0.5 percent in Kavre grow such crops for sale only (Table 4.16).
Table 4.16 Percent of HHs Growing Industrial Crop and Purpose Not Self Self consumption District Sale only Total growing consumption and sale Dolakha 99.0 1.0 0 0 100 Ramechhap 97.4 2.1 0.5 0 100 Kavre 96.9 2.6 0 0.5 100 Sindhuli 99.0 1.0 0 0 100 Mahottari 99.5 0.5 0 0 100 Overall 98.3 1.4 0.1 0.1 100 Source: HH survey, 2009, JICA Study Team
(d) Spices
As shown in Table 4.17, the proportion of HHs growing spices was highest in Ramechhap at 76.5 percent, with 66.1 percent of HHs growing spices for self consumption and 10.4 percent for both self-consumption and sale. The second highest production ratio was in Sindhuli with 34.4 percent for self-consumption and 28.6 percent for both self-consumption and sale. The chili grown in Ramechhap and in Sindhuli has a better reputation in local markets than Indian chili in terms of hotness and taste.
Table 4.17 Percent of HHs Growing Spices and Purpose Not Self Self consumption District Sale only Total growing consumption and sale Dolakha 95.5 1.5 3.0 100 Ramechhap 23.4 66.1 10.4 100 Kavre 77.1 12.5 9.4 1.0 100 Sindhuli 37.0 34.4 28.6 100 Mahottari 92.2 6.8 0.5 0.5 100 Overall 65.2 24.1 10.4 0.3 100 Source: HH survey, 2009, JICA Study Team
(e) Bee Keeping
HHs that engage in apiculture were mainly doing it for self-consumption, especially in Sindhuli and Kavre, where 7.3 percent and 6.3 percent of total HHs surveyed respectively, carried out apiculture for their own consumption (Table 4.18).
Table 4.18 Percent of HHs Involved in Beekeeping and Purpose Not Self Self consumption District Sale only Total beekeeping consumption and sale Dolakha 96.0 3.0 1.0 0 100 Ramechhap 96.9 2.1 1.0 0 100 Kavre 91.7 6.3 1.6 0.5 100 Sindhuli 92.2 7.3 0.5 0 100 Mahottari 100.0 0 0 0 100 Overall 95.3 3.7 0.8 0.1 100 Source: HH survey, 2009, JICA Study Team
(4) Pulses
Overall, 56.7 percent of the total HHs did not grow pulses at all, and the majority of those who did grow pulses only for self-consumption. In Mahottari, which is one of the pulse crop growing districts in accordance with the statistics of MoAC, 15.1 percent grew pulses for both self consumption and sale, but most of HHs grew them only for self consumption.
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Among the five districts, the proportion of HHs growing pulses was highest in Ramechhap (68.7%), followed by Mahottari (61.5%), and lowest in Dolakha (10.1%). Of those HHs who reported growing pulses, Mahottari reported the highest incidence of HHs growing for sale (61.5%) followed by Sindhuli (48%). On average, 43.3 percent of the HHs grew pulses for self-consumption and sale. Refer to Table 4.19 for more details.
Table 4.19 Percent of HH Growing Pulses and Purpose Self-consumption and District Not growing Self-consumption Total sale Dolakha 89.9 9.6 0.5 100.0 Ramechhap 31.3 65.6 3.1 100.0 Kavre 70.8 28.1 1.0 100.0 Sindhuli 52.1 39.1 8.9 100.0 Mahottari 38.5 46.4 15.1 100.0 Overall 56.7 37.6 5.7 100.0 Source: HH survey, 2009, JICA Study Team
(5) Fishery
Fishery as a livelihood option was not evident among the surveyed HHs with a very few percentage engaged in the occupation (0.3% overall).
As indicated in Table 4.20, virtually few sampled HHs were engaged in aquaculture only 0.5 percent of HHs in Kavre, Sindhuli and Mahottari. HHs involved in aquaculture in Sindhuli and Mahottari reported that they engaged in fishery for self-consumption and the respondents in Kavre replied that they did so for self-consumption and sale.
While fishery is not popular in these districts, its potential should not be ignored. These virgin areas of fishery could be developed for fish culture as another efficient value added agro products.
Table 4.20 Percent of HHs Engaged in Fisheries and Purpose Self consumption and District Not involved Self consumption Total sale Dolakha 100.0 0 0 100.0 Ramechhap 100.0 0 0 100.0 Kavre 99.5 0 0.5 100.0 Sindhuli 99.5 0.5 0 100.0 Mahottari 99.5 0.5 0 100.0 Overall 99.7 0.2 0.1 100.0 Source: HH survey, 2009, JICA Study Team
(6) Livestock
(a) Live animals
(i) Chicken
Of the total HHs surveyed, more than 60 percent raise chickens either for self-consumption, sale, or both, and the remaining 40 percent did not rear chicken.
Among the five districts, HHs raising chickens for self-consumption was highest in Ramechhap (53.6 %), followed by Sindhuli (44.8%) and Dolakha (20.7%), as shown in Table 4.21. The percentage of HHs raising chickens for both self consumption and sale was highest in Dolakha (53.5%) followed by Sindhuli and Ramechhap (both nearly 33%). However, the proportion of HHs raising chickens solely for sale was highest in Mahottari (4.2%) followed by Dolakha (2.5%).
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Table 4.21 Percent of HHs Rearing Chicken and Purpose Self consumption District Not rearing Self consumption Sale only Total and sale Dolakha 23.2 20.7 53.5 2.5 100 Ramechhap 13.5 53.6 32.8 - 100 Kavre 51.6 27.1 19.8 1.6 100 Sindhuli 21.4 44.8 33.3 0.5 100 Mahottari 86.5 5.7 3.6 4.2 100 Overall 39.1 30.3 28.8 1.8 100 Source: HH survey, 2009, JICA Study Team
(ii) Goat
The percentage of HHs rearing goats in all the districts was almost 70 percent with a majority of them rearing goats for self-consumption and sale. The percentage of HHs rearing goats was highest in Ramechhap (85.4%) followed by Dolakha (82.3%), and lowest in Mahottari (35.9%), as seen in Table 4.22.
With regard to the purpose of raising goats, the survey revealed that most of the HHs (55.0%) raised goats for sale, which combines (a) the proportion of HHs reporting self-consumption and sale and (b) the proportion of HHs reporting sale only. The survey found the highest proportion of HHs rearing goats for sale in Dolakha (77.8%), followed by Kavre (62.5%) and Sindhuli (55.2%). Although the proportion of HHs rearing goats was lowest in Mahottari, it was highest in terms of the proportion of HHs rearing goats for sale only (29.7%), followed by Kavre (10.9%) and Dolakha (10.6%).
Table 4.22 Percent of HHs Rearing Goats and Purpose Self- Self-consumption District Not rearing Sale only Total consumption and sale Dolakha 17.7 4.5 67.2 10.6 100 Ramechhap 14.6 38.5 46.4 0.5 100 Kavre 21.4 16.1 51.6 10.9 100 Sindhuli 31.3 13.5 52.1 3.1 100 Mahottari 64.1 4.2 2.1 29.7 100 Overall 29.7 15.3 44.0 11.0 100 Source: HH survey, 2009, JICA Study Team
(iii) Pig
As shown in Table 4.23, a little less than 10 percent of the surveyed HHs rear pigs. The percentage of HHs rearing pigs was highest in Sindhuli (21.9%) followed by Ramechhap (12.5 %) and lowest in Mahottari (1.0%) with an overall average of 9.1percent.
Table 4.23 Percent of HHs Rearing Pigs and Purpose Self consumption District Not rearing Self consumption Sale only Total and sale Dolakha 91.4 1.0 3.5 4.0 100 Ramechhap 87.5 4.7 6.8 1.0 100 Kavre 98.4 0 1.0 0.5 100 Sindhuli 78.1 1.6 19.8 0.5 100 Mahottari 99.0 0 0 1.0 100 Overall 90.9 1.4 6.2 1.4 100 Source: HH survey, 2009, JICA Study Team
With regard to the purpose of raising pigs, the survey revealed that most of the HHs in Sindhuli (20.3%) raised pigs for sale, which combines (a) the proportion of HHs reporting both self-consumption and sale and (b) the proportion of HHs reporting sale only. The survey found the
4 - 14 highest such proportion in Sindhuli, followed by Ramechhap (7.8%) and Dolakha (7.5%). Generally HHs in Nepal keeps pigs for self-consumption and sale and not solely for self-consumption or sale only.
(b) Livestock products
(i) Egg
More than 50 percent of HHs did not produce eggs, while nearly 45 percent of the surveyed HHs produced eggs entirely for self-consumption.
Only a small proportion (3.0%) of HHs was found to be producing eggs for self-consumption as well as sale. Table 4.24 provides information on the percentage of HHs involved in egg production for different purposes.
Table 4.24 Percent of HHs Producing Egg for Different Purposes Self-consumpti Self-consumption District Not producing Sale only Total on and sale Dolakha 51.5 46.0 1.5 1.0 100 Ramechhap 14.1 82.3 3.6 0 100 Kavre 60.4 37.5 2.1 0 100 Sindhuli 48.4 47.4 4.2 0 100 Mahottari 90.6 5.2 3.6 0.5 100 Overall 53.0 43.7 3.0 0.3 100 Source: HH survey, 2009, JICA Study Team
(ii) Milk production
Overall, 52.5 percent of the HHs surveyed was involved in milk production, 36.1 percent of HHs produced milk for self-consumption and 25.2 percent both for self-consumption and sale.
As shown in Table 4.25 below, nearly 70 percent of HHs in Ramechhap produced milk solely for self-consumption. Likewise more than 40 percent of HHs in Dolakha and Sindhuli produced milk solely for self-consumption. However, the percentage of HHs producing milk for both self-consumption and sale was highest in Kavre, indicating a very high commercialization of milk in the district. After Kavre, Mahottari has the second largest percentage of HHs (38.5%) producing milk for self-consumption and sale. In both of these two districts, roughly 3 percent of HHs produced milk entirely for sales.
Table 4.25 Percent of HHs Producing Milk and Purpose Not Self- Self-consumption District Sale only Total producing consumption and sale Dolakha 40.4 44.4 14.6 0.5 100 Ramechhap 26.0 68.2 5.7 0 100 Kavre 25.5 9.4 62.5 2.6 100 Sindhuli 52.6 42.7 4.7 0 100 Mahottari 42.7 15.6 38.5 3.1 100 Overall 37.5 36.1 25.2 1.2 100 Source: HH survey, 2009, JICA Study Team
(iii) Milk products
Overall, the majority of HHs did not produce any milk products such as cheese and yogurt while nearly 40 percent produced milk products entirely for self-consumption and nearly 10 percent for self-consumption and sale.
The percentage of HHs producing milk products for self-consumption varied between 14.6 percent in Mahottari to 59.4 percent in Ramechhap. The percentage of HHs involved in the production of
4 - 15 milk products for self-consumption and sale was highest in Mahottari (13.5%) and lowest in Kavre (5.2%) as shown in Table 4.26. Due to the high demand of fresh milk in Kathmandu Valley, milk producers in Kavre preferred selling of fresh milk than milk products.
Table 4.26 Percent of HHs Producing Milk Products and Purpose HHs not Self Self-consumption District Sale only Total producing consumption and sale Dolakha 48.5 44.4 7.1 0 100 Ramechhap 30.7 59.4 9.9 0 100 Kavre 55.2 39.6 5.2 0 100 Sindhuli 54.2 37.5 8.3 0 100 Mahottari 70.8 14.6 13.5 1.0 100 Overall 51.9 39.1 8.8 0.2 100 Source: HH survey, 2009, JICA Study Team
4.3.3 Food Self-sufficiency
As discussed earlier, subsistence agriculture is the dominant activity in the survey districts, though several evidences were suggesting that there has been a substantial shift in recent months towards commercialization. The degree of commercialization was substantial in Mahottari followed by Kavre, Dolakha, Sindhuli and Ramechhap.
Figure 4.9 presents the food sufficiency status of the surveyed HHs in the five districts. Overall, 20.7 percent of the sampled HHs reported to have produced almost enough food to feed their families. The remaining 79.3 percent of sampled HHs revealed food inadequacies for a period ranging from less than three months to nine months. This study considered the status of food sufficiency better for those HHs who reported to have produced enough for more than 9 months. Among the five survey districts, the status of Mahottari was best with 24.5 percent HHs producing enough to feed their families for more than nine months, followed by Sindhuli and Kavre (both 23.5%), Dolakha (20.2%) and with Ramechhap at the low end (12.0%).
Dolakha 18.2% 42.4% 19.2% 20.2%
Ramechhap 12.5% 43.8% 31.8% 12.0% Less than 3 months Kavre 13.5% 37.5% 25.5% 23.4% 3-6 months Sindhuli 11.5% 37.0% 28.1% 23.4% 6-9 months More than 9 months Mahottari 25.0% 29.2% 21.4% 24.5%
Overall 16.1% 38.0% 25.2% 20.7%
0% 25% 50% 75% 100%
Source: HH survey, 2009, JICA Study Team
Figure 4.9 Food Sufficiency Status by District
4.3.4 Household Economy
(1) Income
Income by District
Figure 4.10 illustrates annual cash income per HH by district. HHs in Kavre had the highest annual income on average (Rs.124,947/HH) and those in Dolakha had the second highest
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(Rs.100,218/HH). Mahottari (Rs.99,693/HH), Ramechhap (NRs.90,926/HH) and Sindhuli (NRs. 75,801/HH) follow. The overall average annual income was Rs.98,317/HH.
As shown in the figure, the average does not always represent the annual income of HHs, since the overall median is Rs.72,000/HH, in other words, half of HHs earn less than Rs.72,000 per year. The median of Kavre (Rs.80,000/HH), Dolakha (Rs.80,000/HH), Mahottari (Rs.75,000/HH), Ramechhap (Rs.61,300/HH) and Sindhuli (Rs. 53,000/HH) are also represented for the districts.
E6aFrequency
Dolakha Ramechhap 75 n =198 n =192 60 Xbar=100218.4 Xbar=90925.5 s =76002.81 s =102839.82 45
30
15
0 Kavre Sindhuli 75 n =192 n =192 60 Xbar=124947.2 Xbar=75801.0 s =161568.60 s =60845.23 45
30
15
0 0.0 50000.0100000.0 175000.0 250000.0 325000.0 400000.0 Mahottari 75 n =192 60 Xbar=99692.7 s =74569.65 45
30
15
0 0.0 50000.0100000.0 175000.0 250000.0 325000.0 400000.0 Annual cash income (NRs) Source: HH survey, 2009, JICA Study Team
Figure 4.10 Annual Cash Income per Household by District
Income by Education
As shown in Table 4.27, income levels are influenced by education. Annual income is seen to rise with education level. However, in Kavre it is observed that some respondents with lower education happened to earn better incomes.
The number of samples is not high enough to analyze the higher-educated HHs multilaterally variables, by district.
Table 4.27 Income Level by Education Unit: Rs./year Only Read & SLC G12 Graduated Description Counting Below G10 Overall Write Passed Completed or More Number Average 82,066 96,913 108,296 117,537 161,948 195,615 98,329 Median 60,000 70,00070,000 100,000 150,000 155,000 72,000 Sample No. 363 334 152 68 36 13 966 Source: HH survey, 2009, JICA Study Team
Income by Caste
The lower caste “Dalit” is also low income level, Rs.65,445 on average and Rs.50,500 on median, as shown in Table 4.28.
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Table 4.28 Income Level by Caste Unit: Rs./year Description Brahmin/Chhetri Janajati Madeshi Dalit Others Overall Average 115,020 94,925115,750 65,445 122,429 98,329 Median 80,000 70,500100,000 50,500 77,500 72,000 Sample No. 332 342 88 190 14 966 Source: HH survey, 2009, JICA Study Team
For reference, the correlation between the caste and education level of the heads of surveyed HHs is shown in Figure 4.11. Among the Dalits only 1 percent is SLP holders and high secondary graduates. Most of them are male, since the sample is heads of HHs.
The sample number is 332 for Brahmin/Chhetri, 342 for Janajati and 190 for Dalit, respectively.
Read & writ e Count only Below G10 SLC pass High Secondary Graduate
1% 1% 0%
Dalit 48% 36% 14%
Janajati 40% 35% 16% 5%3% 1%
Brahmin 25% 39% 18% 11% 5% 2% /Chettri
0% 20% 40% 60% 80% 100%
Source: HH survey, 2009, JICA Study Team
Figure 4.11 Education by Caste
(2) Poverty Ratio
Figure 4.12 shows the poverty ratio of the sampled HHs, which is below Rs.10,782 per capita, by district. The ratio of poverty in Sindhuli is highest (58.9%) followed by Ramechhap (54.7%). Since the sampled HHs were intensively selected, it might be a little different from “Poverty Incident” of CBS/WFP/WB 2006 (refer to Table 6.3 in Chapter 6), but the tendency is not vary. Dolakha Ramechhap Kavre
38.4 61.6 33.9 % 45.3 % poverty % % 54.7 % 66.1 Non-poverty %
Sindhuli Mahottari Overall
41.1 45.3 41.1 % 54.7 % % 58.9 58.9 % % %
Source: HH survey, 2009, JICA Study Team
Figure 4.12 Poverty Ratio by District
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(3) Proportion of Agricultural Business
The question “What is the contribution of farm income in percent?” was asked in the HH survey and the answers were analyzed. It is remarkable that 127 respondents out of 966 (13.1%) answered “no contribution at all” even though the respondents recognized themselves as farmers. There are many farmers who produce agricultural products just for self-consumption. On the other hand, 105 respondents (10.9%) answered 100 percent of their cash income is from agricultural business.
Examining each district, 55.5 percent of HHs in Ramechhap answered that the contribution of agriculture for cash income is less than 10 percent including those who answered there is no contribution (68 respondents out of 192). The share of agriculture in cash income of HHs in Dolakha and Sindhuli was also small, with around 60 percent of HHs answering that it covered less than 30 percent. The details are illustrated in Figure 4.13.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0% Dolakha Ramechhap Kavre Sindhuli Mahottari Overall
0<10% 10=<20% 20=<30% 30=<40% 40=<50% 50=<60% 60=<70% 70=<80% 80=<90% 90%=<
Source: HH survey, 2009, JICA Study Team
Figure 4.13 Contribution of Agriculture Income
The overall average share of agricultural sales in the HHs cash income is 32.6 percent as shown in Table 4.29. It is remarkable that the profit in Kavre HHs is not as large as expected even though the share of agricultural turnover is 42.0 percent. The profit from agricultural activities looks very small, which is Rs.9,455/year on overall average.
Table 4.29 Share of Agricultural Sales in Cash Income and Profit from Agriculture Agricultural Cost Profit without Ration of Average Average Family without Self-employment District Agricultural Agriculture Income (Rs/year) Self-employment (Rs/year) Turnover Turnover (Rs/year) (Rs/year) Dolakha 100,218 33.2% 33,274 27,859 5,415 Ramechhap 90,926 12.3% 11,220 7,404 3,816 Kavre 124,947 42.0% 52,518 47,400 5,118 Sindhuli 75,801 28.3% 21,472 10,818 10,654 Mahottari 99,693 42.0% 41,833 19,435 22,398 Overall 98,329 32.6% 32,071 22,616 9,455 Source: HH Survey 2009
(4) Profit from Agri-business
According to the survey, nearly half of HHs, 404 out of 966 HHs, has a deficit from agriculture, as
4 - 19 shown in Figure 4.14. The marked dots on the left are the large deficit cases in Kavre and Dolakha. The deficits are running a poultry farm and a pig farm, respectively. They recorded big losses last year, but their share of agriculture businesses was 10 percent and 40 percent, therefore they could cover the deficit with income from other businesses.
Observing the successful cases, we found some successful farmers also in Kavre and Dolakha. Two farmers having large revenues were running livestock farms. The livestock is risky, but the cost performance is generally better than agriculture in Nepal.
Figure 4.15 is the same scatter graph classified by the share of agriculture income, under 50 percent (round dots) and 50 percent or more (square dots). Most respondents having 50 percent shared agriculture income seems to have profits, but still 12.3 percent of deficit farmers were confirmed. Yet, self-labor cost and land rent were not included as agriculture cost since the convert into cash values were not accurate.
(Rs./year) (Rs./year) 800000 800000
600000 A A 600000 g g r r i i
400000 400000 s s a a l l e e s 200000 s 200000
0 0 0 200000 400000 600000 800000 0 200000 400000 600000 800000 Agri cost without self Agri cost without self Agri cost without self employment (Rs./year) Agri cost without self employment (Rs./year) Source: HH Survey 2009 Source: HH Survey 2009 Figure 4.14 Sales and Cost Figure 4.15 Sales and Cost by Share of Agri-income
Figure 4.16 below shows a scatter plots by districts, which indicate the maturity levels of agri-business in each district. Tables 4.28 and 4.29 show detailed data of agricultural costs.
The agriculture in Ramechhap is rather primitive and farmers seldom have access to markets. In other words, most HHs does farming for self-consumption and don’t expect to profit from agricultural activities. In Sindhuli, some farmers dealing with fruits and chili, earned profits but the scale of agriculture was small, as it is in Ramechhap.
On the other hand, agriculture in Kavre has been expanding in volume of sales, but the district seems to be struggling in an un-sustaining agricultural business. The farmers there started agri-business a few years ago, but they are not yet effective compared with farmers in Dhading, who are pioneers of agricultural cooperatives. Examining the details of agricultural costs (see Table 4.30, 4.31 and 4.32), farmers in Kavre spend two to three times the amount for chemical fertilizers and pesticide, which farmers spent in other districts. The cost of seed potato is also very high compared to the other districts. Farmers in Kavre need to reduce their cost to avoid deficits.
Mahottari seems to be more mature with respect to agri-business. The cost of chemical fertilizers is still high but the price of seed potato seems to be more reasonable. According to the interview survey, there are chilled warehouses for seed potato in Tarai that help stabilize the price.
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X軸:AgriY=Sales cost of withoutAgriculture self products Y軸:Agri sales (Rs./year) Dolakha Ramechhap Kavre 300000 n=197 n=192 n=191 r=0.672 r=0.287 r=0.635
200000
100000
0 Sindhuli Mahottari 300000 n=192 n=192 2 big deficit cases were r=0.728 r=0.610 excluded for calculating correlations (=r) 200000
100000
X=Cost of Agriculture 0 (Rs./year) 0 100000 200000 300000 0 100000 200000 300000
Source: HH survey, 2009, JICA Study Team
Figure 4.16 Sales and Cost of Agriculture by District
Table 4.30 Number of Concerned HHs by Item
Description Dolakha Ramechhap Kavre Sindhuli Mahottari Overall Seeds (cereal crops) 195 187 184 179 175 920 Seeds (vegetables) 194 174 157 132 85 742 Seeds (potatoes) 183 119 118 120 96 636 Fruit saplings 43 12 8 36 15 114 Chemical fertilizers 132 168 182 156 169 807 Pesticides 53 53 155 94 147 502 Procurement/repair of machineries 185 180 156 173 125 819 Water for irrigation 6 19 51 22 124 222 Procurement of animal feeds 175 61 158 24 49 467 Veterinary medicines 156 153 163 158 49 679 Livestock insurance 0 21 25 3 3 52 Agriculture labors 197 119 172 157 153 798 Others 11 1 33 39 1 85 Source: HH survey, 2009, JICA Study Team
Table 4.31 Average Agricultural Cost of Concerned HHs by Item
Description Dolakha Ramechhap Kavre Sindhuli Mahottari Overall Seeds (cereal crops) 893 882 2,229 719 2,674 1,463 Seeds (vegetables) 1,003 252 1,383 596 1,232 861 Seeds (potato) 2,800 375 5,362 370 1,708 2,199 Fruit saplings 424 442 988 1,063 1,635 827 Chemical fertilizers 2,726 2,014 8,097 1,732 4,360 3,939 Pesticides 1,801 644 3,530 624 1,448 1,889 Procurement/repair of machineries 1,026 649 1,530 633 552 884 Water for irrigation 2,267 450 1,480 1,075 3,201 2,334 Procurement of animal feeds 10,016 3,722 19,742 2,249 7,682 11,840 Veterinary medicines 659 539 2,262 671 984 1,043 Livestock insurance 239 2,412 433 853 1,330 Agriculture labors 9,980 2,943 9,944 3,561 7,368 7,159 Others 12,418 400 7,255 15,499 100 11,541 Source: HH survey, 2009, JICA Study Team
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Table 4.32 Summary of Average Agricultural Cost & Profit of Concerned HHs
Description Dolakha Ramechhap Kavre Sindhuli Mahottari Overall Cost without self employment 27,859 7,404 47,400 10,818 19,435 22,616 Profit without self-employment 5,415 3,816 5,118 10,654 22,398 9,455 Source: HH survey, 2009, JICA Study Team
(5) Daily Consumption
As seen from Table 4.33, the average annual expenditure of the sampled HHs in the five survey districts was Rs.65,171, with the highest expenditure in Kavre (Rs.82,806/HH) and lowest in Ramechhap (Rs.53,646/HH). Other items on the table include expenditures for medicines, visiting friends, social functions, etc.
Overall, the percentage spent for food to the total HH expenditure was 43.1 percent followed by education (19.3%), religious activities and festivals (16.8 %), clothes (12.0%) and others (8.8 %) which, as depicted above, include expenditures for medicines, visiting friends, social functions etc.
Table 4.33 Average HH Expenditure and Share of Different Items
Average HH Distribution of HH Expense (%) District Expense (Rs) Food Clothes Religious Education Others Dolakha 56,930 33.812.7 21.8 22.0 9.8 Ramechhap 53,646 41.0 12.9 17.1 16.0 13.0 Kavre 82,806 42.211.6 19.1 19.0 8.1 Sindhuli 63,378 42.313.1 15.4 19.5 9.7 Mahottari 69,354 54.410.4 10.6 19.8 4.9 Overall 65,171 43.112.0 16.8 19.3 8.8 Source: HH survey, 2009, JICA Study Team
(6) Expenditure on Utilities
The average annual expenditure per HH was the highest for fuel for cooking (Rs.3,236/HH), followed by lighting (Rs.1,925/HH) and water and sanitation (Rs.523/HH), as shown in Table 4.34.
By district, the overall average lighting expenditure per HH per month was Rs.160.4, varying from Rs.188 in Kavre to Rs.137.4 in Sindhuli. Likewise, each HH spent Rs.269.7 per month on fuel for cooking, which ranged between Rs.412.6 in Mahottari to Rs.121.8 in Sindhuli. The amount spent on water and sanitation per HH was Rs.43.6, varying from Rs.69.0 in Kavre to Rs.15.9 in Dolakha.
Table 4.34 Average Annual Expenditure on Household Utilities Unit: Rs/HH per year Total cost of District Lighting Fuel for cooking Water and sanitation utilities Dolakha 1,871 2,742 191 4,804 Ramechhap 1,776 1,596 220 3,592 Kavre 2,256 4,044 828 7,128 Sindhuli 1,649 1,462 437 3,547 Mahottari 2,077 4,951 672 7,700 Overall 1,925 3,236 523 5,684 Source: HH survey, 2009, JICA Study Team
(7) Balance of Household Economy
As mentioned above, the average HH income is high in Kavre but so is the cost of living. Table 4.35 shows the weak points of HH economies by district. This data also illuminate the key points of assistances by district, and what are the effective inputs for them. The detailed discussion will follow in Chapter 6.
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Table 4.35 Balance of Household Economy (Rs./Year)
Agricultural cost Average family Average HH daily Average cost of District without Balance income expense utilities Self-employment Dolakha 100,218 27,859 56,930 4,804 10,625 Ramechhap 90,926 7,404 53,646 3,592 26,284 Kavre 124,947 47,400 82,806 7,128 -12,387 Sindhuli 75,801 10,818 63,378 3,547 -1,942 Mahottari 99,693 19,435 69,354 7,700 3,204 Overall 98,329 22,616 65,171 5,684 4,858 Source: HH survey, 2009, JICA Study Team
(8) Degree of Satisfaction in Agriculture and Business
As shown in Figure 4.17, irrigation was marked with the highest degree of complaints among the respondents, followed by transportation and road conditions. The input of fertilizers is of great concern as well.
Satisfied Unsatisfied 1 2 3 4 5
Land ownership
Land quality
Irrigation
Labor shortage Business opportunity
Information access
Transportation means
Road condition Low selling price Collaboration
Micro credit
Production inputs
Source: HH survey, 2009, JICA Study Team
Figure 4.17 Degree of Satisfaction by Topic
The results of the survey indicate that the farmers along the Sindhuli Road Corridor have remained in self-supporting agriculture. They are facing shortages of subsistence crops and most of them cannot afford to sell agriculture products in markets. Basic production technology must be introduced before products can be marketed. Necessary steps should be taken to accomplish the target, which is income generation by agricultural activities.
4.3.5 Household Assets and Utilities
(1) Housing
Almost all HHs reside in their own houses and a large majority of the housing units (70.4%) have galvanized roofing, varying from 51.6 percent in Sindhuli to 96.7 percent in Dolakha, as shown in Table 4.36 below.
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Table 4.36 Housing Unit and Type of Roofing Average No Type of Roofing HH with District of Houses/ House Thatch Galvanized Concrete Total No. of HH (%) Sheet (%) (%) Houses Dolakha 100.0 1.24 1.6 96.7 1.6 246 Ramechhap 99.0 1.93 0.9 59.1 - 369 Kavre 100.0 1.423.7 92.3 4.0 272 Sindhuli 99.0 1.9647.6 51.6 0.8 374 Mahottari 100.0 1.43 24.7 65.8 9.5 275 Overall 99.8 1.5926.8 70.4 2.9 1536 Source: HH survey, 2009, JICA Study Team
(2) Household Assets
As seen in Table 4.37, a large majority of the HHs (73.2%) possessed radios, followed by mobile phones (46.8%), television (35.0%), wind fan (11.1%), telephone (9.7%), irons (8.7%), etc. The proportion of HHs owning a radio varied from 67.2 percent in Ramechhap to 83.8 percent in Dolakha, whereas, that of HHs having televisions vary from 68.8% in Kavre to 10.4% in Ramechhap. Nearly one-sixth of HHs in Ramechhap (15.1%) and Sindhuli (13.0%) have solar power for electricity purposes, whereas such HHs were virtually nil in the rest of the districts.
Table 4.37 Percent of HHs Having Different Physical Assets
Asset Dolakha Ramechhap Kavre Sindhuli Mahottari Overall Radio 83.8 67.268.8 75.5 70.3 73.2 Mobile phone 50.5 38.5 64.6 24.5 55.7 46.8 Television 35.9 10.4 68.8 10.9 49.0 35.0 Wind fan 4.2 6.3 45.3 11.1 Telephone 9.6 5.716.7 8.9 7.8 9.7 Iron 7.1 4.218.2 2.1 12.0 8.7 Washing machine 0.5 0.1 Refrigerator/freezer 2.0 1.6 3.1 1.3 Personal computer 1.5 0.5 4.2 2.6 1.0 2.0 Motorcycle 5.1 0.515.6 2.1 11.5 6.9 Car (sedan/pickup) 0.5 0.5 1.0 0.5 0.5 Truck/tractor 1.5 2.1 1.0 1.6 1.2 Bio-gas facility 2.0 1.6 10.9 9.4 1.6 5.1 Solar power 0.5 15.1 13.0 5.7 Battery power generator 0.5 0.5 1.6 0.5 2.1 1.0 Note: Total does not add up to 100 percent due to multiple responses Source: HH survey, 2009, JICA Study Team
(3) Lighting
As shown in Table 4.38, more than half of the respondents use electric light (59.3%) as the main source of lighting followed by kerosene oil lamp (29.5%), battery cell lamp (6.0%) and solar (5.6%). Apart from this, a majority of the HHs use kerosene lamps (57.5%) and candles (17.7%) as subsidiary sources for lighting. The main source of lighting is electric light in Dolakha (88.9%), Kavre (94.3%) and Mahottari (68.2%) whereas it is kerosene oil lamp in Ramechhap (55.7%) and Sindhuli (43.2%).
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Table 4.38 Lighting Source and Level of Use Unit: Percent of HHs Source Level of use Dolakha Ramechhap Kavre Sindhuli Mahottari Overall Electric No use 10.6 78.1 4.7 77.1 30.2 40.0 light Subsidiary 0.5 1.0 0.5 1.6 0.7 Main 88.9 21.9 94.3 22.4 68.2 59.3 Kerosene No use 3.5 24.5 8.9 27.6 1.0 13.0 oil lamp Subsidiary 85.4 19.8 85.9 29.2 66.1 57.5 Main 11.1 55.7 5.2 43.2 32.8 29.5 Gas lamp No use 100.0 100.0 99.5 99.5 97.4 99.3 Subsidiary 1.0 1.0 Main 1.0 0.2 Battery No use 100.0 68.8 90.6 54.7 99.5 82.8 cell lamp Subsidiary 23.4 9.4 22.9 0.5 11.2 Main 7.8 22.4 6.0 Candle No use 93.4 98.4 35.9 95.8 85.9 82.0 Subsidiary 6.6 1.6 63.0 3.6 14.1 17.7 Main 1.0 0.5 0.3 Solar No use 99.0 84.9 98.4 85.9 100.0 93.7 Subsidiary 0.5 0.5 1.0 1.6 0.7 Main 0.5 14.6 0.5 12.5 5.6 Source: HH survey, 2009, JICA Study Team
(4) Fuel for Cooking
HHs use different sources for cooking such as electricity, firewood, crop residue, coal, dung cake, kerosene and gas (both LPG and biogas). As shown in Table 4.39, 92.8 percent of all HHs use firewood as the main source of fuel for cooking followed by dung cake (4.1%) and gas (3.4%).
Firewood is the main cooking fuel in all the survey districts, varying from 99.5 percent in Dolakha to 77.6 percent in Mahottari. After firewood, gas is used as the main source of cooking fuel in Kavre (12.5%) and Sindhuli (2.1%), and dung cake in Mahottari (20.8%).
Table 4.39 Fuel for Cooking and Level of Use Unit: Percent of HHs Level of Source Dolakha Ramechhap Kavre Sindhuli Mahottari Overall use Electricity No use 99.5 99.5 94.8 99.0 99.0 98.3 Subsidiary 4.2 0.5 0.9 Main 0.5 0.5 1.0 1.0 0.5 0.7 Firewood No use 0.5 1.6 2.1 1.0 4.7 2.0 Subsidiary 6.3 2.6 17.7 5.3 Main 99.5 98.4 91.7 96.4 77.6 92.8 Crop No use 99.5 99.0 91.1 99.5 99.0 97.6 residue Subsidiary 0.5 0.5 8.3 1.0 2.1 Main 0.5 0.5 0.5 0.3 Coal No use 99.5 100.0 96.4 97.4 99.0 98.4 Subsidiary 0.5 3.6 2.1 0.5 1.3 Main 0.5 0.5 0.2 Dung cake No use 100.0 100.0 99.5 99.5 41.1 88.1 Subsidiary 0.5 0.5 38.0 7.8 Main 20.8 4.1 Kerosene No use 100.0 99.5 95.3 99.0 97.4 98.2 Subsidiary 0.5 4.7 1.0 2.1 1.7 Main 0.5 0.1 Gas No use 96.0 97.9 76.6 94.3 92.7 91.5 Subsidiary 4.0 1.6 10.9 3.6 4.7 5.0 Main 0.5 12.5 2.1 2.6 3.5 Source: HH survey, 2009, JICA Study Team
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(5) Drinking Water
Piped water or tap water is considered a source of safe water. Overall, 56.9 percent of the HHs used community tap water as a main source for drinking purposes, followed by their own tap water supply (12.9%) and river/pond (12.7%), as shown in Table 4.40. HHs in the hilly districts such as Dolakha, Ramechhap, Kavre and Sindhuli used surface water (tap, river and pond) for drinking purposes, whereas groundwater was used for drinking in Mahottari, Tarai,.
Apart from this, a few of the HHs also used ponds or lakes (9.3%) as subsidiary sources of drinking water. The community tap water supply, followed by river/pond, was the main source of drinking water in Dolakha, Ramechhap and Sindhuli districts, whereas community and private tap water supplies were the main sources in Kavre. Public and private tube-wells were the main sources of drinking water in Mahottari.
Table 4.40 Source of Drinking Water and Level of Use Unit: Percent of HHs Level of Source Dolakha Ramechhap Kavre Sindhuli Mahottari Overall Use No use 79.8 95.3 79.2 92.7 87.0 86.7 Tap water Subsidiary 0.5 0.5 0.5 0.3 supply (own) Main 19.7 4.2 20.8 6.8 13.0 12.9 Tap water No use 51.0 23.4 26.6 20.8 84.9 41.4 supply Subsidiary 2.6 3.6 1.0 1.0 1.7 (community) Main 49.0 74.0 69.8 78.1 14.1 56.9 Private No use 99.0 99.5 99.5 95.8 68.8 92.5 tube-well of Subsidiary 0.5 0.5 0.2 the house Main 0.5 0.5 0.5 3.6 31.3 7.2 Public No use 92.9 99.5 94.3 97.4 62.0 89.2 tube-well in the Subsidiary 0.5 0.5 0.5 2.1 4.7 1.7 village Main 6.6 5.2 0.5 33.3 9.1 No use 99.5 99.5 100.0 100.0 94.8 98.8 Bottle water Subsidiary 0.5 0.5 0.5 0.3 Main 4.7 0.9 No use 99.5 99.5 100.0 100.0 98.4 99.5 Tube-well of Subsidiary 0.5 0.1 the landlord Main 0.5 1.6 0.4 No use 69.7 54.2 85.4 81.3 99.5 78.0 River, pond Subsidiary 5.6 24.5 9.4 7.3 9.3 and/or lake Main 24.7 21.4 5.2 11.5 0.5 12.7 Source: HH survey, 2009, JICA Study Team
(6) Toilets
Table 4.41 presents the different types of toilets by surveyed HHs. 52.2 percent of the surveyed HHs are using pit latrine toilet, followed by no toilet/open toilet (47.3%) and flush toilet (0.5%). HHs with no designated toilet is most prevalent in Mahottari (63.3%), followed by Sindhuli (52.1%), and are least common in Kavre (32.8%).
Table 4.41 Percent of HHs Having Different Types of Toilet No Designated Toilet/ District Pit Latrine Flush Toilet Total Open Toilet Dolakha 57.6 1.0 41.4 100.0 Ramechhap 52.6 47.4 100.0 Kavre 66.1 1.0 32.8 100.0 Sindhuli 47.9 52.1 100.0 Mahottari 36.5 0.5 63.0 100.0 Overall 52.2 0.5 47.3 100.0 Source: HH survey, 2009, JICA Study Team
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4.3.6 Public Service and Infrastructure
A five-point-scale was used to assess the HHs’ level of satisfaction with public services and infrastructure, with “1” indicating “highly unsatisfied” and “5” meaning “highly satisfied”. The average scores of the responses were computed; a score above three is considered satisfied by the public services and less than three considered unsatisfied. Figure 4.18 illustrates the degrees of satisfaction by service. The condition of public services from the users’ view-points in each district is clarified by observing the figure.
Not satisfied at all Very satisfied 1 2 3 4 5
Health care
Education
Road condition
Drinking water
Waste disposal
Electricity
Support for income
Bank credit
Job creation
Agriculture service
Veterinary service
Dolakha Ramechhap Kavre Sindhuli Mahottari
Source: HH survey, 2009, JICA Study Team
Figure 4.18 Degree of Satisfactions with Services
The degrees of satisfaction with health care and education services are comparatively high in all target districts, while the degrees of satisfaction with job creation, agricultural services and veterinary services were lower in all districts. The infrastructure such as roads, drinking water, waste disposal, and electricity, show the gaps in the districts; i.e. Mahottari faced problem with drinking water, Dolakha and Mahottari complained about waste disposal, Sindhuli and Ramechhap complained about electricity and Kavre is a relatively better state in terms of infrastructure.
4.3.7 Environment
(1) Living Environment
The environment is cleaner in the hills than in the Tarai and the inhabitants are well aware of it. With a view to identify HHs’ perceptions about their environment, respondent HHs were asked to state how they perceive their environment and thereafter rate on a five point scale- very clean, clean, satisfactory, dirty or very dirty. Overall 53.5 percent of the sample HHs rate their environment as satisfactory with the highest proportion in Ramechhap and Sindhuli (78.6% each) and the lowest (9.9%) in Mahottari as seen in Table 4.42.
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Table 4.42 Households’ Perceptions on the Cleanliness of the Living Environment Percent of HHs Average District Very clean Clean Satisfactory Dirty Very dirty rating 1 2 3 4 5 Dolakha 0 51.538.9 9.1 0.5 2.30 Ramechhap 0.5 1.078.6 19.8 0 2.21 Kavre 0.5 31.362.0 6.3 0 2.62 Sindhuli 3.1 14.678.6 3.6 0 3.14 Mahottari 0.5 14.69.9 20.8 54.2 1.71 Overall 0.9 22.853.5 11.9 10.9 2.40 Source: HH survey, 2009, JICA Study Team
The proportion of HHs reporting their environment as clean or very clean was 22.8 percent and 0.9 percent respectively. Likewise, the average overall score of 2.40 out of 5 suggests that most of the respondents viewed their environment as satisfactory.
HH members were also asked about their habits of cleaning their villages to assess their level of awareness on the importance of a clean environment. As seen in Table 4.43, more than half of the total HHs surveyed (53.5%) reported that they “seldom” cleaned their villages and 12 percent reported that they have never been involved in cleaning their villages. The proportion of HHs who regularly cleaned their villages was less than 1 percent. Given the responses, it can be easily concluded that, in general, the level of awareness of the surveyed HHs towards keeping their environment clean is very poor. There were also no participatory community activities for the inhabitants to keep their environments clean.
Table 4.43 Percent of HHs Involved in Cleaning Their Village Regularly Intermittently Seldom District Never cleaned Total leaning Cleaning Cleaning Dolakha 0.0 51.538.9 9.1 100.0 Ramechhap 0.5 1.0 78.6 19.8 100.0 Kavre 0.5 31.362.0 6.3 100.0 Sindhuli 3.1 14.678.6 3.6 100.0 Mahottari 0.5 14.69.9 20.8 100.0 Overall 0.9 22.853.5 11.9 100.0 Source: HH survey, 2009, JICA Study Team
(2) Solid Waste Management
As evident from the last two sections, it can be clearly noted that the consequence of having a lower rating of cleanliness in Mahottari is related to how HHs' manage their household waste. Many HHs in Mahottari threw out their waste in public places (39.1%), which provide a reason as to why the communities there perceived their surroundings being very dirty. Overall, the majority of the surveyed HHs managed their solid waste by burying (67.0%), which ranged between 91.1 percent in Ramechhap to as low as 18.8 percent in Mahottari. (Table 4.44)
Table 4.44 Percentage of HHs Involved in Different Solid Waste Management Practices Throw out open/ District Bury Burn Do nothing Total public place Dolakha 90.9 4.5 4.5 0.1 100.0 Ramechhap 91.1 5.2 3.6 0.1 100.0 Kavre 84.9 11.5 3.1 0.5 100.0 Sindhuli 48.4 20.8 9.4 21.4 100.0 Mahottari 18.8 40.1 39.1 2.1 100.0 Overall 67.0 16.4 11.9 4.8 100.0 Source: HH survey, 2009, JICA Study Team
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(3) HHs’ Perception of the Current Status of the Environment
During the survey, HH members were asked whether, in recent years, they have noticed adverse changes in the status of the surrounding environment. Of the total surveyed HHs, the majority (59.4%) of them reported that conditions have been deteriorating, while 34.3 percent perceived no change in the environment. The percentage of HHs that reported adverse changes in the environment was highest in Mahottari (92.2%), followed by Dolakha (75.8%) and Kavre (62.0%), as shown in Table 4.45. Interestingly, in Ramechhap, the percentage of HHs that did not notice any adverse changes in their surrounding environment was very high (88.5%).
Table 4.45 Percent of HHs Perceiving Adverse Changes in the Surrounding Environment
District Yes No No Idea Total Dolakha 75.8 21.7 2.5 100.0 Ramechhap 10.4 88.5 1.0 100.0 Kavre 62.0 33.3 4.7 100.0 Sindhuli 56.3 26.0 17.7 100.0 Mahottari 92.2 2.1 5.7 100.0 Overall 59.4 34.3 6.3 100.0 Source: HH survey, 2009, JICA Study Team
4.3.8 Information Sharing and Marketing
Table 4.46 lists the types of information needed by respondents in survey districts. Information on modern technology was needed by most HHs (87.0%) followed by information on credit institutions (86.0%), new products/varieties (80.2%), disease and pest control (79.2%), production inputs (75.7%) and prices (65.8%). About 50 percent of the HHs needed information on potential business partners.
As seen in the Table, the proportion of HHs needing most of the information listed above was higher in Ramechhap than in the other districts. Similarly, the proportion of HHs that required information on credit institutions was highest (91.9%) in Dolakha. Likewise, the proportion of HHs that needed information on new products/varieties was highest (94.8%) in Sindhuli. It seems that information of new products, varieties, production inputs, and disease and pest control are short in Ramechhap and Sindhuli.
Table 4.46 Types of Information Required by Farmers by District Unit: %
Description Dolakha Ramechhap Kavre Sindhuli Mahottari Overall Institution of credit for investment 91.9 85.9 74.5 88.5 89.1 86.0 Modern technology 89.4 91.1 84.4 89.1 80.7 87.0 Potential business partners 37.9 79.2 51.6 62.5 17.7 49.7 Price information 54.5 83.9 66.7 75.5 49.0 65.8 New products / new varieties 56.6 91.7 79.2 94.8 79.7 80.2 Production inputs 50.5 91.7 73.4 90.6 72.9 75.7 Disease and pest control 56.6 93.2 78.6 94.3 74.0 79.2 Source: HH survey, 2009, JICA Study Team
4.3.9 Credit
(1) Households Taking Credit
Table 4.47 presents the status of HHs borrowing money over the past year. More than two-thirds of respondent HHs has taken loans, varying from 76.6 percent in Kavre to 61.1 percent in Dolakha. Of those HHs taking loans, the average number of time a loan has taken per year was 2.1 ranging from 2.63 in Kavre to 1.35 in Mahottari.
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Table 4.47 HHs Borrowing Money during the Past Year
Interest rate Percent of HHs No of t loans Average loan Duration District per annum taking loan (%) taken per year amount (Rs) (years) (%) Dolakha 61.1 1.79 67,107 2.2 18.4 Ramechhap 65.6 2.28 37,210 2.3 28.8 Kavre 76.6 2.6362,163 4.8 17.1 Sindhuli 76.0 2.40 68,016 4.8 28.1 Mahottari 74.0 1.35 79,996 3.6 28.2 Overall 70.6 2.10 63,396 3.6 24.1 Source: HH survey, 2009, JICA Study Team
The average outstanding amount of a loan taking by HHs is Rs.63,396 varying from Rs.79,996 in Mahottari to Rs.37,210 in Ramechhap. The average duration of borrowing was 3.6 years, which ranged between 4.8 years in Sindhuli and Mahottari and 2.2 years in Dolakha. The average interest rate of those HHs taking loans was 24.1 percent per annum ranging from 28.8 percent in Ramechhap to 17.1 percent in Kavre. The higher rate of interest in 3 districts is mainly because HHs received loan from money lenders, who generally charge 24 to 36 percent of interest per annum.
Table 4.48 summarizes the sources of credit among those HHs taking loans. More than half of the HHs have taken loans from moneylenders (56.9%) followed by micro-credit associations/institutions (40.2%), cooperatives (29.0%) and friends and relatives (19.8%). Money-lenders were the major source of HHs loans in Ramechhap (79.4%), Sindhuli (69.9%) and Mahottari, whereas cooperatives in Dolakha (62.8%) and micro-credit group/institutions in Kavre (74.8%) were the main sources. The second major sources of credit were micro-credit groups/institutions in Dolakha, Ramechhap and Sindhuli whereas cooperatives were in Kavre and government banks were in Mahottari.
Table 4.48 Sources of Credit Unit: % Micro-credit Money-l Relative/f Middlem Cooperat Private Governm District group/ ender riend an ives bank ent bank institution Dolakha 35.5 32.20.8 62.8 38.0 9.9 Ramechhap 79.4 15.9 14.3 49.2 1.6 Kavre 25.9 25.9 54.4 74.8 9.5 3.4 Sindhuli 69.9 19.22.1 13.0 28.8 4.1 Mahottari 73.9 7.0 3.5 9.9 4.9 33.1 Overall 56.9 19.80.6 29.0 40.2 3.1 10.6 Source: HH survey, 2009, JICA Study Team
(2) Purpose of Credit
Table 4.49 shows the purposes of credit. The majority of HHs have taken loans for foods (40.9%), followed by daily consumption goods (37.7%). Less than 1 percent of the HHs reported to have taken loans for the procurement of agriculture inputs. Likewise, only about one-third of the total respondents reported to have taken loans for other investments in agriculture (30.8%).
Interestingly, nearly 50 percent of the sampled HHs in Kavre reported to have taken loan for investments in agriculture whereas such proportions in Mahottari, Dolakha, Ramechhap, and Sindhuli were 33.8, 31.4, 23.0 and 14.4 percent respectively. This means that farmers in Kavre have started investing in agriculture by taking risks. Since the interest rate in Kavre is a bit lower than in the other districts, it might be easier for the farmers to access credit for investment. Until getting their businesses on truck, the managing would be tough, but promotion of investment in agriculture could be a good sign of agri-business.
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The proportion of HHs taking loans for food was highest in Ramechhap (67.5%) followed by Kavre (41.5%), Sindhuli (39.7%), Dolakha (36.4%) and Mahottari (21.5%). The proportion of HHs taking loans for foreign employment varied from 23.1 percent in Kavre to 5.8 percent in Dolakha.
Table 4.49 Purpose of Credit Unit: Percent of HHs taking loan (multi answer) Purposes Dolakha Ramechhap Kavre Sindhuli Mahottari Overall Education for child/ children 16.5 22.2 27.2 29.5 14.8 22.3 Food 36.4 67.541.5 39.7 21.8 40.9 Daily goods 23.1 60.3 33.3 45.2 26.8 37.7 Durable HH goods 22.3 11.1 16.3 17.1 21.8 17.7 Business 11.6 2.4 12.2 13.0 24.6 13.0 Foreign employment 5.8 22.2 23.1 22.6 19.7 19.1 An agricultural input - 1.6 - - 0.7 0.4 Other investment in ag. 31.4 23.0 50.3 14.4 33.8 30.8 Health/ illness/injury 9.9 8.7 4.1 8.2 19.0 10.0 Wedding/funeral/festival 30.6 19.0 11.6 17.1 9.9 17.2 Land purchase/house 4.1 1.4 4.2 2.1 construction Source: HH survey, 2009, JICA Study Team
4.3.10 Membership in Community Organizations
(1) Types of Community Organizations Surveyed
Parallel to the HH survey, community organizations (COs) were surveyed to understand the farmers’ social involvement. COs comprise both formal and non-formal groups and cooperatives, involved in the production, marketing, financing (saving and credit) and processing of agricultural produce. The study surveyed 90 COs in the five survey districts to collect general information (name, establishment year, functions, membership, roles and responsibilities of members, frequency of meetings, membership fees, external relations, and so forth) to understand their activities related to the production and marketing of agricultural produce.
COs are broadly categorized into the following three types:
Agriculture/multipurpose cooperative: Agriculture and multipurpose cooperatives are registered with the Divisional Cooperative Office as per the Cooperative Act 1992. They mainly carry out functions related to the supply of production inputs and to be marketing and processing of agricultural produces. Apart from this, some agriculture/multipurpose cooperatives mobilize saving and credits among the members as an additional activity. Some agriculture cooperatives are specialized in single commodities such as tea, potato seeds, Junar, milk production, etc.
Agriculture-based income generating groups: Agriculture-based income generating groups are formed mainly through the efforts of donor-assisted projects/programs, government line agencies and NGOs targeting the poor, marginalized caste and women for generating income and reducing poverty. Most of these groups were found to be focused on vegetable production (seasonal and off-seasonal), goat rearing and pig rearing with saving and credit as their main activities. Some of these groups were registered with the District Administration Office as per the Society Registration Act and some were even registered with the Social Welfare Council or both. However, most of these organizations register with the related district line agencies.
Producers’ groups: These are the commodity-specific production groups such as vegetable, cereal, fruits, beekeeping, buffalo rearing, goat rearing, pig rearing, etc. These groups are mainly formed by government-line agencies such as DADO and DLSO for delivery of services. Producers’ groups are mainly involved in the production, saving and credit is usually optional. Many groups have a group welfare fund which is established through entry and membership fees and is often used for
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As shown in Table 4.50, nearly half of the COs surveyed fall under the category of income generating groups (44.4%), followed by producers’ groups (30.0%) and agriculture and multipurpose cooperatives (25.6%).
Among the COs surveyed, the proportion of agriculture/multipurpose cooperatives was highest in Kavre (42.9%), followed by Dolakha (30.0%), and the lowest in Ramechhap (15.8%). The proportion of IG groups was highest in Ramechhap (68.4%) followed by Mahottari (47.4 %), Sindhuli (44.4%), Kavre (42.9%) and Dolakha (20.0%). Likewise, the proportion of producers’ groups was highest in Dolakha (50%), followed by Sindhuli (33.3 %) and lowest in Kavre (14.3%).
Table 4.50 Distribution of COs Surveyed Agriculture/ Income Producers’ Overall average District multipurpose generating groups (%) (%) cooperative (%) groups (%) Dolakha 30.0 20.0 50.0 20 Ramechhap 15.8 68.4 15.8 19 Kavre 42.9 42.9 14.3 14 Sindhuli 22.2 44.4 33.3 18 Mahottari 21.1 47.4 31.6 19 Total 25.6 44.4 30.0 90 Source: HH survey, 2009, JICA Study Team
(2) Membership and Participation in Community Organizations
Table 4.51 shows that about 71 percent of the HHs have obtained membership in community organizations, varying from 95.3 percent in Ramechhap to 21.9 percent in Mahottari. Most of the sampled HHs has obtained membership at least in two groups/COs. The average membership per HH is 2.15. Although the COs survey showed a high proportion of female membership (52% women against 48% men), the HHs survey in 40 VDCs of five districts revealed that the membership was 54 percent male members and 46 percent female. Although slightly lower than the proportion to their population size, female participation is substantial, and this show women’s increased access to COs.
Table 4.51 CO Membership Structure by District Gender distribution Percent of HHs Membership in District Total with membership no. of groups Male (%) Female (%) (No.) Dolakha 74.2 1.64 63.1 36.9 244 Ramechhap 95.3 2.65 56.8 43.2 486 Kavre 81.3 2.15 44.9 55.1 350 Sindhuli 79.7 2.27 51.2 48.8 373 Mahottari 21.9 1.29 61.1 38.9 54 Overall 70.5 2.15 53.8 46.2 1507 Source: HH survey, 2009, JICA Study Team
Table 4.52 shows the proportion of respondent HHs affiliated to different types of groups/COs. Overall, 85.3 percent of all sampled HHs, participated in saving and credit groups whereas less than 21 percent of HHs reported to have been affiliated with agriculture and livestock groups. On the one hand, this reveals that people participate in COs to fulfill their credit needs. On the other, the low participation in agriculture and livestock groups suggests people’s lower access to technology and services.
More than 95 percent of the sampled HHs in Dolakha stated to have participated in saving and credit groups. In Sindhuli, 41.2 percent and 33.3 percent of the respondents reported to have participated in agriculture and livestock groups respectively. With regard to livestock groups,
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Sindhuli was followed by Ramechhap district (30.1%). The higher ratios of livestock groups in Sindhuli and Ramechhap are influenced by projects conducted by the Poverty Alleviation Fund (PAF), which has been promoting livestock raising in the surveyed VDCs in Sindhuli and Ramechhap.
Table 4.52 HHs’ Participation in Different Types of Groups Unit: %
District Agriculture groups Livestock groups Saving and credit groups Dolakha 12.9 7.5 95.2 Ramechhap 15.8 30.1 88.0 Kavre 11.5 11.5 85.3 Sindhuli 41.2 33.3 72.5 Mahottari 21.4 7.1 73.8 Overall 20.3 20.3 84.6 Source: HH survey, 2009, JICA Study Team
(3) Benefit from Participation in COs
Table 4.53 lists the benefits received by the respondents due to membership in COs. Increase in credit facility was the major benefit according to 79.9 percent of the respondents, followed by access to inputs/services and opportunities (43.6%), increase in social prestige (27.3%), enhancement of technical know-how (27.2%), enhancement of managerial capacity/social skills (13.7%) and increase in income/employment opportunity (12.2%).
The survey showed mixed benefits derived by HHs’ participation in COs, although access to savings and credit dominated the benefits. When asked what benefits they have derived by participating in COs, 79.9 percent of the HHs responded that they were able to deposit their savings regularly in the groups and get credits when they needed it, varying from 89.7 percent in Kavre to 50.0 percent in Mahottari. Other benefits included access to inputs/services and opportunities available to them, enhancement of technical knowledge, increase in income and employment, enhancement of managerial capacity/social skills, increase in social prestige and increased ability to influence service providers.
Table 4.53 Benefits from CO Membership
Benefits Dolakha Ramechhap Kavre Sindhuli Mahottari Overall Access to inputs/ services and opportunities available to them 11.6 93.4 25.0 38.6 26.2 43.6 Increase in credit facilities 88.4 73.2 89.7 77.8 50.0 79.9 Enhancement of technical knowledge 6.8 50.8 32.1 16.3 16.7 27.2 Increase in income/employment 21.8 1.6 17.3 6.5 26.2 12.2 Enhancement of managerial capacity/social skills 15.6 12.0 25.6 3.3 7.1 13.7
Increase in social prestige 46.9 10.9 25.6 19.6 64.3 27.3 Ability to influence service providers 10.2 - 1.9 2.6 4.8 3.5 Others 0.7 - 3.2 0.7 - 1.0 Source: HH survey, 2009, JICA Study Team
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CHAP. 5 MARKET SURVEY
This chapter is organized into five sections. Section 5.1 provides the purpose of the market survey. Section 5.2 discusses the history and types of markets in Nepal. Section 5.3 describes the price information of the markets. Section 5.4 provides market profiles of the 10 designated markets. Section 5.5 discusses the results of the traders’ survey.
5.1 Purpose of Market Survey
The overall purpose of the market survey is to review the current situation of agriculture market mechanisms in Nepal. Specifically, the study will focus on markets (wholesale, retail and Haat Bazaars) operating in the SR Corridor districts which include Dolakha, Ramechhap, Kavre, Sindhuli and Mahottari. Besides these districts, markets in Janakpur, Dhalkebar, Kathmandu, Hetauda, Dharan and Birtamod were also observed to clarify the competitiveness and the alternativeness of the potential markets.
The survey was conducted in five steps as follows:
1) Data and information gathering on the selected markets in the five target districts, Dhanusa District, Makwanpur District and Kathmandu. 2) Selecting target agricultural and livestock products 3) Interviewing key players (chamber of commerce, traders, retailers, cooperatives, etc.) 4) Conducting marketing survey on the target potential products. 5) Reporting on market mechanisms of the target potential products.
5.2 History and Types of Markets in Nepal
5.2.1 History of Markets in Nepal
In Nepal, prior to the 1960s, the marketing of agricultural products was carried out almost entirely by the private sector1. Since then new agencies and institutions have been organized in the public sector to undertake various marketing operations and functions.
With the implementation of the Agriculture Perspective Plan (1995-2015) in 1997, Nepal’s efforts in agricultural development have been geared towards commercialization. But this shift has not been reasonably successful or smooth.
Major public sector institutions involved in marketing operations are the Nepal Food Corporation (NFC), the Dairy Development Corporation (DDC), the Agriculture Business Promotion and Marketing Development Directorate (ABPMDD) of the Department of Agriculture (DOA), the Livestock Marketing Directorate of the Department of Livestock Services and the Agro-enterprise Centre (AEC) of the Federation of Nepalese Chambers of Commerce and Industries (FNCCI). Besides these institutions, the Trade Promotion Center has been assisting traders in the promotion of export of leather, carpets, garments and other commodities.
Similarly, several donor agencies have been assisting the GoN for developing and expediting market mechanisms. These include the Asian Development Bank, United Nations Development Program (UNDP), United Nations Capital Development Fund (UNCDF), USAID, JICA, and FAO. These agencies have made substantial contributions to market development. Table 5.1 below presents the history (time line) of government support to develop and assist agricultural marketing in Nepal.
1 Nepal Agriculture Sector Strategy Study, Volume II: Detailed Sector Review and Analysis, ADB, December 1982 (pp 147)
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Table 5.1 History of Agricultural Market Development in Nepal Year Key activity Remarks 1964 Establishment of the Food Management Corporation, a public The establishment of Food sector corporation under the Corporation Act for the Management Corporation is procurement and distribution of food grains within the country regarded as the government’s first and supply of subsidized rice to remote areas in the hills and attempt to intervene in the food mountains. market. 1969 Establishment of the Dairy Development Corporation, a public sector corporation under the Corporation Act to develop the dairy industry by organizing milk collection, processing, and sale of pasteurized milk and milk products to the urban consumers. 1974 Establishment of seven public sector Rice Export Companies (RECs) for the export of rice (monopoly granted) 1974 Establishment of the Nepal Food Corporation by dividing the then Agriculture Marketing Corporation into two corporations- the Nepal Food Corporation and the Agriculture Inputs Corporation. Earlier, 1972. Food Management Corporation was integrated into the Agriculture Management Corporation 1979 Remove of monopoly of RECs 1980 Abolishment of RECs 1984 Land acquisition for establishing Kalimati Fruits and Vegetable Wholesale Markets 1986 Start of operation of Kalimati Wholesale Market 1990 Kalimati Wholesale Market Project was signed by the GON, and UNCDF and UNDP. 1991 Operation of Ratna Park Wholsale Market at the street sides This market operated with the between Ratna Park and Rani Pokhar, Kathmandu permission of Kathmandu Municipality, every morning from 4 to 7.30 a.m. 1992 Operation of Kalimati Market by Marketing Development -94 Division of the Department of Agriculture 1995 Formation of Kalimati Fruit and Vegetable Wholesale Market Development Board for management of the Kalimati Market 1995 Project support for a new Kalimati Project implemented with Project was terminated in the support of FAO and UNDP September 2000 1996 Initiation of Small Marketing Infrastructure Project with the The project was completed in 2000. support of UNCDP. It established 19 marketing centers in different parts of the country, (13 collection centers, 3 trading centers and 3 urban centers (1 wholesale and 2 retail centers)). 1996 Implementation of Agriculture Produce Market Center The directive was amended in 1998 Management and Operation Directives 1996/ Establishment of Agriculture Produce Marketing Center, 97 Dharan with funding assistance from ADB 1997/ Construction of collection centers at Lamahi, Dang and 98 Kohlpur with ADB assistance through Secondary Agriculture Development Project 1998 Improvements of physical facilities at the Kalimati Market Agreement was signed in completed with the assistance of UNCDF November 1990 but the project was commenced in 1996 1998 Agricultural Marketing Development and Management Act, The proposed Bill is still to be 2055 drafted approved. The process is pending due to political instability 1999 Produced of a report on the livestock and meat marketing This report is said to be the first system in Nepal by the Third Livestock Development Project report on livestock marketing system in Nepal 2000 Preparation of a master plan for Agricultural Marketing in The project was started in June
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Year Key activity Remarks Kathmandu Valley with the support of the FAO 1999. 2001 Constitution of the Kalimati Fruit and Vegetable Wholesale Market Development Board (second amendment) under the Development Board Act 1957 2001 A study on the Agricultural Marketing Development Project in the Kingdom of Nepal carried out by JICA 2006 Promulgation of the Agriculture Business Promotion Policy for promotion of market oriented and competitive agriculture production 2006 Third amendment in the Kalimati Fruit and Vegetable Wholesale Market Development Board Source: Compiled from Different Sources
5.2.2 Functions of Markets by Type
Generally, in Nepal, three tiers operate in the marketing system: primary markets at the village level and farm gates where collecting agents and small traders operate; secondary markets at various locations (organized periodically on fixed days, called “Haat”) where wholesalers, agents and processors operate; and permanent markets which include collection centers, and retail and wholesale markets. The following section briefly describes Haat and permanent markets.
Haat Bazaar (Rural Markets)
The “Haat Bazaar” has been a part of rural Nepalese culture for a long time. It is very common to have a market at a particular day of a week at a designated place in a village (usually the village square or on both sides of the road/pathway leading to the village) and this is the Haat Bazaar. It is mostly a collection of individual farmers bringing their produce for sale. The buyers may be another farmer, a local resident of the village, a local retailer who will purchase that day to sell locally on other days or a petty trader. The petty trader is the main link of this market to a larger one. He/She collects produce at the village level (even on credit if he/she is a regular buyer) and dispatches the goods to a larger market. He/She may or may not be working for a city wholesaler. A lot of haggling and bargaining takes place at a Haat Bazaar with no one except the petty trader having information on the going rates of items at the closest main market.
Table 5.2 Distribution of Periodic Markets (Haat Bazaar) by Development Region Established Under Established Under Development Region Government Total Number Proportion Local Initiative Initiative EDR 447 4 451 46.5% CDR 329 2 331 34.2% WDR 131 4 135 13.9% MWDR 41 1 42 4.3% FWDR 7 3 10 1.0% Total 955(98.5%) 14(1.5%) 969 100.0% Source: AMIB, 2008, ABPMDD
As seen in the Table 5.2, the local Haat Bazaars are concentrated more in the Eastern Development Region (46.5%), followed respectively by the Central Development Region (34.2%), Western Development Region (13.9%), Mid-western Development Region (4.3%) and the Far-western Development Region (1.0%). It can also be inferred that the eastern part of Nepal is more commercialized than the western part. Of the total Haat Bazaars, 98.5 percent are developed through local initiatives and about 1.5 percent is developed by the government.
Collection Centers
Collection centers are a notch above the Haat Bazaars and their roles and functions are a bit
5 - 3 different as well. These collection centers are usually situated on the side of a rural road or a highway. Small, moderate, large and cooperative farmers make use of them. This is the type of place where local retailers, petty traders and agents of large main market wholesalers congregate. They bargain with local farmers for the products available in that season. Cash is used most of the time, but goods may be given on credit to regular traders. Retailers use this place to purchase smaller amounts for sale in nearby markets. Traders and agents dispatch goods to main markets. The collection center area is occupied for only a short duration each day. The regularity of the collection center is guided by the harvesting season, since the commodities are rather designated.
Transit Markets
Transit markets play an important role in the supply of foods, vegetables and fruits to remote districts. These markets import and forward produce to other areas in the hills and mountains. Most of the transit markets are strategically located at arterial road heads. From east to west, the transit markets identified are Mechinagar, Dhankuta, Okhaldhunga, Banepa, Dang, Surkhet, Dadeldhura and Sanfebagar. Transit markets function to exchange various commodities. However, the designated areas are not regulated by the government, they are spontaneously established and recognized by the citizens, in other words, and it might be more like a commercial town at crossroads.
Wholesale Markets
Wholesale markets are located exclusively in large towns and cities such as Kathmandu, Biratnagar, Dharan, Birtamod and the like. These markets are more organized and have permanent structures such as sheds, storage space and roads. The volume of transactions is large and produce is dispatched to other towns or across the border to India. The central government, the local municipality and private sector have supported the establishment of wholesale markets. Rates of produces in markets are decided by the traders mostly depending on the mechanisms of supply and demand. Large individual producers and cooperative farmer groups have direct access to these markets. Small producers are usually not entertained here. The wholesale merchants sell in bulk to retailers and to suppliers to towns like Kathmandu and Pokhara.
Retail Markets
Retail markets are situated in municipal areas. They are usually close to the wholesale market and sometimes in the same vicinity. However, a town may have a number of retailing outlets in a single city. Retail markets serve the local consumers. The products are acquired from the local wholesalers, but at times, retailers are known to procure goods directly from farmers/producers at a cheaper price. Such farmers are from the immediate vicinity of the town. The market will have permanent sheds for which retailers pay rent to the local municipality. The private sector has also established retail markets as well as wholesale markets.
The following sections depict different types of markets by broad commodity groups- food grain, vegetable, fruits and livestock products- as the marketing systems, market networks and mechanisms differ by the nature of commodities handled.
5.2.3 Fruit and Vegetable Markets
Recent years have seen an increasing participation of the private sector, traders and producers in the operation of fruit and vegetable markets in Nepal. Within a decade, the demand for vegetables and fruits has increased many folds. Therefore, wholesale and retail markets have been established at the initiative of the government, private and cooperative sectors. Some of the markets and collection centers established by the government are managed by cooperatives. As a result, those markets which were developed through projects such as the Hill Fruits Development Project and Secondary Agriculture Development Project, but until a few years ago, were not operating though good marketing infrastructures have become available.
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Wholesale Markets
Currently there are six types of fruit and vegetable wholesale markets in Nepal:
(a) Operating as per the Marketing Guidelines of the Ministry of Agriculture and Cooperatives (market infrastructures developed by the MOAC and handed over to the Market Management Committee)- e.g. Birtamod Wholesale Market, Dharan Wholesale Market (b) Operating pursuant to the Development Committee Act 2013, e.g. Kalimati Fruit and Vegetable Wholesale Market (infrastructure developed by the MOAC) (c) Operating under the management of Fruits and Vegetables Fruits and Traders Association (e.g. Harsha Fruit and Vegetable Market, Kuleshor, Valley Fruit and Vegetable Market, New Baneshor) (d) Municipality managed (e.g. Biratnagar Fruit and Vegetable Wholesale Market, Tukucha Wholesale Vegetable Market, Kathmandu) (e) Cooperative management (e.g. Malekhu) (f) Private entrepreneur management
There are hundreds of wholesale fruit and vegetable markets in Nepal. Approximately 60 of them are considered important and most of these markets were developed through support of external funding agencies such as UNDP, FAO and so on.
Retail Markets
Currently there are three types of retailers operating in Nepal:
(a) Fixed retail shops: either exclusively run for vegetables or fruits or partially allocated space for vegetables in a grocery (b) Temporary street markets: organized/unorganized markets (c) Street vendors/hawkers: selling in bicycles, tokaris, dokos, kharpans etc.
Please see above for the descriptions of collection centers and Haat Bazaars.
5.2.4 Live Animal and Livestock Products2
In the livestock sector too, there are basically three tiers of marketing systems: primary markets at the village and farm-gate levels, secondary markets organized on fixed day(s) of a week “Haat Bazaars” and markets which are controlled mainly by processors, butchers and traders/exporters. Small traders at the primary markets manage the marketing of live animals. Retail marketing of meat is operated by a large number of small butchers and retail marketing of dairy products by dairy retailers.
(1) Live Animal Market
Livestock markets are comparatively more developed in the eastern Nepal than in the western part. The Damak market in Jhapa District is the largest live animal market of all, held once a week on Wednesdays. Intermediate traders collect livestock from several markets and bring them to Damak for final marketing. The municipality collects tax from the contractor managing the market.
Live animal distribution routes differ according to the kind of animals. The summary follows.
Cattle Distribution
Mainly old bullocks, cows and sterile/infertile heifers from eastern Nepal - Bhojpur,
2 Agriculture Sector Performance Review, 2002.
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Sankhuwasabha, Panchthar, Tehrathum, Dhankuta, Udayapur, Ilam (hill districts) and Morang, Sunsari, Dhanusha and Mahottari (Tarai districts) are bought and sold in the nearest markets. These purchased animals sometimes pass from one market to another and eventually arrive at Damak on Tuesday for final marketing on Wednesday. Although the main market day is Wednesday, marketing of livestock starts on Tuesday and left-overs are sold on Thursday. During the season about 5000 cattle are marketed on one market day. Out of the cattle marketed at Damak, those to be taken to Bengal and Bangladesh are moved on hoof in the middle of the night across the Mechi River on the Indian border and eventually transported on trucks to their final destination without any quarantine checks or custom payment.
Buffalo Distribution
Lactating Murrha and crossbred buffaloes purchased at Darbhanga (India), Siraha and Janakpur (Nepal) are all collected and brought to the Damak Market where nearly 50-60 lactating buffaloes are sold on a market day while 3-4 buffaloes are sold daily on other days to the farmers of the locality. Buffaloes purchased by the intermediate traders at Darbhanga markets are moved on hoof to the Nepal border from where they are transported by truck to the Damak Market for final sale.
Mostly lactating Murrha and crossbred buffaloes as well as some male buffaloes are purchased at Sitamadi (India) by intermediate traders of Indian origin and brought to the Jitpur (Bara, Nepal) Livestock Market for final sale. This is the largest market center for lactating buffaloes held every day to supply potential pockets of the central and western development regions.
Live male buffaloes for slaughter are often directly imported from India through Indian contractors and passed through different border points.
Goat Distribution
For the selling of goats, animals are weighted using visual estimation, as weighing facilities do not exist. Nearly 500 goats are sold on a market day at Damak. These goats are mostly transported to Kathmandu, Darjeeling and Sikkim (India). Goats marketed in different markets are all collected by intermediate traders and contractors and eventually transported to Kathmandu and Pokhara for final marketing. Thousands of goats are also imported every week directly from India through Indian contractors, passed through different Indian borders. Trucks are changed at the border and the goats are eventually transported to Kathmandu and Pokhara, the main markets for goats.
Pig Distribution
Around 350-400 pigs are marketed at Damak every week. These pigs are mostly taken on Nepalese trucks to Pasupati Nagar, from where Indian trucks are used to take the pigs to their final destination of Sikkim (India).
Other pigs destined for the Kathmandu market are collected from pig farms located around the road heads at the periphery. There is no reliable market for pigs to meet the daily requirements of the Kathmandu and Pokhara market centers.
Poultry Distribution
Most rural households raise a few Sakini indigenous birds that scavenge around the village and eat kitchen waste, food grains, vegetables and insects. The surplus birds are sold for cash income.
The main broiler chicken industries are located in and around the Kathmandu valley, Chitwan and other market centers. Cold stores and retailers with deep fridge facilities mainly control the marketing of broilers. In the absence of a properly managed slaughter houses, cold stores or butchers manage the slaughtering and dressing of birds. A major portion of the production (nearly 74 %) is consumed by hotels and restaurants and the rest by consumers through the local market
5 - 6 channel. The demand for chicken is highest during the festival seasons in October/November and in the winter months (October/February), which coincides with the tourist and ceremony seasons.
(2) Market of Livestock Products (Meat, Milk, etc.)
In Nepal, animals are slaughtered in open spaces by the road, house yards and on the riverbanks usually early in the morning. In spite of the legislation prohibiting the slaughter of female animals, many female buffaloes are slaughtered and enter the daily meat market. Law and religion prohibit slaughtering cattle. Meat is sold both with and without skin since some consumers prefers to consume meat with skin.
The government has recently established a few abattoirs but most animals are still slaughtered in open spaces. Effective meat-inspection, grading, standardization and market information systems are almost non-existent to date though the importance of such activities has long been realized for some time and the Animal Slaughterhouse and Meat Inspection Act 2055 and Rule 20573 have been promulgated Meat Distribution: Daily meat markets exist in urban market centers. Meat is also sold in ”Haat Bazaars”. Numerous small retail butchers either carry out their own slaughtering or purchase meat in bulk from large butchers.
Meat Processing Industry: Recently private entrepreneurs have started slaughtering, processing and marketing meat at an organized level. However, most of the slaughtering and marketing businesses are handled by non-organized private sectors. Modern processing and cold storage facilities are lacking except for some dairy products. Private businessmen in the leather industry manage the collection of raw skins and hides, as well as the processing and export of goatskin and hides.
5.3 Market Information
At present, price data on agricultural commodities are recorded and maintained by the following agencies in Nepal: • Agri-business Promotion and Marketing Development Directorate of the Department of Agriculture (ABPMDD) • Livestock Marketing Directorate of the Department of Livestock Services • Agro Enterprise Center of the Federation of Nepalese Chambers of Commerce and Industry • Kalimati Wholesale Market
Since its inception ABPMDD has been collecting and providing price information to help farmers plan their production in line with market demand, schedule their harvests at the most profitable times, decide to which markets they should send their produce and to negotiate with traders for better price. The objective of ABMPDD is to increase the efficiency of the marketing information system and to promote and improve price information to help farmers. ABMPDD’s primary target groups are farmers, and its secondary target groups are consumers, traders, government officials, policy makers and researchers.
The information system of the ABPMDD includes (i) collection procedures; (ii) data processing and analysis; (iii) information dissemination and publication; and (iv) market flow and exchange network. The function and responsibility of the Livestock Marketing Directorate is almost ditto that
3 This Act was enforced in Hetauda Municipality in 2003. Neither has the act been effective in this municipality nor has the government extended it to other municipalities and urban areas.
5 - 7 of the ABMPDD but it is focused on live animals and livestock products. ABMPDD has mandates for cereals, fruits, vegetables, fish products and spice crops under the responsibility of the Department of Agriculture.
AEC has been collecting, compiling and disseminating the daily wholesale market prices in Nepal and border markets in India. It uploads the latest daily wholesale market price bulletin in www.agripricenepal.com4, and provides wholesale price information to be broadcasted on Bheri Awaj FM, Nepalgunj, and to Surkhet DADO, Pokhara DADO and Agriculture Information Communication Centre. The wholesale price broadcasted through Television Channels and some daily newspapers also provides guidance to the farmers to approximate likely prices for their products.
Kalimati Wholesale Market provides price information on its web site5. Price information on various commodities is updated every day. The information is very much useful.
However, discussions with producers and other key stakeholders during the survey revealed that today’s fast developing mobile phones have helped them to know about the on-going prices of different commodities in different markets and share experiences among themselves. Therefore, mobile phones could be considered as an opportunity to those farmers who want to commercialize their agriculture and to get updated information on what is happening elsewhere.
Apart from the above three organizations, the Nepal Rastra Bank and the Trade Promotion Centre also occasionally collect price information of agricultural products. The following sections describe price information systems by commodity group. Food Grains
As Nepal shares a porous border with India, domestic food and commodity prices are directly influenced by supply and prices in India. For example, in October 2007, when India introduced a ban on the export of non-basmati rice, wheat and lentils, and the price of these products in Nepal increased accordingly. However, the food prices in Nepal may not increase to the same extent as on international markets. The price of food grains depend on the following factors6:
• Amount of harvest in the country7 • Amount of import from India (formal and informal) • Domestic sale prices in India • Prices of fuel in Nepal • Export to neighboring countries
Vegetables and Fruits (domestic production)
Traders, usually wholesalers with stalls, receive the products from collectors and sell them in the market at prices which are usually guided by the balance between supply and demand. In the Kalimati Wholesale Market, nearly 80 percent of the market’s wholesalers work principally as commission agents rather than on their own account.
4 www.agripricenepal.com agripricenepal.com is the outcome of joint efforts of AEC/FNCCI and Rural Partnership Program/UNDP (RUPP) in coordination with the Government of Nepal/Market Development Division (MDD). This web site is the outgrowth of the market information service of AEC/FNCCI that was started on 1998. 5 www.kalimatimarket.com/ 6 Preliminary Findings: Market and Price Impact Assessment Nepal: WFP, May 2008. 7 Real agricultural prices are influenced by several structural factors- the balance of supply and demand is the most obvious of these factors. For products oriented toward the domestic market, a poor harvest almost invariably leads to increase in real agricultural prices.
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In collection centers that supply products to Kalimati or other wholesale markets, traders offer the prices to the producers based on the retail prices in wholesale markets from where the traders have come. Therefore, most of the producers keep themselves updated on the prices of the fruits and vegetables prevailing in major markets.
Market wholesalers do not procure their products from the traders (collectors) but sell on a commission basis8, therefore they never have a loss. On the other hand, the two actors in the marketing chain, collectors and producers, have to take the risk of bearing losses.
None of the markets, except the Kalimati Wholesale Market, have been posting market prices (wholesale and retail) where producers and traders can see the prices of the products and assess the market situations.
Livestock and Livestock Products
With the establishment of the Livestock Marketing Directorate in the Department of Livestock Services in November 2000, the directorate has begun to collect price and market information through the support of district livestock service offices and disseminating it through news bulletins. However, price information system on livestock has not been established even in major livestock markets such as Damak and Jitpur.
5.4 Market Profiles of 10 Designated Markets
Considering the importance of markets to the five surveyed districts in the Sindhuli Road Corridor, this study prepared market profiles of 10 key markets which included the following:
1. Agriculture Produce Market Centre, Charikot, Dolakha 2. Agriculture Produce Market Centre, Jiri, Dolakha 3. Haat Bazaar, Bhangeri, Ramechhap 4. Agriculture Produce Market Centre, Tamaghat, Kavre 5. Agriculture Produce Market Centre, Sindhuli Madi, Sindhuli 6. Agriculture Produce Market Centre, Bardibas, Mahottari 7. Fruits and Vegetable Market, Dhalkebar, Dhanusha 8. Fruits and Vegetable Market, Naya Buspark, Hetauda, Makwanpur 9. Kalimati Fruits and Vegetable Wholesale Market, Kathmandu 10. Valley Fruits and Vegetable Market, Naya Baneshwor, Kathmandu
Of the above 10 markets, 7 markets were developed by the Ministry of Agriculture and Cooperatives (SN, 1, 2, 4.5, 6,7, 9 and 10), one (SN.3) is the traditional village market9, and one (SN 10) was initiated by private traders. Annex 5.1 presents brief profiles of each of the above 10 markets as of June 2009.
5.4.1 Key Features of the Designated Markets
Table 5.3 below summarizes the key features of the above 10 markets with respect to the following 10 characteristics: (a) market type, (b) ownership of the market infrastructures, (c) provision of the management system, (d) key commodities traded, (e) operation schedule, (f) number of stalls, (g) market activeness, (h) origin of traders, and (i) price information system
8 It is thought that about 80 percent of the consignments delivered to the market are sold in this manner. 9 When traders were asked about its origin, no one could recall.
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Table 5.3 Key Features of the Selected Markets Markets surveyed Charikot Jiri Bhangeri Tamaghat Sindhuli Madi SN Key features Dolakha Dolakha Ramechhap Kavre Sindhuli (1) (2) (3) (4) (5) 1 Market type Retail Retail Weekly market Collection Retail center collection center 2 Ownership MOAC MOAC VDC MOAC MOAC 3 Market MMC MMC VDC Cooperative MMC management 4 Key commodities Vegetables Vegetables Vegetables Seasonal All agriculture traded Cereals Potato Fruits Vegetables produce but Spices Live animals mainly Poultries vegetables and Groceries Junar in season Cereals Pulses etc. 5 Operation Daily Weekly Weekly market Daily Daily schedule Haat on market on on Thursdays Saturdays Saturdays 6 Time of operation 6 to 10 6 to 10 a.m. Morning to 3 to 6 p.m. Morning to a.m. Afternoon afternoon 7 Number of stalls A few A few Many (Over Many A few operating operating operating crowded) 8 Market activeness Poor Poor Very active Very active Poor 9 Traders Local Local Sindhuli Kathamndu Local Ramechhap Kavre Dhanusha Dhanusha Pokhara Mahottari Mahottari Sarlahi Dolakha 10 Price information Not posted Not posted Not posted Not posted Not posted
Markets surveyed Bardibas Dhalkebar Hetauda Kalimati Baneshor Key features Mahottari Dhanusha Makwanpu Kathmandu Kathmandu (6) (7) r (9) (10) (8) 1. Market type Retail Retail Wholesale/ Wholesale/ Wholesale/rR collection retail retail etail centre 2. Ownership MOAC MOAC Municipality MOAC Private trader 3. Market management MMC MMC Municipality Marketing Private trader and traders’ board association 4. Key commodities All All Fruits Fruits Vegetables traded agriculture agriculture Vegetables Vegetables Fish produce but produce but Potato Fish mainly mainly Onion vegetables vegetables Garlic etc
5. Operation schedule Twice a week Twice a week Daily Daily Daily (Wednesdays (Sundays and and Wednesdays) Saturdays) 6, Time of operation Morning Morning Till evening 4 aMTo 8 pm 4 aMTo 9 pm (16 hours) (17 hours.) 7. Number of stalls Many (over Many (over Not Over crowded Fully crowded) crowded) sufficient occupied
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Markets surveyed Bardibas Dhalkebar Hetauda Kalimati Baneshor Key features Mahottari Dhanusha Makwanpu Kathmandu Kathmandu (6) (7) r (9) (10) (8) 8. Market activeness Very active Very active Very active Very active Very active 9. Traders Sindhuli Sindhuli Local Majority from Local Mahottari Mahottari Nuwakot Dhanusha Dhanusha Dhading Siraha Siraha Kavre and local 10. Price information Not posted Not posted Not posted Not posted Not posted Source: NARMA Study
Data and information presented in the aforementioned table reveal the following with respect to the selected markets:
• Four types of markets are found, collection center, wholesale market, retail market and Haat Bazaar • Even the wholesale markets such as Kalimati carry out retailing of agricultural commodities • From the perspective of ownership, three types of markets were found: owned by the central government or MOAC, the local government (municipality or VDC) and private traders • With respect to management, five types of management systems are found: managed by the market management committee, market board, local government, cooperative societies and the private sector. • All markets handle multiple commodities and vegetables • Some of the government managed market centers (Charikot, Jiri and Sindhuli) are not active and have not been operating properly • Market operating times are determined based on the conveniences of the traders, buyers and consumers • Six out of ten markets operate daily and two operate twice a week. Most of the markets operate in stalls, with the number of stalls varying from five to 450 (see also Annex 5.1). • Generally, market centers have become neither producer-oriented, nor consumer-oriented, as no markets except Kalimati posted selling prices of the commodities.
5.4.2 Distribution of Key Items: Potato, Tomato, Junar and Milk
Based on the key commodities identified during the HH survey, as well as field trips and discussions with the key actors and stakeholders, the market survey identified the following four key commodities (products) for further study of their physical distribution system.
(1) potato, (2) tomato, (3) Junar, and (4) milk
This section briefly discusses the production status of each of the above four commodities and their distribution systems. The latter has been prepared from a rapid market assessment and focus group discussions with key traders, respective commodity associations and experts.
(1) Potato
Production of Potato
Potato is one of the most important cash crops of Nepal. It is widely grown throughout the country, at altitude as low as 100 m in the south to as high as 4,000m in the northern mountains. Among the
5 - 11 major cash crops of Nepal, it occupied the fifth position in area coverage, third position in total production and first in productivity in 2007/08 (SINA 2008). The share of potato in the total area and production of cash crops were 37 percent and 46 percent respectively.
Except in a few high mountain settlements where potato is considered as one of the major food crops, it is used as a vegetable. Table 5.4 presents the area, production and yield of potato. The average area, production and yield of potato over a period of five years (2003/04 to 2007/08) were 150,190 ha, 1,871,003MT and 12.4MT/ha.
Table 5.4 Area, Production and Yield of Potato Unit: Area , Prodn.: MT.,Yield: kg/ha Area of cash crops in Nepal Potato Share of Potato Year Area Prodn. Yield Area Prodn. Yield Area Prodn. 2003/04 404,381 4,101,748 10,143 143,027 1,643,357 11,490 35.37 40.06 2004/05 407,856 4,276,155 10,484 146,789 1,738,840 11,846 36.30 42.39 2005/06 415,692 4,596,469 11,057 150,864 1,974,755 13,090 37.31 48.14 2006/07 416,226 4,698,158 11,288 153,534 1,943,246 12,657 37.97 47.38 2007/08 414,304 4,694,142 11,330 156,737 2,054,817 13,110 38.76 50.10 Average 411,692 4,473,334 10,861 150,190 1,871,003 12,438 37.00 46.00 Source: Statistical Information on Nepalese Agriculture (SINA), 2007/08
Potato production systems vary according to the altitude. In the mid-hills (800 to 1,500 m altitude), potatoes are generally cropped on irrigated land after paddy. In the mid and higher hills (1,500 m and above), it is grown in the uplands with maize as a mixed crop. Finally, it is grown as a mono crop at 2,500 m and above.
The area and production distribution of potato in the SRC districts in 2007/08 are shown below in Table 5.5. As seen in the table, the average yield of potato in Kavre is quite high, more than 17 MT/ha.
Table 5.5 Area, Production and Yield of Potato in SRC Districts, 2007/08
Area (ha) Production, (MT) Average Yield (MT/ha) Dolakha 2,445 26,550 10.9 Ramechhap 3,040 30,430 10.0 Kavre 5,350 94,150 17.6 Sindhuli 1,538 15,950 10.4 Mahottari 3,420 43,605 12.8 Total 15,793 210,685 13.3 Source: SINA 2007/08
Marketing
As potato is one of the important income generating cash crops in the SRC districts, a large part of the total production goes to the market, specifically from the Kavre, Dolakha and Ramechhap Districts. One of the key reasons for the large amount of potatoes going to the market is the access of these districts to the Kathmandu valley, particularly the Kalimati Wholesale Market, and a high demand of potato there. Potatoes produced in the high altitude areas of Ramechhap and Dolakha are regarded as excellent for seed purposes.
Potatoes produced in Ramechhap and Dolakha go to Tarai but the amount is small because of the lack of direct road connection. Potatoes that arrive in the Tarai often reach Indian markets, particularly in Sitamani and Mujaffarpur in Bihar, India.
Wide ranges of market functionaries are involved in the marketing of potatoes, but big collectors play a dominant role in the chain. Collectors involved in the marketing of potatoes generally control the system and ensure a high percent share of the consumer price.
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Wholesalers have market information on the prices at the end markets, the demand situation, quality of commodities, etc.
The production and marketing calendar is illustrated in Figure 5.1 below:
Month July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Area -
Marke High hills Market Production t
Low hills Production Market
Tarai Production Market
Figure 5.1 Marketing Calendar for Potato in SRC Districts
Distribution System
Farmers in the survey districts sell potatoes to consumers, retailers, farmer groups/cooperatives, collectors and wholesalers who usually bring them to the Kathmandu market and other market places. Figure 5.2 presents the distribution systems for potato in the survey districts.
Farmers
65 % 5 % 20 % 3 % 7 %
Collectors/ Agents Farmer groups/ (100%) Cooperatives 65 %
27 % 5 % 90 % Wholesalers (100%)
90 % 10 % Retailers (100%)
10 % 100 % 3 %
Consumers / Restraints
Source: Rapid Market Appraisal, 2009
Figure 5.2 Distribution Systems for Potato in the Survey Districts
Some important notes about the potato distribution systems are listed below:
Sindhuli is one of the smaller potato producing districts. Farmers themselves bring potatoes to the local market, especially in rural Haats during the market day and sell directly to the consumers and retailers. Almost negligible quantities of potatoes are exported from this district.
Different distribution systems exist in large potato producing districts such as Dolakha, Kavre, Ramechhap and Mahottari. However, the most common channels are:
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o Farmer – Collectors– Wholesalers– Retailers – Consumers o Farmer –Wholesalers– Retailers – Consumers o Farmer–Retailers – Consumers o Farmer –Consumers
Of the four types of distribution systems, the first two are largely practiced for exporting potatoes from one district or market center to other areas, whereas the latter two are for local consumption. During the potato production season, collectors or agents establish temporary small shops/stalls, usually located on road sides, to buy potatoes from nearby production pockets. They also buy potatoes directly from the farmers’ field. Farmers bring potatoes to the nearest collection point and sell them to the collectors/agents. Collectors/agents then supply potatoes to wholesalers in different markets in Janakpur, Biratnagar, Pokhara, Kathmandu, Narayanghat, etc. which are ultimately supplied to the consumers through retailers.
Potato produce in the survey districts are also marketed in Indian border cities, mainly through the market channels of producers – wholesalers (India) – retailers (India) – consumers (India)
Potatoes of Kavre, Ramechhap and Dolakha are supplied to the Tarai districts from April/May to June/July, whereas Tarai (Mahottari) potato arrives in Kathmandu and other market centers during November/December to March/April. For the remaining months, either potato is imported from India or cold-stored potato is utilized. Pricing System
The sale price of potato depends on type, color, shape and the balance of supply and demand at the Kalimati Market. Year to year fluctuations occur in wholesale prices of potatoes. Generally, the wholesale prices of red potatoes in the Kalimati Market have ranged from as low as Rs.6.00/kg to as high as Rs.28/kg (see Figure 5.3). The average price was highest in 2007/08 (Rs.17.41/ Kg). The average wholesale price of white potato is slightly lower than that of red potato (see Figure 5.4).
Price in Rs./kg 30 28
25 22 21 20 23 20 17.41 15 13.04 14.11 11.58 13.08 10 9 6 7.5 5 8 8 0 2004/05 2005/06 2006/07 2007/08 2008/09 Min. Price Year Max. Price Avg. Price Source: Kalimati Market
Figure 5.3 Wholesale Price of Red Potato in the Kalimati Market
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Price in Rs./kg
30
25 24 19 20 19 18 14.64 17 15 11.59 9.82 10.91 10 9.98 6 6.5 6.5 5 4 6
0 2004/05 2005/06 2006/07 2007/08 2008/09 Min. Price Year Max. Price Avg. Price
Source: Kalimati Market
Figure 5.4 Wholesale Price of White Potato in Kalimati Market
The market price of potato generally remains higher during July to August and lowers during January to April. According to the Kalimati sources, Kavre potatoes dominate the Kalimati market during June to October (Asar to Kartik in Nepali months) and Sarlahi’s potato dominates from January to March (Magha to Chaitra).
Grading
Potatoes are graded by their color (red or white), size (small or large), and shape (round or oval). While potato prices may vary by size and shape, the Kalimati market records price by color only- red or white. Generally, red fetches higher prices and white potatoes (large) are mostly used for processing, making potato chips and cooking in restaurants as finger chips.
Storage
In the study districts, mainly three types of potato storage are used:
(a) in-house storage: Potatoes are spread in cool and dark places with good ventilation (b) local-rustic stores: Potatoes are stored in thatched houses built in a cool place, preferably in the backyard of house (c) racks and shelves: Potatoes are placed on wooden racks and shelves on top floors and verandas
(2) Tomato
Production of Tomato
Tomato is one of the most important vegetables in Nepal and is available throughout the year, although its availability is high in some months (April to May, July to November) and low in other months (December to March).
According to estimate by the Vegetable Development Directorate (VDD)10, tomato is cultivated in approximately 10,775ha in Nepal. Of the total area covered by vegetables in 2007/08, the share of tomato was nearly 5.6 percent. The average yield per hectare was reported at 14.4 MT. Thus, the total production of tomato as estimated by the VDD was 155,088MT. Its share to the total vegetable production of the country is approximately 6.7 percent. This is quite substantial considering the hundreds of vegetables are grown in Nepal.
10 Annual Report, Vegetable Development Directorate, 2006/07.
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The VDD data revealed that within the surveyed districts, tomato is cultivated in about 493 ha11 of land with the highest area of cultivation in Mahottari (215ha) followed by Kavre, Sindhuli, Dolakha, and Ramechhap. The area and production distribution of tomato in the SRC districts are shown in Table 5.6. As seen in the table, the average yield of tomato in Mahottari and Kavre is quite high, 21.0 and 15.0 MT/ha respectively.
Table 5.6 Area and Production of Tomato in the SRC districts, 2006/7
Survey districts District Area (ha) Production (MT) Yield, MT/ha Dolakha 31 294 9.5 Ramechhap 10 70 7.0 Kavre 199 2,978 15.0 Sindhuli 38 407 10.7 Mahottari 215 4,515 21.0 Total 493 8264 16.8 Source: Statistical Information on Nepalese Agriculture 2007/08, MOAC
Tomatoes are available at the Kalimati Market throughout the year. The total tomato inflow to the Kalimati Market in 2008/09 was 25,271 MT. In 2008/09, the average price of the table tomato was recorded as Rs 22.69/kg and the average price of the local tomato was recorded as Rs.19/kg. The demand for tomato of the Kalimati Market is met by tomatoes from Kavre, Dhading, Chitwanm, Bhaktapur, Makwanpur, Rautahat, Sarlahi, etc. and some potatoes are imported from India as well.
Distribution System
There are two types of tomatoes sold in Nepalese markets- small and large. While small tomatoes originate in the hilly districts such as Dhading, Nuwakot, Kavre and Sindhupalchok, the large tomatoes are produced in Terai districts such as Sarlahi and Mahottari. Kalimati sources12 reported that they do not know if small tomatoes are ever imported to Nepal from India but large ones are definitely imported from India. This means that small tomato producers need not compete with similar Indian products. But the problem with small tomatoes is the storage. They have a high level of moisture content and therefore cannot be stored for long periods due to perishability. If appropriate storage facilities are provided, farmers are likely to benefit from small tomatoes.
The share of Indian tomatoes (large) to the total quantities of tomatoes that arrived at the Kalimati Market in 2008 was about 8 percent. As tomato grown in Sarlahi is the large type, it is likely to compete with Indian tomatoes at the Kalimati Market. Considering the amount of imported tomato at the Kalimati Market, it appears that Nepal could become self sufficient in tomato production if districts such as Mahottari, Sarlahi, Kavre, Sindhuli, Dolakha, etc. could increase tomato production.
Farmers in the survey districts sell tomatoes to consumers, retailers, farmer groups/cooperatives, collectors and wholesalers who usually bring them to the Kathmandu and other market. Figure 5.5 presents the tomato distribution system in survey districts.
11 VDD’s estimation appears too low and conservative. 12 Kalimati Market, News Bulletin
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Producers
60 % 5 % 20 % 5 % 10 %
Collectors/ Agents Farmer groups/ (100%) Cooperatives 65 %
25 % 5 % 90 % Wholesalers (100%)
90 % 10 % Retailers (100%)
10 % Processors 100 % 5 %
Consumers / Restraints
Source: Rapid Market Appraisal, 2009
Figure 5.5 Distribution System of Tomato in the Production Districts
Some important notes about the tomato distribution system are listed below:
As discussed earlier, Sindhuli, Dolakha and Ramechhap are lower producing districts of tomato. In these districts, the farmers themselves bring their produce to the local market, especially in rural Haats on the market day and sell directly to the consumers and retailers. Almost negligible quantities of tomatoes are exported from these districts. In larger tomato producing districts such as Kavre and Mahottari, different distribution systems exist. However, the most common channels are: o Producers – Collectors– Wholesalers– Retailers – Consumers o Producers –Wholesalers– Retailers – Consumers o Producers –Retailers – Consumers o Producers –Consumers
Of these four distribution systems, the first two are largely practiced for supplying tomatoes from one district or market center to another, whereas the latter two are for local consumption.
During the tomato production season, collectors or agents establish small shops/stalls near production pockets, which are usually located at roadsides or market centers. Farmers bring their tomatoes to the nearest collection point. For example, most farmers bring their produce to Banepa or Panchkhal collection centers in Kavre, whereas farmers from Mahottari sell their tomato to the road head collection shops/stalls. Collectors/agents then supply them to wholesalers in different markets such as Janakpur, Biratnagar, Pokhara, Kathmandu, Narayanghat, etc. which are ultimately supplied to the consumers through the retailers.
Tomato produce in Mahottari is also marketed in Indian border cities, mainly through two marketing channels: o Producers – commission agents (Nepal) – wholesalers (India) – retailers (India) – consumers (India)
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o Producers – retailers (India) – consumers (India)
Pricing System
Tomato sale price depends on the type of tomato (small or large), balance of supply and demand at the Kalimati Market. Year to year fluctuations occur in tomato prices. Generally, the wholesale prices have ranged from as low as Rs.6.00/kg to as high as Rs.60 to 65.00/kg, a difference of nearly 10 times depending on season. Figure 5.6 and figure 5.7 present the wholesale prices of small and large tomato at the Kalimati Market in different years.
Price in Rs./Kg 70 60 50 60 48 58 50 40 40 30 22.66 21.11 19.72 22.69 25.07 20 9 10 6 6 8 10 0 2004/05 2005/06 2006/07 2007/08 2008/09 Min. Price year Max. Price Avg. Price Source: Kalimati Market
Figure 5.6 Wholesale Price of Big Tomato in Kalimati Market
Price in Rs./kg 70 60 56 65 50 50 45 46 40 30 19.72 19.09 20.15 20 16.02 15.44 6 5 10 3 3 4 0 2004/05 2005/06 2006/07 2007/08 2008/09 Min. Price Year Max. Price Avg. Price Source: Kalimati Market
Figure 5.7 Wholesale Prices of Small Tomato in Kalimati Market
Tomato market prices of generally remain higher during July to August and lower during January to April. According to the Kalimati sources, Kavre tomatoes dominate the Kalimati Market during June to October (Asar to Kartik in Nepali months) and Sarlahi tomatoes dominate from January to March (Magha to Chaitra). However, it should be mentioned that “Sarlahi tomatoes” do not necessarily mean only tomatoes grown in Sarlahi, they may include tomatoes grown in Mahottari, Dhanusha, or Siraha as well. By the same token, it should be understood that Kavre tomatoes may not be necessarily grown in Kavre but in Sindhupalchok. It should be noted that the Kalimati Market records products by the origin of traders and from where the commodity enters the market.
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Quality Control (Grading, Storage, Packaging and Branding)
None of the actors in the tomato marketing chain reported to have added value to their products either by post-harvest activities such as grading and packaging, or by high quality depending on better varieties, good taste, organic products etc. However, producers appeared very vigilant, watchful and conscious to find out the prices their counterparts/neighbors were getting for their products. On the part of the farmers, they were not found to be making any efforts to improve the quality of the products. Likewise, traders too did not make any attempt to ensure the quality of the products for a long period. Generally, the following practices (Table 5.7) were found to have been adopted by different key actors in the market chain.
Table 5.7 Post-harvest Practices by Actors Activities Performed by Producers Collectors Wholesalers Retailers Grading by size of the products (large Almost none Occasionally Often Often and small sizes) Cleaning Almost Never Almost never Almost always never Packaging in crates Never Transferred to Never Never (Brought in hard plastic bamboo crates for baskets) transportation Storage Never Never Never Never
Every actor in the market chain sells the products to the next actor in the market chain as soon as possible. When they cannot sell the products, they store the items in ordinary storage with no special treatments. However, some consumers suspect that wholesalers and retailers spray their goods with some chemicals to disguise their freshness.
Figures 5. 8 and 5.9 below present the tomato sales at Kalimati by month during the last five years.
Sale amount (Mt.)
700 600 500 400 300 200 100 0 April May June July Augt Sept Oct Nov Dec Jan Feb March Months 2004/05 2005/06 2006/07 2007/08 2008/09
Source: Kalimati Market
Figure 5.8 Sale of Big Tomato in Kalimati Market
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Sale amount (Mt.)
3000 2500 2000 1500 1000 500 0 April May June July Augt Sept Oct Nov Dec Jan Feb March
Months 2004/05 2005/06 2006/07 2007/08 2008/09
Source: Kalimati Market
Figure 5.9 Sale of Small Tomato in Kalimati Market
The above figures show that larger quantities come to market during the dry season than in the rainy season.
The following Table 5.8 shows the monthly average prices of small potato during the last three years at Kalimati Market:
Table 5.8 Monthly Average Price of Small Tomatoes at the Kalimati Market Unit: Rs./kg Year Apr M ay Jun Jul Aug Sep Oct Nov Dec Jan Feb M ar 2005/06 19.8 7.5 10.8 31.6 17.3 15.4 17.6 18 8.2 8.8 10.2 19.9 2006/07 12.8 12.5 13.8 8.0 28.1 41.6 26.6 21.1 21.0 22.1 14.7 14.5 2007/08 18.0 15.7 11.4 29.8 33.1 28.3 23.3 19.7 11.7 12.4 10.7 15.6 Source: Kalimati Market Web site
The above figure and table shows that the prices have inversely correlated to the product quantities at the market.
(3) Junar
Production
Nepal has a high potential for producing a wide variety of fruits, including different types and varieties of citrus fruits. Of the numerous types of citrus fruits, the case of Junar (Sweet Orange) is special and demands special attention. The type of Junar grown in the Sindhuli and Ramechhap Districts is rarely found in other countries. In Nepal too, Junar from these districts are the best in terms of taste, color, percentage of juice and sweetness. Sindhuli Junar has become so popular these days that many traders seem to sell Junar produced elsewhere as Sindhuli Junar. Both Sindhuli and Junar have become popular as one is remembered for the other and vice versa. The productive area and production of Junar in Sindhuli and Ramechhap are given in Table 5.9 below:
Table 5.9 Productive Area and Production of Junar in Sindhuli and Ramechhap District Area, (ha) Production, (MT) Productivity Price (Rs./kg) (MT/ha) Sindhuli 654 9,940.8 15.2 9.00 Ramechhap 970 12,125 12.5 9.00 Source: District Profile, Sindhuli, DDC, 2008. DADO, Ramechhap, 2008
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Utilization and Marketing
Available data from district sources reveal that approximately 60 percent of the total Junar produced in Sindhuli and Ramechhap are sold outside those districts (Table 5.10)
Table 5.10 Sale and Consumption of Junar Sindhuli Ramechhap Total Self consumption and endowment, (MT) 2,187 2,425 4,612 Local processing and sale in local market, (MT) 1,193 716 1,909 Transportation loss, (MT) 796 970 1,766 Sale outside district, (MT) 5,765 8,014 13,779 Source: District Profile, Sindhuli, DDC, 2008. DADO, Ramechhap, 2008
Distribution System
Junar produced in Sindhuli and Ramechhap is sold during the time of the Tihar festival in autumn in a green, unripe form in the name of Mosambi. Traders from India start placing order to the farmers as early as July/August to reserve them green raw Junar. They give cash advances to the farmers and collect the green Junar during the festival time and supply them to the Kathmandu market.
November to January is the peak season for Junar. Kathmandu is the core market of Sindhuli Junar followed by Biratnagar and Janakpur. The Junar of Sindhuli has a good market in Jayanagar – the border of Nepal and India.
The Junar association is also involved in trading and post harvest handling of Junar. The association collects the Junar and redistributes them to other collectors and traders. They have carried out the grading and packaging of Junar and supplied them to the departmental stores in Kathmandu and Biratnagar. Likewise, the association has constructed a cold storage with the support of the Japanese grant aid. Figure 5.10 presents the distribution system of Junar in the survey districts.
Producers
50 % 5 % 15 % 8 % 10 % 12 %
Collectors/ Agents Associations/ (100%) Cooperatives 5 %
45 % 30 %
15 % Departmental store
95 % Wholesalers (100%) 5 % 95 % 5% Retailers (100%)
Processors 5 % 100 % 100 %
Consumers
Source: Rapid Market Appraisal, 2009
Figure 5.10 Distribution System for Junar in the Survey Districts
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Some important notes about the Junar distribution system are listed below:
As discussed earlier, Sindhuli, and Ramechhap are the only Junar producing districts. In these districts, farmers themselves bring their produce to the local market, especially in Haats during the market days, and sell Junar directly to the consumers, collectors and retailers. Likewise, traders also visit Junar farms and pay advances for Junar and bring the products directly to the market center. Different distribution systems exist. However, the most common channels are: o Farmers – Junar Associations– Department Stores – Consumers o Farmers – Junar Associations–Consumers o Farmers – Collectors– Wholesalers– Retailers – Consumers o Farmers –Retailers – Consumers o Farmers –Consumers
The Junar Association is promoting the grading and packaging of Junar through the OVOP program. They sell “Grade A Junar” to Department stores in Kathmandu, Narayanghat and Lalitpur, whereas grade B Junar are sold to traders and consumers. Grade C Junar is sold to the local processing industry. Apart from this, the Association also operates mobile shops/stalls in major urban cities and towns to push the sales of Junar.
Most of the farmers sell Junar to local collectors, who are generally from the Tarai. They supply the Junar to the different market centers and sell them to the consumers through retailers, mainly by mixing Junar with Mandarin.
Junar is also marketed in Indian bordering cities, mainly through the marketing channel of producers – commission agents (India) – wholesalers (India) – retailers (India) – consumers (India). However, the volume of sales is almost negligible. Seasonal Control
For a product like Junar seasonality is an issue because domestic production is abundant and it has a short peak season (December to February); domestic supply is low at other times. The issue of seasonality is also of importance as it brings out problems and issues in several related areas, such as storage, trade and industrial use. As the price of Junar is likely to fall from December onward, many farmers, particularly the poor and small farmers, start harvesting from the October13 when the fruits are not ripe and have not achieved the color of the skin, yet farmers in Sindhuli and Ramechhap often do not receive reasonable prices within the districts. The government, particularly the MOAC has implemented several programs over the last 20 years to introduce Ramechhap and Sindhuli Junar to other districts and popularize the products. The last in the series of the MOAC program is the One Village One Product Program (OVOP) in partnership with the AEC within the approach of public-private partnership.
Pricing System
In recent years, traders and middlemen have started to procure the fruiting trees by number, health and condition of the fruit tree just after the sizes of the fruits are substantial and not likely to drop, unless major hailstones or other natural calamities occur, for the purpose of harvesting fruits as to the decision of the buyers. Most of the small farmers like this idea, but most of the semi-commercial and commercial farmers still prefer to wait until the peak season to harvest the fruits or store them for the lean season. Moreover, most of the producers still feel that they do not receive reasonable
13 Poor farmers harvest Junar early not only to protect themselves from the l effects of low prices in the peak season, but also to earn cash to resolve their daily hardships. As a result, they are sometimes forced to dispose of the fruits at much lower prices than what they may have received even in the peak season.
5 - 22 prices for their products. This has tempted them to form Junar cooperatives and Junar associations. One of the several functions carried out by Junar cooperatives is assisting their members to search and identify potential buyers and markets. This is important, as it helps the farmers negotiate with buyers and get more reasonable prices.
Figure 5.11 shows the wholesale prices of Junar at the Kalimati Market over a period of five years. As seen in this table, junar farmers got good prices in 2006/07, but the average price in 2007/08 was quite low. However, it must be noted that Kalimati figures could be misleading, as Junar sold in Kalimati Market may not always be Sindhuli and Ramechhap Junar; it might even be a type of sweet orange called Mosam imported from India.
Due to the lack of markets during the peak season, the Junar association formed among the members of Junar cooperatives, sometimes, bring truckloads of Junar from Sindhuli and sell them on the street directly from the trucks.
Such practices are common to all agricultural products but seem to be much more so in the case of fruits. Thus, farm-gate prices are about one-fifth to one-sixth of the retail prices. High transportation cost is obviously a key factor behind the large gap, but there could be other factors that are not well known, such as lack of market integration and non-competitive market structures. Across time, both wholesale and retail prices are known to be almost twice as high in the lean season then in the peak season. This is indicative of problems in a number of areas, notably a lack of trading opportunities, storage and facilities of processing of fruits into other products.
Price in Rs./kg Min. Price 80 Max. Price Avg. Price 70 70 60 62.09 50 42 45 40 30 27.79 23.81 40 20 20 14 15.44 10 12 13 0 2004/05 2005/06 2006/07 2007/08 2008/09 Year
Source: Kalimati Market
Figure 5.11 Wholesale Prices of Junar in Kalimati Market
Grading and Packing
Due to the lack of knowledge and marketing skills, most farmers rarely practice any grading. They pack fruits of all shapes and sizes in Dokos (bamboo baskets) or even in sacks and carry them to markets like potatoes. However, in recent years, the level of knowledge among farmers with respect to grading and packing has increased. They have become aware of keeping a small portion of the fruit stalk to increase the storage capacity of the fruits at room temperature and to pack in plastic crates. But grading and packing is still poor, and branding is also poorly practiced. For selling Junar produced in markets, traders will need to prove that these are Sindhuli Junar. As stated earlier, the MOAC has been implementing the OVOP program in Sindhuli and Ramechhap for the last four years to promote commercial farming and marketing of Junar. Although the program has not yet been evaluated, the impacts of this program on quality and branding are not known
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(4) Milk
Production
Milk is one of the most important livestock products for the Nepalese people not only because livestock is an integral part of the Nepalese farming system, but also because its contribution to Agriculture Gross Development is about 25 percent14. The contribution of the dairy sector to the national GDP is estimated at 8 percent. According to the ABPSD/MOAC, there are about 0.9 million milking cows and more than 1 million buffaloes in Nepal. Table 5.11 below shows the number and productivity of milk animals in Nepal and the five survey districts. Of the total milk produced in Nepal, the share of buffalo milk is greater than 66 percent. Per capita consumption of milk is estimated at 47 liters per year.
Table 5.11 Number of Milk Animals, Production and Productivity in the SRC Districts Average yield/animal No. of milk animals Production (MT/year) (kg/year) District Cow Buffalo Cow Buffalo Total milk milk Total Cow Buffalo Total Dolakha 10,773 9,800 20,573 5,100 8,034 13,134 473.4 819.8 638.4 Ramechhap 8,190 13,950 22,140 3,300 13,082 16,382 402.9 937.8 739.9 Kavre 21,652 59,550 81,202 11,500 60,600 72,100 531.1 1017.6 887.9 Sindhuli 11,615 14,862 26,477 4,600 12,149 16,749 396.0 817.5 632.6 Mahottari 7,429 12,998 20,427 4,115 16,250 20,365 553.9 1250.2 997.0 Total 59,659 111,160 170,819 28,615 110,115 138,730 479.6 990.6 812.1 Nepal 915,411 1,158,300 2,073,711 400,950 987,780 1,388,730 438.0 852.8 669.7 Source: Statistical Information on Nepalese Agriculture, 2007/08
The above table shows that the average milk production per milk animal is higher in Kavre and Mahottari than the national average by 32.6 percent and 48.9 percent respectively. Productivity of cows and buffaloes in the five districts is around 479.6 kg/year and 990.6 MT/year respectively.
The main domestic sources of milk and milk products in the Nepalese urban markets are the Dairy Development Corporation (DDC), private dairies and dairy farmers. Establishment of the DDC, a nationally owned corporation in 1969, is considered the milestone of dairy business in Nepal. Nearly a decade later, the private sector started getting involved in the dairy-processing sector with very small-scale operations in Kathmandu. But the significant growth of the private sector occurred after the formulation of the “Ten Year Dairy Development Plan” by the GoN in 1990. The government’s plan to privatize the DDC, although it was never materialized, encouraged private sector to participate aggressively in the dairy business. The implementation of the 20 Year Agriculture Perspective Plan (APP) in 1997 has also contributed substantially to the growth of the private sector in the dairy industry15. The APP emphasized agribusiness and private sector led livestock development in the country. However, private sector involvement is mostly confined to the Katmandu valley where large private dairies are located. Today, there are more than 250 dairies (including the DDC, private sectors and cooperatives), which altogether produce more than 18 million liters of milk per day with a cash contribution of more than Rs.4500 million per year.
In many districts, the dairy farmers have organized themselves into milk producers’ cooperatives and milk producers’ associations. At present, there are more than 1,500 of such unified farmers’ organizations, which represent more than 95,000 farmer families. The average milk supply by each family is around 4 liters/day.
14 TYIP, NPC, 2008. 15 APPSP, 2008.
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These associations collect the milk from individual farmers and supply it to nearby chilling centers or processing plants. Some cooperatives have also started processing and marketing of milk from their own initiatives.
Table 5.12 shows the number of milk cooperatives in the five survey districts. This shows the dominant role of the Kavre District in milk production.
Table 5.12 Number of Milk Cooperatives in the SRC Districts
Nos. of Member Districts No. of Cooperatives Investment (Rs.) Men Women Dolakha 10 45 23 27,800 Ramechhap 1 22 10 3,200 Kavre 249 7,107 5,440 841,900 Sindhuli 6 405 221 24,759 Mahottari 5 205 346 22,300 Total 271 7,784 6,040 919,959 Nepal 1,564 59,841 31,035 28,171,000 Source : Ministry of Agriculture & Cooperative, Department of cooperative, 2064: "Statistical Description of cooperative institution of Nepal"
Milk Distribution Channels
The existing market for milk is mainly occupied by formal and informal sectors. The formal sector represents public/private dairies and milk producers’ cooperatives, whereas the informal sector refers to producers who market the milk themselves. The milk marketed by these sectors is around 10 percent and 2 percent, respectively, of the total milk production. The remaining 88 percent is either consumed domestically or processed in traditional way to make ghee, dahi, khuwa, chhurpi, etc.
Evidence shows that increased private sector investments in dairy processing and marketing has resulted in increased demand for milk. However, the excess use of imported powdered milk by the DDC (Dairy Development Corporation), as well as by private dairies is regarded as one of the causes for the stagnant price of milk.
Farmers near the urban centers and district headquarters sell milk to individual consumers and hotels whereas some of the farmers had the advantage of selling milk to the collection centers owned by the DDC or private dairies, especially in Kavre, Dolakha and Mahottari Districts.
The main distribution systems of milk marketing in the survey district can be summarized as follows:
Farmers – Consumers (households/institutions/hotel associations) Farmers – Milk Producers’ Associations/Milk Producers’ Cooperatives – Chilling Centers (DDC/Private) – Consumer Farmers – Small scale processing (ghee, cheese) – Consumers
Farmers close to the market centers generally sell milk directly to the consumers. This system is quite common throughout the survey districts, since the diary business is yet to build momentum, especially in the Sindhuli, Dolakha and Ramechhap Districts. There are some farmers who supply milk to teashops especially in the rural areas. Teashops in the urban centers usually obtain milk distributed mostly from the DDC and private dairies and to a lesser extent from milk venders. The distribution system for milk in the SRC is illustrated in Figure 5.12 below:
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Producers
40 % 10 %
Milk Producer Association/ Small Scale Processing Cooperatives (Dairy business) 50 %
45 % 55 % 100 % DDC Private dairy
Consumers
Source: Rapid Market Appraisal, 2009
Figure 5.12 Distribution System for Milk in the Survey Districts
Milk Producers’ Associations and Cooperatives have been formed in the survey districts. These organizations are involved in the collection of milk and supply to the DDC-owned or private chilling centers. The milk is then pasteurized at the DDC and supplied to the consumer. This practice is quite common in Kavre and Mahottari Districts whereas it is still evolving in the rest of the districts.
A few Cooperatives have been processing milk and selling milk products where milk production is surplus and selling of milk directly is difficult. Dairy cooperatives in Jiri, Dolakha and Khurkot, Sindhuli produce hard cheese, cheese, butter and ghee and selling them at the local market.
Out of the total milk produced annually, more than 50 percent is consumed in the households, nearly 40 percent is converted into ghee and the remaining 10 percent enters the formal marketing or processing channels operated by the public and private sectors. Processing of dairy products in the form of ghee is undertaken in every rural household and this traditional product is usually consumed locally. Some surplus is available for export as well.
There are more than 200 private dairies and milk processors of different sizes operating in Nepal, but mostly in Kathmandu, Bhaktapur and Lalitpur. These dairies have their own arrangements of milk collection in these districts and transportation to respective milk plants.
Import of Milk Products
The Nepalese dairy industry is not very competitive. Despite a rapid growth in the establishment of private dairies in the country and expansion of the milk collection networks in more than 40 districts, Nepal is a net importer of dairy products.
Recently it was reported that the country is only self sufficient by 40 percent of processed milk. Demand for processed milk in the country is about 0.5 million liters per day while the supply is only 0.2 million liters per day, 55 percent of which is produced by DDC and 45 percent by private dairies.
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The main dairy products imported to Nepal are skimmed milk powder (SMP), butter, cheese, chhurpi, khuwa and ice creams. Condensed milks, evaporated milk, and baby foods are also imported to Nepal from different third countries and India as well. Along with the above-specified imports, it has been reported that there is unofficial importing of raw milk from India due to the price difference between raw milk in the two countries. According to the MOAC statistics, in 2006/07, Nepal imported milk products worth of Rs. 440,000,000 from India and Rs. 40,000,000 from other overseas countries. This shows that the major trading partner of Nepal with respect to milk products is India and that there is substantial scope for Nepal to increase its milk production and diversify the production of milk products. (Source: Dairy Business, News Bulletin, AEC/FNCCI Falgun 2064) Seasonality
Milk production has two seasons; flush and lean. The first half of the lactation period is a flush season in which milk is produced for five to six months while the second half is a lean season, for the next five to six months. The flush season usually starts in August/September and lasts until January/February, which means milk production increase from August/September and continues its peak production to December/January and then starts decreasing in January/February. The lean season or the low production period starts in February/March and lasts until August/September during which milk yield continues to decrease and reaches its lowest in August/September. Seasonality of milk production is related to (i) the onset of parturition (ii) the onset of monsoon and (iii) the availability of green grass. During the flush season, the lactating cows/buffaloes after parturition obtain sufficient green grasses to eat during monsoon and winter months resulting in greater milk production. During the lean season, the availability of green grass is reduced to almost zero during the autumn and summer dry months, causing the lowest milk production.
The ratio of lean to flush season production is about 1:3 in most parts of the country and 1:1.5 in areas where the feed supply is better. The seasonal breeding pattern of buffaloes and availability of green forages are the main reasons.
Pricing
As stated earlier, the retail market price of milk is controlled by the government through the Ministry of Agriculture and Cooperatives. It is said that the present price policy for fresh milk favors urban consumers. Farmers often state that the cost of production would exceed the price they get for their milk if they were to only feed their livestock on purchased feed. Lower milk prices and increasing feed costs could jeopardize the economic viability of raising livestock.
Although the private sector has dominated the milk market by occupying more than two-thirds of the market share, the sole Dairy Development Corporation (DDC) is the price setter. While the private sector wants the MOAC to take the lead in making decisions with respect to the consumers’ price of milk, the position of the DDC is that fixing of milk prices by market players is curtailing. As a result, the consumer price of milk has often increased in Nepal with the negotiation between the DDC and the private dairies after MOAC’s intervention. The role of the National Dairy Development Board (NDDB) on policy formulation and implementation, and trade regulation needs strengthening. It is said that the government policy on fixing the producer and retail prices is a major detriment to the development of the dairy industry in Nepal because prices are set under a climate of political influence with no relevance to general market conditions in Nepal or to border prices. The policy has set both the producer and retail prices effectively constraining the dairy processing industry with margins that do not reflect general business cycles or the impacts of rising costs, wages, utilities, taxes etc. A classified pricing system based on the differentiation of markets and the demand characteristics of the products will provide a better return, a larger market, or both rather than a single price for milk for all uses.
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Figure 5.13 below shows the price of milk over the last five years in Nepal. Based on the consumer price, the DDC and the private sector set the collection center (procurement) price. As collecting milk from door to door is not feasible or practical, producers, through their cooperatives or farmers’ groups, bring milk to the nearest chilling centers. For example, at present, the consumer price of a liter pasteurized milk in the market is Rs.34.00. Based on this price, the DDC and private dairies procure milk from the producers on the basis of fat percentage, which, according to producers, will come about Rs.22/ liter. As most of the producers would prefer the DDC, private dairies often pay Rs.1 or 2/ liter higher to the producers depending on their access to DDC chilling centers, regularity of production, capacity, etc. Although private dairies pay an approximately 10 percent higher price per liter of milk than the DDC, the majority of farmers cannot sell milk to the private dairies because of their limited collections centers.
Price (Rs/L)
40 34 35 30 30 24 26 25 22 22 20 15 10 5 0 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Year
Source: Dairy Development Corporation (DDC)
Figure 5.13 Price of Milk Over the Last Five Years
Packing
The common dairy products made by Nepalese processing industries are pasteurized (whole and standard) milk, yoghurt, ghee, cream, cheese, paneer, butter, ice cream, etc. Out of the total processed products, pasteurized milk is packed in flexible pouches and it accounts for more than 95 percent of the total marketed products. Products are either packed in flexible pouches or polythene packs on which the DDC and private dairies apply their labels and brands.
Quality of Milk and Milk Products
Despite the phenomenal increase in the number of dairies, many consumers still do not trust on the quality of milk (pasteurized milk) produced by the private dairies. Key market stakeholders reported that emphasis on quality improvement in the dairy industries is still not adequate.
5.5 Trader Survey
5.5.1 Purpose of Trader Survey
In addition to the market survey, the trader survey had been conducted by the JICA Study Team. The purposes of the trader survey are;
- To grasp the attitudes of traders who are mainly dealing with vegetables and fruits - To analyze the attitudes of traders by handling size, namely wholesalers or retailers - To analyze the attitudes of traders by dealing commodities - To understand the tendency of the agricultural business of traders
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- To understand the consumer attitudes recognized by traders
5.5.2 Outline of the Respondents
A total of 200 traders were surveyed from 10 markets in the eight districts that are regarded as influential markets in the SRC area. Table 5.13 below presents the name of the markets and number of traders surveyed in each market center. Traders were selected randomly during the survey period.
Table 5.13 Markets and Sample Number of the Trader Survey
S. N. District Name of Market Total Proportion 1 Dolakha Charikot Market 24 12% Jiri Market 10 5% 2 Ramechhap Ramechhap Market 20 10% 3 Kavre Panchkhal Market 15 8% 4 Sindhuli Sindhuli Market 20 10% 5 Mahottari Bardibas Vegetable Market 23 12% 6 Dhanusha Dhalkebar Market 24 12% 7 Kathmandu Kalimati Vegetable Market 20 10% Village Vegetable and Fruit Market, Baneshwor 20 10% 8 Makwanpur Hetauda Market 24 12% Total 200 100%
The number of traders surveyed varied by district, ranging from 34 in Dolakha to 15 in Kavre. The highest number of traders was surveyed from Dolakha since two market centers there were visited whereas in Kavre, the market operation is seasonal and very few traders are to be found, as mainly retailers and wholesalers come there to purchase agriculture produce.
Table 5.14 presents the sexes and ages of the respondents (traders) by district. Of the total traders surveyed, 57 were female and the rest were male. The highest number of female traders was surveyed in Dolakha and none in Kavre. In Dolakha, most of the women were operating small shops along the road-side or selling fruits and vegetables in their grocery shops, whereas in Kavre, most of the men come to buy agriculture produce from nearby markets, such as Banepa and Baneshwor, for retailing.
Table 5.14 Sexes and Ages of the Respondents (Traders) by District
Number of Respondents Ages of Respondents (Years) S. N. District Male Female Total Male Female average 1 Dolakha 14 20 34 39.1 30.8 34.2 2 Ramechhap 10 10 20 45.0 37.4 41.2 3 Kavre 15 0 15 37.3 - 37.3 4 Sindhuli 14 6 20 34.5 41.7 36.7 5 Mahottari 17 6 23 35.4 34.2 35.1 6 Dhanusha 23 1 24 34.2 30.0 34.0 7 Kathmandu 34 6 40 33.5 27.5 32.6 8 Makwanpur 16 8 24 39.3 35.4 38.0 Total 143 57 200 36.3 33.7 35.6 Source: Trader Survey 2009
The average age of the respondent was 35.6 years old, varying from 41.2 years in Ramechhap to 32.6 years in Kathmandu. The average age of male traders was 36.3 years ranging from 45.0 years in Ramechhap to 34.2 years in Dhanusha. The average age of female traders was 33.7 years varying from 27.5 years in Kathmandu to 41.7 years in Sindhuli.
Table 5.15 presents the castes, sexes and ages of the respondents. Nearly two-thirds of the traders were from Brahmin/Chhetri and Janajati caste groups followed by Madhesi, Dalit and others. This
5 - 29 situation remains similar among the male and female respondents.
Table 5.15 Castes, Sexes and Ages of the Respondents (Traders)
Number of Respondents Average Age (Years) S. N. Caste Male Female Total Male Female Average 1 Brahmin/Chhetri 46 20 66 36.9 30.9 35.1 2 Janajati 36 28 64 36.8 33.5 35.3 3 Madhesi 52 5 57 34.5 38.0 34.8 4 Dalit 5 3 8 38.4 49.3 42.5 5 Other 4 1 5 46.8 30.0 43.4 Total 143 57 200 36.3 33.7 35.6 Source: Trader Survey 2009
5.5.3 Features by Business Transaction Types
There are many types of traders in the survey districts. The Study Team categorized them into three types depending on the transaction types: 1) wholesale only, 2) both wholesale and retail and 3) retail only. The various overviews were studied based on those transaction types. Table 5.16 indicates the number of wholesalers and retailers. Of the total respondents, the largest number was involved in retailing (47.0%) followed by both (32.5%) and wholesaling (20.5%). It was not easy to find traders engaged in wholesaling only in local markets, therefore their number is lower than retailers.
Table 5.16 Sampled Traders by Transaction Types
Type of trader Number Proportion Wholesale, Retail, 21% Wholesale 41 20.5% 46% Both, 33% Wholesale & Retail 65 32.5% Retail 94 47.0%
Total 200 100.0% Source: Trader Survey 2009
Many traders are from the Brahmin/Chhetri caste group, followed by Janajati and Madhesi. Very few Dalit and other caste groups were involved in trading. This situation remains similar among all three types of business activity.
Table 5.17 presents the castes of the traders. Among the different caste groups, the Brahmin/Chhetri caste (46.3%) dominated in wholesaling followed by Janajati (24.4%), Madhesi (19.5%) and Dalit and other (4.9% each). It looks as though Brahmin/Chhatri handled larger business than the others; however the Dalit is not always to be excluded from the big deal.
Table 5.17 Caste of Traders Unit: Percent Brahmin/ Type of trader Janajati Madhesi Dalit Other Total Chhetri Wholesale 46.3 24.4 19.5 4.9 4.9 100.0 Wholesale & Retail 32.3 33.8 32.3 1.5 0.0 100.0 Retail 27.7 34.0 29.8 5.3 3.2 100.0 Total 33.0 32.0 28.5 4.0 2.5 100.0 Source: Trader Survey 2009
Traders operates their shops in three types of places: (a) inside the market center, (b) both inside and outside the market center, and (c) outside but near the market center, mainly on the road-side or in rented stalls. As shown in Table 5.18, wholesalers tend to settle the fixed inside place for trading and retailers tend to do their business outside. Wholesale outside means using an open space of markets or selling goods on tracks.
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Table 5.18 Positions of Shops and/or Stalls Unit: Percent Type of trader Inside Both Outside Total Wholesale 63.4 12.2 24.4 100.0 Wholesale & Retail 73.8 9.2 16.9 100.0 Retail 58.5 7.4 34.0 100.0 Total 64.5 9.0 26.5 100.0 Source: Trader Survey 2009
Three categories of tenancy were observed: (a) own shop, (b) tenant, and (c) road side vendors/shops. Table 5.19 presents ownership or tenancy of the shops/stalls. A large majority of the traders (85.0%) were tenants, most of them having rented shops either on a daily basis (43.5%) or monthly basis (41.0%). This is mainly because most of the markets’ operations are weekly and seasonal. Very few traders (8.0%) have their own shops ranging from the lowest of 3.1 percent among traders doing both wholesaling and retailing to 14.6 percent doing wholesalers. The retailers are operating their businesses mainly from roadsides whereas wholesaling only and both wholesaling and retailing from roadsides are very minimal.
Table 5.19 Ownership and/or Tenancy of Shops/Stalls Unit: Percent Tenant Type of trader Own Road Total Yearly Monthly Daily Wholesale 14.6 2.4 53.7 26.8 2.4 100.0 Wholesale & Retail 3.1 0.0 43.1 52.3 1.5 100.0 Retail 8.5 0.0 34.0 44.7 12.8 100.0 Total 8.0 0.5 41.0 43.5 7.0 100.0 Source: Trader Survey 2009
Table 5.20 describes the number of days in a week on which the traders do business. It was revealed that 82.9 percent of wholesalers sold agricultural produce almost every day (6-7 days/week). More than half of the retailers also operated every day, but 41.4 percent of them, seem to prefer a part-time business.
Table 5.20 Period of Business Unit: Percent Type of trader 6-7 days/week 4-5 days/week 2-3 days/week Once a week Total Wholesale 82.9 2.4 14.6 0.0 100.0 Wholesale & Retail 64.6 3.1 26.2 6.2 100.0 Retail 55.3 3.2 22.3 19.1 100.0 Total 64.0 3.0 22.0 11.0 100.0 Source: Trader Survey 2009
As shown in Table 5.21, very few traders (15.5%) have established shops/stalls elsewhere, i.e., other than in the surveyed markets. Less than one-fourth of traders (23.1%) engaged in both wholesaling and retailing have branch shops in market places whereas such proportion is less than one-sixth among wholesalers (14.6%) and retailers (10.6%). It seems that the restructuring of the trade/commercial industry has not yet proceeded to Nepal. The trade business is very individual and traders do not enjoy enough scale merit.
Table 5.21 Branch Shops Unit: Percent Type of trader Yes No Total Wholesale 14.6 85.4 100.0 Wholesale & Retail 23.1 76.9 100.0 Retail 10.6 89.4 100.0 Total 15.5 84.5 100.0 Source: Trader Survey 2009
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As the operation of the markets is mainly seasonal and weekly, traders were asked whether they go to other places such as the rural Haats, market centers or market places to sell their agricultural produce. Table 5.22 presents the proportion of traders who travel to other places to sell their agricultural produce. It shows that 31.0 percent of all traders move from one place to another to sell agricultural produce, varying from 41.5 percent among wholesaler-retailer to 24.5 percent among retailers. Most traders dealing with both wholesale and retail are presumed to be middlemen who move around.
Table 5.22 Traders Moving to Other Places to Sell Their Agricultural Produce Unit: Percent Type of trader Yes No Total Wholesale 29.3 70.7 100.0 Wholesale & Retail 41.5 58.5 100.0 Retail 24.5 75.5 100.0 Total 31.0 69.0 100.0 Source: Trader Survey 2009
Characteristics of the traders can be grouped into two categories: (a) involved in the trading of agricultural produce only and (b) involved in production as well as trade. As shown in Table 5.23, 79.5 percent were involved in trading only, whereas the rests were involved in both production and trade. Retailers doing both were mainly small traders selling their own products along the road.
Table 5.23 Status of the Business, Trade and Produce Unit: Percent Type of trader Trade only Both produce & trade Total Wholesale 80.5 19.5 100 Wholesale & Retail 83.1 16.9 100 Retail 76.6 23.4 100 Total 79.5 20.5 100 Source: Trader Survey 2009
Table 5.24 presents the number of traders by commodities handled. Many of the surveyed traders were involved in green fresh vegetables (both seasonal and off-seasonal) followed by root crops (potato), spices (onion, ginger, garlic and chili) and fruits (seasonal). Very few surveyed traders handled live animals including meat or fish.
The majority of traders sold multiple agricultural commodities, whether wholesalers, retailers or both. For example, traders involved in grains were selling pulses as well, whereas wholesalers involved in potatoes were selling onion and garlic as well. Likewise, retailers were selling green vegetables together with potatoes and spices. When asked the reasons for this, most of the traders reported that consumers preferred to buy different commodities from the same shop/stall rather than visiting many. Wholesalers were more specialized to the specific commodities.
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Table 5.24 Number of Traders by Commodities Handled Whole- Commodity Both Retailers Total salers Frequency Grains 0 7 12 19 140 Beans 1 5 11 17 120 Root crops 10 26 37 73 100 Green fresh 28 41 61 130 80 vegetables 60 Fruits 8 13 23 44 40 Live animals 2 4 5 11 20 Fish 0 1 2 3 0 Spices 7 20 34 61 Grains Beans Root Green Fruits Live Fish Spices Total 56 117 185 358 crops veg. animals Note: Total exceeds the number of respondents belonging to each category due to multiple responses Source: Trader Survey 2009
Table 5.25 shows the origin of the commodities handles by traders. Over one-third (34.3%) of the produce sold is of local origin, followed by products from other parts of Nepal (22.9%), India (18.8%), adjoining districts (15.8%) and China (8.1 %). Local products dominate the sale among traders of all categories. Domestic agricultural production makes up the majority of transactions but some specific fruits and root crops are dominated by Indian or Chinese ones.
Table 5.25 Proportion of Origin of Commodities Sold Unit: Percent Adjoining Nepal in Type of trader Local India China Other Total districts other parts Wholesale 35.5 12.2 16.7 22.9 12.7 0.1 100.0 Wholesale & 30.4 23.5 33.0 12.1 0.8 0.2 100.0 Retail Retail 38.0 15.2 29.614.7 2.4 0.0 100.0 Overall 34.3 15.8 22.9 18.8 8.1 0.1 100.0 Source: Trader Survey 2009
5.5.4 Sales and Costs of Traders
The average monthly sales of a wholesaler was Rs.900,488 and the standard deviation is Rs.804,884. As seen from Figure 5.14, data is scattered. The maximal value was Rs.4,500,000 for the traders dealing with imported fruits at the Kalimati Market, Kathmandu. The median of the sales from wholesaling was Rs.700,000.
The average monthly sales of traders doing both wholesaling and retailing was Rs.274,935 and the median was Rs.200,000.
In terms of the retailers, the average monthly sales was the smallest, Rs. 75,360 and the median sales is being Rs.34,000.
The overall average monthly sales was Rs.309,373 and the median was Rs.93,000.
Although the average is not always representative of the sales, the following analysis of the sales and cost is carried out based on the averages as a matter of practical convenience.
(1) By Transaction Type
Table 5.26 presents the balance sheet of the traders by transaction types. The average monthly sale of traders was Rs 309,373 with a cost of Rs 257,536 and operation cost and profit of Rs 20,854 and
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Rs 20,983, respectively. Most of the traders do not include personnel costs in the total operation cost.
Table 5.26 Sales and Costs of Traders by Transaction Type
Monthly Average (Rs) Number (c) Type of trader of (a) (b) (d) Profit/ Operation samples Turnover Cost Price Profit capita Cost Wholesale 41 900,488751,951 63,415 85,122 51,998 Wholesale & Retail 65 274,935 230,483 17,622 26,830 16,677 Retail 94 75,36060,594 4,525 10,241 5,995 Total/ Average 200 309,373 257,536 20,854 30,983 18,897 Source: Trader Survey 2009
Turnover Figure 5.14 illustrates the monthly sales of the Wholesale traders by transaction type. 80 n =41 64 Xbar=900487.8 s =804884.16 The sizes of transactions were the highest for 48 wholesalers. Going into the wholesale business seems to have a comparatively higher entry 32 barrier than retail business but the profitability 16 potential is higher. On the other hand, the retail 0 business takes commissions for thin profit Both margin. 80 n =65 64 Xbar=274935.4 Table 5.27 presents the margin earned from the s =271915.41 48 trade by transaction type. The operation cost ratio of the traders was 6.7 percent with an added 32 margin of 20.1 percent whereas the profit margin 16 was 11.1 percent on average. Though there is not 0 much difference in operation cost ratios among Retail those involved in wholesaling, retailing and both 80 (7.0%, 6.0% and 6.4% respectively), the added n =94 64 Xbar=75359.6 margin (24.4%) and profit margin (15.7 %) were s =121652.16 quite high among the retailers, whereas it was 48 almost the same among those involved in 32 wholesaling and both (the added margin among 16 wholesalers and both was 19.8% and 19.3% and 0 the profit margin was 10.4% and 10.8%, 0.0 300000.0 700000.0 1100000.01500000.01900000.0 respectively).
Figure 5.14 Turnover by Transaction Type
Table 5.27 Margin of Trade by Transaction Type Unit: Percent Monthly Average (Rs) Number of Type of trader samples Operation cost Added margin ratio Profit margin ratio (c/a) (a/b-1) (a/(b+c)-1) Wholesale 41 7.0 19.8 10.4 Wholesale & Retail 65 6.4 19.3 10.8 Retail 94 6.0 24.4 15.7 Total/Average 200 6.7 20.1 11.1 Source: Trader Survey 2009
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Calculating the figures above, the price is about 491percent increased from the wholesale cost price to the consumer, if the distribution system is “farmer to wholesaler, wholesaler to retailer, retailer to consumer”.
It is controversial if those margins are appropriate or not. The margins of agricultural products in developed countries are much higher than that, more than 60%. When introducing modern grading and packaging, the margins for the distribution process may increase; therefore the efficiency of the distribution process will come to be very important.
(2) By Commodities Handled
Traders dealing with different high value agricultural commodities such as root crops, vegetables, fruits and spices were selected for financial status and pricing structure analysis. Table 5.28 presents the number and proportion of traders by transaction type. Retailers dominate in all categories of products, followed by wholesaler-retailers and wholesalers.
Table 5.28 Number and Proportion of Traders by Transaction Type
Number of concerned traders Percent of traders by transaction type Type Root crops Vegetables Fruits Spices Root crops Vegetables Fruits Spices Wholesale 10 28 8 7 13.7 21.5 18.2 11.5 Both 26 41 13 20 35.6 31.5 29.5 32.8 Retail 37 61 23 34 50.7 46.9 52.3 55.7 Total 73 130 44 61 100.0 100.0 100.0 100.0 Note: Please refer to “Table 5.24: Number of Traders by Commodities Handles” Source: Trader Survey 2009
Table 5.29 presents the sales and costs of traders by type of commodities dealt with. There was no big difference in turnover, cost price, operation cost and profit among the traders dealing with different commodities. Nevertheless, profit per capita is quite high among traders involved in fruits (Rs, 24,795) followed by vegetables (NRs 19,299) and root crops (NRs 16,039) whereas it is lowest among the spices (NRs 10,993).
Table 5.29 Sales and Cost of Traders by Type of Commodities Handled
Monthly Average (Rs) Number of (c) Commodity (a) (b) (d) sample Operation Profit/ capita Turnover Cost Price Profit Cost Root crops 73 285,781 236,025 18,896 30,860 16,039 Vegetables 130 311,366 260,486 20,934 29,946 19,299 Fruits 44 349,295 286,005 24,158 39,133 24,795 Spices 61 235,852 197,813 14,354 23,685 10,993 Source: Trader Survey 2009
Table 5.30 presents the margins of the traders by types of commodities dealt with. There were no big differences in the ratio of operation cost, added margin and profit margin among the traders dealing with different types of commodities. Nevertheless, operation costs and added margin ratio were lowest in spices and highest in fruits. This is because of the degree of difficulty in handling and post harvest losses of the commodities. The fruits require careful handling but spices do not.
Moreover, the profit margin ratio was lowest in vegetables (10.6%) and highest in fruits (12.6%). Vegetables are a regular necessary food but fruits are regarded as sorts of additionally luxury food. Fruits are high-value products that can have thick margins added on.
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Table 5.30 Margins of Traders by Type of Commodities Handled
Monthly Weighted Average Margin (%) Number of Commodity sample Operation cost ratio Added margin Profit margin ratio (c/a) ratio (a/b-1) (a/(b+c)-1) Root crops 73 6.6 21.1 12.1 Vegetables 130 6.7 19.5 10.6 Fruits 44 6.9 22.1 12.6 Spices 61 6.1 19.2 11.2 Source: Trader Survey 2009
5.5.5 Tendency of the Business
The tendency of business over the last three years is discussed in terms of (a) profit, (b) sales volume, (c) prime cost, (d) transportation cost and (e) quantity. Figure 5.15 illustrates the tendency of business over the last three years.
Profit: The majority of the traders (43%) felt that their profit has remained almost the same in the last three years whereas nearly one-third (31.3%) felt that it has increased. 27 percent of the traders reported that their profit has decreased, mainly due to transportation closures and strikes. Trade volume: More than half of the traders (59%) reported that their sales volume has increased, whereas it remained about the same for nearly one-fourth of the traders (23%). Nearly one-sixth of the traders (15%) reported that their sales volume has decreased. Prime cost: When asked about the prime cost of the produce, more than nine-tenth of traders reported that it has increased, with 64 percent reporting an increase and 29 percent reporting a high increase. Transportation cost: The majority of the traders (69%) felt that their transportation cost has increased, followed by highly increased (26%). Quantity: In terms of quantity, nearly two-thirds of the traders (62%) felt that the quantity of trade, both in terms of amount as well as number of products, has increased. It remained similar for one-fifth of the traders (20%).
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Profit Sales volume
70% 70% 59% 60% 60% 50% 43% 50% 40% 40% 31% 30% 30% 23% 23% 20% 20% 15% 10% 4% 10% 0% 1% 2% 0% 0% Highly Decrease No change Increase Highly Highly Decrease No change Increase Highly decrease Increase decrease Increase
Prime cost Transportation cost
69% 70% 64% 70% 60% 60% 50% 50% 40% 40% 29% 30% 30% 26%
20% 20% 10% 7% 10% 5% 0% 1% 0% 1% 0% 0% Highly Decrease No change Increase Highly Highly Decrease No change Increase Highly decrease Increase decrease Increase
Quantity
70% 63% 60%
50% 40% 30% 20% 20% 8% 9% 10% 2% 0% Highly Decrease No change Increase Highly decrease Increase
Source: Trader Survey 2009
Figure 5.15 Tendency of Business in Last Three years
Traders adopt different mechanisms of pricing. Table 5.31 presents the traders’ decision-making factors in pricing and their degrees of importance. As shown in the Table, the number one priority factor which influences the traders’ pricing of produce was the purchasing price.
Quality was regarded as the second most important factor after pricing. Official grading or standards are not available in Nepal and traders evaluate the qualities of produce based on their experiences. Time was the third decision-making factor, since freshness is very important in selling agricultural produce.
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Table 5.31 Pricing Factors and Their Priority
Response 1st 2nd 3rd I don't make a decision (consignment) 12.0 1.5 0.5 Buying price 72.5 6.5 5.0 Consumers’ habits 1.0 4.0 15.0 Time/season 3.5 19.5 49.5 Quality 6.5 59.5 18.0 Supply 4.5 6.0 6.0 Origin of the product 0.0 3.0 6.0 100.0 100.0 100.0 Source: Trader Survey 2009
5.5.6 Consumers’ Attitudes
The Study Team asked the sampled 200 traders to select, from their viewpoints, three factors that consumers might weigh heavily when purchasing a product. Most traders recognized that consumers place great importance on the quality of the product (92%), followed by price (80.0%), mutual trust between buyers and sellers (32.0%), location of shop (27.0%) and the trader’s volume of handling (20.0%) as illustrated in Figure 5.16.
Traders assume that consumers are more focused on quality than price. However, they did not suspect that such awareness of quality might extend to concerns over the use of pesticide or degree of chemical use.
% 100 92.0 90 80.0 80 70 60 50 40 32.0 27.0 30 20.0 20 11.5 10.5 9.5 9.5 7.0 10 1.0 0.0 0.0 0 Price … Credit Quality Grading Rich handling supply Volume of of Volume Locationof (home (home Store/Shop services Mutual trust trust Mutual Packaging/ assortments appearances Regularity of of Regularity assortments) Timing(stable (Trader/Cons… Add'l ServicesAdd'l Transportation
Source: Trader Survey 2009
Figure 5.16 Key Points of Selling Commodities to Consumers
5.5.7 Suppliers’ Attitudes
Table 5.32 presents the suppliers’ status, based on the traders’ answers to the question “From whom do you buy your commodities?” Of the total cost price, four-tenths of the agricultural produce (40.5%) were purchased from wholesalers at markets or collection points, followed by from wholesalers who come to sell regularly (19.6%), direct from farmers on the farm (18.0%) and from farmers who come to sell at the shops (17.9%). Self-production was almost negligible (4%). Around 40 percent of the produce was supplied directory from producers and 60 percent from other traders.
With regard to the proportion of traders, nearly half (48.0%) bought agricultural produce from
5 - 38 wholesalers at markets or collection points, followed by direct from farmers at the shops (15.2%), direct from farmers on the farm and self-production (13.6% each). The ratio of purchasing from other traders is still high.
Table 5.32 Suppliers Status Unit: Percent Supplier Proportion in cost Proportion in traders Self-production 4.0 13.6 Farmers (purchased on the farm) 18.0 13.6 Farmers (purchased at the shops from farmers who come to sell) 17.9 15.2 Wholesalers (purchased at markets/collection points) 40.5 48.0 Wholesalers (purchased from wholesalers coming to sell regularly) 19.6 9.7 Total 100.0 100.0 Source: Trader Survey 2009
Figure 5.17 illustrates the traders’ answers to the question, “How often do you change your supplier?” More than two-thirds of the traders (70.5 %) reported that they change their suppliers often. This situation remains similar in all categories of the traders: however, the percentage of the traders who change suppliers either sometimes or often is high among retailers, followed by wholesaler-retailers and wholesalers. The wholesalers’ supply chain management seems to be more matured than that of retailers.
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Wholesal Both Retailer Overall er Never 24.4% 18.5% 14.9% 18.0% Sometimes 14.6% 15.4% 7.4% 11.5% Often 61.0% 66.2% 77.7% 70.5%
Source: Trader Survey 2009
Figure 5.17 Percent of Traders Changing Suppliers
The Study Team asked the sampled traders their opinions in selecting the suppliers, giving them the same list of factors shown for the previous question on consumers’ attitudes. Since there were 15 traders who only sold their own products, the number of valid responses was 185 in total.
Figure 5.18 summarizes the key points which the traders consider, while purchasing commodities from their suppliers. The majority of the traders placed high importance on the quality of the products (90.8%), followed by price (63.8%), mutual trust (44.3%), credit (33.5%) and transportation services (22.2%). Their priorities in selecting suppliers were similar to their ideas of the consumers’ priorities in selecting traders, but some differences were observed. Price was ranked lower than when asked about the consumers’ priorities, while mutual trust was ranked higher. Among the traders, credit, transportation services and packaging for handling was considered important. Awareness of the importance of building a network based on mutual trust is the sign of development of the supply chain. Introducing efficient supply chain management could be an issue to be considered.
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% 100 90.8 90 80 70 63.8 60 50 44.3 40 33.5 30 22.2 20 13.0 9.2 10.8 5.9 3.2 10 1.6 0.5 0.0 0 … Price Credit Quality Grading Rich handling supply Additional Volume of of Volume services services Locationof services Store/Shop Packaging/ assortments appearances Regularity of of Regularity assortments) Timing(stable Mutual Trust Trust Mutual Transportation Supplier/Trader Source: Trader Survey 2009
Figure 5.18 Key Points of Purchasing Commodities from Suppliers
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CHAP. 6 DEVELOPMENT POTENTIALS AND CONSTRAINTS
This chapter provides development potentials and constraints identified based on the results of study and discussions with stakeholders in the previous chapters, that indicate the current situation of target districts in terms of infrastructure, agriculture produce, household livelihoods, organizations, marketing and so on.
This chapter is organized into four sections. Section 6.1 discusses geographical conditions of the SRC area by zoning and positioning. Section 6.2 discusses agricultural potentials and constraints in the SRC area. Section 6.3 presents focal points for agriculture and rural development and the Study Team’s assessment on the present conditions. Section 6.4 reports the effects of the Sindhuli Road so far clarified.
6.1 Procedure of Compilation on Potentials and Constraints
The Study Team has carried out data collection, field observations, sample surveys and discussions with stakeholders. Through the study, potentials and constraints were identified. The Study Team compiled the potentials and constraints in this chapter in order to formulate an appropriate development program. Figure 6.1 illustrates the position of Chapter 6, which consists of three main components: “6.1 Evaluation of Geological Conditions by Zoning & Positioning,” “6.2 Agricultural Potential and Constraints” and “6.3 Focal Points for Agriculture and Rural Development and their Assessment.”
Chap. 6
Chap.1 -Chap.5 Zoning Potentials & Constraints
Current Situation Surveys Topography Agriculture Farming -Physiological map -Food security -(Geology map) -High-value crops Climate Farm Economy Existing Data -Precipitation map -Agriculture balance sheet -(Temperature) -Evaluation of profitability by items Household Survey Geography Commercialization of Agriculture -Administrative boundaries -Potential commercial crops -Road conditions -Constraints of marketing Marketing Survey -Population density by VDCs Development staffs -Poverty level Field Survey Positioning Discussion with Chap. 7 Stakeholders Correlations among factors -Land size and income -Distance time and income 1. Specific Issues Qualitative analysis -(Irrigation and income) 2. Prioritization of Specific Quantitative analysis -etc. Issues 3. Cooperation Activities 4. Focal Points JICA’s Development Objectives Chart
Figure 6.1 Position of Chapter 6
6 - 1
6.2 Evaluation of Geographical Conditions by Zoning and Positioning
The natural conditions of Nepal vary significantly depending on location and altitude. These conditions, such as topographic conditions, rainfall, soil, slope, population and so on should be taken into account when considering development projects, particularly in agricultural projects for each target area.
Based on the existing data, the JICA Study Team compiled zoning maps in accordance with the following aspects on each district or other definitions in the area:
(1) Physiographic zoning (2) Precipitation zoning (3) Population distribution on each VDC (4) Poverty level
Temperatures and geological conditions were not analyzed in this Study.
6.2.1 Physiographic Zoning
The Sindhuli Road Corridor (SRC) area is divided into three zones depending on the physiographic conditions in accordance with the Nepal Atlas and Statistics, 2008, mainly in altitude, which is also related to temperature. The three zones are (1) Mountain (above 2,000 m), (2) Hill (from 1,000 m to 2,000 m) and (3) Tarai (below 1,000 m). Climatic zones, vegetation and agricultural practices differ in each zone.
Zoning of districts is not strictly followed by altitude, since altitude varies widely following river traces. However, each district is sorted in one zone. The objective five districts are sorted as follows:
(1) Mountain Zone – Dolakha and Ramechhap Districts (2) Hill Zone – Kavre and Sindhuli Districts (3) Tarai – Mahottari District
Characteristics of the physiographic zones and the climatic zoning are summarized in Table 6.1, and the specific issues and potentials of each zone are summarized in Table 6.2.
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Table 6.1 Characteristics of Climatic Zones in the SRC Area
Typical Physiographic Climatic Altitude Present Agriculture and Livestock Vegetation Area in Corridor zoning Zoning (M) Products (Fruit Tree)
Extreme Northern Part of Nil Livestock (Yak, Sheep, Goat, etc.) Dolakha and Ramechhap Temparate 4500 above Mountain Zone Wheat, Buckwheat, Potato, Naked Barley, Northern Part of Dolakha Apple Millet, Maize and Livestock (Cow, 2500 above and Ramechhap Buffalo, Pig, Goat) 2000 above Southern Part of Dolakha Wheat, Potato, M illet, M aize, Tea, Pulse, Pear, and Ramechhap, whole Vegetables, Oilseeds, Pear, Persimmon and Persimmon Kavre and Northern Part of Sub-Tropical Livestock (Cow, Buffalo, Pig, Goat) Hill Sindhuli Zone 1500 above Paddy, Wheat, M aize, Potato, Pulses, Citrus including Oilseeds, Vegetables, Junar, Citrus, and Southern part of Sindhuli Junar Livestock (Cow, Buffalo, Pig, Goat) and northern most of 1000 above Mahottari Innner Tarai 500 above Paddy, Wheat, Sugarcane, Potato, 500 below Mango, Banana, Vegetables, Mango, Pineapple, Banana, Tropical Zone Tarai Lichee Fish & Livestock (Cow, Buffalo and Most Part of Mahottari Goat)
Source: Prepared by the Study Team refering to the Table prepared by M r. M iki, JICA, Nepal Atlas and Staistics revised edition 2008 and other Data collected by the Study Team.
Table 6.2 Specific Potentials and Constraints of Climatic Zones in the SRC Area
Physio- Climatic Altitude Potential grap hic Present Issues & Constraints Development Potentials Improvement Zoning (M) Crops/Commodities zoning
4500 above 1. Livestock breed improvement Temparate 1. Shortage of piglet and calf 1. Seed Potato 1. High potential of livestock especially program; Artificial insemination to be Zone 2. Degradation of grazing land and Mountain 2. Pig & Milk for pig and yak cheese production, and wool increased shortages of fodder processing production. 2. Farmer breeder to be brought up 3. Lack of aqua-culture knowledgeand 3. Rainbow trout 2. Rainbow trout can be cultured in the 3. Fodder tree to be planted on slope 2500 above facilities 4. Vegetables area. 4. Aqua-culture technology with hatchery to be introduced. 2000 above 1. Too much application of chemical 1. Dissemination of organic manure 1. Use of chemical fertilizer shall be fertilizer production and application skill for HVC 1. Potato & Vegetables discouraged and organic manure 2. Skill improvement of vegetable 2. Technical inputs for tea plantation 2. Tea encouraged. cultivation with marketing management & processing 3. Pear & Persimmon 2. Tea production potential is high. Hill 3. Lack of tea processing technology 3. Sapling production of pear and 4. Milk 3. Area of pear & persimmon can be 4. Poor dissemination of Pear & persimmonto be increased with focus on increased. Persimmon extension and marketing services. Sub-Tropical 1500 above Zone 1. Junar area, production and profit could be increased as transportation is 1. Private producer of Junar sapling shall 1. Lack of Junar sapling production improved. be brought up. 2. Skill improvement of vegetable 1. Junar 2. High demands of highland organic 2. Prices of Junar could be increased by cultivation with marketing 2. Vegetables coffee in Jpan and other European improving post harvest skill. Innner 3. Poor post harvest technology 3. Coffee countries 3. Oportunities exist for the production Tarai 3. Opportunity increased to market of high land organic coffeee coffee products to Kathmandu and Tarai due to the Sindhuli Road. 1000 above 1. Low productivity and stagnation 1. Skill improvement of paddy 500 above of Paddy 1. Tropical Fruits 1. Increase of paddy production cultivation 500 below 2. No realization of potentials of Tropical 2. Paddy 2. Increase of tropical fruit production 2. Investment for orchard development tropical fruits production (mango, Zone 3. Sugarcane 3. Increase of sugercane production and improvement Tarai lichee, banana, papaya, pineapple, 4. Fish (Carp) 4. Increase of fish production 3. Improvement of hatchery and fish etc.) culture technology 3. Lack of pond for fish culture
Source: Prepared by the Study Team refering to the Table prepared by M r. M iki, JICA, Nepal Atlas and Staistics revised edition 2008 and other Data collected by the Study Team.
Figure 6.2 illustrates the physiographic zones of the Central Region and Eastern Region. As shown in the Figure, the SRC crosses from the Mountain area to the Tarai area, namely the altitude varies from above 2,000 m to below 500 m. Furthermore, the target districts stretch over the temperate,
6 - 3 sub-tropical and tropical zones.
It is notable that the Mahabharat mountain range is located between the Tarai plain and the Himalayan range, and the river basins are extended by avoiding the Mahabharat mountain range. This causes complex climates in the target districts. Altitude and river basins in the SRC area should be taken into consideration for promoting the appropriate agricultural produces. It is desirable to have a geology map to consider the soil conditions as well.
Figure 6.2 Physiographic Zoning of the Central and Eastern Regions
6.2.2 Precipitation Zoning
The precipitation zoning is illustrated in Figure 6.3. The wet monsoon air is affected by complex topography such as the Mahabharat mountain range and the Himalayan mountain range (refer to Figure 6.2). The rainfall in the SRC varies in relation to the Mahabharat mountain range and rivers.
Figure 6.3 Precipitation Zoning Map of the Central and Eastern Regions
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The area suitable for Junar production may be assumed to be a lower precipitation pocket, which is around 1,200 mm to 1,400 mm of rainfall, along the Sun Koshi River covering Sindhuli and Ramechhap districts. The dry air and cool temperature at the Mahabharat range make the citrus sweet. Chilies are supposed to be of good quality in this area too.
On the other hand, the over 2,000 mm rainfall of Jiri in Dolakha is good for tea plantation as well as in the Ilam district, which is famous for tea production. Cooperatives and private firms in Jiri have started planting tea in recent years and have been making an effort to create an Ilam brand tea.
Rainfall should be taken into account when promoting agricultural produce. Temperature and other climate issues should be studied further in the future.
6.2.3 Population Distribution in VDCs
Population distribution is significant when considering the market availability — which areas could have potential consumer markets or transit markets and what could be the size of the markets. Figure 6.4 shows the population density of the Central Region and Eastern Region on the VDC basis.
The SRC seems to be a low population density area. Low population density is caused by the physiographic condition and water availability. Hill people tend to move to the Tarai or Kathmandu to get jobs.
Regarding the markets for agricultural produce, most people in Sindhuli and Ramechhap cultivate crops for the purpose of self-consumption. Farmers in Kavre and Dolakha dispatch vegetables and potatoes to the Kathmandu Valley and farmers in Mahottari have been marketing the crops to the Tarai plain and India. Access to consumers’ markets with a large population is one of the important issues to consider in the marketing of agriculture products.
Figure 6.4 Population Density of the Central and Eastern Regions by VDC
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6.2.4 Poverty Level of the Survey Area
The stage of development in the target area should be taken into account for program formulation. Each individual project in a development program should suit the needs of the people. In other words, the projects should be formulated in accordance with the stage of development in the areas and the attitudes of individual farmers. Figure 6.5 shows the poverty ratio1 on a district basis in Nepal depending on food availability periods over a year.
Figure 6.5 Incidence of Poverty in Nepal
The average annual HH income in each district is shown in Table 4.29 according to the HH survey. Kavre is the highest at Rs.124,974, followed by Dolakha at Rs.110,218, Mahottari at Rs.99,693, Ramechhap at Rs.90,926 and the lowest in Sindhuli at Rs.75,801.
Poverty incidence of each district in the SRC area is shown in Table 6.3.
Table 6.3 Poverty Incidence in Each District Unit: % SRC National District Dolakha Ramechhap Kavre Sindhuli Mahottari Average Average CBS/WFP/WB 2006 33.6 48.0 35.1 60.3 29.1 41.2 33.5 Household Survey, 2009 38.4 54.7 33.9 58.9 41.1 45.3 - Source: CBS/WFP/WB 2006 and HH Survey, 2009
The numbers on the second line of the table indicate the percentage of HHs whose annual income is below Rs.10,782, which is the poverty line based on the total annual HH consumption per capita. The amount is derived by adopting the poverty line at Rs.8,069.6 per person in 2003/042 in Rural Eastern Hill and the inflation rate between 2003/04 and 2007/083.
The above data show that the incidence of poverty in the Sindhuli district is extremely high, and
1 Poverty Ratio is the ratio of households below the poverty line, which is defined in the document “Poverty Trends in Nepal (1995-96 and 2003-04) published by CBS in Sep. 2005. 2 Source: Poverty Trend in Nepal (1995-96 and 2003-04), CBS, Sep. 2005 3 Urban consumer price index in the Hill region in 2003/04 was 156.6 and that in 2006/07 was 188.2 (Statistical Year Book 2007, CBS). The same inflation trend was applied to estimate the index in 2008/09.
6 - 6 that of the Ramechhap district is much higher than the national average. That of the Dolakha and the Kavre districts is almost the same as the national average and that of the Mahottari district is a little lower than the national average in the CBS/WFP/WB data.
Table 6.4 shows the average number of family members and the poverty line of HHs, adopting the above Rs.10,782 poverty line of per capita and median HH income as discussed Section 4.3.4 (1).
Table 6.4 Poverty Line and Median HH Incomes
Description Unit Dolakha Ramechhap Kavre Sindhuli Mahottari Overall Family Members Nos. 6.3 6.9 6.7 6.5 7.0 6.7 Poverty Line of HH Rs. 67,422 74,395 72,239 70,083 75,474 72,239 Median HH Income Rs. 80,000 61,300 80,000 53,000 75,000 72,000 Source: Prepared by Study Team based on HH Survey 2009
The above table shows that more than 50 percent of HHs in Mahottari, Sindhuli and Ramechhap, as well as of all HHs in the five districts are below poverty line.
The SRC area, especially the Sindhuli and Ramechhap districts, is defined as one of the poorer areas in Nepal and it is appropriate to provide assistances under the JICA cooperation schemes to uplift the livelihoods of the people in the area.
6.2.5 Positioning of the Households by Various Factors
As discussed above, income level is one of the indicators used to grasp the present conditions of the target areas and even target farmers, and the income level is related to sales of agricultural products. In order to come up with potentials and constraints, the hypotheses below were discussed based on the field survey, the HH survey and stakeholders’ interviews.
Hypothesis 1: Distance to town “market” affects sales of agricultural products. Hypothesis 2: Cultivated land size affects sales of agricultural products. Hypothesis 3: Irrigation availability affects agricultural products. Hypothesis 4: Items of agricultural produce influence sales of agricultural products. Hypothesis 5: Education level influences sales of agricultural products. Hypothesis 6: Other factors
The Study Team tried to verify the above hypotheses as described below.
Distance to Market
Hypothesis 1: Distance to Market
During the observation trip to the sites, the Study Team met farmers who insisted that the road conditions and shortage of transportation means had discouraged them from accessing the market. Reviewing the results of the HH survey shown in Figure 4.18 in Chapter 4, the degree of satisfaction is lowest in Sindhuli and Ramechhap, where there is a lower level of agricultural turnover as described in Table 4.29. In other words, the road conditions, as well as the distance to the town and market could contribute to discouraging agricultural business.
A “t-test” of the averages of two groups was carried out (refer to Table 6.5). Group A is comprised of households that can access the market in less than 60 minutes and Group B has an access time to market of more than 60 minutes. The hypothesis, “the agricultural sale of group A, which is closer to the market, is higher, at Rs.34,535, than that of group B, at Rs.22,810” is statistically significant within 1 percent, according to Welch’s t-test. In other words, the statistical data verified the positive difference between groups A and B.
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Table 6.5 Basic Statistics of Sales (in Rs.) by Time to Market
Number Standard Group Description Min Max Median Average of Data Deviation A <=60min 763 0 620,000 17,500 34,535 55614.51 B 60min < 203 0 422,011 10,000 22,810 40124.58 Source: Prepared by the Study Team based on the HH Survey 2009
If it is true that market access time affects agricultural sales, then can Hypothesis 1, “Distance to town market affects sales of agricultural products,” be verified? In other words, is the correlation between distance and agricultural sales statistically significant as well?
Figure 6.6 illustrates the correlation between distance and sales of agriculture products. The tendency can be observed that households located a short distance from markets have an advantage in agricultural sales. However, the coefficient of correlation is close to zero, at -0.096, which indicates there is no relation between distance and sales. There are many households who do not make use of the advantages of accessibility to sell agricultural produce. They have the potential to raise their sales to the level of advanced farmers such as No. 43 and No. 40 in Kavre and No. 368 and No. 328 in Dolakha. Those farmers are producing mainly potato and cauliflower.
On the other hand, there are some farmers living in disadvantageous places who have higher sales. Household No. 619 in the Figure below is a chili producer living in Ramechhap. This exception is a good example to break down the hypotheses.
The data analysis carried out is illustrated in Figure 6.6.
NRs/year 800000 X =(min) Y=(NRs/year)
43 Variable Distance to Annual A 600000 Town Agricultural g Sales r 368 i Number of 966 966 619 400000 40 Data s a 328 Average 51.4 32,071 l e Standard 41.50 52935.6 s 200000 Deviation Correlation -0.096
0 0 50 100 150 200 mi n t o t o wn minute
Source: HH survey 2009
Figure 6.6 Scatter Chart of HHs in Agriculture Sales and Distance to Town
Hypothesis 2: Cultivation Extent
The distance to market could influence the agricultural sales volume but the simple regression analysis indicated that distance is not the only the factor that influences agricultural sales. The Study Team focused on another potential factor, “land size,” because the average land sizes are smaller in the poorer districts of Sindhuli and Ramechhap as shown in Table 4.10. Smaller land size may be one of the barriers to agricultural business.
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The correlation between cultivated land size and agriculture sales is positive but still very low, at +0.350 points and the contribution ratio is 0.122. This indicates that other factors, such as landscape, soil quality, irrigation and so on, may also affect productivity.
Formula 1 is the simple regression equation and Figure 6.7 illustrates the scatter diagram.
Y=a+bX; Y=annual agricultural sales, X=total land size ...... Formula 1
Y=14,891.191+23,475.891X ...... Model 1
NRs/year 800000 Overall Index (5 districts)
X =(ha) Y=(NRs/year) 43 600000 Annual agricultural A Variable Land size g sales 368 r Number of Data 966 966 i 619 400000 40 Average 0.7318 32,071 s a 328 Standard l 0.78859 52935.6 e Deviation s Correlation 0.350 200000 Regression equation: Y=14,891.191+23,475.891X
0 0 2 4 6 8 10 ha Land size Source: HH Survey 2009
Figure 6.7 Scatter Chart of HHs in Agriculture Sales and Land Size
Sample No. 619 in Ramechhap, referred to above, has a land size of less than 1 ha and yet appears to be highly productive according to its position in Figure 6.7. Households No. 40 and No. 43 are in Kavre, producing mainly potatoes. No. 368 and No. 328 are samples from Dolakha. Those profitable farmers’ land sizes are not especially large compared to the others.
Figure 6.8 illustrates the same scatter diagrams but classified by district. It is observed that the agricultural sales in Mahottari have relatively high correlation coefficients with cultivated land size. The natural conditions of most farmland in the Mahottari district are rather similar; therefore the cultivated land size would be more influential to agriculture sales.
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NRs./year Dolakha Ramechhap Kavre 800000 n=198 n=192 n=192 r=0.269 r=0.035 r=0.217 600000
400000
200000
0 Sindhuli Mahottari 800000 n=192 n=192 r=0.543 r=0.639 600000
400000
200000
0 ha 0 2 4 6 8 10 0 2 4 6 8 10 Source: HH Survey 2009
Figure 6.8 Scatter Chart of HHs in Agriculture Sales and Land Size by District
On the other hand, cultivated land size in Ramechhap does not correlate to agricultural sales; the correlation coefficient is only +0.035. It was memorable that the DDC in Ramechhap eagerly adapted the feasibility study on agricultural development projects in order to fit the needs of the landscape, which has too complex a topography to ascertain suitable produces by this statistical analysis.
Hypothesis 3: Irrigation Availability
According to Table 4.10, mentioned in the above hypothesis, the amount of agricultural contribution did not correspond with average land sizes; i.e. the average land size in Mahottari was larger than that of Kavre but agricultural turnover was lower in Mahottari, as shown in Table 4.29. Referring to year-round irrigated land, Mahottari had the lowest rate of irrigation, 0.01ha, which is only 1 percent of the total land size. Irrigation availability could be one of the constraints of agricultural business. Therefore a multiple regression model was considered as follows.
Y=a+b1X1+b2X2+b3X3 Y=annual agricultural sales X1=size of year-round irrigated land X2=size of partially irrigated land X3=size of non-irrigated land X= X1+X2+X3 ...... Formula 2
Y=15,410.225+27,522.051X1+31,481.120X2+15,071.326X3 ...... Model 2
The multiple correlation coefficient is a bit improved, from +0.350 in Model 1 to +0.377 in Model 2, and the contribution ratio is improved, from 0.122 in Model 1 to 0.144 in Model 2. However, the improvement of the fitting model was not as great as expected.
The terms (b1, b2, b3) are also not as expected. If the productivity of year-round irrigated land is higher than that of partially irrigated land and non-irrigated land, the term “b1” should be the largest among b1,, b2, and b3. The contradiction of this model could be due to the huge variety of produce in the agricultural field. Productivity per unit of land varies according to the kind of agricultural
6 - 10 produce. Since the sample households produce a variety of produce in their fields, not single products, the models do not fit the hypotheses.
Hypothesis 4: Items of Agricultural Produce
The issue of items of agricultural produce, discussed with reference to Hypothesis 3, above will now be examined. Potential profitable products were studied during the interview survey. The Study Team talked to farmers and traders, who explained that some varieties of products, for example potato, cauliflower, chili, livestock and fish, were more profitable than other food crops.
As the target districts are located in complex topographic areas, simple causes and effects of the market do not easily apply. It is hard to verify verbal information with statistical data in a short study, but a few profitable farms producing potato, cauliflower and chili could be identified from the data as shown in Figure 6.6 and Figure 6.7. The selection of agricultural produce could be a key to success in agricultural business.
A detailed analysis of farmers’ economies will be described in the next sub-chapter 6.3.
Hypothesis 5: Education Level
Other than the given agricultural factors, the farmers’ educational backgrounds could influence agricultural sales and profit. Table 4.27 in Chapter 4 shows the income level by education. The averages of each categorized level are mostly statistically significant according to the t-test.
The agricultural sales volume might be observed to have the same tendency.
Table 6.6 describes the average agricultural sales by education level with the concerned sample numbers.
Table 6.6 Basic Statistics of Sales Volume (in Rs.) by Education Level
Number Description Min Max Median Average Standard Deviation of Data Read & Write 363 0 385,000 10,000 23,175 36,521 Count Only 334 0 500,000 17,355 34,145 54,887 Below G10 152 0 620,000 20,000 35,584 64,389 SLC Pass 68 0 300,000 25,000 37,219 49,807 High Secondary 36 0 400,000 22,250 58,942 86,088 Graduate 13 3,640 250,000 60,000 84,788 76,629 Source: Prepared by the Study Team based on the HH Survey 2009
The analysis shows that the order of agriculture sales volume is the same as the order of education level. Thus education level could be one of the factors influencing agricultural sales. However, statistical tendency does not always match the reality; for example the education levels of the chili farmer in Ramechhap (sample No. 619) and the cauliflower farmer in Dolakha (No. 368) discussed above are both in the second education category of “count only”.
There are always exceptions that show how it is possible to achieve success even in disadvantageous circumstances.
Hypothesis 6: Others
The regression models among factors are not very fitted as shown in the above Figures 6.6 and 6.7. Therefore the pass analysis, which is one of the multi-valuable analyses, was tried. However, the tried hypothesis among the above factors was not verified; namely it could not at this moment
6 - 11 reach provability level. The qualitative circumstances that are difficult to quantify might greatly influence the individual households’ incomes. Further study should be carried out in order to find the causes of the agricultural income increment.
It should be emphasized that statistical quantitative data cannot fully explain causes and effects, just as there are no simple mathematical formulas to explain success in business and projects. All business and development projects are challenging works involving some amount of “feeling one’s way in the dark.” Invisible factors such as enthusiasm, eagerness, mutual trust networks, experiences, continuous persistence, patience, sensitivity of market currency and so on, could influence the success of the business. The important thing to remember is that a simple formula cannot fully explain the real society, especially in the case of individual income increment projects. The same attitude might be required by both the beneficiaries and supporters in any development program. Study with verification projects could be effective next steps.
6.3 Agricultural Potentials and Constraints
6.3.1 Assessment of Agriculture in SRC
By analyzing the household survey, the items of agricultural produce and land size were determined to be important issues of productivity. The Study Team rearranged the highlighted factors as follows.
Crop and Cultivation Area and Livestock
General features of agriculture in each SRC district in terms of cultivation areas and livestock population is presented in Table 6.7.
Table 6.7 Cultivation Area and Livestock Population (2007/08) Unit: Crop; ha & Livestock; nos. No. Crop / Livestock Dolakha Ramechhap Kavre Sindhuli Mahottari Total 1 Paddy 3,125 8,743 10,550 6,065 46,000 74,483 2 Maize 5,390 23,008 23,200 16,500 2,930 71,028 3 Millet 3,575 5,057 3,450 10,775 335 23,192 4 Wheat 4,603 4,803 12,950 5,580 22,140 50,076 5 Oilseed 275 349 4,240 5,530 2,900 13,294 6 Potato 2,445 3,040 5,350 1,538 3,420 15,793 7 Sugercane 11 40 25 80 3,500 3,656 8 Pulses 1,060 915 3,200 2,597 6,445 14,217 9 Citrus1 137 950 590 1,404 0 3,081 10 Mango 29 119 198 181 1,319 1,846 11 Vegetables 1,431 900 6,903 1,882 6,719 17,835 12 Cattle 93,114 70,782 134,007 110,100 80,900 488,903 13 Buffalo 40,721 64,510 130,999 60,682 45,177 342,089 14 Sheep 23,044 3,242 3,652 1,709 618 32,265 15 Goat 178,409 59,970 289,676 114,859 108,510 751,424 16 Pig 8,719 13,289 13,658 16,606 2,500 54,772 17 Fowl 354,723 203,965 783,900 287,651 293,250 1,923,489 18 Milk (MT) 13,134 16,382 72,100 16,749 20,365 138,730 Note: Crop, for which 1,000 ha or more are cultivated at least in one district, is listed. 1. Citrus in Ramechhap and Sindhuli is mostly Junar and that in Kavre is mandarin. Source: Statistical Information on Nepal Agriculture 2007/08, MOAC
General agriculture in the SRC shows that cereal production prevails, as the largest cultivation areas are for cereals.
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Food Security
It was reported that almost all HHs responded in the HH survey that they were not in a position to produce adequate quantities of food for their families throughout the year, as shown in the Figure 4.9 and Figure 6.9. Only approximately 20 percent of HHs expressed that they produced enough food to feed the family for nine months or more, and more than 54 percent of HHs expressed that their food self-sufficiency was less than six months on average. Therefore, farmers’ self-sufficiency for foods is very limited in the SRC. Figure 6.9 illustrates the level of self-sufficiency in each district on the map.
Figure 6.9 Food Self-Sufficiency in the Target Districts
The results of the HH survey shown in Figure 6.9 indicate that there are severe food shortages in every district in the SRC area. However, respondents of the HH survey in rural areas in Nepal were apt to respond that cereals, especially paddy, are their stable foods, as surveys of WB and WFP used to be conducted in such a manner. On the other hand, Table 6.8 shows the food production and calorie balance of cereals and potato in each district.
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Table 6.8 Food Production and Calorie Balance
Paddy Wheat M aize M illet Barley Potato Total Population Production Requirement Balance Ton Ton Ton Ton Ton Ton Ton kg/capita % No District Kcal Kcal Kcal Kcal Kcal Kcal Kcal Nos. Kcal/ Kcal/Capita Kcal/capita M illion M illion M illion M illion M illion M illion M illion capita /Year /Year 6,318 7,500 10,800 2,896 63 26,550 54,127 233 -36 1Dolakha 232,788 13,460 25,950 36,936 8,949 212 25,754 111,260 477,944 746,790 -268,846 15,757 9,080 46,016 4,985 54 30,430 75,892 313 48 2 Ramechhap 242,136 33,568 31,417 157,375 15,404 181 29,517 267,462 1,104,594 746,790 357,804 35,845 22,050 55,640 2,873 203 94,150 116,611 265 35 3Kavre 439,698 76,363 76,293 190,289 8,878 682 91,326 443,830 1,009,398 746,790 262,608 11,143 10,935 38,693 9,135 15 15,950 69,921 219 0 4 Sindhuli 319,200 23,739 37,835 132,330 28,227 50 15,472 237,653 744,527 746,790 -2,263 115,000 46,494 5,860 314 9 43,605 167,677 266 8 5Mahottari 630,990 244,993 160,869 20,041 970 30 42,297 469,201 743,595 690,580 53,015 331,193 267,554 673,939 81,660 1,470 210,685 484,228 260 13 Total 1,864,812 569,868 420,923 683,180 79,734 1,437 204,364 1,529,406 820,139 727,770 92,369 Source: Prepared by Study Team based on M oAC & CBS data 1. Production data are statistical information of MoAC 2007/08 2. Only paddy is converted to rice at ratio of 0.6175 on the data provided in Population Monograph of Nepal. 3. Calorie conversion rates per 100g of crops are 345 (rice), 346 (wheat), 342 (maize), 309 (millet), 336 (barley), and 97 (potato) based on Population Monograph of Nepal. 4. Population is projected applying increment of CBS projection, 1.14 from 2001 to 2007. 5. Per capita calorie requirements in Hills and M ountain, and Tarai are 2046/day and 1892/day respectively according to Population Monograph of Nepal.
As shown in the above table, calorie balance in the SRC area on average is in surplus on production by 13 percent. However, only in Dolakha district, the balance is in deficit by 36 percent. In the case of Dolakha, as cereal production may not be so favorable taking topographic and climatic conditions into consideration, it is recommended to cultivate more vegetables and to promote livestock so as to increase agricultural income so that cereals could be procured with the earnings from vegetables and livestock.
It also to be noted that as indicated in Table 4.14, 40 percent of farmers in the SRC area cultivate potato only for self-consumption, 25 percent cultivate potato for both self-consumption and sale, and only 2 percent produce potato only for sale. In Dolakha, 49 percent of farmers produce potato only for self-consumption and 40 percent for self-consumption and sale. Therefore, potato is in any way an important food crop in the SRC area.
As discussed above, it is assumed that maize and potato may also be important food crops to substitute cereals in all the districts, and therefore it could be considered that the deficits of foods in the SRC may not be so severe as reported in the results of the HH survey, though further study would be required.
Commercialization of Agriculture
The degree of commercialization on four commodities, namely milk, vegetables, potatoes and fruits, is summarized in Figures 6.10-6.13.
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Figure 6.10 : Milk Figure 6.11: Vegetables
Figure 6.12 : Potato Figure 6.13 : Fruits
Figures 6.10 – 6.13 Production and Commercial Ratios of Commodities
The figures above indicate that even if farmers produce those products, they don’t always sell them to the markets. Farmers in Sindhuli and Ramechhap are behind in terms of commercialization of milk, vegetables and potatoes. Advanced commercial districts by commodities are as follows.
(1) Milk: Dolakha, Kavre and Mahottari (2) Vegetables: Kavre and Mahottari (3) Potatoes: Dolakha, Kavre and Mahottari (4) Fruits: Dolakha, Ramechhap and Sindhuli
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The Dolakha, Kavre and Mahottari districts are relatively commercialized in agricultural products, while Ramechhap and Sindhuli are behind, though Junar production may have made these districts relatively commercialized in fruits.
Farmers in the Kavre district are broadly and relatively commercialized in the SRC, as Kavre has the advantage of having a major market, Kathmandu, nearby, as the Sindhuli Road Section IV in Kavre was completed first. However, their agriculture balance sheet shows that their commercial agriculture operations are not necessarily profitable as explained in the next section.
Agriculture in the Ramechhap and Sindhuli districts follows traditional methods for subsistence agriculture except in the case of Junar. The farmers produce many kinds of vegetables mainly for self-consumption, except for a few vegetables brought to local markets, though very few farmers produce vegetables on a commercial basis. On average, the percentage of agricultural income in the farmers’ annual family income varied from only 12 percent in Ramechhap to 42 percent in Kavre, on average as shown in Table 4.29.
Although the farmers’ basic requirement is to increase food production from farmlands, increase of cereal production may not be so easy since irrigation facilities are limited, and productivity improvement on steep, sloped lands is not so easy. It seems that the farmers eat potatoes to cover the shortage of cereals. It is therefore inevitable for farmers in the SRC to increase farm income through commercialization of their agriculture by producing HVC in some parts of their farmlands and to procure cereals for foods, as the roads connecting them to markets are now ready in some areas and will be fully available in the near future. At the same time it should be noted that the improvement of farming skills and farm management for HVC cultivation may also make positive impacts on increasing the production of cereals.
6.3.2 Agricultural Economy and Potential Crops
(1) Agriculture Balance Sheet
The average annual agricultural incomes of HHs in the five SRC districts are shown in Table 4.29. Table 6.9 shows the average HH income, agricultural income, agricultural cost and profit and relevant ratios.
Table 6.9 Average HH Income, Agricultural Cost and Profit in Each District Unit: Rs./annum Description Dolakha Ramechhap Kavre Sindhuli Mahottari Average HH Income (1) 100,218 90,926 124,947 75,801 99,693 98,329 Agricultural Income (2) 33,274 11,220 52,518 21,472 41,833 32,071 Ratio (%) (2)/(1) 33.2 12.3 42.0 28.3 42.0 32.6 Agricultural Cost (3) 27,859 7,404 47,400 10,818 19,435 22,616 Agricultural Profit (4) 5,415 3,816 5,118 10,654 22,398 9,455 Ratio (%) (4)/(2) 16.3 34.0 9.7 49.6 53.5 29.5 Source: HH Survey 2009
The average agricultural income is the highest in Kavre at Rs.52,518 (42% of HH annual income), followed by Mahottari at Rs.41,833 (42%), Dolakha at Rs.33,274 (33%), Sindhuli at Rs.21,472 (28%) and the lowest in Ramechhap at Rs.11,220 (12%).
Although the order of agricultural income does not correspond to that of the poverty incidence, it is assumed that Sindhuli and Ramechhap are behind in agricultural development, especially in commercialization. Table 4.31 shows that farming in Ramechhap and Sindhuli is not modernized as expenses for vegetable and potato seeds, chemical fertilizers, pesticides and hired labor are very low compared to the other three districts. This is because the two districts are located in remote places due to the lack of transportation before the construction of the Sindhuli Road.
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Table 4.29 and Table 4.32 show the profitability of farming in each district. Although the average annual sales from agriculture among Kavre farmers is the highest in the SRC, their agricultural profit, even without considering family labor, is not necessarily higher. As shown in Table 6.9 above, the agricultural profit is the highest in Mahottari at Rs.22,398 (53.5% of agricultural income), followed by Sindhuli at Rs.10,654 (49.6%), Dolakha at Rs.5,425 (16.3%) and Kavre at Rs.5,118 (9.7%), and the lowest in Ramechhap at Rs.3,816 (34.0%).
The Study Team assumed that though the Kavre farmers spend a lot of inputs such as seeds, fertilizer, pesticide, hired labor, etc., agricultural income, especially agricultural profit is not high as anticipated, as agricultural profit of Kavre farmers on average is only 9.7 percent of agriculture income. In addition, the purpose of loans in Kavre is more on investment for agriculture as shown in Table 4.49. This means that there are a lot of improvement potentials on Kavre agriculture by reducing costs and increasing productivity and the quality of products.
(2) Comparison of Profit between Cereal Crops and Vegetables
Although the Study Team was not able to define the profitability of crops in the SRC in detail except for some trends identified through the HH survey, general comparison of cereal crops and vegetables are provided in this section based on the readily available data in Nepal at present4.
The following Table 6.10 shows the cost and profit balance of some typical crops in 2007/08 in the Study area and other districts in Nepal reported by the DOA.
Table 6.10 Typical Cost, Income and Profit of Cereals Unit: Rs./ha No. Description Paddy Wheat Maize 1 District Dolakha Mahottari Parbat Makuwanpur Ramechhap Kaski Lalitpur 2 Irrigation Yes No No Yes No Yes Yes 3 Seed Khumal 8 Sabitri Annapurna 2 BL 1022 Kumal Yellow M akalu 2 M anakamana3 4 Cultivation Period 5.3 months 4.6 months 5.4 months 4 months 4.2 months 4.7 months 4.5 months 5 Production (kg/ha) 5,432 3,715 2,762 3,359 2,982 2,392 3,289 6 Total Cost 20,690 22,567 20,021 22,756 17,613 20,047 30,895 7 Gross Income 61,801 39,735 31,806 37,539 28,453 23,661 34,879 8 Gross Profit 41,111 17,168 11,785 14,783 10,840 3,614 3,984 Source: Cost of Production & Marketing Margin per Hectare of some Important Cereal Crops Nepal, 2006/07, DOA, MOAC
Profit gained from paddy cultivation in Dolakha is very high because productivity, at 5,432 kg/ha, is exceptionally high compared to the national average of 2,775 kg/ha in 2007/085 and average paddy yield of 2,022 kg/ha in Dolakha in 2007/08 as shown in Table 3.21. Accordingly, this case should be considered exceptional as land, climate and other factors might be much more favorable for paddy cultivation in this area and may not be adoptable in general.
Tables 6.11 and 6.12 show the typical cost and profit balance of some vegetables, spices and potato in different districts in 2007/08 in the Study area and other districts in Nepal.
4 Sources: Cost of Production & Marketing Margin per hectare of some import cereal crops, Nepal, (2006/07) and Cost of Production & Marketing Margin per hectare of some import vegetable and spice crops, Nepal, (2006/07), both by DOA, MOAC, 2008 5 Source: Statistical Information on Nepalese Agriculture 2007/08, Agri.-Business Promotion and Statistics Division, MoAC
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Table 6.11 Typical Cost, Income and Profit of Vegetables and Spices Unit: Rs./ha No. Description Carrot Tomato Brinjal Cauliflower Capsicum Chili Bitter Gourd 1 District Bhaktapur Kavre Mahottari Makuwanpur Jhapa Udhaypur Makuwanpur 2 Irrigatin/Season Yes/Main Yes/Off Yes/Main Yes/Off Yes/Main No/Main Yes/Main 3 Seed Hybrid CL1131 Nurke KTM Local Elephant Task Jwala Hariyo Karela 4 Cultivation Duration 4 months 3 months 3.5 months 4 months 4 months 4 months 4 months 5 Production (kg/ha) 18,560 20,118 17,899 19,287 18,700 18,436 16,328 6 Total Cost 61,466 69,388 42,747 59,574 42,093 37,184 40,260 7 Gross Income 276,544 183,073 176,207 175,522 229,075 262,713 306,150 8 Gross Profit 215,078 113,685 133,460 115,948 186,982 225,529 265,890 Source: Cost of Production & Marketing Margin per Hectare of some Important Vegetables and Spice Crops Nepal, 2006/07, DOA, MOAC
Table 6.12 Typical Cost, Income and Profit of Potato and Vegetables Unit: Rs./ha No. DescriptionPotato Garlic Onion Pea Cowpea 1 District Ramechhap Kavre Ramechhap Dolakha Sindhuli Sindhuli Mahottari 2 Irrigatin/Season No/M ain Yes/M ain Yes/M ain Yes/M ain Yes/M ain No/M ain No/M ain 3 Seed Jank Dev Cordinal Chinese Red Crul N-53 Arkel Sarlahi Tane 4 Cultivation Duration 6 months 4 months 5 months 5 months 5 months 3 months 3 months 5 Production (kg/ha) 25,346 31,864 19,272 17,930 18,336 16,201 52,836 6 Total Cost 120,096 144,427 93,728 45,900 43,254 36,957 34,068 7 Gross Income 310,319 261,284 662,036 206,195 178,776 191,982 351,359 8 Gross Profit 190,223 116,857 568,308 160,295 135,522 155,025 317,291 Source: Cost of Production & M arketing M argin per Hectare of some Important Vegetables and Spice Crops Nepal, 2006/07, DOA, MOAC
In all data, family labor is included in the cost. Although there are some differences in cropping duration, the gross profits of vegetables are higher than cereals by 10–15 times.
Accordingly, the Study Team considers that the introduction and improvement of potato and vegetable cultivation in the SRC shall be first strengthened taking into account the average land holding size, 0.63 ha, as shown in Table 4.7, and profitability of crops6. If one-tenth of the cereal cultivation area were to be converted to HVC, a farmer could increase agricultural income substantially. Various improvements in farming skills of potato and vegetable cultivation would also make positive impacts on increasing cereal productivities.
(3) Present Features of HVC Cultivation in the SRC
Potato Cultivation
The Study Team was able to present features of vegetable cultivation in the SRC based on the results of the HH survey. One is a comparison of potato farmers in the five districts, as a substantial area is cultivated by potato, the highest among HVCs, in the SRC area. Although it is not possible to identify the ratio of potato cultivation extent to total cultivated area of each farm, potato cultivation costs are generally much higher than for other crops. Accordingly, the general features of potato cultivators could be analyzed on a district basis as shown in the following Tables 6.13 and 6.14. The former is a balance sheet of potato farmers only for self-consumption and the latter is for sale as well.
6 If 10 percent of the fields were to be changed to vegetables, the increment of income would be more than the increment obtained from 10 percent increase in land productivity of cereals.
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Table 6.13 Potato Cultivators’ Balance Sheet for Self-Consumption Only
No. Description Unit Dolakha Ramechhap Kavre Sindhuli M ahottari Overall 1 Number of Farmers Nos. 92 12 90 6 58 258 2 Average Cultivation Area ha 0.97 0.72 0.62 0.74 1.36 0.92 3 Average HH Income Rs. 123,261 100,383 141,466 106,167 118,448 127,068 4 Average Agriculture Income Rs. 54,022 20,161 69,986 43,850 73,272 62,107 5 Average Agriculture Cost Rs. 45,720 26,623 77,091 19,053 34,305 52,589 6 Average Agriculture Profit Rs. 8,302 -6,462 -7,105 24,797 38,967 9,518 Source: Study Team based on HH Survey
Table 6.14 Potato Cultivators’ Balance Sheet for Self-consumption and Sale
No. Description Unit Dolakha Ramechhap Kavre Sindhuli M ahottari Overall 1 Number of Farmers Nos. 92 12 90 6 58 258 2 Average Cultivation Area ha 0.97 0.72 0.62 0.74 1.36 0.92 3 Average HH Income Rs. 123,261 100,383 141,466 106,167 118,448 127,068 4 Average Agriculture Income Rs. 54,022 20,161 69,986 43,850 73,272 62,107 5 Average Agriculture Cost Rs. 45,720 26,623 77,091 19,053 34,305 52,589 6 Average Agriculture Profit Rs. 8,302 -6,462 -7,105 24,797 38,967 9,518 Source: Study Team based on HH Survey
As the above tables show the overall agricultural operation of potato cultivators including potato cultivation costs and sales, the general trend of farm operations of potato cultivators are known. Agricultural profit of potato cultivators only for self-consumption in Sindhuli and Mahottari is positive, and that of farmers in the other three districts is negative, while farmers who cultivate potato for sale as well get higher agricultural incomes than average for their respective districts. In Kavre, the average agricultural sales are very high. However, due to high costs, the profit is not so high compared to other districts. Borrowing money for agricultural investment might be one of the causes of the deficit. The conditions are reversed in Sindhuli and Mahottari; the farmers’ agricultural profit is higher than that of farmers in Kavre although the average HH incomes in those two districts are lower than in Kavre. This means that as far as farmers involved in potato cultivation, farmers in Sindhuli and Mahottari are doing better than farmers in Kavre. Further, for farmers in Kavre, the average agricultural profit is Rs.5,188 as shown in Table 4.29, while 128 potato farmers (63%) out of 192 surveyed farmers are negative in profit as shown in the above two tables7.
In Dolakha, agricultural profits of farmers who grow potato for only self-consumption is negative, while those who grow them for sale too is positive, and agriculture incomes of the latter are much higher than the former. This indicates that commercially-oriented farmers with larger extent of cultivation do well in agriculture. It is remarkable that 95 percent of HHs in Dolakha is engaged in potato production. Clearly, potato is one of the main foods in Dolakha, as production of cereals is difficult there as the climate is not favorable for paddy.
On the other hand, in Kavre, neither commercial nor self-consumption potato farmers earn profits from agriculture. It is assumed that Kavre farmers have a lot of potentials to reduce the cost of production. The farmers in Ramechhap also have potentials to improve their agriculture operations, though they are not commercialized at present. It will be necessary to carry out a detailed study on agriculture in Kavre to determine why the production costs there are so high while the profits are negative.
Leading Farmers
Table 6.15 shows the balance sheets of two leading farmers, one mainly producing cauliflower in
7 If only the balance of the 64 non-potato farmers is calculated, the average agriculture profit would be Rs.29,982.
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Dolakha and the other mainly producing chili in Ramechhap, as selected based on the HH survey indicating in Figure 6.6.8
Table 6.15 Balance Sheet of Leading Farmers in the SRC
Cauliflower Farmer Chili Farmer in No. Description Unit in Dolakha Ramechhap 1 Total Cultivation Area ha 2.25 0.73 2 Cauliflower or Chili Area*1 ha N.A. N.A. 3 Agriculture Area Owned ha 2.25 0.38 4 HH Income Rs. 620,000 942,200 5 Agriculture Income Rs. 620,000 422,000 6 Agriculture Cost Rs. 158,600 20,080 7 Agriculture Profit Rs. 461,400 401,920 8 Family number Person 8 9 Source: Study Team based on HH Survey Note: *1 In HH survey they reported Cauliflower and Chili were main crops, but extent of area is not checked.
The Study Team was able to contact and visit the cauliflower farmer to interview him as he attended the district workshop in Charikot, Dolakha. Although the farmer produces cauliflower as a main crop, he also produces other crops in rotation to avoid the adverse effects of continuous cropping of the same commodity. He also markets his products by directly contacting wholesalers in Kalimati and procuring compost from poultry farms in Bhaktapur. Further, he organizes a group for marketing and input procurement so that he gets Cauliflower farmer’s field in preparation for the advantage of having adequate goods to hire a planting cauliflower saplings truck to transport. Small farmers in the surrounding area would get an advantage too, though he has no intention of organizing a cooperative. He expressed interest in obtaining new farming skills from DADO and the private sector.
(4) Potential Profitable Crops
Potential profitable crops to be proposed in the program shall be selected taking into account the experience levels of the farmers, distance of the area from the market, shelf life of the crop, marketing possibilities of the crop after drying, and so on.
The Study Team observed vegetables in local markets in the districts and interviewed retailers for commodities produced locally. Although the period of the Study was only three months, those commodities observed by the Study Team included potato, tomato, chili, cauliflower, onion, ginger, garlic, carrot, brinjal, pulses, gourds, cabbage, okra, other leafy vegetables, etc.
8 Farmers No. 43 for cauliflower farmer and No.619 for chili farmer in Figure No. 6.6
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Many merchants in various markets complained of domination of Indian products. Table 6.16 Import from India at However, data from the Kalimati fruit and Kalimati Market in 2007/08 vegetable market show that Indian products Unit: ton Total Quantity Ratio of Indian occupied 13.2 percent and Chinese products Item 2.1 percent, in 2007/08 annual handling in Handled Products (%) weight. Accordingly, approximately 85 Potato, Red 23,858 13 percent of the commodities are Nepalese Potato, White 9,728 15 products at the Kalimati market. Onion, Dry 12,558 92 Sugarcane 196 91 It should be noted that onion, fresh fish and Fresh Fish 1,807 100 most fruits are imported from India, except Lime 347 99 apple, 71 percent of which come from China, Musk Melon 296 91 as shown in Tables 6.16 and 6.17. Most of Watermelon 333 71 such fruits, especially tropical fruits, could be Sweet Orange 446 89 produced in Nepal. It should also be noted Banana 1,590 98 that the majority of pear and dry garlic are Apple 1,090 39 imported from China, in addition to apple. Pomegranate 347 99 Mango 372 59 In terms of livestock, milk production has Papaya 742 40 increased, as shown in the Table 3.63, and Grape 104 93 Source: Study Team based on Kalimati Data this trend is not likely to change. Therefore, milk production would be recommendable. Poultry development is also recommended by many DLSO officers, but the Study Team would not like to recommend broiler production on a large scale to small farmers, because a large initial investment is necessary and the risks are high, as the supply of both chicks and feeds and even marketing is fully dependent on traders and prices of inputs and products fluctuate so frequently. It is recommended to rear a few local chickens in the backyard. As many recommend, goat rearing is also good because a large investment is not necessary, but care must be taken to avoid overexploitation of grasslands from the environmental point of view.
Table 6.17 : Import from China at Although there are many commodities Kalimati Market in 2007/08 imported from India and China, retailers Unit: ton explained that people prefer Nepalese products for most commodities, such as garlic, Total Quantity Ratio of Chinese Item Handled Products (%) potato, onion and other vegetables, even in the Pear 208 63 Tarai, and that they purchase Nepalese Apple 1,090 61 products even a few Rupees per kg higher Garlic, Dry 3,922 71 than the imported ones. Source: Study Team based on Kalimati Data Further, the tropical fruits that are now imported from India in substantial quantities could be substituted by Nepalese products. Fishes sold at Kalimati and local markets in Tarai could also be produced in Nepal.
Taking the above factors into consideration, the Study Team lists the following as recommendable commodities: firstly potato, chili, tomato, Junar and milk, and secondly cauliflower, onion, ginger, garlic, carrot, pulses, gourds and all kind of fruits, though individual study is necessary to implement a project.
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6.3.3 Potential from Marketing Viewpoint
(1) Potato, Vegetables and Spices
Figure 6.14 illustrates the zoning of the commercial production areas of potatoes, vegetables and spices in the SRC on the topographic map. The flows to and from the market center are indicated on the same map. The distribution flows change their destinations according to the harvest seasons of each commodity. This flow map was prepared based on the data of the Kalimati Market, which reported the district of origin for each commodity, and interviews from wholesalers and retailers in each district. It is necessary to study respective target products further.
There are no thick flows in Sindhuli and Ramechhap. People supply their surplus to the district centers or/and their neighbors. The selling prices of vegetables at Manthali in Ramechhap are sometimes higher than in Kathmandu even though the qualities are lower. The DADO officers of Ramechhap are anxious that outside vegetables would dominate local markets when the road is opened. In order to hold out against vegetables from the outside, it is necessary to determine the appropriate strategy matching the circumstances in Ramechhap.
Figure 6.14 Distribution of Commercial Vegetables in the SRC
(2) Fruits
The distribution of fruits is rather advanced and fruit producers have to compete with well-packaged alternative fruits from foreign countries. Fruit distributors prefer to handle the good appearance fruits using convenient carton boxes. It is hard for fruit farmers just starting out to catch up to the advanced methods of distributing fruits at once.
Agro-tourism and supplying fruits to the visitors of the SRC might be a suitable beginning. The volume of fruits in the SRC is not enough to gain economy of scale; therefore, the freshness and locality should be emphasized and specific markets should be targeted at the first stage of
6 - 22 marketing. Attractive promotion campaigns, together with good quality, may be the direction of fruit marketing in the SRC.
Figure 6.15 illustrates the production area of potential fruits on a topographic map with contour lines. It would be favorable if the marketing could be carried out using the suitable natural environment to produce appropriate fruits.
Figure 6.15 Potential Fruits in the SRC
6.3.4 Development Budget and Staff
Table 6.18 shows the budget and staff numbers of each district.
Table 6.18 Budget and Staff Numbers of Each District
Description Unit Dolakha Ramechhap Kavrepalanchok Sindhuli Mahottari DDC Budget 08/09 Rs. M 939.0 1,507.8 1,320.1 1,062.3 1,469.90 Area Sq. Km 2,191 1,546 1,396 2,491 1,002 Population Nos. 217,218 231,225 434,872 326,534 648,537 Population Density Nos./Sq. Km 99.1 149.6 311.5 131.1 647.2 Per Capita Budget Rs. 4,322.8 6,520.9 3,035.6 3,253.3 2,266.5 DDC StaffNos.3535353535 DTONos.2626262626 Population per Staff Nos. 3,561 3,791 7,129 5,353 10,632 DADO Budget 08/09 Rs. 1,000 9,429 9,573 11,560 9,467 12,243 DADO Staff Nos. 37 46 54 45 44 Nousehold Nos. 40,396 38,800 64,570 46,296 72,632 Household per Staff Nos. 1,091.8 843.5 1,195.7 1,028.8 1,650.7 Budget per Household Rs./Household 233.4 246.7 179.0 204.5 168.6 Budget per Staff Rs./Staff 254,838 208,109 214,074 210,378 278,250 Sources: Prepared by the Study Team based on CBS Year Book 2007, and DDC and DADO office in each District.
The per capita budget of the DDC in Ramechhap is the highest at Rs.6,520.9, while that in Mahottari is the lowest at Rs.2,266.5. The population per DDC staff in Mahottari is the highest at
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10,632, while Dolakha is the lowest at 3,561.
As for the budget and staff of DADO, the budget of each district was calculated for the HH basis. The DADO budget per HH in Ramechhap is the highest, Rs.246.7, while that in Mahottari is the lowest, Rs.168.6. On the other hand, the budget per DADO staff in Mahottari is the highest, Rs.278,250, and the lowest is in Ramechhap, Rs.208,109. The household number per DADO staff is the highest in Mahottari district, 1,650, while the lowest is in the Ramechhap district, 843.
The above table shows that the Ramechhap district is better looked after and Mahottari less, which may be caused by the difference in population density and lesser development in Ramechhap so far.
6.3.5 Potentials and Constraints on Group Activities
Farmers’ Sources and Means of Receiving Information
In the HH survey conducted by NARMA, the issue of “information sharing and marketing” was surveyed as discussed in the preceding section 4.3.8. Results of the survey indicated that information that more than 50 percent of farmers require were on (1) institutions of credit for investment, (2) modern technology, (3) new products/new varieties, (4) production inputs and (5) disease and pest control.
On the other hand, sources of information that the farmers used were (1) neighbors (84.6%), (2) radio programs (74%) and (3) cooperatives/associations (62.1%). They also selected “government dissemination programs” in a lower position (28.7%) than “businessmen (31.5%)” and “merchant of inputs and machineries (37.7%)” as ways to receive necessary information on business.
Government extension workers, JT/JTA, expressed that in the field, due to lack of budget for TAs and DAs, they seldom visit farmers’ fields unless some programs are organized by other agencies, such as NGOs and donor sponsored programs, to invite them as resource persons.
In these circumstances, it is important to diversify extension methods to disseminate improved technology and skills not only through the government institutions but also through other sources, such as cooperatives, NGOs and so on. And an important point is that JT/JTA should acquire new skills to disseminate to farmers so that there will be opportunities for them to be invited as resource persons in various occasions.
Group activities for sharing information and receiving technical assistance are required in each district. Group networks could make extension works more efficient as well.
Potentials and Constraints of Farmers’ Organizations in the SRC
In accordance with the community organization (CO) survey and HH survey for participation in COs conducted by NARMA, more than 70 percent of HHs in the SRC has membership in, and an average HH has multiple memberships for 2.10 COs, as shown in Table 4.47. On average, 85 percent of farmers participated in saving and credit groups but participation in agriculture groups and livestock groups were both 20.3 percent, which has yet to be improved.
57 COs (63%) out of 90 interviewed in the survey were established in the last five years. It is necessary to provide assistance to strengthen COs.
In the HH survey, COs raised the following problems and constraints for their activities in providing agriculture services:
(1) Lack of technical skills on improved farming (2) Timely availability of production inputs
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(3) Difficulty in monthly saving collection (4) Marketing of produce (5) Lesser participation of members in meetings (6) Few skills on group mobilization and account keeping
All of the above issues shall be attended by proper coordination with relevant agencies, such as government line agencies, input suppliers, traders and CO members themselves, in principle. The last item, “skill on group mobilization and account keeping” is crucial for sustaining an organization. In order to motivate farmers to participate actively in group or cooperative activities, some incentives may be effective. Constructing small infrastructure that the members really require, such as micro-irrigation and collection centers, by themselves, would be practical incentives to strengthen organizations, as was proven in the ATEIP.
Participation in Organizations
Table 6.19 shows that most farmers in the SRC have membership in some organization, except those in Mahottari, where only 21.9 percent had obtained membership from any organization.
Table 6.19 Participation in Organizations
Participation in Organizations Participation in Differnet Types of Groups HH with District Membership in Agriculture Livestock Saving & Credit Mambership Nos. of Groups Groups Groups Groups (%) Dolakha 74.2 1.64 12.9 7.5 95.2 Ramechhap 95.3 2.65 15.8 30.1 88.0 Kavre 81.3 2.15 11.5 11.5 85.3 Sindhuli 79.7 2.27 41.2 33.3 72.5 Mahottari 21.9 1.29 21.4 7.1 73.8 Overall 70.5 2.15 20.3 20.3 84.6 Source: HH Survey, NARMA Consultancy 2009
However, most organizations that farmers join are saving and credit organizations. There is not so much participation in agriculture and livestock groups. It should also be noted that most of the organizations have been established only over the last five years, as shown in Table 4.47. There is a high potential for institutional activities to be strengthened in many ways to introduce commercial agriculture.
Credit Arrangement by Organizing Groups
The following Table 6.20 indicates the prevailing conditions of credit in the SRC. It is notable that micro-credit groups are active in Kavre and Ramechhap.
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Table 6.20 Credit Source, Average Interest Rate and Loan Amount
Sources of Credit (%) Average Average Micro Credit Interest Loan District Money Relative/ Cooperative Group/ Others1 Rate Amount Lender Friend Institution (%/Year) (Rs) Dolakha 35.5 32.2 62.8 38.0 10.7 18.4 67,107 Ramechhap 79.4 15.9 14.3 49.2 1.6 28.8 37,210 Kavre 25.9 25.9 54.4 74.8 12.9 17.1 62,163 Sindhuli 69.9 19.2 13.0 28.8 6.2 28.1 68,016 Mahottari 73.9 7.0 3.5 9.9 38.0 28.2 79,996 Overall 56.9 19.8 29.0 40.2 10.6 24.1 63,396 Note: 1. Others include Government Banks, Private Banks, and Middlemen. Credit does not come from only one source but multiple sources, which causes the total to 2 exceed 100%. Source: HH Survey, NARMA Consultancy 2009
The table above indicates that farmers in the Ramechhap, Sindhuli and Mahottari districts still depend on moneylenders, while farmers in the Dolakha and Kavre districts depend on other sources, such as relatives/friends, cooperatives and micro-credit groups. The interest of loans also differs, as the interest in the former group was more than 28 percent, while the latter was more or less 18 percent, which gives a substantial difference of loan interests of 10 percent or more.
The above results show that people in Dolakha and Kavre are socially well linked compared to those in the other three districts.
6.4 Effects of the Sindhuli Road
Since the Sindhuli Road was partly completed — Sections I & II from Bardibas to Khurkot in the Sindhuli district and Section IV in the Kavre district — substantial effects have been realized and anticipated in the area. Examples of those are reported as follows.
6.4.1 Positive Effects
(1) After Section IV of the Sindhuli Road in the Kavre district was completed in March 2005, milk production in the district has been significantly increased from 36,383 MT in 2003/04 to 72,100 MT in 2007/08, as shown in Table 3.63. It is also noted that the Milk Chilling Station in Bakundebeshi provided under Japan’s Grassroots Grant played a significant role in the increase of milk production as the station handled more than 3,000 MT annually (10,000-12,000 lit/day in the peak period and 7,000 lit/day in the lean period). (2) When the Study Team visited the Khanyakharka Junar Cooperative in the Sindhuli district, farmers explained that after a part of the Sindhuli Road Section II opened in 2008, the marketing systems of Junar and vegetables have drastically changed. In 2006 and 2007, many farmers gave up Junar cultivation and cut their trees, as the marketing of Junar was difficult. After the road opened, the situation has changed and many farmers want to replant Junar but saplings are not adequate. The road opening changed farmers’ attitudes to intend to cultivate not only Junar but various vegetables, which will provide them with more income. (3) DDC officers in Manthali expressed that the Ramechhap and Dolakha districts will also benefit very much from the Sindhuli Road within the next 30 months, when a bridge crossing the Sun Koshi River between Khurkot in the Sindhuli district and Seleghat in the Ramechhap district will be completed under the ADB financing. The traveling time required from Kathmandu to Manthali, the center of the Ramechhap district, will be reduced by half, from about 10 hours at present because the present road winds through Charikot in the Dolakha district. Moreover, transportation to and from the Tarai areas will be reduced to approximately four hours from more than 20 hours at present, which contributes to the easy transportation of
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goods between the two areas. DADO officers in Dolakha and Ramechhap explained that seed potato produced in the mountain areas in those two districts are exported to the Tarai and India in quantities of approximately 70 trucks from Dolakha and 2,000 tons from Ramechhap through Kathmandu annually by traders from the Tarai. The Sindhuli Road will change the route of seed potato transportation, which means that the route of transporting cereals from the Tarai to these districts will also be changed. Accordingly, the Sindhuli Road changes the circulation route of goods and drastically reduces transportation costs.
6.4.2 Negative Effects
(1) It was reported in the district workshops that before the Sindhuli Road was constructed, most vegetables in the local markets were produced in the area, but after completion of the Sindhuli Road some vegetables in the local markets started to be imported from Kathmandu, which may negatively affect the local production of vegetables.
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CHAP. 7 SPECIFIC ISSUES, COOPERATION ACTIVITIES AND FOCAL POINTS
This chapter discusses specific issues and cooperation activities derived from those specific issues, further binding the cooperation activities into focal points for agriculture and rural development in the SRC area.
Section 7.1 discusses specific issues and their priorities. Section 7.2 discusses the cooperation activities derived from the prioritized specific issues and the focal points to sort out the cooperation activities. Section 7.3 describes the details of cooperation activities along with their backgrounds.
7.1 Specific Issues and Priorities
7.1.1 Nepal Position Paper for Agriculture and Rural Development by JICA
JICA prepared the “Nepal Position Paper for Agriculture and Rural Development (NPP)” in the understanding that “the poverty stricken people in Nepal depend on the traditional subsistence types of agriculture for their livelihood. Given the diverse agro ecological climate with micro variances, there is immense potentiality to improve them with effective assistance of Official Development Assistance (ODA) of Japan. The present position of Nepal agriculture has to be defined to realize the potentiality.”
The objectives of preparation of the NPP were: (1) to identify the priority issues on agriculture and rural development, and (2) to suggest principles and programs for JICA’s cooperation on agriculture and rural development.
In the NPP, the Program Goal is defined as follows:
“The livelihood in rural areas is improved through better and fair access to commodities (food, resources, etc.) for the people in the rural area.”
To achieve the program goal, the NPP concluded that the program shall consist of the following three approaches:
(1) Food Security (2) Income Generation (3) Capacity Development of Government and Farmers’ Groups
The outcome of the NPP is illustrated in the following Figure 7.1.
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Poverty Reduction
JICA Agriculture & Rural Development Program (Improvement of rural livelihood through agriculture)
Cooperation to Focus on Sindhuli Corridor area food insecure areas and its neighboring area
Capacity Development of Government and Income Generation Farmers’ groups Food Security Production ～ Distribution （Improvement of Stabilization of food of production as the basis for Cash crops, Livestock, Extension Services, human life NTP Organization of farmers’ groups） （ie) KR, KR2, increase of production （ie）technology transfer on horticulture, including irrigation, establishment of livestock, fisheries, establishment of CD of Government, storages, etc. markets, assistance o distribution organization of farmers, system, etc. strengthening the relationship （ie）CD of JT/JTA, empowerment of farmers’ groups, assistance for cooperatives, etc. Source: JICA NPP, Feb. 2009
Figure 7.1 Schematic Diagram of JICA NPP
7.1.2 Specific Issues and Priorities
As this Study is also within the frame of the JICA Thematic Guideline for the Development Objectives on Agriculture and Rural Development, specific issues to be considered are based on those in the Development Objectives Chart. Table 7.1 shows the description of specific issues in accordance with the Development Objectives Chart and a format provided in the NPP and prioritization of the Study Team on the specific issues based on the surveys. The study is placed in connection with the NPP prioritization as shown in Table 7.1.
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L L H H H H H H H H H M M Priority Preliminary (Date of formulation: Nov 19, 2007, Sindhuli added: May 15, 2009) 15, May added: 2007, Sindhuli 19, Nov formulation: of (Date Reasons (Country as a whole) as (Country Reasons ssues I Irrigation facilities basic are very and important items increasing for food productivity, Nepal. in area in remote/rural generation income and sufficiency self food to thus leads at people of and livelihood agriculture Nepalese the with integrated closely is Livestock AI though approx) (7% low is Nepal in breeding improved of introduction The large. resources human adequate not are There 10 % annually. of rate the at increasing is rate of productivity the thus country the in breeding systematic the for facilties the nor livestock is There arelow. high too demands from farmers to provide better servicesfor cow. and buffaro of breeds improved the of factor is a key farmers of building capacity through productivity crop Increasing affordable are and financially) (physically inputs limited only because generation income by farmers side. ensure to fundamental are facilities irrigation on development and technology Research the effectiveness of infrastracture for increasing food productivity. market the to production the connect to important quite is post-harvest Improving provided not are vegetables produced the that happens usually it Nepal, In development. farmers for market to access poor of because just prices at appropriate consumers the to and stakeholders of development Capacity control. quality on know-how and poor essential. establishment infrastructure are of Improving the agriculture extension service is essential for better agriculture production agriculture better for essential is service extension agriculture the Improving knowhow practical with workers Extension condition. living farmers' the and improving and productivity. production the enhance would farming agricultral improved the for trainingThe manuals on various crops prepared with respect to the various geographic more services extension and training the enhance would conditions and climate effectively and effeciently at the farmers level. Together with the promotion highly is service extension of agriculture of vitalization activities, cooperative agriculture GoN. by priotized Land reform programs involves the political and social issues to be tackled, which is which tackled, to be issues and social political the involves programs reform Land development. Nepal's of context present the at complex quite Leaching of the fertile soil leading towards the inappropriate land use, excess of excess use, land inappropriate the towards leading soil fertile the of Leaching induced water farmland, the at degradation environmental the causing deforestation infrastructures. living farmers the destroying stream down the in disaster sediment Establishing of WUAs is truly important because it is necessary to keep the developed the keep to necessary is it because important truly is WUAs of Establishing by activities and maintenance operation appropriate by condition favorable in facilities beneficiaries' efforts. self-help appropriately not are now of as accomplished have facilities research whatever As activities it extension said could be that of improvement level, farmers' to the outreached facilities. of is to increase prior development research/technology than emphasized more be should activities Extension in of changing terms system. derivery service than emphasized more be should activities extension that said be could It research/technology development in termsof changing system. derivery service L L H H H H H H H M M M M Priority Preliminary pecific S II f 䇭 o rioritization P 1 . 7 e There are possibilities to undertake such types of types such undertake to possibilities are There bl 䇭 a T JICA) in Kavre, and a project under Dept. of Soil Conservation in Conservation Soil of Dept. under project and a in Kavre, JICA) projects in other districts. in other projects 䋨 Mahottari. irrigation ratio of farm land in Sindhuli hill area except Mahottari except area hill Sindhuli in land farm of ratio irrigation area, hill in average national the as same almost is which is10.3 in accordance concern highest most farmers' is 10.6% and irrigation introduce to important also is Irrigation survey. household the with HVCs. livestock development is high, their skill is low. There is much and generation income achieve to livestock develop to potential are and pigs cow Buffalo, manure. organic of dissemination animals to raise. possible said be could it level, farmers' the to reached appropriately not are of activities is extension to increase prior that of improvement facilities. research important isIt very to enforce on field technology of farmers level of one are present at much provided not services Extension level. reason ofof low level skill. machineries farm hills, in lands farm of most of slope sharp to Due district. a Terai is which Mahottari except use much of not are farming potential equipments. exist to improve there However, to and sprinkler irrigation drip introduce to potential a large is There water. limited with productivity improve Post harvest skill is important farmers for because appropriate post of price keep and products of loss minimize technology harvest observed team study The others. and grading by high products to potentials of a lot on this are and poor issue skills there farmers' improve them. thanExtension activities more should be emphasized research/technology development improving by current service area. Sindhuli in systems delivery get to training of opportunity their that complain JT/JTAs appropriate skills at local level is limited, while farmers complain services extension appropriate providing been not have JT/JTAs that places. many in period a long since are them of most available, are materials some Although prepare to necessary is It friendly. user and not outdated/old every utilizing by skills disseminate to materials training practical opportunities. labor. Agricultural lands are being increasingly fragmented. increasingly being are lands Agricultural labor. been has tenancy Informal small. is size holding land Average exist. land still of ownership Dual increasing. 1.2.1 Soil conservation1.2.1 Soil facilities irrigation 1.2.2 Increase Association 1.2.12. Users’ in item Water considered be to effective is of issue This 1.2.3 Establishment SABIHAA as such area Sindhuli in the projects some are There As agriculture. in productivity increase to a key is Irrigation breeding animal systematic of 1.2.4 Establishment for demands farmers' Although improved. be shall JT/JTA of Skill facilities research of 1.2.5 Increase crop on research/technology of 1.2.6 Enhancement onbreeding institutional/field level agriculture on now as of technology accomplished of been have facilities 1.2.7 Enhancement research whatever As and equipmentsmachinery on institutional/field level irrigation on research/technology of 1.2.8 Enhancement on institutional/field level on aspect post-harvest of 1.2.9 Enhancement institutional/field level on veterinary on technology of Enhancement 1.2.10 institutional/field level practical based field the of Enhancement 1.2.11 workers extension for knowledge at manuals training of provision and Development 1.2.12 field the 1.1.1 Effective implementation of Land reform program reform Land of implementation 1.1.1 Effective of shortage to due increased have fallow land keeping of Incidences Item issues Specific Corridor) Road (Sindhuli Reasons
1.1 Capacity building for macro-level for building 1.1 Capacity and planning policy agricultural implementation and production 1.2 Agricultural productivity 1. Agricultural Production Agricultural 1.
7 - 3 L L L H H H H M M M M M M Currently, the Governmental service on agriculture sector is quite limited. To achieve the achieve To limited. quite is sector agriculture on service Governmental the Currently, partnership promote to indispensable is it productivity), crop of issues(increase above level. grassroot to the services better provision of for NGOs with To and credit. saving only with dealing are in Nepal cooperatives agriculture the of Most function groups Farmers / Agriculture cooperatives in the sence of economic the boost to expected highly is etc) marketing, group purchase, group as activities(such the this of is one improvement, extension the with Together areas, ineconomics rural most high-priotized GoN. issues by with deal to institutions organized and minimum quite is seed improved of Coverage developed. well not are seed applicationFertilizer factor is of food production. key increase for a also has this a vision to privatize sector. GoN initiatives the to observe like would important, but this JICA is regarded issue Basically first. GoN by taken has and Japan growth economic Nepal's for important regarded is issue this Basically GoN by taken initiatives the observe to like would but JICA it, support to options several first. the be could it But system. extension of improvement the by covered be could issue This solution. alternative In most of the rural side in Nepal, the environmental degradation (except deforestation) (except degradation environmental the Nepal, in side rural the of most In issue. significant so a not is The concept of Saving and credit itself is prevailing in Nepal. The challenges will be to be will challenges The Nepal. in prevailing is itself credit and Saving of concept The them. among and Networks Governance the strengthen It is an challenging issue due to two reasons. 1) The market facility is not modernized at modernized not is facility market The 1) reasons. two to due issue is an challenging It For 2) limited. be could improvement the on effects the and time, of point this is cooperative farmers introducing of and stability competitiveness pricing the system, issue. to this prior is cooperative farmers on activation words, other In fundamental. and hilly in especially inputs, agricultural of terms in condition limited with Facing crop better for improved be should manure of application area, remote mountain management. soil and sustainable production current under But capacity. their show to reserchers for opportunities be should There less. getting are chances the in Nepal, condition L L L L H H H H M M M M M l waste shall be shall waste l Government extension services have not been able to deliver to able been not have services extension Government for even constraints financial including reasons several for services services NGOs' to farmers of access expenses, travel field covering its shortcomings. be enhanced to improve shall of procurement group as such functions different for group Farmers' group, users' water loan, group produce, of marketing group inputs, products, of price high and saving cost for organized be shall etc. agriculture comprehensive organizing for bases provide will which purpose single of number a limited only present, At cooperatives. are on so and Tea Milk, Junar, as such cooperatives agriculture performing been not have they but area Sindhuli in operating effectively. not is area Sindhuli in marketing for production agriculture Since districts, and Sindhuli Ramechhap in Dolakha, especially active yet markets knowledge of among farmers shall be disseminated. Thereafter, competitiveness shall be promoted, through activities 1.2.14. in given It area. the in seeds quality of availability non complain farmers the isto necessary appropriate develop distribution a As system. inthere Dolakha is available production cooperative seed vegetable it. improve to potentials is the from it is apparent However, survey. household with accordance is cultivation potato for application fertilizer that chemical survey in considered be would This Kavre. like districts some in excessive manure. organic of dissemination with connection be shall Skills farmers. and advanced NGOs by manure and sustainable reduction cost production of view in disseminated management.soil factory and the results intended achieve not did privatization Past its privatization. after non-operational virtually remained as such model appropriate identify to trying therefore is Government factory. tool operate to partnership public-private one is import points to be considered; substitution two are There area Sindhuli from export present of Enhancement is other and the not is India to products exporting as and Junar, potato seed as such easy. 1.3.1 as Same level field strengthening to urgent more be may it area, Sindhuli In skills. existing of dissemination system. properly utilized. properly 1.2.13 Promotion of NGOs' focuses on agriculture on focuses NGOs' of Promotion 1.2.13 while area, Sindhuli in operating actively NGOs several are there As develop to groups farmers’ small of Organization 1.2.14 themselves competitive on based prices trading of Promotion 1.2.15 market system and credit savings of Promotion 1.2.16 system distribution seed the of Enhancement 1.2.17 of most as poor is area in Sindhuli system distribution seeds Present 1.2.14 item in attended be shall This fertilizers of applying of Increase 1.2.18 in in general low is area Sindhuli in application Fertilizer application manure organic of Promotion 1.2.19 organic on activities many are there 1.2.18, item to relation In factory tools' agricultural of Functionalizing 1.2.20 factory. tools agricultural to operate effectively to planning is GoN for provision and legal policies of 1.3.1 Formulation export for standard control quality of 1.3.2 Establishment export agriculture for system qualification numerical of 1.5.1 Provision research agriculture on education practical of 1.5.2 Enhancement extension of improvement the by responded be could issue This
1.2 Agricultural production Agricultural 1.2 and productivity 1.3. Export promotion measures promotion 1.3. Export environment the of 1.4. Consideration program recycling of 1.4.1 Provision higher related 1.5. Agriculture- education agricultura of utilization 1.2.19, item to relation In 1. Agricultural Production Agricultural 1.
7 - 4 L L L H H H H M M M Various rural entrepreneurial activities are important that so rural people could be their substantialleaving without andearn income in locality their employed gainfully the so employments, disguised of plenty are there sector agriculture the In town. home introduction of off-farm activitiesto rural people are essential to enhance the labor income. additional generate and productivity and competent the that so systematic and made improved be to need industries Rural market. the to linkages smooth have will which produced be could products qualitative areThere other line ministry which is directly responsible for the local infrastrure development. This issue is one of the most important most the of in forest that since the of This issue is one sustainable usage for opportunity the increasing as well as production food sustainable the to lead resource income generation. For the mountainous regions where the opportunity for income generation is limited, is generation income for opportunity the where regions mountainous the For forests, of and conservation generation income both acquire could NTFP of production development. sustainable the to contributes and thus GoN has an fundamental recognition that food distribution should be besically operated besically be should distribution food that recognition an fundamental has GoN by private sector except for the cases. emergency the from commodity agricultural the protect to difficult it looks condition, current In boundary. over that of flow food area, rural in famine repeated of existance the with Nepal of situation current the In established be should aid food of distribution on Monitoring relief. an emergency aid is effeciency. the maximize to order in operation in and well Basically this issue is regarded important, but JICA would like to observe the initiatives the observe to like would JICA but important, regarded is issue this Basically first. GoN by taken At present Nepalese political context, it is hard to deal with this issue because the system the because issue this with deal to hard is it context, political Nepalese present At discussion. under is governance of L L L L H H H H H M M ptance of trainees, GA= Grant Aid, GR=Grassroots , *="H" prioritized issues without JICA's involvement in the past in the involvement JICA's without issues prioritized , *="H" GR=Grassroots Aid, Grant GA= trainees, of ptance ff-farm sources too. developed indeveloped the area to dhuli area is subsistence level of self of level subsistence is area dhuli Those issues could be dealt in other sectors than agriculture and the line Ministries may vary. may Ministries line the and than agriculture sectors in other dealt be could issues Those account However, Rural DevelopmentHowever, is expected to promoted be in harmony with variety of Ministries/sectors. consumption below sufficiency and farm size is too small and it is it and small too is size and farm sufficiency below consumption o through incomes supplement to necessary organizing with generation In farmers. related income. would of It and juice Junar produce to factory small are there area Sindhuli the cheese. also is It a year. out through access market keep to roads rural of facilities market infrastructure and to provide storage required products. 322into plantation of trees. Tree plantation would contribute also water also contribute would plantation Tree trees. of plantation maintenance. watershed Sindhuli corridor especially in Dolakha, Ramechhap and Sindhuli and Ramechhap Dolakha, in especially corridor Sindhuli self- and not limited is area the in production cereal Since districts. sufficient, introduction high value crops (HVC) appropriate with to thus and income farmers increase to essential is marketing roads feeder and it's road Sindhuli the as livelihood farmers improve markets. to access provide modality. implementation actual and policy appropriate identify out. carried be shall activities JICA's to in relation Advocacy much is It very effective to plant environmental trees for trees. by covered are hills inCharikot Dolakha, Near conservation. improved have area in these resources water which, of a result As degradation in other Butenvironment of substantially. state the is It much. trees not are There alarming. is areas corridor Sindhuli as indicated taking generation income in item to plant trees essential volunteers, SV=Senior volunteer, TCP=Technical Cooperation Project, DS=Development Study, AT=Acce 3.2.2 Promotion of Non-Timber Forest Products(NTFP) Forest Non-Timber of 3.2.2 Promotion by promoted be could tree fodder crops, herbal wood, fire NTFP, As 1.6.1. trading Enhancement and of marketing process products in agriculture is of not prevailing Commercialization policy. decentralization on-going the of 3.1.1 Promotion to necessary it is and DADO, DDC of functions clarifying As Development
1.6. Commertialization of agriculture of 1.6. Commertialization products function distribution 2.2. Food systems2.3. Import process marketing and trading of 2.2.1 Enhancement aid food of 2.4. Use Area. Corridor Sindhuli to relevant Not policy import specific of 2.3.1 Formulation to related policies 3.1. Implementing promotion of rural areas KR of system Distribution of 2.4.1 Improvement Area Corridor Sindhuli to relevant Not Area Corridor Sindhuli to relevant Not 3.2 Off-farm incomes 3.2.1 off-farm of Increase income other than remittance Most of agriculture in Sin industry processing 3.3 Agricultural industries rural up of grading 3.3.1 Systematic 3.4 Infrastructure be shall industry rural related Agriculture environment rural of 3.5. Protection Rural into protection environment of 3.5.1 Introduction infrastructures local of 3.4.1 Provision improvement 3.6. Livelihood and upgrade construct to necessary more much is it area, Sindhuli In Activities community Rural 3.7. 2.1. Food supply/ demand policy demand supply/ 2.1. Food base and data policy supply food of 2.1.1 Provision Area. Corridor Sindhuli to relevant Not 3.8. Health standards among residents among standards 3.8. Health among standards 3.9. Educational residents
1. Agricultural Production Agricultural 1. Supply Food 2. Development Rural 3. Note: DE= Dispatch of Expert, JV=Japan overseas cooperation cooperation overseas JV=Japan Expert, of Dispatch DE= Note:
7 - 5 7.1.3 Overall Rating of Priorities on Specific Issues
The Study Team placed priorities on each specific issue as given in Table 7.1, taking into consideration the NPP priority as well as potentials and constraints on agriculture and rural development in the SRC area as discussed in the preceding chapters, and, consequently, the needs for development of the SRC.
The specific issues were further prioritized, taking the following indicators into account:
(1) The Study Teams’ observations in relation to the priorities of the NPP as shown in Table 7.1 (2) The government policy (3) The local government policy (4) JICA’s experience (5) The availability of cooperation schemes (6) Other donors’ plans
The weight of each indicator above is determined to maximize the local conditions of the SRC areas. Accordingly, the Study Team’s observations are given the highest weight of 50 percent, since the observations are based on the HH survey and other various studies in the SRC. DDC (local government) priority is also given a 10 percent weight so that the total weight of consideration on the SRC local situation becomes a majority, 60 percent. The remaining 40 percent was allocated to other indicators such as the government policy and others for 10 percent each. This has been confirmed with the staff of the JICA head office and Nepal office.
Each specific issue was given a rating of H (25 points for (1) and 5 points for others), M (15 points for (1) and 3 points for others) or L (5 points for (1) and 1 point for others) for each indicator. Thus, the overall score for each issue would be 50 at the maximum and 10 at the minimum. Specific issues obtaining more than 80 percent (40 points) shall be considered as priorities for devising cooperation activities to formulate the cooperation program.
The results of the priorities of each specific issue are summarized as shown in Table 7.2.
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Table 7.2 Priorities of Specific Issues by Rating
Individual Indicat or Rat ing Overall Item Specific issues St udy T eam National District JICA Sch em e Other Rating Observation Priority Priority Experiences Availability Donors' Plan 1.1 Capacity building for macro- 1.1.1 Effective implementation of Land level agricultural policy planning reform program M MMMMM30 and implementation 1.2 Agricultural production and 1.2.1 Soil conservation M HHLHM34 productivit y 1.2.2 Increase irrigation facilities H HHHHL46 1.2.3 Establishment of effective Water Users’ L HHHHM28 Association 1.2.4 Establishment of systematic animal H HHHHL46 breeding 1.2.5 Increase of research facilities L ML HHM22 1.2.6 Enhancement of research/technology on H HMHMM44 crop breeding on inst it ut ional/field level 1.2.7 Enhancement of technology on agriculture machinery and equipments on M MLMMH30 institutional/field level 1.2.8 Enhancement of research/technology on H HHHHL46 irrigation on institutional/field level 1.2.9 Enhancement of post-harvest aspect on H HHMHM48 institutional/field level 1.2.10 Enhancement of technology on M HMMMM32 veterinary on institutional/field level 1.2.11 Enhancement of the field based H HHHHL46 practical knowledge for extension workers 1.2.12 Development and provision of training H MMH H M44 manuals at the field 1.2.13 Promotion of NGOs' focuses on H HHMH H48 1.2.14 Organization of small farmers’ groups H HHHHM48 to develop themselves 1.2.15 Promotion of trading prices based on
1. Agricultural Production L MMMM H22 competitive market system 1.2.16 Promotion of savings and credit L HMMMM22 1.2.17 Enhancement of the seed distribution H HMHMM42 1.2.18 Increase of applying of fertilizers H HMHHM46 1.2.19 Promotion of organic manure L HMHH H28 1.2.20 Functionalizing of agricultural tools' M MLMMM28 factory 1.3. Export promotion measures 1.3.1 Formulation of policies and legal M HLMMM30 provision for export 1.3.2 Est ablishment of quality cont rol standard M HMMMM32 for agriculture export 1.4. Consideration of the 1.4.1 Provision of recycling program M MLMMM28 environment 1.5. Agricult ure- relat ed higher 1.5.1 Provision of numerical qualification L HHHHL26 education system for research 1.5.2 Enforcement of practical education on M HHHHL36 agriculture 1.6. Commercialization of 1.6.1. Enhancement of trading and marketing H HMMH L42 agricult ure product s process 2.1. Food supply/ demand policy 2.1.1 Provision of food supply policy and data L HHMML22 base 2.2. Food distribution function 2.2.1 Enhancement of trading and marketing L HLMMM20 process 2.3. Import systems 2.3.1 Formulation of specific import policy L HHMMM24 2. Food Supply Food 2. 2.4. Use of food aid 2.4.1 Improvement of Distribution system of L HLMMM20 3.1. Implementing policies related 3.1.1 Promotion of the on-going M HHMML32 3.2 Off-farm incomes 3.2.1 Increase of off-farm income other than M HHMMM34 remittance 3.2.2 Promotion of Non-Timber Forest H HHMMM44 Products(NTFP) 3.3 Agricultural processing 3.3.1 Syst ematic grading up of rural industries H MMMM H42 industry 3.4 Infrastructure 3.4.1 Provision of local infrastructures H HHMML42 3.5. Protection of rural 3.5.1 Introduction of environment protection H HHLHM44 i iRlDl 3.6. Livelihood improvement Those issues could be dealt in other sectors
3. Rural Development Rural 3. 3.7. Rural community Activities than agriculture and the line Ministries may vary. 3.8. Health standards among L residents However, Rural Development is expected to be 3.9. Educational standards among promoted in harmony with variety of residents Ministries/sectors. Note: Individual Ratings is as follows: The Study Team Observation; L (5 points), M (15 points) and H (25 points), Other Indicators; L (1 point), M (3 points) and H (5 points). Overall maximum points are 50 points and minimum points are 10. Overall points exceeding 40 points (80%) of specific issue would be considered for the cooperation program. Source: Prepared by the Study Team
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7.1.4 Cooperation Activities
The potential cooperation activities on each prioritized specific issue are studied, taking into account the potentials and constraints for the development of the SRC areas as discussed in Chapter 6, and listed in Table 7.3. The specific reasons why these activities are derived are discussed in Section 7.2 with respect to each activity.
Table 7.3 Potential Cooperation Activities
Item Specific issues Potential Cooperation Activities Grouping
1.2 Agricultural 1.2.2 Increase irrigation facilities 1.2.2.a. Construction of small scale & micro irrigations A production and 1.2.2.b. Rehabilitation of existing irrigation facilities A productivity 1.2.4 Establishment of systematic animal 1.2.4.a. Strengthening of livestock farms B breeding 1.2.4.b. Disseminating AI practice B 1.2.4.c. Promotion of breeder farmers and livestock production through B community livestock resources center 1.2.4.d. Promotion of fish culture and fish and fresh water prawn breeding B 1.2.6 Enhancement of 1.2.6.a. Promotion of seed and sapling production farmers and farmers' groups B research/technology on crop breeding on with appropriate extension services institutional/field level 1.2.6.b. Strengthening of Sindhuli agriculture farm and Punchkhal spice B development farm 1.2.6.c Dissemination of skills for cultivation of potato, junar, tea and so on. B 1.2.8 Enhancement of 1.2.8.a. Organizing irrigation groups and water users' groups of farmers research/technology on irrigation on C institutional/field level 1.2.9 Enhancement of post-harvest aspect 1.2.9.a. Organizing farmers' group on post-harvest aspect including sorting and on institutional/field level grading facilities for fruits and vegetables C 1.2.11 Enhancement of the field based 1.2.11.a. Organizing training session of extension workers at farmers' field on practical knowledge for extension workers practical farming skill B
1.2.12 Development and provision of 1.2.12.a. Preparation, publication and distribution of practical training manuals training manuals at the field B 1. Agriculture Production Agriculture 1. 1.2.13 Promotion of NGOs' focuses on 1.2.13.a. Assistance to NGOs for seed and sapling production, skill extension, and C agriculture organizing farmers' groups 1.2.14 Organization of small farmers’ 1.2.14.a. Organizing farmers' groups for irrigation, inputs procurement, marketing groups to develop themselves products, credit activity, etc. and encouraging organizing cooperatives C 1.2.17 Enhancement of the seed 1.2.17.a Improvement of seed distribution system in relation to 1.2.6.a, 1.2.13.a dist ribut ion syst em and 1.2.14.a. B 1.2.18 Increase of applying of fertilizers 1.2.18.a. Promotion of appropriate fertilizer application through 1.2.11.a., B 1.2.12.a. and 1.2.13.a 1.2.18.b. Promotion of organic manure production and dissemination with B 1.2.18.a 1.6. Commercialization 1.6.1. Enhancement of trading and 1.6.1.a. Providing trading and marketing infrastructure including transition A of agriculture products marketing process market, storage facilities, etc. 1.6.2.b Strengthening of linkages among producers & market stakeholders D 1.6.1.c. Establishing market information system D
3.2 Off-farm incomes 3.2.2 Promotion of Non-Timber Forest 3.2.2.a Promotion of tree plantation for fodders, fuel trees, herbal plants, etc. E Products (NT FP ) 3.2.2.b Strengthening of group activities on management of community forest in C connection with 1.2.14.a 3.3 Agricultural 3.3.1 Systematic grading up of rural 3.3.1.a Promotion of agro-processing by providing skills and if necessary facilities processing industry indust ries A
3.4 Infrastructure 3.4.1 Provision of local infrastructures 3.4.1.a Improvement of rural roads in addition to 1.2.2.b., 1.6.1.a. and 3.3.1.a. A
3. Rural Development Rural 3. 3.5. Protection of rural 3.5.1 Introduction of environment 3.5.1.a. Promotion of utilization of farm waste in connection with 1.2.18.a environment protection into Rural Development E
Note: Symbols of grouping are as follows: A (Infrastructure), B (Skill Enhancement, C (Institutional Development), D (Marketing Activities) & E (Environmental Conservation) Source: Study Team
7.2 Focal Points
The potential cooperation activities above are sorted into the following five groups as focal points for formulating a cooperation program, taking practical implementation of the cooperation activities into consideration.
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a. Infrastructure b. Farming skill improvement c. Development of farmers’ group activities d. Post-harvest and marketing of products e. Environmental aspects
The Study Team expresses hereinafter the background of the cooperation activities made out based on the discussions in the preceding chapters.
7.2.1 Infrastructure
On the basis of the present policy and plans of the government and the Nepal Position Paper of JICA, the following infrastructure items are listed as cooperative activities on agriculture and rural development, taking present constraints and development potentials into consideration: (1) Small-scale and micro-irrigation, (2) Marketing facilities, (3) Agro-processing facilities, and (4) Rural roads. These were confirmed through the results of the household survey and the interviews of stakeholders, especially DDC officers. The Study Team also found in the field that they are essential for development.
(1) Irrigation (Cooperation activities 1.2.2.a & 1.2.2.b)
Irrigation for crop cultivation is essential for increasing the productivity of subsistence crops such as maize, cereals, millet, etc., and for introducing commercial crops. Therefore, irrigation is very important for the improvement of farmers’ livelihoods and to increase farm income. There are many micro-irrigation facilities available in every district, but officers and farmers stated that many more small-scale and micro-irrigation systems could be constructed from springs and mountain torrents.
It should be noted that in accordance with the household survey, the people consider irrigation to be the highest priority to attend to with respect to development activities. Further, respondents in all districts of the HH survey raised the issue that the most important reason for non-cultivation of their farmland was lack of irrigation.
The ratio of irrigated areas in each district is given in Table 7.4.
Table 7.4 Irrigated Areas and Irrigation Ratio
MOAC Data Household Survey Irrigated Area Irrigation Ratio Description Cultivated Area Irrigation Ratio （％） (Ha) (Ha) （％） Partially Fully Irrigated A B B/A Irrigated Nepal Whole 2,968,000 989,580 33.3 -- Hill & Mountain 1,474,800 156,454 10.6 -- Tarai 1,234,300 833,108 67.5 -- Dolakha 29,423 3,211 10.9 33.8 4.6 Ramechhap 40,050 3,560 8.9 6.5 11.7 Kavre 36,442 4,181 11.5 22.9 8.8 Sindhuli 39,485 4,023 10.2 21.8 25.3 Hill & Mountain Total 145,400 14,976 10.3 21.3 12.6 Mahottari 62,944 13,801 21.9 0.9 32.7 Source: Prepared by the Study Team based on Statistical Information on Nepalese Agriculture 2007/08 of MoAC, and Household Survey carried out by NARMA.
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As shown in the table above, the irrigation ratio in the Hill and Mountain regions within the survey area in accordance with MOAC statistics is almost the same as the ratio for the whole region, which is only 10 percent. However, the irrigation ratio in the same area obtained by the household survey is 33.9 percent,1 including both fully and partially irrigated areas. In accordance with MOAC statistics, the irrigation ratio in Mahottari is only 21.9 percent, which is far lower than the average of 67.5 percent in Tarai. The household survey data shows only 0.9 percent of cultivated areas in Mahottari is fully irrigated and 32.7 percent is partially irrigated, which is also very low compared to the average in the Tarai area. These figures show that irrigation ratios have yet to be improved to develop agriculture in the SRC areas.
It has also been observed that water supplies from small springs could be used not only for drinking and domestic use but also for irrigation by retaining excess water in small tanks, especially for flow during the nighttime, and water stored during the night would be used for irrigation. Such micro-irrigation systems are available all over the SRC area, but there is greater potential to develop similar micro schemes. It should also be noted that it was learned from the ATEIP experiences that introducing micro irrigations in villages is very effective in organizing farmers.
The Study Team observed that there are several temporary anicuts available on streams. Those could be improved by replacing with permanent ones and such anicuts for small irrigation should also be built wherever water is available in streams. The Study Team also observed that in certain parts of the Dolakha district, many more trees grow on the mountainside than in other areas. In such places, water in torrents seemed to flow more than in other areas, and many watermills were in operation. This fact indicates that tree plantation would have a function to retain water in addition to other functions such as to prevent landslides and soil erosion, to supply fodder, and so on.
(2) Trading and Marketing Facilities (Cooperation Activities: 1.6.1.a)
As for the trading and marketing facilities, stakeholders suggested a few facilities to be provided to introduce efficient market systems. Those are collection centers, spaces for grading of products, storage facilities and markets.
It is appropriate to provide facilities together with technical cooperation to organize farmers, first into groups and later into cooperatives.
Collection Center and Outlet During the interview in Malekhu in the Dhading district, cooperative members expressed a desire to have a collection center of vegetables to collect and send their products to the market. Such facilities are essential to commercialize agriculture in the SRC, with the strengthening of farmers’ organizations and production groups so that the farmers may have more bargaining power against traders to handle in bulk. Most of the traders stated that they were willing to work with cooperatives and groups directly.
The Michi-no-eki (Roadside Station) concept is well understood in Nepal and one similar such station is the Malekhu vegetable market in the Dhading district. The market is attached to a gas station and tourists stop at the market and purchase vegetables and other products. The retailers at the market procure vegetables from cooperatives and farmers in the morning and sell them throughout the day. This system could be applied in the SRC as the Michi-no-eki concept provides other facilities such as bus stations, toilets and restaurants.
1 Differences between the MOAC data and the household survey data may come from the fact that small and micro scale irrigation systems provided by VDC and communities are included in the household survey data, which may not be reflected in the MOAC data. In addition, as the household samples were selected from relatively higher potential farmers, it may be that sample farmers cultivate more irrigated lands.
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Sorting and Grading Space At present, farmers send products to the market without sorting or grading, which may contribute to low prices. Traders who were interviewed also expressed that if farmers could grade their products before sending them to the market, it would be more convenient for the traders as well. In the case of Junar, although OVOP products have certain standards for grading, most of the Junar are procured at low prices without grading by middlemen at the farm gate. This issue shall also be looked at in connection with farmer group formation.
If such grading is introduced, it will require some place to do the actual grading of products. Although it could be farmers’ house premises in cases where the quantity is not too great, assistance for provision of such facilities in the case of larger quantities would be an incentive to organize farmers.
Storage Facility Japan’s grassroots grant assistance provided a milk collection center in Bakundebeshi in the Kavre district and a Junar storage facility in Sindhulimadi in Sindhuli district. Such facilities strengthen farmers’ activities and encourage more organization among farmers.
It may be quite appropriate to assist in providing such facilities farmers can market their products when prices are high and increase production and income. This could be applied to potato also, as prices of potato fluctuate greatly depending on the season, more than doubling from the lowest to the highest price times.2
Market All the markets visited by the Study Team, have relatively poor facilities. Kalimati in Kathmandu, Bardibas in Mahottari, Biltamod in Jhapa, Biratnagar in Morang, Hetauda in Makwanpur and Narayangadh in Chitwan are all constructed in small areas. Although they are open six days a week, they are too congested and not very clean, and except for Kalimati there is no paved access road. On the other hand, the Dharan Market in Sunsari is relatively clean but not many goods are handled there. The Dhalkebar Market in Dhanusa is also relatively clean but it is open only two days a week.
Many market management committee members and cooperative management people suggested providing temporary storage facilities and accommodations in the market for suppliers such as farmers’ groups and cooperatives, so that they could wait and watch variations in commodity prices and thus fetch higher prices for their products.
The Study Team believes that appropriate markets with temporary storage facilities and accommodations shall be required for all markets so that products could be handled efficiently and quickly.
Products of the SRC will be marketed to the Tarai and India in the near future. A core market near the East West Highway, where the SR joins at Bardibas or Dhalkebar, is to be constructed, or improvement of the present ones is inevitable.
(3) Agro-Processing Facilities (Cooperation Activities: 3.3.1.a)
One way to enhance farmers’ income generation with marketing is providing agro-processing facilities to process agricultural produce into jam, juice and other products. The Study Team visited the Junar juice processing center in Khanyakharka village in Ratanchura VDC in Sindhuli.
2 In accordance with Kalimati Market data in 2007/08, the lowest average monthly price of red potato is Rs.10.91/kg and that of white potato is Rs.10.0/kg in Apr/May, while the highest average monthly prices of red potato and white potato are Rs.24.7/kg and Rs.22.39/kg, respectively, in Sep/Oct.
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In Jiri, Dolakha, there are potentials for agro-processing, such as cheese production from milk and tea production. There are some possibilities to assist in building agro-processing facilities if farmers are well-organized and cooperatives are established with the intent to process products for value addition.
(4) Rural Road Improvement (Cooperation Activities: 3.4.1.a)
Roads are the highest priority of development in the DDCs and VDCs since they are essential to transport people and officers and for outgoing and incoming commodities, as many people in remote villages not connected by roads have to walk a long distance, sometimes for days, to reach a place where public transport is available. Therefore, all stakeholders put the first priority of infrastructure development on road construction. Unless roads are provided, commercialization of agriculture cannot be materialized, and as a result, people’s livelihoods in remote areas would remain at subsistence level. The Study Team visited Manthali in Ramechhap and it required more than nine hours to reach there from Kathmandu because of the present roundabout route through Charikot, Dolakha. DDC officers expect that when the Sindhuli Road is completed, as well as the bridge crossing Sun Koshi River at Khurkot village, the time required to reach the Tarai would be reduced to approximately four hours from more than 18-20 hours at present, and even the time required to reach Kathmandu would be reduced to 4-5 hours.
The importance of roads is clearly seen with the all-weather road from Bhotekoshi to Charikot and Jiri that had been built long ago. The incidence of poverty in Dolakha is much lower than in the Ramechhap and Sindhuli districts and a little lower than in the Kavre district, despite the fact that the Dolakha district is far away from Kathmandu. Further, a very small number of farmers get loans from moneylenders in Dolakha, which may indicate that farmers’ organizations are functioning well and social cohesion is strong in the area.
Results of the household survey conducted by NARMA also indicated that transportation and roads are placed in the second priority for development needs. DDC and VDC officers expressed that as they have been in a hurry to construct rural roads with specifications at a preliminary level, it is necessary to improve and upgrade such rural roads.
7.2.2 Farming Skill Improvement
It is very important that well skilled grassroots extension workers conduct extension works periodically in the farmers’ fields.
Household survey results showed that satisfaction with agriculture services and veterinary services are very low among the public services, being 1.67 and 1.763 respectively, which is the second and third lowest among the 11 items listed in the questionnaire. Interviews in the villages conducted by NARMA and the Study Team showed that extension services are not conducted frequently, and moreover, farmers have to pay fees to the JT/JTA to receive extension services. On the other hand, the JT/JTAs explained that since no TA&DA are provided by DADO and DLSO, it is difficult for them to visit villages for extension activities unless farmers’ cooperatives/groups or NGOs bear such expenses.
Some members of cooperatives such as the Malekhu Fruit and Vegetable Multi-purpose Cooperative in Dhading expressed that they could not depend upon JT/JTAs, and thus procure skills from other sources such as input suppliers. They also stated that one of the important functions of cooperatives is skill and knowledge dissemination to their members.
There are a few facilities in the SRC for research and dissemination of agriculture and livestock skills under NARC. It is important to strengthen the activities of the facilities, especially on skill
3 Full satisfaction is 5.0 and the lowest satisfaction is 1.0.
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It is also very important to disseminate management and human relation skills not only through the government institutions but also through private-sector and NGO activities, as well as from farmer to farmer by organizing them.
Constraints and potentials for individual issues are described as follows:
(1) Strengthening of Livestock Farms (Cooperation Activities:1.2.4.a)
One of the leading livestock farms is located in Jiri in the Dolakha district. The farm conducts research and extension works on cow and pig. The farm uses AI in cows and pigs to increase production and plays an important role in the area. As some of the facilities are old, it may require replacing the facilities to increase the productivity of the farm.
(2) Disseminating AI Practice (Cooperation Activities: 1.2.4.b)
Milk production has increased in recent years4 and it is assumed that the trend will continue. Therefore, it may require strengthening of AI activities of the DLSO in all districts. Intensive training and provision of tools are required.
(3) Promoting Breeder Farmers and Livestock Production (Cooperation Activities: 1.2.4.c)
Improved varieties of livestock have yet to spread widely as AI has only been carried out in some DLSOs in the area. It seems that the Livestock Development Farm in Jiri showed a good model of production of calf and piglet, but dissemination of such skills has not widely taken place.
DLSO is promoting a community livestock resources center to distribute improved varieties of livestock. In this connection it may be recommended to bring up breeder farmers since cow, goat and pig are popular and potential animals for incrementing farmers’ incomes.
As discussed in Chapter 3, DLSO operates livestock development centers to cover several VDCs in a district by assigning JT/JTAs. The JT/JTAs are active because they are often needed urgently and farmers are willing to bear their expenses.
Livestock development has high potentials considering the increase of production in the five districts in recent years, as shown in Table 7.5.
Table 7.5 Annual Production and Increment of Livestock
Variety of Production Ave. Annual Unit Livestock 2001/02 (%) 2006/07 (%) Increment (%) Buffalo Nos. 3,700,864 100 4,366,813 118 3.5 Goat Nos. 6,606,858 100 7,847,624 119 3.6 Pig Nos. 934,461 100 989,429 106 1.2 Poultry Nos. 21,779,004 100 24,319,428 112 2.3 Milk MT 1,158,780 100 1,351,349 117 3.2 Source: Study Team based on CBS Year Book 2007
Since production of all livestock commodities is increasing, there are substantial potentials for farmers in the SRC to strengthen livestock production. On the other hand, constraints are shortage of grazing land and fodder.
4 The production of milk (both cow and buffalo) in 2007/08 was 1,388,730 MT, while in 1997/98 it was 1,048,040 MT, which is an increase of 33% in 10 years in accordance with MOAC statistics.
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(4) Promoting Fish Culture and Fish and Prawn Breeding (Cooperation Activities: 1.2.4.d)
In Mahottari, farmers expressed their desire for fish culture. The Study Team visited the Tarahara regional agriculture research station in the Sunsari district and observed the distribution of fingerlings of carps, tilapia and freshwater prawn. The Team also interviewed a few farmers who purchased those fingerlings. Farmers expressed the profitability of fish culture as follows:
- Fish pond: 600 m2 - No. of fingerings procured: 600 nos., Rs.180 (Rs.0.3/fingering) - Survival rate: 75% (450 nos.) - Culture period: 9 months - Feed: Nil - Production: 450 kg in all (approximately 1 kg/fish) - Income: Rs.49,000 in all (approximately Rs.110/kg) - Net income (without labor): Rs.48,820
They explained that tilapia and freshwater prawn are much more profitable than carp.
As such, fish culture has a large potential in the Mahottari district, provided water is available for ponds.
(5) Promoting Seed and Sapling Production Farmers and Farmers’ Groups (Cooperation Activities: 1.2.6.a)
Almost all farmers involved in vegetable production interviewed by the Study Team during the field trips complained about the quality and availability of seeds. It seems that vegetable production in Dolakha, Ramechhap and Sindhuli is still low and produce is mostly consumed within the district including self-consumption. However, in the Kavre and Mahottari districts commercial vegetable production is well-developed as is understood by the data shown in Table 3.34 and Figure 3.8 by comparing the extent of cultivation area and production, and also in Table 4.13. After the roads are developed, the demand for vegetable seeds in the other three districts shall be increased and the seed issue would become bigger when commercial vegetable production becomes more popular.
In Charikot in the Dolakha district, there is one farmers’ cooperative guided by an NGO, the Rural Development Tuki Association (RDTA), which had production of vegetable seeds contracted with a merchant based in Kathmandu. They produced seeds of four varieties of radish, three varieties of mustard, three varieties of beans, coriander, cucumber, tomato and cauliflower. Ninety members of the cooperative were involved in seed production. They produced substantial quantities of seed annually and sold all seed products to the merchants. Foundation seeds obtained from the DOA were provided by the merchants periodically. The transactions continued very well for the initial four years, but were disrupted for the last two years due to disputes with the merchants. RDTA intends to assist the cooperative in resuming the seed production business through cooperatives’ networks and others.
At the Agro Expo 2009, the Study Team talked with several seed suppliers. One supplier at the Expo laid out only locally produced seeds, while others exhibited hybrid seeds imported from abroad, such as Japan, China, India and others. The seed suppliers indicated that they depend on foundation seeds from the DOA, and production of seeds is dependent upon contract farmers all over the country, and annual vegetable seeds production of the company is 20 tons, more or less. Since hybrid seeds are relatively expensive, it may be necessary to encourage the production of local vegetable seeds for reducing the production cost of agricultural produce. On the other hand, farmers of cooperatives in Dhading and Kavre expressed that they use hybrid seeds more for commercial production of vegetables.
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Sapling production of fruit trees is not adequate and production skills of saplings, especially those of farmers, have yet to be improved. One farmer in Khanyakharka village in the Sindhuli district produces Junar grafted saplings in the 2-3 thousands at his farm and he reported that the mortality rate is approximately 30 percent, which is promising, as the experience at the Horticulture Development Centre shows a similar figure for the mortality of fruit trees.
It should be noted that the Sindhuli Farm of the DOA, established in Sindhuli under the JADP, had been the center of Junar extension. However, it is not presently functioning for production of Junar saplings.
(6) Strengthening Sindhuli Agriculture Farm (Cooperation Activities: 1.2.6.b)
The Sindhuli agriculture farm was initially established under the JADP of JICA in the late 1970s, and it contributed to horticulture development in the area, especially for Junar. The Study Team learned that the farm stopped activities on Junar and is concentrating on root crops. Since the skills for cultivating Junar, including production of saplings, are yet to be disseminated to farmers, the farm shall be upgraded by improving facilities and strengthening staff to produce tropical fruit saplings.
(7) Disseminating Skills for Cultivation of Potato, Junar, Tea, etc. (Cooperation Activities: 1.2.6.c)
Cultivation skills of individual HVCs, such as potato, Junar, tomato, chili, and so on, shall be disseminated either through government institutions, NGOs or private parties, or from farmer to farmer to increase productivity and improve the quality of products for higher income. The Study Team observed that Junar production skills are not necessarily transmitted to JT/JTAs and farmers, as farmers indicated that they do not tend to prune the trees, applying fertilizer and so on. It is necessary to disseminate basic skills for adapting to Junar cultivation.
One specific issue observed in Jiri in the Dolakha district is tea production skills. A tea plantation was started in the area seven years ago, when Mr. Kohei Makita, a JOCV, brought 5,000 saplings from Ilam. There is one private company and one tea cooperative involved with the plantation and production of tea. Today, the area of tea plantation has reached 270 ha in total and is increasing. However, production is still small at only 280 kg in 2008. The Study Team observed that one of the tea plantations visited was not so impressive. It may require a lot of improvement of tea production skills in the areas of plantation, plantation management, processing and so on. But the potential of tea looks certain considering the climatic conditions in the area and the taste of the sample tea.
(8) Organizing Training Sessions for Extension Workers (Cooperation Activities: 1.2.11.a)
Government extension workers, or JT/JTAs, are complaining that they do not have opportunities to attend training programs to improve their skills in agricultural technology, while farmers expressed that JT/JTAs seldom came to visit their fields for technical extension and that their skills were not necessarily up-to-date. In this viewpoint, it is necessary to organize training sessions repeatedly on farmers’ fields, as ATEIP conducted during the project period.
(9) Preparing, Publishing and Distributing Practical Training Manuals (Cooperation Activities: 1.2.12.a)
There are many leaflets and posters that explain cultivation skills to be distributed to farmers and to be put up on walls of offices, halls and other places. Some of them, however, are prepared only in text and are of no use to illiterate farmers. It may be appropriate that such publications with illustrations be prepared and distributed for easy understanding of skills.
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(10) Improving the Seed Distribution System (Cooperation Activities: 1.2.17.a)
Farmers at present procure required seeds individually from private supplier at relatively high prices where no group or cooperative exists. In relation to seed production (Cooperation Activities: 1.2.6.a), assistance to NGOs (Cooperation Activities: 1.2.13.a) and organizing farmers (Cooperation Activities: 1.2.14.a), farmers should improve seed distribution systems.
At present individual farmers procure seeds from private suppliers. If the farmers could be organized so that the quantities they purchase would increase, they would have better bargaining power and obtain technical inputs from suppliers.
Table 4.31 shows the ratio of seed expenses to the average cultivation cost in each district, which shows that the highest expense per annum per HH is in Kavre at Rs.8,974, or 19 percent of the total cost per HH, followed by Mahottari at Rs.5,614, 29 percent, Dolakha at Rs.4,696, 17 percent, while Ramechhap has the lowest at Rs.1,509, 20 percent. The expenses are substantial.
(11) Promoting Appropriate Fertilizer Application (Cooperation Activities: 1.2.18.a)
Application of chemical fertilizers and pesticides is one of the most important skills for agriculture. Table 4.31 shows average HH expenses on fertilizer and pesticide application by district. The results show that the highest average expense per HH is in Kavre at Rs.11,627, followed by Mahottari at Rs.5,808 and Dolakha at Rs.4,527. In other districts, expenses are lower, probably because commercial agriculture has not prevailed.
Tables 6.13 and 6.14 show the agricultural balance sheet of potato farmers in each district. The tables indicate that agricultural cost in Kavre is very high, which may be caused by the high costs of seed potato and fertilizers. Moreover, it seems that potato farmers in Kavre are in a negative profit margin on average, which may be caused by excessive inputs for potato cultivation in Kavre, as shown in Table 4.31. Cost performances both for self-consumption of potato and for self-consumption and sale are negative.
Application of pesticide in Kavre is also more common than other districts. It is said that excessive use of chemical fertilizers and pesticides lowers the quality of products and lands and is hazardous to health.
As discussed above, farmers should have appropriate knowledge on inputs and profit if commercial agriculture is introduced. This issue shall be taken into consideration in connection with item 1.2.11.a “Organizing training sessions for extension workers on farmers’ fields on practical farming skills,” 1.2.12.a “Preparation, publication and distribution of practical training manuals” and 1.2.13.a “Assistance to NGOs for seed and sapling production, skill extension and organizing farmers’ groups”.
As discussed in Section 6.3.2 (3), a leading farmer in Dolakha has practiced crop rotation to avoid the adverse effects of continuous cultivation of the same crop. This also reduces application of chemicals. Further he grows pulses as one of the rotation crops, which fixes nitrogen into the soil. These kinds of practices should be disseminated.
(12) Promoting Organic Manure (Compost) Production and Dissemination (Cooperation Activities: 1.2.18.b)
The farmers interviewed in Ramechhap and Sindhuli explained that chemical fertilizers are used for cultivation of cereals but not for fruits and vegetables, while they used cow dung and compost based on cow dung. In other districts, chemical fertilizers were used for potato in addition to cereals. The advantage of organic manure is well understood by most farmers. However, the quality of compost is not necessarily appropriate, as farmers apply cow dung directly and just mix the cow
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Chemical fertilizer applications for cultivation, especially for potato in Kavre, were reported excessive and as a result, not only has the production cost increased but soil fertility has deteriorated. Excessive use of chemical fertilizers and pesticides is also suspected of causing human diseases, specifically cancer.
Appropriate production methods of organic manure, and its usage with the application of chemical fertilizer should be disseminated to the farmers as most of the farmers in the SRC possess cattle or other livestock. This would increase the productivity of farming and reduce production costs, thus increasing agricultural income.
Some officers stated that due to the decrease in numbers of cow and buffalo, production of compost has recently been reduced. Compost production shall be integrated with livestock development as discussed for cooperation activities 1.2.4b.
7.2.3 Strengthening of Farmers’ Organizations
(1) Organizing Irrigation Groups and Water Users’ Groups (Cooperation Activities: 1.2.8.a)
As discussed in the preceding section for infrastructure, “Irrigation,” construction and improvement of irrigation facilities are the most required by farmers. However, it is important to organize related farmers for these tasks, taking future operations into account. Moreover, through construction and improvement they shall bear some of the cost. Such organizing and cost bearing shall be the basis for establishing groups for other activities also.
(2) Organizing Farmers’ Groups from Post-Harvest Aspects (Cooperation Activities: 1.2.9..a)
As discussed in the preceding section for infrastructure, “Trading and Marketing Facilities,” farmers placed high priority on the provision of trading and marketing facilities. The Study Team also concluded they are inevitable to introduce and activate commercial agriculture. However, as with irrigation, it is very important that the farmers should organize well before the facilities are provided and make some contributions so that they will have a sense of ownership of the facility. It may not be possible for farmers to bear all the cost of the construction of the facility, so assistance for provision could be justified if farmers are organized and decide to bear some of the cost.
Many issues need to be settled before construction, such as land, location, size, etc., and these should be determined by farmers’ participation. Such a process will strengthen the farmers’ group and cooperative activities.
(3) Assisting NGOs (Cooperation Activities: 1.2.13..a)
NGOs have played an important role in various activities to support farmers in many areas. Therefore, it is appropriate to support their activities as the government extension services do not always reach farmers due to budget deficits and other reasons. In Dolakha, an NGO, Rural Development Tuki Organization is providing assistance to farmers to organize themselves and to produce vegetable seeds.
One example of assistance by Japan to an NGO is a satellite shop of an NGO, Love Green Nepal, which was provided under Japan’s Grass Root Grant. It operates in Kavre to produce and distribute fruit and tree saplings to farmers and to disseminate skills for organic agriculture.
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(4) Organizing Farmers’ Groups for Irrigation, Inputs Procurement, Marketing Products, Credit Activity, etc., and Encouraging Organizing Cooperatives (Cooperation Activities: 1.2.14.a)
As discussed in items (1) and (2) above, it is important to organize farmers’ groups and cooperatives. Items (1) and (2) are considered in connection with provision of hardware. It is also important to organize farmers for group procurement of agricultural inputs such as seeds, fertilizers, chemicals and so on. Such groups will have bargaining power for the prices of goods, which could be adopted for marketing of products.
Farmers groups and/or cooperatives also provide a route to access the official loan facilities for procurement of inputs and others, which decreases the cost of production. As it is common in Sri Lanka, it could be applicable in Nepal since the government banks provide agriculture loans. As learned in the HH survey and shown in Table 6.20, farmers in Dolakha and Kavre enjoy low interest loans because of organizing themselves well.
(5) Strengthening Group Activities on Management of Community Forest (Cooperation Activities: 3.2.2.b)
Many farmers are involved in community forest activities in the SRC. These activities will be further strengthened through organizing farmers in groups, since the forest functions to retain water and conserve soil, as well as supply fuel wood, fodders and non-timber products such as herbal plants, mushrooms, and so on. Forest activities will also be expended for tree plantation in degraded forests in view of environmental conservation.
7.2.4 Marketing
(1) Strengthening Linkages among Producers and Market Stakeholders (Cooperation Activities: 1.6.1.b)
Some farmers do not trust traders, assuming that they are exploiting them. Due to the lack of proper linkages between farmers, farmers’ organizations and market stakeholders, marketing of products is weak and farmers are used to procuring various inputs at higher prices.
By organizing farmers, interactions between farmers’ cooperatives and traders will be properly made through workshops and meetings, and it is likely that trust will be established through such interactions. When proper linkages are established, marketing transactions can be reasonable and efficient.
(2) Establishing Market Information Systems (Cooperation Activities: 1.6.1.c)
Most farmers have no access to prevailing market prices for their produce. Some advanced agricultural cooperatives in Dhading use telephones to get price information from Kalimati. Similarly, most wholesale traders obtain prices of agricultural commodities through telephone calls to respective markets, even in India.
The Kalimati Fruit and Vegetable Wholesale Market in Kathmandu provides daily wholesale prices — high, middle and low — of commodities every day on their web site. Further, the AED of FNCCI also provides commodity prices for 11 markets throughout Nepal on their web site. It may be helpful for farmers’ organizations to have computers and to be able to access such information for marketing of their produce in addition to the information obtained by telephone.
7.2.5 Environmental Aspects
(1) Promoting Tree Plantation (Cooperation Activities: 3.2.2.a)
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Tree planting provides advantages to the community such as land and soil conservation, and retaining water. Benefits from non-timber forest production shall be disseminated under community forest activities through education, especially through schoolchildren. Local level tree nurseries will be organized in communities and cooperatives and incentives will be given to people to plant trees by assuring them of profits from forest products such as timber in the long term, firewood, fodder for livestock, herbal plants, mushrooms and so on.
For the construction of the Sindhuli Road, the government decided to plant more than 10 times the numbers of trees that were cut for the road construction. Promotion of tree plantation will enhance the government’s efforts.
(2) Promoting the Utilization of Farm Waste (Cooperation Activities: 3.5.1.a)
In various places, farm wastes such as vegetable wastes are thrown into nearby streams and roadsides, which are degrading the rural environment. Such wastes could be utilized in connection with compost manure production described in cooperation activity item 1.2.18.c.
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CHAP. 8 PROGRAM FORMULATION
Chapter 8 discusses the formulation of the cooperation program. It consists of four sections, namely, Section 8.1 “Basic Concept in Formulating the Cooperation Program,” Section 8.2 “Basic Strategy of the Cooperation Program,” Section 8.3 “Plan of Projects” and Section 8.4 “Implementation Schedule.”
Figure 8.1 is a schematic diagram of the program formulation of the Study, following the study discussed in Chapter 7 on the prioritized specific issues, cooperative activities and focal points.
Increment of Agriculture Income
Planning and Implementation of Projects
Phasing of Implementation: Focal Points 3 Phases: 1st Phase; before SR completion, 2nd Phase; full development, Infrastructure Component of 3rd Phase; follow-up & Expansion Program : Objective & Priority Areas: OA: 5 Districts, Skill Strength PA: Depending on each Project Improvement ening of 1. Vegetable, Farmers' 2. Livestock, Post Harvest Group 3. Fruits, and Schemes to be Adopted: 1. Technical & Marketing 4. Mahottari Area Cooperation with Development Study, 2. Technical Cooperation, 3. Grant Aids, 4. PPP, 5. JOCV, 6. Others Environment Participation and Contribution of Beneficiaries:
Cooperation Activities Potentials & Constraints, Zoning and Positioning Identified through the Study
Prioritized Specific Issues on JICA's Development Objectives Chart Agriculture & Rural Development
Figure 8.1 Schematic Diagram to Formulate Cooperation Program
8.1 Basic Concept in Formulating the Cooperation Program
8.1.1 Background
In accordance with the HH survey and other studies by NARMA and the Study Team, it was noted that poverty was a very complex phenomenon depending on land holding, ethnicity, education, land characteristics, immigration, etc. Therefore, in order to reduce poverty in the SRC, many aspects need to be attended to. In order to improve the livelihoods of HHs in the SRC, stabilization of agricultural operations shall be attended to first under this Study, taking the following aspects into consideration:
(a) Food adequacy: On average, nearly 80 percent of HHs in the SRC produced enough food to feed themselves for less than nine months and more than 54 percent of HHs responded that they produced food for less than six months, as shown in Figure 4.9. On the other hand, the Study Team assessed that farmers’ responses on food scarcity might be for paddy and wheat only, as discussed in Section 6.3.1. If maize and potato are considered as food crops, deficits
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are not observed on calorie basis except in Dolakha, as shown in Table 6.8, though future in-depth study is necessary.
(b) Agricultural income: Annual HH agricultural income on average in the SRC is only 32.6 percent of the total HH income, as shown in Table 4.29. The average HH income and agricultural income in each district, agricultural cost and profit, and ratio of agricultural profit to agricultural income are shown in Table 6.91:
Table 6.9 Average HH Income, Agricultural Cost and Profit in Each District Unit: Rs./annum Description Dolakha Ramechhap Kavre Sindhuli Mahottari Average HH Income (1) 100,218 90,926 124,947 75,801 99,693 98,329 Agricultural Income (2) 33,274 11,220 52,518 21,472 41,833 32,071 Ratio (%) (2)/(1) 33.2 12.3 42.0 28.3 42.0 32.6 Agricultural Cost (3) 27,859 7,404 47,400 10,818 19,435 22,616 Agricultural Profit (4) 5,415 3,816 5,118 10,654 22,398 9,455 Ratio (%) (4)/(2) 16.3 34.0 9.7 49.6 53.5 29.5
The farmers in Kavre have the highest agriculture income, Rs.52,518 (42% of HH income), but the profit margin is the lowest, Rs.5,118 (9.7% of agricultural income). High agricultural income does not mean high agriculture profit, as shown in Table 6.9.
Assessing the data in Table 6.9, the agricultural performance of Mahottari is the most appropriate in the SRC area, as its agricultural income is the second highest and agricultural profit ratio is the highest among the five districts.
The incomes from other than agriculture depend upon salary from employment, small side businesses, migrant labor in other regions or countries, construction labor in the district and others.
8.1.2 Alternatives for Realizing the Concept
From the above two points, alternatives for realizing the concept for the cooperation program would be introduced as follows:
(a) Increment of production of cereals to increase self-sufficiency of food (b) Increment of agricultural income and profit ratio through the introduction of HVCs 2 , commercialized agriculture and skill and management improvement on agriculture (c) Stabilization of farm economy through both (1) & (2) above
8.1.3 Selection of Alternatives
The alternative (b) above, “Increment of agricultural income and profit ratio through the introduction of HVCs, commercialized agriculture and skill and management improvement on agriculture” is the most appropriate alternative to improve the livelihoods of farmers in the SRC area through provision of infrastructure, skill improvement, organization of farmers, appropriate marketing and environmental improvement, as discussed in Chapter 7. Increment of agricultural income alone would not be adequate to improve farmers’ livelihoods, as it was observed that though farmers in Kavre have the highest agricultural income, their profit ratio is the lowest, especially for potato farmers, as discussed in Section 6.3.2. Commercialized agriculture is one of key issues for increasing farmers’ agricultural income.
Further, the Study Team determined that the food security condition in the SRC area is not so
1 For easy reference Table 6.7 is shown here too. 2 HVC (high-value commodities) include vegetables, fruits, livestock and fish culture.
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8.1.4 Reminder Points for Formulation of the Cooperation Program
(1) Commercial Crop Production without Affecting Food Production
Commercialized agriculture does not mean that all farmlands should be changed to cultivate HVCs. The profit per unit area of HVCs is nearly 10 times higher than cereals in general as discussed in Section 6.3.2. Therefore, if 10 percent of cultivation fields for cereals were changed to fields for HVCs, it could be equivalent to doubling the value of cereal production. Further, introduction of HVCs will improve the farmers’ farming and farm management skills, which may bring about an improvement of cereal productivity as a side effect.
It should be noted that most farmlands in the hill and mountain areas are located on steep slopes and productivities of cereals are not high at present. In such conditions, it is not so easy to drastically increase productivities of cereals and produce double the amount or more.
(2) Necessity of Group Formation by Farmers
Most farmers will likely introduce HVCs in limited areas at first and gradually increase HVC cultivation after they are assured that HVC production would be profitable. From this viewpoint, it is inevitable to establish some system in which small farmers will surely benefit from the introduction of HVCs. Farmers’ organizations should play an important role in this aspect, especially for marginal farmers.
It should be noted that if a farmer who owns more land than the average of 0.64 ha and cultivates HVCs in his entire cultivation field, he can deal products independently with traders. However, it is not practical to change his crops to HVC in all of his fields, and farmers prefer to continue producing cereals to secure their food. Further, marginal farmers would not be able to produce enough products to encourage traders to deal with them directly. Taking marketing of products and procurement of inputs into account, group formation of farmers is one of the most important aspects in introducing HVCs.
(3) Establishment of Relations of Trust with Traders and Wholesalers
Another important aspect of marketing of products is for producers to create good relations and trust with traders or wholesalers, most of whom want a constant supply of products in quality and quantity. A trader cum wholesaler at the Panchkhar Collection Centre in Kavre expressed the sentiment that producers who constantly supply products to the traders would be given priority for higher prices. A farmer who deals with the trader also expressed that he has been supplying products to the same trader for quite a long time and that he gained advantages in the long run, though sometimes he would earn less than other farmers who changed traders depending on prices.
8.1.5 Program Outputs
Taking the above situation into account, the Study Team would like to set the program target as follows:
(1) For the three districts of Dolakha, Kavre and Mahottari, whose average HH agricultural income exceeds the average of the five districts at present, HH agricultural income shall
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increase by 20 percent3 as follows:
a. Dolakha: from Rs.33,274 to Rs.39,929 b. Kavre: from Rs.52,518 to Rs.63,021 c. Mahottari: from Rs.41,833 to Rs.50,000
(2) For the two districts of Ramechhap and Sindhuli, whose average HH agricultural income is below average at present, HH agricultural income shall exceed Rs.32,071, the present average of the five districts.
(3) For the two districts of Dolakha and Kavre, whose agricultural profit ratio is lower than the average, agricultural profit ratio shall be increased to 29.5 percent, the present average of the five districts.
Individual project goals will be decided on taking the above criteria, priority area and phasing of the program into consideration.
8.1.6 Beneficiaries
Beneficiaries of the cooperation program shall be both marginal and leading farmers to achieve balanced development. However, depending on the project, objective beneficiaries may differ.
8.1.7 Risks and Countermeasures
Risks of HVC introduction are (1) Prices tend to fluctuate, depending on the balance between production and demand. If production exceeds demand, prices would become low; sometimes it goes lower than production cost. (2) Farmers have to obtain new technologies on vegetable cultivation as for varieties, diseases, packaging and so on. If products are not accepted by the market, farmers will suffer losses. (3) Costs producing HVCs — for seeds, fertilizers, etc. — might be more than cereals, as is the case with Kavre farmers mentioned in Section 6.3.2.
Countermeasures of the risks are (1) collection of market information and adjustment of the production plan based on market information as discussed in Section 5.3, (2) organization of farmers and strengthening the groups for acquiring new skills in a timely manner, (3) reduction of HVC costs by minimizing the use of chemical fertilizers and pesticides and improving farming skills, and (4) taking a holistic approach to agriculture through integration of focal points discussed in Section 7.2.
As for (1) above, it is important to make daily adjustments in sending products to the market based on price information. Also, if the price of a specific commodity is extremely high in a certain year, the price of the same commodity in the next year might decline heavily due to overproduction, or vice versa. Accordingly, keeping a careful eye on market situations is necessary and building mutual trust between producers and traders is important.
8.2 Basic Strategy of the Cooperation Program
The following aspects will be taken into consideration for formulating the cooperation program:
(1) Focal points (2) Components of the program (3) Phasing of program implementation
3 The target could be higher than 20%, but taking into consideration the different situations in each district and the reality of achievement in a short time, 20% was decided to be reasonable.
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(4) Objective area and priority area (5) Schemes to be adopted by the program (6) Participation and contribution of beneficiaries
8.2.1 Focal Points
The potential activities identified in the preceding section could be bound into five main focal points, namely (1) infrastructure development, (2) skill improvement, (3) strengthening of farmers’ organizations, (4) post-harvest and marketing, and (5) environmental aspects for agriculture and livestock development in the SRC.
It is important to integrate assistance of infrastructure such as irrigation and marketing facilities and software components such as technical extension for skill improvement and assistance in organizing farmers. The results of ATEIP showed that the farmers were activated by providing small seed funds for micro-irrigation and other infrastructure. The Poverty Alleviation Fund (PAF) Project of the World Bank is now operating in four districts, namely Ramechhap, Kavre, Sindhuli and Mahottari in the SRC. The project also provides funding for activating community organizations as well as providing infrastructure with beneficiaries’ contributions.
As discussed at length in Section 4.3.4, irrigation is the most required infrastructure to agriculture development and practice in the SRC.
Establishment of infrastructure in the cooperation program, possibly by the beneficiaries themselves with their contributions either in kind, cash or both, will be a great incentive to farmers for participating in development activities. It will also provide an opportunity to organize farmers if appropriate guidance is offered during the preparation and implementation periods with technical cooperation.
The Study Team considers that institutional development of farming HHs is one of the key aspects in carrying out development activities, taking into account the following facts derived from various projects in the past:
(a) Taking O&M of facilities after the completion into account, institutional development is inevitable. A facility provided under a project becomes well functional and well maintained when an organization of relevant farmers is established for infrastructure development and when the involvement of the beneficiaries to construction is secured.
(b) One important aspect of a successful organization is the participation of women. In ATEIP, there are many women members in ADCs and a few women chairpersons. The organizations chaired by women are functioning well. It is essential and appropriate to include women as members of farmers’ organizations.
(c) In Nepal, as the budget of the government extension services on agriculture activities has been reduced, government services have become weak and farmers are complaining about the situation. However, government budget on agriculture extension is not likely to be increased in the near future and some alternative plans should be considered. In the workshops held in each district, many participants explained that extension services were provided to farmers’ groups but not to individual farmers, either by the government or the private sector, and the actual practice of such group extension services were reported functioning well in some cooperatives and groups:
(i) In Malekhu in Dhading, members of the Malekhu Fruit and Vegetable Multi-purpose Cooperative, which numbers nearly 800 HHs, stated that technical improvement activities under the cooperative are mainly dependent upon the private sector and very seldom on the government sector. They also explained that there are two methods of marketing of products;
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one is that individual farmers deal directly with buyers, paying a small charge to the collection center managed by the cooperative, and the other is that products of small farmers are procured by the cooperative and marketing is made by the cooperative or large farmers adding to their marketing.
(ii) In Panchkhal in Kavre, the chairperson of the Shri Gramin Mahila Bikash Multi-purpose Cooperative explained that they have 1,800 members and various activities from saving and credit and IG activities to agricultural training. The cooperative conducts agricultural training for its members, inviting the private sector or sometimes JT/JTAs. The cooperative paid TA & DA to the JT/JTA who was the resource person of the training.
(iii) In Makari Bari, ward 12 of Bineshwar, Dolakha, a leading vegetable farmer explained that he organizes 31 farmers in a group and conducts procurement of inputs, marketing and technical improvement in the group. He gets new skills from the private sector and JT/JTAs.
At the same time, many DDC officers mentioned the utilization of “village agricultural development workers (VDAWs)” in the district workshops. VDAWs are selected among leading farmers in the area and nominated by DADO. It is said that training of VDAWs will be strengthened with better allowance, and extension services will be partly handled by them.
(d) Group activities are efficient and profitable for each farmer in terms of procurement of inputs, as reported by a cooperative in Kavre. It also functions well for marketing of products, as practiced by a cauliflower production group in Dholka. Accordingly, group activities are beneficial to farmers in terms of marketing activities, such as procuring inputs at lower prices and easier marketing.
(e) Group activities are also reported to be functioning well on credit activities, not only for the farmers’ own saving and credit but also for access to official credit facilities so that interest rates are substantially reduced.
Table 6.20 shows the average interest rates of HHs in five districts. HHs in Dolakha and Kavre borrow money at low interest rates of 18.4 percent and 17.1 percent, respectively, which are more than 10 percent lower than rates of HHs in the other three districts, which range from 28.1 to 28.8 percent.
In the SRC area, a few of Japan’s grassroots grant assistances, such as a milk chilling center and a Junar cold storage facility, have contributed a lot to the development of the area and increment of farmers’ incomes. These experiences suggest that systematic technical cooperation by providing infrastructure would have a bigger potential.
It is appropriate that infrastructure and technical cooperation could be integrated in a project. However, if integration of the two components in a project is difficult due to difference of schemes, it is also possible for two projects to be carried out in parallel with proper coordination.
Taking these aspects into consideration, the Study Team would like to propose that the strategy of the agricultural and rural development program in the SRC shall focus on infrastructure, technical improvement, strengthening of farmers’ organizations, post-harvest and marketing, and environmental aspects, while giving special attention to farmers’ organizations as a common issue.
At the same time, a holistic approach will be taken to implement a program as much as possible in order to obtain the maximum advantage of the program through integration of relevant projects.
8.2.2 Components of the Program
As discussed in the preceding sections, to achieve the program concept and increment the
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(1) Continuous study with actual cooperation activities at the beginning of the program
(a) Technical cooperation (development study) component:
Since this preparatory study was conducted with limited time and manpower inputs, it is appropriate to conduct a detailed study on the farm economy of different crops and to determine suitable locations for specific vegetables, fruits and animals with further data collection on their production and marketing. The Study Team would like to recommend carrying out the Study through actual cooperation activities in the field to establish highly probable plans for development projects.
General data on agricultural profits of cereals and vegetables including potato are available and have been collected by the Study Team. However, practical data for a balance sheet on vegetable cultivation will be collected in addition to fruits, livestock and fish culture. Moreover, feeding of livestock and fish culture will be carefully studied, as data shows that farmers in Kavre spent a substantial amount, Rs.19,742 annually on average, to procure animal feed for livestock as shown in Table 4.31. Economic implications for the production and effect of compost will also be studied.
(2) Cooperation for the Hill region
(b) Vegetable production and marketing component:
One of the most appropriate methods for farmers to increase agricultural income is vegetable production and marketing, since the profit from vegetable production is nearly 10 times higher than for cereals, as discussed in Section 6.3.2. Most farmers in the SRC have experience with vegetable cultivation, though many of them only produced vegetables for their own consumption.
In this context, vegetable production and marketing is one of the most practical and attainable components to increase agricultural income in the SRC.
With regard to this component, technical cooperation for organizing farmers will first be implemented with the provision of small infrastructure such as micro-irrigation, skill improvement and marketing, including group procurement of inputs and group sales of products.
Once group activities are well established and production is increased, technical cooperation focusing on marketing will be considered. This includes construction of collection centers, possibly for fruits as well.
With the progress of the above cooperation, storage programs for vegetables and fruits and post-harvest and agro-processing programs shall be followed. This latter stage of the component covers both vegetables and fruits.
(c) Livestock component:
A livestock component will be conducted based on improvement of the quality of animals through AI. One milk-producing cow or buffalo brings a daily income of Rs.120-150, which is substantial for poor farmers, as discussed in Section 5.4.2 (4). Similarly, goat and pig rearing also brings substantial income to farmers. Accordingly, livestock development is an essential component to increment farmers’ agricultural income.
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One of the important aspects of livestock production are animals feed and the effect of compost production.
(d) Fruit production and marketing component:
Fruit production and its marketing component shall be carefully attended to in the program, since the potential of fruit production is very high and fruits handled in the Kalimati market in Kathmandu are dominated by Indian products, as discussed in Section 6.3.2.(4). As a JICA expert is assigned in AEC as the commercial agriculture promotion advisor and looks after the fruits aspects, a “fruit corridor” plan will be implemented along the Sindhuli Road, since the area has produced a lot of fruits ranging from tropical ones such as mango, banana, lychee, papaya, etc. to temperate ones such as Junar, persimmon, pear, etc.
It would be very interesting to adopt the concept of Michi-no-Eki to the Sindhuli Road in relation to the fruit corridor.
(3) Cooperation for the Tarai region
(e) Mahottari agriculture development component:
Agriculture development in Mahottari is a little different from the hill and mountain areas and a different approach may have to be taken. In accordance with the HH survey, farmers in Mahottari are diversified from very poor to rich, mainly due to land holding sizes. In the hill and mountain districts, landless farmers are almost nil, but in Mahottari 11 percent claimed to be landless. The livelihoods of those landless people depend on various types of labor, including agriculture and tenant farming.
In order to attend to those poor, the overall development of agriculture in the area may be important so that opportunities of labor would be increased. In this context, the fact, that the irrigation ratio in Mahottari is only 21.9 percent in contrast to 67.7 percent overall in the Tarai, means there would be higher potential in Mahottari for agricultural development in general by increasing irrigation based on groundwater. This is proven by the presence of self-flowing wells in the district. In the district workshop, participants stressed the need to rehabilitate tube wells constructed by JADP and for new construction of shallow wells for irrigation. The Study Team believes that irrigation is essential in Mahottari and if the irrigation wells could be rehabilitated and constructed, it is also recommended that fish culture is promoted as well, as discussed in Section 7.2.2.
The issue discussed above is not only Mahottari but also neighboring districts such as Dhanusa and Sarlahi. Taking this fact into account, the project, proposed under the program, might be studied further covering not only Mahottari but also other neighboring districts for feasibility of implementation of such project.
8.2.3 Phasing of Program Implementation
In TOR, the period to consider implementation of the cooperation program is fixed for eight years from 2010 onwards. The balance of the SR construction under Japan’s grant was partially committed and would be completed by early 2013. Also, the basic design of the Community Access Improvement Project has been implemented and the Project, which is likely to be implemented by Japan’s grant, will be completed in 2011. Thus, the cooperation program is divided into three phases as follows:
(a) Phase I: This phase is considered a preparatory period before completion of the entire Sindhuli Road construction. Accordingly, technical cooperation with the development study shall first be
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planned and implemented. At the same time, technical cooperation for vegetable cultivation and marketing will focus on strengthening farmers’ organizations by providing small infrastructure close to the completed parts of the Sindhuli Road in the Kavre and Sindhuli districts.
In this phase, awareness of farmers in cooperatives and marketing is very important. Observation tours will be organized frequently, and various trainings for institutional development should also be implemented.
(b) Phase II: This stage is considered as a full development stage in relation to the full completion of the Sindhuli Road. Accordingly, in addition to the vegetable production component, the livestock and fruit components will also be implemented. In this phase, technical cooperation on storage facilities for vegetables and fruits with grant aid, as well as on improvement of livestock rearing, shall be carried out. Further, the fruit corridor plan, taking the Michi-no-Eki concept into consideration, shall be implemented in this phase with the PPP concept.
(c) Phase III: This phase is considered to be the stage for sustainable development and further expansion of agriculture and rural development program in the SRC, based on the outcomes of Phases I and II. Technical cooperation for post-harvest and agro-processing with grant aid for facilities, natural environmental improvement for agriculture and livestock, and construction of a wholesale market in the eastern Kathmandu Valley with grant aid will be implemented in this phase.
8.2.4 Objective Areas and Priority Areas
As discussed in Section 6.2.5, the correlation between successful agriculture practice and distance to market is not confirmed. Even though some farmers are quite some distance from the market, they are doing very well and have obtained substantial profits from agriculture. From this point of view, it is not appropriate to specifically define objective areas within the five districts; the Study Team recommends that the objective area include the entire five districts for the cooperation program. However, priority areas shall be defined depending on each project to be implemented under the cooperation program.
In Phase I, technical cooperation for development studies shall be carried out in the objective areas as defined above. Other technical cooperation projects in this phase will commence in the VDCs directly connected to the completed Sindhuli Road in the Kavre, Sindhuli and Ramechhap districts as the priority areas. As implementation of the program proceeds, the program area for implementation will be extended gradually and through the entire objective area.
The priority areas to start off the program will be selected among the VDCs directly connected to the Sindhuli Road from the Kavre, Sindhuli and Ramechhap districts for the following reasons:
(a) Kavre is close to the main market of Nepal, Kathmandu, and agriculture in Kavre could be a model of commercialized agriculture in the SRC. Although farming in Kavre is not profitable on average as discussed in Section 6.3.2 (3), this could be changed through various improvements in the farming operations and management as well as marketing by reducing costs, increasing productivities and fetching higher prices for products.
(b) Agriculture in the Sindhuli and Ramechhap districts is not yet modernized and the average agricultural income is still low. Much potential will be realized by farmers along the road after the Sindhuli Road in the district has been completed. Although the Ramechhap district is separated from the Sindhuli Road by the Sun Koshi River, there are foot bridges crossing the river, such as the one between Khurkot in the Sindhuli district and Seleghat in the Ramechhap district. The adjacent areas connected by the foot bridges could be included in the priority areas.
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The priority VDCs shall be selected taking the following aspects as selection criteria into consideration:
(a) Presence of community organizations and assessment of their activities (b) Present level of commercialization of agriculture (c) Presence of NGOs and their activities (d) Availability of projects by other donors
The number of objective VDCs to be covered in the program shall be determined taking the extent of the project activities and budget into consideration.
8.2.5 Schemes to be Adopted for the Program
There are many cooperation schemes available in Japan’s ODA program. The following schemes are appropriate and applicable to the agriculture and rural development program in the SRC:
(a) Technical cooperation project with focus on development study (b) Technical cooperation project to transfer specific skills with provision of small infrastructure (c) Various grant aid schemes, namely general, community, grass root, etc. (d) Dispatch of individual experts, senior volunteers and JOCV (e) Public-private partnership (PPP) (f) Combination of the above schemes
When an individual project under the cooperation program is planned, an appropriate scheme or schemes are selected. The Study Team strongly recommends an integrated approach of multiple schemes to enhance synergetic effects.
8.2.6 Participation and Contribution by Beneficiaries
One of the important aspects in implementing a project is full participation of beneficiaries. In the district level workshops, many officers stated that organizations in the area are not necessarily sustainable since an organization established to receive some assistance under a program would cease to be functional after receiving the assistance. It is important to organize or strengthen groups so that the organizations will remain functional after receiving assistance, which may be for infrastructure, technology, etc.
It is also important for participants to contribute toward a part of the costs of a cooperation project in cash or in kind. Such contributions engender participants’ ownership of the project. The ratio of contribution may have to be assessed carefully, depending on the grade of poverty of each participant and the stage of the project. A project would be followed by a subsequent project and if the same beneficiaries were selected, the weight of their contribution should be increased to motivate ownership and self-dependence, which in turn contributes to the sustainability of the project.
8.3 Plan of Projects
Individual cooperation projects will be planned taking the program discussed and formulated in the preceding section into consideration as illustrated in Figure 8.1.
The five focal points will be integrated as much as possible in the planning of the individual projects. Phasing and components are also incorporated into project planning.
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Specific areas of a planned project will be selected taking the priority areas of the project into consideration. Further, cooperation schemes to be adopted for a project shall be carefully examined.
The first project under the program recommended by the Study Team is a technical cooperation program with development studies, taking the following aspects into account:
(1) There are many points yet to be clarified as this study has limitation of period and staff. Therefore a detailed master plan on the whole objective area shall be drawn together with the implementation of the actual pilot technical cooperation. (2) It was defined that vegetable production is definitely one of the prospective components of the program, while agriculture in Kavre, where the most commercialized methods are adopted in the SRC, is not profitable. Further, the Sindhuli Road in Kavre is completed. (3) The first project shall be carried out where the Sindhuli Road has been completed.
Accordingly, the first project shall be technical cooperation with development study covering the whole objective area and technical cooperation on promotion of vegetables including potato with areas along the completed Sindhuli Road in Kavre and Sindhuli as the priority areas.
Once this project for vegetable production is started, projects to follow shall be those concerning marketing, storage, post-harvest and processing, which shall cover other components of the program, fruits and livestock, in addition to vegetables.
Environmental improvement shall also be considered in relation to agriculture and livestock development. In this context, JICA has commenced the technical cooperation for soil conservation and watershed management under the “Participatory Watershed Management and Local Governance Project.” JICA’s technical cooperation project has established a "model" for participatory watershed management with Nepalese authority. Therefore, the GON is expected to replicate this model by using its own resources in order to contribute to environmental improvement in the SRC area.
Further, at the end of the program implementation, a wholesale market project under the grant shall be considered for the eastern part of the Kathmandu Valley to supplement the Kalimati market, which is too congested with no extra space available nearby.
Assigning volunteers for tea and vegetable seed production shall also be considered.
As a result of careful study, the following projects are planned and proposed under the cooperation program taking focal points and other aspects into consideration as shown in Table 8.1.
As discussed above, there are four main program components proposed. It shall be noted that the five focal points as discussed in Section 7.2 constitute each component. The focal points are interrelated and go in cycles as shown in the conceptual diagram shown in Figure 8.2.
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Environment Development Objective Poverty Alleviation by Agriculture Income Generation Feedback Implement Continuously
Marketing Skill Enhancement Infrastructure
・ Marketing Survey ・Seeds & Saplings ・ Rural Road ・ Consumer Survey ・Farming Skill ・ Small Scale
・ Study Tour ・Organic Manure Irrigation ▼
Institutional ▼ Strengthening
Farmers’ Group Feedback & Cooperatives
Figure 8.2 Conceptual Diagram of Circulations of Focal Points
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Table 8.1 Proposed Project Lists
Coverage*1 Project Implementing No. Name of Project Phase Component*2 Area Scheme*3 ABCDE Period (Year) Agency Sindhuli Road Construction Partially 0 ◎ 3 years - SRC DOH Grant Project, Section III Committed
Community Access 1 ◎ Under Study 2.5 years - SRC MLD Grant Improvement Project
TC with small Technical Cooperation for 3 years for VDC directly infrastructure Farming Skill Improvement Dev. Study & attached to MOAC & 2 ○◎◎○○ I a & b & with Development Study 5 years for SR & All DADO Development Project TC SRC Area Study
Ramechhap, M arketing Strengthening Kavre, MOAC & 3 Project with provision of ◎○◎ I & II 5 years b & d TC & Grant Sindhuli & DADO facilities Mahottari
Agricultural Products Storage Facilities MOAC & 4 ◎○○ II 3 years b & d SRC Grant Improvement & DADO Construction Project Post Harvest & Agro- MOAC & 5 ○○○◎△ III 3 years b & d SRC TC & Grant processing Project DADO Livestock Produvtion MOAC & 6 ○◎◎ I & II 5 years c SRC TC & Grant Strengthening Project DLSO Environment Improvement DADO, 7 for Agriculture & Livestock ○○ ◎ II & III 3.5 years b, c, & d SRC DLSO & TC & PPP Project DSCWM Commercial Agriculture MOAC & 8 ◎○○ Committed 2.5 years b & d Whole Nepal Expert Promotion Advisor AEC MOAC & 9 Fruits Corridor ○○◎◎ I & II 4 years d & b Along SR Grant & PPP Develoment Project DOH Wholesale M arket 10 ◎○○○II & III 3 years b & d SRC MOAC Grant Development Project
SV & JOCV Assignment ◎○ I 2 years b Dolakha DADO SV & JOCV for Tea Development 11 SV & JOCV Assignment ◎○ I 2 years b Dolakha DADO SV & JOCV for Seed Production
M ahottari and Adjacent Area Tube Well MOAC, DOI, 12 ◎○ II 5 years e Mahottari TC & Grant Rehabilitation & DADO Construction Project Note: *1 Focal Points: A: Infrastructure, B; Skill Improvement, C; Farmers' Organization, D; Marketing, & E; Environment Aspect *2 Component: a; Development Study b. Vegetables c; ,Livestock & Fish Culture, d; Fruits, e; Mahottari Development *3: Scheme; TC; Technical Cooperation, PPP; Public Private Pertonership, SV; Senior Volunteer
The Project No.0 is Sindhuli Road construction has been committed partially, and the Project 01 Community Access Improvement Project is under consideration for the Grant Aid scheme. Further, the project 08 Commercial Agriculture Promotion Advisor was also committed by JICA. Accordingly, the plan of projects under the program was made from the Project No.2 onwards excluding No. 08.
The cooperation activities to be covered by the project are clearly defined in each project paper as shown in Table 8.2 below.
It shall be noted that implementation and cost estimates of each project in this report are a plan of the Study Team and they are not committed by JICA yet. For the implementation of each project, requests of the GON and mutual consultation on each project between the GoN and JICA shall be conducted.
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Table 8.2 Projects under the Program for Agriculture and Rural Development in the SRC
Project No. 02 Project Name Technical Cooperation for Farming Skill Improvement with Development Study Project Purpose Targeted Area 1) Improvement of Vegetable Production Technique; 2) Technical Cooperation: VDCs abut Strengthening Farmers’ Organization; 3) Activating Agriculture on completed Sindhuli Road in Extension Activities; 4) Research on Business Status of Various Districts of Kavre, Sindhuli, and Agriculture Products and Potential Areas; 5) Accumulation of Ramechhap. Basic Information on Land, Agriculture, and Farmer; 6) Development Studies: Five Districts Research on Actual Marketing Conditions in coordination with Technical Cooperation Project; 7) Evaluate Effective Agriculture Development Projects and Activities Background Beneficiary ATEIP, implemented as a technical cooperation project, carried out organizing Technical ADCs and guiding extension workers and farmers closely in farmer’s field. Cooperation: Especially, technical guidance through providing micro-irrigation facilities was 1) Vegetable welcomed by beneficiaries. Based on the experience, a technical cooperation Production projects will be implemented focusing on organizing farmers through utilizing Farmers maintenance of infrastructure, i.e. micro-irrigation and efficient agriculture 2) Farmers extension activities. However, GON has no intension to increase numbers of Cooperatives extension workers and farmers say “modern technique is learnt from radio and 3) Agriculture private supplier the extension workers.” It is necessary to improve tools of Extension extension to disseminate more people, i.e. posting posters at collection centers. Workers Organizing farmers’ cooperatives could be a tool for increasing agricultural income, which is different approach than ADC. As farm management still has Development room for improvement, i.e. overuse of fertilizer is a problem, farm management Studies: will be solid through extension activities. 1) MoAC For development studies within technical cooperation project, Corridor of Sindhuli officers in Road, connect North and South of Nepal, is rugged from mountainous areas with charge of altitude of 2,000 meters and more to Tarai tropical areas with altitude of Planning 100meters. In mountain corridor, especially temperature and rainfall are various. 2) DADO It is necessary to provide technical guidance and maintenance of infrastructure officers in which is suited to the area. Information on area close to Katmandu, i.e. Kavre, is charge comparatively massive while basic information is limited on Districts of Dolakha, Sindhuli, and Ramechhap. As a result, agricultural production maximizing geographic characteristics are not implemented. Therefore, through area research will be done from comprehensive point of view by experts on soil, irrigation, vegetable farming, husbandry, and farm management, basic information are collected and utilized for make development program more appropriate and effective. Activities (Cooperation Activities: 1.2.2.a, 1.2.6.c, 1.2.8.a, 1.2.11.a, 1.2.12.a, 1.2.14.a, 1.2.17.a, 1.2.18.a, and 1.2.18.b) 1)training of extension workers 2)transferring of production technique, i.e. compost 3)establishment of farmers organization through provision of micro-irrigation 4)development of tools of extension, i.e. posters, radio, internet 5)technical transfer of program planning through Development Studies
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Input Expected Output
Pre-Conditions Expected Socio-Economic Risk
Special Note Providing similar amount of grant aid as cost of expert will be considered. It is important as a first step to achieve the program purpose, to facilitate active participation on necessary activities through generating awareness on increase productivity per unit of land or cost reduction. It is highly values to formulate comprehensive rural development program in the next step through implementing the technical cooperation project. Site Map
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Project No. 03 Project Name Marketing Strengthening Project with provision of facilities Purpose Targeted Area 1)Strengthening of Sale through Establishment of Farmers Districts of Sindhuli and Kavre. Cooperative Junction of Sindhuli Road and 2)Establishment of Collection Centre Feeder Roads Background Beneficiary Agriculture Cooperatives in Nepal are receiving benefit from cost reduction 1)Orchard through cooperative purchase of fertilizer and agrichemicals, but are lack of Production experience on strengthening selling power through cooperative shipping. Farmers Cooperative shipping started a few years ago in Dhading District in West 2)Cooperatives Katmandu whose assured delivery is highly evaluated by wholesaler in 3)Distributor Kathmandu. Through cooperative shipping, products could be collected from members in time and there is a certain power for price negotiation. On the other hand, distributor appreciates them as secure clients of one-window. It is preferred reliable business partner with higher price than unstable delivery with low price. Additionally, agriculture product storage facilities of agriculture cooperatives contribute increase of agriculture income. Linkage with P02 Farming Skill Improvement Project and P04 Agriculture Products Storage Facilities Improvement and Construction Project will be taken. Cooperative shipping is not implemented in the east of Kathmandu. With individual access to market, bargaining power could not be exercised and shipping situation and price is also unstable. In the project, agriculture cooperatives will be organized in Kavre and Sindhuli to strengthen sales channel utilizing collection centre to be provided under the project. Activities (cooperation activities: 1.2.9.a, 1.2.14.a, 1.6.1.a & b,) 1)Strengthening Organization of Production Cooperative 2)Establishment of Collection Centre Target Products: Potato, tomato, Cabbage, Cauliflower, Carrot, Onion, Squash, Chili, etc. Input Expected Output
Pre-Conditions Expected Socio-Economic Risk Land for collection centre Condemnation of In principle, construction of facilities should be covered by Nepali side. The land project covers pilot area only. Special Note It is necessary to strengthening sales power and negotiation power for increase of agriculture income. Cooperative shipping, a process of distribution transformation, is an inevitable activity to achieve program purpose.
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Site Map
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Project No. 04 Project Name Agricultural Products Storage Facilities Improvement & Construction Project Purpose Targeted Area 1) Construction of Agriculture Storage Facilities Districts of Sindhuli, Kavre, and Ramechhap Background Beneficiary With rain-fed cultivation, harvesting season of vegetables and fruits is concentrated 1)Orchard in targeted area and it is not possible to ship products when market price is higher. Production In relation to the technical cooperation project, Project 03: Collection Centre and Farmers Marketing Improvement Project, construction of storage facilities of agriculture 2)Cooperatives products under the grant are implemented. 3)Distributor Activities （Cooperation activities: 1.2.9.a, 1.6.1.a） 1)Feasibility Study - Deliberation of suitable site - Project cost calculation 2)Management of tender and construction Input Expected Output
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Implementing Agencies Implementing Schedule Agricultural Cooperatives 2012 - 2015
Pre-Conditions Expected Socio-Economic Risk Land for collection centre Condemnation of land The project covers prioritized facilities only. The rest should be covered by Nepali side. Special Note While strengthening farmers organizations and introducing cooperative shipping will be implemented by P03 “Marketing Strengthening Project with Provision of Facilities,” it is preferable that cooperative centre will be constructed for facilitating P03. Program Purpose will be achieved effectively with soft component. Site Map
Project No. 05 Project Name Post Harvest & Agro-processing Project Purpose Targeted Area 1) Increasing added-value of agriculture products Districts of Sindhuli, Kavre, 2) Improvement of post-harvest techniques Ramechhap, and Dolakha 3) Improvement of packaging Junction of Sindhuli Road and Feeder 4) Increasing agriculture income Roads Background Beneficiary Districts of Sindhuli, Kavre, and Dolakha are potential production area of 1)Orchard vegetables. If cooperative shipping are promoted and market cultivation and Production production increase are realized through P04 “Agricultural Products Storage Farmers Facilities Improvement & Construction Project” and P08 Commercial 2)Cooperatives Agriculture Promotion Advisor, it is necessary to go through the stage of 3)Distributor increase agriculture income by price stabilization and increase added-value. Added-value will be enlarged through continuous technical transfer on grading and agro-processing technology targeting cooperatives members. Necessary inputs and techniques to be transferred are different in each development stage of organization. This project targets cooperatives with experience of cooperative shipping to lead organizational growing stage from early development stage.
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Activities Cooperation activities: 1.2.9.a, 1.2.14.a, 1.6.1.a, 3.3.1.a) 1)Institutional strengthening of production cooperatives 2)Practice of grading 3)Commercialization of processing products, i.e. juice, Jelly, etc.
Input Expected Output
Pre-Conditions Expected Socio-Economic Risk It is more effective if the project will be done in continuation. In principle, construction of facilities should be covered by Nepali side. The project covers pilot area only. Special Note If agriculture production is increased, there is a possibility that balance of demand and supply would be reversed. Especially, there is a risk of sharp fall of price for seasonal agriculture products without agro-processing products. Higher competitiveness with quality improvement and agro-processing factories as stable supply destination contribute long-term program purpose, stable agro-economics and increase of income.
Site Map
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Project No. 06 Project Name Livestock Production Strengthening Project Purpose Targeted Area 1)Promotion of livestock Districts of Sindhuli and 2)Promotion of hygienic slaughterhouse Ramechhap 3)Building collection and shipping network of milk 4)Increase agriculture income Background Beneficiary PAF with the assistance of World Bank provides goat purchase fund to the 1)Farmer poor. A group with 25 to 30 members is formulated and the fund is directly 2)cooperatives transferred to group’s bank account. While technical assistance are provided by NGO called PO, sufficient institutional assistance and technical guidance is difficult. Livestock food and vaccine are also lacking. In this project, institutionalization of farmers’ group established under PAF is promoted and techniques on livestock food production and countermeasure to plague are disseminated. Additionally, Chilling Center for milk will be established and management of the centre by cooperatives will be realized. Hygienic slaughterhouse will also be promoted. Target livestock are cow, buffalo, goat, pig, and chicken. Strengthening of AI also promoted under the project. Profit ratio of livestock activities is high, but risk at the time of plague outbreak is also high. Therefore, this project promotes livestock as a part of re-cycling agriculture and large facilities, i.e. broiler chicken are not target. Activities (cooperation activities: 1.2.4.a-d, 1.2.12.a, 1.2.14.a, 1.6.1.a, 3.2.2.a) 1)Strengthening farmers’ group (institutionalization of farmers’ group under PAF) 2)Reinforcement of livestock food 3)Building collection and shipping network of milk 4)Construction and management of milk chilling center
Input Expected Output
Pre-Conditions Expected Socio-Economic Risk In principle, construction of facilities should be covered by Nepali side. The project covers prioritized ones only. Special Note Through promotion of livestock which has high potentiality and high profit ratio, the project will contribute increase of agriculture income. Livestock could be a part of recycling agriculture in connection with forestry preservation and utilization of agriculture byproducts. It also contributes to stable farm household economy. The effectiveness of the project will be increased in linking with P07 “Environment Improvement for Agriculture & Livestock Project.” It is also effective to figure out needs of clients on milk, cheese, and meat at a café under P09 “Fruit Corridor Development Project.
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Site Map
Project No. 07 Project Name Environment Improvement for Agriculture & Livestock Project Purpose Targeted Area 1)Production of Livestock Food Districts of Sindhuli and 2)Forestation for Water Protection Ramechhap
Background Beneficiary There are areas in Sindhuli and Ramechhap districts with rainfall of less than 1)Farmers 1,000 mm per year and without rain for four, five months in dry season. While it 2)Passengers is said that forest area is wide, the surface of a mountain is dry with little trees and capacity of water conservation is limited. Additionally, it is important to utilize trees as livestock food for promotion of livestock farming. Therefore, from the long term viewpoint of stabilizing agriculture in the area, forestation and tree conservation activities are essential. At present, there is a plan to forest ten times as many trees as those cut down under the construction of Sindhuli road. In concert with the plan, distribution of fruit and livestock food seedlings to farmers, farming communities, and schools will be implemented. There is little problem on waste disposal at present as the area is sparsely populated area, there is a possibility of arising waste disposal issue with increasing traffic by opening of the road. Environmental education will also be implemented through forestation and other activities. Activities (cooperation activities: 1.2.9.a, 1.2.13.a, 1.2.14.a, 3.2.2.a&b) 1)Selection of villages for forestation 2)Production of seedlings and forestation 3)Environmental education
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Input Expected Output
Implementing Agencies Implementing Schedule Agricultural Cooperatives 2010 - 2013
Pre-Conditions Expected Socio-Economic Risk
Special Note Government of Switzerland has distributed 7,000 Pineapple seedlings in rural areas to plant on side of a feeder road constructed under her assistance. The program is welcomed by people in the area. Forestation in Sindhuli area contributes stable farm HH economy, one of the program purposes. The project make an appeal multilayered Japanese assistance, if it is implemented as a part of holistic approach in connection with Sindhuli Road opening. Image of Sindhuli is improved, i.e. in collaboration with school children.
Site Map
Project No. 09 Project Name Fruits Corridor Development Project Purpose Targeted Area 1)Promotion of sales of special local products Establishment of antenna shops and 2)Establishment of collection and shipping network cafes in three points along with 3)Appealing improvement of nutritional and sanitary situation Sindhuli road. 4)Promotion of tourism 5)Improvement of image of the Sindhuli road
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Background Beneficiary There are production pockets of various fruits along with Sindhuli road running 1)Orchard north-south from Dhulikhel and Bardibas with wide undulating. It is possible to Farmers introduce local special fruits and establish continuous sales network by providing fruit 2)Cooperati juice and cut fruits at three rest areas along with five-hour drive North-to-South road. ves Through managing the antenna shop, beneficiaries learn that constant provision of wide 3)Passenger varieties of fruits is a basis of winning the hearts of customers and leading to customer s reliability. It is meaningful to appealing nutrition and daintiness of local fruits while soft drink, i.e. Coke, is mainstream at present. There is a profit as a café by handling livestock products and vegetables. It could be sales bases of vegetables, fruits, and livestock products. It could also be provide motivation for quality improvement and production increase by meeting customers directly. It make a travel delightful and contribute tourism promotion by improving image of the Sindhuli road with fruits and providing sanitary toilet facilities. It also contribute to improve image of Japanese assistance. On the other hand, production of fruit seedlings utilizing the Sindhuli farm and JADP is included in the activities. Activities (cooperation activities: 1.2.6.a, 1.2.9.a, 1.2.14.a, 1.6.1.a, 3.3.1.a) 1)Establishment of network of orchard cooperatives 2)Quality improvement and production increase of fruits, i.e. citrus, pineapple, lychee, mango, banana, papaya 3)Capacity building on practical management and sales of farm products including vegetables and livestock 4)Construction of café, store, and toilet (Michi-no-Eki) Input Expected Output
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Site Map
Project No. 10 Project Name Wholesale Market Development Project Purpose Targeted Area 1)Construction of Vegetable and Fruit Wholesale Market Bakhutapur District 2)Operation of Vegetable and Fruit Wholesale Market 3)Promotion of Fair and Equitable Dealing Background Beneficiary There is Kalimati wholesale market in Southwest Katmandu which deal products 1)Wholesale from Western distribution route and vegetables from mainly Dhading District. Dealer However, it is crowded and there is space for improvement from a hygiene 2)Farmer standpoint. On the other hand, there is private Baneshawar wholesale market in 3)Consumer Eastern area, which is comparatively small, deal vegetables from Banepa of Kavre District. Agricultural products imported from India and China are handled more than local products in both wholesale markets. As a customer habit, local products are preferred if they are little, a few rupees per kilogram, expensive than imported. Construction of functional wholesale market in Eastern area contribute sales promotion of farmers who aim to ship through Sindhuli road. Idea of new wholesale market was mentioned in “The final report of the JICA Study on the Agricultural Marketing Development Project in HMGN” in 2001. Taking increased population of Katmandu into account, it is also important for consumers to construct hygienic and functional wholesale market.
Activities （cooperation activities: 1.2.14.a, 1.6.1.a-c, ） 1)Strengthening Cooperatives 2)Strengthening Organization of Distributors 3)Construction of Modern Wholesale Market 4)Establishment of Operation and Management System of Wholesale Market 5)Putting Out Price Information
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Input Expected Output
Special Note Once production has increased, approach to wholesale market is essential. As sale of commercial crops is one of the program purpose, construction of wholesale market is essential as a culmination. It is desirable to continue dispatching experts after the completion of construction. Site Map
Project No. 11 Project Name Volunteer Assignment Purpose Targeted Area Farmers institutionalization Dolakha Districts 1)Tea Growth (Jiri, Dolakha District) 2)Quality Seed Production (Charikot, Dolakha District) Background Beneficiary There are potential areas for tea growth, quality seeds. Cooperatives have started 1)Farmer activities on tea growth and quality seeds four, five years ago to commercialize the 2)Agriculture products. Japanese volunteers may be able to contribute to those Cooperatives Cooperatives by working together with Nepalese Counterparts.
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Activities (cooperation activities: 1.2.6.a, 1.2.12.a, 1.2.17.a, 1.6.1.a&b, 3.3.1.a) 1)Tea Growth, Post Harvest, Packaging and Promotion 2)Production of Quality of Seed; Quality Control; Sales
Input Expected Output
Implementing Agencies Implementing Schedule Agricultural Cooperatives Phase2
Pre-Conditions Expected Socio-Economic Risk Authorization of JOCV activities outside of Katmandu in terms of security Special Note The scale is not big to call as “Project,” but it is proposed to dispatch JOCV to Cooperatives have potential and possibility of distribution of these products through Sindhuli road is high. Dispatch of JOCVs as a part of the Program could broaden agriculture extension activities.
Site Map
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Project No. 12 Project Name Mahottari and Adjacent Areas Tube Well Rehabilitation and Construction Project Purpose Targeted Area 1) Rehabilitation of Tube Well, Mahottari District and Adjacent 2) Construction of Tube Wells Area Background Beneficiary Mahottari district, located in Tarai plain, is tropical climate at altitudes between 1)Farmers’ Group 100 meters and 200 meters above sea level. Hours of sunshine is long and triple cropping is possible if water is available. However, irrigation facilities are limited and cash income depends on emigrant to India. According to DADO, there are many abundant wells with broken diesel-powered pump set up by JADP and irrigation condition would be improved by replacing the pump to electric pump. It is also effective not only to supply pump individually, but to establish cooperatives which could be a system for maintenance and overhaul of the pump. Irrigation ratio in Mahottari district is low as 20% while average irrigation ratio in Tarai plain is 70%. It is presumable that potential of groundwater is high and irrigation by tube well with electric pump. If food production in Mahottari district is increased, food supply to food-insecure mountain area is also increased when Sindhuli road is opened. Additionally, the area has potential for fish culture. Corps imported from India are sold in a market and farm-raised fish from Nepal are limited. However, tilapia and carp fry for fish-culture are sold and welcomed by farmers at Agriculture Station in Tarahara. This is profitable side business for farmers as Rs.0.3 per fry become Rs. 120 after 9 months with little bait. Mortality is 40 %. The project will promote fish culture by repairing and constructing tube wells and fish pond construction. Activities (cooperation activities: 1.2.2.a&b, 1.2.4.d, 1.2.8.a, 1.2.12.a, 1.2.14.a. 3.4.1.a) 1)Study on existing well 2)Repair of existing well and construction of tube well 3)construction of fish pond 4)Fish culture Input Expected Output
Special Note As society is instable, traffic obstruction, occur frequently, it is desirable to implement the project after alternate route to target areas is secured by opening of Sindhuli road. This project also contributes food security, one of the Program purpose.
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Site Map
8.4 Implementation Schedule
The phasing and implementation schedule of the cooperation program with individual project considering continuity and consistency of the program is illustrated in the following Figure 8.3:
Phasing & Implementation Schedule No Name of Project 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Phase I Phase II Phase III 00 Sindhuli Road Construction Project
01 Community Access Improvement Project
Technical Cooperation for Farming Skill Improvement with 02 Development Study Project
03 Marketing Strengthening Project with provision of facilities
Agricultural Products Storage Facilities Improvement & 04 Construction Project
05 Post Harvest & Agro-processing Project
06 Livestock Produvtion Strengthening Project
Environment Improvement for Agriculture & Livestock 07 Project
08 Commercial Agriculture Promotion Advisor
09 Fruits Corridor Develoment Project
10 Wholesale M arket Development Project
11 Volunteer Assignment (Rural Development)
M ahottari and Adjacent Area Tube Well Rehabilitation & 12 Construction Project
: Partially or Fully Committed Project : Under consideration : Technical Cooperation under the Program : Public Private Partnership Project : Grant Aid Project : Volunteer Schemes : GoN project utilizing knowledge and ecperiences of the JICA Project
Figure 8.3 Phasing and Implementation Schedule of the Program
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CHAP. 9 RECOMMENDATIONS
The Study Team recommends the followings in connection with the implementation of the cooperation program for agriculture and rural development in the SRC.
(1) Earliest Implementation of the Program and the Project
The Study Team recommends “Technical Cooperation for Farming Skill Improvement with Development Study on Agriculture Project” as the first project to be implemented in the program.
It is most practical to increase the farmers’ incomes in the SRC area by changing one-tenth of the cereal cultivation area into HVCs, since income from HVC is nearly 10 times higher than that of cereals. Changing one-tenth of the cereal areas to HVC areas should not adversely affect the food security of the people, but will increase substantially the farmers’ agricultural income.
In the cooperation program, it is also recommended to carry out a development study on agriculture in depth as this Preparatory Study left many points yet to be clarified.
It is recommended that the GoN requests the GoJ to pick up the project and implement it as soon as possible.
(2) Strengthening of Farmers’ Organizations
It was a common understanding between the Study Team and Nepalese officers and stakeholders that strengthening farmers’ organizations is one of the most important points to attend to when the agriculture and rural development projects are implemented.
Many community organizations exist in the SRC areas and more than 80 percent of farmers participated in some organizations. However, proactive participation of farmers in activities of the organizations is still weak. Therefore, priority in implementing the project shall be given to institutional development with training for encouragement of farmers’ motivation to participate in organizations.
(3) Holistic Approach
In the program, five focal points are listed to implement the program. It is also specified that government agencies, stakeholders, crops, areas and so on must be closely interrelated for program implementation. Therefore, a holistic approach shall be taken with appropriate coordination to carry out the program and projects to achieve the maximum outcome of the program.
(4) Integration of Schemes
In the past JICA programs, an integration of schemes, such as technical cooperation and grant aid, was not very organized and individual schemes have been implemented. However, as integration of schemes will provide more tangible achievement of projects, it is recommended from the viewpoint of the recipients to integrate different schemes under JICA’s development assistance.
(5) Cooperation with Other Donors
Many donors provide assistance to the poor in Nepal. Other donors’ projects may be implemented in the same areas and in the same fields. It is appropriate to share experiences and also to coordinate cooperation programs with them. In the case of the PAF project of the World
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Bank, areas and beneficiaries overlap with the JICA program. It may be possible to utilize community organizations established under the PAF to the program as PAF still does not have clear a plan on subsequent programs after organizations for the poor are established.
(6) Encouraging Private Sector Participation
It is important to interact with the private sector, especially where matters of market and the environmental are involved. When implementations of individual projects are planned, it is recommended to encourage the participation of the private sector and NGOs, not only in Nepal but possibly in Japan also.
For example, when the Fruits Corridor project using the concept of Michi-no-Eki is planned and implemented, participation of the private sector in Japan could assist in project implementation, as well as the FNCCI and district CCI. Further, if the Environmental Improvement Project for Agriculture & Livestock is implemented, an invitation to a private company as one of its CSR activities or NGO is recommended.
(7) Gender Consideration
It has been learned that many cooperatives whose members are dominated by women are very aggressive in various activities. On the other hand, agricultural activities under the cooperation program may add workload to the women.
Taking those aspects into account, it is recommended to attend gender issues carefully when individual projects under the program are planned and implemented.
(8) Encouraging Self-Dependence
It is said that participants in ODA projects are used to receiving various assistance programs and projects. However, the implementation of this program should encourage self-dependace. In the program, stage-wise project implementation is proposed: implementation of the Technical Cooperation on Farming Skill Improvement in the first stage will be followed by the Marketing Strengthening Project in the second stage, Agriculture Products Storage Facilities Improvement and Construction Project in the third stage, and Post-Harvest and Agro-processing Improvement Project in the fourth stage. Accordingly, it may be considered to increase cost sharing of participants through the progressing of stages, if the same participants are involved. This means that while the initial contribution of participants would be 10-20 percent of hardware costs, cost borne by beneficiaries in the later stage would be increased by a maximum of 50 percent or more of the construction cost.
(9) Understanding of the Limitations of the Study and Future Study
Since the Study Team consisted of two people who spent only three months each in Nepal, the Study has certain limitations though substantial inputs were provided by NARMA mainly for the HH survey and the market survey. The following are those items that the Study could not cover and require a detailed study in the future:
a. Geology and soil conditions in the objective areas, which have not been studied at all b. Individual commodities’ farm economy, which have not been studied c. The present irrigation extent, which is not always clear d. The detailed farm economy of each district and individual farmers, which was not able to be studied despite substantial differences observed e. The detail implication of compost for farm economy in relation to livestock development f. The present tube well conditions and potential studies, as well as fish culture studies in the Mahottari district, which have not been carried out
9 - 2 g. Farm and processing waste, which may have a substantial impact on pricing but was not studied h. A study on community forest activities, which has not been carried out i. Food sufficiency in Dolakha in connection with calorie balance discussed in Section 6.3.1 “Assessment of Agriculture in SRC” j. Seasonal quantities of flow and prices of commodities on import and export, and from district to district, which were not available (though some data are available for only the Kalimati wholesale market and the data of AEC, FNCCI)
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