A Value Chain Analysis of Apple from Jumla
MINISTRY OF AGRICULTURE & COOPERATIVES DEPARTMENT OF AGRICULTURE
Foreword
Apple is one of the key fruits with potential to generate income and employment in the high mountain districts of Western Nepal, especially with road constructions gaining pace in these areas. However, a systematic value chain analysis for apple was not yet carried out till date to diagnose constraints and identify the opportunities. We are pleased to report that this knowledge gap has been fi lled and that this information can now be shared with a wider audience.
The study analyses the existing situation of apples in terms of their geographical spread, area coverage and production. It provides a good understanding on the value chain of apple and its constraints that need to be overcome to realise its potential contribution to pro-poor impact. Finally, it provides specifi c value chain solutions and recommendations to the actors involved in this specifi c value chain, and to the District Agriculture Development Offi ce (DADO) Jumla, SNV Nepal and other interested organisations on possible interventions to realise enhanced production, income and employment for the rural poor.
As the DADO Jumla, SNV Nepal and other organisations started facilitating and supporting the Jumla apple farmers in a more structured way from 2008 onwards, already quite some positive changes have taken place in the value chain, which are also described in this report. It is encouraging that prices for the farmers have more than doubled since, that the Jumla organic apple is starting to get a name in the market.
While the present publication will be of immediate value to implement programme activities for the further development and promotion of the apple value chain in Jumla, it will also be useful for government policy makers, planners, and extension workers at both central, regional and district levels to develop the apple sub-sector in other potential districts of Nepal.
January 2011
Vijay Kumar Mallik Hans Heijdra Director General Country Director Department of Agriculture SNV Nepal Acknowledgement
Firstly, we would like to express our gratitude to all the apple growers, farmers, traders, private sector, development organisations and governmental organisations in Jumla who gave their valuable time for interviews, as well as to those who actively participated in multi-stakeholder workshops in Khalanga, Jumla and Kathmandu.
We are very grateful to Mr. Suresh Kumar Verma, Joint Secretary and Chief of the Planning Division of Ministry of Agriculture and Cooperatives (MoAC) for his encouragement and moral support to carry out this study. We would also like to acknowledge Mr. Ram Prasad Pulami, former Regional Director of Regional Directorate of Agriculture, Mid-West for his moral support and feedback.
Several staff of SNV in Nepal have contributed to this value chain analysis and fi nalising it into this report. Special thanks for their efforts go to Dr. Pradeep Tulachan, Monisha Rajbhandari, Chandra Regmi, Chhabi Lal Paudel, Padam Bhandari who undertook the analysis in 2008. Thanks also to Solution Consultants Pvt Ltd which provided useful information on the national apple market dynamics. Ananta Ghimire and Rik van Keulen updated the analysis to include the latest insights and developments and fi nalised it into this up-to-date publication. Although a lot of analysis work was already done in 2008, by including the interventions and various lessons learned, we hope this becomes a more useful and interesting publication.
Mr. Dila Ram Bhandari, DADO Jumla has been involved and cooperated throughout the study. Without his efforts this study would not have been successful.
Finally, we are very thankful to Keshab Datta Joshi, West Portfolio Coordinator of SNV in Nepal who took the initiative for this study, and constantly facilitated and supported it.
The views expressed in the publication are those of the value chain analysis team and not necessarily of SNV and the Department of Agriculture. Similarly, the fi ndings, interpretations and conclusions herein are those of the author(s) and do not necessarily refl ect the views of SNV or the Department of Agriculture.
SNV Netherlands Development Organisation Nepal Abbreviations
APP Agricultural Perspective Plan AEC Agro-Enterprise Centre AFE Action for Enterprise AP&MDD Agribusiness Promotion and Marketing Development Directorate CSP Community Support Project CSIDB Cottage and Small Industries Development Board DADO District Agriculture Development Offi ce DCCI District Chamber of Commerce and Industry DDC District Development Committee DFID Department for International Development DoA Department of Agriculture EIG-CM Education for Income Generation and Confl ict Mitigation Project FDD Fruit Development Directorate FNCCI Federation of Nepalese Chambers of Commerce and Industry ha Hectares HH Households HVA-IB High Value Agriculture-Inclusive Business Pilot Project IEDI Industrial Enterprise Development Institute IFAD International Fund for Agricultural Development JAPC Jumla Apple Processing Centre JAPEC Jumla Agricultural Producers’ and Entrepreneurs’ Cooperative JHRF Jumla Horticulture Research Farm KAC Karnali Apple Company KFC Karnali Fruit Cooperative LARF Local Agricultural Resource Farmers m.a.s.l. Metres above sea level MDGs Millennium Development Goals MEDEP Micro Enterprise Development Programme MoAC Ministry of Agriculture and Cooperatives MSMEs Micro Small Medium Enterprises MT Metric Ton NARC Nepal Agricultural Research Council NGO Non-Governmental Organisation NHPC Nepal Horticulture Promotion Centre NRP Nepalese Rupee OCN Organic Certifi cation Nepal OWF Organic World & Fair Future Pvt. Ltd. PIE Production, Income and Employment REAP Rural Enterprise Assistance Programme SEDA Sustainable & Equitable Development Academy SHCC Small Holder Cash Crops SNV SNV Netherlands Development Organisation VCA Value Chain Analysis VCD Value Chain Development VDC Village Development Committee WUPAP Western Upland Poverty Alleviation Project WV World Vision Summary
Apple is one of the agricultural products with a good potential in the mountainous districts of Mid- and Far-Western Nepal. In contrast to the other districts, apples were already introduced in Jumla in the 1970s. But it was only since 2006 when the Surkhet-Jumla road – the Karnali Highway – was opened as a seasonal road that the people of Jumla suddenly saw apple production as one of the major, or even the major income source for the near future. Since 2008, farmers have been planting more than 100,000 saplings per year. Operating apple nurseries has become a lucrative and fully commercial business.
According to the DDC Household Survey of 2008, nearly 10,000 households were already engaged in apple production in 2008, producing together more than 1800 MT. The production will increase year by year, because in 2008 most trees (70%) were still in a non-fruiting stage. On top of this, farmers are expanding their orchards large scale.
Although a large part is already being blacktopped, the Karnali Highway is still a seasonal road, and remains closed during the monsoon season, which is also the harvesting season. Therefore, nearly all apples ‘exported’ out of the district need to be fl own out by air, which is the single most important factor impeding increased apple sales. Possibly only 10% is sold, while the rest is used for household purpose or remains on the trees. With this oversupply, farmers logically have not invested in orchard management like pruning, use of manure, pest control, etc.
Jumla declared itself an organic district in 2007, and in 2009, the District Agricultural Development Offi ce initiated organic certifi cation of apples for three Village Development Committees, with support of organisations like SNV Nepal and World Vision. Also nursery improvements, pruning, professional apple packaging materials, grading and market linkage with wholesalers were promoted from 2009 onwards. One major success was the apple price increase in Jumla from NRP 10/kg in 2008 to NRP 35 and NRP 25/ kg for organic certifi ed and non-certifi ed respectively. Partially, this was also caused by high prices in the apple market in general. In 2010, the prices went down respectively to NRP 30 and 26/kg for grade A – the fi rst year with price differentiation for different grades.
Progress has also been made on the organisational side. In 2009 the three certifi ed farmer groups undertook joint marketing, and in 2010, nine Jumla cooperatives did so under the umbrella of the Jumla District Cooperative Federation. A major factor in this development was not just the price increase in the year before, but also a change in the agricultural policy, as for the fi rst time only cooperatives were allowed to apply for the air transport subsidy.
Although progress has been made, still more needs to be done if apple is to become the major agriculture sub sector and the major source of income for Jumla and surrounding districts. The Jumla apple will need to compete with the Chinese and Indian apples, which now have a market share of nearly 90% and 10% each in Nepal. One way to create a niche is to further promote the Jumla apple as organic, with or without certifi cation. The price premium received by producers for their organic certifi ed apple still is not suffi cient to cover the extra costs coming with organic certifi cation.
Various improvements still need to be made. Modern high-yielding varieties need to be introduced, those which will do well in Jumla from the perspective of organic production, dry area with little irrigation, less required chilling hours because of climate change, etc. Nurseries must be able to provide disease free saplings and provide advice to farmers. Commercial supply of bio-pesticides and bio-fertilisers through agro-vets and also piloting of home-brewed bio-pesticides are necessary for pest control, which will even become more urgent with the climate change. Further promotion of pruning, irrigation, compost making – lack of available bio-mass being a problem here, and handling of apples during the harvest, especially on-farm, to avoid bruises are important to be able to supply large apples with good appearance for which most consumers are looking for. Well trained Local Agricultural Resource Farmers could be a way to provide on–farm advice and services. Further on, strong cooperatives or other forms of producer organisations are needed to manage post-harvest and marketing activities.
Although the price increase in 2009 was a great success, still marketing is not suffi ciently working in favour of the Jumla apple farmers. Margins upstream are high, limiting sold volumes and still many consumers with an interest in organic apples cannot fi nd the Jumla apple. Linkage to more wholesalers would widen the distribution network, increase sales and should especially reach those consumers who want to pay a premium for organic products.
Table of Contents
Abbreviations 6 Summary 7 1. INTRODUCTION 10 2. OBJECTIVES, METHODOLOGY & LIMITATIONS 11 2.1 Objectives 11 2.2 Methodology 11 2.3 Limitations 11 3. SELECTION OF THE APPLE VALUE CHAIN 13 3.1 Comparison of Value Chains from Jumla 13 3.2 Jumla Apple in a National Perspective 14 4. JUMLA APPLE VALUE CHAIN 16 4.1 Value Chain Map 16 4.2 Nursery Management and Input Supply 17 4.3 Apple Production 19 4.4 Harvesting and Post-Harvest Management 22 4.5 Trade and Marketing of Jumla Apples 23 4.6 Organic Certifi cation 26 4.7 Apple Processing 29 4.8 Trend of Apple Production 30 4.9 Income Generation 30 4.10 Social Inclusion and Gender 31 5. NATIONAL APPLE MARKET DYNAMICS 34 5.1 Market Shares of Suppliers 34 5.2 Physical Apple Flows in Kathmandu 34 5.3 Description of Market Actors 35 6. ENABLING ENVIRONMENT AND SUPPORTING AGENCIES 37 6.1 District Development Committee 37 6.2 District Agriculture Development Offi ce 37 6.3 Jumla Apple Processing Centre 38 6.4 NARC – Jumla Horticulture Research Station 38 6.5 District Chamber of Commerce and Industry 39 6.6 NGOs and Projects 39 6.7 Ministry of Agriculture and Cooperatives 40 7. VALUE CHAIN CONSTRAINTS AND OPPORTUNITIES 41 8. FUTURE VISION AND RECOMMENDATIONS 45 8.1 Towards Sustainable Solutions 45 8.2 Future Vision of the Jumla Apple Value Chain 45 8.3 Recommendations 48 ANNEX A: References 50 ANNEX B: VDC-wise Apple Production Data 51 ANNEX C: Cost/Benefi t Calculation 53 1. INTRODUCTION
Nepal is predominantly an agrarian society: the agricultural sector provides employment opportunities to 66 per cent of the total population (MOAC Web site, 2008) and contributes about 36 per cent to GDP. Presently, production of deciduous fruits (apple, pear, peach, plum, apricot and walnut) in Nepal is limited compared to tropical fruits. As a result substantial quantities are imported to meet domestic demand. However, there appears to be tremendous potential for further development of deciduous fruits in Nepal and for import substitution as also mentioned in the Agricultural Perspective Plan and the fi rst Three Years Interim Development Plan.
Among deciduous fruits, apple is the most important crop in terms of area, production and household economy in remote mountain districts. But most production units are small and often located in isolated and inaccessible areas where infrastructure such as roads, irrigation and storage facilities are inadequate or completely lacking. With the present increasing trend in the connectivity (road network) in remote high mountains and inaccessible districts such as Mustang, Jumla and Kalikot, there is a great potential for increasing area and productivity of these fruit crops.
In view of the signifi cant potential contribution of the apple sub-sector in terms of enhanced production, income and employment of rural poor in high mountains, SNV in Nepal and District Agricultural Development Offi ce (DADO) in Jumla decided to jointly undertake this value chain analysis of apple.
8 A Value Chain Analysis of Apple from Jumla 2. OBJECTIVES, METHODOLOGY & LIMITATIONS
2.1 Objectives This apple value chain analysis aims to: a) Provide a suffi cient contextual analysis of apple in Nepal and especially from Jumla District in terms of present status (geographical distribution, area coverage and production) and future potentials. b) Provide a concise picture of the entire value chain of Jumla apple in order to identify the constraints and opportunities that can be exploited for promoting income and employment for the rural poor of Nepal.
Because of the time between the actual analysis and this publication, this report also provides some of the results already achieved by the interventions in 2009 and 2010 which followed the analysis. New insights and lessons learned have also been included.
2.2 Methodology SNV Nepal utilised and adapted the value chain development approach developed by Action for Enterprise.1
First the apple value chain was selected from a range of possible products and crops by using various criteria to select the most potential product from Jumla. Also on the basis of literature study, the apple sub-sector in Jumla was compared with other deciduous fruits and other districts. This is described in chapter 3, which shows that the apple value chain from Jumla is indeed an important deciduous fruit crop for Jumla and even from a national perspective.
For the actual value chain of apple from Jumla, the methodology involved the collection and review of existing literature and secondary data on apples, followed by primary analysis through various checklists and rapid survey questionnaires, interviews and group discussions at various levels and functions of the apple value chain.
Three multi-stakeholder workshops were conducted during the analysis: twice in Kathmandu (16 May 2008 and 1 August 2008 with a total of 48 participants) and once in Khalanga, Jumla’s district headquarters (14 June 2008 with 50 participants). These workshops have helped in verifying and deepening the value chain constraints and opportunities analysis, and fi nding potential solutions and suitable service providers.
2.3 Limitations Due to constraints of resource and time, the data and information collected and analysed in the report cannot provide sound statistical insights into the different parts, levels and functions of the value chain. Thus, the results rather provide a qualitative picture of various functions and actors at various levels in the chain, where possible elaborated with quantitative data.
This value chain analysis also provides a snapshot of the current situation. While Jumla is an upcoming apple production district, new developments and changes are to be expected. By incorporating interventions taken on the basis of this VCA, results and lessons learned of the last two years, it provides a clearer picture and more understanding in which direction this value chain is developing itself.
1 Action for Enterprise, 2007. Value Chain Programme Design: Promoting Market-based Solutions for MSMEs. 9 A Value Chain Analysis of Apple from Jumla 3. SELECTION OF THE APPLE VALUE CHAIN
This chapter gives a justifi cation for the selection of the Jumla apple value chain for analysis and for the following interventions supporting its development.
3.1 Comparison of Value Chains from Jumla REAP of IEDI2 did a rapid sub-sector assessment conducted from 28 December 2005 to 3 January 2006 in Jumla district.3 In a multi-stakeholder workshop the following potential products were identifi ed: 1) bee-keeping, 2) wool processing, 3) potato, 4) poultry, 5) seed production, 6) apple, 7) herbal processing, 8) beans, 9) seabuckthorn, 10) vegetable production, 11) angora rabbits, 12) dhatelo (Prinsepia utilis), 13) walnut, 14) guchhi chyau (Morchella sps.).
A prioritisation matrix was used to narrow down the sub sectors, using ‘market demand’ and ‘potential to increase rural income’ as the main criteria for further selection.
Table 1: Prioritisation matrix
High potato apple honey
Medium seabuckthorn poultry, herbal processing vegetables, beans
Low angora rabbit, Walnut, wool guchhi chyau, dhatelo processing seed production
Increase in rural Increase in rural income Low Medium High Market demand
Prioritised products with high market demand and high potential to increase rural income were considered: 1) honey, 2) apple, 3) vegetable production, 4) beans, 5) poultry, and 6) herbal processing. The latter related to extraction of essential oils from herbs through distillation.
The next ranking exercise focused on market demand and growth potential, potential for increase in income, social inclusion and potential for employment generation were considered as criteria for ranking of sub sectors using scores.
Table 2: Ranking sub sectors
Criteria Proposed sub sectors honey apple vegetable/beans Market demand and related growth potential (weighted 3×) 12 15 9 Potential for increase in income (weighted 2×) 8 8 9 Social inclusion (weighted 2×) 10 8 8 Potential for employment (weighted 1×) 3 4 2
Total 33 35 28
This led to the following ranking: 1) apple, 2) honey 3) vegetable production. Because of the requirement of high value - low weight due to transport by air, the report also suggested to develop apple-based products. In 2007, the Surkhet-Jumla road was opened as a seasonal road, which even more increased the expectations from the apple sub-sector.
2 IEDI: Industrial Enterprise Development Institute. REAP: Rural Enterprise Assistance Programme, a project of IEDI (phased out in 2008). SNV Nepal provided advisory services to REAP. 3 REAP, 2006, Rapid Sub-sector Assessment Report Jumla. 10 A Value Chain Analysis of Apple from Jumla 3.2 Jumla Apple in a National Perspective
Apple is a deciduous fruit and is grown successfully in mid and high mountainous areas from the East to the Far West of the country. Sub-humid and dry temperate areas in the mountains with elevations ranging from 1800-2800 m.a.s.l. are considered most suitable for high quality apple production. The rain shadow or low rainfall areas are located in the Western and Mid Western mountainous regions. Some low chilling apple cultivars are being grown at low altitudes, as low as 1200 m.a.s.l.
Total of 54 districts grow apple, however, there are only 12 major apple producing districts mainly from high mountain regions (see Table 3). The data for Jumla does not correlate well with that of the DDC Jumla household survey of 2008 (see later in the report), it gives an indication about how districts compare. Also one has to take in consideration that the production is very scattered, a considerable part not with much commercial value and only consumed locally. Only Jumla and Mustang have an organised export to major towns in Nepal. Table 4 also shows that apple is the leading deciduous fruit, while Table 5 shows that apple has a potential to contribute to poverty reduction in the poorer parts of Nepal.
Table 3: Area (ha.), production (MT) and share (%) of major apple producing districts of Nepal (2006/07)
District Area (ha.) % Production (MT) % Jumla 900 30.0 4557 19.4 Mustang 304 10.1 2888 12.3 Solukhumbu 281 9.4 2495 10.6 Kalikot 236 7.9 2179 9.3 Dolpa 225 7.5 2070 8.8 Rukum 218 7.3 1897 8.1 Rasuwa 185 6.2 1610 6.8 Sindhupalchowk 155 5.2 1349 5.7 Humla 137 4.6 1260 5.4 Mugu 136 4.53 1251 5.3 Bajhang 115 3.8 1001 4.3 Baitadi 111 3.7 966 4.1 Total 3003 100.0 23523 100.0
Table 4: Area and production of deciduous fruits in Nepal (2006/07)
Deciduous fruits Area (ha.) % Production (MT) % Apple 4266 37.3 34546 36.3 Pear 2834 24.7 33800 35.5 Walnut 1147 10.0 4522 4.8 Peach 1919 16.8 13263 13.9 Plum 1283 11.2 9041 9.5 Total 11449 100.0 95172 100.0
Table 5: Area (ha.) and production (MT) of apple by development regions of Nepal (2006/07)
S. No. Development Regions Area (Ha) Production (Mt) 1 Eastern 536 4,707 2 Central 587 5,107 3 Western 587 5,407 4 Mid Western 2046 14,902 5 Western 509 4,428
Table 3, 4 and 5 are based on: Statistical Information on Nepalese Agriculture 2006/2007. Ministry of Agriculture and Co-operatives, Agribusiness Promotion and Statistics Division. Kathmandu, Nepal, and DADO Jumla.
11 A Value Chain Analysis of Apple from Jumla 4. JUMLA APPLE VALUE CHAIN
This chapter begins with an overview of the whole value chain of the Jumla apple in a value chain map. The rest of the chapter focuses on the functions and the primary value chain actors, which are the private sector actors making this value chain function. This chapter ends with paragraphs on organic certifi cation, apple processing, trends in apple production, income generation and social inclusion aspects of the apple production in Jumla.
Organisations which support the further development of the value chain, covering the whole range of government, business membership organisations, (I) NGOs and projects but which do not get involved in the apple business directly are described in the next chapter.
12 A Value Chain Analysis of Apple from Jumla 4.1 Value Chain Map
Figure 1 illustrates the value chain map of various actors involved in the Jumla apple value chain, from input suppliers and producers at the bottom all the way to the fi nal consumers. On the left, various functions are shown of these primary value chain actors, while on the right-side the various service providers or support organisations can be seen. Especially, the government support organisations have a strong role in determining the enabling environment through policies, subsidies, etc.
Chart 1: Value chain map for Jumla apples (as per situation of 2010)
Function Primary actors Support organisations enabling environment
Final consumers in major towns and Jumla district Consumption
Retail Apple retailers regional Apple retailers and national markets Jumla market MoAC
Kalimati Wholesale Fruits & Apple importers Kathmandu-based Vegetable wholesalers Terai-based market, AP & MDD regional wholesalers Fruit Business Export Association
Collection, FDD grading, packaging, Karnali Apple District apple Apple RDA-MW processing Company traders processors (I)NGOs/ Projects: SNV JAPC WV Local/village Cooperatives CSP traders EIG-CM Production DADO- Jumla
Apple farmers OCN NARC- Input supply NHPC JHRS
Agro-vets, Private apple JAPEC nursery owners
13 A Value Chain Analysis of Apple from Jumla Box 1: A success story of a nursery 4.2 Nursery Management and Input Supply owner in Jumla5 Apple nursery owners There are a total of 32 registered apple nurseries. Most registered Mr. Govinda Bahadur Rawat, a Chhetri farmer is a successful nursery owners are organised in a “Fruit Nursery Association” since apple nursery farmer in Jumla. February 2008. However, more than double the numbers of apple During the year 2007, he nurseries have not been registered and many of them are supported raised 20,000 apple saplings by NGOs and INGOs. in 5 ropanis of land and he sold 19,000 apple saplings During 2005, the private registered nurseries in Jumla produced a earning Rs 380,000. From these total of 103,000 apple saplings. During 2007 those private nurseries earnings, he planned to send receiving DADO subsidies sold a total of 96,800 apple saplings and his son and daughter to college, earned cash income of NRP 1,934,000. They sold 11,000 to Kalikot, to buy a solar panel for light, 4500 to Dolpa, 6000 to Bajhang, 6000 to Rolpa and 61,700 in Jumla to purchase a colour TV and itself. In 2009, just two nurseries in Talium VDC together produced to send his youngest son to a 60,000 saplings. See Box 1 for a success story of an apple nursery boarding school. operator. This evidently indicates that there is an increasing trend of cultivating more apple trees in the western region.
For several years apple saplings were sold at NRP 2, with the NRP 18 subsidy from DADO, the apple nursery received NRP 20 for their saplings. But when the Surkhet-Jumla road (Karnali Highway) opened in 2007, still as a seasonal road, this came as a surprise to many and from 2008 onwards people started buying unsubsidised saplings, with prices even going up to NRP 25 per sapling. DADO-Jumla continued subsidising saplings but these saplings were reserved only for the poorest farmers.
Major challenges for the nurseries are related to improving the quality of their saplings :
1) Most nursery owners are not aware which varieties they have in stock: some are early varieties, some late; some are self-polinising while others need polinisers to polinise them. Nursery owners are not able to advise farmers, nor do most of the latter have much idea about these issues.
2) Currently the nurseries do not have access or possibilities to supply new and improved varieties: they are mostly the same varieties which entered Jumla in the 1970s and 1980s.
3) Nurseries could well be contributing to the spread of diseases, especially when the saplings are produced within existing orchards.
4) Most common rootstock is the edimel and surkilo plant (both wild apples, the latter is without thorns), but some farmers (estimated at 5%) try to save on the edimel seed costs which are collected from the forests and have a price of 5,000-6,000/- per kilo. Use of modern apple varieties as rootstock can lead to root rot.
5 DADO Jumla, 2007. Agricultural Programme and Statistics. 14 A Value Chain Analysis of Apple from Jumla In 2009, DADO-Jumla, SNV and Jumla Agricultural Producers’ and Entrepreneurs’ Cooperative (JAPEC) organised trainings for registered nursery owners on the above and on the Department of Agriculture “Nursery Guidelines”, but more needs to be done to really increase the quality of sapling supply. It is hoped that the Fruit Nursery Association will expand their infl uence over the many still not registered nurseries. Increased monitoring by DADO-Jumla would be another way towards quality production of saplings.
Box 2: Nursery registration
Till 2007, a farmer interested to establish an apple nursery in Jumla had to go all the way to the Department of Agriculture in Kathmandu to obtain a permit –spending at least NRP 25,000-30,000 on travel and board, thus creating barriers for entry. Now the nurseries can be registered at the Cottage and Small Industries Development Board (CSIDB) offi ce in Jumla after being recommended by DADO-Jumla.
Other input suppliers
Only a few private input suppliers are in place for supply of other types of inputs (e.g. organic pesticides, good quality sprinklers, and other inputs). These agro-vets need to be trained in delivery of organic services as farmers regularly seek their advices. Otherwise these agro-vets will remain a major opponent to the DDC’s decision of 2007 to declare Jumla an organic district.
In 2009, DADO-Jumla provided the contract to Jumla Agricultural Producers’ and Entrepreneurs’ Cooperative (JAPEC) for distributing apple saplings to poor farmers, but this is JAPEC’s only activity related to apple production.
It has been involved in the marketing of high value agriculture commodities such as carrot, caulifl ower and potatoes. It also supplies agro-inputs to local farmers – especially to farmers who are growing fresh vegetables and vegetable seeds.
Box 3: Shifting from chemical to organic inputs
Organic Certifi cation Nepal (OCN), Nepal’s only national certifi cation agency at least till end 2010, found in 2009 that till a few years ago the 3 or 4 agro-vets of Jumla’s district headquarters used to be stocked for two thirds with chemical inputs, for mainly rice and vegetable production. In 2009, chemical inputs for agriculture were not available on the shelves and had been replaced by veterinary inputs. A few bio-inputs could be found, but according to the agro-vets there was no demand, nor could they give suffi cient advice on their use. The only thing which is selling well for apple production is Bordeaux paste, which is allowed by most organic certifi cation systems if used on a limited scale. Training agro-vets on organic production will be necessary to support and improve Jumla’s organic apple production.
15 A Value Chain Analysis of Apple from Jumla 4.3 Apple Production
Here the focus is on the practices of apple producers and their constraints to improve production. As explained, apple production is increasingly becoming popular among Jumla farmers and now apple is being produced in all the VDCs of Jumla.
Varieties There are about 10 varieties of apples being cultivated in Jumla – mostly the Delicious varieties: Red, Royal and Golden Delicious – which constitute approximately 70% of the total production. The rest includes Jonathan, Chocolat, Torikulu and Macintosh varieties.
Cultivation practices While some apple trees are grown on fertile and irrigable lowlands, most have been planted on the slopes with low soil fertility and little irrigation. With the large amount of degraded slope land, this is not per se a bad development, but of course it will not automatically lead to improved production. Apple is mostly inter-cropped with beans and wheat, but also with soya beans, potatoes, buckwheat, etc. Even before announcing Jumla an organic district in 2007, pesticides were only used by the larger famers, an estimated 5%, and mainly limited to Rogar – a pesticide against sucking insects, like Woolly Aphid and San Jose Scale.
The average annual cultivation cycle looks as follows:
Table 6: Annual cultivation practices
S.N. Month Activity 1. June-July Sapling planting 2. Jan-Feb Pruning & manure application 3. March-April Weeding 4. April-June Irrigation 5. Aug-Sept Harvesting
The present apple orchard management is very poor. One of the reasons is that farmers do not have adequate knowledge on when or how to effi ciently irrigate, fertilise, and prune their apple trees. Many also complain that there are inadequate services of apple experts in Jumla and that a big campaign is needed to promote improved technologies to apple growers.
But very important factors for the farmers’ “indifference”, often worded by the farmers as “we are too lazy”, are :
1) Most of the produce can currently not be sold and people are waiting for the Karnali Highway to be improved which would boost sales. In the mean time they do not see enough incentive to invest too much in orchard management except for planting more saplings (area expansion).
2) Till 2010, there was also no price differentiation between different grades: whatever the quality or size, the price remained the same; around NRs. 10/- per kilo in 2007 and 2008. Even an attempt to differentiate prices per grade by the traders in 2008, was protested by the farmers, who mostly have preferred a cost-minimising strategy till now.
In 2010, for the fi rst time a price differentiation was agreed. Grade A received NRP 30 and 26 for organic certifi ed and non-certifi ed respectively and grade B received NRP 24 and 22 respectively (prices at the Jumla airport). Although an important factor was the request of the wholesaler for high quality, also the pruning competition held in three VDCs made farmers more aware and enthusiastic. Unlike before, now more and more apple farmers can be heard discussing the status of each others’ orchards and that pruning had had a considerable effect on the apple size. Grading is still a matter of size and of course of appearance. There is still no difference in price between the different varieties or the time of supply (early or late varieties).
16 A Value Chain Analysis of Apple from Jumla Climate Two important climatic factors for a good production are suffi cient chilling hours in the winter (snowfall) and suffi cient rains during the fl owering season in April. Because of lack of these two, the 2009 apple production was at least reduced by 50%. As the Indian apple suffered the same problems, this led to high apple prices in August.
This also raises questions about the impact of climate change. The expected climate change – less winter rain or snow and more unpredictable starts of the monsoon (starting date) will probably lead to less chilling hours, dryer spring seasons and more pests. This could mean that Jumla would need to import varieties which require less chilling hours, or only start new orchards at higher altitudes. Irrigation will become more important, which is now virtually lacking. Pest management or pest resistant varieties will become increasingly more important. Pest management will not be as easy for organic production as for conventional production.
Diseases and pests The common diseases reported are: Stem Black, Powdery Mildew, Scab, Nectaria Twig Blight, Alternative Twig Blight, Peppery Bark/Pink Disease. Similarly, some of the common pests reported are: Woolly Aphids, San Jose Scale, Stem Borer, Root Borer, and Bark Borer.
The common diseases reported are: Stem Black, Powdery Mildew, Scab, Nectaria Twig Blight, Alternative Twig Blight, Peppery Dark/Pink Disease. Similarly, some of the common pests reported are: Woolly Aphids, San Jose Scale, Stem Borer, Root Borer, Bark Borer.
Labour During peak agricultural seasons, the wage rate for both male and female is around NRP 250-300 per day plus three meals. However, during off-seasons, women tend to get slightly lower wages than males. Now, only large farmers are employing wage labourers, but this is expected to increase once sales increase when the Karnali Highway will become an all-weather road.
17 A Value Chain Analysis of Apple from Jumla Organic production Box 4: Karnali Another important factor which has limited quality production is that Fruit Cooperative the declaration of Jumla as an organic district was not suffi ciently The Karnali Fruit Cooperative combined with awareness and knowledge on organic-permitted started up from discontentment growth stimulants (like Servo oil to be sprayed to increase apple that DADO transport subsidy only size and shininess), bio-fertilisers, compost making and bio went to traders, not to the farmers. pesticides. Half of the organic matter (dry weight) of Farmyard Manure After initiation it was found out is currently pine needles, which increases acidity and lowers nutrient that DADO, by law, can only give availability, but currently there is little other unused biomass available. subsidy to individual companies, not to cooperatives, so it still couldn’t Increased soil fertility is not only good for production but also a benefi t from the subsidy. requirement for organic certifi cation. Taking Jumla’s current low soil The cooperative was set up in a fertility levels into account, OCN advised extensive use of cradle very inclusive manner and soon pits in orchards which gather moisture and organic matter. In a had 167 members: more than 30% similar manner, NARC-Jumla advised to have one compost pit per were Dalits, membership fees could ropani and to massively grow beans around the apple trees and use be paid in apples (in kind), big and the plants as green manure after the bean harvest. Whether organic small apple farmer members supply certifi ed or not, increasing apple quality will require a large scale, an equal amount to sell collectively structured campaign to increase quality and quantities of composting. - only if there is still space left over, larger farmers could contribute more. Organisation of producers In its second year, it transported 10 Till 2009 apple producers in Jumla were hardly organised and MT through Surkhet to Kathmandu’s are selling apple independently: therefore, they did not have Balaju Industrial Area’s cold store. much bargaining power for better prices. They also did not have Out of it, 70% got damaged on direct contact with major apple wholesalers in urban markets and reaching Kathmandu, due to depended on apple sales to local traders. long transportation time and bad packaging, and the cooperative Due to the organic apple certifi cation initiative by the DADO Jumla ended up with a loss of NRP 70.000. and the High Value Agriculture-Inclusive Business Pilot Project Also members were blamed of providing low quality apples, while (HVA-IB pilot project)6 , more formal organisation of farmers trying to sell their better apples became necessary to receive group certifi cation as this reduces elsewhere. They had tried to make costs compared to certifi cation of each individual farmer: three a business plan before hand, but organic apple producer groups were initiated in 2009 (Kartikswami reality turned out totally different. Organic Group, Malika Organic Agriculture Production Group and After this bad experience the Janachetana Organic Group). For the marketing in 2009, these cooperative has remained inactive. three groups organised an apple management committee which signed a contract with the DCCI-Jumla sub-committee (about seven Jumla apple traders) for supply of organic certifi ed apple.
Then in 2010, with the change in DoA’s subsidy on transport and packaging material, formation of cooperatives became an urgent matter. As per the new directive only cooperatives would be able to receive the subsidy, and not organisations like the DCCI, which received the subsidy in 2009. The above farmer groups largely merged with existing cooperatives which were either inactive or only did saving and credit activities. Another six cooperatives, not active in the apple sub-sector before the new directive, also joined the marketing activities of the three cooperatives and collaborated under the umbrella of the District Cooperative Federation. They did not join in the organic certifi cation activities.
These nine cooperatives represented around 460 active commercial apple producers in 2010 and accounted for about half of total apple export from Jumla. The other half is exported by non-organised farmers. Although no data exists about them, quite likely this part exists out of more farmers, each exporting fewer apples.
6 Implemented by SNV Nepal and the local NGO Surya Social Service Society. IFAD provided programme funding for the project. 18 A Value Chain Analysis of Apple from Jumla 4.4 Harvesting and Post-Harvest Management
Harvesting Jumla apple producers do not have much knowledge on the appropriate techniques for proper picking, grading and packing. Apples are harvested in a most haphazard manner – including shaking the tree and picking from the ground. Without grading they are transported to Jumla airport, in dokos and bags. The latter is especially a role for women. One of the challenges to improve harvesting is that damage to the apple often only becomes visible after a few days, especially when it arrives at the heat of the Terai, the bruises quickly become visible.
Grading Grading was done by the traders – usually two grades depending on size alone for export to the Terai till 2008. In 2009 grading (A, B, C, D) was introduced but without price difference. In 2010, this was done by the earlier mentioned nine cooperatives which collaborated under the umbrella of the District Cooperative Federation Jumla. It was agreed to only export A and B grades. Grade A received NRP 30 and 26 for organic certifi ed and non-certifi ed respectively and grade B received NRP 24 and 22 for organic certifi ed and non- certifi ed respectively. There are no grading standards for apple in Nepal, and the defi nition of the different grades is based on mutual understanding between the stakeholders.
As nearly all apples are transported by plane, which is also a challenge because fl ights get rather unpredictable in the monsoon weather, grading, pricing and packaging all happen close to the Jumla airport.
Sometime Golden Delicious, a late variety, gets packaged separately. The district headquarters traders will use the apples other than grade A, B and C for processing or for the local market. When there are no fl ights available to transport the apples to Nepalgunj or Surkhet, from where the transport can continue by road, also A and B grades start fl ooding the local market.
Packaging Till 2008, traders had not properly prepared themselves by bringing packaging material before the monsoon starts. A lot of losses occurred due to improper packaging: old boxes were used without any wrapping or separation material and a considerable amount got damaged. Often the bruises only started to show after a few days, especially when the apples arrive in the heat of the Terai.
Due to collaborative efforts from DADO-Jumla, DDC, DCCI-Jumla, World Vision, SNV Nepal, various new developments took place in 2009. A total of 285 farmers were trained in improved harvesting and post-harvest management, investment was made into improved packaging (boxes and foam nets/wrappers). Grading also improved, although price differentiation was initially resisted by the farmers and only took place in 2010. People’s vision has widened of what is necessary (and possible) to be competitive in the market. In 2010, even the nine cooperatives managed to organise and pay for packaging material from Nepalgunj, which can be seen as a strong proof of increased local capacities.
19 A Value Chain Analysis of Apple from Jumla Storage Traditionally farmers stored apples inside the house in cool dark rooms. Now some improved zero-energy apple stores (rooms) have been developed, but without proper humidity and temperature control, these stores can only extend the commercial life span of apples with one or two months.
The road access problem would be greatly minimised if proper storage would exist. Unfortunately the nearest cold storage is in Kohalpur in the Terai. Jumla currently does not have suffi cient electricity supply for its current needs, let alone the local micro-hydro power that can manage an energy-consuming cold store. The current zero-energy storage (cellar stores) allows for storage, but still causes losses which often outweigh possible price increases.
Another issue is that the Jumla apple does not have a long keeping quality. Although this needs further research, probably there is due to shortage of a certain micro-nutrient in the soil, possibly Calcium.
4.5 Trade and Marketing of Jumla Apples Harvesting already starts during the monsoon and makes transport over the Karnali Highway impossible. This makes costly air transport the only option, but the same weather makes fl ights very unpredictable. There is also considerable competition between cargo and passengers, especially before Dashain as many non-Jumlis want to go home for the holidays. If the road opens early, transport by tractor becomes possible increasing district headquarters apple prices. For example, in 2008 the prices increased from NRs. 10/- to 20/- but with losses of up to 50% due to the bad road conditions.
The 232 km Karnali Highway opened as barely a track in 2007. This has greatly increased the perceived future perspectives for the Jumla apple sector. The World Bank is supporting the blacktopping of the fi rst 132 km (up to Khidkijiula) which is expected to be completed by the end of 2011. Improvement of the next part is expected to start in 2011. But the chances of landslides blocking the road during monsoon will remain large for the years to come.
Those 10% apples which do reach the market outside Jumla largely serve the cheaper market segments in the Terai: poor management, all the way from orchard management to packaging and transport, make these relatively small and often bruised apples less attractive. Nevertheless, in comparison to Chinese and Indian apples, Jumla apples are widely recognised as tasty and crunchy apples in Nepal, but size, colour and general condition have a big infl uence on consumer choices.
The different marketing or trade modalities are currently in operation in Jumla: 1) Large apple producers who bring their produce to Surkhet and Nepalgunj themselves. 2) Growers – especially in Jumla’s Sinja belt – who collect from other farmers as well and send the produce to the Terai. 3) District headquarters traders with a storage at the Jumla airport who either a) ‘rent’ orchards and organise the harvest themselves, or b) buy at the airport from farmers. 4) For the fi rst time in 2010, nine Jumla cooperatives did joint marketing under the District Cooperative Federation.
20 A Value Chain Analysis of Apple from Jumla The third category took the largest volume in 2009, while the fourth category took the largest volume in 2010, increasing the area of infl uence of the apple producers (vertical integration). The transport and packaging subsidies provided by the DADO form part of the profi ts (for transport NRP 7 in 2009 and 75% on transport and on boxes in 2010). As the subsidy is provided on reimbursement basis, it was quite a surprise that the nine cooperatives managed to collect suffi cient working capital internally to bridge the gap between actual payment of transport and boxes and the reimbursement later in the form of subsidy. Another signifi cant feat by these cooperatives in 2010 was management of air transport, not an easy task seen the competition for air transport and the monsoon weather limiting fl ights. Due to these fl ight problems, marketing apple and the coordination between different actors is not easy. Every year a few metric tons of apples loose their marketability while waiting for fl ights for too long, increasing the costs for the traders or cooperatives.
Table 7: Transport costs
Route Mode of transport Transport cost (NRP) per kg
Jumla-Nepalgunj/Surkhet Air 21/- (excluding possible transport subsidies). Jumla-Surkhet Truck/tractor 4/-
Nepalgunj/Surkhet-Jumla Air 82/- (Excess luggage) 55/- (Cargo separate) 42/- (Charter)
Surkhet-Jumla Truck/tractor 8/- to 24/- depending on the volume
After agreeing on a deal with actors in Jumla, wholesale traders from elsewhere collect their apples in Surkhet or Nepalgunj and put their product on night buses to various destinations, where they sell to retailers. Before the market linkage interventions of HVA-IB pilot project, most apples were sold in the Terai, from Naryanghat to the West. With the project larger volumes started reaching Kathmandu.
The year 2009 saw high prices early in the harvest season, which helped the farmers make a good deal with the DCCI-Jumla (NRP 35/kg), but early September the Chinese apples arrived on a large scale after which the apple price in Kathmandu dropped sharply. On the basis of this experience, the above mentioned pilot project argued for a pricing system for Jumla apples based on the general apple market price in Kathmandu, for example agreeing on the apple price in Jumla as a percentage of the general apple market price in Kathmandu and with a certain minimum price also included. But in 2010, the Jumla cooperatives had little interest in such a system: they preferred a fi xed price and left the risks (and possible gains) for the wholesaler.
Box 5: Karnali Apple Company
The Karnali Apple Company (KAC) was supported by a USAID/AEC project from 1996 to 1999. The project also linked Jumla apple traders with apple traders in Bangladesh by supporting the visit of Bangladeshi traders to Jumla, in order to convince them that Jumla apples were superior to Indian apples. The project also organised an exposure visit of apple farmers and traders to Himachal Pradesh in India and even provided management support to KAC.
KAC exported 12 MT of apples to Bangladesh in one year. Apples got damaged as airplanes did not arrive on time and also farmers did not bring their best quality apples. KAC bought at NRP 16/kg from Jumla farmers and sold at a price of NRP 50/kg in Bangladesh. Of the 50 MT delivered, only 14 MT was suitable for export. It rented a cold store in Biratnagar to deliver to Bangladesh which demanded 50 MT per week, which KAC could not deliver, after which the Bangladeshis lost their interest. One important impact of this project was on the price: before this project the price of apple was only NRP 2/kg in Jumla, while afterwards the price settled at NRP 10/kg (up to end 2008).
21 A Value Chain Analysis of Apple from Jumla Box 6: Issues for future consideration
Two issues which are worth considering for the near and distant future:
• Although politically diffi cult to change, the current transport subsidy is actually not promoting increased availability of air transport. It does increase the profi t margins for cooperatives and possibly also profi t sharing towards members, but as airplane companies do not receive any extra margin from this subsidy it will not stimulate them to bring their planes to Jumla at the cost of other destinations.
• Although there were substantial subsidies involved for transport and packaging to achieve the current level of competitiveness, the impact of the opening of the road during the harvesting period is still unclear. Traders will enter Jumla with trucks and possible even with cheaper wage labourers from the Terai and they will try to make deals with individual farmers to rent their orchards. Hopefully the cooperatives will cover more and more apple producers and will have suffi cient capacity to bargain with incoming traders in a collective manner. The cooperatives should make sure that they have other advantages to offer to incoming traders than volume alone (e.g. good storage facilities, a cargo terminal), otherwise it might be too easy for traders to break this collectiveness and start dealing with individuals which could drive down the apple price.
4.6 Organic Certifi cation At least 95% of Jumla apples are organic by default, as the marketing opportunities for Jumla apples have been limited and only a few larger farmers are willing and capable to invest into expensive chemicals. The 10% of the total apples which did reach the market outside Jumla was mostly used to serve the cheaper market segment in the Terai: poor management, all the way from orchard management to packaging and transport, made these relatively small and often bruised apples less attractive.
This was rather unfortunate, as usually organic products serve the top-end markets. With this in mind, the HVA-IB pilot project, implemented by SNV Nepal, and DADO-Jumla agreed to support organic certifi cation in 2009 and 2010. Later World Vision and other organisations also agreed to contribute.
In 2009 three organic apple producer groups were formed in Mahat, Kartikswami and Patmara VDCs respectively: these 207 farmers went through various trainings and were inspected by Organic Certifi cation Nepal (OCN) in August 2009 and were certifi ed “Organic in Conversion”. OCN is a Nepali certifi cation agency which applied the Government of Nepal’s Organic Guidelines for this certifi cation. These guidelines were only approved in May 2009, and the certifi cation of Jumla apples was probably its fi rst successful application. Also marketing was supported with posters, banners and “certifi ed organic in conversion” stickers for each apple to create demand and trust among consumers. In a similar manner, Photo : Certifi cates provided by OCN to the three producer groups after certifi cation.
22 A Value Chain Analysis of Apple from Jumla in 2010 these farmers organised themselves into three cooperatives, and 200 farmers were certifi ed fully “organic’ and another 150 as “organic in conversion”, together exporting 38 MT. Another 30 MT was exported by six cooperatives with the same market linkage support from the HVA-IB pilot project. Although not organic certifi ed, these apples where still sold as organic (‘truthful labelling’), benefi ting from a slowly increasing awareness among consumers about Jumla being an organic district.
This certifi cation was one of the reasons why the price of organic apple in Jumla increased from NRP 10 in 2008 to NRP 35 per kg in 2009 (ungraded) and was marketed through at least 6-8 supermarkets in Kathmandu. Other reasons for the price increase was caused by the better post harvest management, most tangible the improved packaging. Another important factor was the general increase in market price due to the reduced production in the Himalayan belt :7 the price for uncertifi ed, but well packaged apple rose to NRP 25 per kg.
In 2010, the price difference between certifi ed and non-certifi ed organic apple decreased: respectively NRP 30 and 26 for grade A and respectively NRP 26 and 24 for grade B. If this price difference does not increase, this small difference will not justify organic certifi cation from a fi nancial perspective. There appears to be quite some interest for organic apple, but demand and supply are not meeting each other in an effective manner. One reason is Photo : OCN sticker for on the apples that the organic market is not yet well organised in Kathmandu: several places have a few organic products but it remains all very scattered. There are no places where consumers can buy a whole variety of organic products. The other reason is that in 2009 and 2010 the Jumla apples were mainly distributed through a fruit wholesaler which has no expertise and also little interest in organic products. Although there is one organic vegetable wholesaler in Kathmandu, this company did not manage to make a substantial deal with the Jumla cooperatives and the latter preferred the offer of the fruit wholesaler: larger volumes, more advance money, etc.
Even though the Ministry of Agriculture and Cooperatives has published its set of guidelines for organic production, Nepal still has no accreditation body which can accredit certifi ers as complying with an agreed set of policies and guidelines. Therefore, OCN is not an accredited certifi er and its certifi cation remains of a private nature. In Photo : Cooperative representatives offer Jumla organic other words, the certifi cation of organic apples apples to the President of Nepal (September 2010) is based on the trust that OCN is doing its work professionally and there is no accreditation body to guarantee that certain guidelines or standards are met.
7 Just like in Jumla, other main apple producing areas like Kashmir and Himachal Pradesh suffered from little snow fall (too little chilling hours for the apple) and reduced rainfall during the fl owering season. In that year production was reduced up to 50%. 23 A Value Chain Analysis of Apple from Jumla Box 7: Group certifi cation
Two systems of certifi cation exist: individual and group certifi cation. Group certifi cation has been developed to support small producers with its reduced certifi cation costs. Annual inspection, the main recurrent cost of certifi cation, takes place for the whole group of organised organic producers. Group certifi cation requires the organic producers to be organised and to have internal inspectors who monitor whether other group members are applying the organic guidelines and are properly documenting all farm activities in their “diaries”. This is called the Internal Control System. When the external inspector from the certifi cation company comes, he/she fi rst checks whether the internal inspectors are properly doing their work and randomly inspects several farms. If all guidelines are applied at both levels, it is possible to provide a group certifi cation, which is much less costly than individual certifi cation where each farm would need to be inspected.
Already some lessons have come forward from the 2009 and 2010 certifi cation experience:
• Large scale introduction of use of permitted bio-pesticides and organic compost making need to be introduced. Especially pest control is become a large concern among the farmers. DADO-Jumla and the Jumla Horticulture Research Farm are doing some experiments, while the HVA-IB pilot project have provided trainings to farmers. Micro Enterprise Development Project might support the initiation of a small bio-pesticide production unit making use of locally available herbs. • Although there is demand for organic apples in Kathmandu the distribution needs to be better organised to reach out to many consumers. This is related to the fact that there is hardly an organised market for organic products in general in Kathmandu. And preferable a wholesaler should be involved which already has experience and networks to serve the fragmented organic market. Without this a suffi cient premium price cannot be achieved and the certifi cation will not be fi nancially sustainable. • As OCN certifi ed the upland fi elds of the farmers (not the irrigated rice fi elds where they still found some evidence of [illegal] pesticide use), also other non-irrigated crops can be produced under the present certifi cation, like beans, buckwheat, etc. These extra incomes will increase the fi nancially sustainability of the certifi cation.
4.7 Apple Processing
Processing of apple is important as a considerable part of the produce will always remain of too low grade to sell for fresh consumption. At the same time, this is even more urgent for Jumla as market access will remain problematic during harvesting time: processed apples into whatever product can often be better stored and/or have less weight or volume which reduces transport costs.
Several enterprises - including the largest called RN Organic - have started production of dried apple slice on a commercial scale – both for local consumption and ‘export’ out of the district to major markets in Nepal. Other products have not seen any commercial up-scaling, except for apple cider production. Of course, production of local apple rakshi for district or household consumption remains a long term favourite. Another local entrepreneur is ready with distillation equipment to start the production of apple brandy. It is still waiting for a licence, but licence provision for strong alcoholic drinks is - at the time of writing this report - banned by the central government.
The general opinion is that dried apple has the most potential (easy processing, light weight), but they have to compete with the good quality apples coming from Mustang. If these various products are to be promoted on a larger scale, separate value chain analyses of these products would be worthwhile.
24 A Value Chain Analysis of Apple from Jumla 4.8 Trend of Apple Production Apple was introduced in Jumla during the 1970s from Himachal Pradesh, India by the Government of Nepal (GoN). In 2008, a total of 953 hectares of land was under apple cultivation. With more then 1,00,000 new saplings planted each year from 2006 onwards, the area is rapidly increasing. The future improved road access is the driver of expected market access and sales increases.
Similarly, over the years there has been an increasing trend in apple production in Jumla with a production of approximately 1900 MT in 2008 (although some estimate it as high as 5,500 MT but much of this would not have commercial value). Only about 10% of all produced apples are ‘exported’ from the district, actual production data are not available. About another 20% is used for local or household consumption and processing.
In the past, saplings were distributed by DADO Jumla at NRP 2 per sapling (with a subsidy of NRP 18 per sapling) and is still doing so for the most disadvantaged households. From 2008 onwards farmers bought saplings at the rate of NRP 20 to 30 from private nurseries. The demand was so high that even the production of saplings by private nurseries could not meet the demand of local farmers. Even poor Dalit farmers bought apple saplings at NRP 20 to 25 per sapling from these private nurseries. Every farmer met during the studies’ fi eld trips in Jumla mentioned that they were planning to double the number of trees in the next 5 to 7 years.
The most recent data come from District Development Committee (DDC) Household Survey of 2008 (see Table below and Annex B for more details).
Table 8: 2008 data on apple production
Total apple Total apple Total apple Mature apple # of total Matured apple trees productions producing area (ha) tree (ha) apple trees (apple producing) annum (MT) households
953 278 286,000 83,500 1,836 9,913
Whether the Jumla apple can take a serious domestic market share once the Surkhet-Jumla road is upgraded, does not only depend on production, but more importantly also on demand and whether it can compete with Chinese, Indian and Mustang apples (see Chapter 5, National Apple Market Dynamics) and/or whether Jumla is able to forge a niche market based on ‘organic’.
25 A Value Chain Analysis of Apple from Jumla 4.9 Income Generation Annex C provides an overview of the cost structure of the apple production as prepared on a focus group discussion with Jumla farmers. It shows that with 20 trees per ropani (and other assumptions), the net annual income opportunity per ropani from apple production and the inter-copping is NRP 57,000 when the production is in full swing (with ten-year or older trees). This calculation8 is on the conservative side: it assumes high labour costs (which are increasing steadily) and apple prices at least NRP 5 below those received in 2010. With the same assumptions but only a price of NRP 25 instead of the assumed NRP 20, it would already mean a net income opportunity of NRP 77,000 per ropani. The wage labour cost of NRP 400 per day is also on the higher side. Nearly all work is done by family members and is not paid for. Net income opportunity increases to NRP 83,000 per ropani if wage labour cost is taken at NRP 300 per day.
With an average of 0.42 ropani 9 per HH with fruiting apple, this provides on average net income opportunity between NRP 24,000 (USD 320) to 35,000 (USD 466) per households (depending on various assumptions). This income opportunity for 9913 households can only be realised if the apples produced can actually be sold which is not yet the case. This number of households will double (to nearly all households in Jumla) in the coming 10 years, and with more than 1,00,000 samplings being planted each year in the last 5 years and based on the 2008 available data showing that only around 25% of the trees that time were in a fruiting stage10, the income effect of an all-weather road will be tremendous.
Making use of the cost-benefi t calculation mentioned before, the 68MT sold by 460 households in 2010 would have led to a net income of NRP 3050 (USD 40) per household excluding cooperative profi t sharing.11
Information from a 299 household survey by DADO-Jumla, given in the table below, shows that large majority have small apple orchards while only a few people have substantial orchards and who could consequently specialise in and rely on apple production. For the large majority, apple production will, for the time being remain part of a wider livelihood strategy.
4.10 Social Inclusion and Table 9: Size of apple orchards 12 Gender Apple Trees Number of Farmers Percentage As the poor and disadvantaged 15 - 75 193 65% have less land, apple production > 75 - 200 81 27% was not seen as suffi ciently > 200 - 500 25 8% pro-poor. But as poor Dalits have started growing apple trees, this is an indication that they are also capable to enter this sub-sector. Besides, there are hardly any landless in Jumla district. Dalits are aware of the fact that in the future apple production will be their main source of income (See Box below). Poor households are not only characterised by smaller land holdings but even more importantly with less irrigation opportunities or facilities. Due to land pressure, people are bringing more and more slope land under cultivation. Compared to annual crops, apple cultivation on slope lands can be relatively sustainable with limited soil erosion.
Box 8: A Dalit farmer’s story on apple farming
Bhakta Bahadur Nepali (a Dalit farmer) has presently 50 apple trees. He plans to double it in the next fi ve years. He said that now Dalits in his area have complete awareness of the fact that “Apple farming alone can sustain their livelihoods” and they are increasingly planting apple saplings in their farms. However, the farmers in his area do not have knowledge on improved technologies of apple growing and post harvest management. “Dalit farmers have great interest in apple growing, but they need be trained in improved technologies of apple growing and marketing”.
8 Certifi cation costs are not included, neither the extra costs for maintaining the internal control system nor the premium price for organic certifi ed apples. Also costs for land are not included. There is no practice of renting land, which would be an easy way to estimate land costs. 9 Average ropani per HH fruiting: 83500 fruiting trees / (20 trees per ropani * 9913 total number of HH doing apple production) = 0.42 ropani per HH (based on DDC 2008 Household Survey). 10 Apple trees usually start fruiting after 5 years, but large volumes only come after 10 years and the maximum production only takes place at a tree age of 15 to 25 years. 11 Assuming trees are all mature, producing 200kg apples per tree and 20 trees per ropani. A total of 68.000kg apples comes from 17 ropanis, leading to a net total income of around NRP 14,00,000 depending on the various assumptions (NRP 3050 [USD 40] per HH). Profi ts by cooperatives is substantial, they received a price of NRP 62 to 68 at Surkhet in 2010 and also a subsidy of 75% of the transport costs. 12 DADO Jumla, 2008. Agricultural Development Programme and Statistics. 26 A Value Chain Analysis of Apple from Jumla Data from the DDC HH survey 2008 in the box below, give an idea of the social inclusiveness of apple producers. It reveals that disadvantaged groups like Dalit and Janajati are indeed adopting apple production – although slightly less than the higher castes.
Table 9: Social group wise apple production in Jumla
Social group Total Households Apple production HH # % # % Dalit 3,212 19 1442 15 Janajati 258 2 127 1 Brahmin/Chhetri 13,476 80 8,303 84 Muslims 2 0,01 1 0,01 Total 16,948 100 9,913 100
Reports on the relationship between caste/ethnicity and quantity of apple production are not available. It would probably show that higher castes own more land, own more apple trees and consequently produce more apples.
Although access to land is one important factor, investment-wise (see Annex C), the preparation of a boundary wall is another larger investment in the beginning - although currently there are quite a lot of apple trees especially higher up on the slopes without this protection. Intercropping gives some respite for the farmers during the fi rst 5 or 10 years, the non-fruiting stage, probably not unimportant for poor farmers to enter this sub-sector.
Another important aspect, is that if the Jumla apple sector follows a similar development as Himachal Pradesh, there could be huge opportunities for poor wage labourers to work on orchard management, harvesting and post-harvest opportunities. Seen the high labour costs in Jumla, NRP 300 per day in 2009, combined with a future increased and more dynamic apple sector could also cause a large infl ux of cheap daily wage labourers from the Terai.
Box 9: A local farmer’s prediction on the future of apple farming
Krishna Kathayat (a Chhetri farmer) has 62 apple trees. He worked for six months in an apple orchard in Himachal Pradesh (H. P.), India. According to him: “In H. P., majority of the apple orchards are being managed by poor people, and the owners live in the cities. If there are marketing opportunities, apple production in Jumla could increase by 3-4 times in ten years’ time. The present rice fi elds could be planted with apple trees in the next ten years’. If this happens, like in H.P., the poor will benefi t the most by getting employment in apple production and marketing”. This would indeed be good news for Jumla’s poor.
27 A Value Chain Analysis of Apple from Jumla Gender Another important aspect of the social exclusive or inclusive nature of apple production is that of gender task distribution. The table below shows that apple is not an exception to the traditional labour division between male and female. As mainly women carry apples in dokos to the local market or the Jumla airport, this provides them opportunities to engage in the cash economy, and possibly increase decision-making power of women on use of cash/money.
Table 11: Gender work distribution (based on a focus group discussion)
S.No. Description of activities Estimated work load (%) on activity basis Male Female 1 Land preparation including pit fi lling 65 35 2 Collection, transportation & planting sapling 60 40 3 Annual weeding, manuring 40 60 4 Training & pruning of apple tree 80 20 5 Management of plant protection measures 80 20 6 Harvesting, grading & packaging at farm level 70 30 7 Local transportation 25 75 8 Apple processing (dried apple, cider, brandy) 50 50 9 Selling at the local market 25 75
28 A Value Chain Analysis of Apple from Jumla 5. NATIONAL APPLE MARKET DYNAMICS
5.1 Market Shares of Suppliers
Apples for Kathmandu and other major urban markets are mainly supplied through imports from China and India with the domestic production contributing negligible amounts – although apples from Mustang and Jumla are starting to make a name.
Although reliable data is not available, the indications are that China is increasing its market position in Nepal: in 2008/09, China supplied around 70%, followed by India with 29%. In 2009/10, China’s market share was around 90%, with only 9% for India. The rest comes from domestic production. These percentages are indicative as reliable data is not available. Although government statistics show an apple production which could even fulfi l the national apple demand, still most of the domestic produced apples are consumed locally due to lack of transport opportunities, go to waste or do not even have suffi cient commercial value at all (too small, not good-looking enough).
China will continue to dominate the market, even at a global level. Apparently it already produces 70% of the world apple volume, with still many trees in pre-fl owering stage. Its high-quality storage facilities make it even more powerful: it can fl ood world markets when it wants and infl uence prices at its will. India’s market share is only seasonal, just like that of domestically produced apples: only during or right after the harvest period. Indian apples are relatively expensive: compared to the Chinese apples, they are smaller and less well packaged. Apparently the price of Indian apples is being driven up by the increased power of retail chains in the apple value chain in India.
“Premium” quality apple is also being imported from overseas countries such as USA, Australia and New Zealand, but in very small volumes. Most of the domestic apples are still consumed in local and regional markets. With roads to Mustang and Jumla improving in the coming years, the domestic apple market share in Kathmandu is expected to slowly increase, probably at the expense of the Indian market share. A lot will depend on support of the Government of Nepal to this sub-sector (e.g. in the form of transport subsidies).
29 A Value Chain Analysis of Apple from Jumla 5.2 Physical apple fl ows in Kathmandu Apples are considered to be the fruit most in demand in Kathmandu and other city centres of Nepal and unlike many other fruits, it is available all year round. There is an increasing demand for apple of around 10% a year, following indications given by wholesalers, due to urbanisation and income growth of urban populations. Suffi cient demand for apple exists throughout the year with noticeably higher demands during the harvest season as prices are low and during the festival seasons. The total annual traded volume in Kathmandu is estimated at around 27,000 MT: around 9,000 MT for consumption in the Kathmandu Valley and 18,000 MT is transported to different regions of Nepal.
There are two main trade hubs in Kathmandu: the Balkhu Fruit Wholesale Market already has a market share of above 90% and that trend seems to be continuing at the cost of the other hub, the Kalimati Fruits & Vegetables Market.
Numerous dealers in these wholesale markets supply the apples to the various retailers and traders in the country. Around 65% of the apples supplied from these markets are transported to other markets outside the Kathmandu Valley which include markets in Pokhara, Naryanghat, Hetauda, Butwal and Nepalgunj. The rest of the apples are supplied to the consumers of the Kathmandu valley and surrounding areas. The value chain map below shows the physical fl ow of apples.
Chart 2: Value chain map of apples in Kathmandu (With apple prices in NRP per kilo, estimated quantities in MT and number of actors between brackets. Quantities and number of actors are estimates.)
Kathmandu Consumer Consumers (households, restaurants, hotels) 9,000 MT
Cycle Vendors Ret. Shops Dep. Stores Agents Outside Valley Retail NRP. 80-100 NRP. 90-150+ NRP. 150-200+ NRP. 70-150+ 18,000 MT 4,500 MT 3,500 MT 800 MT 100 MT (300-400+) (500+) (10+)
Balkhu Fruit Market Kalimati Vegetable and Fruit Market Wholesale NRP. 55-120+ NRP. 60-120+ 26,000 MT 1,000 MT (60+) (5+)
China India Importers/ Domestic Overseas NRP. 50-60 NRP. 60-70 Suppliers NRP. 70-80 NRP. 80-100+ 24,500 MT 2,500 MT 50 MT 25 MT (40-50) (5-10)
30 A Value Chain Analysis of Apple from Jumla 5.3 Description of Market Actors The market actors in the value chain of apples inside Kathmandu are: • Importers/suppliers • Wholesalers • Retail traders • Consumers Importers/suppliers As mentioned above the majority of the importers import apples from China, as it has become a perennial source of apples, at the cost of the market share of Indian apples. The actual importers are transport/cargo companies which are specialised in importing many different kinds of goods, including apples. Because of regular apple imports, some fruit wholesalers have invested into this part of the value chain as well and have become (co-)owners of cargo companies.
Wholesalers Balkhu Fruit Wholesale Market, fully dedicated to the import and supply of fruits, is considered the main wholesaler hub for supply of fruits and the place where most wholesalers are based. They act as the main wholesale hub not only for the valley but for the rest of the country. There are more than 60 traders inside the wholesale market who are involved daily in the sales of different fruits. This market handles or supplies over 2,500 cartons (11kg each) of apples everyday to various buyers which include cycle vendors, shopkeepers, department stores and hotels.
Table 12: Number of wholesalers in major towns of Nepal Kalimati Fruits and Vegetable Market is increasingly becoming a Towns No. of wholesale Towns No. of wholesales hub for vegetables. Still it supplies Dealers Dealers an estimated around 150-200 Bhairahawa 1-2 Itahari 3-4 cartons of apples every day, mostly Biratnagar 4-5 Janakpur 7-8 to the retailers in the nearby areas. Birgunj 2-3 Kakarvitta 2-3 Several of these wholesalers Butwal 5-6 Kathmandu 65-70 immediately transfer the apples Dhangadhi 3-4 Lahan 2-3 from the trucks of cargo companies Dhankuta 2-3 Nepalgunj 3-4 on to night buses selling it off to Dharan 2-3 Pokhara 8-10 regional wholesalers elsewhere in Nepal.
There are many wholesale traders of fruit in Kathmandu and other market hubs of Kathmandu, who trade mainly in Indian and Chinese apples.
At the central level, apple wholesalers are organised under a national umbrella called “Nepal Fruits Association”.
Retail The retail level buyers in Kathmandu, include: • Cycle vendors, supplying an estimated half of the apples to the consumer market • Retail shopkeepers, supplying around 40-45% of the apples • Department stores and/or super markets, supply less than 5% of the apples to the consumer market; and • Supply agents, who provide supplies to the institutional buyers, such as restaurants and hotels, also with less than 5% of the total volume consumed in Kathmandu.
Cycle vendors: These vendors travel around the city in cycles providing fruits and vegetables to consumers in different areas. Typically being from a Madeshi background, they purchase apples everyday from dealers of the wholesale market and supply it to the consumers. On the one hand they have low costs (don’t pay rent), but also have no storage facilities, and therefore they generally tend to have the lowest price range among different retailers. According to the wholesale dealers, cycle vendors comprise a majority of the daily sales from the wholesale market, they number anywhere from 300-400. During availability of seasonal and popular fruits like orange, grapes and banana, their purchase of apples decreases.
31 A Value Chain Analysis of Apple from Jumla Retail shopkeepers: These are retailers who are mostly dedicated to the sales of different kinds of fruits and spread across different locations and areas of the valley. They also sell value added fruit products such as fresh fruit juice and cut fruit assortments. They source their apples mostly from Balkhu Fruit Market, the purchase cycle being once a week or once in 10 days depending upon the sales. The daily sales vary depending upon the location and season, however on average each of these sell anywhere from 5 to 25 kg of apples every day. There are an estimated 500 or more fruit retail shops and vendors spread across the Kathmandu Valley. They consider Chinese apples to be the most popular mainly because of its size, taste and packaging. These shopkeepers reported of keeping a margin of NRP. 10-20 per kg of apples.
Department stores: Fruit selling in department stores (supermarkets) is a recent phenomenon which started only a few years back. Few of the stores bring in fresh apples from the wholesale market every day. The apples they sell are well packaged and look attractive and appealing to the consumers charging fairly more than other retailers. They also sell apples imported from Western countries (Australia, New Zealand, USA). Their margins are considerably higher, up to NRP 100 per kg.
Supply agents: Institutional buyers such as hotels and restaurants usually have supply agents that provide them with various supplies, including food, vegetables and fruit. These supply agents purchase from the wholesale market and usually put in a margin of 10-15%. However, there are supply agents who work on a fi xed supply price for a period of time, with an obligation to supply at that price irrespective of the market prices.
Consumers These are the fi nal consumers of apples: they can be individuals, households or institutions. Consumers in lower income bracket consider price as the critical factor. They prefer cheaper variety of apple for consumption, as well as for other purposes such as use during religious events for offering. Higher income and upper middle class consumers prefer quality apples (colour, appearance and taste) and price is not the critical factor for their purchases. During festival seasons, the demand for apples increases at the individual consumer level.
Another group of consumers consist of institutional buyers, mostly the hotels and restaurants. They either buy directly from wholesalers, but the majority buy through their supply agents (see above).
32 A Value Chain Analysis of Apple from Jumla 6. ENABLING ENVIRONMENT AND SUPPORTING AGENCIES
This chapter describes a number of supporting agencies and facilitators that are contributing to the enhanced production and marketing of quality apples from Jumla. Together with the relevant policies, they form the enabling environment in which primary actors of the Jumla apple value chain operate.
6.1 District Development Committee
The District Development Committee (DDC) has a key role in the formulation of district level policies, plans and programmes for the district in coordination of various government line agencies and NGOs working in the district. In view of the signifi cant potential contribution of the apple sub-sector to the economy of Jumla, the periodic District Development Plan of Jumla “First Five Year Plan” (FY2002/03 – 2006/07) has an overall slogan saying “Employment through Apple, Tourism, Transportation and Herbs; Development of Jumla with Equitable Norms”. Similarly, it has declared Jumla an “Apple Zone” and has also adopted DADO’s policy initiative of “Each household one apple orchard”. In 2007, Jumla declared itself an organic district and banned import of chemical fertilisers and pesticides.
6.2 District Agriculture Development Offi ce District Agriculture Development Offi ce (DADO) Jumla has been very active in promoting the apple sub-sector and has taken lead in coordinating with other agencies. The DADO-Jumla policy on apples is summarised in its slogan “Every household, one apple orchard”.
Some of the major activities and policies of 2008-2010 related to apples include: • Provision of subsidised apple saplings to poor, Dalit and woman headed households. • Promoting Jumla as an organic district. • Promotion of organic certifi cation, for the fi rst time in 2009, with support of SNV, World Vision, etc. • Improved packaging by introducing boxes and nets. • The initiation of Local Agricultural Resource Farmers (LARFs): one each for the 285 wards, all to be trained in apple orchard management and organic agriculture. They will also be provided with some basic equipment like spray and pruner. • Taking lead with SNV support in formulating a Jumla Apple Upgrading Plan to be adopted by the DDC in 2011. • Training of registered nursery operators in improved production of apple saplings. • Some experiments with bio-pesticides. • Managing the DoA’s subsidy policies at district level.
33 A Value Chain Analysis of Apple from Jumla 6.3 Jumla Apple Processing Centre Jumla Apple Processing Centre (JAPC) is a processing training centre and does not process for marketing. It provides training and input packages for processing (into dried apple, jam, jelly, cider, brandy, squash, and juice) and other necessary materials/instruments/equipments. Processing of apple is an important aspect: many apples are below grade A and B and cannot be marketed for fresh consumption.
Box 10: Processing Centre13
The Apple Processing Centre Jumla, under Department of Food Technology and Quality Control (MoAC) has processing facilities for apple farmers. However, the processing is limited for household consumption and gift purposes, not for commercial purposes. In 2064/2065 the centre processed 360 MT of apple and 760 farmers got services (50 farmers for jam; 150 for juice; 250 for dried apple slice; 50 for cider; 50 for titora (apple sauce); 25 for apple candy and remaining for other services.
6.4 NARC – Jumla Horticulture Research Station Nepal Agricultural Research Council (NARC) has been established as an autonomous organisation under the “Nepal Agricultural Research Council Act – 1991 “with the prospect of having an effi cient, effective and dynamic agriculture research system in Nepal in order to uplift the economic level of the people”.
One of NARC’s centres is the Jumla Horticulture Research Station (JHRS), which has some well proven apple technologies available. The farm has successfully nursed apple trees with the proper pruning, training and management systems – including administering other technologies such as Amali (parasite) to eat aphids, which suck young trees and dry the branches. Still these improved techniques need to be spread among farmers. One of the issues is how to multiply the Amali within Jumla. JHRS has also provided various trainings like nursery and orchard management.
Box 11: Improving varieties
NARC and the Indian Council for Agricultural Research (ICAR) signed a MoU in 2009 for import of new varieties from the Regional Fruit Tree Research Station, Mahshobra, Shimla. This will include varieties with improved colouring, regular bearing, high yielding and suitable for high density planting. Varieties will include Maling (M-) series as root stock – which lead to slightly better fruits compared to the current root stock types - and Spur (Golden, Red) varieties as scion, both still not in Jumla except perhaps for a few smuggled in by some innovative farmers with working experience at Indian orchards. Also Jumla’s special conditions need to be taken into account: 1) as an organic district it will require varieties resistant to diseases which cannot be easily tackled with bio-pesticides; and 2) drought resistant varieties, as Jumla will never be able to achieve the scale of irrigation as currently available in Himachal Pradesh and Kashmir.
But it will take another 5 to 10 years of evaluation on NARC’s horticulture farm in Jumla before these imported varieties can be distributed via the nurseries.
13 Apple Processing Centre, 2008, Annual Report, Jumla.
34 A Value Chain Analysis of Apple from Jumla 6.5 District Chamber of Commerce and Industry District Chamber of Commerce and Industry (DCCI) was established in 1995, but only became active from 2002 onwards. It has 450 members, most of which are shop keepers, and the rest (50-70) are contractors, processors, mill owners, herb traders and furniture producers. Only 15-20 are apple farmers and apple traders. It also runs a Koseli Ghar (‘souvenir shop’), which sell various local produced food stuffs like dried apple, apple juice, etc.
In 2009, the DCCI’s sub-committee on apple trade was involved in 1) organising for professional apple packaging material, for the fi rst time in Jumla’s history; 2) a contract was signed with the management committee of the three organic certifi ed apple producers; 3) apple business was done with wholesalers in Kathmandu and Naryanghat. With its link to Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and its Agro-Enterprise Centre (AEC), it has possibilities to quickly search for business partners.
6.6 NGOs and Projects Various (I)NGOs and projects are promoting and supporting the sub-sector of apple in Jumla. Below follows a list of most of the (I)NGOs and projects which supported the sub-sector in 2009 and 2010:
• SNV Netherlands Development Organisation, supporting with capacity building support to DADO-Jumla, this value chain analysis report, various trainings related to nursery operators, orchard management and organic certifi cation (through the HVA-IB pilot project). SNV is currently supporting the facilitation of a Jumla Apple Upgrading Plan.
• World Vision supported with organic certifi cation, promotion and training of Local Agricultural Resource Farmers (LARFs).
• Community Support Programme (CSP), implemented and funded by DFID, also supported the promotion and training of LARFs.
• Education for Income Generation (EIG) project, implemented by WINROCK and funded by USAID, provided support for apple packaging.
• Western Upland Poverty Alleviation Project (WUPAP), implemented by Ministry of Local Development and funded by IFAD. This project mainly focuses on promotion of apple production in leasehold forestry, an important component of the project. Within WUPAP, DADO is the key implementer of agricultural activities at district level.
• Micro Enterprise Development Programme (MEDEP), funded by UNDP, is looking into ways to promote the production of bio-pesticides in Jumla.
• Nepal Horticulture Promotion Centre (NHPC), a national-level NGO, has provided nursery, orchard management and harvest/post-harvest management trainings through SNV.
• Organic Certifi cation Nepal (OCN) is a private company which provided organic certifi cation for three apple producing cooperatives in Jumla. As long as Nepal has no accreditation body and OCN is not accredited, its certifi cation remains of a private nature.
6.7 Ministry of Agriculture and Cooperatives The ministry is the central body of the Government of Nepal that oversees agriculture in the country. The ministry has several sections, departments, directorates which are related to the apple sub-sector. The most relevant ones are:
• Section Gender and Environment at the ministry has recently developed the organic guidelines. The next step would include an accreditation system. • Department of Agriculture (DoA) is the lead government organisation in agriculture development in the country whose broad objectives have been to support and help achieve food security and poverty alleviation by the transformation of agriculture through diversifi cation and commercialisation. The DoA implements its programmes across the country through its Regional Directorates (RD) and District Agriculture Development Offi ces (DADOs) situated in the districts. These offi ces provide extension services and training services to local farmers in improved agricultural technologies and other services. The DoA has its experts under various divisions at the central level (including the three below).
35 A Value Chain Analysis of Apple from Jumla Important subsidies provided by the DoA to cooperatives in 2010 for apple promotion are that for transport (75% of air transport costs) and packaging (75% subsidy on costs of carton boxes). With some changes every year, this kind of support is expected to continue.
• Fruit Development Directorate (FDD) carries out various activities aimed at developing the fruit sector, including apple, in the country.
• Agribusiness Promotion and Marketing Development Directorate (ABP&MDD) is the major government institution responsible and entrusted for carrying out various activities relating to agribusiness promotion and marketing of various agricultural commodities like vegetables, fruits, species, cash crops and other agricultural products within the country.
• Agribusiness Promotion and Statistics Division transmits required information and agri- data for programme planning, monitoring and evaluation and acts as a coordinator in policy formulations for agribusiness and trade promotion. They also act as the focal point of agricultural sectors’ programmes associated with World Trade Organisation and as the National Notifi cation Authority.
36 A Value Chain Analysis of Apple from Jumla 7. VALUE CHAIN CONSTRAINTS AND OPPORTUNITIES
The previous chapters have mentioned various constraints and opportunities within the Jumla apple value chain to become more competitive in the national apple market and to generate more income for poor producers.
Table 12: Constraints and opportunities
Type Value chain constraint/opportunity
1 Input supply Quality of saplings • Nursery operators are unable to provide advice to the buyer. The former is unaware of the varieties and their characteristics, e.g. need for poliniser, early or late variety. Also practices to limit spread of diseases through nurseries are minimal. Many of the nurseries are unregistered, increasing the diffi culty to monitor them and improve quality of sapling supply. Still every year more than 100,000 old varieties are being planted by farmers.
Organic input supply • Jumla announced itself organic in 2007, but services to farmers to support this decision are still minimal. Knowledge on organic production, bio-pesticides, etc. among agro-vets and DADO extension workers is equally minimal. Also the permitted commercial bio-pesticides and bio- fertilisers are not available in Jumla.
2 Production Orchard management • Still a large part of the apple producers has not yet adopted pruning, irrigation and compost making, causing small apples with less market demand.
3 Harvest & post-harvest Harvest & post harvest management • Grading and careful handling has taken off, but especially on-farm handling still needs to be improved.
Packaging material • 2009 saw great improvements in packaging, but this was mostly subsidised through DADO-Jumla and other supporting organisations. In this aspect, Jumla producers and traders should become less dependent on subsidies and on organising capacities of supporting organisations.
4 Technology development Local bio-pesticides & research • Knowledge on locally producible bio-pesticides is still limited, but there is an opportunity for low-cost inputs.
New apple varieties • Although some new varieties have been ‘smuggled in’ by farmers, basically the main varieties are the same as those brought in by the government 15 years ago or more. These are not necessarily the best varieties for the little irrigation available in Jumla and neither for organic production. Currently new improved varieties have been imported from India for evaluation.
Storage quality • It is unclear whether micro-nutrient defi ciencies are the cause of the poor keeping quality of Jumla apples.
37 A Value Chain Analysis of Apple from Jumla Bio-mass • There is limited suitable bio-mass available for compost-making. The most available, pine tree needles, are not very suitable because of its acidity.
Climate change • Further understanding is needed on the impact of climate change and the possible climate change adaptation strategies. Currently awareness among farmers is extremely limited.
5 Marketing Transportation • As long as the Surkhet-Jumla road is not all-weather and will be closed during the apple harvest, apple transport will remain dependent on costly and unreliable air fl ights limiting volume of trade.
Marketing channels • The number of wholesalers interested in Jumla apples remains low. Effi cient apples trade has not yet taken place. Too many consumers interested in organic are not able to fi nd the Jumla apples. The trade is controlled by one wholesaler who is not much interested in organic products. Also relying on one wholesaler can be risky and limits the chance to benefi t from other marketing opportunities.
Organic certifi cation • The year 2009 saw the fi rst organic certifi cation of three apple producing groups, which are now organised into cooperatives. The premium price received by these organic certifi ed farmers is not suffi cient to cover the extra costs coming with certifi cation, and thus will not be fi nancially sustainable.
6 Organisation & Coordination management • Coordination within the apple value chain in Jumla district has greatly increased, but is still dominated by supporting agencies, which ultimately will not be sustainable.
Cooperative strengthening • To increase their bargaining power and not to become too dependent on the goodwill of other farmers should increase their degree of organisation. Benefi t sharing within cooperatives is one way to measure the degree of good governance within cooperatives.
7 Regulatory (policy) Accreditation • There is no national accreditation system recognised by the Government of Nepal to accredit Nepali organic certifi ers.
Transport subsidy • The current subsidy policy does reduce the transportation costs, but does not increase the number of fl ights which is the actual limiting factor.
8 Value chain governance Pricing in wholesale structures • Trade till now has been focusing on large profi t margins and high consumer prices. This limits volumes of trade and limits benefi ts to farmers. The pricing system (prices of Jumla apples are fi xed for the whole season) is also not fl exible enough to adapt to the volatile market.
38 A Value Chain Analysis of Apple from Jumla 8. FUTURE VISION AND RECOMMENDATIONS
8.1 Towards Sustainable Solutions It is important to work towards solutions which are sustainable and that means that they are performed within the value chain system and that services to be performed are in one way or the other paid for in a commercial manner by the primary actors (the private sector) of the value chain. And not by GOs or NGOs who will not pay or subsidise forever and who will sooner or later move into new priorities. This means working towards market-based solutions
There must be a clear vision of how the value chain should work in the future, and this should be a shared vision of the primary value chain actors. Box 12 shows ‘sustainability matrix’ as developed by Springfi elds Centre. “Development agencies should not be included in the future vision. Their role is regarded as facilitative and short-term without a valid longer-term rationale. Of course, foreign-funded aid agencies may continue to be active in developing countries but building them into a picture of sustainability as long- term players runs the risk of cementing developing countries into debilitating dependence”.14 In the current situation services and goods (the ‘who does?’ column) are often provided by outsiders and subsidised or paid for by outsiders (the ‘who pays?’ column), but in the future vision both, ‘doing’ and ‘paying’ should be sustainable. Either it should be done by the primary actors themselves or by commercial service providers. Payment of, or reward for the activity, services or goods should be done in a commercial manner.
Box 12: Sustainability matrix15
Current situation Future vision
Players Players Functions Determined by : Functions Who does ? Who pays ? Who does ? Who pays ?
CORE CORE Capacity RULES Incetives RULES Nature of market system
SUPPORTING FUNCTIONS History SUPPORTING FUNCTIONS Innovation landscape
14DFID and SDC, 2008. The Operational Guide to the Making Markets Work for the Poor (M4P) Approach. 15DFID and SDC, 2008. The Operational Guide to the Making Markets Work for the Poor (M4P) Approach. 39 A Value Chain Analysis of Apple from Jumla 8.2 Future Vision of the Jumla Apple Value Chain
Following the sustainability matrix as presented in the Table 13 shows a possible future vision developed on the basis of the information in the previous chapters and based on inputs collected during the implementation of this study. This is a vision which needs to be re-discussed with all actors involved and should be adjusted accordingly and also adjusted over time as the markets are dynamic and new developments, positive or negative need to be incorporated into the future vision.
Table 13: Sustainability matrix; towards a future value chain vision.
JUMLA APPLE VALUE CHAIN 2009
Functions Actors/Players
Who does? Who pays?
Core Input supply a) saplings a) apple nurseries a) farmers b) organic inputs b) hardly available Farmers: little pruning, Traders: Production irrigation, manuring did not pay per grade
Harvest & post-harvest management a) harvesting a) farmers a) Jumla traders b) grading & packaging b) Jumla traders b) Jumla traders c) packaging materials c) DCCI c) DADO-Jumla
Marketing a) Jumla traders a) transportation a) DCCI & Sub-committee SNV w/marketing support b) market channels b) Airlines (to Surkhet/Nepalgunj) (posters, banners, media) and wholesalers & market research (to major markets) b) Jumla traders, transport VCD subsidy from DADO
DADO-Jumla: coordination and a) DADO-Jumla, DCCI, SNV, Organisation & management Jumla Apple Upgrading Plan WV, etc.
Rules
a) DDC: Jumla Organic District a) DCC Policy and One Household One Regulatory (policy) Orchard Policy b) DADO/DoA: subsidies for transport, packaging b) DADO, EIG
Supporting Functions Technology development & research a) DADO: experiments a) Local bio-pesticides a,b) JHRC: testing new varieties, a,b) DADO, JHRC b) New apple varieties organic pest control experiments c) Storage quality c,d) No agency e) ADB d) Bio-mass e) ICIMOD/ADB e) Climate change JHRC Technical training providers DADO-Jumla, SNV, WV, CSP NHPC
Organic certifi cation OCN SNV, WV, DADO Jumla
40 A Value Chain Analysis of Apple from Jumla In the current situation, as presented in the box on the left, many activities towards developing the value chain are funded and organised by supporting organisations, whether government or non-government. In the long run, this will not be a sustainable situation: government priorities might change while NGO funding and projects will end and both move on to other sub-sectors. In 2015, or which ever other agreed date, as presented in the box below, the aim is that most constraints identifi ed in this study, have been solved and that further development of the sector is largely paid for by the primary actors of the value chain. The process to bring this vision into reality is called the value chain development (VCD), which of course requires the involvement of the various actors, proper planning and coordination, etc.
JUMLA APPLE VALUE CHAIN 2015 Functions Actors/Players Who does? Who pays? Remarks Core Input supply a) Improvement still required a) apple nurseries a) farmers a) sapling b) Agro-vets need training, b) agro-vets b) farmers b) organic inputs linkage to suppliers All farmers: pruning, Traders: pay different Price differentiation already Production manuring, more do irrigation price per grade started in 2010
Harvest & post- a) farmers a) farmers b,c) Cooperatives already harvest management b) Jumla traders/ b) traders involved in 2010 a) harvesting cooperatives c) wholesalers b) grading & packaging c) Jumla traders/ /traders/ c) packaging materials cooperatives cooperatives
a) DCCI , apple b) DADO subsidy is a) DCCI apple Marketing cooperatives currently not increasing cooperatives b) a) market linkage b) Airlines (to Surkhet/ number of fl ights: should Jumla traders/apple b) transportation Nepalgunj) and wholesalers be applied in a different cooperatives. (to major markets) manner.
DADO-Jumla, Jumla District Cooperative Organisation & DADO-Jumla, DCCI, DCCI, cooperative Federation already involved management cooperative federation federation. in 2010 Rules a) Organic District Policy a) DDC: Jumla Organic should have supportive DCC District Policy and One measures/activities. Household One Orchard b) Current subsidy policy is Regulatory (policy) Policy not increasing the number of b) DADO/DoA: Subsidies for fl ights. Will stop once road transport, packaging opens. Subsidies for packaging should reduce over time.
Supporting Functions
Technology Although most research a) local bio-pesticide development & research cannot be done by primary enterprises a) farmers a) Local bio-pesticides actors, but cooperatives, a,b,c,d,e) JHRC – for new a,b,c,d,e) NARC/ b) New apple varieties cooperative federation, DDC varieties and organic pest JHRC c) Storage quality should lobby for increased control; d) Bio-mass research support from
e) Climate change central level
Technical training providers LARFs Farmers Fee for service. Organic Certifi cation OCN, others Cooperatives Fee for service.
41 A Value Chain Analysis of Apple from Jumla 8.3 Recommendations The constraints and opportunities and the suggested possible future vision of the apple value chain already give strong indications for possible solutions to solve constraints and realise opportunities to move towards the future vision.
General • Further develop the future vision with all primary and supporting organisations involved.
• Detail the road ahead in an agreed multi-stakeholder Jumla Apple Upgrading Plan.
• Regularly update the vision and the Jumla Apple Upgrading Plan in adjustment to new developments in the value chain, the market and local and national contexts. Also important is that Jumla prepares itself for the opening of the Karnali Highway when traders will come with trucks and will try to make separate deals with individual farmers. Input supply • Apple nurseries should improve their supply: increasing skills and knowledge of operators will already make a big difference. Which varieties do they have in stock? What are their specifi cities? What are the basic practices to limit spread of disease through nurseries? Registration, training and monitoring should be taken on more strongly by DADO-Jumla. For supplying new varieties, the nurseries cannot take lead on this and are now relying on Jumla Horticulture Research Farm (JHRF) for selecting and testing new varieties.
• Organic supplies should be provided by the private sector, mostly logically be the agro-vets already active in the district. These need to be trained in organic methods and probably need some facilitation to establish new supply chains for organic fertilisers, bio-pesticides, etc. JHRF should increase its work on testing bio-pesticides and other pesticide control mechanisms. With the climate change at hand, pest control will even become more urgent.
Production Farmers need to improve their orchard management:
• Improve and expand pruning to achieve larger apples as per market demand. Several rounds of trainings will be required and certain people – for example the Local Agriculture Resource Farmers (LARFs) - could specialise in this and sell their services to other farmers.
• Production of home-brewed organic pesticides: this is still an area which needs research and development.
• Compost-making to increase soil fertility: technically it is not diffi cult, but fi nding suffi cient biomass supply could be a challenge and will need research. Green manure could be a good alternative.
• Increasing irrigation facilities will require substantial investments. Low cost water harvesting systems will need to be piloted and applied.
Harvest and post harvest management • Appropriate picking and transport to the market still needs considerable improvement to limit damage/bruising.
• Improved packaging has taken off in 2009. Weighing and labelling needs to be more accurate to generate trust between sellers and buyers.
• Supply of packaging material should be well organised, which is diffi cult for Jumla producers and traders as boxes have to be ordered from Kathmandu (and nets even have to come from China). Cooperatives are increasing their capacity to manage this and should be slowly “weaned off” from massive subsidies.
42 A Value Chain Analysis of Apple from Jumla Marketing • Jumla district traders and cooperatives should work towards several reliable market channels – not just relying on one wholesaler. Competition between wholesalers could increase prices, lead to a larger distribution network and sales volumes, and reduce risks.
• Even without certifi cation, Jumla should continue promoting its apples as organic, as it is starting to make a name. As competing directly with the Indian and Chinese apples will be diffi cult, promoting the ‘organic’ brand will help to create a niche market. Organic certifi ed apple • A stable marketing channel for organic certifi ed apples still need to be developed to reach the niche markets where these apples can fetch premium prices. Too many buyers in organic can still not fi nd the Jumla apples. Prices in the end market should not be so high that only a few consumers will buy: a balance between price and volume would be in the interest of the farmers, with the condition that they also receive a premium price themselves for their ware, otherwise organic certifi cation will not be fi nancially viable.
• Organic farmers should be well organised and be able to fi nancially manage their certifi cation independently within a few years. This requires suffi cient internal saving and maximising the benefi ts of certifi cation by also including other marketable organic products like beans, rice, buckwheat, etc.
Research and development • If Jumla and later other surrounding districts really are to become an important supplier of apples for Nepal, investment into research and development will be necessary. Already mentioned are the need for appropriate bio-pesticides and other pest control measures, ways to increase bio-mass for compost making, ways to improve the storage or keeping quality of Jumla apples, introduction and testing of apple varieties suitable for organic production, resistant to increasing droughts, requiring less chilling hours, etc. Currently, it is only the Jumla Horticulture Research Farm doing initial R&D, but this will not turn Jumla and surrounding districts into the Himachal Pradesh of Nepal. Apple is one of the agricultural products to be prioritised for Mid- and Far-Western Nepal and should receive adequate resources and attention for R&D so that the potential it has for these regions can be brought to fruition. Here is really a role for NARC and other government institutions, as projects and (I)NGOs will not easily invest into R&D. Others • Cooperatives are already playing an increasing role, mainly in the marketing. Further strengthening in entrepreneurship, marketing and delivery of other services to their members is required. Good governance, leadership and suffi cient benefi t sharing are important for long term functioning of these farmer organisations. Cooperatives will also need to play a more important role in lobbying towards various services providers and research institutions to support the apple sector in Jumla in more substantial ways.
• Processing of low grade apples, or in case of oversupply which is already an issue, will also need attention. Further analysis of various options need to be undertaken and then developed accordingly.
43 A Value Chain Analysis of Apple from Jumla ANNEX A: References
1 A Report (undated) on the investigation of apple disease in Jumla, submitted to the Director, Crops and Horticulture Research, Nepal Agricultural Research Council, Kathmandu (in Nepali). 2 Action For Enterprise, 2007. Value Chain Program Design: Promoting Market-based Solutions for MSMES. 3 Agricultural Development Programme and Statistics (2062/63). District Agriculture Development Offi ce, Jumla. 4 Agricultural Development Programme and Statistics (2064). District Agriculture Development Offi ce, Jumla. 5 Nepal Planning Commission 1995. Agricultural Perspective Plan (APP) of Nepal, Singh Darbar, Kathmandu, Nepal. 6 District Development Committee, Jumla. Annual District Development Plan: FY 2064/065. 7 Apple Processing Centre, 2008, Annual Report, Jumla. 8 Bhandari, D.R., 2064. An Action Plan for Developing Jumla as an Organic Agricultural Production District. Department of Agriculture, Mid-west Regional Agricultural Directorate and District Agricultural Development Offi ce, Jumla. (in Nepali). 9 Bhandari D.R., 2065. Feasibility and Its Great Opportunity in Jumla of Organic Agriculture Development. District Agricultural Development Offi ce, Jumla. (in Nepali). 10 Devakota, L.N. (undated). Deciduous Fruits in Nepal. 11 DFID and SDC, 2008. The Operational Guide to the Making Markets Work for the Poor (M4P) Approach. 12 ICIMOD, 1997. Districts of Nepal. Indicators of Development. International Centre for Integrated Mountain Development, Kathmandu. 13 MOAC, 2006/2007. Statistical Information on Nepalese Agriculture 2006/2007. Agribusiness Promotion and Statistics Division. Kathmandu, Nepal. 14 Nepal Planning Commission, 2008. Three Years Interim Plan (2007/08-2009/10). National Planning Commission, Government of Nepal. Singh Darbar, Kathmandu. 15 Periodic District Development Plan of Jumla: First Five Year Plan (FY2002/03 – 2006/07), District Development Committee, Jumla (In Nepali). 16 REAP, 2006. Rapid Sub-sector Assessment Report Jumla. 17 SEDA (undated). Possibility and Challenge in Apple Farming. Jumla (in Nepali). 18 Nepal Planning Commission, 2002. Tenth Five Year Plan (2002-2007) of Nepal, Singh Darbar, Kathmandu, Nepal 19 UNDP, 2004. Nepal Human development Report 2004. Empowerment and Poverty Reduction. UNDP. Kathmandu. 20 www.doanepal.gov.np (2008) 21 www.moac.gov.np (2008)
44 A Value Chain Analysis of Apple from Jumla ANNEX B: VDC-wise Apple Production Data
(Source: DDC HH survey 2008)
Total Total number Number of apple Production Number of apple Total apple Apple Apple #HH with producing HH (% Apple of other Total VDC of apple producing production producing Production other fruits of total HH) tree fruits (kg)/ # HH trees trees (‘000) (MT) tree per /HH (kg) /HH HH #%(‘000) #%HH #% Chandannath 677 46.5 31.7 10.5 23.7 262.5 21.7 5.1 2818 52 4 241 1457
Mahat 298 48.3 28.8 8 16.7 200 20.7 3.5 1547 47 8 154 617
Talium 379 45.8 27.2 7.5 25.7 187.5 14.2 3.6 1811 69 8 166 828
Kartikswami 342 78.3 16.5 6.8 41.5 136 37.7 15.6 15137 0 0 0 437
Depalgaun 253 59.8 15.2 5 18.0 110 24.0 4.3 2004 5 1 1 423
Garjankot 556 86.1 15.6 6.1 50.5 134.2 15.4 7.8 6009 0 0 0 646
Dillichaur 578 81.5 28.5 7.1 14.9 142 26.1 3.9 1792 2 0 9 709
Chumchaur 116 32.2 6.7 3.3 46.5 66 7.5 3.5 3778 9 3 14 360
Patrasi 168 29.8 3.5 1.4 40.6 25.2 6.1 2.5 1238 7 1 47 564
Haku 277 71.6 6.3 0.8 18.6 20 11.1 2.1 1105 13 3 121 387
Tamti 421 65.3 3.9 0.1 2.2 2 6.0 .1 94 0 0 0 645
Lamra 258 50.5 7 2.7 14.7 54.5 9.8 1.4 799 23 5 131 511
Gutichaur 147 33.4 1.8 0.4 22.9 8 4.0 .9 304 21 5 57 440
Tatopani 486 48.1 16.8 3.9 11.2 78.5 16.6 1.9 1079 0 0 0 1011
Kudari 414 52.3 5.6 0.9 16.4 18 7.0 1.2 766 50 6 100 792
Raralihi 229 51.9 1.8 0.3 18.8 6 4.1 .8 464 5 1 10 441
Malikathata 368 72.3 1.7 0.1 6.6 2 3.3 .2 93 0 0 0 509
Ghodemahadev 233 72.1 2.6 0.3 21.1 6 4.8 1.0 338 0 0 0 323
Mahabaipatarkhola 297 66.0 4.2 0.5 10.7 10 9.3 1.0 321 55 12 153 450
Kalikakhutu 275 72.0 3.9 0.4 13.3 8 7.6 1.0 856 0 0 0 382
Badki 432 57.9 6.2 1.3 5.1 19.5 8.4 .4 147 48 6 159 746
Dhapa 435 71.9 4.3 0.9 20.2 18 5.4 1.1 621 78 13 326 605
Sanigaun 303 44.1 4.6 1.5 20.4 22.5 3.7 .8 410 77 11 214 687
Narakot 395 76.0 5.8 1.9 16.0 38 11.2 1.8 2679 42 8 411 520
Pandabgufa 432 71.1 3.9 1.1 17.7 22 6.5 1.2 731 71 12 148 608
Birat 297 61.7 2 0.9 45.3 18 4.2 1.9 2178 44 9 226 481
Kanakasundari 352 86.9 5.8 2.2 38.7 44 14.3 5.6 3865 202 50 1032 405
Bumbramadichuar 116 53.7 1.8 0.4 24.2 8 8.1 2.0 1738 4 2 36 216
Malikabotha 86 40.6 9.5 3.3 57.1 82.5 8.3 4.7 7491 10 5 12 212
Patmara 293 54.7 12.8 3.9 23.0 87 23.8 5.5 4771 0 0 0 536
Total 9913 58.5 286 83.5 22.9 1835.9 12.6 2.9 2038 934 6 3766 16948
45 A Value Chain Analysis of Apple from Jumla ANNEX C: Cost/Benefi t Calculation Years
400 400 100 200 400 600 800 1000 1200 1200 1200 1200 1200250 1200 300 1200 350 1200 400 1200 450 1200 600 1200 750 1200 750 1200 750 1200 750 750 750 750 750 750 750 750 750 750 750 24 612345 7 8 91011121314151617181920 1600 1000 1000 1000 2000 2000 20004500 2000 4500 2000 2000 4500 2000 2000 2000 4500 2000 2000 2000 2000 2000 2000 2000 2000 35.000
All costs in NRP Activities A. Detail of labour expenses -land under Rental cultivation Orchard Fencing (materials + labour) Cost of manure application in pit Sapling planting (Filling & staking) 400Weeding 400Pruning 100 400 200Manure application 400 400 400 400Irrigation cost 600 400 400Application of 800Bordeaux mixture / 400bio-pesticide 1600 400 800 1600 400Micronutrient application 400 1600 800 400 1600Fruit thinning 400 800 400 1600 Inputs and B. 400 800materials expenses 1600 400 400 800 1600Saplings 400 1600 400 800Manures (FYM/ 400Compost) 1600 400 800 400 1600Fertilisers 600 400 800 1600 400 Bordeaux mixture/ bio-pesticide 1600 800 400 400 & equipment Tools 1600 1 (1 secateur, 400 400 1 pruning saw, 800 & 1 Doko) Sprayer 1600 400 800 400 1600 400 800 1600 400 1600 400 400 800 1600 400 800 400 1600 800 400 1600 400 400 Pit preparation Pit preparation (1*1m) cost
46 A Value Chain Analysis of Apple from Jumla 23.950 25.950 30.450 25.950 25.950 25.950 25.950 30.450 25.950 25.950 25.950 25.950 2.900 1.950 0 2.665 1.930 15.010 33.370 51.730 57.250 52.750 57.250 57.250 57.250 57.250 52.750 57.250 57.250 57.250 57.250 ed apple. Without 0 0 0 0 6.000 12.000 24.000 48.000 72.000 80.000 80.000 80.000 80.000 80.000 80.000 80.000 80.000 80.000 80.000 80.000 0 0 0 0 1200 1400 1600 2000 2400 2800 2800 2800 2800 2800 2800 2800 2800 2800 2800 2800 7.000 7.000 6.500 6.000 5.500 5.000 4.5007.000 4.000 7.000 3.500 6.500 6.000 3.000 11.515 3.000 17.030 28.560 3.000 52.120 75.680 3.000 83.200 3.000 83.200 83.200 3.000 83.200 3.000 83.200 3.000 83.200 83.200 3.000 83.200 3.000 83.200 3.000 83.200 83.200 46.350 4.100 4.550 6.000 8.850 15.100 13.550 18.750 -39.350 15 30 60 120 180 200 200 200 200 200 200 200 200 200 200 200 1200 2400 4800 9600 14400 16000 16000 16000 16000 16000 16000 16000 16000 16000 16000 16000
cation costs or premium ows/ ows ows (NRP) Estimated production (@kg/ tree) from sales of Return apple(NRP 20/kg) cash Infl Total E. Net cash Infl Ropani Details of IncomeD. Net income from intercropping Transportation cost Transportation from farm to Jumla airport Storage cash outfl Total (NRP) C. Post harvest harvest C. Post & operations Marketing Grading Harvesting, and Packaging costs for land use. Area: 1 ropani (500 square meter) = 20 trees price for organic certifi Market price= NRP 20/kg at Jumla airport Market = NRP 4/kg Transportation bean, potato Intercrop = wheat, barley, Number of trees/ropani = 20 tree = NRP 400/day Labour rate Without certifi Assumptions:
47 A Value Chain Analysis of Apple from Jumla
Department of Agriculture SNV Netherlands Development Organisation Hariharbhawan, Lalitpur Bakhundole, Lalitpur Tel : 977-1-5521323 Kathmandu, Nepal Fax : 911-1-5524093 Tel : +977 1 5523444 E-mail : [email protected] Fax : +977 1 5523155 Website : www.doanepal.gov.np E-mail : [email protected] Website : www.snvworld.org
MINISTRY OF AGRICULTURE & COOPERATIVES DEPARTMENT OF AGRICULTURE