Nepal
1. The Nepal Investment Meeting and investor tourism
2. Strategy-led dairy and vegetable value chain development
Summary of the CASA Vegetable Strategy
The CASA Vegetable Strategy -Nepal (2020) states the importance of vegetables for food security and incomes for smallholders. They form an integral part of the farming system in Nepal. An estimated 3.2 million households cultivate vegetables, of which 17% are headed by women. Currently the sector contributes nearly 10% of GDP. The sector has seen rapid growth, in recent years, with many farmers have diversified away from cereal crops, in search of better returns.
Nepal imports around 3 million tonnes of vegetables, mainly from India.
Small-scale producer, micro-to-small collection and processing units are typical with a limited number of large-scale processers. But emerging commercialisation from SMEs is apparent. Drivers for commercialisation include favourable growing conditions, expanded road access, increasing involvement of the private sector and cooperatives, greater government interest, buoyant domestic demand and increasing competitiveness against imports.
SMEs face various challenges in accessing commercial finance and investment to exploit opportunities. There is an emerging investment landscape including incubators for helping agri-businesses prepare for investment. Smallholders receive low revenue from the sale of vegetables Low productivity is compounded by an estimated 25% loss through poor post-harvest management. There is little coordination of production so gluts and shortages, are common. This impacts on prices and exacerbate crop wastage
Smallholders have limited access to timely market information, demand. They tend to rely on local middlemen to sell their produce. They tend to push down farmer’s incomes and inflate consumers prices.
More investment is required to develop modern supply chains and logistics services to handle high-value commodities, such as cold chains, reefer vans, and warehouses. The private sector has a greater role to play in terms of investment and strengthening the firm-farm linkages critical to scaling up processing and retailing operations. However, the risk appetite to innovate and invest among processors and SMEs is low due to the high cost of capital, low managerial capacity and an unfavourable business-enabling environment. Due to low investments, the sector has seen a low uptake of innovation and technology, which has resulted in low product diversification.
Organisational development
- Test and operationalize e-commerce platforms among agricultural SMEs
- Assess its impact on business performance and long-term commercial viability of a subscription-based Koklass mobile e-commerce platform
Impact of the work:
- 9 Agri-SMEs supported to operationalise their e-commerce platforms
- 1,022 farmers gained market access through e-commerce platform.
Organisational development
- Supported business expansion by upgrading the collection and processing facilities
- Strengthening the improving its marketing and sales,
- Adopting technology to obtain recognised quality standard certification.
Impact of the work:
- £232,142 investment secured to establish to expand business and purchase machinery and vehicles.
- 32 new collection centres established
- 3 new sales outlets established
- 10,055 farmers accessed vegetable aggregation
- 4,000 farmers trained
More on Paicho Pasal
Organisational development
- Made investment-ready
- Developed growth plan to produce and supply quality ketchup year-round.
- Developed a marketing strategy, improve branding and packaging
Impact of the work:
- Secured £50,000 investment to establish cold storage and upgrade ketchup factory.
- 400 farmers incopororated them into the company supply chain and provided with improved seeds and crates
More on Safal Krishi Farm
Organisational development
- Support value-addition and market-oriented production of vegetables that generate higher revenues.
- Providing advisory services and training, enhancing access to inputs, providing market access and market related information and conducting value addition activities (cleaning, sorting, grading, packaging) and undertaking efficient vegetable procurement and distribution.
Impact of the work:
- 1,500 farmers provided training related to post-harvest management and business literacy
- 704 farmers received organic fertilisers and vegetable seedas part of covid relief effort.
- 200 farmers received agriculture related loan
Organisational development
- Scaling the agriculture app GeoKrishi
- partnering with 5 mid-sized vegetable farmer organizations to GeoKrishi to improve farm productivity and profitability.
Impact of the work:
- 35,000 new downloads app from Playstore
- 2500 farmers trained on app
Organisational development
- business development to maintain profitability by bringing high-quality seed closer to farmers.
- strengthening of their supply chain by aggregating dee multiplying smallholder farmers to provide steady market access
- building an effective supplier and distributors network
- modify branding and packaging activities,
Narti Multipurpose Cooperative
Organisational development
- Expanding and scale aggregation
- supporting expansion of the production base, institutionalize post-harvest management and improve its marketing services.
- Supporting good governance practices
Nepal Agricultural Cooperative Central Federation
Organisational development
- Strengthening the capacity of the 25 vegetable coops to improve governance, marketing and general business skills
- Train member farmers on post-harvest crop management
- Introduction of innovative vegetable aggregation and sales approach.
- Provide Technical Assistance to negotiate offtake deals.
More on Nepal Agricultural Cooperative Central Federation
Summary of the dairy sector strategy
The CASA Dairy Sector Strategy – Nepal (2020) states emphasises the special importance of the sector in Nepal. Dairy provides employment for 130,000 people and around 9% of Nepal’s GDP. The sector is dominated by a vast number of small-scale producers and micro and small collection-and-processing units, with a limited number of large-scale industrial processing units.
Around 3.6 million households have dairy animals to support subsistence and the provision of draft power and local transport. They rely on traditional animal husbandry practices, which do not promote increases in productivity. Only around half a million households produce and sell milk. Milk prices are regulated to protect the smal-scale producer. Production is characterised by surplus and deficit seasons – but there is no differential in the fixed price. This policy was under review at the time of publication. The average daily supply shortfall of 550,00 litres, gives significant scope for smallholders to step up production. Improving practices across the industry will require a major effort.
Smallholder farmers have low incentive to commercialise with high production costs, and low confidence in the market. Any improvement requiring investment (e.g. better breeds, feed, etc.) must be raised through the farmer’s own resources, as access to loans and other sources of finance is extremely low. Families with small surpluses are supported by the existing informal sector buyers. Milk is amalgamated and sold without being subjected to quality checks, raising public health concerns.
SMEs are responding to the emerging commercialisation trends. Most collection centres and processing units are operating below capacity, due to inherent supply problems. SMEs also face various challenges in accessing commercial finance and investment to exploit opportunities, there is an emerging investment landscape including incubators for supporting the investment readiness of agri-businesses. Milk surpluses during the flush creates an opportunity for the informal sector, which buys below the designated price and sells onward to consumers in direct competition with formal processors.
Private businesses development has to compete with a large state company (DDC). To stay competitive, processors must innovate with differentiated products in order to grow their businesses.
In addition to competing DDC, which participates in the price setting mechanism and receives government subsidy, there numerous informal dairy processors, and amalgamators. These are not subjected to milk standardisation, and as such can buy and sell product outside the boundaries of price control.
These factors and an unfavourable business environment. have depressed processors appetite to invest, resulting in low uptake of innovation and technology and little product diversification.
Kamdhenu Dairy Development Cooperative
Organisational development
- Support supply chain development to increase the supply of milk.
- Provide techincal assistance for effective utilization of new dairy plant
- Support production of quality dairy products e.g.ice-cream, lassi and sweets
- Expand geographic reach of distribution.
Organisational development
- Financial and technical support to expand its four existing milk collection centres Bringing new smallholders into formal dairy supply chains
- Improving the quality of raw milk at both producer and processor level, by conducting Good Manufacturing Practice training
- establishing a micro-biology laboratory check the microbial content
Organisational development
- Establish four new bulk milk chiller centres to increase its milk collection from farmers
- Implement a digital management information system enabling access, collection and analysis of real time data to improve decision-making
- farmers advisory service developed bundling training and veterinary services.
Organisational development
- Supporting a feasibility study on expansion into 2 news provinces
- Developing an investment memorandum document to secure investment and supporting the scouting for investment
Organisational development
- leverage the required finances
- develop a processing and chilling facility for distant raw milk to increase the shelf life & maintain quality.
- Establish a series of collection point milk to guarantee a constant milk supply to dairy processors and reduce the overall cost of milk by sourcing it collectively
Impact of the work:
- investment pitch even to Dairy Industries Association generated investment £10,000 from 14 members
Organisational development
- Support Mahila Samudayik Sewa Kendra to be investment-ready to facilitate the construction of a new diary plant
- Technical Assistance supported establishment of a dairy plant and map dairy suppliers in the district.
Impact of the work:
- £42,800 investment secured for construction of dairy plant
Organisational development
- Developed dairy micro plants in rural areas to process milk into dairy products
- Arrange a buyback agreement to provide producers with an assured market.
Impact of the work:
- £933,928 investment leveraged for decentralised dairy processing model and expansion of existing dairy plant.
- 2,540 farmers benefitting through increased farmer aggregation & training
- 1,795 farmers benefitted through COVID-19 grant support
Central Dairy Cooperative Association Nepal
Organisational development
- Implemened Good Manufacturing Practices in 15 cooperatives in the milk supply chain to ensure consistent compliance with quality standards.
Impact of the work:
- 48 trainers trained, and
- 9,611 farmers trained in good manufacturing practice
- 3,731 farmers supported through Covid pandemic
Mangalam Dairy and Foods Industry
Organisational development
- leveraging investment to construct a dairy plant
- Supporting the supply chain by developing linkages with milk collection centers, aggregating smallholder farmers, helping them with production of quality dairy products, and creating market presence for the dairy.
Impact of the work:
- £326,071investment secured