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Agriculture Perspective Plan Implementation Action Plan Preparation
APP Implementation Status Report Annexes
April 2006
In Development Group Limited (UK) in association with
NARMA Consultancy - Nepal and
SEEPORT Consultancy - Nepal
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Table of contents
ANNEX 1: INTRODUCTION ............................................................................................................. 1 ANNEX 1.1: OBJECTIVES AND STRATEGIES OF NEPAL’S APP............................................................. 1 ANNEX 1.2: EXAMPLES OF CONTEXTS, POLICIES AND INSTITUTIONS EVOLVED DURING THE TENURE OF APP IMPLEMENTATION (MAJOR).................................................................................................... 2 ANNEX 1.3: STUDY TOR..................................................................................................................... 4 ANNEX 1.4: LIST OF PERSONS MET AND CONSULTED........................................................................ 13 ANNEX 1.5: COMPOSITION OF TWT.................................................................................................. 15 ANNEX 1.6: COMPOSITION OF THE HLTF ......................................................................................... 13 ANNEX 1.7: CONSULTANTS FOR THE STUDY .................................................................................... 16
ANNEX 2: APP ACHIEVEMENTS ................................................................................................. 17 ANNEX 2.2: IRRIGATION.................................................................................................................... 17 ANNEX 2.3: FERTILISER .................................................................................................................... 26 ANNEX 2.4: TECHNOLOGY ................................................................................................................ 29 ANNEX 2.5: ROAD ............................................................................................................................. 37 ANNEX 2.6: RURAL ELECTRIFICATION.............................................................................................. 39 ANNEX 2.7: CREDIT........................................................................................................................... 40 ANNEX 2.8: LIVESTOCK .................................................................................................................... 42 ANNEX 2.9: HIGH VALUE COMMODITIES ......................................................................................... 54 ANNEX 2.10: AGRIBUSINESS............................................................................................................. 55 ANNEX 2.11: FORESTRY.................................................................................................................... 66
ANNEX 3: STATE OF APP IMPACTS ........................................................................................... 81 ANNEX 3.2: POVERTY REDUCTION.................................................................................................... 81 ANNEX 3.3: FOOD SECURITY ............................................................................................................ 83 ANNEX 3.4: ENVIRONMENT .............................................................................................................. 85 ANNEX 3.5: GENDER ......................................................................................................................... 88
ANNEX 4: POLICY, INSTITUTIONAL AND OTHER CONTEXTUAL ENVIRONMENT ... 92 ANNEX 4.3: INSTITUTIONS ................................................................................................................ 92 ANNEX 4.4: OTHER CONTEXTUAL ENVIRONMENT............................................................................ 98
ANNEX 5: EXPLANATION FOR OBSERVED PERFORMANCES......................................... 101 ANNEX 5.2: PROBLEMS AND CHALLENGES ..................................................................................... 101
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Annex 1: Introduction
Annex 1.1: Objectives and strategies of Nepal’s APP 1. Main objectives of the APP are:
• to accelerate the growth rate in agriculture through increased factor productivity. • to alleviate poverty and achieve significant improvement in the standard of living
through accelerated growth and expanded employment opportunities. • to transform the subsistence-based agriculture into a commercial one through
diversification and widespread realization of comparative advantage. • to expand opportunities for an overall economic transformation by fulfilling the
precondition of agricultural development. • to identify immediate, short-term and long-term strategies for implementation,
and to provide clear guidelines for preparing periodic plans and programs in future
2. Main Strategy of APP are:
• A technology-based green revolution in agriculture becomes the initial engine of accelerated growth.
• Accelerated agricultural growth creates a demand-pull for the production of high-value commodities in agriculture, as well as for non-agricultural commodities, with consequent large multiplier effects on other sectors of the economy.
• Broadly based high employment growth then becomes the mechanism for achieving societal objectives.
• Public policy and investment focus on a small number of priorities, building on past investment in human capital and physical and institutional infrastructure.
• A package approach to development is introduced, which in Nepal's case would be differentiated for the terai, hills, and mountains, and would recognise the powerful complementarity between public and private investment and priorities, and would ensure their co-ordination.
• To achieve broad participation, the strategy is regionally balanced and explicitly ensures the participation of women.
The strategy has 7 components. First, accelerating agricultural growth. Second, doing so through large, concentrated investment in a small number of input priorities. Third, those input priorities are STW irrigation in the terai, agricultural roads, fertilizer, and the technology system of research and extension. Fourth, a small number of high- value commodity priorities to facilitate intensification of agriculture, especially in the hills. Fifth, those priorities are citrus, vegetables and vegetable seeds, apples, apiculture and sericulture. Sixth, strong multipliers from increased farm incomes to growth of output and employment in the rural non-farm sector, as the principal means of solving the problems of employment, poverty, environment, and dispersal of urbanization. Seventh, an implementation mechanism that operates at the district and national levels, and is complemented with an analytical body to facilitate reinforcement and adjustment of the plan over time.
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Annex 1.2: Examples of contexts, policies and institutions evolved during the tenure of APP implementation (major)
1. Context
• More power and authorities devolved to local elected bodies through the promulgation of the Local Self-Governance Act 1999, but absence of the elected local leaders.
• Liberalisation and open market economy and membership in the World Trade Organisation, nearing to the establishment of SAFTA, and membership in the BIMSTEC.
• Increased support and activities for the public-private partnership, privatisation and outsourcing.
• Renewed emphasis on good governance, transparencies, timely delivery of services to the people, gender mainstreaming, equity, inclusion, etc.
• Phenomenal growth of non-government and civil society organisations. • Producers increased dissatisfaction with the pricing policies of companies and
industries, which purchase raw materials, for example, Sugar Factories, Dairy Industries, Tea Companies, tec.
• Donor assistance declining in the agricultural sector. • Termination of government subsidies on fertiliser and shallow tube wells. • The Poverty Reduction Strategy Paper (PRSP) formulated with four distinct but
interrelated pillars. • Escalation of the insurgency movement (domestic conflict) in the country and
difficulties for the government staff including frontline development staff to enter into internal parts of the districts.
• Increasingly rising expectations of the rural people, and support for the participatory approaches increased and its value and usefulness being recognised at all the levels of the government system.
2. Policies
• Allocation of resources within the framework of the Medium Term Expenditure Framework (MTEF), Prioritisation of Government Resources and Budget.
• Devolution of authorities and power to local bodies. • Increased role and responsibilities to the private sector- private sector
development policy. • Conserving agricultural bio-diversities. • Strong commitment to open, liberal and market led economic growth. • Formulation of sectoral policies and strategies (e.g., National Agricultural Policy,
Irrigation Policy, Revised Forest Policy, National Biodiversity Strategy, Water Sector Strategy, Private Sector Development Policy, National Fertiliser Policy, Tea and Coffee Development Policy, Local Infrastructure Policy and so forth);
3. Institutions
• Devolution of basic development functions including agricultural extension services to the local bodies
• Outsourcing agricultural research under the competitive research grant systems • Increased collaborations and partnerships with the civil society organizations and
the private sector (e.g. public-private partnership) • Termination of Agricultural Input Corporation’s monopoly to import and distribute
the fertilizer in the country • Pocket package strategy • Display of civil charters in all the development offices • Increasingly support and confidences in the participatory approaches
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• Establishment of the National Agricultural Development Committee, Central Agricultural Development Implementation Committee, Regional Agricultural Development Committee and District Agricultural Development Committee
• APPMAU established at the MOAC. • Reorganisation of the major line ministries namely MOAC, MOLD and MOWR in
government’s decentralisation policy.
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Annex 1.3: Study TOR
Concept Note and ToRs for1 Agriculture Perspective Plan Implementation Action Plan Preparation
January 2005
Background and Rationale 1. His Majesty’s Government of Nepal (HMGN) has issued the Agriculture Perspective Plan (APP) as a 20 year vision and strategy for agriculture led growth in 1995 and has implemented it since 1997, the first year of the Ninth Five Year Plan. The APP is one of the documents that have received consensus from major political parties and key Nepalese stakeholders. Almost all the bi-lateral and multilateral agencies endorsed and acknowledged the potential merits of APP for Nepalese agriculture led development and poverty reduction. The government has endorsed and incorporated the vision and strategic thrust of APP in it’s policies and plans. The 9th Plan recognized the central role of agriculture and adopted the strategies, priorities and targets set by the APP. The Poverty Reduction Strategy Paper (PRSP)/10th Plan provided continuity to most of the efforts started under 9th Plan and reiterated many of the aims and approaches of the APP and has given agricultural development and poverty reduction a high priority. 2. Some positive effects in the forms of accelerated agricultural growth, improved agricultural trade, increased productivity and steps towards greater market orientation and a favourable investment climate are evident after implementing agriculture and rural development programmes both at central and district level within the APP framework. For instance, the Agriculture Sector Performance Review (ASPR) 2002 identified an improvement in the sector in the late 1990s (average growth rate of 0.7%) relative to early 1990s (average growth rate of - 0.6%). The agricultural GDP is estimated to have grown by 3.7% in 2003/04 as compared to 2.5% growth rate registered in 2002/03 through a noticeable increase in the production of paddy, potato, fish, milk and poultry despite decreased production of barley, sugarcane, tobacco, jute, fruits and vegetable crops; and meat and normal increase in the production of other crops. 3. Despite such apparently impressive agricultural performance, the evaluation of the 9th Plan (1997/98-2001/02) and its impact on poverty reduction revealed that past development efforts have been unable to meet the intended goal of poverty reduction, particularly in rural areas and the problem of poverty is more widespread and deeper amongst women, ethnic groups and Dalits (disadvantaged groups). Incidence of poverty was estimated to be 38% by the end of 9th Five Year Plan i.e FY 2001/02. The poverty problem is more severe among those living in rural areas compared to urban areas and among those living in mid and far western development regions than in western, central and eastern development regions2. It has been increasingly felt that farmers’ income has not increased due to problems in direct access to the market in the absence of agricultural/rural roads, safe and adequate storage facilities including cold storage (ASAR 2002). Middlemen are reaping extra profits at the cost of farmers and consumers (Economic Survey 2004). 4. As coordination of APP implementation is lacking effectiveness at central and regional level, the concept of APP has considerably lost significance. The absence of regular coordination, together with frequent staff changes and the need to attend to immediate priorities, diverts attention from APP issues. Each implementing institution adheres to its sectoral focus with barely token acknowledgement of APP objectives and coordination intentions. At the district level the APP concept of concentrating resources into a limited number of Pocket Packet Programme (PPP) areas is not well understood and APP
1Prepared by APPSP and approved by High Level Task Force. 2NPC, “Poverty Monitoring and Assessment Framework Document” Singadarbar, Kathmandu see http://www.npc.gov.np/introduction/Booklet2.pdf
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awareness raising and guidelines have not been sufficiently institutionalised. Where PPP areas have been designated they are generally in the form of small and separate PPP for each commodity or sectoral programme, instead of the collaborated concentration of investment by all required agencies in a few PPP areas as per the APP concept. Considerable institutional effort will need to be invested to make such APP concepts functional. 5. In conformity to international best practices and pursuant to implementation success and failures, there have been changes in context, policies and institutional framework governing Nepalese agricultural sector during recent years. First, several contextual changes such as insurgency and conflict; increased involvement of private sector and non-government sector in agricultural service delivery; and WTO membership have taken place after APP formulation in 1995. Second, there have been institutional changes at several fronts including attempts to transform the centralised, supply driven and target oriented national public sector extension system into a more decentralised, demand driven and client oriented pluralistic system through devolution of agricultural extension services to the District Development Committee (DDCs) under Local Self Governance Act, 1999; formation and involvement of Department for Local Infrastructure and Agricultural Roads (DoLIDAR) preparing a district transport master plan to ensure access of agricultural products to the market; establishment of the National Agricultural Research and Development Fund (NARDF) to promote a private sector led demand driven type of agricultural research; implementation of the agriculture development programme under Pocket Package Strategy (PPS); and structural changes within MOAC and its line departments to address the changed context and Nepal's recent WTO membership, etc. have implications in Nepal’s agricultural sector. Third, policy changes initiated in Nepalese agricultural sector after APP implementation include, among others, endorsement of the new Agricultural Policy 20043, Water Resource Strategy 2002 and Irrigation Policy 2003, formulation/implementation of the fertiliser policy 1999 and deregulation of fertiliser trade, involvement of private traders on equal footing with the government owned AIC (now the Agricultural Input Company (P) Ltd.) to import and distribute fertilisers, removal of subsidies on fertilisers and STWs4, amendment of the Forest Act 1992 in 2002 and paradigm shift in forest management such as collaborative forest management, and livelihood forestry initiatives, preparation of national and district transport master plan, etc., the impact of which are yet to be seen. 6. Nepalese agriculture is still characterized by subsistence orientation and low level of commercialisation. Main problems of the sector include the reduction on land frontier due to inappropriate use of agricultural land as well as various calamities; lack of access to agricultural land to those providing agricultural labour and possessing skill as well as inability of those with access to agricultural land to adequately commercialize agriculture using improved technologies; low productive livestock, diseases incidence and poor nutrition; market competition with livestock and agricultural commodities; agriculture and livestock industries still depending on imported raw materials; weak agricultural export promotion initiatives; inability to attract enough investment in related agricultural infrastructure such as irrigation, road, electricity, communication, industry, market, agricultural business and improved technologies given the extent of natural resources and bases for non-agricultural sector development; inability of the industrial policies to capture the sensitivity of the agriculture sector. The people's perception of these problems may be incomplete or different from this sectoral analysis. This problem will need to be addressed if farmers are to accept and adopt the necessary actions for change. Present understanding of the challenges in the agricultural sector have led to more pro-poor objectives and approaches, so as 1) to diversify
3HMGN argue that Agriculture Policy 2061 is consistent to APP vision and strategy and prepared in the sprit of the 10th Plan/PRSP see http://www.npc.gov.np/prsp/AgriPolicy2061final.pdf 4Budget speech of the FY 2004/05 has reinstated capital subsidy for STWs in the arid Terai regions and for small irrigation programmes throughout the kingdom. See http://www.mof.gov.np/publication/budget/2004/index.php
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agriculture into labour-intensive high-value agricultural commodities such as horticulture and livestock for increased profit incentives and employment opportunities, 2) strengthen backward and forward linkages between agriculture sector and off-farm sector in rural areas to create a virtuous cycle of growth of incomes and employment, 3) high priority in public sector allocations to rural development, and 4) focus on re-distribution of assets to the poor. 7. In cognizance to this, the major thrust of the 10th Plan in agricultural sector is directed at ensuring successful implementation of the APP through an effort to modernize, diversify and commercialize crop and livestock production by expanding technology use, and increasing access of farmers to modern agricultural inputs and credit, promoting participation of private sector and NGOs/INGOs in service delivery, market promotion and infrastructure development. One important aspect of the 10th Plan is its commitment to implement the programmes relating to the APP in the form of campaign by proclaiming the 10 year period of the current 10th and forthcoming 11th Five Year Plans as an "Agricultural Decade”, which requires sufficient preparation. 8. As laid by above realities and context, the current perceptions about the effective implementation of the APP are mixed. Despite that the broad approaches to agricultural development outlined in the APP is very much accepted, doubts are raised on its targets, implementation aspects, institutional linkages, and achievements in view of the changed context, institutional reforms initiated, policy dynamisms and performance on APP implementation. The need to review the aspects of APP implementation to make it relevant and appropriate in view of recent changes and developments has been widely felt. The Immediate Action Plan (IAP) of the HMGN for the FY 2061/62, indicates that an APP implementation status report, showing APP implementation status at the national level as well as district level will be prepared. Objectives 9. This study is aimed at 1) assessing the current implementation status and modes of APP for their effectiveness and relevance in the present institutional and socio-economic context, and 2) formulation of recommendations on changes and action to be taken in order to accommodate relevant and appropriate aspects of the recent changes and developments, particularly in the context of the four pillars of the 10th Plan/PRSP, government’s main objective of poverty reduction, it's policy to strengthen decentralised governance system, membership in the WTO, recent agricultural policy, etc., ensuring compatibility with people's needs, demands and capabilities. The specific objectives of this study will be the following: a) To undertake a critical assessment of 1) past and ongoing APP initiatives in relation to
priority inputs, priority outputs, approaches, strategies, institutional arrangements, organisation, reform and adjustment, etc., 2) the APP objectives and targets set in the 10th plan/PRSP, and 3) analytical assessment of the APP implementation both at the central and district level.
b) To assess and identify areas of changed environment, like WTO, SAFTA, decentralisation, public private partnerships, etc., and recommend responses in objectives, targets and working modalities of APP, as deemed necessary based on the above assessment.
c) Assess possible consequences of the above recommendations for the recent National Agricultural Policy 2061 and indicate ways to make the two compatible.
d) To assess the institutional aspects of APP implementation and to identify lapses in coordination and implementation and recommend measures for improvement.
e) To assess the extent in which current M&E and reporting systems measure APP implementation and impact on poverty reduction and reaching the rural poor and excluded consistent with the indicators in the Poverty Monitoring and Assessment System (PMAS) and suggest improvement as deemed necessary.
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f) To assess the likeliness of APP being able to reach it's defined goals and targets as well as those set for poverty reduction in accordance with MDGs and PRSP.
g) To identify gaps in the existing planning system, suggest planning modalities responding to actual situation and in line with APP's major strategies and prepare guidelines and a action plan for changes in APP implementation that will ensure concerted efforts in addressing the issues of growth, poverty and social inclusion.
h) To design a coordination model for APP that will guide the agricultural sector and the actors involved in its implementation for the next decade or so.
Implementation 10. Considering the interactive and interdependent nature of the APP that crosses many interrelated sectors, sub-sectors, public agencies, the farming community, private entrepreneurs, non-governmental organizations, and international donor and cooperating agencies, HMGN has formed a High Level Task Force (HLTF) under the chairpersonship of the Honorable Member (agriculture), National Planning Commission (NPC) and charged it with the responsibility for implementation of this study of reviewing the APP and formulation of an APP implementation plan in line with government’s plan to implement 10th Plan and the forthcoming 11th Plan as Agricultural Decade. The High Level Task Force will form and guide the Technical Working Team, who, with the assistance of a group of consultants, will implement the Study. The HLTF will ensure proper coordination among and cooperation from key stakeholders, ensure ownership, and facilitate reflection of the works on policy making and policy adjustment as required. It will also ensure high level intra-ministerial involvement as well as harmonize with donors; NGOs and private sector as necessary. Fig 1: Operational Structure
11. The HLTF will form a seven member Technical Working Team (TWT) involving appropriate sector/professionals representing the key APP partners to undertake the APP implementation review and prepare the APP implementation plan. A Review Group consisting of three senior persons among Nepalese civil society will assist the TWT on technical matters, review process and work in progress, and provide their comments and observations on the reports of review and implementation plan before they will be released
Technical Working Team
Consultants (International and National)
High Level Task Force
Donor Group
CADIC
TWG
- Review Group - Independent
reviewers
A P P S P
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by the TWT. Apart from these, a number of independent reviewers, amongst which the ADB, will be requested to review the outputs and to give their comments and recommendations for consideration at the different stages of the process. 12. In view of the urgency and comprehensiveness required of the study, a competent and experienced Team of Consultants /Firm (National and International) will be contracted to assist HLTF and TWT on implementation review and preparation of the implementation plan. The Consultants team/firm will be identified as per DFID's rules on hiring consultants. The outputs produced from the study on behalf of TWT will be shared among Technical Working Groups (TWG) and Central Agriculture Development Implementation Committee (CADIC)5 for their comments before submitting to the HLTF. At one point in time, feedback will be obtained from the joint donor group as well. At all levels of the study, APPSP will monitor and facilitate/support progress and implementation. Consultants team The Consultants Team should be both multi-national and multi-disciplinary, with the overall leadership coming from an international consultant (firm). The International Partner will have a mentoring and guiding role and should possess the following qualities:
Proven experience in review and strategic planning of national policies and programmes in the agricultural sector
Proven experience in institutional management and change processes Extensive experience in Impact Assessment Current knowledge of Nepal’s agricultural sector and policy environment
A national partner or partners, either as individuals or as a company, should be an integral part of the Team composition.
Extensive knowledge of Nepal, it’s policy framework to address poverty and agriculture, and current trends, changes and processes within it, is considered essential for both national and international members of the Team.
Individual members should have a minimum of 10 years experience of strategic planning level and organisational change management with a background in agriculture. They should have the ability to work in a multi-national team and the commitment and ability to produce pragmatic and workable recommendations. In addition they should have specific skills in one or more of the following disciplines/areas of expertise:
(Agricultural) Policy Analysis Institutional Development and Institutional Change Impact Assessment, Monitoring and Evaluation Agriculture and Livestock Extension Agriculture and Livestock Economics National and International Marketing and Trade of Agricultural Products Social, Livelihood and Rural Poverty Analysis Participatory Approaches and Stakeholder Involvement
Whilst it is recognised that the individual composition of the Team may vary during the Review period according to the issues being addressed, it is essential that the Team retains
5In line with multi-sectoral nature of the APP, the CADIC was formed including members from the key APP implementing institutions and chaired by Secretary MOAC to supervise APP implementation and resolve implementation problems at central, regional and district level. The TWG was created under the chairpersonship of the Joint Secretary, M&E Division, MOAC drawing on members from among Department of Agriculture, Irrigation, Livestock Services and Local Infrastructure Development and Roads, the NARC, the NGO federation, FNCCI to provide technical inputs to CADIC that meets as and when required to screen and discuss the issues on the agenda before every CADIC meeting. APP Monitoring and Analytical Unit (APMAU) based in M&E Division, MOAC works as secretariat for both TWG and CADIC.
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at least one member, designated as the Team Leader, for its full duration to ensure continuity and co-ordination of the inputs and results.
In addition to the necessary and appropriate technical skills and competencies to contribute to the Review itself, the Team Leader will also be expected to have at least ten years of experience successfully leading multi-national and multi-disciplinary teams and producing clear, concise and pragmatic recommendations.
A Review study on the Impact of Agricultural Research will be commissioned at the same time as the present study and is likely to take place in approximately the same period. Although the two studies will have different objectives and are positioned at different policy levels, there are several areas of relationship and interactions and the coincidence of their implementation offers opportunities for interchange of views and findings for mutual benefit and their adjustment and coherence within the wider policy framework. It deserves therefore recommendation that close contacts will be maintained with the team that implements the other study and it would be an advantage if the international member(s) of the team would be the same for both studies. However both reviews will be undertaken under independent contracts and the teams as such should operate independent from each other.
Methodology 13. The review will consist of two parts. The first part will be an assessment and diagnosis the APP implementation, it's problems from a wide range of perspectives and recommendations on ways in which they may be fixed. This will be done through desk and field studies. Desk study will be the basis for reviewing APP implementation status at National level while an assessment on status of APP implementation at district level will be made in selected representative districts6.The Consultants will organise series of consultations with key stakeholders in the sector including representatives of implementing agencies, both at policy making and implementation levels, farmers, local administrators, NGOs, private dealers of agricultural inputs and outputs, and external funding agencies to address their expectations, concerns and suggestions on status report and facilitate emergence of consensus and ownership. The APP implementation status report will be ultimately approved by the Task Force. 14. The APP implementation status report will provide a basis for preparing the APP implementation action plan. The Consultant's team will prepare the draft APP implementation plan in consultations with key stakeholders including Donors, NGOs, private sector and farmers and under the supervision of the TWT. Apart from general aspects of implementation, the implementation plan will also include a model of a complete district level plan for inputs and services packaging, including coordination and planning mechanism in the decentralisation context, for one district. Prior to further processing and action by TWT, the APP implementation plan will be critically reviewed by Review Group and independent reviewers. The plan will also be shared in the TWG and CADIC meetings to obtain their feedback, as well as with donor groups as appropriate and relevant. The APP implementation plan will be ultimately approved by the HLTF. Subsequently, it will be submitted to HMGN for approval through MOAC. The APP implementation plan thus prepared will form the basis for planning, monitoring and evaluation of the agriculture development programme under the APP framework in future. 15. The APP is the main policy framework for the Government for Rural Development and many sector and sub-sector policies and plans are based on it. It is therefore important that care is taken that the review takes into account a number of other policy and planning activities that are presently ongoing, like the National Agricultural Policy, The Review of 6In order to select the districts, the 75 districts will be divided into three categories: (i) better, (ii) good and (iii) slow in term of progress on APP implementation. Districts will be selected from each category for district level studies.
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National Agricultural Research and others in agriculture and other sectors covered by the APP, such as irrigation, forestry, agricultural road and rural electrification. As an important study that will determine the future of an important aspect in the agricultural sector, the Agricultural Research Review will be carried out at approximately the same time as the APP Review and also under the APPSP mandate. Coherence and complementarity of both studies will be ensured at high level through NPC’s active involvement, while the same will be ensured at working level through coordination of the teams implementing the two studies. Expected Outputs 16. The expected outputs of this review will be the following. APP Implementation Status Report APP Implementation Plan, including a district level model APP plan with implementation
modalities and guidelines and coordination mechanism Presentation of the findings in workshops and coordination meetings
Work plan 17. The whole exercise, including fformulation of the APP Implementation Plan is to be completed within a time span of six months and is expected to start by February 1st 2005. The detailed workplan of key actions, responsibilities, activities to be undertaken and the due dates is to be presented in the consultant’s proposal. References ANZDEC Limited, New Zealand (2002), "Nepal: Agriculture Sector Performance Review
(ADB TA No. 3536-NEP) Main Report" prepared for MOAC and ADB. ANZDEC Limited, New Zealand (2002), "Nepal: Agriculture Sector Performance Review
(ADB TA No. 3536-NEP) Final Specialist Report (Institutional Assessment Specialist)" prepared for MOAC and Asian Development Bank.
APPROSC/JMC (1995), "Nepal Agriculture Perspective Plan Main Document (Final Report)"
ADB TA 1854. APPSP (2003), "Inception Report of the APP Support Programme" prepared for MOAC and
Department for International Development. APPSP (2004), "Review the Implementation of the Pocket Package Strategy under
Agriculture Perspective Plan" draft report. MOF (2004), “Economic Survey 2004” Kathmandu. MOAC (1998), "Implementation Guidelines for Pocket Package Strategy for Agriculture
Development” Singhadurbar, Kathmandu. MOAC (2001), "Policy and Institutional Arrangements for Effective Implementation of
Agriculture Perspective Plan – 2057" Agriculture Information and Communication Centre, Pulchok, Lalitur.
MOAC (2003), “Implementation Status of APP during Ninth Plan (Interim Period)”
Singhadurbar, Kathmandu. World Bank (2002), "Reaching the Rural Poor: A Renewed Strategy for Rural Development"
The World Bank, Washington DC.
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Summarised Terms of Reference for Reviewing APP 1. Review of the following:
a) past and ongoing initiatives in relation to implementation (goal, purposes, performance, strategy and operational mechanism) of the APP;
b) review of APP, 10th Plan/Poverty Reduction Strategy Paper (PRSP) and Sector policies, acts, rules, by-laws and directives to assess coherence and/or discrepancies between APP and sectoral policies issued by the concerned ministries, line agencies and other actors; as well as assess the coherence and/or gaps between central level policies and district level interpretation and implementation;
c) current situation of priority inputs (fertiliser, irrigation, agricultural road, rural electrification, technology and agricultural credit) and performance of priority outputs (forestry, agri-business, high-value crops and livestock), approaches, strategies, institutional arrangements, organisation, reform and adjustment, etc. of the APP;
d) mapping of progress in agriculture road, shallow tubewell, irrigation and rural electrification vis-à-vis agriculture development started in 2000/01;
e) public expenditure pattern on agriculture development in relation to priority inputs envisaged in the APP;
f) institutional framework to identify institutional bottlenecks (if any) for agricultural service delivery;
g) human resources and management information system requirements for the implementation of APP, so as to respond effectively to local needs and potentials;
h) Planning system and partner coordination in the sprit of the APP; i) M&E and reporting systems to identify gaps in measuring implementation status
and impact on poverty reduction and reaching the rural poor and excluded; j) on-going budget and planning procedures in the agricultural sector and
recommend areas of improvements to make the process more responsive to priority inputs, priority outputs, approaches, strategies, institutional arrangements, organisation, reform and adjustment, etc. envisaged in APP;
k) import substitution, export promotion, food security and poverty reduction; l) agriculture support policies of the neighbouring countries (India and Tibet); m) APP implementation in line with Punjab and Himachal Pradesh success Models
in the Tarai and Hills/Mountains areas of Nepal respectively. 2. Study the macro-economic framework vis-à-vis agriculture development to identify key
pro-poor macro-policy for poverty reduction; 3. Critical analysis of the causes of lapses on APP implementation; 4. Analyse the causes of poor intra and inter Ministry and line agency coordination and
suggest mechanism for effective sector coordination; 5. Evaluate the
a) sufficiency of the priority inputs and outputs proposed in APP for agriculture development vis-à-vis attainment of poverty reduction targets set in the 10th Plan/PRSP;
b) impact of policy reform measures initiated in the agricultural sector and their impacts on agricultural development and growth; and identify critical issues and gaps acting as constraints to APP implementation and to overall agriculture development; and
c) areas and their relevance of changed environment i.e. in responses of WTO, SAFTA, etc., decentralisation, public private partnerships, etc. on objectives, targets and working modalities set in APP;
6. Assess the adequacy of the Punjab and Himachal Pradesh development model for Terai and Hills/Mountains respectively
7. Identify a) key constraints on delivery/investment on priority inputs and the extent to which
these priority inputs contributed to achieve priority outputs;
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b) MOAC’s need for capacity enhancement institutional and organisational reform to implement APP as a dynamic policy by supporting the needs of institutional structures, technical support, regulatory guidance, input supplies, etc., and the quality of implementation by addressing conflict resolution and security issues, gender and the needs of target groups;
c) gaps on existing planning system; d) service coverage (inclusion); e) devolution and public private partnership.
8. Assess the quality of understanding of the livelihoods of disaggregated socio-economic groups by the various implementers, and the extent to which this understanding informs implementation in practice;
9. Assess the likelihood of the APP achieving its poverty targets; 10. Suggest
a) the mechanisms for strengthening devolution of agricultural extension services, b) planning modalities suitable to match the APP's strategy; c) measures to formulate a demand-led pro-poor national agricultural strategy and to
enable them to formulate the same and enhance their capacity for implementation; d) the measures to address the issues of social inclusion and livelihood; e) updated objectives, target, working modalities of APP as deemed necessary based
on assessment on context, institutional and policy changes; and f) mechanism on using opportunities generated by road access (especially North-South
corridor) on agricultural commercialisation. 11. Prepare
a) APP Implementation Status Report along the above mentioned assessment and evaluation criteria, including identification of major gaps and suggestions and recommendations for policy and institutional changes and adaptations
b) APP Implementation Plan, including a district level model APP plan, addressing the changed context, policy reform and institutional changes that address the issues of growth, poverty and social inclusion, highlighting • inputs and services packaging, including coordination and planning mechanism
under decentralisation context, • immediate, medium term and long-term action plans with implementation
modalities and guidelines and coordination mechanism for agriculture development in line with the APP, that will guide sector development for the coming decade, especially in the context of the current agricultural decade;
• relationships with other actual and relevant policy and strategy documents. 12. Present findings in Workshops and Coordination Meetings.
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Annex 1.4: List of consultations
Sub-thematic/Thematic details SN Sub-thematic/Thematic Date No. of participants
1 Gender 2-May-05 182 Agricbusiness 2-May-05 113 Livestock 3-May-05 224 Irrigation 3-May-05 175 Environment 4-May-05 126 Road and Rural Electrification 6-May-05 157 High Value Commodity 9-May-05 168 Fertilizer 9-May-05 169 Technology 10-May-05 16
10 Credit 10-May-05 1311 Forestry 15-Jun-05 2112 Civil Society Consultation 16-Jun-05 1414 Technology (II) 21-Aug-05 1615 Credit (II) 21-Aug-05 1516 Agribusiness (II) 21-Aug-05 1917 Fertilizer (II) 22-Aug-05 1718 High Value Commodity (II) 22-Aug-05 1819 Irrigation (II) 23-Aug-05 1920 Forestry (II) 23-Aug-05 2113 Marketing & Trade 25-Aug-05 2321 Livestock (II) 28-Aug-05 2522 Road and Rural Electrification (II) 1-Sep-05 1723 Policy and institutional reform 1-Sep-05 2524 Poverty food security and livestock 2-Sep-05 2625 Priority output 4-Sep-05 2926 Priority input 4-Sep-05 2927 National Consultation 30-Sep-05 42
Total No. 532
14
Annex 1.5: Composition of the HLTF meetings held
SN Name / Designation / Organization
Dr. Ram Prasad Chaudhary Hon. Member, National Planning Commission
Chairperson 1
Dr. Hari Krishna Upadhaya Hon. Member, National Planning Commission
Former Chairperson*
2 Mr. Govinda Prasad Pandey Secretary, MOAC
Member
3 Mr. Ananta Raj Pandey Secretary, MFSC
Member
4 Mr. Mahendra Nath Aryal Secretary, MOWR
Member
5 Mr. Laba Prasad Devkota Secretary, NPC
Member
6 Mr. Bal Krishna Prasai Secretary, MLD
Member
7 Mr. Tirtha Raj Sharma Secretary, MLRM
Member
8 Mr. Sri Krishna Upadhaya Chairman, SAPPROS
Member
9 Mr. Binod Bahadur Shrestha President, FNCCI
Member
10 Mr. Deepak Prakash Banskota Chairperson, National cooperative Federation
Member
11 Mr. Bhairab Raj Kaini Joint Secretary, MOAC
Member
12 Mr. Krishna Kumar Shrestha Joint Secretary, Planning Division, MOAC
Member
Mr. Shankar Lal Chaudhary Programme Manager, APPSP
Member Secretary 13
Dr. Purushsottam Mainali Programme Manager, APPSP
Former Member Secretary
* As on 26th April 2005 (13/1/2062)
15
Annex 1.6: Composition of TWT
SN Name / Designation / Organization
Mr. Ganesh Kumar K.C. Secretary, MOAC
Chairman 1
Mr. Govinda Prasad Pandey Secretary, MOAC
Former Chairman*
2 Mr. Bhairab Raj Kaini Joint Secretary, MOAC
Member
Mr. Kapil Dev Ghimire Joint Secretary, MLD
Member 3
Mr. Padam Raj Regmi Joint Secretary, MLD
Member
4 Mr. Narayan Prasad Bhattarai Joint Secretary, MOWR
Member
5 Dr. Mohan Prasad Wagle Joint Secretary, MFSC
Member
Mr. Shankar Lal Chaudhary Programme Manager, APPSP
Member Secretary 6
Dr. Purushsottam Mainali Programme Manager, APPSP
Former Member Secretary
*As on 10th January 2006 (26/9/2062)
16
Annex 1.7: Consultants for the Study
A. International: the IDL Group, United Kingdom
SN Name : Position Key Responsibilities1. Mr Steve Ashley : Team Leader 2. Dr Gerry Gill : Member 3. Dr Taylor Brown : Member
B. Domestic: NARMA Consultancy Private Limited and the SEEPORT Consultancy
Private Limited
Consultants
SN Name Position Key Responsibilities 1. Dr Govind Koirala : Team
Leader Macro-economic Policy Analysis
2. Dr Birendra Bir Basnyat : Dep. Team Leader
Institutional Analysis, Livelihoods Analysis
3. Dr. Shyam K. Poudel : Member High Value Commodities 4 Mr. Bijendra Basnyat : Member Forestry and Environment,
District Model Plan 5 Mr. Ratneshor Lal Kayastha : Member Irrigation and rural
infrastructure 6 Mr. Yam B Thapa : Member Agriculture trade and
marketing 7 Dr Surendra Kumar Shrestha : Member Livestock 8 Dr. Bekha Lal Maharjan : Member Agribusiness 9 Dr. Suman Sharma : Member Poverty and Food Security 10 Mr. Raghu Ghimire : Member Human Resources
Development 11 Mr. Kumar Adhikary : Member Conflicts analysis
Technical support staff
SN Name Position
1. Mr Amir Poudel Research Officer/Environment 2. Mr Samir Rijal Research Officer/Agriculture 3. Mr Parmeshwor Singh Kalwar Research Officer/Horticulture 4. Mr Niraj B Basnyat Research Associate 5 Mr Sarad Sharma Research Assistant 6 Ms Roshni Rupakheti Research Assistant
17
Annex 2: APP Achievements
Annex 2.2: Irrigation
Annex 2.2.1: APP irrigation target by 2016/17
S.N. Particulars Mountain Hill Terai Total
A Irrigable Area ('000 ha) Including forest area 61 374 1,743 2,178 Excluding forest area 55 355 1,356 1,766
B Irrigated area by 1994/95(000 ha ) 1. Surface Irrigation 41 212 407 660
Year round 21 115 182 318 Monsoon 20 97 225 342
2. Ground water Irrigation - - 141 141 Total Irrigated Area 41 212 548 801 Irrigation percentage 77 60 40 45
C Irrigated Area by 2016/17 ('000 ha) 1 Surface Irrigation 53 293 486 832 Year round 40 197 277 514 Monsoon 13 96 209 318 2 Ground water irrigation area - - 612 612 D Total irrigated area (000 ha) 53 293 1,098 1,444 Irrigation percentage 96 83 81 82
Source: APP Main Document - Table 4.2
Annex 2.2.2: APP targets and progress during the ninth plan
New Areas (ha)
S.N.
Irrigation system type
APP
Tar
get
Nin
th P
lan
Targ
et
% T
arge
t as
of A
PP
Targ
et
Prog
ress
% P
rogr
ess
of A
PP
Targ
ets
% P
rogr
ess
of N
inth
Pl
an
Targ
ets
1 Surface irrigation 72000 158900 186 110465 153 69.5 (a) New 52,400 29,856 56.9 (b) Rehabilitation 1,06,500 80.879 75.9 2 Groundwater
irrigation 116000 90500 78 36238 31 40
Total 188000 249400 119 146703 78 58.8 Source: APP 1995, DOI Website (www.doi.gov.np) and Tenth Plan 2002 Total Irrigable Land- 1,766,000 ha
18
Annex 2.2.3: APP targets/tenth plan targets progress
New Areas (ha) for 2002/03 & 2003/04 S.N. Irrigation
System Type APP Targets
Tenth Plan Targets
% Target as of APP Targets
Progress %Progress as of APP Targets
1 Surface Irrigation
18,400 26592 145 17710 96
2 Ground Water 55,600 9815 18 8,220 15 Total 74,000 36,407 49 25,930 35
Source – APP (1995), DOI Irrigation Book 2061
Annex 2.2.4: APP targets and achievements to date
S.N. Irrigation
System Type APP Targets
( 10\997/98-2003/04) Achievements % Progress of APP
Targets 1 Surface
Irrigation 90,400 128175 141.8
2 Ground Water 171600 44478 25.9 Total 262,000 172653 65.9%
Annex 2.2.5:
Total area irrigated by physio-graphic region
Year Mountains Hill Terai Total 1996/97 17299 86833 635470 739602 1997/98 19449 92301 649306 761056 1998/99 21909 99173 684425 805507 1999/00 24203 104825 715166 844194 2000/01 25823 110081 737534 873438 2001/02 26979 115337 753661 895977 2002/03 28119.67 118490.1 761192.3 907802.07 2003/04 28340.27 120588.3 774740.5 923669.07
% change 6.8 4.7 2.9 3.3 Year round irrigation target by % increase (1994/95 to 2014/15) 3.3 2.7 5.2 4.6
Source: SINA, MOAC, Different Years
19
Annex 2.2.6: Government expenditure in irrigation vis-à-vis total government expenditure in agriculture,
irrigation and forestry, (In million Rs.)
Irrigation expenditure Total government expenditure, in agriculture,
irrigation and forestry
Irrigation expenditure as percentage of total
government expenditure in
agriculture sector
Fiscal Year
Regular Develop Total Regular Develop Total Reg. Develop Total1 1996/97 100 2727 2827 688 5080 5768 14.5 53.7 49.0
2 1997/98 104 2438 2542 725 4992 5717 14.3 48.8 44.5
3 1998/99 111 2941 3052 931 5340 6271 11.9 55.1 48.7
4 1999/00 117 3044 3161 1008 5563 6571 11.6 54.7 48.1
5 2000/01 132 3953 4085 1072 6762 7834 12.3 58.5 52.1
6 2001/02 78 3446 3524 1173 6676 7849 6.6 51.6 44.9
7 2002/03 207 2138 2345 1367 4593 5960 15.1 46.5 39.3
Growth rate 8.5 1.5 1.8 11.0 2.1 3.5Source: Economic survey of Nepal, 2004
Annex 2.2.7: APP investment targets and expenditure (NRs. In Millions)
Ninth Plan (1997/98 –2001/02) Tenth Plan (2002/03 & 2003/04)
APP Target
Expenditure % APP Target Expenditure %
13760 15519 113 6040 3337 55 Source: NPC (Annual Programme 2004/05): IDVAFP, Economic Survey 2003/04, Ministry of Finance
20
Annex 2.2.8: Shallow tube well, subsidy and CGISP: Where is the reconciliation?
With the ADB’s approval of a 50 million US$ ADB’s Second Agriculture Programme Loan (SAPL) to the Kingdom of Nepal on 22 January 1998, the subsidy issue for STWs has become a headline news of most of the national newspapers and subject to 3 Cs- contest, challenge and contradictions- within HMGN departments and ministries and the donor agencies. The Agricultural Development Bank of Nepal, the organization which had developed a reasonable capacity for maintaining a high growth rate in STW lending and supposed to be lead agency for the STW promotion in Nepal as per the APP, and joined by many other government departments and professionals, were against to that condition of the SAPL which required the government to eliminate the capital-cost subsidies for private STWs as one of the eight conditions for the release of the SAPL second tranche by November 1999. The ADB, on the other hand, opposed to any decision, which would lead towards the continuation and or reintroduction of the subsidy, and contradict with the SAPL covenants. The purpose of this Annex is two fold. First, it is to present views and concerns of both the subscribers and critics of the STW capital subsidy, conclusions of some said to be7 independent research and studies and the CGISP approach which not only vehemently opposed capital cost subsidy for the private STW development, but also reported to progress STW installations satisfactorily after the termination of the subsidy. Secondly, it is to encourage all concerned stakeholders and agencies to make collective efforts for promoting STWs as to the spirit and target of the APP and keep farmers positive, confident and motivated to install STWs and make most cost-effective use of it. The importance of this Annex comes from the fact that any discussions in irrigation in any coordination committees, discussion forums and meetings at any level would start from this issue, end without any decisions, and sometimes lead to postponement or complete ignoring of other crucial decisions which were supposed to be discussed and resolved. The revised/adjusted APP should appropriately resolve this issue because the present APP8 is supportive of the STW subsidy. Issues STW subsidy subscribers STW subsidy critics Demand for STW • Drastically declined posing a
threat to the success of the APP.
• The removal of subsidy in STWs has hit the farmers hard. Especially so because about 70 per cent of the farmers own a meager half a hectare.
• Inadequate allocation of subsidy was hampering the supply of STWs, and therefore a threat to the success of the APP.
• Demand for the STWs can be increased by decreasing the cost of the STWs rather than by giving subsidies.
• Removal of subsidy, resulting in greater private participation, would ensure higher demand of the STWs through higher supply.
• The demand for an under-priced good is always strong and insatiable
Supply constraints • Improve supply systems • Ensure tight monitoring and
quality control
• Subsidy removal is likely to benefit the farmers through increased supply of STW.
Investment • Compared to surface irrigation, ground water has yielded better return to investment.
• Financially attractive even without subsidy
• Encouraged investment in pump sets that were larger and more costly than necessary
7 The team used the term “said to be” because some might even question the objectivity and independency of the researcher itself. 8 Contradictions were noted between the APP main document and the technical paper, which was supposed to be an input to the APP main document in this regard. The main document explicitly argues to continue with capital cost subsidy, the technical paper (Gautam, K.H. 1994), citing an IIMI study states STW without subsidy is also an attractive investment for farmers.
21
Issues STW subsidy subscribers STW subsidy critics Ability of the government to pay the subsidy
• Questionable, the total subsidy requirement is not so high that the govt is not able to bear
• Questionable, evidences mount to suggest govt. inability to pay the subsidy and it is easy to install subsidy once, but difficult to remove after it is provided.
Access of small and marginal farmers
• Poor and costly for small and marginal farmers as they can’t afford cost of STWs, specifically pumps
• Poor, caused by collateral requirements and not matched with extension, social mobilisation. Training packages and little support and programmes for strengthening user organizations requirements.
Cost of cultivation and ensuring competitiveness with neighboring Indian farmers
• High cost of cultivation and making difficult for the Nepalese farmers to compete with their counterparts in India. Inadequate rural roads and insufficient electrification have further resulted in the increase in the cost of production of the Nepali agro-products- give some relief to the farmers .
• Help farmers to reduce the cost of cultivation by integrating developed irrigation opportunities with other complementary inputs like seeds, fertilizers, technologies etc.
Use and misuse of the subsidy
• Not an issue, can be controlled with good governance and transparency.
• Likely misuse of the scarce resource
External experience
• Subsidy for STWs may be removed in countries like Bangledesh where the STWs installation cost is low and cheap, cheap Chinese pumps are available, but not in countries like Nepal and India where the installation cost is high and aquifer is found at much lower level
• In Bangladesh, number of STWs increased nine times in three years (1980-83) after the government subsidies eliminated. And the growth has been phenomenal ever since.
Effects • Farmers become motivated to install STWs
• Increases farmer dependence on the government
• Tendency to be negligent about tube well O and M.
• Distorts free competition (in the market of well assembly materials such as casing pipes, screens and the pump sets) and likely to affect the innovation of local drilling technology and the STW installations itself.
• The very low utilization rate of the STWs shows that farmers benefiting from the subsidy have not been making efficient use of their STWs
As seen from the above Table which is still not exhaustive, coming to a conclusion on the subsidy issue for STWs in Nepal is an Herculean task and not likely to be resolved in the near foreseeable future. Both views are obviously based on some plausible assumptions, logics and reasons, and guided by two different school of thoughts. Regarding STW subsidies two major studies and two other supplementals were carried out after the SAPL. Box 1 below summarizes their major conclusions.
22
Box 1: Studies and reports related to STW Subsidies
Study Major conclusions and recommendations Irrigation Subsidy Studies, Nepal Irrigation Sector Project, , Royads Consulting Ltd, WB sponsored, February 2001
• While there is a need to protect the poorer farmers with continued (targeted subsidy), subsidy in STW should be reduced gradually on a scheduled basis even for group operation. Instead of providing subsidy in capital costs, provide subsidies in interest and diesel/electricity and intensify extension and training support services.
• Devise system/mechanism to provide subsidy targeting to poor and marginal farmers.
The Case Against Shallow Tubewell Subsidy (Siddiq Akma, Project Economist, ADB, May 2001)
• The paper rejects the statements that the withdrawal of STW subsidy in July 2000 reduced the demand for STW credit from the Agricultural Development Bank of Nepal (ADBN) and that this had significantly affected and targets set by the Agricultural Perspective Plan (APP), 1995-2015. Arguments based on i) exploration of the evolution of the subsidy policy in Nepal and its impact on STW development, (ii) discussions on new trends in the development of shallow groundwater resources by farmers, (iii) analysis of the fiscal sustainability of the subsidy program and farmers' ability to invest in STWs without subsidy, (iv) the factors that are affecting the overall demand for STWs, and (v) comparisons of agricultural subsidies in Nepal with those in India as well as in developed countries are often misleading.
A Study on Shallow Tube Well Demand Assessment , Tiwari, B.N. (September 2002), A study carried out for HMGN, ADB and CIDA
• There is a weak relationship between STW installations and rate of subsidy on STWs, indicating additional influencing factors of demand for STWs. HMGN’s view that the demand for STWs has been drastically reduced only because of subsidy withdrawal is not valid.
• Lower the cost of STW following short-term strategies like increasing competition among producers/supplier of the different brands of pump sets, importing Chinese pump sets, collateral-free loans, improved extension services etc, and long-term strategies like promoting rural electrification, development of rural markets etc.
A Study on Ground Water Markets in Nepal, (K.C, D.B 2004), an unpublished Ph.D Dissertation
• The major constraints to groundwater market development in Nepal are lack of appropriate policies, limited availability of water-responsive technologies, and lack of interagency coordination. Groundwater use has been limited in spite of pump capacity due to high installation and operation costs, especially fuel. No credit policy exists to cover costs like fuel and procurement of accessories in case of pump break down.
• Policies on STW expansion should target medium-sized farms because farmers with small and marginal holdings and less likely to install STWs.
Above Table and Box tend to reinforce the debate/controversy than to solve it. This further suggests that there is no ready made solution to the long outstanding STW subsidy issue. Implications and conclusions from above table and Box will follow after a brief introduction to the CGISP, which, as stated earlier, is one of the critics of the capital cost subsidy. Community Groundwater Irrigation Sector Project9- Initiated in 1999 with ADB’s financing of 43 m US$, the purpose of Community Groundwater Irrigation Sector Project (CGISP) is to create an irrigation system owned, managed and run by local communities. The shallow tubewells are at the heart of the Project. It is designed to install 15,000 STWs covering 60,000 ha over the five-year period with a full-package service to the small and marginal farmers. The Project covers 300 Village
9 Loan No. 1609-NEP: Community Groundwater Irrigation Sector Project, with a total cost of $43 million, was approved in February 1998 and made effective in March 1999.
23
Development Committees in high quality groundwater resources rich 12 Terai districts of the eastern and central development regions ( Jhapa, Sunsari, Morang, Saptari, Siraha, Dhanusha, Mahottari, Saralahi, Bara, Parsa, Rautahat and Chitwan). More than 110,000 households, over 50% of whom live below the poverty line, are expected to directly benefit from this project. The project claims that the approach of this project is financially sustainable and provides for a long-term solution to the development of groundwater resources in the country. In this project the focus is on social mobilization and the organization of small and marginal farmers into groups who together can obtain and afford the credit necessary to invest in an STW. CGISP is flexible in that it would also service eligible individual farmers as well as those who would prefer to install boreholes only or invest in mobile pump sets. Groups are served through a credit programme requiring no formal collateral and credits for other inputs, i.e., seed and fertilizers are also available. The project has been spending considerable effort and resources for mobilizing farmers into groups, training and in establishing linkages with a range of service providers required for the target groups. Box 2 lists support available to STW farmers under the CGISP.
Box 2: Support available to farmers installing STWs under the CGISP
Individual Group
• Credit available, but collateral required
• Ensure the availability of seeds, fertilizer and agro-chemicals.
• Social mobilization • Group-guarantee basis, no formal collateral required • Ensure the availability of seeds, fertilizer and agro-
chemicals • Support in improving the existing farm-to-market roads • Cost of constructing 2.8 km road @ Rs. 10,00,000 per km
for each block of 50 tube-wells • Tube well O and M support of US$50.00 per WUG (One
group has one system)
Although direct capital cost subsidy on STWs is now eliminated, the government is still supporting this sector, albeit in different forms. Table below presents the physical achievement of the project. CGISP noted that it had a slow start during the first two years due to various constraints. One of the major reasons was delay in removal of capital cost subsidy in STWs by HMG. The project started to gain momentum after the subsidy policy was resolved, effective coordinating mechanism was established among the project stakeholders and PFI financing arrangements were settled. Comparing the project performance with other contemporary and past SW projects, CGISP claims that its approach is more cost-effective (see Table below)
Particulars 2000/01 2001/02 2002/03 2003/04 2004/05 (as
of March 05)
Total
STWs/WUGs 83 382 537 (875)
1330 1200 3,532
Command area (ha) 325 1,260 1,711 4,256 3,840 11,392 No. of Households (Beneficiaries)
562 1865 2164 4,927 4440 13,958
Average land size (ha) 3.91 3.27 3.39 3.20 3.20 3.23 Average group size 6.77 5.07 5.37 3.70 3.70 3.95
Source: APP Newsletter, APPMAU, MOAC July 2005
Figures in parenthesis denote target
24
Providing collateral free loan for STW construction and enhancing farmers’ access to the improved technologies (improved seeds and fertilizers) and extension services is fine. Regardless, questions are often asked relating to the indirect support provided to the farmer groups, particularly farm road (2.8 km road/50 STWs), and the basis for fixing NRs. 10,00,000.00 per km road. Why 2.8 km, why not 5.6 km or 1.4 km? Why Rs 10,00,000.00? Why not more or less than that? Apart from this, a large sum of money goes to the NGOs and CBOs for social mobilization activities. These are not accounted. Many argue neither the government can provide this support through any project or from its own sources, and that this amount in itself will be a limiting factor for expanding the STWs as per the APP target (8,800 STWs/per year), similar to the past situation when there was capital cost subsidy. These issues were forcefully raised even in Bara district analysis.
Comparison of STW Installation Under Different Projects, April 2005
Project Name Donor Implementation
period Duration Years
STW Number
Command area (Ha)
Cost/Ha ('000 Rs)
Distribution system
Capital cost subsidy
Number of districts
1. ILC WB 91/92 - 96/97 5 112 1,120 30 BL & PH 75-80% 8
2. NISP WB 97/98-02/03 5 8 80 30 BL,BP&PH 60-
80%
3. APP Special ADB/APL 98/99 3,618 9,045 20 60% 20
4. CSTIP IFAD 94/95 - 99/00 5 715 4,855 30-50 BL & PH 60-
85% 5
5. ADB/N Different 83/84-Ongoing 44,980 na 20-25 30-
90% 20
6. CGISP ADB/CIDA 99/00 -
Ongoing 4 3,532 11,392 12 0 12
Source: CGISP, Internet Download
With the implementation of the CGISP, the ADB no more supports the APP special ground water project which was initiated in 1998 to provide irrigation facility as per the APP. The project was implemented through 8 ground water field offices at Biratnagar, Lahan, Mahottari, Birgunj, Butwal, Lamahi, Nepalganj and Dhangadi and was co-ordinated by Groundwater Irrigation Project Office at Parsa, Chitwan. However, in spite of such indirect subsidies questions arise: where will APP target stand with the above rate of installation even after such a large amount of indirect support provided to the farmers? How did this affect to the performance of other projects and institutions which were expected to be equivalent partners?
The project had a provision to grant shallow Tubewells of 4" (10 mm dia) and covering at least 2.5 ha under 60% and 30% subsidy to group or individual farmers respectively. The remaining portion of cost will have to be borne by the farmers themselves or as a loan from ADBN or other financial institutions. The project had also a provision for other support such as agriculture road, agriculture extension services research and development, rural electrification program when a cluster area of 100-1000 ha demand for shallow Tube wells on priority basis as per APP. The following table has the details about this project:
Project Period: 1998/99 to 20 years Command Area: 461,000 ha Total Project Cost: NRS 2.984 Billion Foreign: 90% Local HMG: 10% Users: 40% as per cost Progress up to 1998/99 Construction and installation of 3618 shallow tube wells providing
irrigation facility to 9,045 ha. 12 deep tube wells have been constructed. 2002/03- 120 STWs (300 ha)
25
Like the above project, ADB too has not been able to progress in terms of distributing credits to the farmers for installing STWs. Table below has the details.
Year Loan distribution Target Achievement % 2002/03 28625000 9965000 (311 STWs)* 34.8 2003/04 25975000 7200000 (225 STWS)* 27.7
Source: ADB Nepal * Calculated on the basis of average Rs. 32,000.00 loan per system
Aforementioned evidences are sufficient to suggest crumble in ground water achievements vs APP targets. And, reintroducing subsidies is also not likely to be sustainable and can’t even proximate the APP target. Figure below indicates the installation of the shallow tube well by the ADB even when the capital cost subsidy was available. This fully suggest for the need to rethink not only on the irrigation target and strategies to achieve the target but also the roles and responsibilities of the extension service providers and research providers which, of course, will include the DOA and the NARC, among others.
Source: The Case Against Shallow Tube well Subsidy (Siddiq Akma, Project Economist, ADB, May 2001
26
Annex 2.3: Fertiliser
Annex 2.3.1: Import of fertilisers by sector and type of fertilisers
Year Public (AICL) Private (Other than AIC) Grant Aid (2KR Japan) Total Total Urea D.A.P Total Urea D.A.P MOP Others Total Urea D.A.P MOP Others Total Urea D.A.P MOP Others 1997/98 49,660 10,000 59,660 17,550 0 0 0 17,550 11,440 11,440 78,650 10,000 88,6501998/99 77,857 50,132 127,989 91,049 0 0 0 91,049 0 168,906 50,132 219,0381999/00 30,000 10,000 40,000 61,347 31,173 92,520 7,000 14,817 1,500 23,317 98,347 55,990 1,500 155,8372000/01 24,189 30,415 54,604 76,354 12,365 88,719 11,820 10,920 5,140 27,880 112,363 53,700 5,140 171,2032001/02 12,500 12,500 79,350 21,004 3,000 103,354 16,220 13,820 4,300 34,340 95,570 47,324 4,300 3,000 150,1942002/03 0 0 0 45,190 28,187 10,062 83,439 17,830 10,255 28,085 63,020 38,442 10,062 111,5242003/04 4134 7,000 11,134 96,146 29,399 1,100 11,303 137,948 7,715 9,500 17,215 107,995 45,899 1,100 11,303 166,297Total 185,840 120,047 305,887 466,986 122128 1100 24,365 614,579 72,025 59,312 9,440 1,500 142277 724851 301,487 10,540 25,865 1062,743Source:
Annex 2.3.2: Consumption of plant nutrients and use in kg per hectare of arable land and cropped area
Year N P K Total N (kg/ha) P (kg/ha) K (kg/ha) Total plant nutrients, kg/ha of arable area
Total plant nutrients, kg/ha of cropped area*
1996/97 43,231 19,283 1,635 64,149 12.0 6.5 0.55 21.6 17.7 1997/98 40,399 13,124 2,123 55,646 13.6 4.4 0.72 18.7 15.4 1998/99 63,813 12,097 1,258 77,168 21.5 4.1 0.42 26.0 21.2 1999/00 55,836 18,900 185 74,921 18.8 6.4 0.06 25.2 20.2 2000/01 54,453 20,526 20 74,999 18.3 6.9 0.01 25.3 20.2 2001/02 47,005 24,512 809 72,326 15.8 8.3 0.27 24.4 19.6 2002/03 59,484 27,321 2,202 89,007 20.04 9.2 0.74 30.0 23.8 2003/04 51,620 24,721 1,581 77,922 17.4 8.3 0.53 26.3 20.8
Annual Growth rate (5) 2.34 8.78 (1.45) 4.04 3.62 8.78 (1.45) 4.04 3.50
Source: *- Cropped area includes cereal and cash cropped areas only.
27
Annex 2.3.3: Investment in fertiliser
NRs in ‘000’
Year Price subsidy (Budget)$
Price subsidy (Paid/Actual)
Transport cost subsidy
Total
(a) (b) (c ) (b+c) 1996/97 60,00,00 50,16,00 1997/98 60,00,00 25,51,02 13,6875 391,977 1998/99 46,66,92, 50,09,23 49,998++ 550,921 1999/00 26,96,60 16,49,53* 55,462 220,415 2000/01 - - 42,035 42,035 2001/02 - - 30,926 30,926 2002/03 - - 31,452 31,452 2003/04 - - 37,368 37,368
Note: $ Price subsidy budget is an indication budget only. When AIC was sole importer, government
used to balance subsidy amount to AIC within a cycle of three to four years having formed an Account Settlement Committee in the MOAC which comprised representatives from the MOF and Accountant General. Total loss of the AIC as a result of the price difference between AIC’s procurement cost and sale price was covered by the Government as a subsidy. This helped AIC to maintain a uniform pricing policy throughout the country. As the Government could neither increase the level of subsidy nor the price then, the Government covered AIC’s total loss within a cycle of three to four years, and the amount used to be huge. After the deregulation of fertiliser in November 1997, subsidy budget was managed by the Nepal Rastra Bank. It paid subsidy to fertiliser importers, be it AIC or private traders, only after the arrival of the fertilisers within the country and after submission of all necessary documents. As a result of this, still AIC and a few private traders have not been able to get back subsidy from the Government. Private traders have filed a case against the NRB in the Supreme Court, which is yet to make a decision.
++ Rs. 64.93 million as price subsidy and Rs. 28.80 million as transport subsidy to be paid to AIC * NRB declined to pay subsidy of Rs 7,76,49,485 to the fertiliser importers for delayed in
importing fertilisers within the given time period and failed to submit required paper Source:
28
Annex 2.3.4: Cross border flow of fertilisers
1. After the deregulation of fertiliser trade in 1997, Nepal’s fertiliser market is heavily affected by imports from India, officially and non-officially. While continuation of subsidy and concessions in fertiliser sector has created strong incentives for illegal fertiliser trade in Nepal, its positive gesture and support to Nepal during shortages of fertiliser in Nepal’s domestic market, has helped Nepalese farmers to meet their fertiliser demands to a certain extent. The ASPR farm household survey estimated that about two-thirds of the fertiliser used in Nepal comes through unofficial channels (Goletti, 2001) - equivalent to approximately 280 thousand tones. 2. Unofficial imports of fertiliser take place after hours at official border crossings and through unofficial border crossings. Fertiliser is transported by bullock carts, bicycles, pack animals, and by porter. Unofficial fertiliser is sold direct to farmers by small local importers or sold to dealers for resale to farmers. While Nepalese farmers benefit from access to cheap imports of Indian fertiliser, the lack of quality control and inappropriate use of unofficial imports are a cause for concern. 3. During the field survey conducted for this study, some traders and farmers questioned why the Government stops and seizes IFFCO Urea entering into Nepal through cross-border mechanisms whereas the National Co-operative Federation and other traders import it and sell at a much higher prices. Others even see a smell of corruption and play of commission. A trader satirically said, “If this is done because of just quality, Government should not allow even NCF and other importers to make a deal with the IFFCO”. He added, “ But IFFCO urea, whether it comes through official channels or through cross-border, is excellent. Farmers have been using both types of IFFCO urea and that they have no complains”. Purchasing officially imported fertiliser, particularly, urea is farmers’ powerlessness and compulsion. 4. Farmers questioned, “If quality is the issue, why does custom authorities auction fertilisers seized by them to use by the farmers.” This is against the spirit of the FCO. This is cheating us. 5. Not only urea, all types of fertilisers enter Nepal through informal/illegal sources. If police or some law enforcing authorities find, they seize fertilisers and take legal actions against the offender. On the other hand, custom has problem with regard to unofficial import of fertilisers not because of quality but they are concerned with disposal issue. They question, “Who will bear the cost of destroying those fertilisers? How to destroy those fertilisers? If it is destroyed, what will be its effect to the environment?” Therefore, they prefer to auction fertilisers using related legislation. 6. Fertiliser inspectors, investigation officer designated by FCO, prefer to remain blind for they are less aware of legal tactics and do not want to confront, partly due to role conflicts and partly due to the lack of awareness and support from the higher authorities. Police, District Administration and Revenue Investigation Authorities would often seize such fertilisers, and take action using other relevant legislation rather than use the FCO. Whatever be the consequences, some traders have found their own ways and mechanisms to bring in fertilisers and sell to farmers. Unofficial imports of fertiliser are driven by periodic localised shortages of fertiliser and substantial fertiliser price differences between Nepal and India. Mainly three factors - availability, prices and effectiveness in border control measures determine the level of unofficial flows of fertilisers from India to Nepal. Nevertheless, due to quality reasons and many types of DAP are manufactured in India, Nepalese farmers would prefer to buy Nepalese DAP provided these are available and price differences are not substantial.
29
Annex 2.4: Technology
Annex 2.4.1: APP research agenda and implementation status
Hills and Mountains Terai SN Area/input
/Output APP Agenda/priority Implementation status APP Agenda/priority Implementation status 1 Input • Allocate 60% of the
agricultural research budget to the development and extension of appropriate technology for the hills and mountains.
• Soil fertility research and
specialised activities on lead commodities
• Disciplinary share of agricultural research budget suggest Terai receiving a major research budget than the hills.
• No evidences for priority
given to the soil fertility research and research on lead commodities.
• Research and extension systems to prepare farming systems for shallow tubewells –multiple cropping
• NARC to emphasize water harvesting and developing sprinkler, water harvesting and developing sprinkler, drip, tribune pump and other forms of water conserving irrigation
• NARC and DOAD research geared towards ensuring continuous, profitable, effective, and environmentally sound growth in fertilizer use .
• The NARC and AIC should work in close cooperation in monitoring the growth in fertilizer use
• Expansion of research activities pertaining to the present major filed crops (rice, wheat, maize and potato).
• After first five years of the plan, emphasis need to include dairy animal nutrition, particularly fodder crop production and
Shallow tubewell based multiple cropping focused research yet not carried out An INGO, IDE has emerged as a pioneer in the development of water harvesting and micro irrigation technologies, and the DOI has established a new division in it. But the involvement of NARC in this regard could not be traced. No substantial initiatives from NARC to monitor growth in fertiliser use.
30
Hills and Mountains Terai SN Area/input/Output APP Agenda/priority Implementation status APP Agenda/priority Implementation status
utilization
2 Output Single “lead” crop and a single “lead” livestock commodity per ecological planning unit (EPU)10 Identified a number of subsidiary commodities in each EPU Extension to be channelled into the lead commodities
• Lead commodity is yet to be identified and promoted within the EPU framework.
• Extension follows PPS
approach and pockets identified based on district potentialities and not on lead commodities identified in the APP.
• Priority package emphasizes food grain production,
• • Development based on the
selection of quick return blocks, and move on to next blocks in sequential manner.
• Move towards food grain
self sufficiency
• Situation of rice exemplifies that most of the ‘modern’ rice varieties grown in Nepal are quite old and have degenerated.
• Our district analysis in
Bara, a Terai district, showed poor performance of research in terms of its responsiveness to farmers’ needs and priorities (see Box 1 in the main text). Likewise, western Nepal, is dominated by Sarju 52 and Kanchi Mansuli, Indian Rice. In Chaite season, 96% of farmers grew CH 45 a variety which was released in 1959.
10 APP has identified 10 EPUs in 5 development regions.
31
Annex 2.4.2: HRP funded projects by APP research priorities
Number of research project Investment APP Research Priorities Number Percent Amount (Rs 000) Percent
1) Resource productivity 14 10.7 38,804 9.6a) Soil fertility 9 6.9 24,071 5.9b) High intensity farming system revolving around modern shallow tube well
0 0.0 0 0.0
c) Integrated pest management 5 3.8 14,733 3.62) Basic food crops 21 16.0 65,439 16.1a) Rice 6 4.6 15,857 3.9b) Wheat 4 3.1 17,254 4.3c) Maize 6 4.6 17,281 4.3d) Potato 5 3.8 15,047 3.73) High value commodities 47 35.9 155,202 38.3a) Citrus 8 6.1 26,006 6.4b) Apples 3 2.3 8,868 2.2c) Livestock 13 9.9 50,795 12.5d) Vegetable 21 16.0 60,808 15.0e) Apiculture 1 0.8 3,950 1.0f) Sericulture 1 0.8 4,775 1.2Sub-total APP technology area 82 62.6 259,445 64.0Non-APP Priority area 49 37.4 146,049 36.0Total 131 100.0 405,494 100.0
Note- Dropped/ terminated projects are also included in the table. Source: NARMA, 2004
Annex 2.4.3: Share of public sector agricultural research budget
In million NRs. Research budget as % of
FY GDP AGDP National Budget
NARC budget
NARDF Budget
Total Research
budget GDP AGDP National budget
1997/98 289,798 112,495 62,022 322.8 - 322.8 0.11 0.29 0.52
1998/99 330,018 132,373 69,693 315.7 - 315.7 0.10 0.24 0.45
1999/00 366,251 145,131 77,238 372.6 - 372.6 0.10 0.26 0.48
2000/01 393,566 151,059 91,621 486.6 - 486.6 0.12 0.32 0.53
2001/02 405,632 160,144 99,792 577.8 - 577.8 0.14 0.36 0.58
2002/03 435,531 171,104 96,125 297.8 3.5 301.3 0.07 0.18 0.31
2003/04 472,424 183,357 102,400 300.6 6.2 306.8 0.06 0.17 0.30 Annual growth % 7.4 7.2 8.2 0.9 - 1.2
32
Annex 2.4.4: Share of public sector in agricultural extension budget
In million NRs. Extension budget as % of
FY GDP AGDP National Budget DOA DLS
Total Extension
budget GDP AGDP National budget
1997/98 289,798 112,495 62,022 654.8 517.5 1,172.3 0.40 1.04 1.891998/99 330,018 132,373 69,693 770.8 581.6 1,352.4 0.41 1.02 1.941999/00 366,251 145,131 77,238 1,198.7 660.7 1,859.4 0.51 1.28 2.412000/01 393,566 151,059 91,621 1,382.1 925.4 2,307.5 0.59 1.53 2.522001/02 405,632 160,144 99,792 1,810.9 1,002.7 2,813.6 0.69 1.76 2.822002/03 435531 171104 96125 1212.2 661.4 1873.6 0.43 1.10 1.952003/04 472424 183357 102400 1344.7 606.0 1950.7 0.41 1.06 1.90Annual Growth% 7.4 7.2 8.2 10.6 3.9 8.1
Annex 2.4.5: Budget allocation and expenditure in technology (research and extension)
In million NRs.
Research Total Extension Total Total (Technology) FY Allocation Expenditure Expenditure % Allocation Expenditure Expenditure % Allocation Expenditure Expenditure %
1997/98 322.8 264.2 81.85 1,172.3 1,131.2 96.49 1,495.1 1,395.4 93.3 1998/99 315.7 296.7 93.98 1,352.4 1,210.4 89.50 1,668.1 1,507.1 90.3 1999/00 372.6 331.1 88.86 1,859.4 1,468.7 78.99 2232 1,799.8 80.6 2000/01 486.6 424.6 87.26 2,307.5 1,714.2 74.29 2,794.1 2,138.8 76.5 2001/02 577.8 436.7 75.58 2,813.6 1,935.8 68.80 3,391.4 2,372.5 70.0 2002/03 301.3 268.2 89.01 1,873.6 1,498.8 80.00 2,174.9 1,767.0 81.2 2003/04 306.8 290 94.52 1,950.7 1,650.3 84.60 2,257.5 1,940.3 85.9 Annual Growth% 1.2 1.4 8.1 6.1 7.0 5.3
33
Annex: 2.4.6: Major functions/roles of different of organisational units of DOA in the delivery of agricultural
extension services (from bottom to the top)
S.N Responsible
organisations (Key actors)
Major functions/activities Remark
1. Agricultural services centre/sub-centres
• Plan programs in consultation with farmer groups, CBOs etc.
• Submit requests to DADO • Implement programs as approved
by DADO • Help farmers to adopt mproved
agricultural technologies • Help farmers to solve their farming
problems • Implement devolved agricultural
services programs in the respective focus/command VDCs.
JTs provide leadership at the Service Centres and generally JTAs are fielded at ASCs
3. District Agricultural Development Office (DADO)/ District Development Committee
- Review and submit district agricultural development program to District Council for approval in accordance with MOAC’s guidelines and NPC’s budget ceiling.
- Submit agricultural development annual plan and budget to DDC for approval as per MOAC’s instructions and guidelines
- Field and supervise frontline extension workers (JT/JTAs) in the district
- Implement, supervise and monitor agricultural development programs in the district
Key actor for agricultural development (crops, horticulture and fisheries) in the district Each of the 75 districts of the country has a DADO Pursuant to LSGA, Department of Agriculture delegated authorities (financial/program) to DDC, who is to further delegate authority to DADO.
6. Regional Directorate of Agriculture (RDA)
- Provide technical backstopping to DADO
- Co-ordinate agriculture (crops, horticulture and fisheries) programmes/units at the regional level
- Supervise and monitor district programs
- Administratively control DADO
- Each of the five regions of the country has a Regional Directorate of Agriculture
6 Programme Directorates
- Formulate national policies, strategies, plans and annual programmes in respective subject areas;
- Undertake regular monitoring and evaluation of programmes/projects in respective subject areas;
- Impart training and extension functions in respective subject areas
- Facilitate private sector participation in the respective areas as appropriate and applicable
12 Programme Directorates operate under the DOA
34
S.N Responsible organisations (Key actors)
Major functions/activities Remark
7. Department of Agriculture
- Provide technical backstopping to DADO
- Administratively control RDAs - Review and submit district
agricultural programs to the Ministry for approval
- Delegate financial and program implementation authorities to DADOs
- Enhance DDC's capacities for planning and supervising district programs
The lead public sector agency for extension services in crops, horticulture and fisheries sector.
35
Annex 2.4.7: Major functions/roles of different organisational units in the delivery of livestock extension
services S.N Responsible
organisations (Key actors)
Major functions/activities Remark
1. Livestock services Center/sub-centres
- Plan programs in consultation with farmer groups, CBOs etc.
- Submit monthly and periodic requests to DLSOs
- Implement programs as approved by DLSOs
- Help farmers to adopt improved agricultural technologies
- Help farmers to solve their farming problems
- Implement devolved livestock services programs
- JTs provide leadership at the Service Centres and generally JTAs are fielded at LSCs
3. District Livestock Development Office (DLSO)/ District Development Committee
- Review and submit district livestock/veterinary development program to District Council for approval in accordance with MOAC’s guidelines and NPC’s budget ceiling.
- Submit agricultural development annual plan and budget to DDC for approval as per MOAC’s instructions and guidelines
- Field and supervise frontline extension workers (JT/JTAs) in the district
- Implement, supervise and monitor livestock /veterinary development programs in the district
- Key actor for livestock services/veterinary development
- Each of the 75 districts of the country has a DLSOs
- Pursuant to LSGA, Department of Livestock Services delegated authorities (financial/program) to DDC, who is to further delegate authority to DLSOs
6. Regional Directorate of Agriculture (RDA)
- Provide technical backstopping to DLSO
- Co-ordinate livestock / veterinary programmes/units at the regional level
- Supervise and monitor district programs
- Administratively control DLSOs
- Each of the five regions of the country has a Regional Directorate of Livestocj Services
7 Programme Directorates
- Formulate national policies, strategies, plans and annual programmes in respective subject areas;
- Undertake regular monitoring and evaluation of programmes/projects in respective subject areas;
- Impart training and extension functions in respective subject areas
- Facilitate private sector participation in the respective areas as appropriate and applicable
- 4 Programme Directorates operate under the DLS
36
S.N Responsible organisations (Key actors)
Major functions/activities Remark
7. Department of Livestock Services
- Provide technical backstopping to DLSOs Administratively control RDAs
- Review and submit district livestock programs to the Ministry for approval
- Delegate financial and program implementation authorities to DLSOs
- Enhance DDC's capacities for planning and supervising district programs
- The lead public sector agency for extension services in various livestock species and veterinary services.
37
Annex 2.5: Road
Annex 2.5.1: APP agricultural road target (physical and financial)
Ecological Zone 20 years Target Phase I (first 10 years)
Target Phase II (second 10
years) Target Physical
km Financial Rs million
Physical km
Financial Rs million
Physical km
Financial Rs million
Terai 3400 2805 3400 2805 0 Hill 1950 4875 1428 3570 522 1305 Mountain 850 4250 318 1590 532 2660 Total 6200 11930 5146 7965 1054 3965
Source: Annex 2.5.2:
Physical and financial targets and progress
Physical
Financial
Fiscal year
Target Km
Progress of the year km
Cumulative Progress up to the year
against APP target
Target Rs Million
Progress of the year Rs Million
Cumulative Progress up to the year
against APP target
1997/98 181 0.00 224 0 1998/99 446 48 811 53 1999/00 537 94 1189 70 2000/01 537 172 1190 130 2001/02 537 150 1195 108 2002/03 537 250 1195 61 2003/04 537 140
1195 93
Total 3312 840 25.36 % 59235 515 4.3% Source:
Annex 2.5.3: Construction of rural roads
Projects Ninth Plan Progress-
construction of rural road length (Km),
Tenth Plan Target
Remarks
Rural community infrastructure works Programe (RCIW)
2361 440
Rural Infrastructure Development Project
161 500 ADB loan (Baglung, Kavre and Tanahu)
Agricultural road 326 500 Rural Agricultural Road and Local Development Construction
Local development construction programme
1619 NA* DDCs
Rural Infrastructure project NA 400 WB, 8 districts Rural Access Programme NA 500 Km DFID (6 districts) Total 2361 2340
Source:
38
Annex 2.5.4: Major rural road sector programs
SN
Major Rural Road Project /Duration
Funding agency District Covered
Project Cost/ Budget for current
Fiscal Year 2004/05
1 Local Development Construction program, LDCP continued since 1976
HMG 75 districts not fixed/ NRs 305 million
2 District Road Support Program, DRSP II 2002-2006
SDC/ HMG/ DDC
6 districts: Kavre, Sindhupalchok, Dolakha, Ramechhap, Okhaldhunga, Sindhuli
NRs 395 million/ NRs 95 million
3 Rural Access Program, RAP 2001-2007
DFID/ HMG
6 districts: Bhojpur, Sankhuwasabha, Kotang, Dailekh, Achham, Doti
NRs 1.4 billion / Rs 464 Million
4 Rural Infrastructure Development Program, RIDP 1997-2005
ADB/ HMG
3 districts: Baglung, Tanahu, Kavre
NRs 1.24 billion / NRs 223 million
5 Decentralized Rural Infrastructure and Livelihood Program, DRILP 2005-2010
ADB/SDC/HMG
18 districts:Darchula, Bajhang, Baitadi, Bajura, Kalikot, Mugu, Dolpa, Humla, Jumla, Jajarkot, Gorkha, Lamjung, Baglung, Myagdi, Okhaldhunga, Ramechap,Solukhumbu, Taplejung
US$ 55.4 Million / not allocated
6 Rural Access Improvement and decentralization program, RAIDP 2005-2010
WB/HMG 20 districts:Kailali, Bardiya, Banke, Salyan, Nawalparasi, Rupandehi, Palpa, Kapilbastu, Syangja, Kaski, Dhading, Nuwakot, Makwanpur, Rautahat, Sarlahi, Siraha, Udaypur, Mahottari, Dhanusa, Rasuwa
US$ 43 million/ NRs 153 million
7 Rural Road Maintenance Fund, RRMP since 2000
HMG/ Local Bodies
as per request by the districts not fixed/ NRs 99.4 million
8 Road Board Fund, RBF since 2004
HMG/ Local Bodies
as per the request by the districts not fixed/ NRs 44.5 million
9 Rural Community Infrastructure Works, RCIW 1996-2005
WFP/ GTZ/ HMG
30 districts NRs 3.37 billion / NRs 320 million
10 Decentralized finance and Development Program, DFDP 2000-2007
UNCDF/DFID
20 districts: Achham, Rupandehi, kaski, kavre, Dolakha, Dhanusa, Udayapur, tehrathum, darchula, Baitadi, Bajhang, Kailali, Humla, Mugu, Jumla, Jajarkot, Kukum, Salyan, Solukhumbu, Taplejung
US$ 10 million / NRs 40 million
11 People's Cost Sharing Development Program
HMG 40 districts not fixed/ NRs 400 million
12 DDC capital grant HMG All districts not fixed/ NRs 320 million
13 VDC capital grant HMG All VDCs not fixed/ NRs 1.46 billion
Source:
39
Annex 2.6: Rural electrification
Annex 2.6.1: Rural demand of electricity, by use category, Terai of Nepal 2014/15
Nepal 2014/15 Category
Megawatt Hours per year Percent Residential 794,488 41 Commercial 116,575 6 Irrigation 407,402 21 Cottage Industry 591,446 31 Others 174,86 1
Total 1,927,397 100 Source: APP
Annex 2.6.2: Proposed investment on rural electrification
Year Cost in Rs. MillionA. Transmission line construction Length of Transmission Line (km) 1999/2000 76 4562000/01 142 852Total 218 1308B. Subsidies for micro hydro Capacity 1997/98 20KW 11998/99 20KW 11999/00 20KW 12000/01 20KW 12001/02 20KW 15 yrs. Total 100KW 5 Source: APP Interim Plan 1997
Annex 2.6.3: Tenth plan budget allocation in rural electrification
Rs, million
Expected Growth Rate Normal Growth Rate
Particulars Total
AllotmentHMG
Source NEA
sourceTotal
Allotment HMG
Source NEA
sourceOther rural electrification 3301.2 3301.2 0 2751 2751 0Kailali, Kanchanpur electrification 1867.3 1263.2 604.2 1556.1 1052.6 503.5Rural electrification & distribution system reform 4074.8 3244.3 830.5 3395.7 2703.6 692.1Mid and Far western region rural electrification Project 812.6 690.2 122.3 558.6 474.5 84.11Rapti, Veri rural electrification 4.2 4.2 0 1.5 1.5 0Mechi Rural electrification 4.2 4.2 0 0.9 0.9 0Koshi, Sagarmatha, hill area rural electrification 4.2 4.2 0 0.9 0.9 0Western region hill area rural electrification 7 7 0 1.5 1.5 0Total 10075.5 8518.5 1557 8266.2 6986.5 1279.71Source:
40
Annex 2.7: Credit
Annex-2.7.1: APP estimates of credit requirement
Particulars Current Phase I Phase IIPhase
III Phase IV Total % share %
increaseFertilizers 316 3,618 7,523 14,051 24,147 49,339 45.1 12.8 Mountain 83 142 246 416 887 0.8 Hills 984 2046 3911 6898 13839 12.6 Tarai 2,551 5,335 9,894 16,833 34,613 31.6 Shallow tubewells 105 2,000 2,000 1,750 1,710 7,460 6.8 28.2 Livestock 661 4,440 7,186 11,518 18,548 41,692 38.1 31.7 High value crops 98 659 1060 1705 2747 6171 5.6 31.8 Agro-industry 77 517 832 1343 2163 4855 4.4 31.7 TOTAL 1,257 11,234 18,601 30,367 49,315 109,517 100.0 23.0 Mountain 83 142 246 416 887 0.8 Hill 984 2,046 ,3911 6,898 13,839 12.6 Tarai 4,551 7,335 11,644 18,543 42,073 38.4 Unallocated 5,616 9,078 14,566 23,458 52,718 48.1 % share 10.3 17.0 27.7 45.0 100 Source: APP 1995.
Annex 2.7.2: Lending activities of ADBN on APP specified purposes, 2002/03 and 2003/04
(Rs. In million)
2059/60 2060/61 Achievement/Target
Particulars Target Achievement Target Achievement 2059/60 2060/61 Total loan disbursement 10288 10115 10498 10151 98.3 96.7Loan on APP focused purpose 2421 4955 2521 4678 204.7 185.6 STWs 29 10 26 7 34.8 27.7 Fisheries 18 33 22 56 183.1 259.2 HVC 421 1349 529 1218 320.6 230.2 Livestock 875 1634 867 1597 186.8 184.3 Agro-industry 1079 1930 1077 1799 178.8 167.0Share of APP loan 23.5 49.0 24.0 46.1 Source: APP 1995.
41
Annex 2.7.3: Lending activities of ADBN on APP specified purposes, 2002/03 and 2003/04.
2059/60 2060/61 Achievement of Target (%) Particulars Target Achievement Target Achievement 2059/60 2060/61 Total loan disbursement 407,4725 8745,204 4346,229 9312,240 214.6 214.3 Cereal crops 226,464 772,538 217,580 708,572 341.1 325.7 Cash crops 220,984 1091,805 376,619 990,401 494.1 263.0 Special crops 199,752 257,166 152,462 227,305 128.7 149.1 Marketing 1030,168 2889,373 1109,925 3166,759 280.5 285.3 Irrigation 127,588 , 84,900 12,604 39.1 14.8 Land development 88,884 20,502 55,017 4,956 23.1 9.0 Agro-industry 1079,011 1929,612 1077,203 1845,786 178.8 171.3 Livestock 892,510 1634,038 888,251 1597,440 183.1 179.8 Horticulture 52,702 48,227 80,805 31,545 91.5 39.0 Tea and coffee 156,662 52,119 79,763 66,408 33.3 83.3 Non-agro credit and service 216,808 651,207 300.4 Micro-credit 6,896 9,257 134.2 Source:
42
Annex 2.8: Livestock
Annex 2.8.1: Average annual growth rate of milk production during 1997-2003
Average annual (GR) Ecological Zone
Quantity (Mt.) Percent Cow Mountain 282.2 0.84 Hill 3532.4 1.97 Terai 4486.3 3.42 Nepal 8304.8 2.42 Buffalo Mountain 1105.1 1.92 Hill 6477.3 1.45 Terai 15206.8 5.49 Nepal 22789.3 2.92 Total Mountain 1391.3 1.52 Hill 10009.7 1.60 Terai 19693.1 4.84 Nepal 31094.1 2.77
Annex 2.8.2:
Average annual growth rate of meat production during 1997-2003
Growth Rate Ecological Zone Quantity (Mt.) Percent
Mountain 291.2 1.74 Hill 1650.7 1.60 Terai 3637.9 4.85 Total 5579.8 2.87
Annex 2.8.3:
Average annual growth rate of meat animals/bird after APP implementation
Meat production Per capita meat Production
Population SN Species
Quantity (Mt)
Percent Quantity (Kg.)
Percent Number Percent
1 Buffalo 2820.8 2.26 0.0 -0.02 83627 2.31 2 Sheep -9.6 -0.29 0.0 -0.43 -6772 -0.8 3 Goats 1597.5 4.23 0.1 2.15 146719 2.26 4 Pigs 468.8 3.08 -0.1 -0.48 31851 3.49 5 Fowl 711.5 5.37 0.0 -0.26 1095277 5.53 6 Duck -7.9 -2.75 0.0 -2.29 -2014 -0.49 7 Total 5579.8 2.87 - - - -
Annex 2.8.4: Average annual growth rate of poultry during 1997-2003
Egg Production No.of laying hen Egg production
laying hen Per capita egg
Production Species
Number (‘000)
Percent Number Percent Number Percent Number Percent
Fowl 23033.5 4.69 276049.5 4.6 0.0 0.05 -0.2 -0.91 Duck 83.6 -0.53 -1129.2 -0.52 0.0 -0.01 0 -0.04
43
Annex 2.8.5: Trends in the poultry meat and egg production and business in Nepal
Indicators Unit 1996-97 97-98 98-99 99-2000 2000-01 01-02 02-03 03-04 Percent change
1 Number of Poultry Birds ('000) No 15,577 16,665 17,797 18,620 19,790 21,370 22,261 23,024 6
2 Meat M. Ton 10,671 11,400 12,146 12,659 13,259 14,118 14,756 15,881 63 Egg ('000) No 421,460 440,910 460,620 480,799 507,323 538,420 557,361 575,565 5
4 Sales value (Rs million) Rs 636 714 791 868 945 1,025 1,073 1,105 9
5 Number of farms (above 1000 birds) No 3,165 3,514 3,904 4,338 4,820 5,355 5,950 7,000 15
6 Association/Member Hatchery No - - - - 43 61 61 61 5
7 Employment (Household) days 39,842 43,826 48,209 53,030 51,104 55,648 55,648 55,440 5
8 Investment (million) Rs - - - 1,702 1,837 1,914 2,000 2
Sources: M.N. Lohani and others "Commercial Poultry Production, Nepal, 1997 and Nepal Hatchery and Poultry Association, 2005
Note: Production of poultry meat and eggs as per private sector estimate in 2004 are 37,100 m. ton and 432,422 thousand eggs respectively which differs from the estimates of the Ministry of Agriculture.
44
Annex 2.8.6: Registered private dairies operating through the country
Region Number Percentage Eastern 15 11.45 Central 73 55.74 Western 37 28.24 Mid-Western 4 3.05 Far-Western 2 1.52 Total 131 100
Annex: 2.8.7: DLS budget and expenditure during the post-APP period
Rs. 000
Budget Expenditure Total Percent (%) Year Central District Central District Budget Expenses Central District
1997/98 307076 202915 252049 190944 509991 442993 82.1 94.1 1998/99 337652 231844 266318 209824 569496 476142 78.9 90.5 1999/00 384964 262154 159163 254414 647118 413577 41.3 97.0 2000/01 575923 350537 368375 326086 926460 694461 64.0 93.0 2001/02 581969 413414 372775 338062 995383 710837 64.1 81.8 2002/03 307645 337169 250891 322371 644814 573262 81.6 95.6 2003/04 298682 290720 218312 277116 589402 495428 73.1 95.3 Average 399130 298393 269698 274117 697523 543814 Percent 1.0 7.5 1.1 7.4 3.8 4.3
Annex: 2.8.8:
Number of research projects and annual budget under NARC, Rs000
FY 2004/05 FY 2003/04 FY 2002/03 Sector No. % Budget % No. % Budget % No. % Budget %
Crop & Horticulture Related
230 51.8 38607 36.7 201 50.5 34762 35.0 205 50.4 31679 33.7
Livestock & Fishery
99 22.3 25455 24.2 96 24.1 24388 24.6 92 22.6 23057 24.5
Common 115 25.9 41027 39.1 101 25.4 40141 40.4 110 27.0 39210 41.8Total 444 100 105089 100 398 100 99291 100 407 100 93946 100
] Source-NARC
45
Annex 2.8.9: Number of livestock related research project & budget (Rs OOO) under NARC
FY 2004/05 FY 2003/04 FY 2002/03 Discipline
No. % Budget % No. % Budget % No. % Budget % Animal Breeding
28 28.3 9956 39.1 28 28.9 9775 39.7 29 26.4 11771 51.1
Animal Nutrition
12 12.1 1446 5.7 15 15.5 1650 6.8 18 16.4 2300 10.0
Pasture & fodder
15 15.2 1565 6.1 14 14.4 1368 5.6 12 11.0 2408 10.4
Animal Health
10 10.1 1290 5.1 8 8.2 1068 4.4 13 11.8 1937 8.4
Fishery 34 34.3 11198 44.0 30 30.9 10395 42.8 36 32.6 4524 19.6Other Animal
- - - - 2 2.1 137 0.7 2 1.8 117 0.5
Total 99 100 25455 100 97 100 24388 100 110 100 23057 100 Source-NARC
46
Annex 2.8.10: International assistance after the APP implementation
Sn Name of the Project Donor/type Project Finance Project Period Components 1 Third Livestock
Development Project (TLDP)
Asian Development Bank/Loan
ADB/M $ mil. 17.55 AUS/AID- $ mil.- 0.75 HMG/N-$ mil. 3.8 Beneficiaries-$ mil. 2.3 Participating Bank-$ mil. 3.5 Total 27.9 (# million)
1997/98- 2003/04
Intensive Livestock Development to increase livestock productivities. Develop Institutional capacity in public and private sector Support in livestock related agro processing marketing
2 Strengthening of veterinary services for Livestock Disease Control (SVLDC) projects
EC/grant EC- 8.7 mil Euro HMG- 0.4 mil Euro Total- 9.1 mil Euro
Oct 1995- Sept 2002
Legislative Programme Rinderpest eradication Strengthening of Veterinary field service. Disease Surveillance System. Manpower Development Vaccine production and supply Animal Health Awareness Information and communication
3 DANIDA Support Project (DSP) to National Dairy Development Board
Royal Danish Govt (DANIDA)/ Grant
DANIDA- 12.9 mil Danish Krooner and 120 mm of expertise service
June 1996- April 2001
Establishment of an autonomous NDDB Planning and coordinating the implementation of Dairy development Plan. Milk Cooperative development and quality milk production
4 Hills Leasehold Forestry and Development Project
IFAD loan and Netherland Grant
IFAD-$ mil 8.96 Netherlands-$ mil 12.0 HMG/N-$ mil 0.65 Farmers-$ mil 1.3m Total- $ mil 17.03m
1993/94- 2002/03
Formation of Farmer’s Group (Poor) Leasing the degraded forest to the farmers’ group. Support the farmers group for fodder production Credit facility from Bank
5 Community Livestock Project (CLDP) (yet to b effective)
Asian Development Bank/ Loan
ADB-$ mil 20.0 HMG/N-$ mil 5.0 Rural micro finance company-$ mil 6.5 Beneficiaries$ mil 1.5 Total-$ mil 33.0
2004/05- 2009/10
Market/Demand led approach Gender main straining Public/Private partnership Project management Support to local bodies for decentralization
47
Annex 2.8.11 Nepal’s membership at the WTO and the dairy industry
Many often advise Nepalese dairy industries to take advantage of quota of WTO for products of those countries in world market capable to produce high-quality milk and diary products at low cost. Theoretically, Nepalese dairy industry could give at least some relief to milk producers with regard to so called milk holiday, if they would be able to take the advantage of the WTO membership and start exporting milk and dairy products in international market. However, this seems easy in saying than done.
Similar to many developing countries, lberalisation of world trade in dairy products11 under the new world trade regime has brought about new challenges and opened up new export opportunities for the dairy industry in Nepal. This necessitates Nepal to enhance its competitive economic advantage in dairy products, in terms of both cost and quality, and to enhance its credibility in international markets. However, Nepal’s dairy sector is in desperate stage.
With regard to the cost of milk production. the cost of producing one kilogram of milk in Nepal is between NRs 13.5 and 15.5 depending on the type of farm, location etc. Internationally, the cost of milk production in Nepal is higher (by 50% or more) than in countries such as New Zealand and Australia. The cost of milk production is high because of factors such as low productivity per animal, poor feed and fodder supplies, inadequate extension services, poor research etc. Since, reduction in cost of milk production is not possible, the option available to reduce cost of production per unit of milk and thus keep domestic prices low is to increase the yield level of dairy animals. The average milk yield per animal in Nepal is one of the lowest in the world. Nepal has highest per capita livestock holding size and lowest productivity at least in Asia if not in the world.
The other issue is about the quality of the milk produced. As reported by Joshi (2002), the relatively high cost of producing milk of a general low quality is a major constraint of the Nepalese dairy industry and aggravated by the lack of transparent, accountable and open policy to promote and develop the dairy sector (see Box 1).
The cost of raw milk is increased due to the internal transport cost. Private entrepreneurs are required here to pay multiple local development taxes imposed by local/ district governments in the movement of goods for trade which
goes against to the trade policy 1992. The policy states that no restrictions will be imposed on the movements of products for internal trade. This issue was repeatedly raised by the district chamber of commerce during district analysis in Bara. The internal transport tax imposed by DDCs has increased the cost of agri-business output. Business persons had no objection to pay tax but they had problems in paying taxes at multiple levels, which is not friendly to dairy industry and private sector development . National Diary Development Policy drafted by NDDB is yet to be approved by the government. Likewise, the effectiveness of the code of practices for dairy industry formulated by the NDDB is not yet known and how will the dairy industry will respond to
11 The new world trade regime concerning dairy products became effective on 1 July 1995.
Box 1: Proper Dairy Development Policy Needed On the fourth annual general meeting organised by Nepal Dairy Product Corporation Association (NDPCA) in Jhapa on October 24, 2004, majority of the participants expressed their dissatisfaction with the government for not paying serious attention towards the promotion and development of dairy products. They demanded for the suitable Act to enable them to compete in the international markets. They reiterated that the failure of the government to introduce Dairy Development Act has resulted in severe difficulties to the farmers dealing dairy products.
48
it and adopt it is yet to be seen, The code was approved by the Government recently in FY 2004/05.
With regard to the quality issues, the National Dairy Development Board (NDDB)/DANIDA Support Project (DSP)’s 1999 survey on quality of milk and milk products in Nepal showed lack of standards, lack of pricing systems for raw milk and lack of monitoring of quality at all levels (Joshi and KC 2002). The study indicated about the weak implementation of the Food Act 1996 which was promulgated to protect consumers against hazards to their health from adulterated food; to protect and safeguard consumers against fraudulent and malfeasant practices in the food business; to ensure fair practice by food handlers; to help minimise dumping of hazardous and substandard food articles; and to determine and maintain the quality and standard of food. Dairy industries are often held responsible for their slackness to follow the minimum code of quality production during the manufacturing process. In order to benefit from the new trade opportunities, and protect growing domestic dairy Industries, Nepal needs to set and enforce high quality standards for various dairy products through an independent non-governmental authority. . For improving the quality of milk products, Nepal must adopt the latest processing and packaging technologies and professional management. Compliance with phytosanitary specifications will also be necessary in order to increase the export of dairy products.
While Nepal’s open border with India places pressure on Nepalese producers and processors to be efficient and competitive to Indian market, at the current price structure, it seems impossible. The cost of raw milk is higher in Nepal than in India. As a result of this, increasingly imports of dairy products at cheap prices from India and neighboring countries pose a threat to Nepalese domestic milk production. In Nepal, many hold the view that the open border shared by Nepal and India is a major barrier for the growth of domestic agricultural industry. The open border always has been supportive for the inflow of Indian produce that has eventually dominated the local market. The most destructive act for the fast growing Nepalese dairy sector is the import of cheap and dubious milk powder from abroad. The government has allowed the import of powder and condensed milk from Denmark, Australia, Singapore and New Zealand because production of milk is not uniform: there is a surplus during the winter months and a summer deficit.
If Nepal fails to improve its competitive advantage in milk production by improving milk yields, ensuring quality, better policy environment and reduction in per litre cost of production, there is strong possibility that WTO membership and the import of cheap and dubious milk powder are likely to bring nearly an end to Nepalese fast growing dairy industry. Seriousness is therefore required from all quarters at this stage, otherwise, in the near future, Nepal might become a dumping site for cheap milk powder. In order to remain competitive in the international market, Nepal needs to enhance productivity of milch animals and to introduce measures to improve sanitary standards with legal back-up in the milk production and processing sectors in the global free trade regime.
49
Annex 2.8.12: Policy reforms in the livestock sector
Focus
area APP 9th Plan 10th Plan N. Agriculture policy Implementation Status
Promote private farmers and business people to compete efficiency in the commercialisation process of livestock production system
• More attention for commercialisation of agriculture production system including livestock;
• Implementation of
extension programme through pocket package
• Agri. Extension not to
limit only on production but to take care of agri- business promotion and market interaction
• Involvement of private and non-government organizations in production marketing and processing in the feasible area.
• Promotion of local farmers and business organizations for the supply of inputs.
• Launching of extension and research programmes through partnership with private local community organization, NGO.
• Introduce concept of contract farming.
• Commercialisation of agriculture production system.
• Privatisation of agriculture Extension service in the commercial areas by involving NGO, cooperative etc.
• Promote contract farming
• MOAC adopted the concept of Partnership Programme which has been incorporated in the annual programme of DLS.
• Systems Learning Approach introduced to focus farmers as a primary stakeholder through ADB supported Third Livestock Development Project
Reforms in service delivery approaches and methodology
Integrate livestock development with infrastructure development like road, electricity.
.
Emphasize Pocket Package Strategy
• Pocket Package Strategy formulated in 1998/99, which is reflected in the annual programme of DLS thereafter.
Improve veterinary
services
Privatisation of animal health services.
• Privatisation of animal health service could not move smoothly despite support by the two externally assisted
50
Focus area
APP 9th Plan 10th Plan N. Agriculture policy Implementation Status
projects, TLDP and (SVLDC).
• Nearly 4000 VAHWs involved in providing animal health services in the rural areas (Table K…)
• By the end of FY 2004/05 there are 2426 no of veterinary medicine shops established by farmers group under government scheme and private business people (Table K)
• Animal Health and Livestock Service Act 1999 and The Animal Health and Livestock Service Rule 2000 enforced, Slaughter House and Meat Inspection Act 1999 promulgated and Slaughter House and Meat Inspection Rule 2001 issued but implemented only in Makawanpur district presently.
• Enforced the Nepal Veterinary Council Act 1999 and the Nepal Veterinary Council Rule 2001.
Removal of all subsides in livestock processing and marketing
• No financial subsidies available to livestock processing and marketing at the public sector
51
Focus area
APP 9th Plan 10th Plan N. Agriculture policy Implementation Status
Setting and enforcement of grade and standards and establish market information system.
• Directorate of Livestock Marketing Promotion and Livestock Quality Management Laboratory, and Veterinary Quality Control and Drug Administration Office under the DOLS established in 1999/00 and 2002/03 respectively.
Introduction of seasonal pricing policy in the milk collection by DDC.
• Seasonal pricing policy implemented for one and half year (July 1999 to January 2000) but discontinued thereafter.
Government support
Removal of restriction in the movement of livestock commodities across district
Exemption of local tax VAT in livestock products
• Exempted VAT in transportation of fresh milk and yoghurt, but still imposed in other dairy products
• No Local Tax in transportation of Livestock Product except poultry products, feed and feed ingredients.
Privatization
Privatization or provide free standing to public sector institutions
• Despite inclusion of the DDC under the privatisation list, it is yet to be privatised. However, Pokhara Milk Supply Schme, under the DDC sold out to a private businessman in 2004 as a par of government’s fulfilment for the loan conditionality of the CLDP
• Process for privatization of Animal Feed Development Company, Hetuda not yet
52
Focus area
APP 9th Plan 10th Plan N. Agriculture policy Implementation Status
initiated • Milk Producers Cooperatives
entrusted responsibility to collect milk for the DDC. 933 milk cooperatives operational at the end of FY 2002/03
Institutional reforms
NDDB to play positive role in promoting the private sector in the milk processing and marketing.
• NDDB developed code of practices for diary industry which has been approved by Government in FY 2004/05
• Support Cooperatives to established mini dairies in Jhapa, Morang, Dang amd Banke districts.
• Support cooperatives and private business to established 71 chilling vats.
• Organization training program in quality milk production, product diversification and maintenance of dairy equipments.
• National Diary Development Policy drafted by NDDB is still to be approved by the government
Legislation Firmly enforce The Aquatic Life Conservation and Utilization Act 1993.
• Aquatic Life Conservation Act amended in 1998 and the corresponding rule is still to be approved by the government.
53
Annex 2.8.13: Number of livestock groups formed after APP implementation
Farmers Group
Year Male Female Mixed Total Percentage of
Female 1997/98 3170 903 844 4926 18.31998/99 3407 1114 922 5443 20.51999/00 3416 1439 1139 5994 24.02000/01 2670 1774 2457 6901 25.72001/02 2776 1768 2395 6939 25.52002/03 2861 1885 2208 6954 27.1
Annex 2.8.14: Number of production pockets formed after APP implementation
Region Cattle Buff Goat Sheep Pigs Poultry Total (%) Eastern 28 26 80 1 31 2 168 20.8Central 5 43 80 3 33 - 164 20.4Western 33 83 118 2 40 19 295 36.6Mid-Western 2 23 56 4 14 - 99 12.3Far-Western 2 20 48 1 6 3 80 9.9Total 70 195 382 11 124 24 806 (%) 8.68 24.19 47.4 1.38 15.38 2.97 100
54
Annex 2.9: High Value Commodities
Annex 2.9.1: Targets and achievements of high value commodities in ninth plan
Year wise achievements Crops Description Base year
1996/97 Ninth Plan
Target 2001/02
Anticipated Growth Rate (%)
1997/98 1998/99 1999/2000 2000/01 2001/02Annual
Growth %
Citrus Area ( 000 ha) 15.9 20.9 5.6 17.0 18.0 19.0 20.7 22.4 7.10 Production (000 Mt) 93.0 126.0 6.3 100.4 107.3 115.1 121.7 130.9 7.08
Apple Area (000 ha) 4.7 6.9 8.3 4.8 5.0 5.2 6.3 6.6 7.29 Production (000 Mt) 28.6 31.4 1.9 29.4 30.5 31.2 31.8 32.3 2.47
Vegetable Area (000 ha) 145.0 160.0 2.0 150.0 14018.0 149.0 157.2 161.1 2.13 Production (000 Mt) 1350.0 1716.0 4.9 1449.5 1342.6 1489.7 1653.0 1738.1 5.18
Off sea. veg Production (000 Mt) 10.8 25.0 18.3 Na Na Na 18.76 Na 14.80Veg. Seed Production (Mt) 261.0 700.0 21.8 Na Na Na Na Na NaApiculture Honey prod (Mt) 60.0 85.0 7.2 100.0 129.0 150.0 155.0 Na 26.78Sericulture Cocoon prod (Mt) 24.5 44.0 12.4 18.0 20.0 26.0 31.0 Na 6.06Source: The ninth plan, His Majesty’s Government, National Planning Commission. 1997-2002 Agricultural Sector in the Ninth Plan, a statistical review of sub regions. 1997-2002 PC, Ninth Plan Mid –term Progress,2001
55
Annex 2.10: Agribusiness
Annex 2.10.1: Trends of selected agricultural production (1996-97 to 2003-04)
Quantity in M.Ton.
Commodity 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 %
Cereal Crops 6,425,640 6,360,789 6,465,318 6,985,277 7,171,781 7,247,289 7,360,400 7,746,352 2.56
Oilseed 119,250 110,226 119,731 122,751 132,331 134,950 124,931 132,865 1.42
Sugarcane 1,629,300 1,762,580 1,971,646 2,103,426 221,178 2,247,990 2,343,054 2,305,326 5.10
Legumes/Pulses 223,000 211,250 228,840 237,325 243,243 250,400 256,900 265,360 2.37
Potato 997,400 971,680 1,091,218 1,182,500 1,313,717 1,380,196 1,401,710 1,430,270 5.42
Fresh Vegetables 1,357,435 1,449,475 1,342,567 1,489,665 1,652,980 1,738,087 1,799,973 1,890,100 4.90
Fruit 406,092 447,440 437,090 478,479 462,147 473,490 518,864 511,397 3.24
Milk 1,012,163 1,048,040 1,072,945 1,097,023 1,124,132 1,158,780 1,195,931 1,231,853 2.71
Tea 290 3,021 4,493 5,085 6,638 7,518 - 11,651 490
Coffee 3 56 48 72 89 139 - 217 890
Meat 174,268 180,675 185,035 189,166 194,257 198,895 203,899 208,412 2.44
Fish 23,200 24,866 25,780 31,723 33,250 35,000 36,530 39,947 9.0
Cardamom 3,423 3,852 433 6,530 6,080 617 - 5,983 9.3
Poultry Meat 10,671 11,400 12,146 12,659 13,259 14,118 14,756 15,881 6.10
Veg Seeds - 271 271 717 588 700 700 708 23.0
Eggs (number in thousands) 421,460 440,910 430,620 480,799 507,323 538,420 557,361 575,565 4.57
Honey 6 100 129 150 155 - - 577 1189
56
Annex 2.10.2: Comparative performances of agri-business enterprises In Nepal
(1996-97 To 2003-04)
1996-97
2001-02
Performance Indicators
All manufact
uring establish
ments
Agri-business establish
ments
% of Agri-
business establish
ments
All manufac
turing establish
ments
Agri-busines
s establishments
% of Agri-business establish
ments
% Change
Number of Enterprises 3,557 1,740 49 3,213 1,377 43 -6
Persons Employed 187,316 114,674 61 181,943 93,663 51 -10
Investment (Rs. million) 33,052 20,372 62 62,206 34,808 56 -6
Output (Rs. million) 54,927 35,299 64 94,811 56,080 59 -15
Source: Central bureau of Statistics 1997-1998 and 2001-02
57
Annex 2.10.3: Trends in the vegetable seeds production and business in Nepal
Indicators Unit 1996-97 97-98 98-99 99-2000 2000-01 01-02 02-03 03-04 Growth %
1 Vegetable Seeds Areas Ha NA 100 365 90 518 610 610 610 63
2 Seeds Production Ton NA 271 271 717 588 763 700 707 20
3 Sales Volume (million) Rs NA 20 20 30 50 73 73 75 34
4 Export Value (million) Rs NA 1.5 2.6 9.4 4.7 NA 2.5 5 29
5 Number of Companies No NA 15 18 20 30 25 35 35 16
6 Association/Members No NA 102 112 124 147 150 158 162 7
7 Employment (days) No NA 306 336 373 441 450 474 486 7
8 Total Investment (million) Rs NA 22.5 27 30 45 37.5 52.5 52.5 16
9 Investment per seed company (thousands) Rs NA 642 771 857 1,285 1,071 1,500 1,500 16
Sources: Seed Entrepreneurs Association of Nepal, " A Report on Vegetable Seed Trade Survery",2003-2004 and AEC Commodity Reports, Kathmandu, 2005
58
Annex 2.10.4: Trends in flower production and business in Nepal
Indicators Unit 1996-97 97-98 98-99 99-
2000 2000-
01 01-02 02-03 03-04 Growth %
1 Area under Flower Hectare NA 5 10 10 12 20 25 27 55
2 Production of Stems (per day) No 4,000 5,075 7,725 7,725 10,775 10,775 10,850 11,750 24
3 Number of Nurseries No 80 120 200 200 250 250 450 550 73
4 Export (Rs/million) Rs NA 4 - 1.5 4 25 18 11 21
5 Association/Member No 55 82 101 120 133 133 187 192 31
6 Sales value (Million) Rs 30 40 56 61 70 70 170 200 70
7 No of flower shops in Kathmandu No 14 14 22 33 36 38 50 56 37
8 Employment (No) Days 240 360 600 600 750 750 1350 1650 73
9 Total Investment in '000 Rs Rs 6,000 9,000 15,000 15,000 18,750 18,750 33,750 41,250 73
Sources: Floriculture Association of Nepal, 2005 and AEC
59
Annex 2.10.5: Trends in the tea production and business in Nepal
Indicators Unit 1996-97 97-98 98-99 99-2000 2000-01 01-02 02-03 03-04 Growth %
1 Tea Area in Hectares Ha 3,502 4,515 10,250 10,250 11,997 12,346 12,643 15,012 41
2 Production M. Ton 2,906 3,019 4,493 5,085 6,638 7,518 8,198 11,651 37
3 Sales volume (Rs million) Rs 320 354 568 646 683 859 859 2,000 65
4 Export (Rs/million) Rs 22 12 30 26 24 28 54 104 46
5 Number of Companies No NA 20 132 98 120 192 192 173 95
6 Association/Member No NA NA 7 7 19 19 19 19 21
7 Employment days 8,750 11,280 25,620 25,620 29,990 30,865 31,600 37,560 41
8
Total Investment on working capital (million)
Rs 174 181 269 305 398 452 492 699 37
Source: Nepal Tea and Coffee Development Board and AEC 2004
60
Annex 2.10.6: Table: Trends in dairy production and business in Nepal
Indicators Unit 1996-97 97-98 98-99 99-2000 2000-01 01-02 02-03 03-04 Growth %
1 Milk Production M. Ton 1012163 1048040 1072945 1097023 1124132 1158780 1195931 1231853 3
2 Dairy Processing Litre/Day M. Ton 37,000 90,000 94,000 99,000 370,000 381,000 393,000 474,000 147
3 Sales Value (Rs/million) Rs 635 657 686 723 2,971 3,059 3,156 4,000 66
4 Number of Dairy Enterprises No 52 - - - 131 - - 225 41
5 Association/Members No NA - - - 100 - - 100 -
6 Employment (Households) No 60,000 - - - 75,000 - - 95,000 7
7 Investment (million) Days 416 - - - 5,550 - - 7,110 201
8 Milk Cooperatives Rs NA - - - 1,000 - - 1,365 4
Sources: National Dairy Development board 2005 and AEC
61
Annex 2.10.7: Trends in the poultry meat and egg production and business in Nepal
Indicators Unit 1996-97 97-98 98-99 99-2000 2000-01 01-02 02-03 03-04 Growth %
1 Number of Poultry Birds ('000)
No 15,577 16,665 17,797 18,620 19,790 21,370 22,261 23,024 6
2 Meat M. Ton 10,671 11,400 12,146 12,659 13,259 14,118 14,756 15,881 6
3 Egg ('000) No 421,460 440,910
460,620 480,799 507,323 538,420 557,361 575,565 5
4 Sales value (Rs million) Rs 636 714 791 868 945 1,025 1,073 1,105 9
5 Number of farms (above 1000 birds)
No 3,165 3,514 3,904 4,338 4,820 5,355 5,950 7,000 15
6 Association/Member Hatchery No - - - - 43 61 61 61 5
7 Employment (Household) days 39,842 43,826 48,209 53,030 51,104 55,648 55,648 55,440 5
8 Investment (million) Rs - - - 1,702 1,837 1,914 2,000 2
Sources: M.N. Lohani and others "Commercial Poultry Production, Nepal, 1997 and Nepal Hatchery and Poultry Association, 2005
Note: Production of poultry meat and eggs as per private sector estimate in 2004 are 37,100 m. ton and 432,422 thousand eggs respectively which differs from the estimates of the Ministry of Agriculture.
62
Annex 2.10.8: Nepal’s agriculture trade
Exports Imports Fiscal
Years
Tot
al E
xpor
ts
Foo
d an
d Li
ve
Ani
mal
s (0
)
Tob
acco
and
B
ever
ages
(1)
Ani
mal
and
Ve
geta
ble
Oil
and
Fats
(4)
Oth
er E
xpor
ts
Tot
al Im
port
s
Foo
d an
d Li
ve
Ani
mal
s (0
)
Tob
acco
and
B
ever
ages
(1)
Ani
mal
and
Ve
geta
ble
Oil
and
Fats
(4)
1974/75 890 518 0 2 369 1,815 243 19 7 1975/76 1,186 804 4 2 376 1,982 291 42 7 1976/77 1,165 600 12 5 548 2,008 249 20 8 1977/78 1,046 405 11 6 624 2,469 323 44 31 1978/79 1,297 489 14 17 778 2,885 292 36 22 1979/80 1,151 307 3 20 821 3,480 413 26 26 1980/81 1,609 589 15 38 967 4,428 601 25 93 1981/82 1,492 736 18 40 693 4,930 619 36 64 1982/83 1,132 328 13 42 749 6,314 925 63 66 1983/84 1,704 584 5 68 1,047 6,514 728 72 79 1984/85 2,741 992 5 57 1,686 7,742 783 79 123 1985/86 3,078 836 0 61 2,181 9,377 971 113 102 1986/87 2,991 704 4 117 2,167 10,905 1,029 144 176 1987/88 4,115 804 10 171 3,129 13,870 1,524 172 353 1988/89 4,195 578 7 100 3,511 16,084 1,333 197 343 1989/90 5,156 616 4 20 4,516 18,325 1,608 227 476 1990/91 7,388 987 11 202 6,188 23,227 1,821 257 742 1991/92 13,707 1,942 14 160 11,591 31,940 2,948 288 802 1992/93 17,267 1,863 13 176 15,214 39,206 3,025 469 1,085 1993/94 19,293 1,163 13 138 17,979 51,571 4,085 368 1,457 1994/95 17,639 1,563 11 215 15,851 63,679 4,464 501 2,056 1995/96 19,881 1,947 10 251 17,674 74,455 4,786 509 2,831 1996/97 22,637 2,662 15 313 19,647 93,553 5,401 591 2,328 1997/98 27,514 3,123 23 2,136 22,231 89,002 4,929 800 2,026 1998/99 35,676 3,725 50 3,597 28,305 87,075 7,170 846 3,329 1999/00 49,823 4,240 117 3,230 42,235 108,505 10,839 907 4,446 2000/01 55,654 4,777 76 4,104 46,698 115,687 5,994 906 5,589 2001/02 46,945 5,094 146 7,421 34,284 107,389 6,333 717 7,888 2002/03 49,931 6,101 139 4,279 39,412 124,352 9,371 792 7,751 2003/04 25,536 3,031 6 1,358 21,141 136,277 8,554 1,027 8,634
63
Annex 2.10.8: Agreements made by Nepal with WTO in relation to agriculture
Terms of accession of goods 1 Customs tariffs (para.37 and
Goods Schedule) • Nepal has bound all tariffs lines except on arms,
cement and petroleum product • The average applied tariffs rate us about 11% • The average tariffs bound rate is 39% at the date of
accession subject to lowering it down to 24% in the long run
• The harmonized system of commodity classification (HS system) is in vogue in Nepal
2 Other Duties and Charges – ODCs (para. 41)
• Nepal has committed to gradual elimination of ODCs between two and ten years time from the date of accession
• After ten years ODCs will be bound at zero • For ten years Nepal shall apply ODCs subject to
gradual reduction • 2.5 – 4.5%on imports of agricultural goods have
been levied as ODCs at the date of accession • 2.5 – 11.5% on imports of industrial goods have
been levied as ODCs at the date of accession • Nepal has also committed not to introduce new
ODCs 3 Export Restrictions (para
80,81,84) • Nepal has confirmed that it would continue export
restrictions on exhaustible natural resources such as logs, timber and mamira.
• The restriction is also imposed to fulfill the obligations arising from different MEAs to which Nepal is a party.
• Nepal also said that it would not allow export of those flora and fauna that are prohibited for export to respect the obligations arising from the CITES.
• Export restriction on raw hides, skins and raw wool is temporarily applied and Nepal would lift the ban at an appropriate time.
• Nepal would review the export ban on imported raw materials, parts and capital goods in the light of Article III and XI of GATT 1994.
4 Subsidies (paras. 87,88,89) • Nepal did not provide direct payment of incentives to any industry.
• Nepal provides certain exemptions in terms of income tax, sale tax, excise tax, excise duty and customs duties to the industries qualifying under the conditions stated in Industrial Enterprise Act, 1992.
• Nepal has committed to identify subsidy measures incompatible with the WTO and eliminate them.
• Upon the entry into force of the Nepal's Accession Protocol, Nepal has committed to notify the Committee on Subsidies all the necessary information in the regard.
• Nepal has committed to administer its subsidy
64
programmes in full conformity with WTO Agreement on Subsidies and Countervailing Measures.
5 Sanitary and Phytosanitary Measures (para. 103, 106, 107)
• Nepal is a party to different international instruments and has different laws to harmonise and implement the sanitary and phytosanitary measures.
• Nepal is also a member of different international organizations and follows international standards including Codex Alimentarius and has different laws to adopt and implement the sanitary measures.
• Nepal has also informed about lack of technical expertise to implement the SPS Agreement.
• Ministry of Agriculture and Cooperatives (MoAC) would establish an SPS enquiry point by 1 January 2004.
• Nepal would fully implement the SPS Agreement by 31 December 2006.
• Nepal has confirmed to review laws and regulations relating to SPS Measures and accordingly amend necessary legislation.
• Nepal has committed to apply existing measures in a non-discriminatory manner to all imports.
• Measures already in conformity with SPS would not be subject transition period.
• Nepal has made a commitment to ensure that any changes during transitional period would not result in a lesser degree of consistency with the provisions of the SPS Agreement than existed on the date of accession.
• Technical regulations and other measures adopted during this period would be developed in conformity with the provisions of the SPS Agreement.
• Nepal has also committed to notify existing SPS measures to the Committee on Sanitary and Phytosanitary Measures.
• Nepal has expressed its interest for technical assistance.
• Nepal has established an Inquiry Points in the Department of Food Technology and Quality Control (DFTQC) under ministry of Agriculture and Cooperatives before the deadline of June 2003.
• Nepal would fully participate in the work of the SPS Committee.
65
Terms of accession on Trips 1 Membership (Paras.12) • Nepal is a member of WIPO since 4 Feb. 1997.
• Nepal is a member of Paris Convention since 22 June 2001.
• Nepal has committed to join Berne Convention by December 2005.
• Nepal has committed to join Rome Convention and Treaty on Intellectual Property Rights by December 2006.
• Nepal has also said that it would also look at other WIPO and IP related Conventions e.g. Geneva Phonograms Convention, WIPO Copyright Treaty and the WIPO Performance and Phonograms Treaty in terms of national interest and explore the possibility of joining them in the future, as appropriate.
66
Annex 2.11: Forestry
Annex 2.11.1: Area coverage of CFs
Area in ,000 ha
Total Forest area*
Potential CF** Area
% of potential CF area of total forest area
CF Handed over Forest Area ***
% of handed over as CF area to potential CF area
EDR 951.3 677.8 71.3 299.3 44.16 CDR 1,634.4 574.0 35.1 249.0 43.38 WDR 991.2 932.5 94.1 171.2 18.36 MWDR 1,152.4 871.8 75.6 279.9 32.11 FWDR 1,098.7 522.6 47.6 139.8 26.75 Nepal 5,828.0 3,578.7 61.4 1,139.2 31.83 Mountain 1,954.3 1,408.9 72.1 217.8 15.46 Hills 3,386.4 1,952.2 57.6 769.6 39.42 Terai 487.3 217.6 44.7 151.8 69.76 * Computed from Forest and Shrub Cover of Nepal 1994, Department of Forest Research and Survey, 1999 ** Computed from Community Forestry Manual, *** Computed from Community Forestry Database (As on 31st March, 2005)
Annex 2.11.2: Area and households coverage of CFs by development and physio-graphic region
CF Number Area Households
Number Percent Area Percent Total HH CF member
HHs % of total
HHs
% of CF Members
HHs EDR 2,579 18.7 299,347 26.3 1,012,968 319,281 31.5 20.3 CDR 3,250 23.6 249,040 21.9 1,475,477 389,094 26.4 24.7 WDR 3,638 26.4 171,169 15.0 863,045 405,864 47.0 25.8 MWDR 2,517 18.3 279,890 24.6 534,310 278,313 52.1 17.7 FWDR 1,807 13.1 139,788 12.3 367,420 182,960 49.8 11.6 Nepal 13,791 100.0 1,139,233 100.0 4,253,220 1,575,512 37.0 100.0 Mountains 2,336 16.9 217,845 19.1 269,769 234,229 86.8 14.9 Hills 10,348 75.0 769,572 67.6 2,032,871 1,099,177 54.1 69.8 Terai 1,107 8.0 151,817 13.3 1,950,580 242,106 12.4 15.4
67
Annex 2.11.3: Cumulative average annual growth rate of CFUGs number
Development Region Physio-graphic Region
Number EDR CDR WDR MWDR FWDR Nepal Mountains Hills Terai Up to 1996/97 1,642 1,565 1,967 1,278 1,065 7,517 1,304 5,831 382 1997/98 1,884 1,857 2,324 1,629 1,276 8,970 1,584 6,843 543 1998/99 2,058 2,124 2,647 1,887 1,410 10,126 1,772 7,685 669 1999/00 2,217 2,349 2,923 2,165 1,544 11,198 1,919 8,502 777 2000/01 2,308 2,655 3,119 2,306 1,664 12,052 2,078 9,130 844 2001/02 2,376 2,903 3,273 2,383 1,714 12,649 2,174 9,543 932 2002/03 2,473 3,087 3,453 2,460 1,763 13,236 2,277 9,954 1,005 2003/04 2,553 3,241 3,638 2,510 1,807 13,749 2,336 10,320 1,093 2004/05 2,579 3,250 3,638 2,517 1,807 13,791 2,336 10,348 1,107 Growth rate (%) 5.0 8.7 7.0 7.0 5.8 6.8 6.5 6.5 11.0
Annex 2.11 4: Cumulative average annual growth rate of CFUGs area handed over
Development Region Physio-graphic Region
Area EDR CDR WDR MWDR FWDR Nepal Mountains Hills Terai Up to 1996/97 165,276 114,783 88,238 136,647 76,787.0 581,731.4 119,959.3 406,293.0 55,479.1 1997/98 195,004 144,729 107,797 173,992 97,321.2 718,843.3 149,847.4 487,919.4 81,076.6 1998/99 221,035 161,769 125,211 203,320 107,034.5 818,369.4 160,226.6 559,558.7 98,584.1 1999/00 242,839 175,749 140,550 232,552 119,943.4 911,633.3 173,683.4 627,588.7 110,361.2 2000/01 259,721 201,584 149,094 255,206 131,014.7 996,619.9 194,414.6 680,516.2 121,689.1 2001/02 271,350 222,143 154,445 264,728 135,632.6 1,048,296.9 205,705.0 710,635.0 131,956.9 2002/03 282,689 235,505 162,185 274,293 137,435.6 1,092,107.9 213,853.7 739,418.8 138,835.4 2003/04 294,949 247,411 171,169 278,739 139,787.7 1,132,056.2 217,844.5 764,877.9 149,333.8 2004/05 299,347 249,040 171,169 279,890 139,787.7 1,139,232.6 217,844.5 769,571.5 151,816.6 Growth rate (%) 6.6 8.9 7.2 7.6 6.3 7.4 6.7 7.1 10.0
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Annex 2.11 5: Annex 3 Table 5: Cumulative average annual growth rate of households’ coverage of CF programme
Development Physiographic
Households EDR CDR WDR MWDR FWDR Nepal Mountains Hills Terai Up to 1996/97 183,657 187,493 226,810 136,327 102,848 837,135 127,819 612,547 96,769 1997/98 217,950 223,023 265,289 175,329 126,176 1,007,767 156,874 722,714 128,179 1998/99 242,809 250,638 301,283 204,103 143,526 1,142,359 176,871 811,762 153,726 1999/00 262,789 277,784 332,423 233,566 157,660 1,264,222 192,380 901,856 169,986 2000/01 275,314 314,882 352,399 250,601 168,627 1,361,823 208,260 965,902 187,661 2001/02 288,411 344,101 368,993 258,772 175,841 1,436,118 218,207 1,011,900 206,011 2002/03 302,911 368,747 386,276 267,724 179,115 1,504,773 228,137 1,056,791 219,845 2003/04 315,018 387,409 405,864 275,902 182,960 1,567,153 234,229 1,094,819 238,105 2004/05 319,281 389,094 405,864 278,313 182,960 1,575,512 234,229 1,099,177 242,106 Growth rate (%) 6.1 8.8 6.6 7.4 6.1 7.1 6.6 6.6 9.9
69
Annex 2.11.6: Status of private forests
PF Area
Number Percent ha percent EDR 883 36.8 1,141.7 48.9 CDR 996 41.5 772.5 33.1 WDR 308 12.8 258.4 11.1 CDR 157 6.5 95.4 4.1 MWDR 58 2.4 65.1 2.8 Total 2,402 100.0 2,333.0 100.0 Mountains 53 2.2 40.6 1.7 Hills 426 17.7 671.0 28.8 Terai 1,923 80.1 1,621.4 69.5
.
70
Annex 2.11.7: Cumulative average annual growth rate of PF area
Development region Physiographic region
EDR CDR WDR MWDR FWDR Nepal Mountains Hills Terai Upto 1996/97 897.8 546.3 200.4 63.5 22.6 1,730.6 37.1 596.5 1,097.1 1997/98 1,025.9 649.5 243.0 69.9 29.1 2,017.4 37.1 641.0 1,339.4 1998/99 1,089.7 699.2 245.8 75.9 37.3 2,147.9 40.6 649.2 1,458.1 1999/00 1,096.7 719.6 251.0 77.5 46.5 2,191.3 40.6 658.3 1,492.4 2000/01 1,109.6 745.2 251.0 79.1 53.7 2,238.5 40.6 659.5 1,538.4 2001/02 1,131.7 752.1 252.0 87.9 64.2 2,287.9 40.6 663.8 1,583.5 2002/03 1,139.8 752.1 252.9 91.9 65.1 2,301.7 40.6 665.5 1,595.6 2003/04 1,141.7 772.5 258.4 95.4 65.1 2,333.0 40.6 671.0 1,621.4 Growth rate (%) 2.7 3.9 2.3 5.5 14.0 3.4 1.3 1.3 4.4
Annex 2.11.8:
Cumulative average annual growth rate of LF groups
Development region Physiographic region Number EDR CDR WDR MWDR FWDR Nepal Mountains Hills Terai
Upto 1996/97 - 544 25 - - 569 115 428 26 1997/98 - 880 97 - - 977 156 751 70 1998/99 - 1,143 162 - - 1,305 181 1,004 120 1999/00 - 1,304 250 - - 1,554 201 1,203 150 2000/01 - 1,390 272 - - 1,662 217 1,285 160 2001/02 24 1,390 272 10 10 1,706 217 1,329 160 2002/03 66 1,478 315 48 49 1,956 242 1,544 170 2003/04 101 1,530 345 78 67 2,121 252 1,689 180 Growth rate (%) 55.3 10.6 20.2 57.1 56.2 13.7 9.1 14.3 15.7
71
Annex 2.11.9: Cumulative average annual growth rate of area coverage of LF programmes
Development region Physiographic region Area EDR CDR WDR MWDR FWDR Nepal Mountians Hills Terai
Upto 1996/97 - 2,470.6 88.3 - - 2,558.9 428.4 2,039.3 91.2 1997/98 - 3,928.2 303.5 - - 4,231.8 585.5 3,371.4 274.9 1998/99 - 4,941.0 535.7 - - 5,476.7 701.5 4,307.2 468.0 1999/00 - 5,645.6 877.0 - - 6,522.6 824.9 5,107.6 590.1 2000/01 - 6,065.7 978.5 - - 7,044.2 888.5 5,482.9 672.9 2001/02 57.3 6,065.7 978.5 59.8 24.6 7,185.9 888.5 5,624.5 672.9 2002/03 167.6 6,425.0 1,149.0 148.4 147.0 8,036.9 1,003.2 6,302.7 731.1 2003/04 265.5 6,602.7 1,233.0 233.9 171.9 8,506.9 1,026.3 6,718.0 762.6 Growth rate (%) 55.7 10.2 21.2 55.1 55.8 12.7 10.4 12.6 17.1
Annex 2.11.10:
Cumulative average annual growth rate of household coverage of LF
Development region Physiographic region Households EDR CDR WDR MWDR FWDR Nepal Mountain Hills Terai
Upto 1996/97 - 3,785 142 - - 3,927 880 2,886 161 1997/98 - 6,088 533 - - 6,621 1,220 4,964 437 1998/99 - 7,894 935 - - 8,829 1,417 6,657 755 1999/00 - 9,106 1,489 - - 10,595 1,577 8,060 958 2000/01 - 9,838 1,649 - - 11,487 1,717 8,732 1,038 2001/02 155 9,838 1,649 92 53 11,787 1,717 9,032 1,038 2002/03 452 10,535 1,982 357 367 13,693 1,948 10,627 1,118 2003/04 733 10,928 2,173 616 642 15,092 2,028 11,876 1,188 Growth rate (%) 55.8 11.0 21.4 57.0 58.2 14.3 9.7 15.0 16.4
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Annex 2.11.11: Preparation of OFMP for commercial forest management
Districts Year of plan
approval No of Plans Terai Inner Terai
1995 2 Rautahat and Bara - 1996 4 Parsa, Nawalparasi, Rupandehi Makwanpur 1997 0 1998 10 Jhapa, Morang, Sunsari, Sarlahi, Banke,
Bardiya, Kailali, Kaplivastu Ilam, Udaypur
1999 3 Chitwan, Kanchanpur and Dhanusha
73
Annex 2.11.12: Achievements of soil and watershed conservation programmes
Unit 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 Growth rate %
Land use development planning Preparation of sub watershed plan per unit 16 15 29.35 46 20 12 9 23 -3.3Preparation of forest work plan per unit 75 58 18 173 12 13 5 59 -12.8Preparation of land use and community development plan per unit 101 65 471 87.1Natural disaster control Control Galley erosion per unit 56 72 66 56 8 20 0 5 -30.4Control landslide Ha. 30 39 54 53 5 0 5 4 -28.2Construction of conservation pond per unit 24 44 31 87 46 79 39 19 1.1Bioengineering/torrent control KM 117.61 4 -186.8Development infrastructure protection Irrigation canal KM 65.6 65 48.81 51.93 5 12.25 10 9 -29.5River sides KM 7.03 7.6 14.9 4.3 -1.1Shelter belt/ greenbelt KM 4 2.5 1 1 -49.4Land productivity conservation Terrace improvement Ha. 257.16 295 219.25 189 75 300 183 439.42 4.1Rehabilitation of degraded land Ha. 615.9 617 420.5 329.7 105 300 241 24 -23.7Cultivation of fruit plant Ha. 13 68 19 37 2659 79.8Fodder/grass cultivation Ha. 53.7 57 7 27.5 -35.4Community soil conservation Programme Water source protection per unit 83 99 50.24 147 20 98 105 51 -2.6Demonstration of Small watershed per unit 22 19 8.6 19 10 14 17 -5.4Conservation education in School level times 133 146 146 173 136 185 252 117 3.7Soil conservation Tour/training for farmers Person 880 913 1345 1890 3095 4254 2045 3125 17.0Community Development programme Community 44 35 -22.8Income generating programme HH 8 7 25 1309 116.3Community soil conservation special programme Place 6 216 94.6Establishment of Nursery per unit 20 35 31.7 16 5 4 5 5 -27.3Extension materials unit 40880 42590 26830 34911 29950 -8.4
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Annex 2.11.13: Level of investment on APP priority programmes up to 2004
APP priority programme APP requirement
Up to 2004 (Rs Million) Actual investment
Up to 2004 (Rs Million) Percent Community forestry 1444 342 23.7 National Forestry 1293 248 19.2 Private and leasehold forestry 650 155 23.8 Supportive programs 609 16 2.6 Total 3996 760 19.0
Annex 2.11.14: Average annual growth on budget allocation, release and expenditure of APP priority
programmes after APP implementation
HMGN Foreign aid Total
Bud
get
Allo
catio
n
Rel
ease
Expe
nse
Bud
get
Rel
ease
Expe
nse
Bud
get
Rel
ease
Expe
nse
Community forestry (11.3)
(11.7) (11.7)
(3.6)
5.5
5.2 (4.6) 2.8 2.6
Leasehold forestry 35.1
(3.1) (3.1)
(36.7)
(19.5)
(19.5) (31.8)
(17.4) (17.4)
National Forestry and leasehold forestry
(2.0)
(1.1) (1.4)
(1.1)
(0.3)
(0.3) (3.1)
(1.3) (1.7)
Supportive programs (16.1)
(30.2) (30.2) 0.4
50.0
50.0 (6.1)
(18.9) (18.9)
Total (3.5)
(2.9) (3.7)
(12.6)
(4.1)
(4.4) (9.1)
(3.6) (4.1)
Source: Computed from Annual report of DOF
Annex 2.11.15: Expenditure on forestry sector
Unit: Million Rs
Year Development Regular Total 1996/97 463.8 512.9 976.7 1997/98 410.4 539.6 950 1998/99 480.5 731.8 1212.3 1999/00 519 790.9 1309.9 2000/01 478.9 829.4 1308.3 2001/02 630.9 1007.8 1638.7 2002/03 623.9 1021.2 1645.1 Annual growth rate % 6.4 11.8 9.6
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Annex 2.11.16: Foreign aid on forestry sector
Grant Aid Loan Aid Total
1996/97 168.1 51.1 219.21997/98 111.4 81.1 192.51998/99 76 113.2 189.21999/00 172.7 37.3 2102000/01 96.7 26.4 123.12001/02 227 0 2272002/03 302.6 18.8 321.4Slope 23.407 -12.354 11.054Average 164.93 46.843 211.77Percent 14.2 -26.4 5.2
76
Annex 2.11.17: Donor assisted projects on forestry sector
Name Sector Initiated Year
Completed Year
Funding Agencies
No of District
Remark
Nepal Australia Community Resource Management Project
Forestry
1997
2002 AusAid 2 Started from 1992
Nepal Denmark Watershed Management Project
Watershed Mgmt. 1997
2003 DANIDA 3
Nepal Denmark Natural Resource Management Sector Assistant Programme
Watershed Mgmt.
1997
2003 DANIDA 20
Bagmati Integrated Watershed Management Project – Phase Ii
Watershed Mgmt.
1997 2003 EU 6 Community Development and Forest Watershed Conservation Project – Phase Ii
Watershed Mgmt.
1999 2004 JICA 2 Nepal Swiss Community Development Programme
Forestry 2000 2004 Swiss Government
3 Started from 1990
Dhading Resource Management Project
Forestry 2000 2003 UNM/USAID 1
Churia Forest Development Programme
Forestry 2001 2003/04 GTZ 3 Started from 1992
Livelihoods and foresty project
Forestry 2001 2011 DFID 15
Terai Arc Landscape project Forestry 2001 2006 WWF 14
Chure Watershed management Project
Watershed Mgmt.
2001 2006 CARE/Nepal 2
Biodiversity Sector Programme-Siwalik-Terai
Forestry 2002 2006 The Netherlands
8
Strengtheinign Advocacy for governed utilisation of Natural Resource Programme (SAGUN)
Forestry 2002 2006 USAID 4
BIo-diversity sector Programme for Shiwaliks and Terai BISEP-ST
Watershed Mgmt.
2002 2006 SNV/Nepal 3
Nepal Australia Community Resource management and Livelihoods Programme
Forestry 2003 2009 AusAid 2
Started from 1992
Nepal Australia Community resource Management and Livelihoods
Watershed Mgmt.
2003 2009 AIDAB 2
Natural Resource Sector management assistance programme
Forestry 2004 2005 DANIDA 38
Tree Improvement and Silviculture Component
Forestry 1998
2003 DANIDA 75 Started from 1982
Community Forestry Development Programme- center
Forestry
1999
2003 DANIDA 0
Community Forestry Development Programme-district
Forestry
1999
2003 DANIDA 38
Source: Computed from Annual report of DOF and DSCWM
77
Annex 2.11.18: Policy reforms within forestry sector after APP implementation
SN Policies and
procedures Year Focus
1 BZ Management Guidelines, 1999
1999 Made provisions directing 30-50 percent of Protected area revenues for community development activities in the Buffer Zone
2 CF inventory guideline, 2000
2000 Provides guidelines for growing stock assessment
3 Leasehold forestry policy, 2002
2002 Involvement of poor households and enterprises on forest management and utilisation; emphasis on eco-tourism and private sector participation
4 CF guidelines, 2002 2002 Handing over procedures and steps of CF; emphasised on social mobilisation
5 National Biodiversity Strategy, 2003
2003 Biodiversity conservation and economic development; Involvement of NGOs in conservation
6 Monitoring and evaluation concepts and strategies, 2003
2003 Monitoring and evaluation
7 Collaborative forest management guidelines, 2003
2003 Sustainable forest management in Terai; collaboration and partnerships with local governments on forest management;
8 Forest products auctioning procedures, 2003
2003 Competitive marketing of forest products
9 Terai Arc landscape board strategies, 2003
2003 Biodiversity conservation at landscape level and livelihoods promotions
10 Working procedures for involvement of NGOs on management of Protected areas, 2004
2004 Streamlining government role on conservation; NGOs involvement in conservation
11 Wild life farming, reproduction and research policy, 2004
2004 Biodiversity conservation, income generation; private sector involvement in conservation and poverty reduction
12 Non government service provider guidelines, 2004
2004 Involvement of NGOs in provision of services in forestry sector development, sustainable forest management
13 Herbs and Non timber forest products development policy, 2004
2004 Promotion of MAPs and NTFPs through polycentric organisations; enterprise development, poverty reduction, better forest management
14 Forest Sector Foreign Aid policy guidelines, 2004
2004 Sector wide approach in foreign sector development, donor coordination; sustainable forest development and poverty reduction
15 Human Resources Strategy, 2004
2004 Training and organisational development, sector wide approach in forestry
16 Guidelines for Initial Environmental Examination in forestry sector, 2004
2004 G
78
Annex 2. 11.19: Forestry sector analysis
Particulars APP Policy, Directives,
Guidelines and Target etc. Performance/achievements/
deviations Remarks/comments
A. Physical Target None for the forestry sector, suggest to follow FSMP
(a) Community forestry
Focus on 51 hill districts, − Expanded to 74 districts, except Mustang − In Terai 68% of the potential CF handed over
to FUGs, comparative figures for Mountains and Hills are 15 and 39 % respectively covering 87% and 55% households
− Average cumulative growth rate of CFUGs number, area of handed over forests and households’ coverage under CF increasing annually at the rate of 6.8 %, 7.4% and 7.1 % respectively.
− Moved beyond APP’s focus − This figures seem inadequate and too little
considering the potentialities and demands of the local people. Still many applications are pending with the DFOs.
− Contemporary literatures show, however, serious problems with elite dominance (elite capture), primarily by men over women, the wealthy over the poor and dominant castes over other castes.
− CFUGS often challenge the government on policy related and legal issues as empowered within the framework of FECOFUN.
(b) Private and leasehold forestry
− Encouraged both pure plantations or intermixed with agricultural crops in the form of agroforestry.
− Endorsed leasehold forestry (LF) for the expansion of forage and pasture area to enhance production of the livestock sector,
− Average cumulative growth rate of PF area in Terai, Hills and Mountains recorded at 4.4, 1.3 and 1.3 percent respectively, and national average-3.4%.
− Above figures could be misguiding because many people reluctant to register PF.
− Encouraging performance- by April 2005, 2,121 LH groups formed and handed over 8507 ha of forestlands to 15,122 families.
This figures seem inadequate and too little considering the potentialities and demands of the local people.
(a) Commercial forestry management in Terai
Focus on 24 Terai and Inner Terai Districts
− Despite 19 OFMPs prepared, not fully implemented.
− FECOFUN’s legal protests for continued access of the communities to forests in Terai, Inner Terai and Churia hills impeded the implementation.
− Government shifted to collaborative forest management.
79
Particulars APP Policy, Directives, Guidelines and Target etc.
Performance/achievements/ deviations
Remarks/comments
B. Investment Sought foreign assistance for
the commercial management of the Terai forests. APP projection-3996 miiion
− No direct assistance available for commercial forest management. Donors such as DFID and SNV supported for piloting collaborative forest mgt.
− The budget allocated for APP priority programmes on forestry sector until 2004 is 19 percent of amount envisaged by APP. By component wise, 24 percent in CF and leasehold forestry programme, and just 2.6 percent for supportive programmes.
− Total investment=760 million − Number of donor supported projects
increased- 18 projects undertaken after APP. Some were continued projects with new name and focus areas. e.g, NUKCFP-LFP.
− donor support has now shifted from forest development to forestry sector development
C. Policy measures
− Resolve conflicts with existing acts, rules and regulations regarding the management, harvesting and utilization of the forest products, ownership of the forest resources in the district.
− Expand the roles of the NGOs in organizing community forestry through large scale contracting for services under strict quality control measures
− Still Forest Act conflicts with the LSGA and sectoral legislations in several fronts, Forest Act 1993 conflicts with Leasehold Forest Policy particularly with regard to the powers of the DFO to handover forest to the leasehold groups
− NGOs are involved in the CF but under different policy regime, no rules and regulations exist to contract out or outsource NGOs to organize community forestry, but they have roles in activities such as OP revisions, social mobilization and facilitating hand over processes.
− Forest authorities are directed by Master Plan for forestry Sector (MPFS) 1989, Forest Policy and Forest Act.
− At least 16 policies, guidelines or directives which among others include National Biodiversity Strategy 2003 and Revised Forest Policy 2000, approved by the government in the forestry sector, of which some relate to the APP and others are not directly dealt by it. These policies mostly follow changing development paradigm for the forestry sector (Principles of sustainable development, polycentric institutions, decentralization and people's participation in natural resource management).
− Some gaps between policy objectives and accomplishments observed, particularly in
80
Particulars APP Policy, Directives, Guidelines and Target etc.
Performance/achievements/ deviations
Remarks/comments
in revenue sharing mechanisms among and between user groups, local government bodies and central government.
D. Institutional aspects
− Not envisaged any major institutional reforms in forestry sector for delivery of services.
− Emphasized for establishing institutional linkages between Forestry Research and Services Center, now Department of Forest Research and Survey (DFRS) and NARC for conducting research in agro-forestry system.
− No institutional arrangement developed for undertaking joint researches on agro-forestry by these two institutions.
− Forest sector coordination committees formed at central, regional and district levels. This could duplicate the roles and responsibilities APP coordination committees, and may dilute the importance of APP committees, particularly in relation to agriculture and forestry.
Above provide reasons for study teams assessment for forestry sector as follows- Physical achievement- Partial, Investment- Inadequate and too little, Policy reforms- forward looking, advanced to APP, but still conflicts and contradictions with sectoral legislations and LSGA, and institutional aspects- not supportive to the APP concerns, and many innovative measures introduced. Forestry sector more advanced and progressive than that of APP with the inclusion of development concepts like livelihoods forestry, collaborative forestry, Terai Arc Landscape, Churia Action Plan, forestry sector planning, and little attention to soil and watershed conservation issues and integration of development and conservation issues being addressed under the buffer-zones of the protected areas.
81
Annex 3: State of APP Impacts
Annex 3.2: Poverty reduction
Annex 3.2.1: Trends in rural poverty with and without APP, 1991/92 to 2014/15 (Incidence in percent and
number of poor in millions)
Region 1991/92 1994/95 1999/00 2004/05 2009/10 2014/15
Mountains Incidence 64 (64) 62 (62) 56 (58) 44 (49) 29 (43) 19 (34)
Number of poor 1.0 1.0 1.0 0.8 0.5 0.4
Hills Incidence 64 (64) 63 (63) 53 (56) 40 (50) 27 (45) 19 (39)
Number of poor 5.1 5.3 4.9 3.9 2.8 2.1
Terai Incidence 34 (34) 33 (33) 26 (33) 19 (29) 14 (25) 9 (21)
Number of Poor 2.8 3.0 2.7 2.3 1.9 1.3
Nepal Incidence 49 (49) 49 (49) 40 (45) 30 (39) 20 (34) 14 (29)
Number of poor 8.9 (8.9) 9.3 (9.3) 8.5 (9.5) 7.0 (9.3) 5.2 (8.9) 3.8 (8.4) Source: APPROSC, Kathmandu and John Mellor Associates, Inc., Washington DC, 1995 Note: Figures in parentheses refer to case without APP
Annex 3.2.2:
Poverty measures for Nepal based on Nepal Living Standards Survey (NLSS): 1995/96 and 2003/04
Head-count Index (proportion of population below poverty line) Region
1995/1996 2003/04 Ecological Zone
Mountain 57.0 32.6 Hills 40.7 34.5 Terai 40.3 27.6
Sector Urban 21.6 9.6 Rural 43.3 34.6
National Average 41.8 30.85 Source: NPC 1998; CBS 2005 (based on work in progress)
82
Annex 3.2.3: Incidence of poverty among rural household groups
Household Types Poor
household (%)Poor HH as a % of
total rural population Per Capita Incomes
(1995 NRs.) Small Farmers-Mountains 29.03 4.76 7,652 Small Farmers- Eastern-hills 42.56 16.88 6,881 Small Farmers – Western Hills
35.05 17.58 7,323
Small Farmers – Terai 25.10 14.47 8,832 Medium Farmers – Terai 17.35 4.91 8,670 Medium farmers –Eastern Hills and Mountains
35.98 6.19 7,737
Medium farmers –Western Hills and Mountains
18.31 2.26 9,365
Large Farmers 18.93 4.71 11,211 Agricultural Laborers 45.64 13.25 5,922 Non-farm – Terai 19.96 6.23 11,402 Non-farm -Other 31.61 9.43 10,493 Total 29.70 100.0 8,596
Source: CBS 2005 (preliminary work in collaboration with the World Bank, based on NLSS 2003/04)
Annex 3.2.4: Income shares in rural Nepal (2003/04)
(All in percent except mentioned explicitly) Consumption Quintile
Group
Crop Livestock
Agricultural Wage labour
Non-Agricultural Wage labour
Non-farm self
employment
Remittances
Other Real per capita
income (95/96 NRs)
Lowest 28.50 9.65 21.56 17.7 5.1 10.3 7.2 3730Q2 28.77 12.18 15.41 16.6 6.3 12.6 8.1 5293Q3 28.46 11.77 9.45 15.0 7.5 18.1 9.7 7094Q4 28.85 12.17 6.92 12.45 9,15 16.9 13.5 9153Q5 21.07 9.42 1.73 14.3 14.2 19.9 19.3 17693Total 25.54 10.75 7.51 14.6 10.3 17.2 14.1 8596
Source: CBS / World Bank, 2005
83
Annex 3.3: Food Security
Annex-3.3.1: Per capita edible food supply targets of APP
Description Mountain Hill Terai NEPAL 1991/92 163 233 338 277 1994/95 163 229 337 276 1999/00 178 259 379 312 2004/05 197 300 417 352 2009/10 222 347 452 393 2014/15 245 380 482 426
SSoouurrccee:: AAPPPP 11999955
Annex 3.3.2: Food balance situation in Nepal, 1996/97 to 2003/04.
1996/
97 1997/
98 1998/
99 1999/
00 2000/
01 2001/
02 2002/
03 2003/
04 Total cereal production ( 000 mt) 6,426 6,361 6,465 6,985 7,172 7,247 7,360 7,746Total edible cereal (mt) 3,973 4,027 4,098 4,452 4,513 4,543 4,641 4,836Population (million) 2.09 2.13 2.18 2.23 2.29 2.34 2.39 2.45Per capita edible cereal (kg) 190 188 187 198 197 194 194 197Total edible cereal requirement (000 mt) 4,079 4,178 4,279 4,383 4,430 4,463 4,566 4,683Surplus/deficit (000 mt) -107 -151 -182 68 83 80 76 153Proportion edible (%) 0.618 0.633 0.634 0.637 0.629 0.627 0.631 0.624Edible (000 mt) Rice 2,003 2,036 2,074 2,259 2,357 2,294 2,271 2,426Maize 895 941 920 1,007 1,001 1,000 1,060 1,123Wheat 827 807 856 935 915 1009 1069 1049Millet 237 234 239 242 232 232 232 230Barley 11 10 9 8 8 8 9 8Total 3,973 4,027 4,098 4,452 4,513 4,543 4,641 4,836Raw (000 mt) Rice 3,711 3,641 3,710 4,030 4,217 4,165 4,133 4,456Maize 1,317 1,367 1,346 1,445 1,484 1,511 1,569 1,590Wheat 1,072 1,030 1,086 1,184 1,158 1,258 1,344 1,387Millet 289 285 291 295 283 283 283 283Barley 37 37 32 31 31 31 32 30Total 6,426 6,360 6,465 6,985 7,173 7,248 7,361 7,746Proportion edible Rice 0.540 0.559 0.559 0.561 0.559 0.551 0.550 0.544Maize 0.679 0.688 0.684 0.697 0.675 0.662 0.675 0.706Wheat 0.772 0.783 0.788 0.790 0.790 0.802 0.795 0.756Millet 0.819 0.820 0.820 0.820 0.820 0.820 0.820 0.811Barley 0.290 0.276 0.274 0.275 0.271 0.275 0.272 0.259Total 0.618 0.633 0.634 0.637 0.629 0.627 0.631 0.624
Source: CBS 2003, The Statistical Yearbook of Nepal 2003, Central Bureau of Statistics, HMG/N
84
Annex-3.3.3: Food balance situation 2002/03
(in mt) Belt Population Rice Wheat Maize Millet Barley Total Reqmt Balance
BY ECOLOGICAL BELT Hills 1728,288 55,763 1069,257 1059,751 231,931 8613 262764 330,103 -67,339Mountain 10568,028 522,202 348,512 816,005 176,696 3913 1867328 2124,174 -256,846Terai 11665,965 1693,949 663,395 144,052 9,615 363 2511374 2111,540 399,834
BY DEVELOPMENT REGION EDR 5497,697 782,296 211,826 260,185 57,815 559 1312,681 1032,753 279,928CDR 8358,860 704,879 350,372 310,969 56,636 1,035 1423,891 1592,605 -168,714WDR 4705,923 414,435 208,959 272,947 90,426 1,434 988,201 909,116 79,085MWDR 3116,620 197,758 172,982 184,538 18,188 4,031 577,497 597,585 -20,088FWDR 2283,181 172,546 125,118 31,112 8,866 15,54 3391,96 433,758 -94,562
OVERALL NEPAL 23962,281 2271,914 2081,164 2019,808 418242 12889 4641,466 4565,816 75,650
Source: CBS 2003
85
Annex 3.4: Environment
Annex-3.4.1: APP assumptions on sectors/theme influencing environment
SN Sectors Assumptions 1 Poverty Reduction The most environmentally positive consequence of the APP is
a radical reduction in Poverty. 2 Better land Use As rural income increase, farmers will stop cultivating the most
fragile land and relocate such land to grasses and trees. Expanded community and Sal forests would have a particularly beneficial impact in the Siwaliks, since they would check and reverse the worsening land degradation there. High-Value commodities prioritized by the APP will provide a soil-conserving tree cover. High value of output per hectare from fruits and sericulture will assist in withdrawing cereals production from marginal lands, restoring tree plantation on slope-lands, and promoting soil conservation. The situation of converting existing terai forest into arable agriculture does not arise for APP for at least twenty years because of rapid expansion of terai irrigation, which is expected to play a key role in boosting income. Effective management of both grass and tree fodder has a strong interactive relationship with community forestry. The community forestry thus becomes a means of integrating grassland management with trees.
3 Dispersed urbanization The increased income under the APP will check the migration trend by providing employment opportunities in the newly emerging urban centers dispersed across the country.
4 Resource Management None 5 Education The most important measure for protecting environment is
education. 6 Legislations None 7 Gender Women are the principal managers of natural resources, and
they play a key role in sustainable development 8 Institutional Capacity None
86
Annex 3.4.2: APP sectoral targets on environmental impact
SN Sectors Targets 1 Poverty
Reduction • With the growth that is expected to emanate from the improved
productivity of land and labor over the next twenty years, the incidence of poverty should decline from initial 49 percent to 14 percent.
• The number of poor would decrease to less than 4 million at the end of the APP period.
2 Better land Use • Increasing in the profitability of environmentally sound farming systems through strong measures in research and extension in collaboration of farmers.
3 Dispersed urbanization
• Increased irrigation in the Terai will lead to decrease in the conversion of forestland into arable lands.
4 Resource Management
• Strict regulations should be made on grazing of steep slopes, marginal lands, and Churia ranges that are environmentally fragile and of low agricultural productivity.
• Churia range should be given particular priority as a “ protected area’ under an appropriate management programme.
• Integrated Plant Nutrition System (IPNS) should be implemented through the collaboration between DOAD and NARC. Farmers should be educated about the importance of a balanced use of chemical fertilizer and organic plant nutrient sources; and it should promote the use of appropriate ratio of nutrients (N:P:K) in the form of chemical fertilizers that will increase the uptake efficiency of plants and reduce leaching into the water table.
• Balance between removal of nutrients and replacement should be done through the use of farmyard manure, chemical fertilizers, and mulching with crop residues; the use of agriculture lime on acidic soils; and in the hills and mountains; conservation-farming techniques such as contour cultivation.
• Integrate the management of watersheds, livestock and rangelands, and forest.
• IPM should be implemented on a crop-specific basis, by combining chemical, biological, and cultural methods of controlling pest; developing and promoting resistant varieties; and rotating crops.
• Combination of biological measures and locally available materials to minimize soil erosion and landslide should be done.
• Green belt should be made on either side of the agriculture road. • Development of forests and other permanent vegetation covers in
catchment areas of hydro-powers dams, upper watersheds and water sources should be done.
5 Education • Incorporation of ecological and environmental courses in the syllabi of schools and universities with effective teaching materials.
6 Legislations • Implementation Action Plan of NEPAP should be made. • Development projects on roads, irrigation canals, hydropowers
dams, and agro-industries should undergo both an initial environmental assessment and an environmental impact assessment.
7 Gender • Promote the use of alternative sources of energy such as biogas and fuel-efficient cookstoves to save women’s time and protect the environment.
• Expand income-generating activities such as sericulture, fruit farming, and the planting of fuelwood trees, which are especially easy for women to fit into their time frame.
• Preference must be given to women farmers in the protection,
87
SN Sectors Targets conservation and management of CF.
8 Institutional Capacity
• Highest priority should be given to strengthening the capacity of NARC and DOAD.
• The capacity of the Ground Water Board and DOI should be enhanced.
• DOAD, DOI and NARC need to expand their institutional linkages with universities, research organizations and NGOs.
• International assistance is needed to strengthen research facilities, improve data management and information system.
New Problems 1 Fertilizers • Research must focus on the proper selection, timing, and
application rates of nutrients and farmers must participate in the research and extension processes.
• Undertake vigorous research and extension programme that can point the way to sound environmental management.
2 Pesticides • rigorous research and extension on IPM 3 Ground Water • The permit system should be strengthened to limit the extraction
of ground water. 4 Biodiversity • None
88
Annex 3.5: Gender
Annex 3.5.1: Gender concerns of the APP by priority Inputs and Outputs, and Impacts
Theme Priority Areas Gender concerns Inputs Irrigation Emphasises on the role of women in irrigation
development Women farmers to be encouraged and given priority in
forming water users’ groups and in training directed at the organization and management of irrigation systems.
Some measures also suggested to expand the participation of women
Fertiliser Improved access of women to credit, and provision of at least one woman in ADBN’s fertilizer cell
Involve women farmers in the dissemination of fertiliser knowledge
Technology Research to understand women’s time allocations and input of labor-saving devices, particularly for household and livestock activities
Technology improvements be designed to relieve women farmers from their time burden
Appropriate banking system to be developed to provide women with easy and direct access to financial institutions
Roads and power
None
Outputs Livestock Given the high growth rates expected of the livestock sector, efforts to improve rural women should be targeted
Develop a sound planning system to enable women farmers to participate in all stages of the planning cycle for livestock production and marketing and in extension education activities
High Value Crop
Specific attention to be given to lending to women Institutional structure relating to HVCs be open to women
and structured to service them The major probes of risk and risk aversion need to be
addressed particularly from the point of view of women NARC to make a specific effort to involve women in trials
of high value commodities and to find work to reduce the labour burden on women
Agribusiness Provide opportunities for women farmers to achieve some degree of economic independence
Need for research and technology policy that deliberately involves women in every aspects of research by relating to their specific socioeconomic and agroecological condition.
Train women in entrepreneurial and operational skills, and identify the specific training needs of different categories of women (depending on ecological region, ethnic community, and economic status)
Improved access of women to credit Forestry Suggested to include women in community forestry for
seemingly benefits for the forestry and women themselves (win-win situation)
Provide opportunity for the involvement of women in agro-forestry
Impact Poverty APP will contribute to uplift the status of women, and help to gain access to resources, particularly land. Women’s share in income from livestock, horticulture and agro-industries increased.
89
Theme Priority Areas Gender concerns Environment Promote women’s participation in all community
organizations and in all development and environment related projects.
Make women central to that efforts on exploration, revival and improvements on indigenous techniques that have been locally adapted
Specific programs for integrating environment-related activities and messages in the training and extension programmes of the DOA
Promote the use of alternative sources of energy such as biogas and fuel-efficient cookstoves to save women’s time and protect the environment;
Give preference to women in the protection, conservation, and management of community forestry
Expand income generating activities such as sericulture, fruit farming, and the plantation of fulewood trees
Promote local women’s institutions dedicated to the sustainable development and management of agriculture and the environment..
Hills and Mountains
Special emphasis to be given to the needs of women, particularly in forming groups in priority inputs, priority outputs, obtaining credits, and in training in plucking, picking, grading and packing fruits and vegetables.
SIDAP (equivalent to DADC) may wish to impose sanctions on agencies that do not include women in their programs,
Terai Special emphasis to be given to the needs of women, particularly in forming irrigation groups, obtaining credits for fertilizer, constructing shallow tubewells, producing livestock and in training in plucking, picking, grading and packing fruits and vegetables.
90
Annex 3.5.2: Female participation in group activities, 2003
Group Members
Male Female S.N. Particulars Total
No. % No. % 1 Community Forestry Programme 147771 111839 76 35932 24
2 Rural Community Infrastructure Work (Food for Work) 60230 39916 66 20314 34
3 Participatory District Development Programme (PDDP) 459700 236566 51 223134 49
4 Farmer Groups (DOA) 146802 56335 38 90467 62
5 Sustainable Soil Management Project (SSMP) 33785 15942 47 17843 53
6 Miscellaneous Cooperatives 372250 321996 86 50254 14 Total 1220538 782594 64 437944 36
Executive Members Male Female S.N. Particulars
Total No. % No. %
1 Irrigation Water User Associations 6206 5795 93.4 411 7
2 Sustainable Soil Management Project (SSMP) 3325 1499
45.1 1826 55
Total 9531 7294
76.5 2237 23 Source: An Exploratory Study of Gender, Social Inclusion and Empowerment through Development Groups and Group-Based Organisations in Nepal: Building on the Positive, Stephen D. Biggs, Suitra M Gurung, Don Messerschemidt, November 2004
91
Annex 3.5.3: Mainstreaming gender considerations into national plan and sectoral policies
Policies/Plan Mainstreaming Gender Considerations
Tenth plan (2002-07) • Emphasis will be laid on women’s skill development and business enhancement by including them in mainstream of agricultural and livestock service promotion
• To enhance the knowledge, level of skill and to raise the standards of living of women and the farmers of underprivileged community, on-site training will be provided through mobilization of specific programs.
• The families of J.T. and J.T.A. will be encouraged to open agrovet where they are posted to provide services to the farmers.
• The greater participation of the cooperatives, the private sector and women group will be encouraged in market management and operation.
Contribution to Gender Equity through the programs and policies • The involvement of women in the agricultural programmes on and average
will be 40% while it will be more than 60% in programmes like vegetable farming, horticulture and silk farming
• Participation of women will increase because of the skills and expertise of women cooperatives and women groups in different cooperatives
Tenth plan (Forest policy)
• Effective participation of women in the management of forest and use of forest resources will be increased.
• The participation of women in the leadership level shall be increased to discourage gender inequity by raising awareness about the gender equality in all forest related and community related development programs
• The aspect of gender equality will be taken into consideration in the trainings on human resource development in forestry sector
National Agriculture Policy, 2004
• Women’s involvement and participation will be raised to 50 percent in the implementation of all agricultural programmes where it is possible
• Women’s involvement and participation will be raised to 50 percent in the implementation of all agricultural programmes where it is possible.
• With respect to women’s training, arrangements will be made, as far as possible, to conduct mobile training programmes to take training programmes closer to villages and households. The flow of information and data relating to the involvement of women in the programmes will be ensured.
Rural Infrastructure Policy, 2004
• Special emphasis will be given to gender equity in the planning, implementation, and operation of rural infrastructure projects. In the first place, gender policy will be adopted so as to increase women participation in the projects and reflect the benefits/welfare of women in the development of projects.. Following working strategies will be followed for gender equity
• Following working strategies will be followed for gender equity: • To analyze the labour, quantity, resources of women, men, and dalits for
their benefits in the projects • To increase participation and involvement of women, men and dalits during
planning and implementation • To implement those programmes which will increase people’s awareness
on the benefits of projects, train, improve access to information and increase social understanding by enhancing participation of women, men and dalits
Irrigation policy, 2003 • User association shall be composed of with at least thirty three percent of the women representation as well as, there shall be representation of dalit, downtrodden and backward ethnic communities in such association.
Forest sector policy 2000
• The principles of decentralization will be applied in the forestry sector through community forestry, which, according to the Forest Act of 1993 and the Forest Rules of 1995, has a priority over other forest management strategies. Priority will be given to underprivileged communities, or to the underprivileged people within a community.
Agri business promotion policy (Proposed)
• A discount of 50% in interest rate will be provided in credit flow for unemployed, disadvantaged groups and women to establish and run agri business
92
Annex 4: Policy, Institutional and other Contextual Environment
Annex 4.3: Institutions
Annex 4.3.1: Agriculture sector institutions by type and function
Function\Type Public Sector Semi Government NGO and private
sector Macro policy and coordination NPC
NARC NDDB
NGO Federation FNCCI
APP coordination and Monitoring
MOAC - -
Development finance MoFin ADBN NIDC
INGOs NGOs Commercial Banks
Sub-sector (theme) specific and micro-policies formulation, implementation, coordination, monitoring and evaluation (National level)
MFSC MOWR MLD
FNCCI, Ag. Enterprise Centre (AEC), Ag. Industry Associations
Administration, Regulation
DOA, DLS DOC, DOF DOI, DOFTQC
National Coop. Assoc. NCDB, NDDB NTCDB National Seed Committee AFPDB
Not Applicable
Technology (Research & extension)
DOA, DLS NARDF DOFTQC DDC
NARI NASRI IAAS
INGOs, NGOs
Training DOA, DLS DOF, DOI, DOFTQC
IAAS, CATC, RATCs CTEVT
INGOs, NGOs Private training institutions
Rural Infrastructure DOLIDAR, DOI, DDC INGOs, NGOs, CBOs, private contractors
Rural Credit - ADBN
INGOs, NGOs Cooperatives, Grameen Bank, Commercial Banks Private moneylenders, SC groups
Input supplies DOA DLS DOF
AICL ALI AFPDB
Private sector (agrovets, commercial suppliers)
Processing - DDC, AFPDB TCN, NRTC, HPPC CDC
Private sector – small, medium and large scale
Marketing outputs - DDC NFC TCN, NRTC, HPPC
Private sector – small, medium and large scale
Sub-sector (theme) specific and micro-policies formulation, implementation, coordination, monitoring and evaluation (District level)
DDC District unit of the concerned line ministries
District unit of concerned agencies
NGOs, CBOs, District Chambers of Commerce etc.
93
Annex 4.3.2: Classification of production pockets
S.N. Type Categories 1 Crop production Area with road access and availability of irrigation, and
electricity; Area with availability of irrigation and road access; Area with irrigation facilities Areas with road access Other feasible sites (Traditional agricultural areas)
2 Livestock and livestock originated products
Area with road access and availability of electricity and feed / fodder;
Area with road access Other feasible sites (Traditional agricultural areas)
Source: PPS, 2055, pp. 4
Annex 4.3.3: Size of the agriculture pocket area
Region Type of crops Area (ha)
Cereal and cash crops Approx. 1000 ha irrigated land or command area of approx. 400 STWs
Fruit Approx. 150 ha Vegetable Approx. 100 ha
Tarai
Fish Approx.10 ha including lakes of varied size Cereal and cash crops Approx. 100-150 ha Fruit Approx. 60-70 ha
Hills
Vegetable Approx. 30-40 ha Mountain Fruit Approx. 40-50 ha
Source: PPS, 2055, pp. 4
Annex 4.3.4: Size of the livestock pocket area
Livestock type Size of the pocket area
Cow and Buffalo Approx. 50-75 cattle/buffalo raised by approx. 5 groups of 10-15 members per group and each group member's family raising at least one improved productive cattle/buffalo.
Goat, sheep and pig Approx. 100-150 goat/sheep/pig raised by approx. 5 groups of 10-15 members per group and each group member's family raising at least two improved productive goat/sheep/pig.
Chicken Approx. 1750-3000 chicks raised by approx. 5 groups of 10-15 members per group and each group member's family raising at least 35-40 chicks.
Source: PPS, 2055, pp. 4
94
Annex 4.3.5: PPP type, key elements and objectives
Package
type Key elements Objectives
Basic Agricultural inputs, agricultural technology and institutional structure
Strengthening food security situation in production pockets in the hills and the mountains
Commercial oriented
Agricultural inputs, agricultural technology, institutional structure, technology, agricultural loan and storage facilities
Area orients towards commercialisation on basic packages starts to generate marketable surplus and these packages are required to attain certain economy of scale.
Commercial Agricultural loan, agriculture stores, market development and agro-based industries; irrigation, electricity and agricultural roads.
Ensure agricultural commercialisation motivating farmers on investment on technology and value addition.
Infrastructure Irrigation, road and electricity
These three elements are considered to be a prerequisite for leapfrogging agriculture development.
Source: PPS, 2055, pp. 4
Annex 4.3.6: Key actors and their roles and responsibilities in the PPS
SN Agencies involved Key responsibilities 1
MOAC Formulate guidelines, oversee implementation, coordinate with the NPC to allocate budget and resources, monitor and evaluate the PPS
2. Departments
Compile and consolidate sectoral programmes , lobby and influence the MOAC, MOF and NPC for necessary allocation of budget and resources, ensure that the programmes and budgets are timely approved by the DDC as per NPC’s guidelines, oversee implementation, supervise and monitor programmes and report to the MOAC
1 Agriculture/Livestock Services Centre
Propose the production pocket areas under their supervision to the DADO/DLSOs, organize farmers into groups and implement the programme.
2. DADO/DLSOs Consolidate the proposals, analyse it and formulate integrated district pocket programme in their respective areas based on the total budget ceiling available for the district. MOF does not provide budget ceiling specifically for the pocket area development. DADOs/DLSOs, if they wish, may take suggestions from the concerned technical directorates or the technical directorates may advise on their own.
3 DADC Discuss and recommend the District Development Committees for approval
4 District Line Agencies Comment or react on the proposals submitted by the DADO/ DLSO and be a part of decision by virtue of being a DADC member.
4 DDC Approve annual programme, oversee and monitor the implementation
5 Farmers’ groups (target group)
Implement the programme
95
Annex 4.3.7: Area covered under PPP as a percent of total areas under each crop as of 2002/03
S.N. Particulars Coverage
(ha) Area under
crops (ha)
% of the Total
1 Intensive crop development 199,878 4,725,661 4.2 2 Commercial vegetable farming 14,237 165,988 8.6 3 Fruit farming Citrus development 4,229 23,663 17.9 Deciduous (winter) fruit 1,038 17,123 6.1 Tropical (summer) fruit 2,048 39,641 5.2 4 Apiculture - bee hive distribution 1,857 126,884 1.5 5 Sericulture 200 245 81.6 6 Potato development 7,161 140,171 5.1 7 Cardamom 166 11,095 1.5 8 Ginger 1,175 11,480 10.2 9 Coffee 152 764 19.9
10 Other 2,925 12,643 23.1
Total 243,794 5,154,460 4.7 Source: Dhakal, 2004
96
Annex 4.3.8: Basic information related to pocket areas as of FY 2002/03
Districts (No.) Project (No) Pockets (No) Average size (Ha) S.N. Types of the Pockets
No. % of total No. % of Total No. % of
Total
Pockets per
Project (No)
Area (ha)
% of the
Total Project Pocket
1 Intensive crop development programme
71 95 98 17 438 26 4 199878 82.0 2040 456
2 Commercial vegetable farming 72 96 88 16 334 20 4 14237 5.8 162 43 3 Fruit farming 0 Citrus development programme 49 65 52 9 241 14 5 4229 1.7 81 18 Apple development programme 17 23 19 3 40 2 2 1038 0.4 55 26 Other fruit development programme 24 32 32 6 57 3 2 2048 0.8 64 36 4 Seed Multiplication Resource Centre
Development 0 0 -
Cereals 15 20 26 5 60 4 2 610 0.3 23 10 Vegetables 9 12 13 2 34 2 3 521 0.2 40 15 Potato 5 7 9 2 12 1 1 368 0.2 41 31 Other 2 3 3 1 3 0 1 98 0.0 33 33 5 Apiculture (bee hive distribution) 26 35 39 7 58 3 1 1857 - 48 32 6 Sericulture 9 12 14 2 42 2 3 200 0.1 14 5 7 Fish Development Programme 15 20 28 5 57 3 2 8988 3.7 321 158 8 Potato Development Programme 42 56 47 8 132 8 3 7161 2.9 152 54 9 Cardamom 7 9 11 2 33 2 3 166 0.1 15 5 10 Ginger 17 23 62 11 150 9 2 1175 0.5 19 8 11 Coffee 8 11 12 2 37 2 3 152 0.1 13 4 12 Other 8 11 14 2 24 1 2 2925 1.2 209 122
Total – Apiculture 528 93 1694 97 3 243794 100.0 462 144 Total 567 100 1752 100
97
Annex 4.3.9: Progress on livestock pockets development
As of July 2003 S.N
. Regions/ Districts Cattle Buffalo Goat Sheep Pig Poultry Tota
l % of total
1 Eastern 28 26 80 1 31 2 168 20.8 2 Central 5 43 80 3 33 0 164 20.3 3 Western 33 83 118 2 40 19 295 36.6
4 Mid-western 2 23 56 4 14 0 99 12.3
5 Far-western 2 20 48 1 6 3 80 10.0
Total 70 195 382 11 124 24 806 100.0
Percent 8.7
24.2
47.4
1.4
15.4
3.0
Source: DLS, 2003
Table 4.3.10: Progress on livestock pockets development
S.N. Regions/ Districts District (No) Livestock Pockets (No)
Pockets/District
1 Eastern 16 168 11 2 Central 19 164 9 3 Western 16 295 18 4 Mid-western 15 99 7 5 Far-western 9 80 9
Total 75 806 11 Source: DLS, 2003
98
Annex 4.4: Other contextual environment
Annex 4.4.1 Import tariff and bound tariff on major agricultural products (August 2002) (per cent)
Products India Pakistan Bangladesh Sri lanka Nepal Bhutan
Bound Tariff % Mostly 100% (300% on edible oils)
100-120
50-200 (90 products have 200%; 10 Percent have 59%)
50% for all agriculture products
42-51% Not Entered Into WTO
Cereals 36 25 36 30 10 30 Vegetables 35
(onion:5) 10-20 26-36 30-60
(Garlic:12) 10 20
Fruits 35.2-45.2 DG/BN: 108-113.2
20-25 26-75.8 Betel nuts:102.3
30 Dates: 6
10-15 20
Prepn. of fruits and Vegetables
35.2-40.4 25 36-86.4 30 25-40 30
Coffee/Tea 108 20-25 36 30 (QR for Tea)
10-25 20
Spices 35.2-76.8 (QR for CC)
20 26-102.3 6-60 5-10 20
Animals 35.2 10-20.25 11 30 10 20 Poultry 35.2 20-oct 26+QR 30 10 20 Egg 35.2+QR 20 36+QR 30 10 10 Meats and Skin 0-35 0-25/oct 0-36 12-30 5-10 10-30 Fish/crustaceans 35.2 10 36-62.5 12 10 20 Dairy Products 15-60 20-25 36-86.5 10-30 10-15 30 Rice 87.2 10 26 60 10 20 Wheat and Wheat flour
35.2-50 20-25 11-18.5 0-10 10 20
Coarse grain and Flours
019.6-50 10-25 3.5-18.5 0-30 10 20
Processed Cereals 36-56/QR 20-25 36-75.8 5-30 10 20 Spices 35.2-
35.2/QR 20 36-75.8 30 5-10 20
Edible Oils 75-85 S 18.5-36 26-30 5-15 30 Fibers 9.2-19.6 5-10 3.5-26 0 5-10 0 Sugar 60+QR 25 86.4 3.5 40 20 Rubber 30-76.8 5 18.5 12 5 20 Raw Tobacco 36 25 18.5 90 10 100 Wool, and wood products
5-36 10-25 3.5-36 0-30 5-15 10-30
Source: WTO/Nepal Unit (Unpub). Q R:Quantative restrictions, DG: Dried Grapes. BN: Betelnuts, CC: Cardamon & cumin
99
Annex 4.4.2 Agreements made by Nepal with WTO in relation to agriculture
Terms of Accession of Goods
1 Customs tariffs (para.37 and Goods Schedule)
• Nepal has bound all tariffs lines except on arms, cement and petroleum product
• The average applied tariffs rate us about 11% • The average tariffs bound rate is 39% at the date of
accession subject to lowering it down to 24% in the long run • The harmonized system of commodity classification (HS
system) is in vogue in Nepal 2 Other Duties and
Charges – ODCs (para. 41)
• Nepal has committed to gradual elimination of ODCs between two and ten years time from the date of accession
• After ten years ODCs will be bound at zero • For ten years Nepal shall apply ODCs subject to gradual
reduction • 2.5 – 4.5%on imports of agricultural goods have been levied
as ODCs at the date of accession • 2.5 – 11.5% on imports of industrial goods have been levied
as ODCs at the date of accession • Nepal has also committed not to introduce new ODCs
3 Export Restrictions (para 80,81,84)
• Nepal has confirmed that it would continue export restrictions on exhaustible natural resources such as logs, timber and mamira.
• The restriction is also imposed to fulfill the obligations arising from different MEAs to which Nepal is a party.
• Nepal also said that it would not allow export of those flora and fauna that are prohibited for export to respect the obligations arising from the CITES.
• Export restriction on raw hides, skins and raw wool is temporarily applied and Nepal would lift the ban at an appropriate time.
• Nepal would review the export ban on imported raw materials, parts and capital goods in the light of Article III and XI of GATT 1994.
4 Subsidies (paras. 87,88,89)
• Nepal did not provide direct payment of incentives to any industry.
• Nepal provides certain exemptions in terms of income tax, sale tax, excise tax, excise duty and customs duties to the industries qualifying under the conditions stated in Industrial Enterprise Act, 1992.
• Nepal has committed to identify subsidy measures incompatible with the WTO and eliminate them.
• Upon the entry into force of the Nepal's Accession Protocol, Nepal has committed to notify the Committee on Subsidies all the necessary information in the regard.
• Nepal has committed to administer its subsidy programmes in full conformity with WTO Agreement on Subsidies and Countervailing Measures.
5 Sanitary and Phytosanitary Measures (para. 103, 106, 107)
• Nepal is a party to different international instruments and has different laws to harmonise and implement the sanitary and phytosanitary measures.
• Nepal is also a member of different international organizations and follows international standards including Codex Alimentarius and has different laws to adopt and implement the sanitary measures.
• Nepal has also informed about lack of technical expertise to implement the SPS Agreement.
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Terms of Accession of Goods • Ministry of Agriculture and Cooperatives (MoAC) would
establish an SPS enquiry point by 1 January 2004. • Nepal would fully implement the SPS Agreement by 31
December 2006. • Nepal has confirmed to review laws and regulations relating
to SPS Measures and accordingly amend necessary legislation.
• Nepal has committed to apply existing measures in a non-discriminatory manner to all imports.
• Measures already in conformity with SPS would not be subject transition period.
• Nepal has made a commitment to ensure that any changes during transitional period would not result in a lesser degree of consistency with the provisions of the SPS Agreement than existed on the date of accession.
• Technical regulations and other measures adopted during this period would be developed in conformity with the provisions of the SPS Agreement.
• Nepal has also committed to notify existing SPS measures to the Committee on Sanitary and Phytosanitary Measures.
• Nepal has expressed its interest for technical assistance. • Nepal has established an Inquiry Points in the Department
of Food Technology and Quality Control (DFTQC) under ministry of Agriculture and Cooperatives before the deadline of June 2003.
• Nepal would fully participate in the work of the SPS Committee.
Terms of Accession on Trips 1 Membership
(Paras.12) • Nepal is a member of WIPO since 4 Feb. 1997. • Nepal is a member of Paris Convention since 22 June 2001. • Nepal has committed to join Berne Convention by December
2005. • Nepal has committed to join Rome Convention and Treaty
on Intellectual Property Rights by December 2006. • Nepal has also said that it would also look at other WIPO
and IP related Conventions e.g. Geneva Phonograms Convention, WIPO Copyright Treaty and the WIPO Performance and Phonograms Treaty in terms of national interest and explore the possibility of joining them in the future, as appropriate.
2 UPOV (para 122) • Nepal has expressed that it would also look at UPOV 1991 in terms of national interest and explore the possibility of joining in future, as appropriate.
3 Plant Varities (para 130)
• Nepal has committed to provide plant variety protection by December 2005.
Legislative Plan 1 SPS Measures
(para. 105) Make existing laws compatible with SPS Agreement
by December 2005
2 TRIPS (para 120) • Nepal has committed to prepare Industrial Property Act covering all categories of industrial property rights under Section 2 through 7 of Part II of the TRIPs.
• Nepal has committed to amend the Copyright Act 2002 as necessary
by December 2005
3 Plant Variety Protection (para 130)
Nepal has committed to prepare Plant Variety Protection Act
by December 2005
Source: S. Bhandari, S.M. Shresttha, Y.G, Upreti (January 2005): Nepal Accession to the WTO: Challenges and opportunities for Nepal, Kathmandu, Action Aid Nepal.
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Annex 5: Explanation for Observed Performances
Annex 5.2: Problems and challenges
Annex 5.2.1 Problems and constraints
APP Priority
Areas Findings/conclusions Reasons/causes Problem area
Inputs Achieving GW target is remote within the APP period remote
• Subsidy issue • Inadequate investment • Ambitious target
• Investment • Market promotion
strategy, extension services support not adequate
• Design problem Irrigation facilities increased/rehabilitated in mountains and hills could not be traced
• DOI, MOAC, DDCs and other NGOs/CBOs involved in small irrigation, and no consolidated figures available by physio-graphic regions
• IP 2003 and ISP 2004 mandates DDCs to undertake the small irrigation projects
• Implementing agency responsible for NAP not identified
• APP Design • Coordination • Policy
weaknesses • Governance • Human resource
capacity
Achievement behind the APP target in mountains and terai
• Inadequate investment • Conflict
• Design • Policy
weaknesses • Human resource
capacity
Irrigation
Irrigation policy 2003 not fully supportive to the policy and legal framework provided by the LSGA
• Roles and responsibilities of the Divisional Office and local bodies not appro. identified
• Divisional concept of the DOI might undermine the DDCs role and responsibilities
• DTO overburdened with irrigation and other infrastructural works undertaken by the DDC;
• Policy weaknesses
• Governance
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APP Priority Areas
Findings/conclusions Reasons/causes Problem area
Wide gap between the fertiliser use APP target and actual achievement
Ambitious target • Inadequate fertiliser use
promotional activities to promote the use of fertilisers
• Informal flow of fertilisers from India to Nepal too high to discourage importers to import fertilisers and to MOAC to project demands
• Government shaky policy
• Farmers lack incentives to increase the use of fertilisers
• Import does not correspond to the farmers’ demand
• Policy weaknesses
• Design problem • Global or inter-
country effect
NFP poorly implemented
• Lack of accountability
• Governance issue
Quality of fertilisers perceived low
• Availability of different grades of mixed fertilisers
• General perception fertiliser entered into Nepal through informal source low quality or fake fertilisers
• Rumours made by private importers
• Inadequate extension services
• Lack of farmers’
awareness
Fertiliser
AICL’s credibility going down
• Import of fertiliser decreased and dominated by private sector
• Dependent on the
MOAC buffer stock • Undue support and
coverage by the MOAC
• Governance issue
Technology Poor responsiveness to farmer’s demands/needs
• Lack of accountability • Investment problem • Poor supervision and
guidance • Lack
incentives/premium for better performance
Governance Organizational problem
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APP Priority Areas
Findings/conclusions Reasons/causes Problem area
APP’s research and extension priorities are poorly addressed.
• Lack of accountability • System deficiencies • Weak farmer-research
extension linkages • Highly diverse
NARC’s research programme
• Despite of 66 commodities, accepted by NARC for proposals submission in 2005/06, , it missed to include those issues in agricultural development which are of at the heart of national policy.
Governance issue Weak management
Funding priority for research and extension different
• Inadequate investment for research and extension
Top down and centralised extension system despite it is devolved to local bodies
• Weak capacity of the local bodies
• No presence of elected local bodies
• No efforts from the part of the line ministries to enhance the capacities of the local bodies
Issue on rural road vs agricultural road
• Conceptual clarify and confusions
Design problems
Inadequate investment • Financial capacity of the government
Investment
Road
Not geared/directed towards PPS/PPP
• Poor accountability • Ownership problem
• Coordination • Investment
Poorly used for STW and agro-processing
• STWs poorly installed as per APP target
• Irregular supply of electricity
• Electricity charge high • Most pumps are diesel
run
• Complimentarity • Design problem • Implementation • Support from the
government
Inadequate investment • Financial capacity of the government
• Investment
Power
Not geared/directed towards PPS/PPP
• Poor accountability • Ownership problem
• Coordination • Investment
ADBN, APP’s prime institution for agricultural credit, drifting away from agricultural financing
• Poor accountability • Ownership problem
• Governance • Investment
problem
Substantial shortfall in agricultural financing
• Other financial and micro-credit institutions coming up, but not recognised by the APP
• Investment
Credit
Credits hardly packaged with the PPS
• Poor accountability • Ownership problem
• Coordination • Investment
Outputs
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APP Priority Areas
Findings/conclusions Reasons/causes Problem area
Livestock/ HVC
In general, targets not achieved
• Capacity (Financial, technical, managerial etc)
• Investment
Private sector dairy constrained by DDC pricing policy
• Privatisation issue of DDC still not resolved
• Governance
PPS operating on its own- not packaged as per APP spirit
• MOAC guidelines not clear
• Unclear roles and responsibilities
• Coordination • Investment • Accountability
Agricultural road not constructed as per APP targets
• Capacity (Financial, technical, managerial etc)
• Complimentarity • Investment
Forestry Slow handing over of community forestry
• MFSC concerned with post formation support to CFs, and most of the households in the hills and mountains are already covered by the CFs.
• Design problem
Shifting from commercial to collaborative forest management
• Forestry sector moved ahead of APP
• Design problem
Poor performance and growth of agro/private forestry
• Inadequate investment in APP priority areas
• Investment
Forestry sector programme not linked with the PPS
• Inadequate investment in APP priority areas
• Investment • Coordination
Agribusiness Confused approaches towards the expansion of priority output of agribusiness
• Specific and clear-cut agribusiness policy missing
• Commodity specific policies
• Conceptual problem
•
Poor private sector friendly environment
• Multiple tax at multiple levels
• Supportive institutional structure
• Conflicts escalation • Lack of competitiveness • High cost of credit to
agri-business sector is another important issue
Coordination Coordination
Investment inadequate Capacity (Financial, technical, managerial etc)
• Investment
Agricultural road not constructed as per APP targets
• Capacity (Financial, technical, managerial etc)
• Complimentarity • Investment
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Annex 5.2.2: Root causes: Output
OUTPUT S. No. Root Causes Livestock Forestry HVC Agri.Buss Total RANK
1 Poor implementation/not effective
2 2 3 3 10 III
2 Coordination 3 3 3 3 12 I
3 Investment 1 3 3 2 9 IV
4 Conflict 2 3 2 3 10 III
5 Ownership 2 3 2 3 10 III
6 Policy weaknesses 2 2 3 3 10 III
7 Different understanding 3 1 2 3 9 IV
8 Human Resource Capacity 1 3 3 3 10 III
9 Management 2 2 2 3 9 IV
10 Governance 3 2 3 3 11 II
11 Organizational weaknesses 3 2 3 3 11 II
12 Unclear Roles 2 3 2 3 10 III
13 Unrealistic assumptions 3 1 3 3 10 III
14 Design Problems 3 2 3 3 11 II
15 Incompatibility with peoples' needs
3 2 2 3 10 III
16 Global effect 3 2 3 3 11 II
Total 38 36 42 47 V VI III I
1- OK (Least perceived), 2- Average (Partial problem) 3- High (Full problem)
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Annex 5.2.3: Root causes: Inputs
INPUT
SN Root Causes Irrigation Fertilizer Technology Road/power Credit Total
Rank
1 Poor implementation/not effective
3 1 3 3 3 13 III
2 Coordination 3 2 3 3 3 14 II 3 Investment 2 1 3 3 1 10 VI 4 Conflict 2 1 3 3 3 12 IV 5 Ownership 3 1 3 3 3 13 III 6 Policy weaknesses 3 3 3 3 3 15 I 7 Different understanding 3 1 1 3 3 11 V 8 Human Resource Capacity 3 3 3 3 1 13 III 9 Management 2 3 3 2 3 13 III
10 Governance 2 3 3 2 3 13 III
11 Organizational weaknesses
3 3 3 2 2 13 III
12 Unclear Roles 3 3 3 2 2 13 III 13 Unrealistic assumptions 3 3 3 3 2 14 II 14 Design Problems 3 3 3 3 3 15 I
15 Incompatibility with peoples' needs
3 3 2 1 3 12 IV
16 Global effect 2 3 1 1 2 9 17 Total 43 37 43 40 40 18 Rank II VII II IV IV 1- OK (Least perceived), 2- Average (Partial problem) 3- High (Full problem)