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Technical Assistance Consultant's Report Technical Assistance Consultant’s Report Project Number: 43166-062 May 2013 India: Advanced Project Preparedness for Poverty Reduction - Institutional Development for a Value Chain Approach to Agribusiness in Bihar (Financed by the Government of the United Kingdom) Prepared by IL&FS Cluster Development Initiative Ltd. In collaboration with Agrifood Consulting International For Bihar Department of Agriculture This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. Advanced Project Preparedness for Poverty Reduction - Institutional Development for a Value Chain Approach to Agribusiness in Bihar (Contract No. : 100146-S41802) Final Report Submitted to: Asian Development Bank Prepared by: In collaboration with: Agrifood Consulting International 1 Knowledge Summary ....................................................................................... 10 1. Introduction .................................................................................................. 13 1.1 Background - Technical Assistance Programme ................................. 13 1.2 Approach of TA Programme ................................................................. 14 1.2.1 Field Survey .................................................................................... 14 1.2.2 Stakeholders’ Consultations ......................................................... 15 1.2.3 Capacity Building Initiatives ........................................................ 17 1.2.4 Agricultural Roadmap of the State Government ....................... 18 1.2.5 Changes in AIDIP investment project structure ........................ 19 2. Agribusiness and Agrimarketing Strategy ................................................ 22 2.1 Review of Agribusiness and Agrimarketing Policy ............................. 22 2.1.1 Repeal of the APMC Act in 2006 .................................................. 22 2.1.2 The Agricultural Road Map 2012-2017 ....................................... 24 2.1.3 Market Intelligence and Status in Bihar: .................................... 29 2.1.4 Issues and Challenges of Implementation ................................... 35 2.1.5 Possible solutions for new Agricultural Marketing Policy ........ 40 2.1.6 Setting up a Market Intelligence System in Bihar: .................... 55 2.1.7 Case Study of an International Value Chain Upgradation (West Java) ......................................................................................................... 61 3. Field Visits, Stakeholder Consultations, workshops and Capacity Building activities ............................................................................................. 63 3.1 Field Visits and Stakeholder Consultations ...................................... 63 3.2 Policy Roundtable and Stakeholder Consultation ............................... 65 3.3 Capacity Building workshop on Value Chain Approach .................... 70 3.4 Workshop on Agrimarketing Strategy ................................................. 72 3.5 Policy Roundtable for Finalising Agri-Marketing Policy ................... 74 2 3.6 Orientation of PMU on Market Intelligence and Communication .... 78 4. Field Survey .................................................................................................. 80 4.1 Planning and Design of Field Survey .................................................... 80 4.1.1 Survey Background ....................................................................... 80 4.1.2 Survey Objectives........................................................................... 80 4.1.3 Geographical Area and Focus Crops ........................................... 81 4.1.4 Scope of Work ................................................................................ 81 4.1.5 Linkages among the Stakeholders ................................................ 82 4.1.6 Orientation of Survey Teams ........................................................ 82 4.1.7 The Survey Strategy ...................................................................... 84 4.2 Final Findings of Field Survey ............................................................... 86 4.2.1 Main Features of the Survey Area ............................................... 86 4.2.2 General Profile of the Stakeholders ............................................. 87 4.2.3 Existing Features of Marketing Strategy of Major Focused Crops ........................................................................................................ 90 4.2.4 Main Features of Agri-Marketing Structure in the Survey Area ................................................................................................................... 95 4.2.5. Way Forward for Institutional Development of Value Chain Approach to Agri-business in BIHAR ................................................ 102 5. Communication & Information Dissemination ....................................... 107 5.1 Background ............................................................................................ 108 5.2 Existing Communication Channels ..................................................... 109 5.2.1 IFFCO Kisan Sanchar Kendra ................................................... 109 5.2.2 Kisan Salahkar and Kisan Pathshala ........................................ 110 5.2.3 Developmental Camps ................................................................. 110 5.2.4 Publications .................................................................................. 111 5.3 Communication Strategy ...................................................................... 113 3 5.3.1 Major Challenges ......................................................................... 113 5.3.2 Proposed Strategic Interventions ............................................... 114 5.4 Various gaps in the communication process / information flow ...... 128 5.5 Recommendations for strengthening Communication Process ........ 131 6.0 Case Studies – Value Chain Efforts for select horticulture produces . 137 6.1 Vegetable Growers Group - Leadership that rallies both people and purpose around it ........................................................................................ 138 6.2 Organic Farming in Sodhadih - A Government led Initiatives in Nalanda ......................................................................................................... 142 6.3 Owner of Ravi Shankar Cold Storage, Biharsharif, Nalanda .......... 147 6.4 District Horticulture Officer (DHO) of Nalanda District ................. 149 6.5 The Kaushalya Foundation - An Experiment in Agri–marketing ... 151 6.6 Mushroom Cultivation - An Initiative fraught with marketing fears ....................................................................................................................... 153 6.7 Pan (Betel Leaf) Cultivators of Nalanda - In need of orientation in Value Addition ............................................................................................. 154 6.8 Makhana crop in Madhubani .............................................................. 155 6.9 Rythu Bazaar of Andhra Pradesh ....................................................... 158 7. Project Information Memorandum – AIDIP Investment Project ......... 162 7.1 Introduction ........................................................................................... 162 7.2 Revised Land Requirement, Project Cost and Means of Finance Assumptions: ................................................................................................ 164 7.3 Key Operating Assumptions: Muzaffarpur and Patna-Nalanda region ............................................................................................................ 166 7.3.1 Operating Cost Assumptions: ..................................................... 166 4 7.3.2 Power & Fuel Costs ..................................................................... 166 7.3.3 Water Cost .................................................................................... 167 7.3.4 Employee Cost .............................................................................. 167 7.3.5 Cost of Maintenance .................................................................... 168 7.3.6 Cost of Insurance ......................................................................... 169 7.3.7 Admin & Marketing Overheads ................................................. 169 7.4 Financial Assumptions: Muzaffarpur and Patna-Nalanda region .. 170 7.4.1 Taxes .............................................................................................. 170 7.4.2 Depreciation Rates ....................................................................... 170 7.5 Revenue Assumptions: Muzaffarpur and Patna-Nalanda region .... 171 7.5.1 Rental assumptions ...................................................................... 171 7.5.2 Capacity Utilization ..................................................................... 171 7.6 Muzaffarpur District Details ................................................................ 172 7.7 Vaishali/ Hajipur District Details ........................................................ 176 7.8 Darbhanga District Details ................................................................... 180 7.9 Samastipur/ Dalsinghsarai District Details......................................... 183 7.10 Begusarai District Details ..................................................................
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