A case study on the successful experience of the

Off Season Vegetable Value Chain Development under HVAP

Members of Hariyo Hira Agriculture Cooperatives, Milijuli

Vegetable Producers Group, Mel Milap Vegetable Producers
Group and Ekta Aya Arjan Farmers Group

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List of Acronyms

AEC: Agro Enterprise Centre

BEE: Business Enabling Environment

DADO: District Agriculture Development Office

DDC: District Development Committee

FNCCI: Federation of Nepalese Chamber of Commerce and Industries

GoN: Government of Nepal

HVAP: High Value Agriculture Project

MSP: Multi Stakeholders Platform

RAD: Regional Agricultural Directorate

RISMFP: Raising Income of Small and Medium Farmers Project

SNV: Netherlands Development Organization

VDC: Village Development Committee

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Table of Content

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1. Summary

This case study analyzes the experiences and successful intervention practices on various actors
involved in the Value Chain of Off Season Vegetables in the areasaround the regional markets of
Hariyo Hira Agriculture Cooperatives, Milijuli Vegetable Producers Group, Mel Milap
Vegetable Producers Group and Ekta Aya Arjan Farmers Group supported by the High Value
Agriculture Project in Hill and Mountain Areas (HVAP).

This case study was developed jointly by Procasur Asia and the Pacific, HVAP, the farmers
cooperatives and other groups for the purpose of demonstrating innovations in strengthening
various aspects of the region’svalue chain for off season vegetables. Information included in
thecase studywascollected by using Procasur Learning Route tools with the helpof stakeholders
as well asfromreports developedby the Knowledge Management section and Value Chain
Advisor.

This case study focuses on two areas of intervention to betterunderstand the challenges facing,
and innovation needed for, strengthening the value chain of certaincommodities based on the
distances from the markets, and involvement and understanding of the community. Both
areas/cases have the same marketing channels but received different levels of intervention. The
example of the Hariyo Hira Agriculture Cooperative focusesmainly on access to
resourcessupporting the value chain, i.e. access to information, finance, input and technical
services.Conversely, the example of groups in Pinghale highlightsmarket lead group
mobilization (change in production practices), crowding in of agribusiness and e-Agriculture
(technical support in agriculture).

2. Overview of High Value Agriculture Project in Hill and Mountain Areas (HVAP)

2.1 The Project

HVAP is a program implemented by the Government of Nepal with financial support from the
International Fund for Agricultural Development (IFAD) and is executed by the Ministry of
Agriculture Development (MoAD) in partnership with SNV Netherlands Development
Organisation (SNV) along with the Agro Enterprise Center (AEC) of the Federation of Nepalese
Chamber of Commerce and Industries (FNCCI). The duration of the project is six and a half
years.

The project is separated into three components mainly focusing on:

Component 1: The development of pro-poor value chains

Component 2: Implementing initiatives that directly support value chain development, i.e.
forming/strengthening value chain producers groups, supporting initiatives to promote gender
and social inclusion, supporting high value commodity production and post-harvest activities,

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establishing grant-based value chain development funds, supporting district operation and
increasing inclusion and access to rural communities

Component 3: Project management and related activities, i.e. monitoring and evaluation (M&E)
and knowledge management

2.2 Value Chain Development Under HVAP

This project wasimplementedto drive the value chain process from the demand/agribusiness side
of business by establishing the value chains and participating producers on the basis of a
demonstrated, concrete market for high value commodities. The project works to ensure that the
producers involved become partners in the value chain by developing them into cost effective
producers that are able to deliver the quantities and quality of products required to make the
value chain profitable, thereby strengthening their position and improving their bargaining
power.

During the process, an environment is createdwith robust,built-in processes and structures

(groups) that enable women, poor and vulnerable households, and restricted communities, such
as the Dalits and Janjatis, to actively participate in the project. The project facilitates both spatial
and social inclusion promoting equity in project support among the implementing districts.
During this process, various group financing initiatives are implementedincluding agribusiness
financing linked to agreed contracts, self-generated saving from group saving and credit
schemes, loans from local MFIs, a project value chain fund for infrastructure/equipment
investments, and a project production inputs fund to establish revolving group funds.

HVAP hasselected certain commodities to be supported by the project, which are ginger,
turmeric, apples, goats, timur (non-timber forest products), off season vegetables and vegetable
seeds.

Based on all these activities, HVAP has already supported 286 projects for value
chainstrengthening, 68of which are off season vegetables.

3. Actors of Off Season Vegetable Value Chain

3.1. Nature of Intervention by Projects

The majority of smallholder producers in Midwest Nepal practice subsistence farming

withsupport from HVAPfor inclusive agriculture business through market-led production
activities. The majority of farmers in Nepal do not consider agriculture as a business since it does
not result in as attractive returns as other businesses. Therefore, it isimperative that strategies and
intervention approaches should be in line to shift currentfarming practices towardmass
production onthe part of smallholders. With this in mind, the project has provided support to
these producers through co-investment and strengthening support services.

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In terms of grant support, the project focused primarily on downstream and upstream growth of
value chain actors. For downstream growth of value chainactors, the project put forth significant
focus on scaling up production, PPH management, strengthening services, technology innovation
and market arrangement, all of which was only possible if basic agriculture infrastructure, such
as irrigation schemes, plastic ponds, canals and market collection centers were in place. This
required enabling access to appropriate tools, technologies and service provisions such as
sprayers, plastic houses, crates, power tillers and technology-based agrisolutions (e-
Agriculture),as well asaccess to financial support and services, insurance, etc. whichincreased
thecapacity of individual producers and producer organizations for market-led production.

Likewise, capacity building of smallholders as well as strengthening support services to develop

capacity of producer organizations through social mobilization, trainings, and exposure to GESI
and Business Literacy Classes, developing forward-backward linkages and facilitates business-
enabling environment (BEE). Multi Stakeholder Platforms (MSP) were used for facilitating
business environments, developing business-to-business connections, strengthening service
markets and ultimately introducing collective marketing.

The intervention approaches havebecome very effective since the project areas were largely
dominated by smallholder, resource-poor and marginalized farmers who were suffering from
lowproduction and low incomes from their farming practice, not to mention lacking in adequate
irrigation, transportation, market information, mechanisms, basic inputs (seeds, seedlings, tools)
and technology as well.

Agreed Decision Made During the Agribusiness Producers Interaction Meeting at

Pokharikanda

 Traders and producers agree to collect and buy tomato and other vegetables from three
collection points; Following wholesalers are responsible to collect from respective
collection centers:
o Pinghale + Amalakhali Collection Centre: (Gobinda Mandi & Pooja Mandi)
o Sankh Sub Collection Centre: (Devkota Sabji Mandi)
o Lakharpata Collection Centre: (Babu & Shahi Mandi)
 The price of tomatoes would be the wholesale market price of Birendranaga, Surkhet from
all three collection points for any given day including transportation, other logistics and
profit margin of wholesalers.
 The producers and wholesalers agree to fix gross margin of NPR 5 (for Pinghale
/Amarkhali and Sankha Collection Centres) and NPR 5.5 (for Lakharpata Collection
Centre) including transportation costs and profit margins, i.e. if the wholesale price is NPR
32/kg., farmers will get NPR27/kg.
 Traders have to bring packaging crates while collecting the produce. The farmers have to
count 2 kg for the crates while weighing bought produce.
 Both the parties agree to share the loss equally in case of damage or loss due to unfortunate
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accidents or blockades.
 The traders agree to give higher prices of HEMSONA variety of tomatoes than SERES
variety of tomatoes.
The project has contributed in filling the gap of all items and processes that were lacking, and
has shown tremendous potential in collective marketing and crowding-in of buyers and
wholesalers through increasing vegetable production.

4. Case 1 Analysis: Collective Marketing for Strengthening the Off Season Vegetable Value
Chain within theHariyo Hira Cooperative

4.1 Background

Surkhet is a Regional Capital of Nepal’s Mid-Western Development Region. Utar Ganga 4

village is situated just few akilometers away from the Surkhet district headquarters.
Previously,farmers’ main source of income was seasonal farming. Income was not enough to
support the farmers’livelihood and they were forced to search for alternative employment
opportunities. The areahad potential but due to lack of knowledge,farmers continued their
traditional patterns of farming. To overcome this problem, a farmers group was formed,with the
support of a local NGO, which was later upgraded intothe Hariyo Hira Agriculture Cooperative.
During this period, the District Agriculture Office initiated and supported the Cooperative with
acooperative farming scheme in which people were trained in vegetable farming. This support
had a catalyst effect in changing farming practices in the area.

Farmers usedto transportvegetables on their own tothe markets, which normally took 4-5 hours,
sell the product in the local market and then return back home. This processtook an entireday
for farmers even though it limited their time to devote to production. Besides transportation
issues, farmers also faced irrigation problems, lack of market information (mainly pricing) and
lack of a collection/storage center. All of these factorshampered themarketing of agricultural
products and further added to market imperfections such as low income of producers, poor
infrastructures and poor communication.

Recognizing Utar Ganga 4 as a cauliflower production pocket area by the District Agriculture
Office encouragedfarmers to start shifting their traditional farming practices into vegetable
production which further amplifiedmarket-related issues along with other problems in
production,includingsufficient market information systems, access to markets and prices. These
problems createdreluctance among farmers to continue the new farming processes and increase
the area of production.

4.2. Process of Change

HVAP started supporting this cooperative through window 2NPR1,327,619 (USD 12,615);
Cooperative Contribution: NPR234,286 (USD 2,226). They supportedthe construction of
avegetable collection center, the additionof an irrigation pond, water harvest tank, ground water
well for irrigation purposes, and purchased a weighing machine and spray tank. In addition to
HVAP, a local NGO called Sundar Nepal also supported the Cooperative withdrip irrigation,

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plastic tunnels, green houses, and training local farmers in compost production which lead to a
tremendous increase in farmers shifting from traditional farming methods to off season vegetable
farming.
HVAP helped theCooperative identify and overcome the restrictionsit faced and develop a
business plan under HVAP to address the constraints for scaling up vegetable commercialization.
HVAP and the Cooperative made joint investments for increasing production, reducing the
farmers’ risk and improving marketing processes through collective marketing at the collection
center which made it easier for traders to collect vegetables.
These modifications initiated change in the practices of the farmersas well asthe quality of
services provided by the Cooperative:interaction increased between farmers resulting in better
coordination among the producers in produce aggregation and higherquality standards
whilecollective marketing enhanced the bargaining power of farmers. Additionally, recruitment
of a Junior Agriculture Technician (JTA) by the Cooperative increased access to technical
support to the farmers and further increasing the quality of production. Provision of providing
inputs from the Cooperative decrease the input cost and ensure the quality of inputs. Finally,
technical interventions like e-Agriculture (including soil testing and e-based technical
solutionsusedduring production) enhanced access to all newservices.

4.3 Map of Actors

During discussions with the community, different government and non-government

organizations playedan important part in developing the Cooperative.
Currently, HVAP is playing the crucial role in continuing to strengthen off season vegetable
production.The organizationhassupported the Cooperative in constructinga collection center,
which helped spur changes in the practices of individual producers who used to produce small
harvests as they had tocarry the product for 4-5 hours to sell. After constructingthe collection
center, HVAP provided trainingand created awareness among the producers aboutcollective
marketing approaches. HVAPalso trained the Cooperativeincollection center management,
facilitatedconnectionswith vegetable wholesalersinBirendranagar, Surkhet to establish market
connectionsand further improvedthe business environment. Furthermore, HVAP supported
crowding-in of local buyers and developed clear mechanisms to outsource vegetable products
from the production area.
The District Agriculture Development Office (DADO) has been providing regular technical
support to the farmers in the Hariyo Hira Agriculture Cooperative for increased vegetable
production. It also supports the Cooperative through a Cooperative Farming Scheme which was
milestone inincreasing vegetable production in thearea. Additionally, DADO is continuing to
support the Cooperative inmaintaining connectionswith other relevant organizations and projects.
A local NGO, Sundar Nepal, backed the initial formation of the Cooperative and still provides
continuous support. It also assiststhe Cooperativein various input and production levels.
Additionally, itprovides support through group and cooperative management training,
introduction of drip irrigation, green houses, plastic tunnels, seed and seed trials, and creating of
crop calendars.

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Environment Development Society, another local NGO and the local implementing partner of
HVAP, supports the Cooperativethrough coordination and cooperation with various agencies as
well as HVAP.
The Village Development committee also supportsthe Cooperative with various financial aspects
and aiding the construction of a cooperative building.
The Agriculture Development Bank is workingwith the Cooperative and farmers to
provideagriculture insurance.
The Cooperative Development Bank is providing the Cooperative with aloan increasing access to
availablefunds and supporting its members in differentaspects of the production practice.
The District Agriculture Cooperative Federation provides regular training to Cooperative
members including assisting with plastic house constructing.
Raising Incomes of Small and Medium Farmers Project (RISMFP) provides support to
theCooperative mainly at the input and production level. For example, ithas provided them with
irrigation pipes, seeds and other production support.
Local traders including Devkota, Babu and Shahi, Govinda, Puja, Sharma and Mahatara
Vegetable Traders are the main traders involved in buying commodities from the collection
center. They were identified and connected with the Cooperative with support from HVAP.
Other projects, like PACT and RDP, are also around but the Cooperativeneeds to increase
collaborationwith them along with other commercial banks which can support the Cooperative
with loans.
4.4 SWOT Analysis
Strengths
 Improved farmers’ access to services
 Collective marketing increased the Cooperative’s bargaining power
 Supported women empowerment
 Increasedproduction area and income
 Obtained agriculture insurance
 Increased the Cooperative’s capital
 e-Agriculture practices increasedthe ability of farmers tomake informed decisions
 Increased overall capacity of the Cooperative and coordination with other agencies
 Secured additional financial support with a loan from a financial institute
 More involved in social and community activities or initiatives
Opportunities
 Areas for production, vegetable production and income can still be increased
 Introduction of new farming technology
 Enhancing the capacity of the Cooperative to provide technical support to the farmers
 Strengtheningconnectionswith traders and identifyingnew markets
 Creating a more welcoming environment and climate for vegetable production
Weaknesses

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  Not all farmers are convinced about the benefits ofcollective marketing
 Low participation during meetings
 Cooperative is sometimes unable to provide input level supports (such as seed and
fertilizer) in time
Threats
 Some Cooperative members are still selling products on their own
 Farmers are unable to produce the commodity year round per demands of the market
 Irrigation problems

Despite these issues, members of the Cooperative continue to work toward improving practices,
addressing issues through discussions and further strengthening the value chain. They are also
searching for other areas in which they can determine and focus on additional opportunities.

4.5 Milestones in the Process of Change

During the exercise inmapping the changes within the community and farming practices, four
steps of the value chain were identifiedas follows:

Collection
Input
Production and Marketing
Supply
Processing

Farmers in thearea were mainly involved in traditional food production practices as the area
lacked irrigation and farmers were not aware of market demands or alternative production and
marketing practices. To initiate changes, a local NGO formed a farmers group in 2061 B.S
(2004). This was the first initiation by any agency to bring farmers in this areatogether in
production. Later, in 2065 B.S (2008), this group held a meeting to finalize a plan to
transitioninto a cooperative. In 2066 B.S (2009), the group officiallyregistered as a Cooperative.
DADO supportedtheCooperative under the Cooperative Farming Scheme and there was an
official visit from an HVAP project official from theRegional Directorate of Agriculture
Regional Directorate Office. During 2068B.S (2011),thevillage was recognized by the District
Agriculture Office as acauliflower production pocket which played an immense role in shifting
production practices.
When the community understoodthe potential profit in vegetable production, there was more
support in the form of input supplies from various organizations. In 2070 B.S (2013), a local
NGO supported the Cooperativewith drip irrigation, training members in compost improvement,
plastic tunnels and agreen house. Additionally, in 2071 B.S (2014),the Cooperativestarted
purchasingagriculture insurance. That same year they received a loan from the Cooperative
Development Bank and hired a JTA to provide technical support to farmers, which helped
address potential problems during allphases of production. In 2072 B.S (2015),the
Cooperativestarted soil testing with technical support from HVAP ande-Agriculture software.
The Cooperative also started selling input supply for affordable input support to farmers which
decreased input costs and ensured quality product to farmers.

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The most challenging part of the value chain collection and marketing processbegan later that
year. In 2070 B.S (2013), the Cooperative started constructing the collection center with support
from HVAP and other local partners. In 2071 B.S (2014), the collection center was open and
operating and HVAP provided training to members on collection center management. HVAP
alsohelped initiatediscussions and established relationships with different traders for selling the
Cooperative’sproducts. Additionally, to promote furtherlearning and helpfarmers diversify their
income, the Cooperative started a homestay where people from different regionscan come stay
with them and learn from the Cooperative’spractices.

During the entire process, community meetings were held to discuss various
changesregardingaccess to and the use of resources, and to create a resource map based on the
community’s conditionsten years prior to starting the Cooperative, the current resource situation
and expected or desired resource situation for the future based on plansestablished during the
collection center being in operation.
The map of past resources clearly showed that trees in the jungle were not as dense as they are
presently. The majority of land was used in traditional cropping practices with very few
areasdedicated to vegetable production - most farmers produced paddy during the season when
they had water and were forced to leave the land barren during the rest of the time. The
village’sinfrastructure and layout was different but the major problem with the area was access to
availablewater. There was only one well that was used as the single source of water for the
people living in the surrounding areas as well so it was a limited resource. There was also only
one road, limited transport to the farmlands and small area submergedunderwater – water

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collected during the rainy season and was used by the locals for feeding animals. The
area’spopulation was smaller and there were fewer houses compared to current times.
In the current map, it’s clear that the land use pattern has changed a lot with the addition of wells
for irrigating the land and every house in the area has atoilet. The mapalso shows achange in
awareness among the community regarding health practices. The use of green houses,plastic
tunnels and land for vegetable plantinghas also increased by large proportions. The community
has constructed buildings for the Cooperative and collection center andthere is a regular flow of
different traders to collect vegetable during the harvesting season. Additionally, the jungle
densityhas increasedeven though the number of houses has grown.
Looking ahead to the future, the community is planning to double the area of vegetable
production as well as construct a straight road to the collection center which will increase easy
accessibility for traders. They also are planning to strengthen the technical capacity of the
Cooperative in regards to input supply, production andmarketing along with increasing the
capacity of the collection center and the drip irrigation pattern while addressing all the problems
farmers currently face.

4.6. Achievement
New practices havegreatly affected income generation along with the sustainability of the
collection center. The collection centerhas done a total of NPR 1.2 million in transactions from
November to March 2015 with a net income ofNPR20,000, not including JT/Collector
remuneration Income generated through service charge provisions areNPR0.50 per kilogram for
producers and traders. There is better coordination among producers which has, in turn,
enhanced bargaining powers through collective marketing. Theagro vet is functioning properly
which provides reliable input support to farmers ande-Agriculture has enhanced access to
services that facilitate improved production. Additionally, new practices have resulted in better
integration and relationships between vegetable wholesalers, as well as increased access to loans
and insurance, because of new businessconnections and coordination.

4.7 Knowledge Management

The Cooperative is a special group in the area that now has a better understanding of their value
chain and potential problems, and is now sharing their knowledge with thecommunity. Producers
have also supportedthetrial of e-Agriculture software. Many organizationsnow visit this
Cooperative to understand various aspects of the value chain.

4.8 Scaling Up

During the systematization process, the concept of asustainability tree was usedto illustrate the
Cooperative’splan to sustain their activities. Roots were divided into two parts to show what are
the group iscurrently working on and what they will be doing in future, while the tree’s leaves

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show output from the sustainable Cooperativeto itsmembers and other related groups. Activities
the Cooperative iscurrentlyperforming include:
 Agro vet
 Technical services to members
 Collective marketing
 Saving and credit services to members
 External source mobilization
 Improvement in relationship with traders
 Increasing productivity
 Commercial vegetable farming
The map also shows the activities the Cooperativeplans to perform in the future which willensure
the sustainability of the Cooperative and provide numerous benefits to itsmembers including:
 Increasing production area
 Constructing another collection center (so farmers from other places need not have to
walk far)
 Continuing to search for external sources of funds
 Introducingnew technology into production
 Identifying and connecting with other markets, allowing farmerstohave more choice
when selling their product

All these activities will result in a sustainable Cooperative and provide benefits to members such
asincreases in production and income, creating more employment opportunities, helping alleviate
poverty among members and ensuring food security.

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5. Case Two: Institutional Development of Collection Center and Crowding-In of Traders
Strengthening the Off Season Vegetable Value Chain

5.1 Background
PinghaleMilijuli Vegetable Producers Group, Mal Milap Vegetable Producers Group and Ekta
Aya Arjan Farmers Group are registered with DADO. The tomato production cluster comprising
these threeproducers groups is situated in the Pinghale of Pokharikanda VDC, Surkhet (West) of
the Mid-Western Development Region of Nepal. It falls along the Surkhet-Jumla Corridor,
which is about a1.5-hour drive west from Birendranagar.
This area has a high poverty rate with the majority of the community belonging to ethnic
minority groups. Due to lack of infrastructure like irrigation and roads, people living in this area
were forced to cultivate only seasonal crops which didnot provide enough to feed family
members and did not support adequate income generation through the selling of these crops. Due
to these factors, this area was supported by various agencies to develop the off season vegetable
production pocket.
Various activities such as training in vegetable production,providing input supplies and support
at the input level increased this area’s production of vegetables and helped identify it as one of
the vegetable productions pockets. However, due to marketing problems and other market-
related activities, members of the farmers and producers groups were reluctant to increase their
area of vegetable production. They had to carry their product long distances to sell, but after
constructingatemporary collection center, the motivation for farmers to produce vegetables
greatly increased and also showed incremental growth in areas of
production,howevermarketissues – primarily lack market information and poor connections with
traders or regional markets – remaineda problem.
HVAP, with support of investment window 2,has continue to support these groups in various
waysfrom the input level to market level totally changing the practice of production and
marketing as well as increasing ties to or support from other organizations. This not only
encourages farmers to produce yearround but also influencedthe selling of their product.

5.2 Process of Change

The objective of supporting these groups was to economically empowercommunity members
through commercial production of tomatoes with improved marketing practices such as
collective marketing and crowding-in of wholesalers to enhance competition and further develop
relationships. Investments were used for procurement of crates, irrigation ponds, spray tanks,
water cans and commercial drip systems.
After HVAP’s support, the production of vegetables and net income in these areas
increasedtremendously: Milijuli increased production by 162,439kg, Melmilap by 42,912kg, and
Ekta by 46,938 kg. In terms of increased net income, Milijuli increased total income by NPR
3,667,190.00, Melmilap increased total income by NPR 2,622,648.00 and Ekta increased total
income by NPR 1,770,742.00 – all far higher thanthe groups’ baseline incomes and production
volumes.

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The tomato producer groups have been operating collective marketing from Srijana Vegetable
Collection Center at Pokharikanda since 2013 during which HVAP and DADO teams facilitated
Agribusiness –Producers Groups’ interaction at Pokharikanda with the presence of four major
wholesalers, 50 farmers, a DADO team and HVAP staff set norms for the marketing of tomatoes.

5.3 Map of Actors

As per discussion with the communities, there are various types of organizations supporting
these groups in producingvegetables. Organizations like CEPRED, SAC Nepal and Care
supported the groups’ formations, vegetable production trainings and input provisions. These
organizations were involved in the groups’ initial formation stage but are no longer providing
support.
The farmers and producers groups are quite close with other organization including WINROCK
(KISAN Project) which has supported them withlift irrigation help, including providing solar
panels and pump, EDS Nepal, a local NGO that has provided coordination and cooperation
support, and BNA, another local NGO that has sourced input supplies. Projects like MEDEP and
RISEMFP are also supporting the groupsin training and input supplies.
The groups have an ongoing relationship with HVAP, VDC, DADO and the Agro Enterprise
Center. Currently these organizations are supporting them in strengthening the value chain along
with the production activities. Introduction of a market information system by the KISAN project
allowed farmers to accessregularly updated commodity prices in various marketswhile e-
Agriculture systems introduced by HVAP havefurther enhanced the community’s access to
information.
Local traders including Devkota, Babu and Shahi, Govinda, Puja, Sharma and Mahatara
Vegetable Traders are the main traders involved in buying commodities from the collection
center. They were identified and connected with the Cooperative with support from HVAP.

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5.4 SWOT Analysis
Strengths
 Improved farmers’ access to services
 Collective marketing increased thedifferent groups’ bargaining power
 Supported women empowerment
 Increasedproduction area and income
 Obtained agriculture insurance
 Increased capital
 e-Agriculture practices increasedthe ability of farmers to make informed decisions
 Increased overall capacity of the Cooperation and coordination with other agencies
 Secured additional financial support with a loan from a financial institute
 Farmers groups are more involved in social and community activities or initiatives
Opportunities
 Areas for production, vegetable production and income can still be increased
 Introduction of new farming technology
 Collection of different production groups has increased opportunities to form a new
Cooperative. This will further enhance capacity of members and ensure the formation of
a sustainable cooperative.

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  Increasing road connectivity
Weaknesses
 Distance from market
Threats
 Still unclear if traders will continue supporting after completion of HVAP project
 Irrigation problems

5.5 Milestones in the Process of Change

During the exercise in mapping the changes within the community and farming practices, four
steps of the value chain were identifiedas follows:

Collection
Input
Production and Marketing
Supply
Processing

The area these groups farmed in was a significant distance from Surkhet and producerstotally
depended on traditional farming resulting inlow productivity and poverty. Irrigation
problemsposedanother major problem for farmers wanting to try and follow alternative farming
practices. Additionally, connectivity and farmers’ awareness of different production practices
were also issues.
The first major intervention in the area came with the formation of the groups in 2065 B.S (2008)
registered in DADO by CEPRED, a national NGO. The organizations also supported training
and input supplies for increased tomato production. This played a significant role in shifting
traditional farming practices while theconstruction of collection center in Amalakhani encourage
farmers to produce more as they could nowsell their product, however the center was quite far
for most farmers carrying their product from their farms. Sometimes, due to distance, the price of
the product was low. In 2067 B.S (2010), a road was constructed which significantly
supportedthe commercialization process. In 2068 B.S (2011), the community constructed a
temporary collection shed in their farming area which started to positively affect production.
In 2069 B.S (2012), Care and SAC Nepal supported the farmers in constructing a permanent
shed which helped bring all the farmers groups to one place. HVAP aided in
developingabusiness planand linking producerswith traders increasing the capacity of
groups’production and marketing capabilities during 2070 B.S (2013). That same year, MEDEP
provided training to farmers and ANSAP, a national NGO, constructed drinking water facilities
and a boundary wall around the collection center. MEDP also supportedthe farmerswith input
supplies, such as plastic tunnels and farmers’ diaries. Similarly, HVAP providedadditionalinput
level support including aspray tank, irrigation pond, carets to carry tomatoes, soil testing kits and
business literacy classes. To further encourage farmers in collecting produce, in 2071 B.S (2014)
DADOprovided a weighing machine. Lift irrigation was constructed as part of the pilot program
by WINROCK and RISMFP providedadditionalinput suppliessuch aspipes, spray tanks, carets
and bamboo.

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In 2071 B.S (2015), the Kisan Project supported the farmers with a Market Information System
along with a hoarding board to regularly show and update prices so farmers can make informed
decisions on pricing and selling their products.Furthermore, increased connections with traders
and access to accurate market information systemsincreased the farmers’ ability to shift their
entire production and marketing processes and encourage increasing their areas of vegetable
production.

Since beginning this project, there have been a number of changes in the way farmers work with
the land and what resources they have access to.Before interventions and support from all these
different organizations, farmers practicedgrowing traditional hill crops during rainy seasons,
which was not enough to support theirfamilies. The distance between the farms and Surkhet, not
to mention lack of roads,only added tothe hardships of living in the area. Even after formingthe
farmers groups and introducing tomatocultivation, farmers were reluctant to change their farming
practicesdue to lack of proper market support.The majority of youth living in this region migrate
to India in search of work, which has becomethe main source of income for families living in this
area. The village is surrounded by jungle, which helps supply needed resources such as fire wood
and a place for livestock to graze, howeverthe unmanaged use of the forest negatively affects the
quality of the forest. Additionally, water both for drinking and irrigation in the region was scarce.
With these factors in mind, support from various agencies have broughtmajor changesto the
quality of life of people living in this village both from a social and financial aspect.
Constructinga road to Surkhet, along with currently improving the quality of the road,hashelped
spur tremendous changes in the farmers’ practices as the road has cut down on transport times
and allows more time to be spent farming. Construction of an additional smallcollection center
closer to production areas has enhanced in quantity of product and worked as a pulling factor for
traders. Transitioning farmers from traditional practices to using more modern farming
technologies and techniques has clearly positively affected the farmers’ incomes and even
attracted the communities’ youth to become involved in production.Construction of plastic ponds
and irrigation system supports have increased the land’s productivity as well as changedthe
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land’s crop cycle pattern whilethe solar lift irrigation system ensured ponds are always full and
farmers can irrigate their land when needed.
Looking ahead to the future, communities want to further strengthen existing relationshipsand
are planning to increase the area of vegetable production, as there is now a high level of demand
and potential for increased income. Additionally, as different people and groups have come to
work together at the collection center, they want to continue to grow together and are discussing
forming a cooperative that will help further strengthen their voices and power in future.

5.6 Achievement
Besides obviousshifts in farming practices, other achievements can be observed in the area. The
groups have started keeping records of their activities and progress, an uncommon practice in
Nepal, and have provided HVAP with data regarding achievementsbased on baseline and current
datawhich can be seen in the tables below.

Particulars Baseline After Intervention Changed by

MILIJULI VEGETABLE PRODUCERS GROUP

Area of Farming (Ropanies) / No.: 29.50 76.00 46.50

Production (Kg): 93,965.00 162,439.00 68,474.00

Consumption (Kg): 3,435.00 2,502.00 -933.00

Sales(Kg): 88,385.00 157,577.00 69,192.00

Sales Income (NPR): 1,303,275.00 3,173,390.00 1,870,115.00

Cost of Production (NPR): 185,080.00 303,000.00 117,920.00

Post-Harvest Loss %: 2.28% 1.45% -0.83%

Net Income (NPR): 1,118,195.00 2,870,390.00 1,752,195.00

Average Net Income per HHs (NPR): 36,070.81 92,593.23 56,522.42

Other Income (NPR): 2,075,000.00 796,800.00 -1,278,200

Total Income (NPR): 3,193,195.00 3,667,190.00 473,995.00

Co-Investment: HVAP Grant: NPR 778,462 (USD 7,785) ; Cooperative: NPR 137,373 (USD 1,370)

MALMILAP VEGETABLE PRODUCERS GROUP

Area of Farming (Ropanies) / No.: 40.50 58.50 18.00

Production (Kg): 36,698.00 42,912.50 6,214.50

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Particulars Baseline After Intervention Changed by

Consumption (Kg): 850.00 3,530.00 2,680.00

Sales(Kg): 28,338.00 31,016.00 2,678.00

Sales Income (NPR): 511,852.00 868,448.00 356,596.00

Cost of Production (NPR): 190,300.00 203,300.00 13,000.00

Post-Harvest Loss % 20.46 % 17.34 % -3.13 %

Net Income (NPR): 321,552.00 665,148.00 343,596.00

Average Net Income per HHs (NPR): 6,990.26 14,459.74 7,469.48

Other Income (NPR): 2,236,000.00 1,957,500.00 -278,500.00

Total Income (NPR): 2,557,552.00 2,622,648.00 65,096.00

Co-Investment: HVAP Grant: NPR 656,200 (USD 6,560) ; Cooperative: NPR 171,300 (USD 1,713)

EKTA AYEARJAN FARMERS GROUP

Area of Farming (Ropanies) / No.: 15.10 33.56 18.46

Production (Kg): 15,376.00 46,938.50 31,562.50

Consumption (Kg): 1,112.00 3,130.00 2,018.00

Sales(Kg): 13,162.50 39,176.50 26,014.00

Sales Income (NPR): 328,437.50 1,096,942.00 768,504.50

Cost of Production (NPR): 77,800.00 128,200.00 50,400

Post Harvest Loss %: 7.16 % 9.28 % 2.12 %

Net Income (NPR): 250,637.50 968,742.00 718,104.50

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Particulars Baseline After Intervention Changed by

Average Net Income per HHs (NPR): 9,282.87 35,879.33 26,596.46

Other Income (NPR): 774,000.00 802,000.00 28,000.00

Total Income (NPR): 1,024,637.50 1,770,742.00 746,104.50

Co-Investment: HVAP Grant: NPR 95,6971 (USD 9,570) ; Cooperative: NPR 247329 (USD 2,473)

5.7 Gender Mainstreaming and Involvement of Youth

These groups are focused on including women, youth and minorities.Currently, the groupsare
made up of around 76% female members,around 41% of Dalit and around 59% Janjati. Out of
these members, we can observe active youth participation in production and marketing activities.

Table: Composition of Members

Groups Total Members Female Male Dalit Janjati Other

Milijuli Vegetable Producers Group 31 30 1 2 29 0
Malmilap Vegetable Producers Group 46 29 17 29 16 1
Ekta AyeArjan Farmers Group 27 20 7 12 16 0
Total 104 79 25 43 61 1

5.8 Scaling Up
Discussion in a form of a sustainability tree was used to understand the ideas of the community.
Half of the tree diagram shows what the groups are doing currently and half shows future plans,
while the tree’s leaves portray targeted outcomes. Various activities are identified throughout the
tree but everything revolves around the collection center. A few activities being conducted
include saving credit, commercial production, maintaining funds, linking with traders and
connecting with other organizations. Future plans include forminga cooperative, increasing
production and irrigation areas, increasing in production and increasingmembers’ access to new
farming technology.
The groups are planning to form a cooperative so that all activities they are currently performing
will continue to grow and ensure the sustainability of the activities. They believe that these
activities will support members in increasing income, employment opportunities, food security,
community development, and their dream of converting the village to an example village so
other people from different places can come learn from their practices.

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6. Project Activities
Input Supply Support
Input supply plays an integral role in ensuring produced products meet quality standards and
market demands. The main goal of input supply support is to strengthen the capacity of the
producers. With this in mind, various organizations and projects have supported the producers,
including pro-poor,with training, technical services, various equipment neededfor plantingand
harvesting, irrigation supplies, seeds and more.

E-Agriculture

E-Agriculture is a global initiative to improve agricultural practices involving the

conceptualization, design, development, evaluation and application of innovative ways to use
information and communication technologies (ICTs) in agriculture. Most importantly, it plays
an important role in agricultural value chains while using different type of software packages.

As a means of e-Agriculture, HVAP has been practicing eAgro Suite technology in four
communities throughout Surkhet district. At present, HVAP practiced and localized the
application of Mrittika (a software package which provides information to farmers on soil
conditions and recommends necessary actions)in four communities only. These applications
have been tested in Bangladesh and India immenselyimproving productivity and farming
incomes. In fact, the applications allow a multitude of local smallholder farmers to be
connected to the rest of the value chain, learn about best practices, and access reliable input
supplies such as quality seeds, fertilizers and pesticides. Furthermore, the improved
connectivity also allows farmers to pursue better prices by conducting business with multiple
buyers. According to recent reports, the fertilizer recommendation software, Mrittika, can help
double the yield of winter crops. Based on local information inputted into the system –
including land type, size, season, irrigation and soil characteristics through soil tests– the
software application helps farmers identify the best type, optimum amount and appropriate
method of using fertilizers, seeds and pesticides. As a result, farmers cannot only maximize
productivity, but also reduce costs by minimizing waste. For this, the trained e-Agriculture
persons (Local Service Providers) must regularly update farmers’ information in the software.
The updated information is stored in the information management system of GISB in
Bangladesh.
Production support
Project supports farmers in producing side also. They supports in input supply for the farmers so
the produced material is of high quality and based on the demands of the market. This not only
stimulates producers to produce quality goods but also to have a knowledge based production,
through various discussion and exposures. This is further strengthening by Social Mobilization.

Collection and processing

The project realized the real need for collection centers and access to inputs for commercial
vegetable production. Therefore, HVAP supported the construction of market collection centers
in Hariyo Hira and Pinghale, Pokharikanda of Surkhet district. Similarly, the project provided
orientation and created awareness among the producers on collective marketing approaches and
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facilitated them for bulking and marketing in collective manner through the collection center.
The project trained the groupsin collection center management, as well as facilitated linkages
with vegetable whole sellers of Birendranagar, Surkhet to establish market linkages and improve
business environment.
Most importantly, the project has been able to successfully crowd in local buyers and develop
clear mechanisms to outsource vegetable products from these areas as explained below.

Marketing
A wholesale market is a fundamentallink in the marketing channel connecting rural production
areas to urban consumption centers. In Surkhet, HVAP and other stakeholders supported an
existing market center to manage wholesale mandis. The established wholesale market in
Surkhet district is meant to strengthen relationships among backward and forward market forces
and facilitate market connections. Supporting wholesalers in forward relationship will strengthen
overall capacity through market assurance; wholesalers will have a fixed market to sell their
products, more authority when price bargaining, and the flow of their products to other regional
markets, such as Nepalgunj, Butwal, Chitwan, Birgunj, Kathmandu, Pokhara and Jhapa, will
increase. The case of Bulbule Market center highlighted in the box shows the role of HVAP in
managing of wholesale mandis in project areas.

Bulbule Regional Agriculture Market, Surkhet

(HVAP Co-investment Under Sectoral Development Fund Investment)

Bulbule Regional Agriculture Market was established in Surkhet on 18 September 2012 with
financial and technical support from the Market Development Directorate/District Agriculture
Development Office (DADO). The overall operation and management is driven by the market
management committee that consists of trader and farmer representatives formed as per
Government of Nepal/Market Operational Directives 2053. The existing market land was
provided by the Surkhet Town Development Committee to the Market Development Committee
under the recommendation DADO andoccupies 18 katha.
A master plan was devised jointly by acommittee comprised of the District Agriculture
Development Office, local traders, farmers and the District Chamber of Commerce and Industry.

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The conceptualized strategy included four market buildings, sanitation and security provisions,
and loading-unloading facilities.
So far, the executed strategy includes the construction of one of the market buildings with four
stalls.The second building with four stalls hasbeen partly constructed. Primary traders, Babu &
Shahi Sabji Mandi, have been in operation while nine wholesalers have already booked the
sheds. The committee now seeks an additional HVAP grant to further support completing the
remaining construction work.

Project Investment: The total cost of the market center isNPR 13,312,999 (USD 126,502)
divided among thefollowing agencies:
 DADO, Surkhet: NPR 1,400,000 (13,302 USD)
 HVAP Grant: NPR 1,988,099 (18,891 USD)
 Market Development Directorate: NPR. 6,500,000 (65,000 USD)
 Market Management Committee: NPR 220,900 (12,099 USD)
 Environmental Development Society: NPR 230,000 (2,185 USD)
 SIMI Nepal: NPR 75,000 (750 USD)
 CEAPRED: NPR 60,000 (600 USD)
 Dalit Welfare: NPR49,000 (490 USD)
 CECI: NPR 25,000 (250 USD)
 BDS MAPs:NPR 5,000 (50 USD)
 Labor Contribution: NPR 200,000 (2,000 USD)

The investment resources are meant to support the construction and management of the Bulbule
Regional Agriculture Product Market Center (Block E Building)whileHVAP is supporting
construction improvement (building and gate), market information digital display, Market
Management Committee capacity development, and floor leveling.
Current Scenario:
 Imported Products: This market center offers a range offruits and vegetables grown both
within and outside of Surkhet district including
o vegetables and oranges from Dailekh
o apples, beans and potatoes from Jumla
o ginger and turmeric from Salyan
o tomatoes from Jajarkot
o bananas from Salyan.

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 In addition to this, other agriculture products come from Sanjyang, Bardiya, Dang
and Chitwan districts.
 Exported Products:Large amounts of product are mainly collected and consumed within
Surkhet district, however it also exports products to Jumla, Dailekh, Kalikot, Banke,
Bardiya, Dang, Pokhara, Mahendranagar, Butwal and Chitwan districts.
 List of traders and their source of income:
o Babau Shahi Mandi: Rented 4 rooms for fruit and vegetable trade that cost NPR
96,000/year
o Neupane Fruits Mandi: Rented 1 room for fruit trade that cost NPR 26,400/year
o Timilsina Mandi: Rented 1 room for fruit trade that cost NPR 36,000/year
o Devkota Mandi: Rented 2 rooms for vegetable trade that cost NPR 54,000/year
o KP Mandi: Rented 1 room for fruit and vegetable trade that cost NPR 24,000/year
o Canteen: Rent at NPR 9,600/month
* These are the traders housed in the first market building that has been completed.

Outcome and Way Forward:

The major outcomes of the market center development are as follows;
 One roof for all the mandis
 Increased overall transactions close to around 2,375,522 USD by selling 350 quintal(a
unit of weight equal to 100kg) vegetables and fruits
 Increased revenue generation from services, rent, transaction fees
 Enhanced market information services (Demand, Supply, Price: AMIS-AEC/HVAP)
 Provisioned services of business counseling and farmer/trader interaction through
contract facilitation, B2B linkages, quality control, cropping patterns, export and
marketed production
 Improved waste management to promote green city initiatives
 Load/unload dock

7. Lessons Learned
These lessons came through the feedback from the participants during the SWOT Analysis.
Some of the lessons learned are as follows:

Intervention Strategy

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The project should have a practical and tested intervention strategy. When the project intervenes
without this strategy, beneficiaries will continue working only during the project period and then
most of the activities stop due to various factors, including lack of management.
We should be clear on what we want to achieve and should try to quickly identify problems in
the value chain and address them accordingly. During discussion with both the communities, it
was clear that most of the project support was only at the input and production level leaving the
most challenging part of marketing to the farmers – a task that is difficult for them and which
halts further activity.
Along with supporting infrastructure, like irrigation, roads must also be established so that
beneficiaries can have easier access to markets.
Market development linking traders with producers is vital as it not only brings both parties
together, but also encourages farmers to produce more as there is a guaranteed market.
Market information is also a key factor for producers to strengthen their bargaining power.
Without this information, producers are helpless and cannot bargain with traders, which leads to
damaged relationships.
Access to financial services and support plays the most crucial role insupporting farmers from
the production side. In many cases, it was observed that farmers are reluctant to change their
practices due to limited finances however there is more interest and incentive to change when
financial services are available locally better supporting farmers at the production level.
Similarly, availability of e-Agriculture and market information improves the farmers’ capacity at
the input level as, historically, access to these services (technical input from a technical person)
is quite difficult.Time factors as an important role in using these new technologies and
information. This problem of time can be solved to, some degree, through strengthening the
capacity of community and linkages with traders.

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