Annual Report
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ANNUAL REPORT NEPAL, ECONOMIC, AGRICULTURE, AND TRADE ACTIVITY OCTOBER 2010 – SEPTEMBER 2011 October 2011 This publication was produced for review by the United States Agency for International Development. It was prepared by Chemonics International Inc. Point of Contact Phil Broughton Chief of Party USAID Contractor 5524038 [email protected] NEAT Consortium: Center for Environmental and Agricultural Policy Research, Extension, and Development (CEAPRED) Fintrac Incorporated The Kaizen Company Land O’ Lakes Incorporated Making Cents International METCON Consultants Women Organising for Change in Agriculture and NRM (WOCAN) NEAT Activity Annual Report 2010-2011 ii ANNUAL REPORT OCTOBER 1, 2010-SEPTEMBER 30, 2011 Contract No. AID-367-TO-11-00001 The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. NEAT Activity Annual Report 2010-2011 iii NEAT Activity Annual Report 2010-2011 iv CONTENTS List of Acronyms..................................................................................................... vii I. Executive summary ................................................................................................ 1 II. Introduction to the Annual Report ......................................................................... 3 III. Administration ..................................................................................................... 3 IV. Activities and Performance .................................................................................. 5 IV.A. PIR 1: Economic Policies Strengthened ..................................................................... 6 Sub-IR 1.1: Business enabling environment strengthened ............................................... 6 Sub-IR 1.2: Advocacy and distribution of information improved to facilitate business growth ............................................................................................................................. 10 Sub-IR 1.3: Trade policies and practices improved ........................................................ 11 Sub-IR 1.4: Fiscal policies and practices improved........................................................ 13 Lessons Learned: PIR 1 .................................................................................................. 15 IV.B. PIR 2: Competitiveness of Selected Sectors Increased ............................................. 20 Sub-IR 2.1: Production, processing, and marketing constraints addressed .................... 20 Sub-IR 2.2: Linkages between lead firms, small and medium enterprises, and microenterprises strengthened ........................................................................................ 23 Lessons Learned: PIR 2 .................................................................................................. 27 IV.C. PIR 3: Food Security Enhanced ................................................................................ 31 Sub-IR 3.1: Agricultural productivity and production increased .................................... 31 Sub-IR 3.2: Agricultural innovations developed and disseminated ................................ 33 Lessons Learned: PIR3 ................................................................................................... 34 IV.D. PIR 4: Access to Microfinance Services Increased ................................................... 38 Sub-IR 4.1: Microfinance policy improved .................................................................... 38 Sub-IR 4.2: Capacity of microfinance institutions strengthened .................................... 39 Lessons Learned: PIR 4 .................................................................................................. 40 V. Monitoring and Evaluation Data ......................................................................... 43 VI. Financial Summary ........................................................................................... 60 VII. Annexes ........................................................................................................... 61 Annex A: NEAT Project Districts ....................................................................................... 61 Annex B: Examples of Training Handouts for Farmer Groups .......................................... 62 Annex C: Success Story ...................................................................................................... 64 Annex D: Supplemental M&E Data ................................................................................... 65 NEAT Activity Annual Report 2010-2011 v NEAT Activity Annual Report 2010-2011 vi LIST OF ACRONYMS AEC Agro-Enterprise Center ASYCUDA Automated System for Custom Data Analysis CAT Community Agricultural Technicians CIB Credit Information Bureau CNI Chamber of Nepalese Industries DOC Department of Customs FBO Farmer-based Organization FITTA Foreign Investment and Technology Transfer Act FNCCI Federation of Nepalese Chambers of Commerce and Industries FORWARD Forum for Rural Welfare and Agricultural Reform for Development GAP Good Agricultural Practices GON Government of Nepal GPS Global Positioning System HIMCOOP Himalayan Marketing Cooperative (for Tea) HOTPA Himalayan Orthodox Tea Producers Association HS Harmonized Commodity Description and Coding System IEA Industrial Enterprise Act IPM Integrated Pest Management IRD Inland Revenue Department M&E Monitoring and Evaluation MFI Microfinance Institution MOF Ministry of Finance MOFA Ministry of Foreign Affairs MOAC Ministry of Agriculture and Cooperatives MOCS Ministry of Commerce and Supplies MOI Ministry of Industry NEAT Nepal Economic, Agriculture, and Trade Activity NMBA Nepal Microfinance Bank Association OCR Office of Company Registration PCA Post clearance audit PMP Performance Management Plan PPD Public-Private Dialogue PPP Public-Private Partnerships RFP Request for proposal SAARC South Asian Association for Regional Cooperation SAWTEE South Asia Watch on Trade, Economics and Environment SQCC Seed Quality Control Center TeaSec Tea Sector Service Centre TEPC Trade and Export Promotion Centre TPAW Trade Policy Analytical Wing USAID United States Agency for International Development VDC Village Development Committee WCO World Customs Organization WTO World Trade Organization NEAT Activity Annual Report 2010-2011 vii I. EXECUTIVE SUMMARY The Nepal Economic, Agriculture, and Trade (NEAT) Activity is a 30-month project, launched in early January 2011 and funded by the United States Agency for International Development (USAID). NEAT is designed to promote economic growth, reduce poverty, increase food security, and improve lives in Nepal. NEAT’s project objective (Increased Economic Opportunities and Food Security Enhanced) is divided in to four Project Intermediate Results (PIRs): Economic Policies Strengthened, Competitiveness of Selected Sectors Increased, Food Security Enhanced, and Access to Microfinance Services Increased. Much of NEAT’s first quarter of operations was focused on start up activities, such as establishing office space and hiring staff. The second and third quarters of operation were then focused on program implementation. Although the program met with several challenges in its first year, particularly related to the instability of the Government of Nepal, much was accomplished. Some of the key accomplishments from year 1 include the following: • NEAT completed value chain market studies for four sub-sectors: lentils, ginger, orthodox tea, and off-season vegetables. NEAT held a public-private dialogue (PPD) on each commodity area, providing stakeholders and agencies from both the public and private sectors the opportunity to discuss the results, identify constraints and opportunities, and formulate possible intervention strategies, the implementation of which began in year 1. • NEAT supported the Himalayan Orthodox Tea Producers Association’s (HOTPA’s) and the Himalayan Marketing Cooperative’s (HIMCOOP’s) participation in two World Tea Expos, resulting in the purchase of Nepali tea by U.S. buyers. This success was emphasized by the announcement of the United States Tea Association’s decision to facilitate a Nepal Tea Tour for U.S. buyers in May 2012 to help expand the Nepal tea market in the U.S. • Under NEAT’s food security component, 368 farmer groups were formed, comprised of 8,006 producers. All producers received cost-shared inputs and training on modern farming techniques. State-of-the-art durable training materials were developed that will be used by all 28,000 planned food security beneficiaries. • NEAT signed an MOU with Monsanto-India to improve food security in Nepal by jointly implementing two key initiatives: a pilot project to introduce hybrid seed and modern farming techniques to 20,000 producers on 8,000 hectares of land, and a licensing program between Monsanto and Nepali seed companies to produce hybrid corn seed in Nepal. While only a 30-month program, many of NEAT’s objectives are long-term. As such, it is important to note that much of the program’s progress is not immediately obvious from the data, particularly in the M&E section. For example, one of NEAT’s life-of- project goals is to establish 30 produce collection centers. While the M&E data indicate that none have yet been established, NEAT has already awarded grants to two separate organizations that will result in 25 new collection centers. The same holds true for many program indicators—though final