USAID/NEPAL Experiences with Agricultural Programs

Lessons Learned

Rave Aulakh, Ph.D. Senior Economic Growth Advisor

USAID/Nepal

USAID/Nepal- Programs in Agriculture

• Rapti Development Project (First Phase) ,1980-1986. Focus on Rapti Zone , integrated development approach.

• Rapti Development Project (Second Phase), July '87 - July '95. To increase household incomes and well-being through increased productivity and improved sustainable management of farm and and forest resource system.

• Agriculture Research and Production Project, 86 - 91. Built the capacity of the research system for multi disciplinary farming system approaches and assisted the government to establish NARC as a autonomous agency. Strengthened research extension linkages through a production program that introduced research system developed cropping system packages and livestock technologies.

• Agro-enterprise Technology Support Project, 1990-1996. To strengthen the research system and to link private agro enterprise, and farmers by strengthening the role of the private sector in value adding services, agro-enterprises and market opportunities.

Programs in Agriculture….cont • Market Access for Rural Development, April '97 - '02. The focus was on promoting

market expansion and participation of farmers and agro-entrepreneurs in high-value commodity production and marketing and to improve the nutritional status of farm households. BDS-MAPs refined and introduced the processing technology and business models for essential oils enabling a rapid increase in exports.

• Tree Crops GDA, Sept '02 - Sept '04. Goal was to develop the capacity of smallholders and apex organizations to introduce specialty coffee processing, and international branding of tea with a focus on lucrative export markets.

• Tea and Coffee GDA, Oct '04 to Sept '06. Same goal as above but more focus on exporting branded tea. The GDA working with stakeholders established substantial specialty coffee exports and branding of Nepal Orthodox tea in international markets thru a code of conduct program.

• Smallholder Irrigation Market Initiatives, June '03-Sept09. To increase the incomes of smallholder farmers through production and marketing of high value commodities.

• Improving the Policy Environment for Agricultural Trade, Production and marketing in Nepal, Nov. '03 - Dec. '07. To stimulate quality analysis and debate with respect to key ag. policy issues; to impact on policy reform and support Nepal's accession to the WTP; and focus on policy analysis and advocacy.

Programs in Agriculture….cont • Business Development Services - Marketing, Production and Services Project, Jan

'04 - Sept '07. To raise incomes of rural Nepal through by increasing production, processing of Non-Timber Forest Products and high-value crop products.

• Education for Income Generation, Jan '08 - Jan '13. Increase disadvantaged youth's access to training and education for employment and income generation.

• Nepal Flood Recovery Program, May '08 - Aug '12. Improve the livelihoods of flood affected people in Nepal through provision of goods and services.

• Nepal Economic, Agriculture and Trade. Dec '10 - June '13. Strengthen the foundation for rapid, sustained and inclusive economic growth to reduce poverty.

• CIMMYT, Sept '10-Sept'14. Improve food security and income in farm households in the hills of Nepal, especially poor and disadvantaged groups.

• CSISA, ’09. Improve food security through the accelerated development and inclusive deployment of new varieties, sustainable management technologies, and policies.

• IPM CRISP, Sept‘14. Develop safe IPM packages working with the research extension system for vegetable crops and tea and coffee.

Nepal’s Agriculture Sector • GDPA and GDP growth rates of 3.3% and 3.4%

(2000/07) • Economic dependence and prevalence on

Subsistence Ag. • Ag. Contribution to GDP 34% (2008/9) • Employment 70% of total workforce • Population growth rate 2.1% (2001-08) • Cereal production growth rate 1.7% • Low yields for major cereals: Paddy 2,700kg/ha • Wheat 2,150kg/ha • Maize 2,100/kg/ha • Food availability adequate, access and utilization

poor • High-value sector growth rate 7% pa

Constraints to Increasing Ag. Productivity

Land Resources: Out of the total land area only16% is cultivable (50% in Terrai, 37% in hills and 3.9% in mountains) Water Resources : 2.3% of world’s water resources Input Supply constraints

-Irrigation: Total irrigated area 30% of total cultivated area -Seeds: Low intensity of availability and usage of improved varieties -Fertilizer: Steep decline in usage, informal accounts for 80% of supply -Agriculture Research /Extension: Role of NARC, weak linkages of research and extension, lack of resources and trained manpower -Credit: Decline in on-farms loans; informal borrowing; weak financial institutions, lack of coverage and penetration. -Labour: Migration, feminization of agriculture

Constraints ……

• Output Marketing – Infrastructure: Out of 75 districts, 9 districts and

11 district HQs not covered by roads – Lack of private sector in transportation, agro-

storage and agro-processing – Marketing surplus low – Weak market linkages – Open border with India

Lesson’s Learnt What has worked……

1. PPP- crucial for investment in public goods and services; to increase scale and sustainability.

2. Market opportunities – Growing unmet demand for vegetables and other high value commodities. Potential to earn higher incomes than low wage jobs across the border

3. Collection Centers - develop small holder commercial pockets; aggregate product and grade produce; lowers transportation costs and provides scale

Lesson’s Learnt…..cont What has worked……

4. Embedded Service providers- Within the community; linked as subagents to larger agrovets in districts and DADO/DLO; sustainability 5. Establishing value chains- Crucial for impact and sustainability 6. Strengthening regional ties-Linking national systems across S. Asia and the private sectors) 7. Working with farmers on an intensive basis, using demonstrations, training over multiple cropping cycles- Leads to sustained changes in adopting agronomic practices. 8. Linking health and nutrition activities to agriculture- Helping HHs make good decisions with increased income and productivity has large food security benefits 9.Entrepreneurial literacy link to agriculture –crucial for impact among vulnerable populations

Lesson’s Learnt…..cont What has worked……

10. Access to Water-Game changer and lasts for several years; increases value of land, off-season opportunities when prices are high and it is low cost for farmer groups. USAID programs have scaled up access to micro irrigation technologies critical for smallholders 11. Linking finance to small holder farmers – to invest in improved inputs/technologies 12. Participatory strategy - involving farmers in the technology development chain and working with GON at the district level 13. Livestock - can be an alternative for the poor and landless to produce high value meat products for income and nutrition 14. Integration of interventions from multiple sectors - (agriculture, infrastructure, nutrition) deepens impacts, strengthens sustainability 15. Projects need to be linked to scaling up utilizing GON resources 16. Importance of women and DAGs in rural collection centers and farmer producer organizations.

Lesson’s learnt…….cont What has worked……

17. Nepalese small holders are efficient producers and can increase incomes substantially given access to technology, irrigation, knowledge and market access.

Presentation photos by Bimala Rai Colavito, IDE Volunteer

What has hindered……... 1. Lack of adequate GON Investment to Agriculture - Present levels not

sufficient to take advantage of high-value commercial opportunities and to ensure food security and nutrition needs

2. Non-Replication of Successful Pilots - Undertaken by the donor/NGO community

3. Inadequate investment for high value crop irrigation – with piped multiple use systems utilizing micro irrigation

4. Lack of capacity and need for institutional building - in the GON, national development partners, and the private sector

5. Non-commercialization of successful research – design technologies to be marketed by the private sector

6. Weak link between Research and Extension services 7. Lack of focus on agro processing and value added starting at the village level 8. Weak commitment to policy reform and its implementation 9. Inconsistency of Donors and GON in providing support to the

agriculture/food security sector. 10. Neglect of land use planning and management.