I TABLE OF CONTENTS LIST OF TABLES ..................................................................................................................................................... III LIST OF FIGURES ................................................................................................................................................... III ACKNOWLEDGEMENT .......................................................................................................................................... IV ABBREVIATIONS..................................................................................................................................................... V EXECUTIVE SUMMARY ........................................................................................................................................ VII CHAPTER ONE .......................................................................................................................................................... 1 INTRODUCTION ....................................................................................................................................................... 1 1.1. BACKGROUND ................................................................................................................................ 1 1.2. OBJECTIVES .................................................................................................................................... 1 1.3. METHODOLOGY ............................................................................................................................. 2 CHAPTER TWO ......................................................................................................................................................... 5 VALUE CHAIN ANALYSIS ...................................................................................................................................... 5 2.1. INTRODUCTION TO VALUE CHAIN ......................................................................................... 5 2.2. VALUE CHAIN MAP ....................................................................................................................... 5 2.3. ECONOMIC ANALYSIS ................................................................................................................. 9 2.4. MARKET TREND AND COMPETITIVENESS ANALYSIS .................................................... 18 2.5. GOVERNANCE FOR EMPOWERMENT .................................................................................... 28 2.6. CONSTRAINTS AND OPPORTUNITIES ................................................................................. 29 CHAPTER THREE .................................................................................................................................................... 32 MARKET BASED SOLUTIONS ............................................................................................................................ 32 3.1. IDENTIFICATION OF MARKETBASED SOLUTIONS ......................................................... 32 3.2. ASSESSMENT OF MARKETBASED SOLUTIONS ................................................................ 33 CHAPTER FOUR ...................................................................................................................................................... 37 STRATEGIC AREAS OF INTERVENTIONS ..................................................................................................... 37 3.3. PRIORITY AREAS OF INTERVENTIONS (SHORT TERM) ................................................ 37 3.4. PRIORITY AREAS OF INTERVENTIONS (LONG TERM) .................................................. 39 3.5. OTHER SUGGESTED AREAS OF INTERVENTIONS .......................................................... 40 REFERENCES ........................................................................................................................................................... 42 II LIST OF TABLES Table 1 Area of Production, Production Volume and Productivity of Turmeric in FY 2010/11 .................................................................................................................... 11 Table 2 Area, Production and Productivity of HVAP Districts in FY 2010/11 ........................ 11 Table 3 Calculation of Cost of Production for Fresh and Dried Turmeric ............................. 13 Table 4 Share Percentage of Major Factors in Total Cost of Production of Fresh Turmeric .... 14 Table 5 Cost of Goods Sold and Profit Margin Calculation ................................................. 17 Table 6 Major Market Centres in Project Districts and Regional and Export Markets ............ 19 Table 7 Major Production Pocket of Chhinchu-Jajarkot Road Corridor as per Major Market ... 21 Table 8 Major Production Pockets of Surkeht- Dailekh as per Major Market Centres ............ 22 Table 9 Major Production Pockets of Surkhet- Dailekh as per Major Market Centres ............ 23 Table 10 Constraints and Opportunities in Turmeric Subsector ......................................... 30 Table 11 Market-based Solutions Addressing Value Chain Constraints of Turmeric .............. 32 Table 12 Assessment of Market-based Solutions for Turmeric Value Chain ......................... 33 Table 13 Visited and surveyed market centres and production pockets.............................. 45 Table 14 FGDs conducted in market centres and production pockets ................................. 45 Table 15 Trade Indicators of Top Ten Turmeric Exporters of the World in 2010 AD ............. 48 Table 16 Trade Indicators of Top Ten Turmeric Importer of the World in 2010 AD .............. 48 Table 17 Some Brand Names of Turmeric Powder in the Project Area ................................ 49 Table 18 ASTA Cleanliness Specification for Turmeric ...................................................... 49 Table 19 ESA Quality Minima for Turmeric ..................................................................... 49 LIST OF FIGURES Figure 1 Map showing the study area ............................................................................ 2 Figure 2 Value Chain Map of Turmeric ........................................................................... 6 Figure 3 Total Cultivated Area and Production Volume of Turmeric and Other Spices in 2010/11 .................................................................................................................. 10 Figure 4 Production Trend of Turmeric in Various Fiscal Years ........................................ 10 Figure 5 Worldwide Export Trend of Turmeric in Terms of Quantity and Value .................. 18 Figure 6 Marketing Channel for Turmeric ..................................................................... 20 Figure 7 Dried Turmeric Transactions in Major Market Centres of Chhinchu Jajarkot Road . 21 Figure 8 Dried Turmeric Transaction in Major Market Centres of Surkhet-Dailekh Road Corridor .................................................................................................................. 22 Figure 9 Turmeric Transactions in Major Market Centres of Chhinchu-Jajarkot Road Corridor .................................................................................................................. 23 Figure 10 Market Share of Three Road Corridors in Turmeric Transaction (MT, share%) .... 24 Figure 11 Export Trend of Turmeric from Nepal ............................................................ 25 Figure 12 Major Export Destination and Quantity Exported of Turmeric from Nepal - 2009/10 .................................................................................................................. 25 Figure 13 Major Turmeric Supplying Countries and Quantity Supplied in Nepal in 2009/10 26 Figure 14 Import Situation of Turmeric Products .......................................................... 26 III ACKNOWLEDGEMENT This study was accomplished with the help and support of several organisations, institutions, and individuals, which are rather difficult to cover in rendering them with full acknowledgement compared to what they have contributed in the study process. We would like to thank all who directly or indirectly helped in executing field study, supported the study process, and took strong participation in the workshop, interactions and discussion. We would like to especially thank Mr Rajendra Bhari, Project Manager, HVAP, Surkhet and his entire team members for providing cordial support in designing the study method, field study and for their active participation in district, regional and national level validation workshops. Without their critical help and support the findings wouldn't come to this shape. Likewise, help and support from HVAP team including Mr Eelco Baan, Mr Sanjeev Shrestha, Mr Madan Rauniyar and Mr Keshav Karki, is praiseworthy – thank you very much for your genuine support, help and facilitation of the total study process. The study team is highly grateful to all the participant farmers, entrepreneurs /traders /processors, and staff from DADO, DCCI (from all the project district offices) and various organisations for their active support and help in providing useful information, sharing facts and figures and for their cordial company during the study. Help from field level staff, enumerators and those directly or indirectly involved in the study are duly acknowledged. Thank you all, Study Team IV ABBREVIATIONS AEC Agro Enterprise Centre AEO Agriculture Extension Office AICC Agriculture