Livelihood Based Agri Business and Market Studies for … Livelihood Study Report of...Livelihood Based Agri Business and Market Studies for North East Rural Livelihood Project Final

Livelihood Based Agri Business and Market

Studies for North East Rural Livelihood

Project

Final report, Sikkim

April 2011

Submitted by

MART

A-32, 1st Floor,

Sector 17, Noida - 201 301 Tel: 0120-2512140, Fax: 0120-4273995

www.martrural.com

http://www.martrural.com/

Livelihood based Agri Business and Market Study in Sikkim

MART, Noida 1

Acknowledgement

At the onset, we extend our thanks to DoNER for giving us this opportunity to undertake this important

livelihood study under NERLP.

We thank Mr. Alok Kumar Shrivastava, Project Director, NERLP and his entire team at Guwahati for their

constant guidance and unconditional support during the entire study period. A number of meetings with

him and his team at Guwahati and Delhi helped in smooth completion of the assignment. We would again

like to thank him for his and team support for facilitating the stakeholders’ workshops in states. NERLP

feedback on draft report has helped us improve it suitably to make it a useful project document.

We would like to sincerely thank Mr. Biswajit Sen, Senior Rural Development Specialist, and Mr. Nathan

M. Belete, Senior Rural Development Economist at World Bank for their constant support in ensuring

completion of the study; the first meeting at World Bank office along with PD, NERLP helped finalize the

report templates. Subsequently, the initial feedback after the first field visit has helped in finalizing

selection of 5 economic activities for undertaking detailed value chain analysis in the state. We would also

like to thank Mr. Varun Singh, Social Development Specialist at World Bank and Dr. Amarendra Singh for

their valuable feedback on the study.

We would also like to thank Shri A. K. Ganeriwala, Secretary RMDD, Dr. S. Tambe, Special Secretary

RMDD and Shri D. T. Bhutia, State Coordinator NERLP for their critical support and wonderful

coordination to make the study a reality. We would like to thank all state level officials and resource

persons including Mr. A. K. Singh, District Collector, Namchi, Mr. J. S. Raje, SDM, Soreng, Dr. P. Senthil

Kumar, MD, Sikkim Milk, Mr. B. Swaroop, MD, SIMFED, Mr. R. Gurung, CEO, ECOSS, Mr. Raj Basu of

Help Tourism Private limited, Mr. J. C. Biswas DDM, NABARD, Mr. B. K. Rai, Joint Director HCCD, Dr.

K.C. Bhutia, Joint Director, AHVS, Mr. B. Subba of VHAS, Mr. Vishal Mukhia, BDO, Sikkip and Ms.

Chandrakala Rai, Deputy Director, SIRD who spared their valuable time to provide us important

information and relevant documents. We particularly thank all the stakeholders present in the two highly

informative and fruitful workshops conducted at Gangtok on 23rd August 2010 and 9th February 2011 for

their invaluable contributions and feedback in guiding and finalizing the study.

We would also like to thank all SIRD, HCCD and AHVS staff who facilitated and organized village

meetings and also accompanied us in villages.

We would like to thank a large numbers of villagers, SHG members, cooperative society office bearers,

entrepreneurs who spent their valuable time with us in field and also a number of market players

including wholesalers and retailers, processing units, transport services and various other support

services at Gangtok and district markets.

MART Team


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Contents Abbreviations and Glossary of terms ...................................................................................................... 5

Executive Summary ................................................................................................................................... 6

Chapter 1: Background and methodology ............................................................................................. 12

1.1. Background ................................................................................................................................. 12

1.2. Objectives of the study ............................................................................................................... 12

1.3. Approach of the study ................................................................................................................ 13

1.4. Key features of study methodology ............................................................................................ 14

1.5. Limitations of the study .............................................................................................................. 15

Chapter 2: State Profile and Livelihood Issues .................................................................................... 16

2.1 State profile ................................................................................................................................. 16

2.2 Key indicators for project districts .............................................................................................. 17

2.3 Rural livelihood and poverty issues ............................................................................................ 17

Chapter 3: Livelihood Profile .................................................................................................................. 20

1.1 Overall Livelihoods Profile .......................................................................................................... 20

1.2 Infrastructure and Resource Profile ............................................................................................ 22

1.3 Banking and SHG Profile ............................................................................................................. 24

1.4 Market Profile ............................................................................................................................. 25

1.5 Land based livelihoods ................................................................................................................ 27

1.6 Floriculture .................................................................................................................................. 32

1.7 Live stock based livelihoods ........................................................................................................ 33

1.8 Service based livelihoods ............................................................................................................ 35

1.9 Rural tourism............................................................................................................................... 37

Chapter 4: Value Chain Analysis ............................................................................................................ 38

4.1 Introduction ................................................................................................................................ 38

4.2 Summary of suggested interventions ......................................................................................... 40

4.3 Value Chain of Dairy .................................................................................................................... 43

4.4 Value Chain of Ginger ................................................................................................................. 54

4.5 Value Chain of Pig ....................................................................................................................... 68

4.6 Value chain of Floriculture .......................................................................................................... 78

4.7 Value chain of Homestay Rural Tourism ..................................................................................... 90


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List of secondary sources/references .................................................................................................. 103

Annexure ................................................................................................................................................. 104

Annexure 1: Some Steps taken by the State Government ................................................................... 104

Annexure 2: List of participants for the stakeholder consultation workshop ..................................... 107

Annexure 3: List of select stakeholders met during the field visit ....................................................... 108

Annexure 4: Support plan for Dairy development in the NERLP Project Area .................................... 110

Annexure 5: Sikkim State Stakeholders Consultation Report ............................................................... 116

List of Tables

Table 1: Key Indicators for project districts ................................................................................................ 17

Table 2: Surveyed Villages .......................................................................................................................... 20

Table 3: Infrastructure Profile ..................................................................................................................... 22

Table 4: Market Facilities ............................................................................................................................ 25

Table 5: Market Profile ............................................................................................................................... 26

Table 6: Cropping Pattern vis a vis Households .......................................................................................... 28

Table 7: Seasonality of Crops ...................................................................................................................... 29

Table 8: Average Investment size ............................................................................................................... 30

Table 9: Average Selling Prices of crops ...................................................................................................... 32

Table 10: Household Involvement in livestock based livelihoods .............................................................. 34

Table 11: Household involvement in service based livelihoods ................................................................. 35

Table 12: Skill levels in service/nonfarm based livelihoods ........................................................................ 36

Table 13: Summary of suggested interventions ......................................................................................... 40

Table 14: Extension services in Dairy .......................................................................................................... 47

Table 15: Constraint Solution Matrix for Dairy ........................................................................................... 49

Table 16: Financial plan for Dairy farming .................................................................................................. 51

Table 17: Sensitivity Analysis forDairy ........................................................................................................ 52

Table 18: Implementation plan for Dairy .................................................................................................... 52

Table 19: Constrain Solution Matrix for Ginger .......................................................................................... 62

Table 20: Financial plan for Ginger cultivation ........................................................................................... 64

Table 21: Sensitivity analysis for Ginger ..................................................................................................... 65

Table 22: Implementation plan for Ginger ................................................................................................. 66

Table 23: Comparative weight gain analysis of 2 pig varieties ................................................................... 71


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Table 24: Constraints Solution Matrix for Pig rearing ................................................................................. 72

Table 25: Financial plan for pig rearing ....................................................................................................... 74

Table 26: Sensitivity Analysis for pig rearing .............................................................................................. 75

Table 27: Implementation plan for pig rearing ........................................................................................... 76

Table 28: Comparative analysis of different flowers .................................................................................. 80

Table 29: Constraints Solution Matrix for Floriculture ............................................................................... 84

Table 30: Financial plan for Floriculture (Alstroemeria) ............................................................................. 86

Table 31: Sensitivity analysis for Floriculture ............................................................................................. 87

Table 32: Implementation plan for Floriculture ......................................................................................... 88

Table 33: Constraints Solution Matrix for Homestay.................................................................................. 96

Table 34: Financial plan for Homestay ........................................................................................................ 98

Table 35: Sensitivity Analysis for Homestay ............................................................................................... 99

Table 36: Implementation plan for Homestay .......................................................................................... 100

List of Box items Box 1: Study Framework ............................................................................................................................. 13

Box 2: MART's 3M Model ............................................................................................................................ 15

Box 3: Value chain analysis framework ...................................................................................................... 38

Table of Figures

Figure 1: Sikkim: Area and landuse Map ..................................................................................................... 21

Figure 2: Cropping Pattern .......................................................................................................................... 27

Figure 3: Consumption vis a vis Marketable Surplus .................................................................................. 30

Figure 4: Crop Marketing Channels ............................................................................................................ 31

Figure 5: Sikkim milk production estimate ................................................................................................. 43

Figure 6: Value chain map of milk ............................................................................................................... 45

Figure 7: Production trends of Ginger ........................................................................................................ 54

Figure 8: Value chain map of Ginger ........................................................................................................... 57

Figure 9: Value chain map of Pig ................................................................................................................. 70

Figure 10: Value chain map of Flowers ....................................................................................................... 81

Figure 11: Value of Tourism Projects in Sikkim ........................................................................................... 91

Figure 12: Value chain map of Homestay rural tourism ............................................................................. 94


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Abbreviations and Glossary of terms APRLP Andhra Pradesh Rural Livelihood Project

AHVS Animal Husbandry and Veterinary Sciences Department

DoNER Ministry of Development for North Eastern Region

DRDA District Rural Development Agency

FGD Focus Group Discussion

FYM Farm Yard Manure

GPU Gram Panchayat Unit

GNP Gross National Product

GSDP Gross State Domestic Product

HCCD Horticulture and Cash Crop Development Department

HDI Human Development Index

Hul Unit of land

Ishkus Squash, a fruit bearing creeper used as vegetable

Kg Kilogram

Kms Kilometers

MART A leading livelihood and marketing consultancy agency

MFI Micro Finance Institution

MPDPIP Madhya Pradesh District Poverty Initiatives Project

MT Metric Ton

NABARD National Bank for Agriculture and Rural Development

NERCRMP North Eastern Region Community Resource Management Project for

Upland Areas

NERLP North East Rural Livelihood Project

MGNREGA Mahatma Gandhi National Rural Employment Guarantee Act

NREGS National Rural Employment Guarantee Scheme

NSDP Net State Domestic Product

OTELP Orissa Tribal Empowerment and Livelihood Program

RBI Reserve Bank of India

RGVN Rashtriya Gramin Vikas Nidhi

ROI Return on Investment

RMDD Rural Management and Development Department

Rs Rupees

SGSY Swarnjayanti Gram Swarozgar Yojana

SHG Self Help Group

Sikkim Milk Sikkim Cooperative Milk Producer’s Union Limited

SIMFED Sikkim State Cooperative Supply and Marketing Federation Limited

SIRD State Institute of Rural Development

SISCO Bank Sikkim State Cooperative Bank Ltd

SHRA Sikkim Hotel and Restaurant Association TASS The Travel Agents Association of Sikkim (TASS)

VAT Value Added Tax

WORLP West Orissa Rural Livelihood Project

http://rural.nic.in/anual0203/chap-5.pdf


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Executive Summary

The North East Rural Livelihood Project (NERLP) of the Ministry for Development of North Eastern

Region (DONER), Government of India, aims to address rural poverty in the region through creation

of sustainable livelihood for the rural poor, particularly for women. The project has commissioned

‘Livelihood Based Agri Business and Market study’ in Sikkim, Mizoram, Nagaland and Sikkim to

MART, a leading livelihoods and marketing consultancy, which was selected to conduct the study in

all four states. MART signed a MoU with DoNER and closely coordinated with Project Director,

NERLP based at Guwahati for finalizing study design, plan, fieldwork and information to key state

stakeholders. The primary objective of the study is to assess economic opportunities in both farm and

non-farm activities in the project area. NERLP assumes that intensive and innovative use of these

local opportunities can result in enhanced livelihood opportunities and incomes for the communities.

MART used 3M approach for the study that looks at ecosystem at the village level, market and

enabling environment to analyze the livelihood scenario and challenges. Study looked at existing

resources, skills, infrastructure and support services, markets for poor, major livelihoods of poor

involved in agriculture, livestock and non-farm activities to suggest practical interventions.

Study followed an 8-step approach involving secondary literature review, stakeholders’ consultation,

preliminary field visits, village and market survey, writing draft report and final report after receiving

feedback from NERLP and the World Bank. MART covered 13 villages with DRDA support and

conducted FGDs and individual interviews with villagers, state and district officials. Market study

involved interviews with wholesalers and retailers, traders, transporters, entrepreneurs, cooperatives

and processing units based at South district, West district and Siliguri. MART coordinated with

Project Director, NERLP during the entire study period for finalizing study design, plan, fieldwork

and information to key state stakeholders. MART used 3M approach for the study that looks at

ecosystem at village level, market and enabling environment to analyze the livelihood scenario and

challenges and accordingly suggest practical interventions.

Sikkim is rich in natural resources and one of the most sought after tourist destinations of India. In

2015, the number of tourists visiting the state is expected to be around 7.93 lakhs (Department of

tourism) which is more than the existing population. The community consists mainly of Nepalese,

Lepcha and Bhutia community with Hinduism and Buddhism being the major religions.

Land ownership in Sikkim is restricted to two types only; government land and private land with no

common land or panchayat land. The NERLP project area of South and West districts of Sikkim is the

most poverty stricken area with acute water shortage. Almost 1/3rd land of the project area is unfit for

agriculture. There is a strong need for land development activities to promote cultivable crops. The

area is also prone to natural disasters like landslides which affect the transport and communication

very severely.

There are about 2000 SHGs formed by State Rural Development Agency and other NGOs all across

the state of which around 1300 are in the NERLP project area with almost 100% coverage of the poor

under SHGs. The SHGs are also federated in some cases although the linkages and institutional

structure of these federations are reported to be weak and needs strengthening. The poor in Sikkim is

also reported to have low levels of business and marketing skills.


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MGNREGA is reported to be functioning satisfactorily in the state with a very high (around 80 days)

average person days of work being generated. All 163 panchayat units of the state have gone through

social audits. The government has taken up a drive towards financial inclusion by promoting business

correspondent models using biometric cards for payments and other financial service extension in

rural areas. Under the Sikkim Universal Financial Inclusion Project, the government has taken a

target to open savings account for 7500 married rural women across Sikkim and provide doorstep

banking services including health, life and property insurance through the business correspondent

model.

The government is also implementing a unique housing policy to make the state free from “kachha

houses” by 2011. It is also worth mentioning that Sikkim is one of the few states in the country to have

received “Nirmal Rajya” award following achievement of almost 100% sanitation. The Government

also has a special focus on promoting organic agriculture/horticulture/milk produce through Sikkim

Organic Mission. The State Institute of Rural Development (SIRD) is also actively implementing

livelihood schemes on Apiculture and floriculture under SGSY special projects.

The extension departments of the government provides free of cost training and exposure apart from

inputs like seeds, bio fertilizers, cattle feed and also infrastructure support like poly-houses, tools,

implements etc. It was also observed that most government schemes routed through the line

departments of Agriculture, Horticulture, Animal Husbandry etc. do not have specific schemes for the

poor and and thus there is little pro-poor focus in the implementation of these schemes.

All surveyed villages have mobile network coverage, bank, post office, milk collection centre, roads,

skill training centres, transport services, drinking water, electricity, school building, veterinary

department, agro cooperatives and haats. While 80% villages had marketing cooperatives and access

to nurseries, 90% of the surveyed villages had community buildings, too. About 40% of the villages

had irrigation facilities in the form of springs and rivulets. However, access to cold storages and forest

godowns is low; around half of the surveyed villages had access to market yards. Recently a few

floriculture cold storages are also opened in the state. Since paddy is sparsely grown paddy hullers are

found in only 20% villages.

About 90% of the surveyed villages are connected by all weather roads which are frequented by

private jeeps and taxis along with occasional buses run by Sikkim Nationalized Transport. While all

surveyed villages had access to 24 hour electricity, approximately 80% population in all the villages

had mobile phones.

The stakeholders feel that in spite of the progressive actions from the government regarding

livelihood promotion, the participation of the poor in the aforesaid programmes is less and there is an

ardent need of community level institutions like cooperatives, farmers’ groups, producers’ company

etc. The government has also taken policy level decisions to promote and encourage cooperative

systems in the state by awarding all government contracts and tenders for supply of materials and

construction to registered cooperatives only. However, the participation of the poor and the needy in

these cooperative institutions are still areas of improvement.

There are five apex level cooperative bodies in the state which are Sikkim State Cooperative Supply

and Marketing Federation Ltd (SIMFED), Sikkim State Cooperative Bank Ltd (SISCO Bank), Denzong

Agriculture Cooperative Society Ltd, Sikkim Cooperative Milk Producers’ Union Ltd and Sikkim

Consumer Cooperative Society Ltd.


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There are 16 bank branches in South District and 9 in West District. While deposits have registered a

healthy growth rate in 2009-10 (19.66% in South District and 25.94% in West District), the growth

rate of loan outstanding is surprisingly low (10.32% in South District and 3.99% in West District).

SISCO bank is a major stakeholder in extending financial services to the rural poor and Kisan Credit

card being the major financial product for on-farm credit. Credits to farmers are routed through

primary agriculture credit societies at the village level. The credit portfolio of SISCO bank in the South

District has been mainly for financing Ginger cultivation, dairy and piggery and also SGSY and non

SGSY activities.

The major SGSY activities sanctioned by the South district branch are floriculture, goat rearing and

vegetable cultivation. Other activities supported and financed through SHGs and SHG federations are

marketing of hill broom, piggery, ginger cultivation, wool knitting etc. The rural community has been

found to be more or less financially disciplined with around 6.7% NPA of the South district branch of

SISCO Bank. However the banks and financial institutions were found to be very conservative in

extending adequate and timely loans to poor. Activity specific funding based on practical return on

investments need to be promoted.

Government administrative officials stated that implementation costs of central government funded

schemes are very high in Sikkim due to extremely difficult terrain, high cost of transportation, inputs

and labour. Although an allowance for hilly areas exist for some schemes, they are found to be largely

inadequate. It is also worth mentioning that Sikkim has the highest per capita central assistance in the

country (planning commission).

It was also suggested by the stakeholders that NERLP needs to promote certain potential activities in

a cluster based approach to achieve economies of scale and build cost effective aggregation and

marketing models around the same. The cluster approach will also help in minimizing costs of

support service extension and reduce transport costs for input supply and output marketing. It was

also suggested that local level resource persons be engaged in motivating community for enhanced

participation in the project.

There are no regulated markets or mandi for farm based produce in Sikkim. The major feeder and

terminal market of Sikkim is Siliguri which is in West Bengal. Jorethang, due to its strategic border

location between South District, West District and West Bengal is the next important market after

Siliguri. Other important town level markets are Namchi, Namthang, Ravongla etc. Permanent shops

exist in all villages, vendors and traders all villages in deal in agriculture, allied and non-farm

activities. Most GPUs have access to weekly markets all across the state which offer producers the

opportunity of selling directly to consumers.

A wide range of crops under agriculture and horticulture are cultivated all across Sikkim. Maize is

chiefly cultivated in the area but as a fodder crop. Paddy is cultivated only in patches. 100% paddy

and maize are consumed at the household level. The project area cultivates ginger as a principal cash

crop. A shift in the winters and prolonged summers in the state is being attributed for the downfall in

quality and quantity of large cardamom produced in the state. Sikkim otherwise is the largest

producer of large cardamom in the country. All types of vegetables like cabbage, cauliflower tomato,

potato, peas, cherry chilli, Squash etc. are also cultivated. While most vegetables are primarily for self

consumption potato, tomato, chilli and Squash are regularly sold in the market. While high valued

cash crops are sold through town level traders, vegetables and other crops are often sold through

weekly haats and village level traders. Floriculture has picked up pace in the state with the


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government putting a lot of effort in promoting the activity by providing free of cost inputs,

infrastructure development, capacity building and handholding. SIRD is also promoting a special

SGSY scheme around floriculture in the project area. The major markets for flowers are SIMFED and

Mainam Gardens which are currently absorbing most of the produce.

Sikkim has a strong base of Livestock based rural livelihoods. Around 73% of population engaged in

animal husbandry sector is women. Animal husbandry and fisheries sectors together engage 3.7 lakh

populations. The total employment in animal husbandry and fisheries is around 9.05% of the total

work force. All villages surveyed were found to have 60-65% dairy and pig farmers. Sikkim is a milk

surplus state with Sikkim Milk producer’s Co-operative Limited (Sikkim Milk) being the biggest

player in Dairy in the State. More than 12,000 dairy farmers through nearly 280 co-operative

societies are registered members of this cooperative. More than 15,000 litres of milk are being

processed everyday by the cooperative resulting in incomes to the tune of Rs 60 lakhs per month to

dairy farmers. An average household has 3 cows of local variety with average 6 litres of milk output

per day. After a household consumption of 1-2 litres the average household sells off the surplus to the

milk collection centres in the GPUs. The state government has launched dedicated missions on

Poultry and Dairy to enhance livelihoods promotion initiatives under these activities.

The poor in Sikkim are reported to have low levels of business and marketing skills. The rural youth of

Sikkim was reported to be mostly literate but lacking in specialized vocational or employability skills.

As a result most vocational jobs like that of cook, plumber, electrician, barbers etc in the state

constitute of non locals. The state and district level stakeholders interacted shared the view that there

is a lot of potential for the local youth to be absorbed in the hospitality industry provided they acquire

required skills. Apart from targeting to be a poverty free state by 2015, there has been substantial

focus of the government to create employment avenues through creation of Livelihood Schools

(vocational training centres) for youth in all constituencies of the state. These Livelihood Schools are

to be managed by the State Institute of Capacity Building headquartered at Jorethang and having

state of the art infrastructure for imparting trainings. Most surveyed villages had people in

government service, teaching and army etc. fixed jobs. Incidence of private jobs is very low.

Carpentry, construction and driver are certain skills in which a considerable number of households

were engaged. Women possess traditional skills like food processing and knitting but very few use

these skills for business purposes.

Rural tourism is one of the most upcoming sectors in Sikkim which has potential to provide

employment and address poverty.

Most SHGs in Sikkim have less than nine members and no age bar. The members of SHGs make

average monthly savings of Rs 50 to 100, and are found to be actively involved in inter-group loaning

at rates of interest ranging from 24% to 60% per annum. However, there is a risk aversive behavior

when the same loan is routed from banks at lower rates of interest. SHG members were found to be

taking loans from SHG funds primarily for consumption purposes with a section of productive loans

for ginger cultivation, piggery and poultry activities. Most activities taken up by SHGs under SGSY are

at individual levels only. Many SHGs have experimented with activities like paper bag making, pickle

making, knitting, mushroom cultivation etc. but have faced marketing problems for their produce.

There are number of activities that project can promote among the poor that includes potato

cultivation, vegetable cultivation, fish culture, pineapple cultivation, piggery, goatery, pulse

cultivation, cow rearing, rubber plantation, and areca-nut cultivation. However, five activities namely


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potato, vegetables, fish culture, pineapple and pulses have been shortlisted in consultation with PD,

NERLP and the World Bank staff for a detail value chain analysis using criteria such as interest and

capacity of poor, possibility of engaging large number of poor, project mandate, market demand and

gestation period. Value chain helps to identify opportunities for poor at every stage of product

movement from producers to consumers based on which intervention strategies can be designed.

The supply for select five products in the state is less compared to their demand and therefore, these

can be promoted in the state. All five products are feasible from technical, market and economic point

of view. The key constraints involved in value chain products are high costs of initial investment, use

of traditional practices, low productivity levels, and low affinity among farmers for collective inputs

sourcing and output marketing.

The suggested interventions and size of investments along with partnership potential regarding the

selected products are as follows:

Produce / Product

Intervention Suggested

Size of activity suggested Convergence and partnership potential

Unit of activity

Fund requirement (Rs)

RoI (%)

Cow Milk Improved practices in dairy farming both project districts

3 cross bred cows per house hold

151598 29.43

AHVS department and Sikkim Milk union.

Ginger Improved package of practices for Ginger cultivation in both project districts

1 acre 24300 73.6 Wholesalers, HCCD Department, SIMFED, Progressive farmers and Financial institutions

Pig Rearing of American Hampstead variety of pig by adopting improved package of practices

6 pigs (5 female and 1 male) per household

209234 36.2

Wholesalers and retailer, Inputs suppliers , Progressive farmers, Financial institutions And AHVS department

Floriculture

Cultivation and marketing of Alstroemeria flowers

400 saplings under 1 poly house of 90 ft by 22 ft

263200 10.9 HCCD Department, SIMFED, Mainam Gardens, Other Wholesalers and retailers, Inputs suppliers , Financial institutions and Progressive farmers

Rural tourism

Promotion of Homestay based Rural Tourism

1 household constructing additional room for 4 persons

462400 20.3 Tourism Department, various cooperative societies involved in rural tourism, ECOSS, Help tourism, TASS etc

The activities to be performed by the project involves selection of beneficiaries and cluster, social

mobilization and institution building of poor, preparation of business plan with the community,

organize technical and business trainings, market exposure visits, establish backward and forward

linkages with resource agencies, facilitate market linkages and monitoring and evaluation, and

promoting higher order institutions such as federation and producer groups for collective actions.


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Project needs to create a chain of marketing professionals at head office, state level and district level

and para professionals at the village level to execute the implementation plan.


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Chapter 1: Background and methodology

1.1. Background

The North East Rural Livelihood Project (NERLP) of the Ministry for Development of North Eastern

Region (DONER), Government of India, aims to address rural poverty in the region through creation of

sustainable livelihood for the rural poor, particularly for women. The project has commissioned

‘Livelihood Based Agri Business and Market study’ in Sikkim, Mizoram, Nagaland and Sikkim.

MART, a leading livelihoods and marketing consultancy, was selected to conduct the study. MART held

discussions with DONER team at New Delhi and signed a MoU. MART placed a two member team for

each state to coordinate the study. MART maintained close coordination with Project Director, NERLP

based at Guwahati to facilitate the study.

1.2. Objectives of the study

The primary objective of the study is to assess economic opportunities in both farm and non-farm

activities in the project area. NERLP assumes that intensive and innovative use of these local

opportunities can result in enhanced livelihood opportunities and incomes for the communities.

The study evaluates livelihoods and opportunities on the basis of the following two components:

1.1.1 Infrastructure, resources and support services

Identify major livelihood occupations of the rural community, categorize them according to

geographical, ecological and watershed clusters and assess their viability based on local resources,

infrastructure, support services, technology, policy environment and potential for growth.

Suggest strategies to enhance income and nutritional security from the existing livelihoods

through improved productivity, access to inputs and markets, capacity building, and collective

action in marketing to achieve economic scale.

Provide guidance in agriculture and horticulture development, changing demand and supply

scenario, projection of future trends to ensure that farmers are able to face the challenge of

negotiating on an equitable basis with market players.

1.1.2 Value chain analysis

Shortlist major high growth subsectors and commodities for value chain analysis where the

project can intervene to benefit the poor.

Prepare value chain map for key products/commodities/services reflecting economic return at

every stage, product movement from the rural producers to the final consumers.

Identify major players in technology, markets, finance, and inputs contributing to value chain,

and explore partnership possibilities with them.

Identify infrastructure availability and institutional arrangements for input supply and output

marketing.

Identify constraints and institutional obstacles, social process, vulnerabilities and risks

hampering benefits to the poor along the value chain.

Identify critical investment needs in the value chain that can accrue better income to the poor.


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Prepare techno economic feasibility guideline for setting up small, viable and sustainable

processing units to impart value addition and longer shelf-life to-farm products.

1.3. Approach of the study

Box 1: Study Framework

Activities Key Steps Outputs

Reviewed of project literature and reports

Studied livelihoods initiatives such as NERCRMP in north east states.

Studied secondary reports

Met World Bank and Project Director, NERLP at New Delhi to discuss study design

Step 1

Pre study preparation

Developed better understanding of the study and project states

Finalised study design and plan

Project Director sent intimation to state rural development office regarding MART field visit and coordination support

Met state nodal officer, rural development department officer at Agartala

Meeting with DRDA and line department officers

Shared study approach and methodology

Understand NERLP objectives

Step 2

Initiation meeting at state and

district level

List of key stakeholders finalised for meeting

Feedback on livelihood constraints and opportunities in the state

Finalized approach and methodology

Interacted with key stakeholders from line departments such as agriculture, horticulture, animal husbandry, resource agencies, and key market players

Visited three villages in two project districts

Generated list of livelihood activities

Step 3

Fieldwork -1 (Interactions

with key stakeholders)

Shortlisted 10-12 major products for promoting in the state and value chain analysis

Prepared list of stakeholders and value chain players and service providers

Finalized plan for Fieldwork-2

Met with World Bank staff and Project Director, NERLP at New Delhi to share fieldwork-1 observations and experience

Discussion to finalise products for taking up value chain analysis

Step 4

Initiation Report

Finalised five products i.e. Ginger, Dairy, Pig rearing, Floriculture, and Rural Tourism for value chain analysis

Submitted initiation report containing livelihood profile and issues, overall approach and methodology, and field visit plan

Finalized field visit plans

Placed field teams

Visited 10 villages in two districts and interviewed producers/farmers

Met market players in wholesale and retail markets at Agartala and project districts.

Step 5

Fieldwork -2 (Interactions

in villages and markets)

Completed livelihood survey in villages and markets

Collected information for value chain analysis of 5 products by meeting value chain players


MART, Noida 14

Met line-department officials

Livelihood analysis

Value chain analysis for 5 products

Data analysis

Report writing

Step 6

Draft Report

Draft report as per study objectives and feedback of World Bank and PD, NERLP

Share draft report through power point presentation to World Bank, DoNER staff and other stakeholders as suggested by the PD, NERLP

Step 7

Stakeholders consultation workshop to share Draft

Report

Agreed feedback of stakeholders on the draft report

Content for final report finalized

Stakeholders consultation workshop report

Feedback incorporated from stakeholders consultation workshop report

Step 8

Final Report

Final report as per study objectives defined earlier

1.4. Key features of study methodology

MART coordinated with Director, Ministry of DoNER and Project Director, NERLP, Guwahati for

finalizing study design, plan, fieldwork and intimation to key stakeholders.

The Project Director, NERLP intimated the state government’s rural development department about

the proposed study to seek their cooperation during the field visit. Additional Secretary, Rural

Management and Development Department introduced MART team to district level officials of both

project districts and also facilitated meeting with heads of government agencies at state level.

MART team got in touch with officials of both project districts to finalize village selection for

undertaking village survey and meeting with state line department officials. Line department, NGO

and SIRD staff accompanied MART for village visit and facilitated meetings with villagers.


MART, Noida 15

3M is a systematic approach to

livelihood based on the three tenets of

micro finance, micro market and micro

planning. The model primarily provides

a tool to systematically map the local

resources, skills, support services,

markets and enabling environment for

developing business plans. This

process of 3M is as follows: surveys are

conducted to assess the current

available resources as well as the

existing market demand. Once

established, the levels of supply and

demand determines the selection of

appropriate livelihoods activities.

Analysis of information collected from villagers, market players and enablers leads to field based practical strategies to

successfully launch and manage the activities. MART has extensively used 3M (Micro Finance, Micro Market and Micro

Planning) Model for livelihood promotion, for resource mapping under various poverty alleviation projects across India such as

APRLP, WORLP, OTELP, APDPIP, MP-DPIP and Rajasthan-DPIP. Based on its successful implementation a User Manual has

been prepared with support of DFIDI and CARE India for its replication by agencies engaged at grass root level in poverty

alleviation. The model has been presented at national and international seminars in USA, Philippines, Sri-Lanka and Thailand.

MART used 3M approach to capture the existing livelihood scenario

as described in Box 2.

The fieldwork was planned in two phases: in the first phase knowledge of major livelihood activities

was gathered through discussions with stakeholders at the state and district levels and popular

activities were selected for the study; in the second phase, value chain analysis of the livelihood

practices, productivity and marketing challenges was done.

Ten villagers were visited in two project districts and information was collected from villagers through

Focus Group Discussion (FGD). Individual interviews were conducted with farmers/villagers engaged

in shortlisted activities for value chain analysis. List of villages are mentioned in Chapter 3.

Interviewed value chain players like the producers, wholesalers, retailers, traders, transporters,

entrepreneurs, processors, cooperative agencies and government institutions at village, block, district,

and state level. List of stakeholders met is annexed.

1.5. Limitations of the study

The information from villagers was collected using FGD approach and therefore primary data

collected from them may not exactly match with data available with government department.

Market related data has been collected from wholesalers and retailers in the wholesale and retail

markets by conducting interviews. Therefore, accuracy of data may not be entirely reliable.

Discrepancy has been noticed in various state level data available from various secondary sources. Self

judgment has been used while using the data from a particular source.

The value chain analysis of each products and the intervention plans have been worked out after

interactions with entrepreneurs, best practitioners, market players and enabling agencies. The unit

costs and return on Investments may vary from circulated and published unit costs and return on

Investments by different agencies like the line department and NABARD.

Box 2: MART's 3M Model


MART, Noida 16

Chapter 2: State Profile and Livelihood Issues

2.1 State profile

The Location: Sikkim is placed between latitudes of 27° 5' N to 20° 9' N

and longitudes of 87° 59' E to 88° 56' E. Positioned in north-east, Sikkim

is the second smallest state of India. Sikkim is sandwiched between

Nepal in the west and Bhutan in the east, China in the north and West

Bengal in the south. The Indian border of Sikkim is shared only with the

state of West Bengal.

The Land: Oblong in its shape, Sikkim lengthens 114 kms approx.

from north to south and broadens 64 kms approx from east to west.

Sikkim covers an area of 7,096 km². Highly dominated by mountainous

terrain, Sikkim gets water from rivers like Teesta and Rangeet. The

State receives an Annual Rainfall of 2000mm to 4000mm.Roughly

three-quarters of its perimeter, enfolds the east and the west,

incorporating the complete northern borderline. The southern fringe of

Sikkim is the only liberated edge that is open to West Bengal.

The whole setting makes a horseshoe corral, which acts as a trap for moisture-laden winds from the Bay of

Bengal. Consequently, Sikkim receives plenty of rain showers round the year. With the elevation ranging

from 280 m (920 feet) to 8,585 m (28,000 feet), Sikkim has diverse climate ranging from tropical to

tundra. The geographical statistics of Sikkim is probably the reason for the rich collection of flora and

fauna in this small state.

The People: The population of Sikkim is 540851 (2001 Census) with around 20.6% Scheduled Tribe

population and 5% Scheduled Caste. The population density of the state is 76 persons per square

kilometer with 36.55% population below poverty line. 68.8% Sikkimese are literate.

Sikkim has an interfusion of diverse communities, cultures, religions and customs. In Sikkim, the leading

communities are the Lepchas, Bhutias and Nepalese. However, the municipal areas are dominated by the

plainsmen, who have settled there, owing to their businesses and Government services. The

developmental activities in Sikkim like construction of roads, bridges, buildings etc, have informally

invited migrant laborers from the plains and Nepal.

The Lepchas: The Lepchas are said to be the original inhabitants of Sikkim. They used to reside in Sikkim,

long before the migration of Bhutias and Nepalese. The original Lepchas were believers of the bone faith

or mune faith. The faith was essentially based on spirits, good and bad. They used to worship spirits of

mountains, rivers and forests. Constituting only 13% of the total population of Sikkim, Lepchas are

concentrated in the central part of Sikkim. Lachen, Lachung River and Dickchu are the prominent places

of Lepchas.

Map 1: Sikkim District Map


MART, Noida 17

The Bhutias: The Bhutias are people of Tibetan origin. After the 15th century, these people migrated to

Sikkim. The northern part of Sikkim is basically inhabited by the Bhutias. These people speak 'Sikkimese'

language. If compared with the Lepchas, the Bhutias are dominating large number of villages constituting

around 16% of the total population of Sikkim,

The Nepalese: In Sikkim, the Nepalese came long after the Lepchas and Bhutias. They migrated to Sikkim

in huge numbers and rapidly, emerged as the leading community. In the present day, the Nepalese

constitute 67% of the total population of Sikkim. These people commenced terrace farming in the state.

Cardamom is an important cash crop that was cultivated by the Nepalese. The Nepalese are sub-divided

into various castes and tribes like Bawans (Brahmans), Chhetries, Gurungs, Tamangs, Rais, Limbus,

Magars, Damais, Kamis etc.

The Economy: The State is one of the most bio-diverse areas in the country, suitable for a large variety

of Agro/horticultural crops. Approx. 11% of the total geographical area is under agriculture. Cultivators

account for the greater majority of the people in the state with 57.84%. The importance of agriculture can

be judged by the high percentage of population approx. 65% engaged in it Agricultural labourers as a

whole constitute only 7.81% of the workers in the state. Animal husbandry is also an integral part of the

house hold economy of the region. The past one and half decade has witnessed a tremendous upward

swing in various development programs giving a new thrust to the Sikkim economy. This process has

increased wage employment opportunities. Though most of the inhabitants are basically agriculture, they

have diversified into tertiary jobs such as Government services.

2.2 Key indicators for project districts

Table 1: Key Indicators for project districts

Indicator State South District West District

Population (Census 2001) 540851 131525 123256

Total area (square kilometers) 7096 750 1166

Percentage of total population 100 24.31 22.79

Total Number of Households (2009) 76813 20380 23851

Households who have availed no

benefits from Government schemes

5973 1827 1397

Number of SHGs (as per SIRD) 2000 737 537

Number of bank branches 80 13 10

Average population per branch 6761 10117 12326

Source: “Sikkim in Brief 2005”- Government of Sikkim, RMDD census 2009, NABARDs

2.3 Rural livelihood and poverty issues

(Source: Rural Management and Development Department and Human Development Report 2001)

Being the highest, steepest and remotest state in the country poses unique challenges for sustainable

development. Inaccessibility, marginality, fragility in physical terms lead to a limited base for sustaining

livelihoods and result in a higher degree of vulnerability, risks and uncertainty in realizing the outcomes

of livelihood activities. Any activity conducted by the poor is restricted in terms of access to markets and


MART, Noida 18

support services. Market information is also restricted in remote villages where the markets are mostly

controlled by middlemen. The major feeder and terminal market of Sikkim is Siliguri which is in West

Bengal. The state is also dependent upon West Bengal for the major railway junction of the area which is

New Jalpaiguri and the only airport in the area which is Bagdogra. Though per capita resource is high,

productive resource or asset base is limited.There are a total of 26 Developmental Blocks, 163 Gram

Panchayat Units, 891 Gram Panchayat Wards (GPW) in the State.

Primary sector employs about 50% of the working population, 12% are in government jobs and about 10%

are self employed. Slightly more than 5% of the total rural population was found to be unemployed, which

along with the issue of underemployment is a matter of concern. Unemployment is highest in villages with

higher levels of education and those that are adjacent to urban areas. The multifarious development

schemes of the government are omnipresent and 5973 households (less than 8%), have indicated in the

State census 2009 that they have not received any benefits from the state government so far.

Of the total rural area of 1633 square kms, dry land farming constitutes 53%, 21% is wasteland, 19% is

under large cardamom plantations, and 7% is irrigated and is under paddy cultivation. Taking into

account the sharp decline in large cardamom production, nearly 40% of the private land is non-productive

and mostly a waste land as far as rural livelihoods is concerned. The productive resource base in rural

areas is only a fraction of the total resource owned. Ninety percent of the State population is rural and

agriculture is the primary source of livelihood for the villagers. However, the contribution of agriculture to

the state GSDP has been showing a declining trend, indicating a stagnation and reduction in incomes due

to reduction in productivity and production of the major cash crops, namely, ginger, large cardamom and

orange which are facing pathological problems leading to low income levels in the villages. The sectoral

contribution of agriculture to the GSDP has been declining from 52% (1980-81) to 21% (2004-09).

Limited irrigation coverage, mostly rain fed farming, high percentage of wasteland, coupled with

reduction in production and productivity of horticulture crops has resulted in stagnation in farm income.

Consequently, the demand for non-farm employment from the rural households has been sizeable and

nearly 52,000 rural households out of 90,000 were provided employment under MGNREGA during

2008-09. There are limited employment opportunities in the urban areas as well to attract seasonal

migration. Also, there is a general reluctance amongst the simple hill folks to venture outside the state in

search of employment. The demand for non-farm employment is during the period October to March,

which is the dry season as well as agriculturally lean season. Employment opportunities for educated

youth in secondary and tertiary sectors are very limited resulting in high scale of unemployment.

Population projections indicate that the annual growth rate will continue to be almost double that of the

national average during the period from 1991 to 2016. As per these projections, the population of Sikkim

would be 739,000 by 2016 . This high rate of growth points to the need for interventions in the area of

population management in the State. A positive feature, however, is that Sikkim has a very young

demographic profile, with only 4.5 per cent of its population in the 60+ age group . Population in the 0–14

age cohort is 39 per cent of the total population, while 60 per cent of the total population is below 24

years. Thus, State policies should focus more on the youth who, if properly motivated and trained, could

be of tremendous value to the State building process


MART, Noida 19

Of the total 76,813 rural households, 3106 (4%) are vulnerable ( vulnerability being defined as Single

woman headed household, Old age headed household and Minor headed household), out of which more

than half were old aged households i.e. these old aged were staying alone. There is a need to provide a

selective robust social safety net for these vulnerable households specially for those among them who are

economically challenged.

More than two fifth (42%) of the rural houses were found to be pucca or permanent type, which had both

the walls as well as the roof made of pucca material. The government is implementing a special mission to

make the state kuccha house free by 2015.

At the state level, of the total 76,813 households, 24,397 households (32%) were found to be educationally

backward with educationally backward households being defined as those who have no family member

above 30 years of age, who has passed fifth grade.

There is an acute water shortage during winter which is the dry season. November to March is the dry

season, and due to the reduction in the discharge of the mountain springs during these 5 months, the

rural water security is adversely affected. The East, South and West districts are the most affected since

village springs here are dying up due to insufficient recharge. 13 of the 26 blocks namely, Duga, Rakdong,

Pakyong, Rhenock, Khamdong in East, Namthang, Jorethang, Melli, Namchi, Wok and Temi in South and

Kaluk, Soreng and Gyalsing in West are facing the maximum shortage in drinking water.

In terms of sanitation, the State has made tremendous progress and only 797 (1%) of the total 76813

households do not have toilets. These are mostly in the labour camps of BRO, hydel power developers,

transition camps, temporary herder sheds and others. The state is the only state to have achieved “Nirmal

Rajya” award from the president of India.

The persistence of poverty in this hill State is in stark contrast to its relatively high achievement in the

social sectors as compared to the national average. However, this could be explained by considering that

Sikkim remained marginalized from the development activities that characterized mainstream India.

Prior to its merger with India, its very political economy did not, in fact, permit Sikkim to entertain

development interventions of a democratic variety. Only in the last 25 years, the philosophy of growth

with equity and self-reliance in the planned development of the State has become important.

The per capita GSDP at current prices for 2003-04 was Rs 23786 while that of India was Rs 23492. Also

the BPL population as per 2001 census of Sikkim was 36.55% while that of India was 26.1%. The high per

capita GSDP vis-à-vis a very high poverty status implies that income distribution is very skewed in

Sikkim. The coexistence of extremely affluent segments with the astonishingly poor overwhelming

majority is hard reality for Sikkim, although there are no incidences of abject or extreme poverty.

Secondly, since most of the poverty-stricken people are concentrated in rural areas, the urban-rural gap,

in terms of both distribution of income and asset creation, could emerge in a very precarious manner. In

the long run, this may go against environmental security and socio-economic sustainability of the State.

Thirdly, the syndrome of income concentration indicates a deviation in the fundamental principle of

objective governance and management of the economy wherein the guiding philosophy has been to

distribute national wealth across the State in an increasingly equitable manner.


MART, Noida 20

Chapter 3: Livelihood Profile

The success and growth of poor’s livelihood depends on enabling environment in terms of support

services provided by government and private players, availability of basic infrastructure facilities, training

and skills promotion facilities, marketing information and infrastructure, private sector participation,

promotion of micro, small, and medium enterprises, supportive legal and policy framework, and overall

entrepreneurial environment.

At an individual level viability of a livelihood is influenced by entrepreneurial attitude of the community,

organization and management practices and decisions related to input sourcing, adoption of package of

practices, technology, market access, access to finance, and access to government support for the

sustainability of livelihoods.

The following section presents findings from the field survey for existing infrastructure and support

services used by villagers, markets availability and linkages, existing livelihoods pursued by villagers, and

livelihoods pursued by SHGs.

1.1 Overall Livelihoods Profile

Table 2 is a list of the villages surveyed under the study along with the number of households and average

landholding per household for each village.

Table 2: Surveyed Villages

Sr.

No Village Name District

Number of

households

Average number

of members per

household

Average

landholding per

household

(units in acre)

1 Mellidara Ward

-1 South 150 6 2

2 Salghari Upper South 80 6 3

3 Sallebong South 69 6 2.5

4 Biriang Ward South 1600 4 3

5 Ramaram Kali

Khola South 160 6 2

6 Darap Lagay West 40 5 3.5

7 Samsing Ward

– 5 West 100 7 2.5

8 Tinzerbong West 107 6 1.5


MART, Noida 21

9 Rodhu Khandu

Sanku West 300 6 1.5

10 Lower Okharey West 65 5 7

The data above was collected during focused group discussions in the respective villages and may vary

with data from other sources.

Villages in Sikkim are referred as wards and each ward generally constitutes of 100 – 300 households;

each household has average of 6 members in the surveyed villages. A cluster of 4 -5 wards make a Gram

Panchayat Unit (GPU) , and a group of 4-5 GPUs make a Block Administrative Unit (BAU).

Land holding in Sikkim is classified into private land or government land. The average land holding in the

surveyed area is around 2.5-3 acres per household. The average arable land per household is 70% of the

total land holding per household.

About 90% of the state population is rural and agriculture is the primary source of livelihood. However,

contribution of agriculture to the state GSDP has

been showing a declining trend, indicating a

stagnation and reduction in incomes.

The farm productivity and income has been

declining due to limited availability of irrigation,

which is largely rain fed, and high percentage of

wasteland. The sectoral contribution of agriculture

to the GSDP has declined from 52% in 1980-81 to

21% in 2004-09.

NERLP PIP document states that though the

average land holding is 3.25 acre, the operational

holding is only a fraction of this. Out of the total

cultivated land of 2.75 lakh acre only 11% is

irrigated, while 58% is rainfed. The maximum dry

land rain fed farming area is in the West District

(35%), followed by South (33%).

Figure 1 depicts a GIS map of Sikkim (Source:

Rural Management and Development

Department, Govt. of Sikkim) showing the dry

areas of the state. The project area of South and

West Sikkim is the driest part of the state with minimum rainfall and no perennial water sources.

Figure 1: Sikkim: Area and landuse Map


MART, Noida 22

1.2 Infrastructure and Resource Profile

Being an entirely hilly state, people in Sikkim face difficulties in commutation and information access.

However, being one of the most frequented tourist destinations, infrastructure development in Sikkim is

quite regular. The state is rich in natural resources and lays special focus on protecting them. The

government is also implementing a unique housing policy to make the state free from “kachha houses” by

2011. It is also worth mentioning that Sikkim is the only state in the country to have received “Nirmal

Rajya” award for 100% sanitation. Through its Organic Mission the government promotes organic

agriculture/horticulture/diary produce.

Table 3 displays the accessibility of various infrastructure and resources from the surveyed villages. It

needs to be appreciated that compared to plains covering even seemingly small distances can be arduous

in hills.

Table 3: Infrastructure Profile

Infrastructure Accessibility (%)

Distance travelled to Access

Infrastructure

At own

Village

Less than 5

km

More than 5

km

Telephone (mobile) 100 10 0 0

Bank 100 1 2 7

Post Office 100 4 4 2

Skill training centre 100 2 2 6

Milk collection centre 100 9 0 1

Road 100 9 0 1

Irrigation 40 4 0 0

Nursery 80 5 0 3

School Bldg 100 10 0 0

Drinking Water 100 9 1 0

Com. Building 90 7 2 0

Transport 100 10 0 0

Electricity 100 10 0 0

Cold storage 20 0 0 2

Veterinary dept. 100 7 1 2

Agro. Co-operative 100 10 0 0

Marketing co-operative 80 8 0 0

Market Yard (RMC) 50 0 0 5

Haat 100 3 1 6

Forest Go down 10 0 0 1

Rice mill (Hullers) 30 2 1 0


MART, Noida 23

All surveyed villages have mobile network coverage, bank, post office, milk collection centre, roads, skill

training centres, transport services, drinking water, electricity, school building, veterinary department,

agro cooperatives and haats. While 80% villages had marketing cooperatives and access to nurseries, 90%

of the surveyed villages had community buildings, too.

About 40% of the villages had irrigation facilities in the form of springs and rivulets. However, access to

cold storages and forest godowns is low; around half of the surveyed villages had access to market yards.

Cold storages located at Singtam and Gangtok in East District are accessed mainly for potato. Recently a

few floriculture cold storages are also opened in the state. Since paddy is sparsely grown paddy hullers are

found in only 20% villages.

There are five apex level cooperative bodies in the state , Sikkim State Cooperative Supply and Marketing

Federation Ltd (SIMFED), Sikkim State Cooperative Bank Ltd (SISCO Bank), Denzong Agriculture

Cooperative Society Ltd, Sikkim Cooperative Milk Producers’ Union Ltd (Sikkim Milk) and Sikkim

Consumer Cooperative Society Ltd. The cooperative movement has picked up momentum in the state as

all the villages have multipurpose cooperative societies dealing in agriculture and horticulture produce.

Sikkim Milk is found to have milk collection centres in 90% of the surveyed villages. Similarly SIMFED

and Denzong Cooperative, dealing in marketing of agri-produce and horticulture commodities, are

functional all across the state. SIMFED in particular plays a very important role in marketing of ginger

and flowers from the surveyed villages.

Dairy and piggery are popular occupations in all surveyed villages, and there is a good network of

extension services from the animal husbandry and veterinary services department. About 70% villages

have department representatives servicing their villages. Also there are artificial insemination centres in

almost all GPUs, which are run by private paravets trained by the department.

About 90% of the surveyed villages are connected by all weather roads which are frequented by private

jeeps and taxis along with occasional buses run by Sikkim Nationalized Transport. Since ward or village

level households are scattered there are foot paths connecting these households to the main road. Travel

from nearest road points to households is often difficult as foot paths are often steep and narrow.

Sometimes mules are also used for transportation from these roads to respective households.

The state government has opened livelihood schools (vocational training centres) in all the constituencies

of the state to create employment. These Livelihood Schools are managed by the state-of-art State

Institute of Capacity Building headquartered at Karfectar. The major capacity building institutions

accessed by the surveyed villagers, apart from the livelihood schools, are village level training centres

operated by the Department of Handloom and Handicrafts. About 40% of the surveyed villages were

found to have such training facilities either in their villages or within 5 km from their villages.

Sikkim is an electricity surplus state and all the surveyed villages are not only electrified but electricity

supply was reported to be regular and very satisfactory.


MART, Noida 24

Sikkim has one of the highest mobile phone densities in the country. The surveyed villages were no

exception. An average of approximately 80% population had mobile phones in the surveyed villages.

Banks and Post Offices are accessed by all villages with around 70% surveyed villages having banks at a

distance at more than 5 kilometers from villages.

The line departments of the government provides free of cost training and exposure apart from inputs like

seeds, bio fertilizers, cattle feed and also infrastructure support like poly-houses, tools, implements etc.

However, it was observed that most government schemes, routed through the line departments of

agriculture, horticulture, animal husbandry etc., do not have specific measures for the poor and thus there

is little pro-poor focus in the implementation of these schemes.

The government officials stated that implementation costs of central government funded schemes are very

high in Sikkim due to extremely difficult terrain, high cost of transportation, inputs and labour. Although

an allowance for hilly areas exist for some schemes, they are found to be largely inadequate. It is also

worth mentioning that Sikkim has the highest per capita central assistance in the country (Planning

Commission).

1.3 Banking and SHG Profile

There are about 2000 SHGs in the state, of these around 1300 are in the NERLP project area with almost

100% coverage of the poor under SHGs. The SHGs are also federated in some cases although the linkages

and institutional structure of these federations are reported to be weak and needs strengthening. The poor

in Sikkim are reported to have low levels of business and marketing skills.

Most SHGs have less than nine members and no age bar. The members of SHGs make average monthly

savings of Rs 50 to 100, and are found to be actively involved in inter-group loaning at rates of interest

ranging from 24% to 60% per annum. However, there is a risk aversive behavior when the same loan is

routed from banks at lower rates of interest.

SHG members were found to be taking loans from SHG funds primarily for treatment of illness, marriages

and festivals etc. A major section of productive loans was for ginger cultivation, piggery and poultry

activities. Most activities taken up by SHGs under SGSY are at individual levels only. Many SHGs have

experimented with activities like paper bag making, pickle making, knitting, mushroom cultivation etc.

but have faced marketing problems for their produce.

As informed by NABARD, there are 16 bank branches in South District and 9 in West District. While

deposits have registered a healthy growth rate in 2009-10 (19.66% in South District and 25.94% in West

District), the growth rate of loan outstanding is surprisingly low (10.32% in South District and 3.99% in

West District).

Sikkim State Cooperative (SISCO) Bank is a major provider of financial services to the rural poor and

Kissan Credit Card for farm credit. The credit portfolio of SISCO bank in the South District indicates loan

financing for ginger cultivation, dairy and piggery. The bank also finances SHGs directly for SGSY and


MART, Noida 25

non SGSY activities. Credits to farmers are routed through primary agriculture credit societies at the

village level.

The major SGSY activities sanctioned by the South district branch are floriculture, goat rearing and

vegetable cultivation. Other activities supported and financed through SHGs and SHG federations are

marketing of hill broom, piggery, ginger cultivation, wool knitting etc. The rural community is found to be

more or less financially disciplined. The NPA of the South district branch of SISCO Bank was about 6.7%.

To support the financial inclusion of the women, the government is promoting business correspondent

models based on biometric cards for payments and other financial services. Under Sikkim Universal

Financial Inclusion Project, the government has set a target to open savings account for 7,500 married

rural women across Sikkim to provide them doorstep banking, health, and life and property insurance

services through the business correspondent model.

1.4 Market Profile

Sikkim is characterized with scattered villages and extremely difficult terrain. .. There are no regulated

markets or mandi for farm based produce in Sikkim. The major feeder and terminal market of Sikkim is

Siliguri which is in West Bengal. This restricts access of the primary producer to the terminal market.

Furthermore, the entry into the regulated market signifies movement of the produce from one state to

another, which necessitates further expenses like Sikkim Nationalized Transport (SNT) tax, West Bengal

government tax, bribes to policemen and regulated market tax. Thus, only large volumes of produce in

units of truck loads are economically viable to be transported to Siliguri. This is in particular difficult for

any primary producer due to absence of economies of scale and lack of market information.

Jorethang, due to its strategic border location between South District, West District and West Bengal is

the next important market after Siliguri. The area has overwhelming number of town level traders. These

town level traders are mainly from Marwari and Bihari community with a few Sikkimese traders.

Table 4: Market Facilities

Table 4 showcases percentage of surveyed villages having different types of marketing facilities. All

surveyed villages have around 3-4 permanent shops selling products ranging from utensils, grocery items,

cosmetics to vegetables, tea stalls, mobile recharge vouchers etc. 20% of the surveyed villages had vendors

residing in them while another 20% villages recorded presence of temporary shops. About 80% of the

surveyed villages are frequented by vendors dealing in steel utensils, clothes, scrap, shoes, cosmetics, toys,

mattress and razai making, etc.

Types of Market Facilities Availability in percentage of village

Permanent shops in the village 100

Temporary Shops in the village 20

Vendors of the same village 20

Vendors coming to village/day 80


MART, Noida 26

Most villages however have village level traders who procure village produce of ginger, Squash etc and sell

them off to town traders. However, most villagers prefer to sell their produce to town traders themselves

or to village level multipurpose cooperative societies.

Traditional rural weekly markets (haat), held on specific days of week all across Sikkim, form the main

retail markets for primary producers. The Haats are often frequented by both town level and village level

traders, where producers sell their agro produce.

Haats are generally held at all GPUs. Certain places are exclusively named after the day it hosts the haat

e.g. Sombarey named after Sombar (Monday), Mangalbarey named after Mangalbar (Tuesday) etc. The

town markets like Namchi, Jorethang etc. also host haats one or two days a week. Town level markets in

each district function for six days a week.

Table 5 showcases the major town level markets of South and West District and profile of commodities

traded

Table 5: Market Profile

South District Markets West District Markets Products traded

Town level markets

Jorethang, Namchi, Melli,

Ravongla

Gyalshing, Geysing Legship,

Ginger, Cardamom, Orange,

Chilli, Vegetables, Milk

products, Poultry, Pork,

Mutton, Clothes, utensils,

consumer goods, Agri

implements, Agri inputs, Cattle

Feed, service centres,

departmental stores etc.

Weekly (Haats) and village level markets

Simchuthang (Mangley),

Majhitar, Temi Bazar,

Damthang, Namthang

Kewzing, Yangyang, Ralang.

Reshi, Hee, Sombaria, Soreng, Daramdin,

Dentam,

Rinchenpong, Kaluk, Mangalbarey,

Shreebadam, Bermiok,

Pelling, Tashiding, Chakung, Nayabazar.


Chilli, Vegetables, Poultry,

Pork, Mutton, Clothes, utensils,

Agri inputs, Cattle Feed, etc.


MART, Noida 27

1.5 Land based livelihoods

Ginger is the principal cash crop grown in the project area. Apart from this, a wide range of agriculture

and horticulture crops are cultivated all across Sikkim. Vegetables are grown primarily for local

consumption. Paddy is cultivated in relatively plain and irrigated areas. The agriculture and horticulture

yield in the project area is seemed to be affected by recurring spells of freak climatic conditions.

Figure 2: Cropping Pattern

Shown in Figure 2 and Table 6 is the percentage of households involved in the cultivation and marketing

of various crops in the surveyed villages. Maize is the most prevalent crop; it’s grown by all landholding

households. The crop is however exclusively for consumption at the household level and cattle feed.

Paddy was found in only one surveyed village although rice is the staple food of the region. Large

cardamom, one of the most expensive produce, was grown in 40% of the surveyed villages, whileginger,

another cash crop, is grown by 60% villages. Tomato is commercially cultivated in around 50% of villages.

Squash, locally called Ishkus, is found in all villages but commercially grown in 30% of the surveyed

villages. This creeper crop is also a regular source of income to villagers. Likewise Chilli (Cherry Chilli

locally termed as Dalle) is found in all villages and mainly consumed at the household level was found to

be commercially grown in 30% surveyed villages.

Orange is also cultivated in a few patches of West District in particular. Less than 20% households of the

20% villages are involved in orange cultivation.

0

20

40

60

80

100

120

Availability Percentage in surveyed village

Percentage of Households involved


MART, Noida 28

Peas and pulses were commercially grown in only 10% of households.

Table 6: Cropping Pattern vis a vis Households

Table 6 (a)

Table 6 (b)

Table 6 (c)

As mentioned in Table 6 (a) maize has the maximum area under cultivation per household – nearly 5

acres per household. Ginger, the main cash crop in 60% of the surveyed villages, has average cultivation

over 0.8 acres per household.

As mentioned in Table 6 (b), while Squash and chilli are commercially cultivated in 30% of the villages, an

average of around 68 quintals of Squash is produced per household every season.

Orange and large cardamom yields are recorded on the basis of yield per tree. Table 6(c) shows that in

40% of the surveyed villages, where cardamom is a major crop, each household had average of 524 trees.

Crops Prevalence in

surveyed villages

(Percentage)

Average Area per

village (acres)

Average crop

area /

Household

(acres)

Average

Yield/acre

(quintals)

Ginger 60 42.6 0.81 17.6

Maize 100 146 5.4 1.73

Paddy 10 30 6 24

Tomato 50 23.35 0.628 16.2

Potato 20 90 0.96 16

Peas 10 3 0.48 6

Pulses 10 2.5 0.1 3.2

Crops Prevalence in surveyed

villages (Percentage)

Average no of households

per village cultivating the

crop

Average Yield/Household

(Quintals)

Squash 30 108.3 68.6

Chilli 30 25.8 1.8

Crops Prevalence in

surveyed villages

(Percentage)

Average number of

trees per village

Average trees /

Household

Average Yield/

Tree

Orange 20 450 101 1050 pieces

Large

Cardamom

40 17950 524 0.031 quintals


MART, Noida 29

However, during recent years, the production of cardamom has decreased drastically due to degeneration

of old plants and various diseases.

Information from Spice Board of India reveals fall in the production of large cardamom in Sikkim from

5401 tons in 2003-04 to 3833 tons in 2006-07. Long summer spells in the state are being attributed to

deterioration in quality and quantity of large cardamom in the state. Sikkim is traditionally the largest

producer of large cardamom in the country.

Seasonality of the major crops are mentioned in Table 7

Table 7: Seasonality of Crops

Crops Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

Ginger P P PM P P PM M M

Maize P P P P P P

Paddy P P P P P P

Tomato PM PM P P PM PM P P PM PM P P

Potato P PM P P PM M P P P P PM P

Pulses P P P P PM

Squash PM PM PM PM PM PM PM PM PM PM PM PM

Chilli P P PM PM PM

Orange P PM PM M

Large Cardamom P P PM PM PM PM M M

P: Production phase, M: Marketing Phase

The mother rizhome of ginger, locally called Mau, is harvested and sold in May; it fetches around Rs 55-

65 per kg.

While maize is grown during the summer and rainy season, paddy in irrigated patches is grown twice a

year. Tomato and potato have three seasons per year while Squash is produced and marketed throughout

year. Orange and cardamom being plantation crops starts bearing fruit from November and May,

respectively. While the marketing season of Orange is during the winters, cardamom has a long marketing

period of around six months starting from July.


MART, Noida 30

Figure 3: Consumption vis a vis Marketable Surplus

Figure 3 denotes the approximate percentage of domestic consumption and marketable surplus of major

crops in the surveyed villages.

Maize and paddy are fully consumed while around 30% of total pulses (Yellow) production is sold off.

While around 15% of peas production was locally consumed ginger, orange, potato, Squash and chilli were

found to have less than 10% domestic consumption. This signifies a unique cropping pattern in Sikkim –

one that prefers cultivation of cash crops to that of consumption crops.

Table 8: Average Investment size

Crops Average investment per unit (Rs) Value addition at the village level

Ginger Rs 10000 per acre Cleaning by few farmers

Grading by few farmers

Maize Rs 2500 per acre Cleaning

Drying

Grading

Crushing into flour

Paddy Rs 8000 per acre Cleaning

Threshing

Husking into Rice

Tomato Rs 5000 per acre Grading by few farmer

Packing in Baskets

5

100

0

100

10 5 10 5 8 15

70

95

0

100

0

90 95 90 95 92 85

30

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Percentage consumed Percentage Surplus


MART, Noida 31

Potato Rs 7000 per acre Cleaning by few farmers

Peas Rs 3000 per acre Grading by few farmers

Pulses Rs 2500 per acre Cleaning

Drying

Squash Rs 5000 per household None

Chilli Rs 2000 per household Grading and drying for consumption

Orange Rs 5000 per household Grading

Box packing

Large Cardamom Rs 20000 per household Cleaning

Kiln drying

Grading

Table 8 presents the amount of investment for major crops and value addition after harvesting. While

products like paddy, maize, and chilli undergo value addition for consumption purposes, cardamom is the

only crop which undergoes market led value addition. Cardamom is dried in wood kilns and graded as per

quality and size. A few progressive farmers only however clean and grade ginger before selling.

Figure 4 depicts approximate percentage of produce sold by the primary producer through different

channels viz. village trader, haat and town trader.

Figure 4: Crop Marketing Channels

While large cardamom, orange, peas, pulses, ginger and Squash are largely sold to town traders, chilli and

tomato are largely sold at retail through haats. Important markets for ginger are Namchi, Naya bazaar,

Namthang, Reshi, Legship etc. Cardamom farmers generally take their produce to town level markets

including Gangtok and sell them to Marwari and Bihari traders. Oranges are sold per piece and often

0

10

20

30

40

50

60

70

80

90

100

Large Cardamom

Orange Pulses Ginger Peas Quash Potato Tomato Chilli

Sale percentage of major crops through different channels

Village Trader Haat Town Trader


MART, Noida 32

traded before production. Traders often visit orange farmers and pay an advance amount for the

forthcoming production. Nowadays, some multipurpose cooperative societies and agro cooperatives at the

village level are also procuring ginger.

The role of village traders is prominent though small in turnover. They generally procure from marginal

and small farmers who do not have enough produce to achieve economies of scale for selling their produce

directly to the town level trader.

The produce collected by town level traders and even by some village level traders is transported to

Siliguri. Cardamom and ginger are supplied to all across the country from Siliguri. Some produce like

potato, Squash, chilli, peas, pulses and tomato have a minor but remunerative marketing channel ending

at Gangtok.

Average producer sale prices of the major crops, as per information collected from the surveyed villages,

are mentioned in Table 9.

Table 9: Average Selling Prices of crops

Crop Unit Average Selling Price (Rs per unit)

Ginger Quintal 4050

Tomato Quintal 1760

Large Cardamom Quintal 45000

Squash Quintal 466.6

Chilli Quintal 9666.6

Orange Per piece 2.12

Potato Quintal 5900

Peas Quintal 2500

The prices of cardamom and ginger have escalated over the last 3 years due to reduction in production

and increase in demand. Average price of cardamom have increased from Rs 100 per kg in 2007 to Rs 200

in 2008 and finally Rs 450 in 2010. Similarly average prices of ginger in 2007 were Rs 15 which increased

to around Rs 20 in 2008 and Rs 40 in 2010.

However, the prices of vegetables like Squash and peas have a marginal increase in average prices over the

last three years.

1.6 Floriculture

Floriculture is a new but common activity in almost all villages. Although the number of farmers currently

involved in this occupation is low as compared to ginger or cardamom farmers, the number is growing

fast. The activity attracts heavy investments and has long payback period and so the state government is

extending extensive support to promote the activity.


MART, Noida 33

Cultivation of cymbadium orchids, zantedeschia (cala lily), alstroemeria, lilium, gervera, rose etc. is being

promoted by the horticulture and cash crop development department across Sikkim. The department

regularly imports seed bulbs and tubers from New Zealand, Netherlands etc through suppliers in Pune

and Bangaluru and provides them free of cost to a number of farmers. The major suppliers are Kumar

Florists of Pune and Florence Flora of Bangaluru. A number of poly houses are also provided along with

training, irrigation facilities and implements.

A model floriculture centre is being set up by the department to develop floriculture in the state. It

disseminates technical knowledge, provides support services and inputs for floriculture. The centre is also

equipped with a cold storage. Apart from this, cold storages have come up in Daramdin and Soreng. One

is also sanctioned to be constructed in Seleb.

Rose village near Daramdin in the West district has around 70 households with 91 poly houses in the area

along with a cooperative society for cultivating and marketing different varieties of roses. It also has a cold

storage for storing rose sticks. Around 3000 to 4000 sticks are produced daily from the area, which are

transported to Namchi and Siliguri. The activity is entirely supported by horticulture department and calls

for huge investments and efficient irrigation facilities.

Sikkim State Institute of Rural Development (SIRD) is also implementing a special SGSY project on lilium

and glorecia plant nursery. The seeds are provided by SIRD along with buyback support for saplings. A

nursery spread over 1 hul or ¼ th acre of land is expected to yield Rs 30,000 per year. SIRD has also

facilitated SHGs to be linked with State Bank of India for SGSY loans.

It is worth mentioning that some private nurseries and floriculture companies are also supporting

floriculture venture of the state. ‘Mainam Gardens’ of Namchi is one of the most prominent private

institutions functional in the area. Owned by Mrs. Tika Maya Chamling, it procures flowers from farmers

and supplies them all over India. Zopar Exports Private Limited, having more than 80 poly-houses in

Sikkim and Darjeeling district of West Bengal, supplies multiple varieties of roses.

SIMFED is a major stakeholder in providing marketing support to the farmers of Cymbidium and Lilium.

It has buyers and agents all across the country. Any procurement by SIMFED is however only done at

Gangtok and thus needs special transportation from the project area.

1.7 Live stock based livelihoods

Sikkim has a strong base of Livestock based rural livelihoods. Around 73% of population engaged in

animal husbandry sector is women. Animal husbandry and fisheries sectors together engage 3.694 lakh

populations, including 2.088 million women. Thus, the total employment in animal husbandry and

fisheries is around 9.05% of the total work force. According to estimates of the Central Statistical

Organization (CSO), the value of output from livestock and fisheries sectors together at current prices was

about Rs. 2, 82,779 crores during 2007-08 (Rs 2,40,601 crores for livestock sector and Rs 42,178 crores

for fisheries) which is about 31.6 percent of the value of the output of Rs. 8,94,420 crores from Agriculture


MART, Noida 34

& allied sector in the state. The contribution of these sectors in the total GDP of Sikkim during 2007-08

was 5.21%.

Milk and meat (beef, chicken, pork and mutton) contributes largely to the food plate of Sikkim. The

contribution of milk alone (Rs 1,62,136 crores) was higher than paddy (Rs 95,038 crores), wheat (Rs

71,579 crores) and sugarcane (Rs 33,691 crores). The value of outputs from meat group as per estimates of

Central Statistical Organization (CSO) at current prices in 2007-08 was Rs 40,399 crores. The present

demand of pork in Sikkim is around 550 Metric tonnes per annum, while the production is about 150

Metric Tonnes per annum showcasing good scope.

Sikkim is a milk surplus state with marketable surplus milk being sold to neighboring state of West

Bengal. The per capital milk availability is Sikkim is 243 grams per day. Sikkim Milk producer’s Co-

operative Limited (Sikkim Milk) is the biggest player in Dairy in the State. More than 12,000 dairy

farmers through 270 co-operative societies are registered members of this cooperative. More than 15,000

litres of milk are being processed everyday by the cooperative resulting in incomes to the tune of Rs 60

lakhs per month to dairy farmers. Sikkim Milk Union is reported to be earning profits since last two years.

(Source: Sikkim Livestock Policy document 2009-10).

The state government has launched dedicated missions on Poultry and Dairy to enhance livelihoods

promotion initiatives under these activities. Almost all households practice backyard poultry for

household level consumption of eggs and chicken. Broiler is also practiced by some villagers whose

marketing networks are present in towns like Jorethang or Namchi. Incidence of disease and

geographically restricted immediate support service is a bottleneck for broiler.

3.7.1. Status of Livestock based livelihoods

Table 10: Household Involvement in livestock based livelihoods

Major Livestock Availability in percentage of

villages

Percentage of households involved

Dairy 100 65

Piggery 100 60

Goat rearing 70 25

Poultry 100 50

As mentioned in Table10, Dairy, Piggery and Poultry (backyard and broiler combined) are by far the most

important Livestock based activities found in the surveyed villages with all villages having 65%, 60% and

50% households involved in these activities respectively. Goat rearing is prevalent in 70% villages but

involving 25% houses.

In Pig rearing, the majority of poor farmers rear local and indigenous breeds, a few progressive farmers

have adopted American Hampshire and Yorkshire breeds also. An average of 7-9 piglets is produced every

6 months in case of the American Hamstead variety while the local variety generally produces 5-6. The

mortality in local varieties is also high.


MART, Noida 35

While poultry farming is mainly consumption based, some SHG members have taken internal SHG loans

for piggery and poultry activities. The presence of functional milk cooperatives in the villages have

boosted the dairy activity a lot and mostly surplus milk is sold at the village level through milk collection

centres facilitated by Sikkim Milk Union.

The AHVS department has a good network of veterinary doctors and staff for providing extension services

free of cost in the villages. Sikkim Milk also has its own veterinary care centre at Karfectar.

3.7.2 Marketable surplus and selling dynamics

Average of 3 indigenous variety cows are assets to all households who keep cows. The average milk output

per cow in the surveyed villages is 6 litres per day and the average milk output per household is 11 litres

per day. 1-2 litres are consumed at the household level while the rest is sold.

Sikkim milk has a minimum procurement price of Rs 16 for standard milk with 3.5% fat and 7.5% SNF.

However, the quality of the milk in the surveyed villages have seldom reached the desired level in terms of

fat and SNF. The average price at the village level that is fetched by the dairy farmer is around Rs 13 to Rs

15 per litre. Maximum price of milk at the village level was reported to be around Rs 19 per litre. (as per

primary survey)

Price of piglets vary between Rs 2000- 2500 per animal while full grown pigs sold for pork are sold at an

average price of Rs 100-110 per kg. Piglets pigs are generally sold from the farm gate to butchers and other

farmers.

3.7.3 Seasonality

All the major Livestock activities do not have any fixed season for production or marketing. However, the

festive seasons sees an increase in demand of livestock. Prices for some products are elevated during this

period. Sikkimese people being primarily non-vegetarian, their food plate includes livestock products all

year through.

1.8 Service based livelihoods

Table 11: Household involvement in service based livelihoods

Livelihoods Availability in

percentage of villages Average number of

households involved

Army 70 6

Permanent govt. job 100 17

Permanent private job 40 5

Electrician 50 2

LIC agent 20 1

Driver 90 8


MART, Noida 36

Plumber 60 1

School teacher 100 8

Hotel jobs 10 2

Government temporary 20 10

Table 11 clearly depicts that government service, Army, teacher etc fixed income based livelihood are more

or less consistent in the surveyed villages. 90% villages had drivers from around 8 households. The apt

transport system of Sikkim through shared taxi jeeps and vehicles explains the finding.

Only a few other households are engaged in other service based occupation like electricians, insurance

agents etc.

The different skill levels of villagers in the surveyed villages have been mapped in table 12.

Table 12: Skill levels in service/nonfarm based livelihoods

Skill

Available in % of villages

Avg. no of persons

possessing skill

Use skill for

Business purpose

Tradition skill/ acquired skill

Stitching 60 4 Few Acquired / Traditional

Food processing 40 All women No Traditional

Handicraft 40 6 Yes Acquired / Traditional

Weaving 30 7 No Traditional

Knitting 50 All women Few Traditional

Electricals 40 2 Yes

Acquired

Carpentry 100 9 Yes

Traditional

Construction 70 12 Yes

Traditional

Driver 100 9 Yes

Acquired

Insurance agent 10 1 Yes

Acquired

Beauty Parlour 20 2 Yes

Acquired

Electronic Repair 30 1 Yes

Acquired

While women of 40-50% surveyed villages were traditionally skilled in knitting woolen garments and food

processing (primarily pickle making and making fermented food products), very few of them are actually

using the skill in business generation. Construction and carpentry related skills are high in villages. Both

of these skills are traditional in nature and 9 households of every village are engaged in the crafts of wood

carving.


MART, Noida 37

As mentioned earlier, the state government has opened livelihood schools (vocational training centres) in

all the constituencies of the state to create employment. These Livelihood Schools are managed by the

state-of-art State Institute of Capacity Building headquartered at Karfectar. The major capacity building

institutions accessed by the surveyed villagers, apart from the livelihood schools, are village level training

centres operated by the Department of Handloom and Handicrafts. About 40% of the surveyed villages

were found to have such training facilities either in their villages or within 5 km from their villages.

1.9 Rural tourism

Around 40% of the villages visited had villagers interested in homestay based village tourism.

As mentioned in the Tourism sector Policy 2010 of Sikkim Tourism department, the number of Domestic

tourists in 2003 were about 1, 76,659 while in 2008 more than 5, 00,000 tourists have visited the state.

The estimated number of domestic tourists in 2009 is around 6,00,000. This signifies a growth of around

3.5 times within a time span of 6 years.

The boost in the growth of tourism in the state is also attributed to the growth in the associated sectors.

Sikkim since last 5 years is following a strict Organic policy and is also the first state in the country to

achieve total Sanitation. A Green Mission program has been launched by the government under which

every individual, agency and the Department contributes towards the planting of trees all over the State.

Village tourism is being specially encouraged to preserve culture, heritage & handicrafts and to create

better economic and employment opportunity in the rural area. Floriculture is being promoted at large in

the State and Sikkim has earned its place as a major orchid and exotic flower producer in the country.

Use of polluting plastic is also banned in the State. All the ethnic Communities have different and distinct

festivals, which are celebrated all over the State. Tourism Department plays a major role in promoting

these festivals in order to showcase Sikkimese culture and heritage.

The ability of rural tourism to contribute directly to the village economy and the growing industry of

tourism can be capitalized to mitigate poverty by promoting rural tourism in pockets of poverty. The

interventions regarding home stay based tourism mentioned in Chapter 4 is an attempt to include the

poor in the larger ecosystem of Tourism.


MART, Noida 38

Chapter 4: Value Chain Analysis

4.1 Introduction

Chapter 3 captured community’s engagement in long list of livelihoods across agriculture, livestock and

non-farm sectors. Field experience shows that there is very little value-addition taking place at the

producer level in villages leading to a large chunk of produce moving out of the village in the raw form.

Value addition is generally taken up by players with high capital base located at higher order markets.

However, simple aggregation at village level with rudimentary value addition activities like cleaning,

sorting, grading, drying etc. can fetch higher price to the poor rural community.

Value Chain development is a process, which analyses every stage of the product or services i.e. from

production to the end consumer and endeavours to build the competitiveness across the chain. Value

chain analyses involves identifying product movement, number of channel partners involved and roles

performed by them, value received by each of the channel partners, constraints faced by each player in the

chain. Value chain analysis helps to identify opportunities for value addition at every stage of the product

from production to its marketing, prices at every stage and corresponding value addition possibilities,

assess infrastructure requirement and capacity building needs of producers to achieve higher value in the

chain.

Activity selection for value chain analysis

Following is the flow of key steps performed to select the five potential products for conducting value

chain analysis;

Box 3: Value chain analysis framework

Task performed Key Steps Shortlisted activities

Review of regional implementation plan provided by World Bank

Study secondary reports and concerned websites

Step 1 Literature review

Small holder dairy farming, piggery, poultry, village tourism, land development, horticulture (large cardamom, ginger, fruit plants, floriculture (rose, cymbidium), offseason vegetable, bee keeping, handicrafts, fodder development, Vocational trainings, entrepreneurship seed funds, placement support

Meeting with state nodal officer

Stakeholder consultation workshop with line department officers, bankers and NGOs at Gangtok

Meeting with govt. officials, SHG members and NGOs at District levels

Village visits in both districts

Step 2

Stakeholder consultation in

Sikkim

Dairy, Ginger cultivation, Floriculture, Pig rearing, Homestay (Rural Tourism), Hill grass trading, Poultry farming, cardamom cultivation, offseason vegetable farming, bee keeping, goat rearing and wool knitting.


MART, Noida 39

Review of secondary reports

Meeting with World Bank staff and Project Director, NERLP at New Delhi

Analysis of secondary reports

Step 3

Consultation with PD, NERLP and World Bank staff

Dairy

Ginger cultivation

Floriculture

Pig rearing

Homestay (Rural Tourism)

Based on the discussion with Project Director, NERLP and World Bank staff at New Delhi criteria

(engagement, interest and capacity of the poor, possibility of engaging large number of poor, market

demand, gestation period) was shared to shortlist five products i.e. milk, ginger, pig, flowers and

homestay for carrying out value chain analysis. All the five shortlisted produce are suitable for both

project districts. Summary of the recommended products and interventions are mentioned in Table 13.


MART, Noida 40

4.2 Summary of suggested interventions

Table 13: Summary of suggested interventions

Produce / Product



Key support to be provided by the Project

Unit of activity


RoI (%)

Cow Milk Improved practices in dairy farming both project districts

3 cross bred cows per houshold

151598 29.43 AHVS department and Sikkim Milk union.

Organise poor in SHGs, federation and producer group Introduce collective action for input sourcing Capacity building on improved package of practices, Finance linkage Handholding support Institutional support to Sikkim Milk

Ginger Improved package of practices for Ginger cultivation in both project districts

1 acre 24300 73.6 Wholesalers, HCCD Department, SIMFED, Progressive farmers and Financial institutions

Organize poor in SHGs, federation and producer group Introduce collective action for input sourcing and output marketing Capacity building for improved package of practices Finance


MART, Noida 41

Produce / Product




Unit of activity


RoI (%)

linkage Market linkages Market exposure Handholding support

Pig Rearing of American Hampstead variety of pig by adopting improved package of practices

6 pigs (5 female and 1 male) per household

209234 36.2 Wholesalers and retailer, Inputs suppliers , Progressive farmers, Financial institutions And AHVS department

Organize poor in SHGs, federation and producer group Introduce collective action for input sourcing Capacity building for improved package of practices Finance linkage Market linkages Handholding support

Floriculture Cultivation and marketing of Alstroemeria flowers

400 saplings under 1 poly house of 90 ft by 22 ft

263200 10.9 HCCD Department, SIMFED, Mainam Gardens, Other Wholesalers and retailers, Inputs suppliers , Financial institutions and Progressive farmers

Convergence with HCCD department Organize poor in SHGs, federation and producer group Introduce collective action for input sourcing and output marketing


MART, Noida 42

Produce / Product




Unit of activity


RoI (%)

Rural tourism

Promotion of Homestay based Rural Tourism

1 household constructing additional room for 4 persons

462400 20.3 Tourism Department, various cooperative societies involved in rural tourism, ECOSS, Help tourism, TASS etc

Formation of homestay collectives Capacity building for improved package of practices Finance linkage Market linkages Market exposure Handholding support


MART, Noida 43

4.3 Value Chain of Dairy

4.3.1 Background

It is well known that India is the world’s largest milk producer. In 2006-2007, it celebrated reaching to

the magical figure of 100 million tonnes. The growth of the milk production has been consistently high

since 70s. For example, since the inception of the “Operation Flood” program (1971-1996) by the National

Dairy Development Board (NDDB) Anand, the average annual growth rate of milk production has been

over 5 percent during the period. In 2005, the size of India’s dairy sector was estimated at Rs 2300 billion,

with a production of 95 million tonnes. Dairy India 2007 estimates that by 2011 the value of the dairy

industry will more than double, reaching Rs 5200 billion, with annual milk production of 120 million

tones. (Source: IIMB Management Review, Volume 20, Number 1 Article by Vinod K Huria March, 2008)

Figure 5: Sikkim milk production estimate

Sikkim has been a major milk producing state in the North eastern region of the country. Figure 5 shows

that while the increase in milk output since the last decade in Sikkim has been more or less slow, it has

also been consistent and steady. The growth in the sector has been brought about not by enhanced milk

productivity but by the formalization of milk marketing channels through cooperatives. Unlike most

heavy milk producing states, milk in Sikkim is primarily sourced from cows. The current average milk

yield per cow in the state is 6.5 litre per day. There is thus scope of productivity enhancement in milk in

the state.

The per capital milk availability in Sikkim is 243 grams per day. At present total milk production in

Sikkim is around 49000 MT per annum and milk procurement and processing in the organized sector is

15000-17000 litre per day which is meeting the requirement of the state. The marketable surplus milk is

being sold to the neighboring state of West Bengal. The government has a target to process at least 40,000

litres of milk in the milk unions and other organized sectors by the year 2015.

Since the last 5 years Sikkim has been following organic practices in cultivation of maize and other fodder

and as so the milk being produced in Sikkim is more or less organic. However, proper certification of the

35 35 35 35 37

45 48 46 48 49 49 49 49

0

10

20

30

40

50

60

Estimates of Milk Production in Sikkim ('000 tonnes) from 1997-98 to 2009-10

Source: Ministry of Agriculture, Govt. of India


MART, Noida 44

milk as organic and positioning of the same as organic milk is yet to be done. (Source: Sikkim Livestock

Policy document 2010)

4.3.2 Feasibility of the activity

Technical feasibility

The agro climatic conditions of West and South districts of Sikkim (project area of NERLP) are

suitable for dairy farming. The dairy practiced in Sikkim is primarily of cow milk since the climatic

conditions of the state do not encourage keeping buffalos.

The basic skill for dairy farming is available with the poor community since most housholds keep

animals. Dairy is a part of the Livelihoods basket of almost all rural households of Sikkim.

There are also no social taboos or caste preference for Dairy in Sikkim and the activity is practiced by

all ethnic groups across all sections of the farmer community, big or marginal alike.

There is an strong enabling environment in the state for Dairy farming with the Department of

Animal Husbandry Livestock Fisheries and Veterinary Services (AHVS) of providing regular

trainings, required extension services and inputs. Research agencies like the ICAR and KVKs are also

conducting research to enhance productivity in Dairy farming.

The importance of the dairy subsector in Sikkim is also accounted by the fact that Sikkim has been

following organic practices in agriculture which has banned the use of chemical fertilizers and cow

dung is the single most bio-fertilizer that is being used.

Market feasibility

The Sikkim Cooperative Milk Producers Union Ltd. (Sikkim Milk) formed in the year 1980 is an apex

body of the primary milk producers’ cooperative societies formed at the village level on Anand Model

Milk Cooperatives. The milk union is a profit making entity and has more than doubled its turnover in

the last 4 years. Sikkim has a very good network of village level milk marketing cooperatives at all

GPUs. There are functional milk collection centres in all of the surveyed villages which are operated

by Sikkim milk.

The Milk Union offers a minimum price of Rs 16 per litre at the village level for standard milk with

3.5% fat and 7.5% solid non fat (SNF). This minimum rate is one of the highest in thye country for

cow milk.

Sikkim Milk has a wide network of retailers and milk parlours all across Sikkim for marketing milk

and milk products.

Unlike other tribal areas, Milk is a part of the daily diet of Sikkimese people. There are various value

added milk products like curd, paneer, churpi, butter, ghee etc. which are in high demand in urban all

across Sikkim.

The toursim sector in Sikkim is pretty evolved with a large number of hotels and restaurants all across

the state. This secor is one of the highest absorber of milk and milk products.

Economic feasibility

The ideal investment is Rs 55000 per unit. The overall income per household is around Rs 44699

with 29.4 % return on investment.

Finance is available from SISCO bank, other commercial banks and Micro finance institutions like

BASIX and Bandhan. However, the available finance from banks is often not adequate for the dairy

farmer and special financial support in Dairy farming is expected from the project.


MART, Noida 45

The Potential Linked Credit Plan prepared by NABARD outlays Rs 62.1 lakhs for West District and Rs

40.5 lakhs for South District for bank loan on Dairy farming for the year 2011-12. This target

allocation has increased by 20% in South and 4% in West district signifying a thrust on the activity.

4.3.3 Production Cluster

The dairy activity by virtue of the well networked milk collection centres at almost all GPUs of the state

are suitable to be implemented in both the project districts of South and West. There might be some

constraints for villages with water shortage to take up dairy activity since the activity requires adequate

water. However, since almost all rural households keep cattle, Dairy farming can be easily taken up by the

poor of both the districts.

4.3.4 Value chain map of Milk

Figure 6 is a depiction of the value chain of Milk from the surveyed villages in Sikkim.

Figure 6: Value chain map of milk

The two most prominent players in the value chain of milk especially in Sikkim are the dairy farmer and

Sikkim Milk. Around 65% of the households of the surveyed villages keep milching cows. Average of 3

indigenous variety cows are assets to all households who keep cows. The average milk output per cow in

the surveyed villages is 6 litres per day and the average milk output per household is 11 litres per day. 1-2

litres are consumed at the household level while the rest is sold.

Franchise / Retailer

margin: Re 0.5/litre

Unprocessed: Rs 13–18/ litre

Unprocessed: Rs 24-30/ litre

High cream: Rs 36 / litre

Toned: Rs 25/litre

Processing by Sikkim Milk

Dairy Farmers

Retailers

and milk

parlors

(Inside

Sikkim)

Consumers Consumers, Hotels,

Restaurants

Input Supply

Fodder, Cattle feed, nutrient supplements, dairy implements, equipment, etc.

Milk Collection centre run by Milk producer’s

Cooperative Societies

Milk unions

outside

Sikkim

(side Sikkim)

Consumers

Franchisee

(Outside Sikkim) Institutional

supply. e.g.

Army, IRCTC

Commission to

Cooperative

Societies: 3.3%

of value of milk


MART, Noida 46

4.3.5 Fodder and feed

The major fodder for cows constitute of wild grass, maize stocks, paddy straw, maize dust (Bhoosa) and

paddy husk. Green fodder in the form of wild grasses is sourced locally. Most farmers also grow fodder on

their fields in the form of Napier and C1 grass. 22% of the total area of Sikkim is reported to be available

for fodder cultivation (NABARD Potential Linked Credit Plan 2011-12). Milk output of the project area

decreases after the rainy season due to shortage of green fodder and water in some areas during winter.

During this period substitutes are used or fodder is purchased from Jorethang and other places. Oil cakes

(locally called pina) and common salt is also used as mineral supplements.

Cattle feed like Hemul Dana constitutes an important part of input supply for Dairy farming other than

fodder. Feeds and supplements for Dairy, Poutry and Piggery are commonly available in special shops

selling in major towns of Namchi, Jorethang, Namthang etc. There are cattle feed factories in Siliguri

producing cattle, poultry and pig feed in bulk. At Chompasari in Siliguri, West Bengal Dairy and Poultry

Development Corporation (a unit of Government of West Bengal) manufactures Hemul Dana, a highly

sought after feed in Sikkim. Samrat Feeds Private Limited and Apic Feeds Private limited are two private

players with factories at Fulbari and Mallaguri respectively. The feed from all these companies are

brought in regularly to these towns from the respective factories. Apart from these companies, Anmol and

Amrit feeds from Bihar are also available in these markets. Although cattle feed is exempted from VAT in

West Bengal, the transportation costs from the factory at Siliguri to the town level markets are high. Each

bag of cattle feed (sizes vary between 50 kg, 65 kg and 70 kg) incur around Rs 50-60 for transportation

including Sikkim Nationalized Transport tax, regulated market charges of Siliguri, market charges of the

local market, loading, unloading and miscellaneous charges. The retailer margin on each bag is around

8%. Around 9-10 such retailers are present in Jorethang market.

Some entrepreneurs use waste of beer factory as a cheap substitute for cattle feed which is sourced from

the beer factory at Melli.

4.3.6 Extension Services


free of cost in the villages. Sikkim Milk also has its own veterinary care centre at Karfectar. However,

accessibility of these services in far flung villages is restricted. While big farmers and entrepreneurs are

regularly visited by the veterinary doctors, poor farmers often spend around Rs 300 -500 per visit for

transport of the doctor. Vaccinations and de-worming are done free of cost from the respective

cooperatives and AHVS department. The department also forwards cattle insurance facilities to farmers in

association with Oriental Insurance Company wherein 50% insurance premium of each cattle insured is

borne by the department. Under a tribal sub-plan, there is a provision for distributing 1 cow per every BPL

household along with 5 day training on cattle management after the formation of a cooperative society

with at least 10 members. The scheme, however, has not been implemented satisfactorily since

community mobilization was inadequate and the process required a recommendation from the local

MP/MLA. The department also provides a subsidy of 33.33% in association with various banks for

procurement of animals under SGSY. Cows are procured by department of AHVS from other states like

West Bengal, Haryana etc. Some local dairy based entrepreneurs reported sourcing cows from Kurseong

and also Pashupati in Nepal through the Sukhia border between Nepal and Sikkim. Generally price paid

for a good HF breed is around Rs 25-30 thousand while a Jersey breed is expected to cost around Rs 15-

20 thousand. Cross bred animals are expected to cost around Rs 10 -12 thousand.

Table 14 showcases the strength of the extension services in the two project districts.


MART, Noida 47

Table 14: Extension services in Dairy

Particulars Number in South District Number in West District

Veterinary hospitals 2 3

Veterinary Dispensaries 6 6

Disease Investigation

Laboratories

1 1

Artificial Insemination

centres

27 38

Stockman Centres 21 16

Rinderpest checkpost 1 1

Source: NABARD Potential Linked Credit Plan 2011-12 for South and West Districts

The AHVS department has trained educated youth in the area to run Artificial Insemination (AI) centres

at the GPU level. Semen, liquid Nitrogen and other equipments are regularly made available with these

para-professionals. The charges for AI are paid after the cow gives birth, which is Rs 300-500 for a male

calf and Rs 800-1000 for a female calf.

The KVKs located in each of South and West Districts also conduct various capacity building programs for

dairy farmers on Dairy in association with external experts, best practitioners and AHVS department.

A recent drive by the AHVS department in promoting good breeds is expected to increase the number of

cross bred cows with Holstein Frisian (HF) or Jersey variety. The department has established a Brown

Swiss Farm at Ravongla and a State Bull Rearing Farm at Karfectar for promoting good breeds. However,

as per the feedback of senior scientists of the department promotion of dairy among the poor should be

focused on cross breed cows only since pure breed HF and Jersey are expensive, more prone to diseases

and difficult to maintain under the known constraints of green fodder shortage during winters, water

shortage and low capacities of the poor dairy farmer. The milk of pure breed HF is also low in fat and

hence is expected to yield lower returns when marketed through the formal cooperative milk marketing

channel. As per the department, a properly maintained cross breed jersey cow can yield around 20 litres

of milk under ideal conditions.

The department recommends construction of Silage pits for storing fodder to address the shortage of

green fodder during winter along with following special winter package of practices. The department also

has completed an exercise in mapping mineral potential of entire Sikkim to find out mineral deficient

areas and supplement adequate mineral mixture for these areas for enhanced milk productivity all year

round.

4.3.7 Milk Marketing and role of Sikkim Milk

A majority of dairy farmers in each village are members of the milk producer’s cooperative society at the

GPU level. These collection centres are equipped with electronic lactometers and necessary equipments

for accurate measurement of fat and SNF in milk. There are generally 2 staff of the respective cooperatives

for each collection centre who are trained in testing milk. Payment registers are maintained by the staff

according to an index chart which determines due payments as per fat and SNF content. Payments to

members are done weekly. Collection of milk occurs twice a day and the collected milk is transported by

milk vans to nearest milk chilling units to be transported to the milk processing plant at Karfector near

Jorethang. There are also around 40 deep freezers provided by Sikkim Milk to various cooperative


MART, Noida 48

societies. While the centre at Karfector caters to South and West districts, East and North districts are

catered by a bigger unit at Tadong in Gangtok.

Sikkim milk has a minimum procurement price of Rs 16 for standard milk with 3.5% fat and 7.5% SNF.

However, the quality of the milk in the surveyed villages have seldom reached the desired level in terms of

fat and SNF. The average price at the village level that is fetched by the dairy farmer is around Rs 13 to Rs

15 per litre. Maximum price of milk at the village level was reported to be around Rs 19 per litre. (as per

primary survey)

Sikkim Milk is associated with 286 cooperative societies all across Sikkim with 114 in the South and West

Districts. Sikkim Milk has an association with West Bengal Dairy and Poultry Development Corporation

for bulk procurement of Himul dana. The annual report of Sikkim Milk signifies that in 2008-09

procurement of milk was 2213048 litres and 718201 litres from South and West District respectively.

Sikkim Milk has the following products under its belt:

o Pasteurized Fresh Cow Milk

o Toned Milk (3% fat and 7.5% SNF)

o High Cream Milk

o Butter

o Paneer

o Curd

o Lassi

o Chhurpi

Sikkim Milk has institutional tie ups with the Army cantonments in Sikkim for regular supply of milk and

milk products. Linkages with IRCTC are also in the process. Apart from this a chain of retailers and milk

parlors are associated with Sikkim Milk for marketing of the aforesaid products. Sikkim Milk is also

supplying surplus milk to West Bengal.

The cooperative societies associated with Sikkim Milk gets the following benefits from Sikkim Milk:

o Commission to the societies at 3.3% of the value of milk procured.

o Societies received bonus in the year 2009-10 at 50% of the average monthly milk

supplied.

o Supply of Cattle feed at cost price to the farmers with transportation costs being borne by

Sikkim Milk.

o Provision of milk cans at subsidized cost.

o Provision of mineral mixture, de-worming and medicines free of cost according to

availability under different projects/grants.

o Provision of Bulk Milk coolers and deep freezers under various projects / grants.

o Emergency veterinary support

o Free Capacity Building to members and functionaries

While a majority of the milk nowadays is collected by the milk collection centres, a few dairy farmers with

enough scale directly sell milk to consumers, hotels and restaurants in major markets of Namchi,

Jorethang etc. This milk is not processed (although adulterated with water in some cases) is often sold

twice a day to fixed consumer households, hotels, restaurants, sweet shops etc. The price of milk ranges

between Rs 20-30 per litre based on the quality of the milk. In some cases, the farmer also collects milk at


MART, Noida 49

the village level to achieve scale and then supplies the same in the market. The payment for regular

household level or hotel supply is generally made monthly.

There are a few milk producer groups which have come a long way in manufacturing of milk products and

marketing the same. Naya Bihane SHG (men SHG) of Lower Okahare procures milk at the village level

and uses a cream separator to make paneer, butter and Chhurpi. The products are packed and branded

“Naya Bihane” before marketing through different channels (retailers based at Gangtok, Jorethang,

Sombarey and Dharamdin). The SHG is selling around 4 kgs of paneer every day at Rs 140 per kg to these

retailers. However, the SHG is restricted to scale up due to the need of advanced machinery and

refrigerators.

An Alpine cheese factory at Dentam has been set up under the Indo –Swiss project. The factory is

administered by a cooperative society which also procures around 2500 litres of milk everyday from local

dairy farmers. Amul is currently marketing the cheese manufactured by the factory.

4.3.8 Constraints-Solution Matrix

Table 15: Constraint Solution Matrix for Dairy

Factor Constraints faced by small and poor dairy farmers

Critical Intervention points

Input sourcing and Production

Availability of adequate water and

green fodder round the year.

Low productivity of cows.

Availability of good cross breed cows.

Dairy farmers different qualities and

quantities of cattle feed resulting in

non standardization of practices

Establish a formal arrangement with

the AHVS department and Sikkim

Milk for ensuring availability of good

quality cross bred cows.

Promote Silage pits for storing green

fodder.

Identify and promote specific cluster

of villages for specially producing

fodder.

Ensure adequate availability of

mineral mixtures and nutrition

supplements at all project village

levels.

Create village level cadre of technical

persons to provide technical services

to dairy farmers regarding

productivity enhancement.

Regular training on best practices and

exposure visits to best practitioners in

the local area.

Access to finance

Availability of timely and right amount

of credit for working capital and

sourcing cows is an issue. Bank loan

also requires a lot of paper work.

MFIs and banks working in the area

provide loan but their loan products

don’t match expectations of dairy

farmers. Even established dairy

Organize poor famers in SHGs to link

them with local banks to ensure their

financial inclusion.

Develop partnership with existing

MFIs and banks encourage them to

develop specific loan products for

commercial dairy farming and

expansion


MART, Noida 50

Factor Constraints faced by small and poor dairy farmers


entrepreneurs face problems in scaling

their activities due to lack of adequate

bank finance.

The Project can also fund the activity

directly.

Marketing Payment for milk is based on fat and SNF content which is low in cow milk. The niche value for cow milk is not accrued to the producer.

Although the milk produced in Sikkim is primarily organic, there is no premium price to producers for being organic.

The project can facilitate proper organic certification of milk and develop niche markets for cow milk to enable premium prices for the poor producer.

Cooperation among farmers and institutions building

There is low affinity among farmers

for collective action for sourcing of

feed and fodder in higher operating

costs.

Guide dairy farmers for collective

sourcing of feed and fodder to reduce

operational costs.

Govt. policies and external ecosystem

Low outreach of schemes for dairy

promotion among poor.

Blockage of roads and landslides may

lead to market failure making dairy

activity unviable.

Appoint implementing agencies and

develop village level service providers

to help famers link with need based

government schemes and services.

Development of adequate milk chilling

and storage mechanism at village level

to withhold milk from perishing

during roadblocks due to landslides.

4.3.9 Project Interventions

Project can promote Dairy farming to be taken up by SHGs and dairy groups in a cluster. Individual

farmers will be keeping cattle for milk production but sourcing of feeds and fodder can be done

collectively. Marketing can be done through the cooperative societies associated with Sikkim Milk.

Special marketing infrastructure can be build and existing infrastructure of Sikkim Milk can be

enhanced by the project to facilitate efficient marketing of milk once the total volumes of milk in both

the district enhances due to project interventions.

Project need to work on strategies and capacity building inputs suggested in the previous section and

by adopting an implementation plan described later.

Project can facilitate funding to individual farmers on the basis of unit cost described below.

4.3.10 Economics of Dairy farming (for 1 houshold keeping 3 cross breed cows)

a. Assumptions

Calculations have been done for 3 cows with 1 acre of land for fodder cultivation. Cost of various

inputs and outputs are based on information collected from villagers, entrepreneurs, market

players, Sikkim Milk and AHVS department. A silo pit for storing green fodder will be constructed

at Rs 40,000 per year for 10 dairy farmers.

The rate of interest for bank loan is taken @ 12% per annum. The average price of milk is assumed

to be Rs 18/ litre after following best practices. 3 cows will produce 20 litres of surplus milk per


MART, Noida 51

day. Income from selling 2 calves per year and selling dry cow dung has also been taken into

account.

Table 16: Financial plan for Dairy farming

Sr. No Particular Unit Quantity Unit Price (Rs)

Total Amount

(Rs)

1 Fixed capital

1.1 3 cross breed cows including transportation numbers 3 15000 45000

1.2 Shed Reinforcement with locally available materials lumpsum 1 5000 5000

1.3 Milk Cans and implements lumpsum 1 5000 5000

1.4 Total fixed capital

55000

2 Yearly Revenue generation

2.1 Sale of Milk at Rs 18 per litre for 20 litres per day Days 365 360 131400

2.2

Sale of dry Cowdung at Rs 100 per bag (3 cows produce 15 bags per month) Bag 12 1500 18000

2.3 Sale of 2 calves at Rs 5000 per calf lumpsum 2 5000 10000

2.4 Total Income 379

159400

3 Yearly Expenses

3.1 Cultivation Expenses for fodder (Napier) in 1 acre land lumpsum 1 5000 5000

3.2 Cattle feed (Hemul dana) at Rs 14 per kg (1 kg per cow per day) Days 365 42 15330

3.3 Maize dust (Bhoosa) or paddy straw at Rs 10 per kg (2 kg per cow per day) Days 365 60 21900

3.4 Oil cake (pina) at Rs 14 per kg (1 kg per cow per day) Days 365 42 15330

3.5 Mineral Mixture at Rs 15 per kg (0.5 kg per cow per day) Days 365 22.5 8212.5

3.6 Calcium Supplement at Rs 100 per litre (1.5 litre per cow per month) Months 12 450 5400

3.7 Labour Charges at Rs 15 per cow per day Days 365 45 16425

3.8 Silage pit for Fodder storage (Rs 40,000 for 10 farmers) lumpsum 1 4000 4000

3.9 Artificial Insemination charges lumpsum 1 4000 4000

3.10 Insurance lumpsum 1 1000 1000

3.11 Total running cost

96597.5

4 Profit before interest

62802.5

5

Interest (12% per annum on Total investment including fixed capital) 12% 151,598 18191.7

6 Net profit

44,611

7 ROI

29.43%

8 Payback period Year

2.413877


MART, Noida 52

b. Sensitivity Analysis for Dairy

Table 17: Sensitivity Analysis forDairy

Sr. No Parameters Revenue

(Rs) Expenses

(Rs) Profit before interest (Rs)

1 What if labour utilized is family labour 159400 80172.5 79227.5

2 What if running expenses go up by 10% 159400 106257.3 53142.75

3 What if running expenses fall by 10% 159400 86937.75 72462.25

4 What if average price of milk decreases by Re 1 152100 96597.5 55502.5

5 What if average price of milk increases by Re 1 166700 96597.5 70102.5

6 What if average productivity of milk goes up by 1 litre 165970 96597.5 69372.5

7 What if average productivity of milk falls by 1 litre 152830 96597.5 56232.5

4.3.11 Implementation plan for Dairy promotion

Table 18: Implementation plan for Dairy

Key steps to be

followed

Activities to be performed by project

Phase I – Preparedness at the community level

Cluster selection Select the right cluster for initiating dairy promotion based on technical

feasibility.

Identify target block, village and the community.

Social mobilization

and institution

building

Sensitize poor dairy farmers on potential of dairy using the findings of value

chain analysis described earlier and their impact on livelihood.

Share various possibilities of Dairy, its cost benefit analysis, and assess

community interest level to take up the activity.

Identify the members/groups to start Dairy as a new unit. Initially only a

limited number of groups should be encouraged to start the activity. Based

on the results of pilots add more members. List out members separately who

are already doing the activity and want to either expand or strengthen the

activity.

Initiate participatory discussion to arrive at consensus on roles and

responsibilities of members and group leaders to take up the activity.

Preparation of

business plan

Prepare a proper business plan for Dairy in consultation with the

community detailing the economics of the activity, sourcing of inputs,

linkages with market players, production practices and technology to be

used, and government schemes to be availed.

Capacity building Leadership training for group members–functions and responsibility to

interact with external players.


MART, Noida 53

Training in business and marketing skills (costing, pricing, accounting, sales

and marketing, negotiation, market analysis) to members using

participatory techniques.

Technical training on better practices, exposure visits to nearby best

practitioners and outside the states as well.

Identify suitable government and private agencies that can provide need-

based technical and business training at the community level. Identify local

level best practitioners.

Phase II - Launching of the unit

Backward linkages Counsel farmers to procure feed and fodder collectively in bulk to reduce

operational costs.

Systematize training management.

Establish finance support for Dairy on unit cost basis.

Production Implement best practices.

Clarity of roles, specialization and continuous skill improvement

Bring quality control in production to achieve efficiency, higher productivity

at lower costs.

Better record keeping and financial management.

MIS development and multidimensional intervention opportunity.

Market access Identify suitable and multiple markets and prepare list of market players

with their contact details for sourcing inputs. Identify niche markets for cow

milk and organic milk.

Clarify on profit sharing and funds rotation among members in case of

group activity.

Understand organic certification norms and methodology to obtain organic

certification. Prepare special action plan for the same.

Build System for collaborations and employment

Possibilities of Partnership

Partnership possibilities exist with AHVS department and Sikkim Milk union.

As mentioned earlier, Sikkim Cooperative Milk Producers Union Ltd. (Sikkim Milk) is already functional

in the project area and can act as a ideal stakeholder in promoting cluster based interventions around

Dairy for the project. However, the institution needs support in strengthening its infrastructure and

building appropriate capacities to specially include the project beneficiaries under its umbrella. A 3 year

plan jointly prepared by Sikkim Milk and MART, for the project to support Sikkim Milk is annexed with

this report.

Possibility of setting up processing unit

There is a possibility of processing milk into milk products like ghee, butter, churpi etc. However, setting

up such processing units at the village level would require sufficient entrepreneurial skills among poor,

marketing and technical skills, and ensured market linkages with bulk buyers to sustain such units. The

demand at the village level is low and marketing of products outside would require successful marketing

interventions such as proper packaging and branding. Sikkim Milk is already processing the same. It is,

therefore, suggested that for first couple of years poor (both individuals and groups) should encouraged


MART, Noida 54

for milk production, productivity enhancement and market linkages. After a couple of years project can

identify few individuals with entrepreneurial skills to experiment setting up few processing units.

4.4 Value Chain of Ginger

4.4.1 Background

Ginger (Zingiber officinale) is an herb that is native to South East Asia and has been used as a food

additive for more than 4,000 years, and for medicinal purposes for more than 2,500 years. Originaly

cultivated in China ginger is now equally spread around the world. It is the "root" of the ginger plant

(which is actually not a root, but a rhizome) that is most useful for medicine and for flavoring food.

The eight North Eastern states of India accounts for 49% of India’s Ginger producing area and 72% of

India’s ginger production. Ginger is an important cash crop of Sikkim. It is grown by all section of farmers

including small and marginal farmers. The ginger available in Sikkim is less fibrous with high moisture

content. Ginger produced in these parts are reported to have higher oil (5.9-8.56%) than ginger from

other parts of India (5-8%). (Source: Traditional practices of ginger cultivation in Northeast India; H

Rahman, R Karuppaiyan, K Kishore & R Denzongpa; Indian Journal of Traditional Knowledge).

Figure 7: Production trends of Ginger

Figure 7 shows the trend of ginger production in India from 1997-98 to 2008-09 which clearly shows a

fall in productivity and production since the last 5-6 years.

The last five years have been crucial for ginger production in Sikkim as well, since the state has stopped

using chemical fertilizers and pesticides for ginger cultivation. Use of chemical fertilizers and pesticides

75.6 77.6 80.8 86.2 91.3 88.2 85.1 95.3 110.6 106.1 104.1 108.6

252.1 263.2 282.6 288.0

322.1

280.2 301.9

359.0

391.2 393.4 382.6 380.1

0

100

200

300

400

500

600

Year wise area under Cultivation and Production of Ginger in India (Source: Ministry of Agriculture and National Horticulture Board)

Production ('000 Tonnes) Area under cultivation ('000 hectares)


MART, Noida 55

has been banned all across the state. Currently only preventive organic pesticides like Neem is being used

by farmers. The most common problem faced by ginger farmers of Sikkim is soft rot, which is the most

destructive disease of ginger resulting in total loss of affected clumps. Different research agencies like

Indian Council for Agriculture Research (ICAR) and Krishi Vigyan Kendra (KVK) are still in the process of

developing curative organic pesticides for the same. This has resulted in a marked decrease in production

and productivity of ginger due to high incidence of diseases.

However, in-spite of the problems faced, ginger remains as one of the most important cash crops of the

state.

4.4.2 Feasibility of Activity


The agro climatic conditions of West and South districts of Sikkim (project area of NERLP) are

suitable for ginger cultivation.

Ginger available in Sikkim is less fibrous with high moisture content. Ginger produced in these parts

are reported to have higher oil (5.9-8.56%) than ginger from other parts of India (5-8%). This

attributes to the good quality of ginger that ios produced from this state.

Sikkim has around 7000 hectares under Ginger cultivation which annually produces around 377000

tonnes. This accounts for around 9.8% of India’s production. (Source: Ministry of Agriculture, Govt.

of India - 2007-08)

The basic skill for ginger cultivation is available with the poor community. Ginger is also cultivated

across all sections of the farmer community, big or marginal alike.

There is an enabling environment in the state for ginger cultivation with the horticulture department

providing regular trainings and inputs for ginger cultivation. The department supports around 300

hectares of ginger cultivation every year in the two project districts of South and West alone with

seeds, bio fertilizers etc. Research agencies like the ICAR and KVKs are also conducting research to

enhance productivity and counter diseases in ginger cultivation.

Market feasibility

The quality of ginger produced in Sikkim is one of the best in country as per market demand. Thus the

Sikkim’s variety of ginger fetches the best prices in the market.

There is well organized market network in the state for ginger. Villages of South and West districts are

connected to various assembled markets like Namchi, Jorethang, Soreng, Singtam, Reshi etc. Ginger

from all these markets are traded through Siliguri regulated market.

There are multi purpose cooperative societies formed in almost all Gram Panchayat units which deal

in ginger. These societies either trade by themselves or pass on their produce to Sikkim State

Cooperative Supply and Marketing federation Ltd. (SIMFED). SIMFED has a counter at the Siliguri

regulated market and also linked to various national and international buyers.

Siliguri, the main regulated market of the area is a major ginger hub of the country which supplies

ginger to Delhi, Mumbai, Kolkata etc National markets as well as international markets like

Bangladesh. There are around 150 national and international level traders dealing in ginger having

counters at the Siliguri regulated market. As estimated by ginger traders, an average of 1500 tonnes of

ginger is traded out of Siliguri every day.



MART, Noida 56

The ideal investment is Rs 23300 per acre. The overall income per acre is around Rs 17844 with 73.6

% return on investment.


BASIX and Bandhan. However, the available finance from banks is often not adequate for the ginger

farmer and special financial support in ginger cultivation is expected from the project.

The Potential Linked Credit Plan prepared by NABARD outlays Rs 444 lakhs for West District and Rs

740 lakhs for South District for bank loan on Ginger cultivation for the year 2011-12. This target

allocation has increased by 57.2% in South and 34.7% in West district signifying a thrust on the

activity.

4.4.3 Production clusters

Sikkim produces one of the best qualities of ginger in the country.Ginger cultivation is generally practiced

throughout the state. The project districts of South and West Districts are ideally suited for ginger

cultivation and almost all villages are well suited for Ginger cultivation. Productivity of Ginger is found to

be best in villages with heights between 2000 feet to 4500 feet.

4.4.4 Major usage and by-products

Ginger has a strong distinct flavor that can increase the production of saliva due to which Ginger is mainly

consumed as a major spice and flavor ingredients all across the globe. Pickles, ginger flavoured tea, candy,

toffees, lozenges etc are also common. A Government Fruit Preservation Factory by the Governemnt of

Sikkim is functional at Singtam which

Compounds in the ginger rhizome, called oleoresins, have anti-inflammatory properties and are also

known to have a positive effect on the muscles in the digestive tract. Thus Ginger is often an important

ingredients in various medicines, chawanprash, syrups, health tonics, cough tablets, digestive tablets etc

various applications.


MART, Noida 57

4.4.5 Ginger value chain map

Figure 8 is a depiction of the value chain of Ginger in Sikkim.

Figure 8: Value chain map of Ginger

* The rates given are for fresh Ginger and ‘q’ stands for quintal.

Siliguri is the terminal market for ginger not only for Sikkim but also for all other North Eastern

states and West Bengal. Ginger in Delhi, Kolkata, Mumbai and other major cities of India are mainly

sourced from Siliguri. There are also regular international consignments to Bangladesh from Siliguri.

Ginger is sold throughout the year. However the ginger sold through vegetable retailers at Gangtok,

Namchi, Jorethang etc. urban centres of Sikkim often come from Siliguri except during the harvesting

season.

By the time the produce reaches consumers in major cities, almost 3 times value is accrued to Ginger

from the base value that the producers get. High transaction costs also contribute the enhanced value

of Ginger.

SIMFED

Ginger Farmers

Wholesalers

(Siliguri)

Retailers

(Outside Sikkim)

Consumers Consumers

Traders at

Jorethang, Reshi, Namchi,

Namthang,etc.

Retailers

(Outside Sikkim)

Consumers

(Local market)

Input Supply from farmer’s own sources

Seeds, bio-fertilizers, agriculture implements, equipment, cow dung

Rs 2500-3500/q

Village level

traders

Rs 3500-4500/q

Rs 4500-5500/q

Rs 2000-2500/q*

Wholesalers

(Delhi, Mumbai, Kolkata)

Wholesalers


Wholesalers

(Siliguri)

Traders at

Jorethang, Reshi, Namchi,

Namthang,etc.

Retailers

(Gangtok, Namchi, Jorethang)

Wholesalers

(Siliguri)

Rs 5500-7000/q

Multipurpose

Cooperative

Societies


MART, Noida 58

4.4.6 Input suppliers

The main inputs required for Ginger cultivation are seeds, organic fertilizers and agri implements. Under

a directive by state government, the farmers of Sikkim have stopped using chemical fertilizers and

pesticides for Ginger production. Chemical pesticides and fertilizers usage is not only banned by all Gram

Panchayat Units, but also sale of such products are banned in markets. The GPUs have a system of

imposing fines in case of non compliance.

Currently, the only fertilizer being used is cow dung. Ash is also applied as a fertilizer. Neem is often used

as a preventive fungicide / pesticide. However, there is a dearth of availability of curative organic

fungicides and pesticides. Horticulture department provides certain bio fertilizers free of cost but only to a

limited number of farmers. As mentioned earlier, research is being undertaken at KVKs and other ICAR

organization for developing suitable bio fertilizers, fungicides and pesticides.

4.4.7 Farmers

Farmers generally keep seeds from previous year harvest. Seeds are also procured from nearby open

markets. Farmers are also provided free of cost seeds and other inputs from the Horticulture department.

Cow dung is often used from farmer’s own sources since almost all farmers keep cattle and bullocks.

Around 70% of the farmers in the surveyed villages had their own bullock pairs for ploughing. Since the

fields are terraces cut out on hill slopes, mechanization of the ploughing process in the form of tractors or

power tillers is either not possible or very difficult. Irrigation is through natural springs (locally called

Dhara) and water tanks specially constructed by Horticulture department or department of soil and water

conservation. However irrigation facilities are very much limited and ginger cultivation in Sikkim is

primarily rain fed.

A collective farming system called Parma system prevails among many communities in Sikkim in which

friends and relatives of individual farmers come together to work in the fields of the farmer free of cost.

Mutual help saves labour costs.

4.4.8 Production practices

In the selection of land for ginger cultivation, fields where water stagnates are avoided. Farmers also

believe that planting the same land every year does not produce a good crop. Chosen fields are cleared of

all vegetation by burning and the ash is also used as fertilizer. The land is then ploughed, dug and hoed. A

second plowing occurs 15 to 18 days later. Cow dung is applied to the fields and they are plowed again to

mix the manure into the soil. Beds 20 to 25 cm high are prepared with drains between them. Just before

planting, the stored ginger seed rhizomes are sorted again. Good healthy rhizomes, that are, large, shiny,

free from spots or marks, and free from bud or eye injury, are selected.

The selected ginger rhizomes are planted in two or three zigzag rows in the beds and covered with up to 8

cm of soil. The spacing between the rhizomes are about 15 cm. Some farmers believe that to increase

production, one can plant three or four rows in a bed. During planting the seed rhizomes are broken into

pieces to ensure that each has two to four sprouts. Immediately after planting, the beds are mulched with

dry leaves up to 8 to10 cm thick. Some farmers use mulch made by putting grasses in the cowshed for a

few days so that it mixes with cow urine and dung. Mulching protects the seedlings from rain, prevents


MART, Noida 59

weed growth, keeps the soil soft and moist, and accelerates growth. Most farmers, practice intercropping

with maize as maize plants provide shade to the ginger. Maize is planted in the drains in between the

beds.

After about a month, the beds are weeded. Ginger shoots are still very small and the chances of damage to

them are high. Weeds are uprooted and disposed of outside the bed. When the ginger plants have three or

four leaves, the mau or mother rhizome is removed, although if it is too small, it is left in place. Care is

taken not to damage the roots and cause infection. The roots are immediately covered again with soil. The

mau is sold off to traders at Namchi, Jorethang, Reshi etc. markets which fetches anywhere between Rs

3500 to 4500 per quintal. Fifteen days after mau extraction, manure is applied.

To keep the seeds for the next season, healthy looking plants are selected i.e. plants that are not dried,

which are harvested 15 to 20 days before and stored in a dry, shady place. The rest of the crop is harvested

for sale. Some farmers harvest the entire crop and then select healthy rhizomes and store them either in a

pit covered with straw or in a cool, dry place in the house or godown.

If seeds are bought from open market or obtained from government sources, they are stored in house in a

cool, dry place covered with gunny bags or outside in a dry, shady place. The ginger for sale is harvested

depending on the market price. Farmers usually change the seed every two to three years to reduce the

prevalence of disease. A few rich farmers also store the harvest to sell in off season when prices are

comparatively higher.

Bhainse, Gurubathane and Majauli are the three types of Ginger harvest based on their respective sizes of

the harvested rhizomes. However, there are little efforts by farmers to sort the produce according to their

sizes and sell the same. However, the Bhainse variety fetches better prices than Gurubathane and

Majauli.

Farmers have been experimenting with various disease management practices in different villages. Some

Lepcha farmers clean all the mud from the bottom of the diseased plant and expose the roots to the sun.

Rotten plant roots are scratched and ash is applied. Some believe that just exposing the roots of infected

plants to the air and sun can stop further spread of disease. The farmers say that these roots or rhizomes

germinate and grow well. Some farmers cultivate ginger only in sloping fields using traditional methods,

that is, without much land preparation. They just scratch the soil to make a hole and plant the rhizome

seed in it. Many farmers contend that red soil helps control disease.

4.4.9 Market access

Farmers sell Ginger in local weekly haats, to local traders and traders at Namchi, Jorethang, Legship etc.

rural and urban centres. All transactions are done in cash. Sikkim has a very vibrant cooperative system at

the village level and some multipurpose cooperative societies at the GPU level also procure Ginger from

farmers and sell the produce to wholesalers at Siliguri through SIMFED. In the surveyed villages, while

around 20% of the produce was sold through village level traders and cooperative societies, another 20%

were sold through weekly markets and 60% is sold directly to traders at Namchi, Jorethang etc. urban

centres.


MART, Noida 60

Ginger is generally sold loose by farmers without much cleaning and value addition. The unit of sale is

Mon which is equivalent to 40 kgs. The average price received by farmers is Rs 2000- 3000 per quintal.

When sold directly to town level traders, farmers generally bring their produce in jute bags (borra) via

local jeep transport. After selling the produce the jute bags are taken back by the farmers.

4.4.10Village level traders

Village level traders generally deal in multiple produces and receive advances from wholesalers in Siliguri

for procuring Ginger from farmers at the village level itself. A section of these traders are also linked to

town level traders for passing on the produce to them in the value chain. The village level trader in some

cases were found to undergo basic value addition to the procured Ginger in terms of cleaning, sorting,

grading and standard packing the ginger into jute bag (borra) packets of 60 kgs. Village level traders of

the surveyed villages transport their produce in half trucks at an average cost of Rs 10 per Borra (60kgs)

to town level traders. Sometimes local transport jeeps are also used as transport.

4.4.11 Town level traders

A large section of the town level traders constitute of Bihari community along with Marwari community.

These traders are the major aggregators of Ginger at the town levels and also form the main link with

wholesalers in Siliguri. While Namchi has around 50-60 such traders, Naya Bazaar near Jorethang houses

another 70-80. The town level traders grade the produce according to parameters like size of rhizomes,

quality, moisture content, colour etc. Generally the market area from which the produce has originated

bears much importance in marketing of Ginger. e.g the Melli quality named after the market of Melli in

South Sikkim is one of the best qualities of Ginger. Similarly Reshi and Singtam variety refers to the

market of Reshi of West Sikkim and Singtam in East Sikkim respectively which procures a bulk of the

Ginger of the area but has lower quality attributes. There is a price difference of around Rs 5-8 per kg

between these qualities. The procurement prices of Ginger in these town level markets fluctuate often

according to the demand and supply conditions of the Siliguri market. These traders negotiate with

wholesalers in Siliguri and finalize deals telephonically before sending the produce. Later they themselves

visit Siliguri to collect their due at least once in every fortnight.

The traders store the procured produce in their own godowns and sends off the collected produce to

Siliguri regulated market every week. A primary function of the town level trader is to grade the collected

produce and pack them in standard packing sizes of 60 kg jute bags. The weight of the jute bag which is

around 900 grams and costing around Rs 25 per piece is also included in the weight of the packet. The

labour charges incurred by the trader are around Rs 10 for packing, weighing and loading the packets

onto the vehicles of transport.

The town level traders often deduct 3-4 kgs per packet while paying the farmer his dues by accounting for

impurities in his ungraded produce. There is also incidence of cheating in weights where at least 1-2 kgs

per packet goes unpaid for.

4.4.12 Transportation

All types of transport vehicles are used for transport of Ginger ranging from Half trucks with 2-5 tonnes

capacity to 9 tonnes and 16 tonnes capacity trucks. There are around 8-10 different transporters in

Namchi alone who own trucks. As informed by some interviewed traders around 4-5 trucks of 9 tonnes


MART, Noida 61

capacity ply every day from Namchi to Siliguri carrying ginger during the harvesting season. A 9 tonne

truck is also reported to carry around 180 packets as an optimum. The transportation charges charged by

transporters are around Rs 40 per packet from Namchi to Siliguri. The same cost varies as per distance

like from Melli it is Rs 30 per packet and from Geyzing it is Rs 45 per kg. This includes various costs of

transport like Sikkim Nationalized Transport tax of Rs 9 per packet, West Bengal regulated market tax of

Rs 6 per packet, charges for crossing over to the state border (often referred as Gunda tax), bribe to

policemen etc.

4.4.13 Wholesalers

There are around 150 wholesale Ginger traders in the regulated market for Agri-Horti produce in Siliguri.

Ginger from Sikkim, Darjeeling, Kalimpong , Dimapur, Shillong, Guwahati, Aizwal etc. converge in

Siliguri to be traded to all corners of the country. In this market the quality of Ginger is differentiated not

only by the area of origin like town level traders but also by the thickness of the Rhizome which are Mota

(thick) or Patla (Thin). While the produce of Sikkim is largely thick, the variety of Ginger from other

North Eastern states of Mizoram, Nagaland and Meghalaya are of thin quality. The thick variety is

reported to be of demand in Delhi and North Indian places while the thinner quality is in demand in the

eastern parts of the country like Kolkata, Patna and also Dhaka in Bangladesh.

The produce after arriving in the regulated market undergoes a washing (in the river or specially

constructed tanks) and grading again to be repacked into packets of 60 kgs. The washing of the produce

brings about a special glaze to the ginger which not only fetches a good price also restores the lost

moisture. However, only the fresh ginger is washed and mother rhizhome (Mau) is not washed. There are

around 15-20 organized players in the regulated market who exclusively performs the washing grading.

Expenses per packet of 60 kgs for each process is as follows;

Unloading charges: Rs 2.5 (charges fixed by labour union)

Washing: Rs 25-30

Sorting and Grading: Rs 3 (done by women and charges fixed by labour union)

Packing, weighing and Loading: Rs 7 (charges fixed by labour union)

There are generally three types of deals that generally occur between town level trader and wholesalers in

Siliguri.

1. The wholesaler acts as a commission agent in selling the produce to wholesalers in other places of

the country. The commission charged is 5% from both parties (seller and buyer) and all other

costs like sorting, grading, washing, weighing, loading, etc are borne by the seller. Unloading

expenses is borne by the buyer. The responsibility of taking the produce to the regulated market

is also with the buyer. The wholesaler plays the mediator between the buyer and seller.

2. The wholesaler acts as a trader and negotiates a deal from the seller by fixing the price of the

produce per quintal such that whatever be the prevailing prices in the market, the deal will be

carried out at the negotiated prices only. Under such circumstances all expenses are generally

borne by the wholesaler himself including transportation charges. The wholesaler decides

himself whom to sell and at what price to sell and the buyer and seller do not come face to face

with each other.


MART, Noida 62

3. The wholesaler acts as a service provider between two parties (seller and buyer) and does not

charge a fixed commission but a facilitation and service provision charge for arranging

transportation and other services. All expenses are borne by the parties and certain services like

transportation, loading, grading etc are provided by the wholesaler.

Some transport costs per kg as reported from traders in the regulated market are Rs 2.3o for Delhi

(Azadpur Mandi) and Rs 2 for Kolkata (Barabazaar).

There is some weight loss (around 1 -2 kg per packet) reported of the Ginger by the time it reaches its

destination in Delhi or Kolkata. This is due to the loss of moisture that occurs in the fresh Ginger. To

counter this weight loss the packet size is made at 61 kgs instead of 60 kgs. This weight loss is however

very little for mau or the mother rhizome.

The actual produce is often devalued on paper to reduce the imposed sales tax on the item. The financial

transactions that occur between various wholesalers are not always through ethical or legally sound

channels with a majority of them being conducted through Hawala at a commission of 3%. There are also

reported systems of bribes to the tune of Rs 5 lakhs per annum from the regulated market for these

transactions to continue unhindered.


Table 19: Constrain Solution Matrix for Ginger

Factor Constraints faced by small farmers Critical Intervention points

Input sourcing

and Production

Ginger seeds from the government

department are distributed to only a

handful of farmers who are not

marginal or poor.

Availability of bio fertilizers other

than ash and cow dung.

Availability of organic fungicides and

pesticides.

Incidence of diseases like Poinle or

Soft rot.

Farmers who took one-time training

from agriculture department didn’t

get the desired yield. By hit and trials

approach they develop package of

practices.

Cold storages are very far and few.


the Horticulture department for

ensuring adequate supply of Ginger

seeds and fertilizers to farmers.

Support KVK and ICAR in speedy

research of appropriate organic

fertilizers, fungicides and pesticides.




government schemes and private

services.



to farmers.

Regular training and exposure visits to

best practitioners in the local area can

help poor farmers.

Set up new cold stores after feasibility

study.

Access to Availability of timely and right Organize poor famers in SHGs to link


MART, Noida 63


finance amount of credit is an issue. Bank

loan requires a lot of paper work and

farmers’ don’t have proper papers

against their land. The loan provided

is also inadequate for ginger farming.



don’t match expectations of farmers.





develop loan product for Ginger

cultivation based on its economics.


directly.

Value addition Farmers do not clean their produce

and sells off the produce immediately

after harvesting without sorting and

grading

Cleaning, sorting and grading should

be taken up at the village level by

farmers to maximize profits.

Capacity building of farmers should be

done in taking up elementary value

addition.

A 7.5 MT/day capacity ginger

processing plant has been

commissioned recently at Jorethang

which will be operated by SIMFED.

The centre can cater to the needs of

the poor farmers in the project area

through convergence by NERLP.

Market access Farmers sell individually to the village

level trader or town trader resulting in

higher overhead marketing costs

Farmers get 1/3 rd of value paid by the

final consumers

There is scope for collectivizing

farmers to sell collectively and directly

to higher order markets at towns and

Gangtok for better price realization.

Cooperation

among farmers

and

institutions

building



seeds and sale of Ginger resulting in

higher operating costs.

Guide farmers for collective sourcing

of seeds and marketing to reduce

operational costs.

Govt. policies

and external

ecosystem


lead to increase in input costs and

market failure making Ginger

cultivation unviable.

Development of local market system

will reduce dependence on external

markets.

4.4.15 Project Intervention

Project can promote Ginger cultivation to be taken up by an individual family. Individual farmer will

do the production but sourcing of seeds and marketing can be done collectively.


MART, Noida 64




4.4.16 Economics of Ginger cultivation (for 1 acre)

a. Assumptions

Calculations have been done for 1 acre of land for Ginger cultivation activity. Cost of various inputs

and outputs are based on information collected from villagers, market players and agriculture

department.

The rate of interest for bank loan is taken @ 12% per annum. Bank loan is considered for 1 year.

The wholesale price of Ginger is taken as Rs 25/kg for Manjali and Gurubathane varieties while Rs

30/kg for Bhainse and Rs 40 /kg for Mau.

Table 20: Financial plan for Ginger cultivation

Sr. No Particular Unit Quantity

Unit Price

(Rs)

Total

Amount(Rs)

1

Fixed capital (Agri-implements,

packing and storing materials) lumpsum 1 1000 1000

2 Revenue generation

2.1

Sale of Majauli and Gurubathane

ginger (Rs 25 per kg on average) Quintal 5.4 2500 13500

2.2

Sale of Bhainse ginger (Rs 30 per kg

on average) Quintal 5.4 3000 16200

2.3

Sale of mother rizhome (mau) (Rs 40

per kg on average) Quintal 3.6 4000 14400

2.4 Total Income 14.4 44100

3 Cultivation Expenses

3.1

Land preparation (2 times ploughing at

Rs 200 /plough) Plough 2 200 400

3.2

Fertilizer Application (raw cowdung

100 baskets at Rs 20 per basket)

cowdung

basket 100 20 2000

4

Seed cost (360 kgs at Rs 35 per

kg) Kg 360 35 12600

5 Labour Expenses

5.1

Labour employed for fertilizer

application and seeding (10

persondays) Persondays 10 100 1000

5.2

3 times weeding (requiring 10

persondays per weeding) Persondays 30 100 3000

5.3

Labour charges for extraction of

Mother rizhome (10 persondays) Persondays 10 100 1000

5.4 Labour charges for harvesting and Persondays 10 100 1000


MART, Noida 65


Unit Price

(Rs)

Total

Amount(Rs)

storage (10 persondays)

6 Marketing expenses

6.1

Labour charges for cleaning, sorting

and grading Quintal 10.8 100 1080

6.2

Transport charges to nearest town level

market Quintal 14.4 50 720

6.3 Miscellaneous marketing expenses lumpsum 1 500 500

7 Total running cost 23300

8 Profit before interest 20800

9

Interest (12% per annum on Total

investment including fixed

capital) 24,300 12% 2916

10 Net profit 17,884

11 ROI 73.60%

12 Pay back period Year 1.16

b. Sensitivity Analysis for Ginger cultivation

Table 21: Sensitivity analysis for Ginger


(Rs)

Expenses

(Rs)

Total

Investment

(Rs)

Profit

before

interest

(Rs)

1 What if productivity of ginger

goes down by 20%

38050 23300 24300 14750

2 What if running expenses go up

by 20%

44100 27960 28960 16140

3 What if sorting grading is not

done and output is sold at Rs 25

per Kg

41400 23300 24300 18100

4 What if running expenses fall by

20%

44100 18640 19640 25460

5 What if selling price of fresh

ginger goes up by 20%

50040 23300 24300 26740

6 What if productivity of ginger

goes up by 20%

50150 23300 24300 26850

7 What if labour utilized is family

labour and cowdung is used

from own sources

44100 15300 16300 28800


MART, Noida 66

4.4.17 Implementation plan for Ginger cultivation promotion

Table 22: Implementation plan for Ginger

Key steps to be

followed



Cluster selection Select the right cluster for initiating Ginger promotion based on technical

feasibility.


Social mobilization

and institution

building

Sensitize Ginger farmers on potential of Ginger cultivation using the

findings of value chain analysis described earlier and their impact on

livelihood.

Share various possibilities of Ginger cultivation, its cost benefit analysis,

and assess community interest level to take up the activity.

Identify the members/groups to start Ginger cultivation as a new unit.

Initially only a limited number of groups should be encouraged to start the

activity. Based on the results of pilots add more members. List out

members separately who are already doing the activity and want to either

expand or strengthen the activity.



Preparation of

business plan

Prepare a proper business plan for Ginger cultivation in consultation with

the community detailing the economics of the activity, sourcing of inputs,





Training in business and marketing skills (costing, pricing, accounting,

sales and marketing, negotiation, market analysis) to members using





based technical and business training at the community level. Identify

local level best practitioners.


Backward linkages Counsel farmers to procure seeds collectively in bulk to reduce operational

costs.


Establish finance support for Ginger cultivation on unit cost basis.


MART, Noida 67



Bring quality control in production to achieve efficiency, higher

productivity at lower costs.




with their contact details.

Engage in bargaining, marketing of produce and realize better price.


group activity.


Phase III – Up-scaling

Monitoring and

evaluation

Set up regular follow up and monitoring system to evaluate units from

time to time to finds out gaps, take corrective steps and ensure delivery of

appropriate extension services.

Strengthening

Institution

Facilitate secondary institution (producer group) to upscale and sustain

the initiative.

Plan capacity building for strengthening of secondary institutions

Diversify activities to increase income

Create village level cadres to extend technical and marketing inputs to

community at village level.

Provide handholding and technical support to secondary institution

Legal aspects Compliance to legal implications for excise, sales and VAT (once activity

achieves scale it would be required to market Ginger directly to Siliguri

regulated market).


Partnership possibilities exist with Wholesalers, HCCD Department, SIMFED, Progressive farmers and

Financial institutions.


There is a possibility of processing ginger into pickle, candy etc. However, setting up such processing units

at the village level would require sufficient entrepreneurial skills among poor, marketing and technical

skills, and ensured market linkages with bulk buyers to sustain such units. The demand at the village level

is low and marketing of products outside would require successful marketing interventions such as proper

packaging and branding. It is, therefore, suggested that for first couple of years poor (both individuals and

groups) should encouraged for ginger production, productivity enhancement and market linkages as

supply of ginger in the state is going down steadily. After couple of years project can identify few


MART, Noida 68

individuals with entrepreneurial skills to experiment setting up few processing units. Project staff with

marketing skill could be involved for conducting the detail feasibility study before setting up such units.

4.5 Value Chain of Pig

4.5.1 Background

Pork is naturally low in salt and a rich source of good quality protein. Lean pork is a great source of

protein in your diet. Lean red meat when eaten with starchy carbohydrates, fruit and vegetables form part

of a healthy, balanced diet. A 100g portion of pork provides about half of the protein needed in a day. It is

also a good source of several vitamins and minerals needed for good health including iron, zinc, some of

the B group vitamins, selenium and phosphorus. (Source: http://ireland-guide.com)

Sikkim’ after Orissa is the second state in India to come out with a unified livestock sector policy

framework. Livestock sector contribution to Sikkim’s GDP in 2002 was over 6%. In Sikkim’s context

livestock holds immense potential for diversification in agriculture, offering gainful employment and

incremental incomes to tens of thousands of landless, marginal and small farmers. Livestock sector in

Sikkim is highly livelihood intensive, agriculture along with livestock is the single largest employer in the

state. over 80% of households in the state own livestock and earn supplementary income from them,

distribution of livestock holdings is less iniquitous-over 80% of all species of livestock are owned by

marginal and small holders.

Pigs account for 9% of livestock population in the Sikkim and pork contribute 8.13% to the total livestock

asset value. In Sikkim pig farming has a special significance and can play an important role in improving

the socio- economic status of the weaker community. Pig rearing is very popular among the tribal

community in the State. It is due to food habits of the people in hills, every household reared few herds of

pig to cater to their demands of meat. The State Government has extended a great help to the weaker

sections of the society by arranging subsidy and Bank loan to popularize the pig rearing.

4.5.2 Feasibility of piggery in Sikkim


The agro climatic conditions are suitable for pig promotion the state.

There is one state veterinary hospitals in east district, four district veterinary hospitals, 7 sub division

veterinary hospitals, 23 veterinary dispensary, and five piggery farm in the state.

The basic skill for pig rearing is available with the poor community.

Pig farms exist at Gyaba,Chungthang, Mangalbaria, Karfector and Tingvong. Two new pig farms have

been set up; Assam Lingzey in east district and Melli dara in south district to provide sufficient

number of piglets to farmers.

There are also no social taboos or caste preference for Pig rearing in Sikkim except the Brahmin

Chettri community and the activity is practiced by most ethnic groups across all sections of the farmer

community, big or marginal alike.

There is an strong enabling environment in the state for Pig rearing farming with the Department of

Animal Husbandry Livestock Fisheries and Veterinary Services (AHVS) of providing regular

http://ireland-guide.com/


MART, Noida 69

trainings, required extension services and inputs. Research agencies like the ICAR and KVKs are also

conducting research to enhance productivity in Pig rearing farming.

Government is introducing improved breed of pig such as American Hampshire and White Yorkshire

to improve productivity. The AHVS department has established 1 piggery farms in Gyalsing of West

District and 3 farms in Karfectar and Ralong of South District.

Market feasibility

Pork is an important part of the food plate for Sikkimese.

There is a huge gap between the supply and demand of pork in the state. The current demand is

550MT and supply is only 150 MT per annum.

Government to set up modern slaughter house at the Majitar with a pig line of carrying capacity of 50

numbers in one shift.

There are 30 rural primary markets in the state where farmers can sell pig/pork directly to

consumers.


The cost of investment is Rs 124200 per unit. The net income per year is around Rs 75858 with 36.2

% return on investment.

A pig are highly prolific, grows fast and farrows 8- 10 piglets at a time. Pigs convert inedible feeds,

forages, grain by-product and garbage into valuable nutritious meat.


BASIX and Bandhan. A large number of SGSY loans have been disbursed around piggery activity in

the state.

The Potential Linked Credit Plan prepared by NABARD outlays Rs 29.25 lakhs for West District and

Rs 58.5 lakhs for South District for bank loan on Pig rearing farming for the year 2011-12. This target

allocation has increased by 19% in South and 11% in West district signifying a thrust on the activity.

4.5.3 Production Clusters

The Pig rearing activity by virtue of high demand in the state is suitable to be implemented in both the

project districts of South and West. Since almost 60% household in all the surveyed villages keep

pigs, Pig rearing farming can be easily taken up by the poor of both the districts. However, Piggery is

best suited for mid hill and low lying areas in the state and the activity in the higher altitudes may not

yield desired results.


MART, Noida 70

4.5.4 Value chain map of Pig

Figure 9 is a depiction of the value chain of Pig from the surveyed villages in Sikkim.

Figure 9: Value chain map of Pig

4.5.5 Input Supply and Production

The two most prominent players in the value chain of pig especially in Sikkim are the Pig rearing farmer

and Sikkim Pig. Around 60% of the households of all the surveyed villages keep pigs. Average of 4-5

indigenous variety pigs are assets to all households who keep pigs.

The major fodder for pigs constitute of grasses, maize stocks, millet dust and maize dust (Bhoosa).

Practices differ from farmer to farmer and many farmers do not use pig feeds especially for local variety

pigs. Growth of pigs not fed with Pig feed is also low.

Feeds and supplements for Pig rearing, Poutry and Piggery are commonly available in special shops

selling in major towns of Namchi, Jorethang, Namthang etc. There are feed factories in Siliguri producing

cattle, poultry and pig feed in bulk. West Bengal Pig rearing and Poultry Development Corporation (a unit

of Government of West Bengal) Samrat Feeds Private Limited and Apic Feeds Private limited are feed

manufacturers with factories at Chompasari, Fulbari and Mallaguri respectively. The feed from all these

companies are brought in regularly to these towns from the respective factories. Although pig feed is

exempted from VAT in West Bengal, the transportation costs from the factory at Siliguri to the town level

markets are high. Each bag of pig feed (sizes vary between 50 kg, 65 kg and 70 kg) incur around Rs 50-60

for transportation including Sikkim Nationalized Transport tax, regulated market charges of Siliguri,

Pork seller margin:

Rs 1000/quintal

Pork: 110 - 120/Kg

Pig Farmers

Pork

shops in

Namchi,

Gangtok,

Jorethang

etc

Consumers Pig Farmers

Input Supply

Fodder, Pig feed, nutrient supplements, implements,

equipment, etc.

Temporary

shops in

haats across

Sikkim

Pig for pork: Rs

100-110 per kg

Breeding piglets: Rs

2000-200 / piglet

Piglets for

breeding purpose


MART, Noida 71

market charges of the local market, loading, unloading and miscellaneous charges. The retailer margin on

each bag is around 8%. Around 9-10 such retailers are present in Jorethang market. Retail prices of pig

feed vary from Rs 550 – 900 per bag.

As informed by a local pig farmer, a mixture of around 15 kgs (1 tin) of fodder ingredients (30% maize

dust, 50% grasses and 20% millet dust) are boiled in 3-4 litres of water. This mix is used as primary

fodder twice a day for each more than 6 months old pig. Apart from this organic household wastes are also

added to the mixture. Around Rs 800 per month is accrued for such a availing such a fodder per month.

The practices of Sushil Subba from Dentam, an entrepreneur rearing pigs are however different from the

one mentioned above. The waste of beer factory in Melli is procured every month and mixed with 2 kgs of

pig feed, whea (locally available from alpine cheese factory at Dentam) and water and fed thrice to the pig

each day. In case the whea is not available, salt water is used as a substitute. Pig feed although available in

Jorethang, Namchi and other towns, is procured in bulk from Siliguri. Separate nutrient supplements are

also used from time to time. While the earlier feeding practice was for local varieties, Subba had sourced 8

American Hampshire breed pigs from the AHVS department in 2009.

An average of 7-9 piglets is produced every 6 months in case of the American Hamstead variety while the

local variety generally produces 5-6. The mortality in local varieties is also high.

Scabies is a common disease in pigs which is countered by application of Sulphur powder (locally

available or sourced from AHVS department) from time to time.

The approximate weight gained in time by the American Hampshire and local varieties are mentioned in

Table 22 which is derived from Field Survey.

Table 23: Comparative weight gain analysis of 2 pig varieties

Months Approximate Weight in Kgs

American Hampshire Local variety

1 6 5

2 10 8

3 12 10

4 15 13

5 25 20

6 35 30

7 45 40

8 55 50

9 65 60

10 75 70

11 85 80

12 95 85

13 100 90

14 105 95

15 110 100


MART, Noida 72

16 115 105

The local varieties are available in all villages at Rs 2000-2500 per piglet. The American Hampshire breed

is available at Karfectar pig farm at Rs 3000 per piglet. However, prior order has to be placed for the same

at least 2-3 months in advance. Subba sells his piglets at Rs 2000 for female and Rs 2500 for male.


free of cost in the villages. Pig farms and demo units are established all acoss the project area. However,

accessibility of these services in far flung villages is restricted. While big farmers and entrepreneurs are

regularly visited by the veterinary doctors, poor farmers often spend around Rs 300 -500 per visit for

transport of the doctor. Vaccinations and de-worming are done free of cost from the AHVS department.

The KVKs located in each of South and West Districts also conduct various capacity building programs for

Pig rearing farmers on Pig rearing in association with external experts, best practitioners and AHVS

department.

4.5.6 Pig and Pork Marketing

Pigs are sold either directly to pork shop owners and occasional customers for pork or to fellow farmers

for breeding purpose. While the sale for breeding pigs is assessed per animal basis, price of pigs sold for

pork is assessed by weight. Sale of pigs is often an insurance activity and they are sold whenever there is

need for liquidity. Seasonally, the festive seasons has more demand when the rate of pork also steps up.

The price of pork does not vary on the breed of the pig. There are around 4-5 permanent pork shops in

Namchi while another 5-6 regularly sets up temporary shops on weekly market days. Pigs are seldom

reported to be traded out of state. Butchers and pork shop owners regularly procure pigs from villages at

around Rs 100 -110 per live weight. There are no formal measurements of weight done before selling.

Prices are fixed after negotiations and visual inspection. Payment is in cash and immediate.

The entire pig apart from wastage of around 5-6% of the weight of the animal is sold as pork. As

mentioned by a retailer at Namchi, the main prices of pork items are; Pig legs at Rs 100 per kg

(constituting around 4% of the total weight), pork meat at Rs 120 per kg (constituting around 80% of the

total weight), intestines and guts at Rs 80 per kg (constituting around 5% of the total weight) and pig head

at Rs 120 per kg (constituting around 5% of the total weight).

A pork shop owner has a margin of around Rs 1000 per 1 quintal of pork, which takes approximately 2

days to sell out in a place like Namchi.


Table 24: Constraints Solution Matrix for Pig rearing

Factor Constraints faced by small and poor

Pig rearing farmers


Input sourcing

and Production

Availability of adequate water and

fodder round the year.


the AHVS department for ensuring


MART, Noida 73

Factor Constraints faced by small and poor

Pig rearing farmers


Low productivity of local varieties.

Availability of good breed pigs.

Pig rearing farmers use different

qualities and quantities of pig feed

resulting in non standardization of

practices

availability of good breed pigs.

Identify and promote specific cluster

of villages for specially producing

fodder.

Ensure adequate availability of

mineral mixtures and nutrition

supplements at all project village

levels.



to Pig rearing farmers regarding

productivity enhancement.

Regular training on best practices and

exposure visits to best practitioners in

the local area.

Access to

finance

Availability of timely and right amount

of credit for working capital is an

issue. Bank loan also requires a lot of

paper work.



don’t match expectations of Pig

rearing farmers. Even established Pig

rearing entrepreneurs face problems

in scaling their activities due to lack of

adequate bank finance.






develop specific loan products for

commercial Pig rearing farming and

expansion.


directly.

Cooperation

among farmers

and institutions

building



feed and fodder in higher operating

costs.

Guide Pig rearing farmers for

collective sourcing of feed and fodder

to reduce operational costs.

Govt. policies

and external

ecosystem

Low outreach of schemes for Pig

rearing among poor.




government schemes and services.


MART, Noida 74

4.5.8 Project Interventions

Project can promote Pig rearing farming to be taken up by SHGs and Pig rearing groups in a cluster.

Individual farmers will be keeping pigs for production but sourcing of feeds and fodder can be done

collectively.




4.5.9 Economics of Pig rearing (for 1 household keeping 6 American Hampstead pigs)

a. Assumptions

Calculations have been done for 6 pigs (5 female and 1 male). Cost of various inputs and outputs

are based on information collected from villagers, entrepreneurs, market players and AHVS

department. A pig sty will be constructed on the land of the farmer.

The rate of interest for bank loan is taken @ 12% per annum and insurance is assumed to be

12.5% of the stocks.

The average price of pig is assumed to be Rs 3200 per pig including transportation. 5 female pigs

will produce 80 piglets per year with a sex ratio of 50:50.

Male piglets will sell at Rs 2500 while female piglets will sell at Rs 2000 per piece.

Pig feed Gunny bags and pig manure will be sold

Table 25: Financial plan for pig rearing


Unit

Price

(Rs)

Total

Amount

(Rs)

1 Fixed capital

1.1

5 Female and 1 Male Americal

Hamstead at Rs 3200/ pig

including transportation pigs 6 3200 19200

1.2 Construction 23 by 24 ft Pig Sty lumpsum 1 100000 100000

1.4 Tools, buckets and implements lumpsum 1 5000 5000

1.5 Total fixed capital 124200


2.1 Sale of 40 male piglets per year piglets 40 2500 100000

2.2 Sale of 40 female piglets per year piglets 40 2000 80000

2.3

Sale of pig feed gunny bags and

manure lumpsum 1 1000 1000

2.4 Sale of Manure lumpsum 1 5000 5000

2.5 Total Income

186000

3 Yearly Expenses


MART, Noida 75


Unit

Price

(Rs)

Total

Amount

(Rs)

3.1

Unskilled Labour charges at Rs

2000 per month month 12 2000 24000

3.2

Grower ration concentrate at 1.5 kg

/pig/day (Rs 14/kg) for 6 months days 183 126 23058

3.3

Breeder ration concentrate at 2

kg/pig/day (Rs 14/kg) for 6

months days 182 168 30576

3.4 Medicines lumpsum 1 5000 5000

3.5 Insurance at 12.5% of total stocks livestock 12.50% 19200 2400

3.6 Total running cost 85034

4 Profit before interest 100966

5

Interest (12% per annum on

Total investment including

fixed capital) 209,234 12% 25108.08

6 Net profit 75,858

7 ROI 36.26%

8 Pay back period year 2.07

b. Sensitivity Analysis for Pig rearing

Table 26: Sensitivity Analysis for pig rearing

Sr. No Parameters Revenue (Rs) Expenses

(Rs)

Profit before

interest (Rs)

1

What if labour utilized is family

labour 186000 61034 124966

2

What if running expenses go up by

10% 186000 93537 92463

3 What if running expenses fall by 10% 186000 76530 109470

4

What if average productivity of pig

goes up by 2 piglets/pig/year 208500 85034 123466

5

What if average productivity of pig

falls by 2 piglets/pig/year 163500 85034 78466


MART, Noida 76

4.5.10 Implementation plan for Pig rearing promotion

Table 27: Implementation plan for pig rearing

Key steps to be

followed



Cluster selection Select the right cluster for initiating Pig rearing promotion based on

technical feasibility.


Social mobilization

and institution

building

Sensitize poor Pig rearing farmers on potential of Pig rearing using the

findings of value chain analysis described earlier and their impact on

livelihood.

Share various possibilities of Pig rearing, its cost benefit analysis, and assess

community interest level to take up the activity.

Identify the members/groups to start Pig rearing as a new unit. Initially only

a limited number of groups should be encouraged to start the activity. Based

on the results of pilots add more members. List out members separately who

are already doing the activity and want to either expand or strengthen the

activity.



Preparation of

business plan

Prepare a proper business plan for Pig rearing in consultation with the

community detailing the economics of the activity, sourcing of inputs,





Training in business and marketing skills (costing, pricing, accounting, sales

and marketing, negotiation, market analysis) to members using





based technical and business training at the community level. Identify local

level best practitioners.


Backward linkages Counsel farmers to procure feed and fodder collectively in bulk to reduce

operational costs.


Establish finance support for Pig rearing on unit cost basis.


MART, Noida 77



Bring quality control in production to achieve efficiency, higher productivity

at lower costs.




with their contact details for sourcing inputs.


group activity.



Monitoring and

evaluation

Set up regular follow up and monitoring system to evaluate units from time

to time to finds out gaps, take corrective steps and ensure delivery of


Strengthening

Institution

Facilitate secondary institution (producer group) to upscale and sustain the

initiative.







Partnership possibilities exist with Wholesalers and retailer, Inputs suppliers, Progressive farmers,

Financial institutions, and AHVS department.


There is a possibility of producing and marketing pig meat (pork) directly. However, setting up such

processing units at the village level would require sufficient entrepreneurial skills among poor, marketing

and technical skills, and ensured market linkages with bulk buyers to sustain such units. The demand at

the village level is already fulfilled by local butchers and marketing of pork products outside would require

successful marketing interventions such as proper packaging and branding. It is, therefore, suggested that

for first couple of years poor (both individuals and groups) should encouraged for pig rearing,

productivity enhancement and market linkages. After a couple of years project can identify few

individuals with entrepreneurial skills to experiment setting up few pork processing units. Project staff

with marketing skill could be involved for conducting the detail feasibility study before setting up such

units.


MART, Noida 78

4.6 Value chain of Floriculture

4.6.1 Background

Sikkim is house to over 4,000 species of plants and shrubs, around 556 varieties of rare orchids and

rhododendrons and mountain flowers of myriad hues and sizes which makes the state a very important

centre for floriculture. Making full use of this natural advantage, the State government has successfully

implemented a multi-pronged strategy for the development of floriculture.

Development initiatives by the government include expansion of land under floriculture, mass publicity

through training and awareness camps, establishment of joint venture companies and market linkage

through market intelligence network.

One of the thrust areas in this sector is the promotion of Cymbidium orchids, Zenderdechia, Alstroemeria,

Rose and Gerbera. For promoting cymbidium orchids, 157 units have been developed covering large areas

of East, West and South districts of Sikkim. A Cymbidium Development Centre has been envisaged at

Rumtek, which will have facilities for research, a full-fledged tissue-culture laboratory for production of

planting materials, and a virus indexing unit.

The high level of investment required makes it difficult for the State government to promote floriculture

in all parts of the State. It has marked out some areas as Floriculture Zones for example Assam Lingzey for

cymbidium orchids, Duga Bhurung for gerbera, Kamrang for Alstroemeria, Gladiolus and Gerbera, and so

on.

Also, for the first time in Sikkim, rose cultivation has been started commercially, for which a complete

pre-fabricated green house with high-quality planting materials have been imported from the

Netherlands, and from reputed nurseries in India.

The government has also established two joint venture companies for the development of floriculture - the

Sikkim Himalayan Orchid Ltd at Assam Lingzey, and the Sikkim Flora Ltd at Mazitar.

4.6.2 Feasibility of Activity


Out of the 26 Biodiversity hot-spots in the world, India owns 2, namely the Western Ghats and the

Eastern Himalayas. Sikkim covering just 0.2 % of the geographical area of the country has

tremendous biodiversity and has been identified as one of the these hotspots in the Eastern

Himalayas. There are 10 bio-geographic zones & 25 biotic provinces in Sikkim which have 16 major

forests types and more than 200 sub types(Champion & Seth 1968). As a result the agro climatic

conditions of Sikkim is well suited for a range of floriculture, especially a range of cymbadium

orchids.


MART, Noida 79

Land availability, young entrepreneurs, capital investments from the Horticulture and Cash Crop

Development Department (HCCD) and convergence of resources are the main factors behind the

success of floriculture in the State.

There is a strong enabling environment in the state for floriculture with the HCCD department

providing intensive support in the form of free of cost poly houses, implements, saplings and bulbs etc

along with necessary training, exposure visits and handholding.Trainings are also organized regularly

by SIMFED and KVKs on floriculture.

SIRD is also implementing a special SGSY project promoting floriculture for enhanced income of poor

households in the project area.

There are many cooperatives and community based institutions that have come up to promote

floriculture at the GPU level in the project districts.

The HCCD department regularly imports bulbs, seeds, tissue culture and tuber bulbs from the

Netherlands, New Zealand etc. countries. The department is setting up its own tissue culture and seed

producing centre at a model Floriculture centre in Maniram.

A Rs 500 crore investment in being planned by the government for setting up such cold chain systems

near the upcoming national airport in Sikkim, near Gangtok for supporting floriculture activity

A wide range of floriculture activities are being promoted by the HCCD department. Howeever

looking at the gestation peiod, availability of resources, amount of investment required and the

heights of the villages the following three types of plants are recommended to be taken up by NERLP

for the poor;

o Alstromeria (Peruvian Lily) and Zanderdeschia (Cala Lily) for villages at a minimum height

of 4000 ft from the mean sea level.

o Gerbera and Carnation for villages below 4000 ft from the mean sea level.

Market feasibility

Nationally and internationally, Sikkim is famous for the quality of its orchids. Sikkim is a sought after

tourist destination and floriculture is very well associated with the tourism industry. A recent

international flower show was organized at Ranipool where around 58 private parties and agencies

from different parts of the country and 17 State Governments and more than 300 floriculturists and

vegetable growers including 12 international florists from 22 countries participated. The HCCD

department had a budget of Rs 19 crores alone for this event to promote Sikkim as a major player in

floriculture (Source: Business Line).

All the floriculture farmers of South and West District are linked to different markets. The largest

procurer of flowers are SIMFED and Mainam Gardens Private Limited based at Namchi. Both

SIMFED and Mainam Gardens has suppliers and agents for their produce all across India. There are

also several small private players at Gangtok and district levels who procures produce from farmers

producers. Low quality floweres are also sent to Siliguri for marketing. Gangtok is also a local market

for flowers and orchids.

The department also has established cold storages for floriculture at Dharamdin, Soreng, Maniram

etc places. Mainam Gardens has also got its own cold storage at Namchi. This ensures longer shelf life

of produced flowers and orchids.


MART, Noida 80


Floriculture is Sikkim without the intensive support of the governemnt would not have been a viable

proposition. However the support provided by the department to not one or two but many villages

have opened up a huge potential for the activity. The activity thus has potential to be adopted as

poverty allieviation tool under the aegis of NERLP.

The ideal investment is around Rs 2 lakhs per household. The overall income per household is

around Rs 28816 with 10.95% return on investment.

Finance is available from commercial bank, other commercial banks and Micro finance institutions

like BASIX and Bandhan. However, the available finance from banks are often not schematized for

floriculture and special financial support in building infrastructure is expected from the project.

Analyses of a few varieties of flowers are mentioned in Table 27.

Table 28: Comparative analysis of different flowers

Sr. Parameters Cymbidium Calla Lilly Rose Anthurium Gerbera

1

Gestation

Period 3 t0 4 yrs 1 yr 6m - 1yr 2 yrs 6m - 1yr

2

Planting

material

Sikkim &

Abroad Abroad Pune Pune Pune

3 Planting Time Feb-March Feb-March March- April Feb- March

March-

April

4 Variety Mixed Mixed Mixed Mixed Mixed

5

Planting

mechanism Seedling Tubers

Budded/

Grafted Seedling Seedling

6 Ideal Elevation 4500 - 6500 ft

4500 - 6500

ft

2500 – 3500

ft

1000 – 2500

ft

2000 –

3500 ft

7

Water

requirement High High High Medium Medium

8 Market Price Rs 50/ flower Rs 5/ flower Rs 3/ flower

Rs 10 per

flower

Rs 3/

flower

9

Production per

plant 4-6 nos 4-6 nos

20 - 25

flowers 6 flowers 20 flowers

10

Total income

per tree Rs 200-300 Rs 30 Rs 60 - 75 Rs 60 Rs 60

11 Season Oct – March July-August All Season All Season All Season

12 Local market Assured Assured Assured Assured Assured

14

Pest and

Disease risk High Medium High High High

(Courtesy: Horticulture and Cash Crop Development Department)


MART, Noida 81

4.6.3 Production Clusters

Both the districts of South and West can be taken up for floriculture promotion under NERLP.

However, as mentioned before, the following criteria should be kept in mind while promoting

floriculture.

o All villages should have adequate water supply throughout the year. Dry and draught prone

areas should be avoided for floriculture to maintain ecological balance.

o Alstromeria (Peruvian Lily) and Zanderdeschia (Cala Lily) can be taken up for villages at a

minimum height of 4000 ft from the mean sea level.

o Gerbera and Carnation for villages below 4000 ft from the mean sea level.

o Both Altstromeria and Gerbera are relatively simpler to grow, requires less investment, yield

income throughout the year and has a low gestation period.

It is also important that the activity is promoted in clusters to facilitate input supply, service delivery and

marketing.

4.6.4 Value chain map of Floriculture

As under stood from the surveyed villages, Figure 10 is a flow diagram of Alstroemaria (normal stick) as

an example.

Figure 10: Value chain map of Flowers

Rs 8-10/stick

Rs 10-15/stick

Rs 2-3 /stick SIMFED

Floriculture Farmers

Retailers

(Outside Sikkim)

Mainam Gardens Private

Limited, Namchi

Retailers

(Outside Sikkim)

Input Supply

Saplings, NPK, fertilizers, fungicides, floriculture implements, cow dung

Village level

traders

Wholesalers, Agents


Wholesalers


Retailers

(Siiliguri, Gangtok,

Namchi)

Consumers Consumers Consumers

Rs 1-2 /stick


MART, Noida 82

4.6.5 Input Supply

As mentioned earlier, the HCCD department is a prime stakeholder in the value chain if flowers in Sikkim.

The amount of investment made by the department is the primary reason in making the activity viable in

Sikkim. Seeds, tissue cultures, bulbs are often imported from different countries like Netherlands and

New Zealand. The department also procures these inputs from Florence Flora in Bengaluru and Kumar

Florists in Pune. Since most seeds and bulbs are genetically modified and patented, they have to be

procured on a regular basis. However, the department is setting up its own tissue culture and seed

production farm in Maniram of South District. While these inputs are provided by the department free of

cost while they are charged by SIMFED and Mainam Gardens who also procures them from abroad and

the mentioned sources.

Fungicides, pesticides, dolomite and various medium for bed preparation along with various implements

are available in local shops for floriculture in Namchi, Jorethang, Gangtok and other towns e.g.

Tarakeshwar Stores in Namchi is a similar shop.

4.6.6 Quality parameters

The production of flowers is a very intensive activity and requires specific capacity building along with a

lot of attention to the plants. Most harvested flowers and orchids were found to be graded according to

their qualities. The grading is generally done by the procuring agency and vary as per quality. Straight and

long (minimum 2 feet) cut flower sticks with sufficient numbers of equi-directional semi-bloomed flowers

of good appearance generally fetch good prices. The cultivation practices are often non-negotiable for

higher priced orchids since a small variation in the package of practices can bring around a change in

quality of the output. Based on the mentioned parameters, three different types of qualities are judged by

the procurement agencies. Any flower sticks which do not expect these criteria are often rejected which

are sold in the local market. This makes cultivation of Cymbadium, Lilium and Anthurium risky for the

farmer since a slight change in judged parameters can result in a drastic fall in expected price from Rs 15-

20 per stick/flower (best quality) to Rs 5-8 per stick/flower (rejected quality sold in local market or

Siliguri). The Altroemeria and Gerbera sticks which are priced at Rs 2-3 per are relatively safer positioned

since the rate difference between grades is only around Re 0.5-1.

4.6.7 Market Players and Marketing

Mainam Gardens private Limited, an enterprise owned by Mrs. Tika Maya Chamling (wife of Chief

Minister of Sikkim) is based at Namchi with 150 plus employees and having its own cultivation farms. The

company is also planning to set up its own tissue culture laboratory. The company has an outreach for

procurement of flowers from farmers in West and South districts. SIMFED on the other hand has its

operations all across Sikkim in the context of enhanced production of various flowers through NERLP,

SIMFED has the potential to scale up its operations. The biggest bottleneck for marketing of flower is the

delicate and perishable nature of the flowers. SIMFED needs to develop a cold chain transport system to

address this. No regular exports of flowers to other countries were reported from these two agencies due

to absence of cold chain transport system and refrigerated flight containers from Bagdogra airport. The

nearest airport with this facility is Kolkata.


MART, Noida 83

Cut flower sticks and buds are packed in plastic sheets or cartons in bundles. The packing material is

locally available in the towns of Namchi, Ravongla, Jorethang etc. Mainam Gardens also provide card

board cartons for packing flowers. The transportation of flowers is often through local jeep transport with

charges ranging from Rs 20-50 per carton (containing 80 -100 flowers). In such cases, the driver of the

local transport jeep hands over the cartons (with name and contact details of the farmer mentioned on the

carton) to the representatives of Mainam Gardens at Namchi. Mainam gardens keep exclusive records for

entry of flowers from each farmer. After grading of flowers the due payments are noted down. Payments

are often made in cash to the farmer directly whenever he visits Namchi in a week or fortnight. Some

cooperatives having enough scale use exclusive vehicles for transport which reduces transportation costs.

Around 5-8% of the transported high cost flowers are reported damaged which result in decrease in

quality and/or rejection.

Both Mainam Gardens and SIMFED have suppliers and agents all across India and cut flowers are

regularly sent to them by rail/road or air. Flowers are in high demand during marriage seasons, Christmas

or festive seasons. The demand for roses is also reported to shoot very high during Valentine ’s Day.

SIMFED procures flowers from Gangtok and thus access to SIMFED from far flung areas in West District

turn out to be expensive. The payments of SIMFED were also report to be irregular for Lilium and

Cymbidium to the extent of delay up to 4-6 months. The officials at SIMFED however said that this was a

temporary phenomenon due to rare market failure from their end and currently the system has been

streamlined.

Rose village of Dharamdin in the West district has around 70 households with 91 poly houses in the area

along with a cooperative society for cultivating and marketing different varieties of roses. There is also a

cold storage for storing Rose sticks. Around 3000 to 4000 sticks are produced daily from the area at Rs 4-

5 per stick which is transported to Mainam Gardens in Namchi. The low quality and rejected flowers are

sent to retailers in Siliguri.

Some farmers were also found to sell flowers directly in weekly and daily markets of the Gangtok and

other towns frequented by tourists. There are village level traders of flowers in some villages who procure

flowers directly from farmers and passes the same to different florist chains and retailers in Gangtok and

other towns of Sikkim.

Zopar Exports Private Limited, a private floriculture company having more than 80 poly-houses in Sikkim

and Darjeeling district of West Bengal is dealing in multiple varieties of roses. Although the company has

ploy houses in Dharamdin, there is little convergence with the local cooperative society.

4.6.8 State Institute of Rural Development’s role in Floriculture

State Institute of Rural Development (SIRD), Karfecter, South Sikkim has undertaken a special project of

floriculture under Swarnajayanti Gram Swarozgar Yojna. The project of Rs 695.44 lakhs project from

2006-07 till 2010-11 is aimed to enable 2000 Below Poverty Line families to cross over the poverty line

within a period of two-three years. This includes women, SC/ST and also the physically challenged. Two

hundred new Self Help Groups have been targeted to be formed under the project till 2010-11.


MART, Noida 84

The project is also designed to assist APL families and educated unemployed youth through schemes of

National Horticulture Board or even State Programs to become an example for BPL families. The project

mostly concentrates in South and West districts and some selected villages of North and East districts.

The villages selected in South are Sadam, Sumbuk, Turuk, Namchi, Singhithang, Boomtar, Kamran,

Perbing, Namthang, Maniram, Salghari, Tenik, Chisopani and Wok. While

in the West District the villages are Tashiding , Yoksom, Hee, Budang, Sombarey, Soreng, Zoom, Sigeng,

Mabong, Suldung and Kamling.

One of the thrust areas of the project is to take up Gladiolus farming which has been found ideal for the

region. Farmers are also encouraged to take up other species like Cymbidium, Lillium, Glorisa, Amaryllis,

Cala Lily, Haemanthus etc. A nursery spread over 1 hul or ¼ th acre of land is expected to yield Rs 30,000

per year. SIRD has also facilitated SHGs to be linked with State Bank of India for SGSY loans.

Training for the farmers and Self Help Groups is conducted at SIRD, Regional Centre and Floriculture

Centre of the Horticulture Departments. The seeds are provided by SIRD along with buyback support for

saplings.

SIRD, also has already received the sanction for an AC refrigerated transport van at the cost of Rs 12 lakhs

for the transport of cut flowers to Siliguri, New Jalpaiguri and Bagdogra airport in West Bengal. A cold

storage facility at the cost of Rs 15 lakhs is also to be built to enable farmers to store the bulbs and also

facilitate the stocking of cut flowers during road blockade in the monsoon season. A collection-cum-

grading centre at the cost of Rs 10 lakhs is to be established near Melli in South district.


Table 29: Constraints Solution Matrix for Floriculture


Input sourcing

and Production

Highly capital intensive activity to be

taken up by small farmers without

assistance and support.

Source of seeds and other inputs are

not only expensive but access to these

sources is restricted by large players

since they have to be imported.

Most floriculture activities involve an

intensive package of practices which

calls for rigorous capacity building.

Although the support from HCCD

department is provided to farmers,

very little poor and marginal farmers

have come up to take up the activity.

Identification of interested poor

farmers and establish a formal

arrangement with the HCCD

department for ensuring adequate

supply of inputs. Convergence of the

department support with the project is

crucial.

Support HCCD department, SIMFED,

KVK and ICAR to take up research for

developing appropriate

seeds/tissues/bulbs for floriculture

which is otherwise very expensive and

have to be imported.





MART, Noida 85


government schemes and private

services.



to farmers.

Regular training and exposure visits to

best practitioners in the local area can

help poor farmers.

Access to

finance

Availability of timely and right

amount of credit is an issue. Bank

loan requires a lot of paper work and

farmers’ don’t have proper papers

against their land. SISCO bank takes a

mortgage of loans above Rs 60000.



don’t match expectations of farmers.






develop loan product for Floriculture

cultivation based on its economics.


directly.

Market access Farmers sell individually to the village

level trader or Mainam Gardens or

SIMFED resulting in higher overhead

marketing costs.

Promote the activity in a cluster to

optimize input costs and transport

expenses.

There is scope for collectivizing

farmers to sell collectively and directly

to higher order markets through

SIMFED or Cooperative retail outlets

in Gangtok for better price realization.

Cooperation

among farmers

and

institutions

building



inputs and sale of flowers/orchids

resulting in higher operating costs.

Guide farmers for collective sourcing

of inputs and marketing to reduce

operational costs.

Govt. policies

and external

ecosystem


lead to increase in input costs and

market failure.

Set up new cold stores for storing

flowers and cold chain transport

system after feasibility study.

A Rs 500 crore investment in being

planned by the government for setting

up such cold chain systems near the

upcoming national airport in Sikkim,

near Gangtok for supporting

floriculture activity


MART, Noida 86


Project can promote floriculture to be taken up by an individual family. However, as mentioned

before, cluster based approach needs to be taken to achieve economies of scale. Individual farmer will

do the production but sourcing of inputs and marketing should be done collectively.




4.6.11 Economics of Alstroemeria cultivation (for 1 household)

Alstroemeria, commonly called the Peruvian Lily or Lily of the Incas, is a South American genus of

about 50 species of flowering plants. Each year up to 80 new shoots are produced from the rootstock

and each terminates in an umbel of a few up to 10 or so flowers. Alstroemeria come in orange, pink,

rose, purple, red, yellow, white or salmon colors. The prices offered for a normal Alstroemeria stick by

SIMFED and Mainam Gardens vary between Rs 2 -3.5 per stick as per season.

a. Assumptions

Calculations have been done for 400 saplings planted in a poly house of 90ft by 22 ft dimensions.

Weekly marketable production from the saplings are, 800 sticks from September to February, 1000

sticks from March to May and 900 sticks from June to August excluding damaged and rejected

flowers.

Cost of various inputs and outputs are based on information collected from villagers, market players

and HCCD department.

The rate of interest for bank loan is taken @ 12% per annum.

A separate irrigation tank is being setup for irrigation.

Table 30: Financial plan for Floriculture (Alstroemeria)

Sr. No Particulars Unit Quantity Unit Price

(Rs)

Total

Amount

(Rs)

1 Fixed capital

1.1

90 ft by 22 ft poly house with bamboo

structure lumpsum 1 100000 100000

1.2

Bed preparation, Rack construction

and netting for 400 saplings lumpsum 1 50000 50000

1.3 Irrigation tank with 22 mm poly pipe lumpsum 1 45000 45000

1.4 Tools and implements lumpsum 1 5000 5000

1.5 Total fixed capital

200000


2.1

Sale of 3200 sticks per month at Rs

3.5 per stick for 6 months (Sept - Feb) sticks 19200 3.5 67200

2.2 Sale of 4000 sticks per month at Rs 2 sticks 12000 2 24000


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Sr. No Particulars Unit Quantity Unit Price

(Rs)

Total

Amount

(Rs)

per stick for 3 months (Mar- May)

2.3

Sale of 3600 sticks per month at Rs 3

per stick for 3 months (Jun - Aug) sticks 10800 3 32400

2.4 Total Income 42000

123600

3 Yearly Expenses

3.1

Labour charges for Trimming,

Weeding and Irrigation at

Rs120/personday for 5

persondays/month

personday

s 60 120 7200

3.2

Sapling cost at Rs 30 per sapling for

200 saplings saplings 400 30 12000

3.3 Packing material at Re 0.75 per stick sticks 42000 0.75 31500

3.4 Medicines lumpsum 1 2000 2000

3.4 Transport costs of sticks sticks 42000 0.25 10500

3.5 Total running cost

63200


60400

5


Total investment including fixed

capital) 263,200 12% 31584

6 Net profit

28,816

7 ROI

10.95%

8 Pay back period year

4.35

b. Sensitivity Analysis for Alstroemeria cultivation

Table 31: Sensitivity analysis for Floriculture


(Rs)

Expenses

(Rs)

Profit

before

interest

(Rs)

1 What if labour utilized is family labour 123600 56000 67600

2 What if running expenses go up by 10% 123600 69520 54080

3 What if running expenses fall by 10% 123600 56880 66720


MART, Noida 88

4.6.12 Implementation plan for Floriculture cultivation promotion

Table 32: Implementation plan for Floriculture

Key steps to be

followed



Cluster selection Select the right cluster for initiating promotion based on technical

feasibility.


Social mobilization

and institution

building

Sensitize Floriculture farmers on potential of Floriculture cultivation using

the findings of value chain analysis described earlier and their impact on

livelihood.

Share various possibilities of Floriculture cultivation, its cost benefit

analysis, and assess community interest level to take up the activity.

Identify the members/groups to start Floriculture cultivation as a new

unit. Initially only a limited number of groups should be encouraged to

start the activity but enough to achieve scales. Based on the results of

pilots add more members. List out members separately who are already

doing the activity and want to either expand or strengthen the activity.



Preparation of

business plan

Prepare a proper business plan for Floriculture cultivation in consultation

with the community detailing the economics of the activity, sourcing of

inputs, linkages with market players, production practices and technology

to be used, and government schemes to be availed.












Backward linkages Counsel farmers to procure inputs collectively in bulk to reduce

operational costs.


Establish finance support for Floriculture cultivation on unit cost basis.


MART, Noida 89









Engage in bargaining, marketing of produce and realize better price.


group activity.



Monitoring and

evaluation




Strengthening

Institution

Facilitate secondary institution (producer group) to upscale and sustain

the initiative.






Legal aspects Compliance to legal implications for taxes and VAT (for marketing Flowers

directly to Siliguri).


Partnership possibilities exist with HCCD Department, SIMFED, Mainam Gardens, other wholesalers and

retailers, Inputs suppliers , Financial institutions and progressive farmers


There are little possibilities in processing fresh flowers at the village level. The project can however help

set up a cold chain network for effective and fast transportation of flowers to higher order markets.


MART, Noida 90

4.7 Value chain of Homestay Rural Tourism

4.7.1 Background

Tourism is one of the priorities and important sector of the State and there is special focus to make

tourism as a major contributor to the State Economy.

The state of Sikkim takes pride in its natural beauty manifested by the snow clad mountains, landscape

dotted with perennial streams & waterfalls, lush green forests, picturesque villages, natives in traditional

dresses and indigenous architecture. The crime rate is low and special focus of the state on maintaining an

eco friendly environment makes Sikkim one of the sought after tourist destination in the country. Being a

prominent place on the Buddhist tourism circuit also contributes to this.

Tourism sector is looked at a creator of a substantial employment, directly or indirectly Eco-tourism in

Sikkim especially has evolved as a non‐polluting, low cost and high return industry where a large section

of the Sikkimese population can be involved.

As mentioned in the Tourism sector Policy 2010 of Sikkim Tourism department, the number of Domestic

tourists in 2003 were about 1, 76,659 while in 2008 more than 5, 00,000 tourists have visited the state.

The estimated number of domestic tourists in 2009 is around 6,00,000. This signifies a growth of around

3.5 times within a time span of 6 years.

Number of foreign tourists in 2003 was reported to be around 11,966 while in 2008 about 23,000 foreign

tourists visited the state.

The boost in the growth of tourism in the state is also attributed to the growth in the associated sectors.

Sikkim since last 5 years is following a strict Organic policy and is also the first state in the country to

achieve total Sanitation. A Green Mission program has been launched by the government under which

every individual, agency and the Department contributes towards the planting of trees all over the State.

Village tourism is being specially encouraged to preserve culture, heritage & handicrafts and to create

better economic and employment opportunity in the rural area. Floriculture is being promoted at large in

the State and Sikkim has earned its place as a major orchid and exotic flower producer in the country.

Use of polluting plastic is also banned in the State. All the ethnic Communities have different and distinct

festivals, which are celebrated all over the State. Tourism Department plays a major role in promoting

these festivals in order to showcase Sikkimese culture and heritage.

Figure 11 depicts the central and state share to different tourism projects taken up between 2004-05 and

2007-08. As is evident the share of central assistance in tourism has shown a sharp increase.


MART, Noida 91

Figure 11: Value of Tourism Projects in Sikkim

However, the total central sanctioned projects are worth Rs 258.67 lakhs only during this period. (Source:

Lok Sabha un-starred question number 738 dated 23.02.2006 and question number 791 dated

22.11.2007). Thus there was a large scope of central funding particularly in Rural tourism projects.

Moving towards promoting rural and eco tourism, the central assistance in undertaking Eco tourism

projects alone in 2007-08 was Rs 389.54 lakhs which paved the way for a focus on promoting Eco tourism

(Source: Press Information Bureau, Govt. of India).

During the 11th 5 year plan up to September 2009, the Ministry of Tourism had sanctioned a total sum of

Rs 163.44 crores for 63 different tourism related projects for Sikkim making the state to receive the

highest amounts of tourism funds from the centre. Recently the Asian Development Bank (ADB) has

signed an agreement with the union government and the State government for providing a credit of US $

20 million to enhance religious, eco tourism and adventure based tourism in the state. Under the South

Asian Infrastructure Development Project, the ADB has aimed to contribute to sustainable and inclusive

development of this part of Asia by tapping complimentary and contiguous tourism assets. (Source:

Sikkim Express, 5th October 2010)

4.7.2 Homestay

Homestay is a form of tourism that allows visitors to rent a room from a local family to better learn the

local lifestyle as well as improve their language ability. While homestays can occur in any destination

worldwide, some countries do more to encourage homestay than others as a means of developing their

tourism industry – Wikipedia.

1576.83

2687.89 2914.71

6880.21

112 323.25

1031.38

107.36 0

1000

2000

3000

4000

5000

6000

7000

8000

2004-05 2005-06 2006-07 2007-08

Value of Tourism Projects sanctioned in Lakh Rupees (Source Sikkim tourism department)

Central Share

State Share

http://en.wikipedia.org/wiki/Tourism


MART, Noida 92

Village/Rural tourism in the form of Home stay has emerged as a very new concept in the tourism

industry. This concept is fast growing in Sikkim as a responsible and sustainable tourism product with

critical social objectives through people’s participation. Home stay rural tourism is perceived as an

effective tool in boosting the overall tourism scenario of Sikkim as its rural hinterlands are endowed with

fabulous natural beauty, serene environment, heritage sites and unique cultural flavor. The endorsement

of rural tourism ensure the dispersal of tourists from city congestion to the villages so that they can have a

glimpse of rural Sikkim, familiarize with unique village culture and heritage so that they are mentally

rejuvenated, culturally enriched and spiritually elevated. The objective is therefore to harness vast

untapped rural tourism potential of Sikkim so that their multiplier benefit reaches out directly to the rural

communities. Some of the villages of Sikkim like Kewzing, Hee Bermoik, Yoksum, Lachen, Tumin,

Pastanga, Tinchim, Lunchok, Maniram, Rong, Jaubari, Linjee Payiong, Darap etc. have already taken up

lead in home stay facilities for the tourists.

Under the present purview of NERLP, Home stay rural tourism has been found to be a growing sector

with particular potential for providing Livelihoods to rural poor.

4.7.3 Feasibility of the activity


There are well identified tourist circuits in West and South districts of Sikkim (project area of

NERLP). Sikkim is connected by rail, air and road with the rest of the world through Siliguri

/Bagdogra. There are also helicopter services from the Bagdogra Airport to Gangtok.

The flow of tourists continue for the whole year with peak tourist seasons from September to March.

The warm reception of the state, cultural richness of the ethnic groups and peaceful and friendly

environment combines with the natural and beautiful environment of rural Sikkim to attract tourists.

There is an enabling environment in the state for Homestays with the tourism department, NGOs like

Ecotourism and Conservation Society of Sikkim (ECOSS), agencies like Help Tourism Private limited

which provides regular trainings and inputs for establishing Homestays.

There are a numerous cooperatives and community based institutions that have come up to promote

village based tourism and homestays in the project districts. Some of these have already made good

progress in terms of providing quality services to tourists.

South Sikkim Tourism Development Society and West Sikkim Tourism Development Society are two

district level societies established in the two project districts of South and West Sikkim respectively as

apex level institutions for the respective village level societies that have been established.

Market feasibility

The Travel Agents Association of Sikkim (TASS) and Sikkim Hotel and Restaurant Association

(SHRA) are Department of tourism recognized bodies which are associated with homestay rural

tourism. Travel agencies have included home stay packages in their itenaries.

Homestays are positioned as a learning and sharing platform and is thus different from other tourism

concepts. Thus rural homestay has created its own niche which is also often priced at premium rates


MART, Noida 93

in comparison with budget tourism packages. Help tourism alone has a network of over 6 lakh

tourists worlwide who regularly keep visiting Sikkim and prefer accommodation at village homestays.

Apart from the niche markets the mainstream travel agents in West Bengal, Delhi, Mumbai etc places

along with others in the international circuit also recognize and support homestays.


Rural Tourism enables a lot of cash flow at the rural and underdeveloped pockets of the state and

boosts the local economy. Darap Eco tourism Committee of Darap village in West district reports that

in the last financial year, around 3000 tourists have stayed in 10 homestay houses under their society

which have resulted in an average income of Rs 1 lakh per household per season. The Homestay

concept is thus has potential to be adopted as poverty allieviation tool under the aegis of NERLP.

The ideal investment is around Rs 3 lakhs per household. The overall income per household is

around Rs 94,112 with 20.35% return on investment.

Finance is available from commercial bank, other commercial banks and Micro finance institutions

like BASIX and Bandhan. However, the available finance from banks are often not schematized for

home stays and special financial support in building infrastructure is expected from the project.

4.7.4 Promotion clusters

Homestay based rural tourism can be promoted in almost all villages of both the districts of South and

West. However, looking at the potential of tourism and environmental concerns it is advisable to restrict

the activity to a maximum of 20% households in each village. The activity is also different from other

activities in the sense that only interested and adequately capacitated households can be included in home

stays. The activity requires a lot of customization at the household level and is difficult to regularize

through the area.


MART, Noida 94

Domestic tourists International Tourists

Village based tourism societies in Sikkim

(Kewzing, Hee Bermoik, Yoksum, Lachen, Lunchok, Maniram, Rong, Jaubari, Lingi Payong, Darap etc)

International

Travel agents

Travel agents in Sikkim

Travel agents

outside Sikkim

Travel agents in Sikkim

Web site booking

20% referral

commission

Homestay Households Homestay Households Homestay Households

4.7.5 Value Chain and stakeholders of Homestay Rural Tourism

Figure 12 is a depiction of the flow of tourists for Homestay in Sikkim.

Figure 12: Value chain map of Homestay rural tourism

Around 80% of the homestays surveyed in South and West Sikkim were found to be frequented by

domestic tourists from other parts of the country while remaining 20% constituted of international

tourists.

Various kinds of referrals were found in the form of Travels agents at international level, national level

and at Sikkim level and websites. While almost all international tourists were found to come through

referrals of various forms, a section of domestic tourists were found to be walk in customers directly in

home stays.

The general commission paid by the home stays for any kind of third party referral is 20% of package

charges. In case two or more players exist in the referral chain, the same commission is shared among the

players. In off season, however, there are little referral commissions and tourists directly contact the

homestay societies.

A major facilitating role for tourists visiting home stays is played by the Sikkim Tourism department

which has tourist information offices at all district places across Sikkim and also in Delhi, Kolkata,

Sikkim Tourism department, ECOSS,

Help Tourism Pvt. Ltd


MART, Noida 95

Siliguri, New Jalpaiguri station, Bagdogra Airport etc important locations. The department also has a

detailed website which provides information and contact details of various home stays across Sikkim.

A similar role is played by an NGO Ecotourism and Conservation Society of Sikkim (ECOSS) and agencies

like Help Tourism Private limited which provide regular trainings and inputs for establishment of

Homestays under various projects. These agencies have expertise in implementation of Homestay

schemes and can be partnered with under NERLP as well.

4.7.6 Home stay packages

The Homestays generally offer tourists a combination of accommodation and food along with certain

cultural packages e.g. cultural shows, traditional attire etc. Each home stay is thus unique in itself due to

the inclusion of the cultural package. The cultural package generally allows the tourist to experience a

slice of life lead by rural Sikkimese people. The cultural package often involves cross cultural learnings

like learning a new recipe of traditional food by the tourist, learning local language, learning various

agricultural practices followed in the village, voluntary teaching of the tourists in local schools, interaction

on maintaining health and sanitation etc. This adds further value to the tourism experience of the tourist

which clearly differentiates home stay from any other kinds of tourism.

Certain other recreational activities are often included in the packages which include angling in the rivers

and streams, bird watching, meditating, jungle walk, yoga, rock climbing, trekking, camping, sightseeing,

etc.

All the family members of a host household are involved in the concept and the tourist is also treated like

a family member. The accommodation is generally modest as per typical rural culture of Lepcha, Limboo,

Bhutia etc ethnic groups. A typical homestay household has 2-3 exclusive and fully furnished rooms for

tourists. The food is also traditional and in some cases customized to the requirement of the tourist as

well. Generally the charges paid by the tourist ranges anywhere between Rs 400-500 to Rs 3000-4000

per person per day depending on the package and amenities provided.

Generally any household opting for Home stays maintain a clean and healthy environment both inside

and outside the house with clean toilets and comfortable beds for tourists. The food is also prepared

hygienically.

4.7.7 Registration and legal formalities

Currently the concept of Home stay is new to Sikkim and clear cut government policies are yet to be made.

There are no legal or registration formalities for conducting homestays. A few homestays hold hotel

license in the absence of any other form of registration. Sikkim is also a state exempted from direct taxes

and thus there are no taxation formalities for conducting homestays also. In order to obtain a hotel license

in a rural area an annual fee of Rs 450 is to be submitted to the department of Urban Development and

Housing along with the annual renewal of no objection certificates from Power department, Fire

department, Forest department, Labour department and Health departments.


MART, Noida 96

While a drive is in force to promote village based tourism in the state, awareness and interest of rural

people is also on the rise to get involved in homestays. There is urgent need of regulation and policy

framing by the government in this regard.

4.7.8 Institutional Arrangement

The homestays in any village are generally not promoted in isolation. A group of 10-15 homestays

involving same number of households are developed in a Gram Panchayat unit which forms a society at

the village level. Many such societies have been formed in both the project districts of South and West

Sikkim. While South district has at least 15 such village level societies, West district has at least 20. Each

society undergoes different types of promotional strategies to attract tourists through websites,

pamphlets, brochures, tie-ups with different travel agencies in and outside the state, affiliation to various

tourism organizations etc. Once a tourist contacts the society, the society passes on the tourist to its

member households as per preference of the tourist or availability. These societies generally have an

annual membership fee for the facilitation provided.

In some cases certain supporting enterprises like poultry, dairy, provisional stores, handloom and

handicrafts store etc are also developed under the aegis of these village level tourism societies. These

enterprises support each other under conditions of mutual agreement. e.g. in Darap, a poultry enterprise

and Dairy enterprise are members of the tourism society who is also the primary supplier of poultry and

milk or milk products required for homestay households while attending to tourists.

Each district has an apex level Tourism Development Society at the district level for self regulation and

policy advocacy to the government. These societies are also the gateway to various grants and assistance

from the government and other projects regarding infrastructure development and training. As

mentioned earlier, the tourism department and a few agencies also provide support to these societies.


Table 33: Constraints Solution Matrix for Homestay

Factor Constraints faced by small

households taking up homestays


Infrastructure

development

Homestays require basic

infrastructure in the form of up-

graded toilets, a comfortable bed and

hygienic kitchens. The beneficiaries of

NERLP lack the necessary

infrastructure to set up Homestays.

Access to credit facilities for such

infrastructure development is

restricted for poor households due to

lack of collaterals and also lack of

prevailing unit costs with banks and

Organize poor households into

collectives in the form of societies or

SHGs to link them with local banks to

ensure their financial inclusion.



develop loan product for Homestay

based on its economics.


directly.


MART, Noida 97

Factor Constraints faced by small

households taking up homestays


financial institutions.

Capacity

Building of

community

The Homestay promotion requires

adequate capacity building of the

entire household on aspects like

hospitality management and

etiquettes.

In order to attach adventure tourism

concepts to the homestay the

community needs special capacity

building on activities like rock

climbing, facilitating trekking, rafting

etc.

There is also a need for mobilizing the

community on sticking to certain

cultural values in order to make the

homestays culture exclusive and

attractive.

The community also needs special

capacity building on waste

management and environment

protection issues attached with

tourism.

The entire family needs capacity

building on various health and

hygiene issues since the entire

household will be in contact with

outsiders.

Establish formal arrangements with

the Sikkim Tourism department,

ECOSS, Help Tourism Pvt. Ltd etc for

ensuring adequate capacity building

of the target community through

training, exposure visits to successful

cases and handholding. Special

modules can be developed for

delivering special capacity building to

community on various highlighted

issues in tourism



to help mobilize the community and

link them with various aspects of

environment, health and sanitation

along with tourism.

Establish proper community managed

waste management systems at the

village level.

Detailed health trainings should be

imparted to community on how to

avoid infection and maintain a

healthy homestay business.

Certain sections of the poor

communities can also be trained in

providing associated services like

porters, cooks, guides etc.

Cooperation

among

households

and

institutions

building

There is low affinity among poor for

adopting the activity and collective

action for forming societies for

homestay

There is constant requirement of

market planning and institutional tie

ups for smooth flow of tourists.

Guide the beneficiaries for collective

action and form societies on village

based homestays through

implementing agencies.

Create village level cadre of

knowledgeable persons to establish

linkages with various institutions

regarding tourism.


MART, Noida 98


Project can promote homestays to be taken up by an individual family. 15 – 20 Individual households

in homestay can form a collective for joint marketing initiatives and self regulation.



Project can facilitate funding for infrastructure building to individual households on the basis of unit

cost described below.

A traditional village-based Sikkimese Homestay would maintain and share a traditional way of life and its

values, provide traditional food, be based on eco-friendly concepts and require some amounts of

investment for renovation.

4.7.11 Economics of Homestay Development (for 1 household)

a. Assumptions

The Homestay includes accommodation and food for tourists.

Calculations have been done for 1 household with an assumption that the household has enough space

to construct a room accommodating 4 persons. Cost of various inputs and outputs are based on

information collected from villagers, service providers and tourism department.

The rate of interest for bank loan is taken @ 12% per year. Bank loan is considered for the entire year.

The rates charged for Homestay are Rs 700 and Rs 500 per person per day in peak and off seasons

respectively.

Referral commission paid to travel agents is 20% of the earned revenue and is only paid in peak

season. There are no referrals in off season.

The homestay is being registered with a hotel license and at least 10 such homestays are being

promoted in the concerned GPU forming a village level tourism society. The society will develop a

common website and take on marketing activities in the form of brochures, pamphlets etc. The

membership charges per homestay household are Rs 5000 per year.

Table 34: Financial plan for Homestay


Unit

Price

(Rs)

Total

Amount

(Rs)

1 Fixed Capital

1.1 Up-gradation of toilets and kitchen Lumpsum 1 80000 80000

1.2

Construction of 1 additional room

(wooden) for accommodating 4

persons Lumpsum 1 150000 150000

1.3

Furniture and fixtures including

bed and beddings for 4 persons Lumpsum 1 70000 70000

1.4 Total Fixed capital

300000

2 Revenue generation from


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b. Sensitivity Analysis for Homestay

Table 35: Sensitivity Analysis for Homestay

Sr. No Parameters

Revenue

(Rs)

Expenses

(Rs)

Profit before interest

(Rs)

1

What if number of expected tourists

goes down by 10% during peak

season 286800 151960 134840

Homestay

2.1

Homestay during peak season (6

months) at 4 persons/day/15

days/month persondays 360 700 252000

2.2

Homestay during lean season (6

months) at 2 persons/day/10

days/month persondays 120 500 60000

2.3 Total Income

312000

3 Homestay Running Expenses

3.1

Food expenses at Rs 100 per

person per day for the entire year persondays 480 100 48000

3.2

Labour charges for maintenance at

Rs 50 per person per day for the

entire year persondays 480 50 24000

4

Referral Commission during

peak season at 20% of revenue persondays 360 140 50400

5

Depreciation of fixed assets at

10% of fixed capital per year

10% 300000 30000

6

Yearly Membership to Village

level tourism society for

marketing and website

development Lumpsum 1 5000 5000

7

Miscellaneous expenses

(Hotel registration and other

expenses) Lumpsum 1 5000 5000

8 Total running costs

162400


149600

10


Total investment including

fixed capital)

12% 462,400 55488

11 Net profit

94,112

12 ROI

20.35%

13 Payback period Year

3.090909091


MART, Noida 100

2


goes up by 10% during peak season 337200 172840 164360

3


goes down by 10% during off season 306000 160600 145400

4


goes up by 10% during off season 318000 164200 153800

4.7.12 Implementation plan for Homestay promotion

Table 36: Implementation plan for Homestay

Key steps to be

followed



Cluster selection Select the right cluster for initiating homestay promotion based on

technical feasibility.


As mentioned earlier a maximum of 20% of households should be involved

in each GPU for the activity.

Section of communities which are already involved in similar activities can

be started with.

Social mobilization

and institution

building

Sensitize interested households on potential of homestays as emerged

from the findings of value chain analysis described earlier and their impact

on livelihood.

Share various possibilities and packages of homestay, its cost benefit

analysis, and assess community interest level to take up the activity.

Identify the households to start homestay as a new unit. Initially only a

limited number of groups should be encouraged to start the activity. Based

on the results of pilots add more members. List out members separately

who are already doing the activity and want to either expand or strengthen

the activity.



Preparation of

business plan

Prepare a proper business plan for homestay in consultation with the

community detailing the economics of the activity, capacity building

requirements, issues and challenges, linkages with travel agencies, tourism

packages to be developed, and government schemes to be availed.






MART, Noida 101








Backward linkages List out major components required for setting up the homestay

Guide and oversee appropriate infrastructure development for homestay

promotion.


Establish finance support for homestay promotion on unit cost basis.

Service delivery Implement best practices.








Engage in negotiation with travel agents, drivers, hotels etc. players to

establish relationship.


group activity.



Monitoring and

evaluation




Strengthening

Institution

Facilitate secondary institution (district level) to upscale and sustain the

initiative.






Legal aspects Compliance to legal implications in terms of licensing (hotel) and

regulation.



MART, Noida 102

Partnership possibilities exist with Tourism Department, various cooperative societies involved in rural

tourism, ECOSS, Help tourism, TASS etc.


MART, Noida 103

List of secondary sources/references

1. Addressing Sustainable Livelihoods in Rural Sikkim: Experiences with Participatory Technology

Development in Ginger cultivation; Indo-Swiss Project Sikkim

2. Annual Reports 2005-06, 2006-07, 2007-08 and 2008-09; The Sikkim Cooperative Milk

Producers’ Union Limited (Sikkim Milk)

3. Annual Reports 2008-09, 2009-10; Sikkim State Cooperative Supply and Marketing Federation

Ltd.(SIMFED)

4. Chautare India, East and North-East: TTF 2009-10; Help Tourism Pvt. Limited

5. Eleventh Five year Plan: Volume 1 - Inclusive Growth; Planning Commision, Govt. of India

6. Govt. of India Census, 2001

7. IIMB Management Review, Volume 20, Number 1 Article by Vinod K Huria March, 2008

8. Livestock Self Sufficiency Mission; Animal Husbandry, Livestock, Fisheries and Veterinary

Services Department, Government of Sikkim

9. Lok Sabha un-starred question number 738 dated 23.02.2006 and question number 791 dated

22.11.2007

10. Markets that work, Making a Living from Livestock: 2007 Annual report; International Livestock

Research Institute

11. NERLP Regional Project Implementation Plan document; Ministry of Doner, Govt. of India

12. Potential Linked Credit Plan, South District; National Bank for Agriculture and Rural

development (NABARD), Regional Office, Gangtok

13. Potential Linked Credit Plan, West District; National Bank for Agriculture and Rural development

(NABARD), Regional Office, Gangtok

14. Sikkim Express, dated: 05th October 2010

15. Sikkim Human Development Report 2001

16. Sikkim in Brief 2005; Government of Sikkim

17. Sikkim, Small and Beautiful, Shrivastava, Alok K, Tourism department, Govt. of Sikkim, 2006

18. Sikkim State census 2009

19. Sikkim State Livestock Sector Policy Perspective and Policy Elements; Animal Husbandry,

Livestock, Fisheries and Veterinary Services Department, Government of Sikkim

20. Sikkim, A guide and Handbook; Seventeenth Edition 2009; Rajesh Verma

21. Sikkim…the land of peace and tranquility; Department of Tourism, Government of Sikkim

22. Tourism Sector Policy 2010; Sikkim Tourism department, Govt. of Sikkim

23. Traditional practices of ginger cultivation in Northeast India; H Rahman, R Karuppaiyan, K

Kishore & R Denzongpa; Indian Journal of Traditional Knowledge

24. www.indianspices.com

25. www.indiastat.com

26. www.ireland-guide.com

27. www.pragya.org

28. www.sikenvis.nic.in

29. www.sikkiminfo.in

http://www.indianspices.com/

http://www.indiastat.com/

http://www.ireland-guide.com/

http://www.pragya.org/

http://www.sikenvis.nic.in/

http://www.sikkiminfo.in/


MART, Noida 104

Annexure

Annexure 1: Some Steps taken by the State Government

(Courtesy Rural Management and Development Department)

The government of Sikkim has launched a dedicated mission for “Poverty Free Sikkim” by 2013. The five

pronged strategy for becoming poverty free would involve:

Providing universal access to essential infrastructure and services

Improved earned incomes

Increased emphasis on equitable and inclusive growth

Facilitating empowerment

A stronger safety net

Following is a gist of action taken by State government of Sikkim in purview of promotion of Livelihoods.

The State Government has taken up a housing program by placing it at the top end of its development

priorities, thereby imparting great vigour to the implementation process. A plethora of housing assistance

schemes (RHS, IAY and recently MMAY) have been operational for more than 15 years now and have

shown high impact, which can be discerned by the fact that in the year 2001 (9 years back) itself, only

16,487 (18%) of the total rural households were classified as Temporary (kutcha) as per Census of India,

2001.

Based on the physical progress over the last 9 years (from 2001 to 2009) of the ongoing generous rural

housing scheme, it is estimated that in 2009, less than 8,000 (10%) rural households are staying in

Temporary (kutcha) houses. The generous rural housing scheme of the State Government has now been

universalized and has reached all the households. It is proposed to reduce the quantum of allocation

under the saturated housing sector and use it for other need based areas like the wage employment

sector.

After universalizing the Rural Sanitation sector in 2008, the State is now poised to universalize the

important Rural Housing Sector as well. All it needs is a strong policy push by actively involving the

Hon’ble Ministers, MLAs and Panchayats to give this vital sector high priority, to achieve the status of

becoming the first state to become Temporary (Kutcha) house free, where all the rural households reside

in either permanent or semi permanent houses. After achieving the first Nirmal Rajya status in 2008,

this could be the next significant achievement in the rural development sector in 2010-11, and an

important milestone in our journey towards achieving the vision of making Sikkim a poverty free state by

2015.

Under MGNREGA, Sikkim was ranked 2nd in the country in delivering the 100 days guarantee by the

Ministry of Rural Development recently. The assets created in the village relate to minor irrigation

channels, jhora training works, school playgrounds, footpaths, horticulture and pasture development etc.

There is a provision of taking up maintenance of permissible assets that had been created under

MGNREGA. Other than providing employment, the Scheme has been able to create durable assets related

to income generation in the villages. Compared to the national average of 54 persondays per household in


MART, Noida 105

2009-10, Sikkim was able to provide 80 personday on an average to a household, with 23% of the

households achieving 100 days.

One of the biggest concerns in the Rural Development sector is the maintenance of various Government

owned physical infrastructure, whether it is primary schools, dispensaries, ICDS centers, footpaths, water

supply, panchayat ghars, community halls etc. There is no regular scheme funded by the Union

Government to assist in the maintenance of these physical assets created with sizeable government

investment. Most of the rural households in the State are marginal farmers with fragmented land

holdings and there is limited income from the traditional agriculture and horticulture sector (ginger,

cardamom and orange). Hence of the three factors of economic production namely land, capital and

labour, they are left mainly with the latter to contribute towards their economic development. Due to the

low levels of industrialization in the rural sector, coupled with saturation in government jobs, there are

limited employment opportunities at the government notified minimum wage rate of Rs 100 per day for

unskilled labour. This has resulted in underemployment and unemployment in the rural areas.

It is proposed to initiate a new scheme which will be 100% funded from the State Plan budget as the

“Mukhya Mantri Grameen Rozgar Yojana (MMGRY)”. This program will ensure in utilization of the

existing, underutilized labour force with the rural poor getting productively employed to maintain the

existing physical infrastructure of the Government, thereby giving a major thrust to sustainable

development in the State. The program if implemented in all the 905 GPWs of the State, by employing

30,000 rural households (households expected to demand employment) for 30 days in a year, at the wage

rate of Rs 100/day with a 50:50 wage material ratio, and 5% Administrative expenses will entail a

financial outlay of Rs 19 crore annually from the State Plan.

Primary education has been universalized, and the rural literacy has touched 82

%. Currently 32% of the local rural households are educationally backward i.e. no adult member in the

family above 30 years of age has studied upto class V. Currently the government’s support is in the form

of free uniform and books upto class V and 50% subsidy on text books after that. Some children are

forced drop out in Class VI since the cost of uniform, books, shoes etc which comes to about Rs 3500 per

student forms an economic barrier for their parents.

In human resource development, new and innovative Conditional Cash Transfer (CCT) programs are in

vogue over the last decade all over the developing world. These new methods serve the dual purpose of

poverty reduction coupled with improvement in human capital (education and health). The conditions

are focused on building the human capital of children (rather than simply supporting parents) adds to

CCTs’ political acceptability as an instrument to promote opportunities; after all, it is hard to blame

children for being poor. Making payments to mothers also resonates with well-accepted beliefs that

women will tend to put funds to better use than will men.

The World Bank assessment of this program in several countries (Brazil’s Bolsa Escola, Mexico’s

Oportunidades, Bangladesh’s Female Secondary School Assistance Program, Pakistan Punjab Education

Sector Reform Program, India (Haryana) Apne Beti Apna Dhan) concludes that CCTs generally have been

successful in reducing poverty and encouraging parents to invest in the health and education of their

children. Enrollment rates have increased and dropout rates have reduced. The expected outputs will be


MART, Noida 106

significantly reduced dropout rates, improvement in school attendance, and also poverty reduction and

the outcomes as the overall improvement in the human capital. The Cash Transfer programs have a track

record of bringing about a behavioural change in the recipients, and if rural parents start giving top

priority to their children's education by investing in them, then the human capital would show a

qualitative jump in 5 years as envisioned by the Government.

In order to significantly improve the attendance in government schools and drastically reduce dropout, it

is proposed to initiate a new education incentive program “Mukhya Mantri Gramin Shiksha Protsahan

Yojana (MMGSPY)”. This is a cash incentive program for the mother of the household, to encourage the

parents to invest in the human resource development of their children conditional on 85% attendance and

passing the final exam. The total cost would come to about Rs 15 crore annually and the funds could be

transferred after the declaration of final results into the newly opened Financial Inclusion bank accounts

of the mother directly from the state level.

The Chief Minister’s Rural Universal Financial Inclusion Programme was launched during the

Independence Day Celebration on 15th Aug, 2010. The programme aims to provide universal access to

formal banking services to rural Sikkim, provide easy access to formal financial services, ensure inclusive

and equitable growth, empower rural women and to accelerate economic development in rural areas in

general. It will also provide insurance services related to house and personal accident to the beneficiary

families. Under this programme, about 70,000 rural families in the State will be benefited by opening a

savings bank account in the name of the mother of the nuclear family. They will be able to operate this

account through a composite biometric smart bank card. The facility for savings and withdrawals from

these bank accounts will be provided in the Gram Panchayat Unit itself by opening 163 Points of Service

(PoS) facilities to be operated by Banking Business Correspondents as per the Reserve Bank of India

guidelines.

Sikkim was ranked 3rd by the Ministry of Panchayati Raj recently in the performance and accountability

of Panchayati Raj Institutions (PRIs). The schemes related to MGNREGA, Water Supply and Sanitation

are being implemented bottom up though the PRIs. The Government has also approved the

recommendation of the 3rd State Finance Commission of devolving 15% of the State Plan funds to the

PRIs. It is estimated that the total fund outlay for each Gram Panchayat will be to the tune of Rs 80 lakh

per annum.

The Skill Development Initiative was launched in 2003 and apart from the Directorate of Capacity

Building, the State Institute of Capacity Building at Karfectar with state of the art facilities for residential

training have been established. Under the Chief Minister’s Self-Employment Scheme 5,780 youths have

been covered for self-vocational ventures encompassing various agro-based activities and IT and Tourism

related vocations. As a pioneering step, livelihood schools have been established in every constituency.

Many boys and girls primarily from rural areas are undergoing different kinds of vocational upgradation

trainings in such Institutes across the State.


MART, Noida 107

Annexure 2: List of participants for the stakeholder consultation workshop

(23rd August 2010, Gangtok, RMDD conference hall)

Sr.

No

Name Designation Contact No Department Email

1 Dr. S. Tambe Special

Secretary

9474059291 RMDD [email protected]

2 Kailash Rai Dy Gen

Manager

9832014342 SIMFED [email protected]

3 L Moorthy Asst Gen

Manager

9474983819 NABARD [email protected]

4 D Tewari Dy. Manager 9434750527 SISCO Bank [email protected]

5 R D Kaleon Asst Manager 9434109713 SISCO Bank [email protected]

6 Dr. Partha

Sarathi Ghosh

Sr. Project

Officer

9775873293 WWF [email protected]

7 Bhupesh

Subba

Project

Incharge

9733149964 VHAS,

Gangtok

[email protected]

8 Gloria

Namchu

Deputy

Secretary

9434037788 DPER NEIAP [email protected]

9 Kiran K

Pradhan

Joint Director 9832017868 Agriculture [email protected]

10 Anupa

Tamling

Under

Secretary

9733012024 RMDD [email protected]

11 T. D. Bhutia Assistant

Directot

9434409281 RHH [email protected]

12 R. P. Gurung CEO 9733088003 ECOSS [email protected]

13 Dr. S. Bhutia Dy. Director 9474350740 AHLF & VS

14 Dr. N.B.

Chettri

Jt. Director 9733255821 AHLF & VS

15 Dr. K. C.

Bhutia

Jt. Director 208483 AHLF & VS [email protected]

16 G. P. Chauhan Add. Director 9573776903 Horticulture

17 Tashi P

Nagyal

Under

Secretary

9547405676 RMDD

18 L. P. Chettri P.D. SKDA 9434406753 RMDD

19 Ghanshyam IT Manager 9647892997 RMDD

mailto:[email protected]














MART, Noida 108

Annexure 3: List of select stakeholders met during the field visit

Sr.

No

Name Designation Place Contact

1 Ajneya Kumar Singh District Collector, South Namchi, 9434201222

2 Jitendra Singh Raje SDM Soreng, West Soreng 9434041007

3 Vishal Mukhia BDO Sikkip(Wok) Jorethang 9733064606

4 Chandrakala Rai Deputy Director SIRD 9733240418

5 J C Biswas DDM NABARD Namchi 9434089765

6 B. K. Rai Joint Director,

Horticulture

Namchi 9434063536

7 D. B. Tamang Jt. Director, Horticulture Namchi 9434103504

8 H. Kuchay Consultant for Fabric

print

Namchi 9647642198

9 D. T. Bhutia Ex Director SIRD Namchi 9434063279

10 Noveen Subba Branch Manager, SISCO

Bank, South District

Namchi 9775461855

11 Subha Mukhiya BDO, Tinik Jorethang 9593886965

12 C. B. Rai Jt. Director, Soil and

Water Conservation

Namchi 9434063566

13 Nandalal Subba Rose Farmer, Rose

Village

Dharamdin

14 L. B. Vijay Rose Farmer, Rose

Village

Dharamdin

15 Sujan Subba Rose Farmer, Rose

Village

Dharamdin

16 Smriti Pradhan Kanchenjunga Floratech

Cooperative Society Ltd,

Rose village

Dharamdin

17 Pemdoma Bhutia Rose Farmer, Rose

Village

Dharamdin

18 Milan Chettri Rose Farmer, Rose

Village

Dharamdin

19 Shyam Kumar Field Staff, Horticulture

department

Dharamdin

20 Sai Patri SHG Tinik

21 Neel Kamal SHG Sisupani

22 Pragati SHG Ambote

23 Lilium SHG Samsebung

24 Gulab SHG Poklok Denju

25 Dr. P. Senthil Kumar

IFS

MD, The Sikkim Co-

operative Milk Producers

Gangtok 94341-91883

03592 – 204133


MART, Noida 109

Union Ltd - Sikkim

26 C B Subba Former Speaker, SLA Gangtok 98320-34822

27 Noveen Subba Sikkim State Co-

operative Bank ltd

Namchi 97754-61855

28 Rajendra P Gurung CEO, Ecotourism &

Conservation Society of

Sikkim

Gangtok 02592-232798

29 John Shankar AGM Marketing, Sikkim

Tourism Development

Corp ltd

Gangtok 94341-27252

30 Pavan Kumar Yangaldas Chief Executive, Srikar

Knowcon Services

Gangtok 94340-76102

31 Karan Souvenir Tours & Treks Gangtok 97332-59355

32 Chewang Chojar Travel Sikkim Gangtok 94341-69615

33 Bijendra Swaroop IFS MD, Sikkim State Co-

operative Supply and

Marketing Federation

Ltd

Gangtok 94341-69208

34 Kailash Rai Dy GM, Sikkim State Co-

operative Supply and

Marketing Federation

Ltd

Gangtok 98320-14342

35 Sushil Tamang MD, Cherry Village

Resort

Darap 97332-35441

36 Indra PD Shivakoti Subject Matter

Specialist, Krishi Vigyan

Kendra

Namthang 94343-18310

37 L Moorthy Asst GM, NABARD Gangtok 94749-83819

38 A P Sherpa Owner, Sherpa Lodge Varsey 94745-27836

39 Prasun Majumdar The Silk Route Tour &

Travel

Kolkata 94335-07902

40 Suresh Patel Patel Ginger Company Siliguri 94324-02267

41 T N Sharma President, Hee-Bermiok

Tourism Development &

Heritage Conservation

Society

Hee - Bermiok 94340-60563


MART, Noida 110

Annexure 4: Support plan for Dairy development in the NERLP Project Area

Dairy as an activity has been analyzed in section 4.3 and individual level plans have been shared for implementation. As mentioned earlier Sikkim

Cooperative Milk Producers Union Ltd. (Sikkim Milk) is already functional in the project area and can act as a ideal stakeholder in promoting

cluster based interventions around Dairy for the project. However, the institution needs support in strengthening its infrastructure and building

appropriate capacities to specially include the project beneficiaries under its umbrella. A 3 year plan jointly prepared by Sikkim Milk and MART,

for the project to financially support Sikkim Milk is as follows.

1. ACTION PLAN AND FINANCIAL OUTLAY:

Rs in Lakhs

S. No.

Key Activity Details Unit Cost

Units

Year 1 Year 2 Year 3 Total

Phy Fin Phy Fin Phy Fin Phy Fin

A Research and Training

A.1 Dairy Research Small Grants Initiative for PhD Scholars in the State in Collaboration with national and international experts from ICIMOD, SDC, IC, Amul etc

1. Approaches to understanding Farmers cattle feed strategies and identifying ways to improve fodder supply that involve farmer and village-level initiatives in different agro-climatic zones. 2. Study of the contribution of the smallholder dairy sector to poverty alleviation. 3. Indigenous knowledge system for tree fodder using a multi-method on-farm research approach 4. Institutional, technological and marketing systems, gaps and prospects in the smallholder dairy sector of the state 5. Status, potential and strategies for improving fodder supply from Goucharan forests of the state 6. Documenting the nursery techniques for fodder trees and grasses by compiling existing research studies in the region and documenting indigenous knowledge system using on-farm research approach.

3.0 Rs per Study

5 15.00

5 15.00

0 0.00 10 30.00


MART, Noida 111

Rs in Lakhs

S. No.


Units



A.2 Training Workshops in Collaboration with National and International Experts from ICIMOD, SDC, IC , AMUL etc

3 day Workshops, Designing the study and program in collaboration with national and international experts from ICIMOD. Outcomes would include books along the lines of "Smallholder Dairy in Mixed Farming Systems of the Sikkim Himalayas: Issues and Prospects for Development" and "Livestock in mixed farming systems of the Sikkim Himalayas: trends and sustainability, training material and knowledge sharing.

4.00

Rs per workshop

2 8.0 2 8.0 2 8.0 6 24.00

A.3 Training of Technicians for Extension

One month long training to be conducted at SIRD followed by annual week long training programs. These technicians will in turn support the Milk Producers Cooperative Societies

2.00

Rs per month

1 6.00 1 6.0 0 0.0 2 12.00

B Strengthening Local Dairy Marketing Infrastructure

B.1 Strengthening Local Milk Collection Infrastructure

To include milk transport cans, milk testing equipments, milk collection utensils and milk collection centers in the relative poverty hotspots of the state

5.00

Rs per unit

0 0.0 13 65.0 13 65.0 26 130.00

B.2 Strengthening Local Milk Chilling infrastructure

To include commissioning of bulk milk chilling machines of 1000-2000 liter capacity with gen set, deep freezes and toolkits for operators in the relative poverty hotspots of the state

9.50

Rs per unit

0 0.0 5 47.5 13 47.50 18 95.00

B.3 Strengthening the existing Dairy Processing Plant

Capacity expansion of the existing Dairy plants are required to make it capable of handling increasing milk production from the implementation of the project 1

90.0 120.0

90.0 300.72

1 Please refer to Support in Plant expansion as Point 2 of Annexure 4


MART, Noida 112

Rs in Lakhs

S. No.


Units



C Cattle Improvement

C.1 Artificial Insemination Equipment

To provide artificial insemination equipment, including two liquid nitrogen containers, for 26 centres involved in cattle programmes to improve productivity of existing cattle.

2.00

Rs per Equipment Set

0 0.0 13 26.0 13 26.0 26 52.00

C.2 Vaccination Against Major Diseases

Comprehensive Vaccination of All Dairy cows in the Project area - Annual Vaccination - 20000 cows

0.80

per 1000 doses

20 16.0 20 16.0 20 16.00 60 48.00

C.3 Technical Extension Service

Extension services, including basic animal disease-prevention inputs, technical advice, artificial insemination services and veterinary drugs, to be provided at a fee cost, which motivated technicians to improve the quality of their services. 26 Technicians to be paid honorarium of Rs 5000 per month for 3 years

15.60

Rs per Year

1 15.6 1 15.6 1 15.60 3 46.80

C.4 Crossbreed Milch cattle for Poor Households

Crossbreed Milch cattle to be provided to each household as per economics provided under section 4.3.10 of main report

0.55

Rs per Household

0 0.0 2250

1,237.50

2250

1,237.50

4500

2475.00

D Tree Fodder Development

D.1 Promoting Tree Fodder Development in Privately Owned Marginal Lands

Incentive of Rs 50 for every healthy seedling of permissible fodder tree species on attaining 2 feet height, with an upper limit of Rs 2500 (50 trees) per household

0.15

Rs per Household

0 0.0 5000

125.0

5000

125.0 10000

250.0

E Project Management


MART, Noida 113

Rs in Lakhs

S. No.


Units



E.1 Project Management

Hiring staff, Project office, Project coordination, monitoring, evaluation and reporting. Project administration, travel costs and financial accounting

20.0

Rs per Year

1 20.0 1 20.0 1 20.00

3 60.0

F Total

170.60

1,701.60

1,651.32

3,523.52

B.3 SUPPORT IN PLANT EXPANSION

Rs in Lakhs

Sr. No Particulars Units Cost/ Unit

Total Cost

Remarks

1 Pasteurizer 5000 litre capacity 2 18.00 36.00 Two Units to replace the old ones - one is already unserviceable and the other is critical

2 Milk Chiller - 5000 litre to 10000 litre 1 5.00 5.00 To support existing old chiller

4 Storage Silos -10000 2 8.00 16.00

5 Milk Tanker Tank -8KL with Chasis 3 18.00 54.00 To meet milk transportation from Jorethang/ from outside the state

6 TATA 407 for Marketing 1 6.00 6.00 to meet the increasing marketing

7 Pouching Machine - Double Head 1 9.00 9.00 to cope up with increased pouching

9 Piping and realigning 3 6.00 18.00 stainless steel piping needs of the plant

11 Plant Communication Systems 1 2.00 2.00

12 Inspection Vehicles for Procurement and Marketing 1 7.00 7.00

13 Curd Making Unit 1 22.00 22.00 1000 litre Capacity with incubator and packaging machine

14 Dairy Dock Automation System 1 14.00 14.00 Including Hardware and software


MART, Noida 114

Rs in Lakhs

Sr. No Particulars Units Cost/ Unit

Total Cost

Remarks

15 Generator 1 8.00 8.00 for standby

16 Revamping of HT Electrical Fittings for the Dairy Plant at Gangtok

1 9.00 9.00 To Repair the Existing Electrical System to cope up with the expansion plans

17 Total 206.00

18 Installation, Commissioning and Contingencies- 12% of the total

24.72

19 Repairing and Civil Works to accommodate the above expansion including the Cold store

1 70.00 70.00 Lump sum

Grand Total 300.72

2. TOTAL BUDGET

Rs in Lakhs

Sr. No. Sector Budget

A Research and Training 66.00

B Strengthening Local Dairy Marketing Infrastructure 525.72

C Cattle Improvement - Total 2621.80

Contribution from Farmers as loan (as per section 4.3.10 of report) 2475.00

Contribution from NERLP 146.80

D Tree Fodder Development 250.00

E Project Management 60.00

Total 1048.52


MART, Noida 115

3. SUGGESTED IMPLEMENTING AGENCIES

Sr. No. Sector Implementing Agency

A Research and Training Research by Dept of Science and Technology and Training by State Institute of Rural Development, Government of Sikkim

B Strengthening Local Dairy Marketing Infrastructure

The Sikkim Cooperative Milk Producers Union Ltd, Tadong, Gangtok, Sikkim

C Cattle Improvement The Sikkim Cooperative Milk Producers Union Ltd, Tadong, Gangtok, Sikkim

D Tree Fodder Development Panchayati Raj Institutions

E Project Management NERLP unit, Rural Management and Development Department, Government of Sikkim


MART, Noida 116

Annexure 5: Sikkim State Stakeholders Consultation Report


MART, Noida 117

Background:

The North East Rural Livelihoods Project (NERLP) is a World Bank funded poverty alleviation initiative

by the Ministry for Development of North Eastern Region (DoNER) which is planned in the 4 North

Eastern states of Sikkim, Mizoram, Nagaland and Tripura. The project envisaged conducting Livelihood

Based Agri Business and Market study in each of its project states.

MART a leading Livelihoods and Marketing Consultancy was commissioned to conduct the aforesaid

studies through a contract signed between DoNER and MART on the 4th of August 2010. MART

submitted draft report of Sikkim state to NERLP and World Bank by email to receive their feedback on

the report. This report is the documentation of the feedback received on the draft report submitted by

MART to NERLP. The feedback to be incorporated by MART in the final report is mentioned separately

under section 3, later in this report.

Three kinds of consultations took place that gave feedback on the draft report are;

Written feedback from NERLP (23rd December 2010) and discussions with PD, NERLP in

Delhi.

Feedback from World Bank via forwarded email from NERLP on 26th January 2011

Stakeholders consultation workshop in Sikkim on 9th February 2011

Stakeholders’ consultation workshop

Objective : To share findings and recommendations of draft report

Date : 9th February 2011

Venue : RMDD Conference hall, RMDD, Gangtok, Sikkim

Time : 3:00 pm to 5.00 pm

MART has been conducting “Livelihoods based agribusiness and market study” in all four states under the

purview of NERLP. In order to finalize the draft report of the aforesaid study in Sikkim, a multi

stakeholder workshop was organized at RMDD conference hall of Gangtok at 3 PM on 9th February 2011.

Organized and coordinated by RMDD and SRDA, the workshop was attended by senior representatives of

government department and state level resource agencies along with representatives of NERLP and

MART. The workshop was chaired by Mr. A. K. Ganeriwala, Secretary RMDD. Secretary RMDD opened

the workshop by welcoming all participants to the workshop and sharing the objectives of the workshop

which were as follows:

Sharing of findings of the ‘Livelihoods based agribusiness and market study’ by MART

Feedback and suggestions on the findings and recommendations by stakeholders in the

context of implementation by NERLP.

Secretary RMDD also highlighted the timeliness of NERLP in the context of Sikkim and that the project

had all the ingredients to eliminate poverty in the state. He mentioned that the project actually covers a

large section of the poor in Sikkim and thus will be a major contributor to the state government’s mandate

of “poverty free Sikkim by 2013”. He reasserted the fact that the role of all stakeholders in the form of line

departments, cooperatives, banks, NABARD, resource agencies, NGOs etc. will be crucial in rendering

success to NERLP. He then invited Mr. D.T. Bhutia, State Coordinator, NERLP for the opening remarks to

the workshop. Mr. Bhutia, highlighted the salient features of NERLP in Sikkim and its coverage area. He


MART, Noida 118

also mentioned the premises under which the Livelihoods study was conducted by MART, a leading

national level livelihoods consultancy agency and requested participants to actively participate in the

workshop.

Post remarks by Mr. Bhutia, Secretary RMDD invited Mr. Sanjay Gupta and Mr. Nirmallya Mandal of

MART to share the methodology adopted and the findings of ‘Livelihoods based agribusiness and market

study’ conducted in Sikkim.

Mr. Nirmallya Mandal, presented the detailed 8 step methodology of the study followed by major findings

in the context of existing rural Livelihoods in Sikkim like infrastructure and resources available, markets,

land based activities undertaken in villages, Animal husbandry and livestock based activities undertaken

and also Non-farm and service based activities undertaken. The detailed value chain analysis of milk,

ginger, flowers, pigs and homestay (rural tourism) were shared with reference to value chain maps of each

product, stakeholders and their roles, salient features of each value chain, constraints and gaps in the

value chain in terms of inclusion of the poor and critical intervention points suggested. The power-point

presentation is annexed with this report for reference.

In course of the presentation by MART, various comments were received from the participants which are

as follows:

NERLP Project Manager, Ms. Sanchyeeta Gohain commented that value chain maps should be

comprehensively drawn to include all necessary information in the map itself. She mentioned that

the consumers should be highlighted in oval shape and separation of processes with stakeholders is

required in the value chain map for better understanding. Percentage of product movement through

different channels also needs mention.

As per the findings of the dairy value chain, Mr. Gurung of ECOSS inquired reasons for low fat

percentages in cow milk in Sikkim which was later answered by Dr. Senthil Kumar, MD Sikkim Milk.

Dr. Senthil Kumar mentioned the reasons of low quality fodder and lack availability of green fodder

are prime reasons along with the fact that milk from hilly areas have low fat content as compared

with that of plain areas.

Dr. Senthil Kumar highlighted the following points;

o Dairy is Sikkim is traditional and people have the skills for practicing dairy activity. However,

clusterization of the milk producing areas is required to achieve viability in terms of scale.

Hence the project needs to be set up dairy clusters across the project area. Sikkim milk can be

a major stakeholder in the same.

o Although various schemes have distributed good quality cows in the rural hinterlands to poor

beneficiaries their productivity often decrease after the initial milk cycles due to lack of good

management of the cows along with shortage of good quality green fodder all the year round.

Thus NERLP needs to take up special programmes on fodder development along with

appropriate capacity building in the project area. Good quality cross bred cows should also be

arranged by NERLP.

o In order to maintain a proper milching cycle, strengthening of artificial insemination (already

initiated by the AHVS department) needs to be supported by the project.

o Marketing of milk is an area which needs proper support from the project and since Sikkim

Milk is already functional in the project area supporting dairy farmers in providing marketing


MART, Noida 119

support, Sikkim milk can be a major stakeholder in implementing marketing systems for milk

under NERLP.

o Sikkim Milk already has a milk processing plant in Jorethang catering to the project area.

However, the infrastructure of the plant needs serious and immediate renovation to be able to

continue the marketing support. NERLP needs to support such infrastructure development in

order to create robust marketing systems for milk in the project area.

After the findings of the complexities in the traditional marketing channel of Ginger in Sikkim was

shared, marketing through SIMFED was proposed as an option for small and poor farmers.

It was also shared that bank credit in Ginger has increased during the last two years and banks are

anticipating a rise in ginger cultivation

Mr. P. Tshering, Director Food Security and Agriculture department also shared that a 7.5 MT/day

capacity ginger processing plant has been commissioned recently at Jorethang which will be

operated by SIMFED. The centre can cater to the needs of the poor farmers in the project area


When a major bottleneck of absence of cold chain networks was highlighted for floriculture activity,

Mr. Tambe, DGM NABARD shared the information that a Rs 500 crore investment in being planned

by the government for setting up such cold chain systems near the upcoming national airport in

Sikkim, near Gangtok.

Mr. Gurung, CEO ECOSS suggested some action by NERLP to include the poor in Rural Tourism

through creation of porter, guides, cooks etc. service delivery mechanisms and linking them with

mainstream tourism initiatives. He stated that marketing is a major issue in the area of homestays

and that as mentioned in the livelihoods study, NERLP should facilitate in setting up and running

websites for marketing. He also highlighted the upcoming government policy of registering and

certifying rural homestays for better monitoring and standardization.

After the end of the presentation, Secretary RMDD congratulated MART for completing the study

successfully and satisfactorily. He mentioned that the study will largely help NERLP in planning and

implementing the project in Sikkim. He also thanked all participants for participating in the workshop.

The closing remarks and vote of thanks to the workshop was presented by Ms. Sanchayeeta Gohain, PM,

NERLP Guwahati.

Feedbacks to be incorporated in the final report

The following is a list of relevant feedback on the draft report received from various sources and their

corresponding responses by MART;

Feedback received from NERLP

Observations Response

In the step 4 of Chapter 1, the examples of five

products should be relevant to a particular state as

indicated in respect of other two state studies

already.

Taken note of for addressing it suitably


MART, Noida 120


Regarding Chapter 4

The process of short listing of products has to be

elaborated and justified.

Justifications for short listing of products will be

included under value chain analysis section

All the products should cover the national and

international market status and overall scope of the

products.

Available data from secondary sources have been

already included under background sections of

each product value chain. However, will include

additional relevant data if available.

The economic feasibility of the selected products

has not been mentioned

Economic feasibility of all the selected products

are already mentioned under feasibility of the

product (refer to sections 4.3.2, 4.4.2, 4.5.2, 4.6.2

and 4.7.3)

The study has suggested dairy farming at cluster

level, whereas, the economics of the sub sector has

been given according to individual basis.

The study proposes that the project should

promote Dairy activity in a cluster to achieve

economies of scale. However, the activity needs

to be conducted by each individual participating

household hence the plan is given at the

individual level.

The action plan for the cluster level sub sectors has

to be suggested.

Since Sikkim Milk is already functional in the

area at the cluster level, a separate plan for

supporting Sikkim Milk will be shared.

The economics of all the sub sectors should be

more broad, covering all aspects, including

marketing.

Although most aspects have already been

accounted for in the economics relevant

explanations or additions will be provided for

each economics.

The study has not identified the major players of

the products within and outside the region.

Major players of all value chains are already

mentioned in the value chain map of the product

with role of each in the subsequent paragraphs.

Major players met during field survey will be

annexed.

Similarly, the possibilities of partnership with the

identified players of the sub sectors have not been

explored.

Taken note of for integrating the same separately

under each product value chain, although

possibilities of partnership have been accounted

in the strategic action points of the constraint

solution matrix of each value chain.

The study has not identified the critical Critical intervention points are presented as


MART, Noida 121


intervention points in the value chain of the

products. Resultantly, it did not cover the

investment planning for those critical points.

strategic action points in tabular form under

constrain solution matrix for each product value

chain. Economics of each value chain activity

covers investment points for raw

material/inputs, transportation, marketing, fixed

cost and working capital requirement wherever

relevant.

The study should provide guidance for setting up

small, viable and sustainable processing units.

Taken note of for integrating it under each

product value chain

The study must also highlight the changing

demand and supply scenario as well as projection

of the future trend to ensure that the farmers are

able to trace and face the challenges of negotiation

with market players and ultimately get full benefits.

Additional information from secondary sources

will be collected and reflected if available.

However, based on the market scenario given in

introduction part of each value chain activity and

field survey challenges for small and marginal

famers are already included under each product

value chain analysis.

Feedback received from World Bank feedback (26.01.2011)


The UNIT costs/investment required for each

livelihood activity studied by them is put in a

tabular form starting from the household/SHG/

and cluster level, so that we are clear what is the

allocations for investments to be made from the

various funds within the project

The details will be given in tabular form in the

executive summary also.

Also, for each activity in each state they should

clearly identify one agency who can be the overall

resource/ sector support agency which can be

contracted in.

Potential partners will be mentioned in tabular

form in the executive summary also.

Relevant feedback received from State level consultation workshop (09/02/2011) and

Special Secretary RMDD


Annexure 1: Some steps taken by the State

Government needs to be updated with recent

developments

Taken note of for integrating the same in the final

report.


MART, Noida 122


Section 4.7.12, Table 34: One criterion for selection

of clusters can be areas where already similar

community driven activities have been initiated.


report.

Section 4.7.5, Figure 12: Linjee Payiong village to

be added


report.

Section 4.6.2, Table 27: Courtesy to be in the name

of HCCD


report.

Section 2.3: BPL percentage is around 20% as per

DESME 2005

The 2001 census has been referred for most

demographic data in the report. The section

concerned in particular projects the findings of

the HDI report 2001.

The report should highlight strong decentralization

of the state with good PRI systems


report.

The report should highlight the significance of

safety net programs in the state ensures that there

are no abject poverty situations in the state


report.

Value addition of Hill Grass as broom stick as a

potential activity

The activity although significant in terms of

livelihoods of the rural population, has little

scope of value additions and thus the project’s

interventions and investment potential is low.

Hence it has been excluded as a major value

chain activity.

Inclusion of Poultry as a potential activity The activity has already been included in the

potential activity list for the state. However,

being a risky activity in the hilly areas and

bottlenecks in marketing and service delivery of

poultry, piggery has been preferred to poultry.

Inclusion of Large Cardamom as a potential

activity

The said activity although important for Sikkim,

has a high gestation period, declining production

trend in the state and generally excludes the

poor. Hence the activity has not been preferred to

be included in the top 5 list.

Water is often a constraint in rural Sikkim and the

activity plans shared in the report also assumes

water availability.

Point taken; however water crisis is an universal

cross cutting issue in Sikkim which has a bearing

on the successful implementation of the


MART, Noida 123


livelihood plans. Hence the project needs to

implement special water harvesting plans

through NRM related activities.

Value chain Analysis maps need to be more

comprehensive with all information

The value chain analysis sections of each

potential product already cover all necessary

information and simplicity in maps have been

purposely maintained to ensure better visibility.

NERLP should support Sikkim Milk for ensuring

better market linkages and processing of milk

A separate plan to support Sikkim Milk is shared

in the final report

Marketing of Ginger can be proposed through

SIMFED since the other channels were found to be

complex

Already proposed in the report

A 7.5 MT/day capacity ginger processing plant has

been commissioned recently at Jorethang which

will be operated by SIMFED. The centre can cater

to the needs of the poor farmers in the project area



report.

A Rs 500 crore investment in being planned by the

government for setting up such cold chain systems

near the upcoming national airport in Sikkim, near

Gangtok for supporting floriculture activity


report.

Include the poor in Rural Tourism through

creation of porter, guides, cooks etc. service

delivery mechanisms and linking them with

mainstream tourism initiatives.


report. However, from amongst all these options

to include poor in rural tourism, homestays is

discussed in detail in the report.


MART, Noida 124

Annexure A: Presentation by MART in stakeholder consultation workshop (9th

February 2011)

A-32, 1st Floor, Sector 17, Noida - 201 301

Tel: 0120-2512140, Fax: 0120-4273995www.martrural.com


MART, Noida 125

Objectives of stakeholder workshop

Recap of study methodology and process adopted Share findings on livelihoods status Facilitate discussion on

• Proposed implementation• Envisaged roles and responsibilities of project

partners

Background The Ministry for Development of North Eastern

Region (DONER), Government of India proposesNorth East Rural Livelihood Project (NERLP) toaddress the issues of rural poverty and creation ofsustainable livelihood for rural poor particularly forwomen.

Project states include Tripura, Mizoram, Nagaland andSikkim.

MART, a leading Livelihoods and MarketingConsultancy signed agreement on the 4th of August2010.


MART, Noida 126

Livelihood based Agri-Business and Market study

Assess economic opportunities in farm, off-farm and non-farm sectors Understanding existing infrastructure, resources ,

support services, major occupations, production systems, technology, policy environment and potential for growth

Conduct market assessment and value chain analysis for potential livelihood activities

Suggest viable income enhancement strategies for potential farm, off-farm and non-farm sectors

Suggest business plans for appropriate livelihood interventions for potential activities

Approach of the studyActivities Key Steps Outputs

Review of project literature and

reports

Study livelihoods initiatives/project

such as DONER, NERCRMP in north

east states.

Secondary reports and website

Draft study design and plan

Step 1

Pre study

preparation

Develop better understanding of the

study and project states

Draft study design and plan

State wise meeting with state

nodal officer and stakeholders from

line departments and resource

agencies

To understand NERLP objectives

and process, and key stakeholders

in the region

Generate list of livelihood activities

Share study approach and

methodology

Share outline of draft report

Step 2

Initiation

Meeting at

state level

Develop better understanding

keeping project objectives in mind

List out key stakeholders for meeting

during field visit

Feedback on constraints and

opportunities in the state

Finalize approach and methodology

Finalize study villages based on

availability of key products/services

Finalize field visit plan


MART, Noida 127

State wise data information

collection, compilation and analysis

of initiation meetings

Step 3

Initiation Report

State wise initiation report. It contains:

Existing livelihood profile and issues

SWOT analysis of the region

Overall approach and methodology

List of villages to be visited

List of key stakeholders shortlisted

Field visit plan

Discussion guides

10-12 potential list of products for

value chain analysis

Interaction with key stakeholders

from line departments such as

agriculture, horticulture, animal

husbandry, resource agencies, and

key market players

Analysis of secondary reports and

market analysis

Step 4

Fieldwork -1

(Interactions

with key

stakeholders)

Shortlist 4-5 products/commodities/

services per state for undertaking

value chain analysis

List of stakeholders/VC players and

products/commodities/ services

villages finalized for Field Work-2

Finalized discussion guides for

Fieldwork-1

Finalize study design

Finalize field visit plans

Finalize field teams

Undertake field visit

Finalize list of stakeholders to be

met

Step 5

Fieldwork -2

(Interactions in

villages and

markets)

Fieldwork involves

Livelihood survey in villages and

market and meeting with enablers

Value chain analysis of 4-5

products/commodities/services and

meeting with value chain players

Data compilation and analysis

Prepare draft strategies Step 6

Draft Report

Draft report as per objectives listed

out earlier

Share draft report though power

point presentation to World Bank,

DoNER staff and other stakeholders

as suggested by the project

Step 7

Stakeholders

consultation

workshop to

share Draft

Report

Agreed feedback of stakeholders on

the draft report

Content for final report finalized

Stakeholders consultation workshop

report

Additional data analysis and

information collection from

secondary sources

Feedback incorporated from

stakeholders consultation workshop

report

Step 8

Final Report

Final report as per study objectives

defined earlier


MART, Noida 128

Identification

of Viable

Activities

Sustainable

Activities

Matching Supply & Demand

Handholding

services

Training

Exposures

Infrastructure

Survey in

Villages

Resources

Skills

Technology

Finance

Infrastructure

Support

Services

Market survey

• Own Village

–Shop

–Trader

–Vendor

• Haat Bazar

• Town Market

Supply Possibilities Demand Pattern Project SupportIncome Opportunity

3M Concept

District Villages

South

Mellidara Ward -1, Salghari Upper,

Sallebong, Biriang Ward, Ramaram Kali

Khola

West

Darap Lagay, Samsing Ward – 5,

Tinzerbong, Rodhu Khandu Sanku,

Lower Okharey

Study villages


MART, Noida 129

Key Informants Place

Villagers (Farmers, SHG Members,

youth, Panchayat members etc.)

10 villages in South and West

districts

Secretariat & Directorate Officials Gangtok, Soreng, Namchi

Govt. Line Dept. Officials Gangtok and Dist. HQs

Support Institutions (NABARD, SIRD,

SISCO Bank, SIMFED, Sikkimilk etc.)

Gangtok, Jorethang, Dist.

HQs, blocks, GPUs

NGOs (ECOSS, VHAS, Help Tourism

etc.)Gangtok, Siliguri, Dist. HQs

Processors, Traders, Transporters etc.Gangtok, Siliguri, Dist. HQs,

Jorethang etc.

Others (Mainam Gardens, GPU level

Cooperatives, eco-tourism societies)

Namchi, Geyzing, Daramdin,

Gelling, Varsey, Seleb, Darap,

Hee-Bermiok

Key Stakeholders consulted

Livelihood Profile


MART, Noida 130

Infrastructure and Resources

100% surveyed villages had

mobile network coverage, bank, post office, milk collection centres, roads, skill training centres, transport services, drinking water, electricity, school building, veterinary department, agro cooperatives and haats.

80-90% of the surveyed villages had community buildings, marketing cooperatives and

access to nurseries

40% of surveyed villages had

access to irrigation facilities in the form of rivulets and springs

MarketsSouth District

MarketsWest District Markets Products traded

Town level markets

Jorethang, Namchi,

Melli, Ravongla

Gyalshing, Geysing Legship, Ginger, Cardamom, Orange,

Chilli, Vegetables, Milk

products, Poultry, Pork,

Mutton, Clothes, utensils,

consumer goods, Agri

implements, Agri inputs,

Cattle Feed, service centres,

departmental stores etc.

Weekly (Haats) and village level markets

Simchuthang

(Mangley), Majhitar,

Temi Bazar, Damthang,

Namthang

Kewzing, Yangyang,

Ralang.

Reshi, Hee, Sombaria, Soreng,

Daramdin, Dentam,

Rinchenpong, Kaluk, Mangalbarey,

Shreebadam, Bermiok,

Pelling, Tashiding, Chakung,

Nayabazar.


Chilli, Vegetables, Poultry,

Pork, Mutton, Clothes,

utensils, Agri inputs, Cattle

Feed, etc.


MART, Noida 131

Land based Livelihoods

0

20

40

60

80

100

120

Availability Percentage in surveyed village

Percentage of Households involved

SeasonalityCrops Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

Ginger P P PM P P PM M M

Maize P P P P P P

Paddy P P P P P P

Tomato PM PM P P PM PM P P PM PM P P

Potato P PM P P PM M P P P P PM P

Pulses P P P P PM

Quash PM PM PM PM PM PM PM PM PM PM PM PM

Chilli P P PM PM PM

Orange P PM PM M

Large Cardamom P P PM PM PM PM M M

P: Production phase, M: Marketing Phase


MART, Noida 132

Consumption pattern

5

100

0

100

10 5 10 5 815

70

95

0

100

0

90 95 90 95 9285

30

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Percentage consumed Percentage Surplus

Marketing channels

0102030405060708090

100

Sale percentage of major crops through different channels

Village Trader Haat Town Trader


MART, Noida 133

Animal Husbandry and LivestockMajor

Livestock

Availability in

percentage of villages

Percentage of households

involved

Dairy 100 65

Piggery 100 60

Goat rearing 70 25

Poultry 100 50

• Animal Husbandry and Fishery contributes to 31.6% value in the entire Agri allied sector of Sikkim.

• Highly women centric activities• Dedicated Poultry and Dairy Mission by the Govt.• After farmers, Sikkim Milk and AHVS dept. largest

stakeholders in Dairy.

Non-farm and Services Women are traditionally skilled in knitting woolen

garments, stitching, pickle making and making fermented food products. Very few use skills for income generation.

Construction (70%) and Carpentry (100%) related skills are high.

90% villages had drivers while 70% villages have Defense personnel.

Low specialized skills like mobile repairing, electronics repairing, insurance agents etc.

Livelihood Schools by Govt. to enhance skill development 40% surveyed villages interested in Homestay based Rural

Tourism


MART, Noida 134

Value Chain Analysis

Dairy

Franchise /

Retailer margin:

Re 0.5/litre

Unprocessed: Rs 13 –18/ litre

Unprocessed: Rs 24-30/ litre

High cream: Rs 36 / litre

Toned: Rs 25 / litre

Processing by Sikkim Milk

Dairy Farmers

Retailers

and milk

parlors

(Inside

Sikkim)

Consumers Consumers, Hotels,

Restaurants

Input Supply

Fodder, Cattle feed, nutrient supplements, dairy implements,

equipment, etc.

Milk Collection centre run by Milk

producer’s Cooperative Societies

Milk unions

outside

Sikkim

Consumers

Franchisee

(Outside

Sikkim)Institution

al supply.

e.g. Army,

IRCTC

Commission to

Cooperative

Societies: 3.3% of

value of milk


MART, Noida 135

Salient features of Dairy 65% of HHs keep milching cows. 2-3 cows /HH. 8-10 litres/

HH

• Different package of practices by AHVS, Entrepreneurs and local villagers.

Marketing by Sikkim Milk, Entrepreneurs, SHG (NayaBihane)

Constraints Water availability Green Fodder availability round the year Low productivity of cows Cow milk is low in fat content no organic premium Access to credit Road blocks and market failure risks

Critical Intervention Points Formal arrangement with the AHVS department and Sikkim Milk for ensuring availability of

good quality cross bred cows.

Promote Silage pits for storing green fodder.

Identify and promote specific cluster of villages for specially producing fodder.

Ensure adequate availability of mineral mixtures and nutrition supplements at all project

village levels.

Create village level cadre of technical persons to provide technical services to dairy farmers regarding productivity enhancement.

Regular training on best practices and exposure visits to best practitioners in the local area.

Organize poor famers in SHGs to link them with local banks to ensure their financial inclusion.

Develop partnership with existing MFIs and banks encourage them to develop specific loan products for commercial dairy farming and expansion

The Project can also fund the activity directly.

The project can facilitate proper organic certification of milk and develop niche markets for cow milk to enable premium prices for the poor producer.

Guide dairy farmers for collective sourcing of feed and fodder to reduce operational costs.

Appoint implementing agencies and develop village level service providers to help famers link with need based government schemes and services.

Development of adequate milk chilling and storage mechanism at village level to withhold milk from perishing during roadblocks due to landslides.


MART, Noida 136

Ginger

SIMFED

Retailers

(Outside Sikkim)

Consumers Consumers

Traders at

Jorethang, Reshi,

Namchi, Namthang,etc.

Retailers

(Outside Sikkim)

Consumers

(Local market)

Input Supply from farmer’s own sources

Seeds, bio-fertilizers, agriculture implements, equipment, cow dung

Rs 2500-3500/q

Village

level

traders

Rs 3500-4500/q

Rs 4500-5500/q

Rs 2000-2500/q*

Wholesalers(Delhi, Mumbai, Kolkata)

Wholesalers


Wholesalers

(Siliguri)

Retailers

(Gangtok, Namchi,

Jorethang)

Wholesalers

(Siliguri)

Rs 5500-7000/q

Multipurpose

Cooperative

Societies

* The rates given are for fresh Ginger and ‘q’ stands for quintal.

Traders at

Jorethang, Reshi,

Namchi,

Namthang,etc.

Ginger Farmers

Wholesalers

(Siliguri)

Salient features of Ginger Siliguri’s regulated market is the terminal market with year

round trading. Farmers get 1/3rd price paid by end consumers.

Bhainse, Gurubathane and Manjali are different varieties at the farmer level. Reshi, Melli and Singtam are qualities at the market level.

Trading of Ginger (by the book) to Siliguri is often not viable

Constraints Diseases, soft rot, availability of organic curative solutions

Lack of basic value addition

Inadequate market infrastructure

Availability of credit

Roadblocks and market failure risks


MART, Noida 137

Critical Intervention Points Formal arrangement with the Horticulture department for ensuring adequate supply

of Ginger seeds and fertilizers to farmers.

Support KVK and ICAR in speedy research of appropriate organic fertilizers, fungicides and pesticides.

Appoint implementing agencies and develop village level service providers to help famers link with need based government schemes and private services.

Create village level cadre of technical persons to provide technical services to farmers.

Regular training and exposure visits to best practitioners in the local area can help poor farmers.

Set up new cold stores after feasibility study.


Develop partnership with existing MFIs and banks encourage them to develop loan product for Ginger cultivation based on its economics.


Cleaning, sorting and grading should be taken up at the village level by farmers to maximize profits.

Capacity building of farmers should be done in taking up elementary value addition.

There is scope for collectivizing farmers to sell collectively and directly to higher order markets at towns and Gangtok for better price realization.

Guide farmers for collective sourcing of seeds and marketing.

Pig rearing

Pork seller

margin: Rs

1000/quintal

Pork: 110 -

120/Kg

Pig Farmers

Pork

shops in

Namchi,

Gangtok,

Jorethang

etc

Consumers Pig Farmers

Input Supply

Fodder, Pig feed, nutrient supplements,

implements, equipment, etc.

Temporary

shops in

haats across

Sikkim

Pig for pork: Rs

100-110 per kg

Breeding piglets:

Rs 2000-200 / piglet

Piglets for

breeding purpose


MART, Noida 138

Salient features of Pig rearing

60% of HHs keep indigenous variety of pigs. 4-5 pigs per HH.

The current demand of Pork in Sikkim is 550MT and supply is only 150 MT per annum.

Constraints

Availability of water and fodder round the year

Non standard package of practices

Low productivity of indigenous pigs

Availability of good breed pigs

Access to Credit

Critical Intervention Points Establish a formal arrangement with the AHVS department for ensuring

availability of good breed pigs.

Identify and promote specific cluster of villages for specially producing fodder.

Ensure adequate availability of mineral mixtures and nutrition supplements at all project village levels.

Create village level cadre of technical persons to provide technical services to Pig rearing farmers regarding productivity enhancement.

Regular training on best practices and exposure visits to best practitioners in the local area.


Develop partnership with existing MFIs and banks encourage them to develop specific loan products for commercial Pig rearing farming and expansion.


Guide Pig rearing farmers for collective sourcing of feed and fodder to reduce operational costs.

Appoint implementing agencies and develop village level service providers


MART, Noida 139

Floriculture

Rs 8-10/stick

Rs 10-15/stick

Rs 2-3 /stick SIMFED

Floriculture Farmers

Retailers

(Outside

Sikkim)

Mainam Gardens

Private Limited,

Namchi

Retailers

(Outside Sikkim)

Input Supply

Saplings, NPK, fertilizers, fungicides, floriculture implements, cow

dung

Village

level

traders

Wholesalers, Agents

(Delhi, Mumbai,

Kolkata)

Wholesalers

(Delhi, Mumbai,

Kolkata)

Retailers

(Siiliguri,

Gangtok,

Namchi)

Consumers Consumers Consumers

Rs 1-2 /stick

Alstroemaria (normal stick)

Salient features of Floriculture

High investment and technically intensive activity. Very strong support system by HCCD. Alstromeria (Peruvian Lily) and Zanderdeschia (Cala Lily) proposed

for villages at a minimum height of 4000 ft from the mean sea level. Gerbera and Carnation for villages below 4000 ft from the mean sea

level.

Flowers from the project area mostly sent to domestic markets with very little or no exports.

Constraints Access to direct sources of seeds and tubers Inclusion of poor in the activity Lack of adequate marketing infrastructure (cold chain) for exports Access to credit Road blocks and market failure risks


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Critical Intervention Points Identification of interested poor farmers and establish a formal arrangement

with the HCCD department for ensuring adequate supply of inputs. Convergence of the department support with the project is crucial.

Support HCCD department, SIMFED, KVK and ICAR to take up research for developing appropriate seeds/tissues/bulbs for floriculture which is otherwise very expensive and have to be imported.

Appoint implementing agencies and develop village level service providers to help famers link with need based government schemes and private services.

Create village level cadre of technical persons to provide technical services to farmers.

Regular training and exposure visits to best practitioners in the local area can help poor farmers.


Develop partnership with existing MFIs and banks encourage them to develop loan product for Floriculture cultivation based on its economics.


Promote the activity in a cluster to optimize input costs and transport expenses.

There is scope for collectivizing farmers to sell collectively and directly to higher order markets through SIMFED or Cooperative retail outlets in Gangtok for better price realization.

Guide farmers for collective sourcing of inputs and marketing to reduce operational costs.

(Rural tourism)Homestay

Domestic tourists International Tourists

Village based tourism societies in Sikkim

(Kewzing, Hee Bermoik, Yoksum, Lachen, Lunchok, Maniram,

Rong, Jaubari, Darap etc)

International

Travel agents

Travel agents

in Sikkim

Travel agents

outside

Sikkim

Travel agents

in Sikkim

Web site

booking

20% referral

commission

Sikkim Tourism department,

ECOSS, Help Tourism Pvt. Ltd

Homestay

Households

Homestay

Households

Homestay

Households


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Salient features of Rural Tourism 80% domestic and 20% international toursists

20% referral commission

No registration and legal norms by govt. yet

Constraints Infrastructure bottlenecks for the poor

Access to credit

Capacity building of entire family on various aspects like waste management, ettiquettes, etc.

Associated sectors like health care, law and order, environment etc.

Sensitivity of tourism Market, road blocks etc.

Critical Intervention Points Organize poor households into collectives in the form of societies or SHGs to link

them with local banks to ensure their financial inclusion.

Develop partnership with existing MFIs and banks encourage them to develop loan product for Homestay based on its economics.


Establish formal arrangements with the Sikkim Tourism department, ECOSS, Help Tourism Pvt. Ltd etc for ensuring adequate capacity building of the target community through training, exposure visits to successful cases and handholding. Special modules can be developed for delivering special capacity building to community on various highlighted issues in tourism

Appoint implementing agencies and develop village level service providers to help mobilize the community and link them with various aspects of environment, health and sanitation along with tourism.

Establish proper community managed waste management systems at the village level.

Detailed health trainings should be imparted to community on how to avoid infection and maintain a healthy homestay business.

Guide the beneficiaries for collective action and form societies on village based homestays through implementing agencies.

Create village level cadre of knowledgeable persons to establish linkages with various institutions regarding tourism.


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SummaryProduce /

Product

Intervention

Suggested

Size of activity suggested Convergence and

partnership

potential

Unit of

activity

Fund

requirement

(Rs)

RoI

(%)

Cow Milk Improved practices in

dairy farming both

project districts

3 cross bred

cows per house

hold

151598 29.43 AHVS department and Sikkim

Milk union.

Ginger Improved package of

practices for Ginger

cultivation in both

project districts

1 acre 24300 73.6 Wholesalers, HCCD

Department, SIMFED,

Progressive farmers and

Financial institutions

Pig Rearing of American

Hampstead variety of

pig by adopting

improved package of

practices

6 pigs (5 female

and 1 male) per

household

209234 36.2 Wholesalers and retailer,

Inputs suppliers ,

Progressive farmers,

Financial institutions

And AHVS department

Floriculture Cultivation and

marketing of

Alstroemeria flowers

400 saplings

under 1 poly

house of 90 ft

by 22 ft

263200 10.9 HCCD Department, SIMFED,

Mainam Gardens, Other

Wholesalers and retailers,

Inputs suppliers ,

Financial institutions and

Progressive farmers

Rural tourism Promotion of

Homestay based Rural

Tourism

1 household

constructing

additional room

for 4 persons

462400 20.3 Tourism Department, various

cooperative societies involved

in rural tourism, ECOSS, Help

tourism, TASS etc

Implementation Phase I – Preparedness at the community level

Cluster selection Social mobilization and institution building Preparation of business plan Capacity building

Phase II - Launching of the unit Backward linkages Service delivery Market access

Phase III – Up-scaling Monitoring and evaluation Strengthening Institution Legal aspects


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Thank You


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Annexure B: List of Participants in stakeholder consultation workshop (9th

February 2011)


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Documents

Livelihood Based Agri Business and Market Studies for … Livelihood Study Report of...Livelihood Based Agri Business and Market Studies for North East Rural Livelihood Project Final