Understanding One Village One Product in Japan, Thailand and Nepal Ganesh Shakya Agro Enterprise Centre / Japan International Cooperation Agency

This book is published with funding from Japan International Cooperation Agency (JICA) and technical support from Masahiro Kawamura, PhD, JICA Expert for Commercial Agriculture Promotion / One Village One Product for the promotion of One Village One Product Programme implemented by the Government of Nepal and Federation of Nepalese Chambers of Commerce and Industry.

Responsibility for the contents and opinions expressed on this book rests solely with the author.

Author:

Ganesh Shakya, Senior Programme Manager, Agro Enterprise Centre, Federation of Nepalese Chambers of Commerce and Industry

Publisher:

Japan International Cooperation Agency (JICA) Nepal Office,

Block B, Karmachari Sanchaya Kosh Building, Hariharbhawan, Lalitpur, Nepal

Mail: Post Office Box 450, Kathmandu, Nepal

Tel: +977-1-5010310 / 5010305 / 5010311

Fax: +977-1-5010284

Date of Publishing:

September 2011

This copy of the book has been supplied on condition that anyone who consults it is understood to recognise that its copyright rests with the Author and JICA and that no quotation from the report, nor any information derived therefrom, may be published without the Author and JICAs prior, written consent.

Understanding One Village One Product in Japan, Thailand and Nepal Ganesh Shakya Agro Enterprise Centre / Japan International Cooperation Agency

i

Preface

It is my great pleasure to help publish an article, Understanding One Village One Product in Japan, Thailand and Nepal in Nepal written by Mr Ganesh Shakya who is my colleague working as Senior Programme Manager at Agro Enterprise Centre, Federation of Chambers of Commerce and Industry. This is the first book which describes the history and effect of original Japanese OVOP movement and its dissemination to Thailand and Nepal. In his article, I found it particularly valuable that he describes the different natures and characteristics of OVOP in the 3 countries, yet shows that they have strikingly similar messages: importance of rural entrepreneurship with positive participation at grassroots level for the development of their local pride, local materials and local employment. As he describes in his articles, One Village One Product movement was born 30 years ago in Japan, my native country, and has been adopted by various countries and regions in the world, including Nepal. He has been working as the Senior Programme Manager of One Village One Product Programme since its inception in Nepal in 2006. I acknowledge that he is the person who contributed to the successful operation of this One Village One Product Programme in Nepal and who knows best about achievements and potentials, as well as difficulties, in the production and marketing of all the One Village One Product items in Nepal. I highly appreciate his hard working and professional nature for his work, and wish him to be so in future. I hope that he will continue writing such a meaningful article as this for many years to come. I wish him great success in his professional work.

Masahiro Kawamura, PhD JICA Expert for Commercial Agriculture Promotion / One Village One Product AEC, FNCCI / Ministry of Agriculture and Cooperatives

ii

Prologue

It is my great pleasure to express few words pertaining to a book "Understanding One Village One Product in Japan, Thailand, and Nepal" written by Ganesh Shakya Senior Program Manager of this Centre. He is working in this Centre since last six years. In Nepal, OVOP was introduced in 2006 and Mr. Shakya is closely involved in One Village One Product Program since its inception period. The OVOP program in Nepal has successfully completed its 5 years of operation. The Government of Nepal has given OVOP a top priority and extending the program in this fiscal year as well as in the years to come. At a time when OVOP is getting popularity in Nepal, this book is sure help understanding the OVOP concept and practices. The author has cited very interesting example of OVOP Japan and tried to compare with OTOP Thailand and OVOP Nepal. The author has clearly explained the fundamental Principles of OVOP Japan that helps understanding OVOP and also helps effective implementation of the program in Nepal in the days to come. I found the book is first in Nepal of its own kind. I hope the book will be helpful to the implementers of the program as well as benefits the rural community who are interested in launching of the program. I as a Member Secretary of the OVOP Secretariat believe that the book will help those who are working for revitalising the rural community through OVOP program. I really appreciate Mr. Shakya's endeavour and urge him to continue this type of creative and professional works in the future too. Finally, I am very much thankful to JICA Office Nepal for publishing the book and also would like to extend my sincere thanks for supporting us in enhancing OVOP in Nepal.

Pradip Maharjan

CEO Agro Enterprise Centre Member Secretary OVOP Secretariat

iii

Acronym and Abbreviation

AEC Agro Enterprise Centre ASC Agriculture Service Centre DADO District Agriculture Development Office DCCI District Chamber of Commerce and Industry DFTQC Department of Food Technology and Quality Control DOPIC District OVOP Program Implementation Committee FNCCI Federation of Nepalese Chambers of Commerce and

Industry JETRO Japan External Trade Organization MoAC Ministry of Agriculture and Cooperatives MoICS Ministry of Industry, commerce and Supply MoLD Ministry of Local Development NARC National Agriculture Recearch Centre NPC New Plum Chestnut OHOP One Hamlet One Product OOIEPC Oita OVOP International Exchange Promotion Centre OPC OTOP Product Champion OTOP One Tambon One Product OVC OTOP Village Champion OVOP One Village One Product PPP Public Private Partnership VDC Village Development Committee

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Table of Contents

Preface........................................................................................................... i Prologue ....................................................................................................... ii Acronym and Abbreviation........................................................................... iii Table of Contents ........................................................................................ iv List of Tables ................................................................................................v List of Figures ...............................................................................................v Chapter 1: Introduction .................................................................................1 Chapter 2: OVOP in Japan...........................................................................1 Oyama-Machi Experience.........................................................................1 Starting of the Movement ..........................................................................2 Principles of OVOP ...................................................................................2 OVOP products in Oita, Japan..................................................................3 Role of Government ..................................................................................5 Role of Leaders.........................................................................................5 Conclusion ................................................................................................6

Chapter 3: One Tambon One Product in Thailand.......................................6 Introduction ...............................................................................................6 Philosophy, Activities and Objectives .......................................................7 Administrative Structure and Committees.................................................8 Types of OTOP .........................................................................................9 OTOP Promotion.....................................................................................10 Product Sales Trend ...............................................................................12 OTOP focus in 10 years Road Map ........................................................13 Conclusion ..............................................................................................13

Chapter 4: OVOP Programme in Nepal .....................................................14 Background .............................................................................................14 Initiation ...................................................................................................14 OVOP Programme..................................................................................15 OVOP Nepal Products ............................................................................16 Role, Duties and Responsibilities of the Committees .............................20 Programme Partners...............................................................................22 Role, Duties and Responsibilities of the Partners...................................23 Hiramatsu OVOP Award 2010 ................................................................25 Support by the Government of Japan .....................................................26 Strength and Weakness..........................................................................26 Conclusion ..............................................................................................28

Chapter 5: Overall Conclusion....................................................................28

v

List of Tables

Table 1 OVOP products in Japan in 2002.................................................. 3 Table 2 OVOP Product price compared with Motorcars ............................ 4 Table 3 OTOP Producer registration Year 2010 ...................................... 10 Table 4 OTOP Product Registration Year 2010 ....................................... 11 Table 5 OTOP Quality Assurance ............................................................ 12 Table 6 Number of OTOP products with Star........................................... 12 Table 7 OTOP 10 Years Road Map ......................................................... 13 Table 8 OVOP Products in Nepal............................................................. 16 Table 9 Annual budget Allocation............................................................. 19 Table 10 Composition of Basket Fund Sub-Committee ........................... 20 Table 11 Composition of District Committee ............................................ 21 Table 12 Government Partners ................................................................ 22 Table 13 Private Sector Partners ............................................................. 23

List of Figures

Figure 1 Sales Trend ................................................................................ 13 Figure 2 Planning Process........................................................................ 19 Figure 3 Shiitake mushroom and distilled barley spirit ............................. 35 Figure 4 OVOP Hiramatsu Award ............................................................ 35 Figure 5 Nepalese participant with Dr Hiramatsu in Japan ...................... 35 Figure 6 Junar orange from Ramechhap and Sindhuli............................. 36 Figure 7 Lapsi candy and lapsi fruits from Bhaktapur .............................. 36 Figure 8 Bel tree, bel juice stock, bel fruits and bel squash ..................... 36 Figure 9 Trout raceway, trout and trout for sale in Nuwakot and Rasuwa37 Figure 10 Coffee nursery, coffee trees and processed coffee from Kaski

and Syangja ............................................................................... 37 Figure 11 Lokta farmer with Lokta shrubs, Lokta bark, and Lokta Hat..... 37 Figure 12 Orchid farming in green house and orchid flowers................... 38 Figure 13 Agro Tourism in Begnas Lake are (restaurant, fish pond,

panoramic view) ......................................................................... 38

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Chapter 1: Introduction

Isson Ippin meaning One Village One Product (OVOP) in Japanese is a community centred and demand driven rural economic development programme that originated in Oita Prefecture, one of 47 Prefectures in Japan in 1979. OVOP is now a popular term of rural development in Asia followed by Africa and Latin America (Annex 1). A credit goes to Dr. Morihiko Hiramatsu, the former Governor of Oita Prefecture, who named and promoted OVOP as a campaign with a vision of revitalising remote villages at a time when there was a problem of depopulation due to the migration of village youngsters to big cities for seeking employment. Dr Hiramatsu retired from the Governor in 2003, and is now the President of Oita OVOP International Exchange Promotion Committee (OOIEPC), working for the promotion on OVOP all over the world.

Chapter 2: OVOP in Japan

Oyama-Machi Experience Oyama-machi is a beautiful village nestled in mountains 100 to 500 meters high with very little open country. Three quarters of the area is covered in mountain forest whereas half the remaining area is covered with orchards for plums, chestnuts, prunes, grapes, and pears

1. Previously, local people used to work as wood cutters or

seasonal migrant labourers. The Central Government at that time urged people to plant rice but the local people denied the Central Government plan. In 1961, Mr. Yahara, the Mayor of Oyama town launched a New Plum Chestnut (NPC) strategy aiming at transforming the local agricultural production from rice to more promising plum and chestnut and this improve the livelihood of the hilly town which was the poorest in Oita Prefecture. The challenging attempt of Oyama town whose motto was let's plant plums and chestnuts to go to Hawaii! proved successful in 1967 when the local people really visited Hawaii with their increased income. This is an example of right decision of the local people choosing right products in right time to revitalise the town. The NPC later changed its name and natures from an economic to a social one: New Personality

1The Past, Present and Future of the Town of Plums and Chestnuts, by Oyama-Machi, a hand out in JICA Training Community Capacity and Rural Development Promotion for Asia Countries - One Village One Product on June 16, 2011.

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Combination first and then New Paradise Community which aimed at human and community improvement

2.

Starting of the Movement The OVOP at the very beginning was proposed to prevent depopulation and loss of energy in Oita Prefecture, to find and nurture products/industries that could best reflect and benefit each region, and to eradicate heavy dependency upon government, and to promote autonomy and willingness amongst regional people

3.

Dr Hiramatsu proposed the movement to regional leaders and delivered lectures on the movement to people of all sectors in all the regions of Oita. The movement was further publicised through mass media. Research and guidelines facilities were established for technical support in various industries within the prefecture. A special system for the distribution and sales of OVOP products was set up and finally the achievers of OVOP were rewarded

4.

Principles of OVOP The OVOP movement defined by Oita OVOP International Exchange Promotion Committee is based on the following three principles

5.

1. Think Globally, Act Locally 2. Self-reliance and Creativity 3. Human Resource Development The first principle Think Globally, Act Locally that is meant for the creation of globally acceptable products and/or services based on local resources. Local residents are expected to create globally marketable products and/or services which represent local peoples pride in material and cultural richness of their home villages/towns. The story behind any product or its development helps attract consumers attention such as local flavour will help add values to local products while the use of local human and material resources will help make economic activities sustainable.

2 Stenning and Miyoshi (2008) Knowledge and Networking Strategies for Community Capacity Development in Oyama-machi: An Archetype of the OVOP Movement, Journal of OVOP Policy vol.1 Oct, 6, 5-20. 3 Oita OVOP International Exchange Promotion Committee, OVOP Movement: Why was OVOP proposed?, at http://ovop.jp/en/ison_p/haikei.html 4 Oita OVOP International Exchange Promotion Committee Bulletin 5 Oita OVOP International Exchange Promotion Committee, OVOP Movement: Principles of OVOP, at http://www.ovop.jp/en/ison_p/jissen1.html

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The second one is Self-reliance and Creativity. These two factors are crucial since local knowledge and instinct can aid the discovery of buried treasures in each village/town. Everything local is potentially valuable, but whether the potential turns into a reality depends on the initiative and effort of the local people.

The last one is Human Resource Development which aims at fostering local people with challenging and creative spirit. For example, the regional development policy of Japan has traditionally focused on construction of infrastructure like roads and bridges. The OVOP movement, in contrast, emphasises visionary local leadership with challenging and creative spirit. The success of any OVOP product/service largely depends on its quality - developed and improved by local people themselves

OVOP products in Oita, Japan In the context of Nepal, majority of people think that OVOP means only one product in one village. Actually, this is not the philosophy of the Oita movement. A village might have one or more products or a single product can be developed in one or more than one village. In addition to agricultural items any other products, services or events could be a successful product under OVOP. It is necessary to understand that the products should have local essence and worth for value addition and be of globally accepted products. It is already been 30 years since OVOP was first introduced in Oita Prefecture. Today's 300 or so OVOP products include both tangible products. Tangible products include agricultural products, while intangible products include building farcicalities, cultural activities, rural development activities and conservation activities (Table 1)

6.

Table 1 OVOP products in Japan in 2002 Products / activities Number Agricultural products 338 Building facilities 148 Cultural activities 133 Rural development activities 111 Conservation activities 80

6 Oita OVOP International Exchange Promotion Committee, OVOP Movement: Fruits of OVOP, at http://www.ovop.jp/en/ison_p/seika.html

4

Tangible Products Shiitake mushrooms, (Figure 3), Kabosu limes, barley spirits (Figure 3), and greenhouse mandarin are the branded OVOP products of Japan. Shiitake mushrooms is one of the best products of Oita. In 2001, a total of 1425 tons Shiitake mushrooms were produced which accounts 28 % of domestic market share

7. Similarly, another product

Kaboshu limes is the product that produces only in Oita. Its annual production as recorded in 2001 was 6050 tons. Greenhouse mandarin is another unique product ranking Oita's 4th production. Its annual production is recorded to 5630 tons. Other products like Bungo Beef that topped the Japanese Beef Grand Championship in 2002. It is famous for quality throughout Japan. Oita's Distilled barley spirits (fig 2) is also equally famous product of OVOP. The combination of Kaboshu lime juice and barley spirits is famous and smooth in taste. Oitas produces like Shiitake mushroom (Figure 3), Kabosu lime, Greenhouse mandarin and distilled barley spirit (Figure 3) has now become national brands of Japan. The price of 100 gm dried Shitake mushroom costs US$ 28 (3,000 yen) whereas the price of a motor car, if calculated simply by weight, costs just US$ 1.9 (200 yen) per 100 gm (Table 2)

8.

Table 2 OVOP Product price compared with Motorcars Product Price (US$ per 100 gm) Dried shiitake mushroom 28 Distilled barley spirit 2.3 Greenhouse orange 2.8 Motorcar 1.9 Intangible Products In OVOP Japan, there is no limitation in product selection. Tangible or intangible, any product could be OVOP product. For example, Yufuin town and Kuju town both have successfully achieved regional development without compromising natural environment

9. Oita's

Soccer Team Trinita, Annual Wheelchair Marathoon are the events included in OVOP. Similarly, Beppu Argerich Music Festival and Oita Asia Sculpture Exhibition are another example of successful OVOP

7 Oita OVOP International Exchange Promotion Committee, OVOP Movement: Local Yet Global, at http://www.ovop.jp/en/ison_p/jissen1.html 8 OOIEPC Office. 9 Oita OVOP International Exchange Promotion Committee, OVOP Movement: Local Yet Global, at http://www.ovop.jp/en/ison_p/jissen1.html

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events. These are the example of the right choice of local products, quality consciousness and value addition wisdom of the local people.

Role of Government In Japan, there is no such OVOP program or project implemented by the Central Government. There are only some Prefectural Governments which supports OVOP. OVOP was initiated autonomously in 58 cities, towns and villages of Oita Prefecture

10. In

the year of its introduction, the number of OVOP products throughout the prefecture was 143, but 20 years later the figure had increased more than two-folds to 336. OVOP wasn't always met with success, and there were many trials and errors along the way. Yet, no matter how unpromising things seemed, the Prefectural government never attempted to provide subsidies for OVOP regions because they feared that such assistance would only hamper self-reliance and prevent lasting success of OVOP. Instead, the government assisted in product development and distribution. Through the establishment of institutions such as Agricultural Technology Centre, Mushrooms Research and Guidance Centre, Livestock Experimental Station, and Institute of Marine and Fisheries Science, the government offered guidance in production and processing technology. Distribution routes were opened and expanded by the efforts of the Prefectural government and the then governor Mr. Hiramatsu himself, who organised numerous fairs in major Japanese cities and abroad, where he personally advertised Oita's prospective products. Also, regional markets were set up throughout Oita to encourage local consumption of OVOP products. Moreover, groups and individuals with outstanding achievement in OVOP were honoured with rewards.

Role of Leaders OVOP's ultimate goal is fostering global-minded, challenging leaders, who could drive OVOP into further success

11. Regions that have

successfully adopted OVOP in the past all had such leaders at the frontier. A number of regional training schools have been founded to educate potential leaders and students of these schools usually work by day and study by night. By 2002, 10 years after the schools first opened,

10 Now OVOP is not officially supported by Oita Prefectural Government. Towns and villages people themselves promote OVOP with their own fund. It is up to them to continue OVOP or not. 11 Hiramatsu (2001) OVOP Movement, http://www.ovop.jp/en/ison_p/gaiko.html

6

there were 1,991 graduates, and they were all actively involved in OVOP in their respective regions and sectors. Training schools that were exclusively designed for each industry, such as Agricultural Training School, Commerce School, International College, Environment School, IT Academy and OVOP Women's 100 Member Group, were also established to nurture leaders in a wider range of fields

Conclusion The OVOP program started 30 years ago in a small village of Oita Prefecture, Japan as a community centered and rural economic development program now has been reached to different countries of Asia, Africa and Latin America. This program has given a good lesson of utilisation of local resource, local skills and local leadership in order to revitalise the poor condition of the village community. It has emphasised on self-reliance and creativity whereas attempt to discouraged the dependency nature. The OVOP in Japan is a cooperative, village or district level movement but not a central government program. Now, OVOP is not officially supported by Oita Prefectural Government. The local people of Towns and villages themselves are responsible for promoting OVOP with their own fund. The success of failure of the program depends upon the commitments and dedication of the local community. Identification of potential local resources, utilisation of local skills to promote the globally accepted products is the main theme of the OVOP Japan. The equation of local resource and local skills utilisation generates local pride creating Independence mentality amongst the local communities. This philosophy of OVOP Japan is equally applicable to Nepal also in order to sustainable development of OVOP Nepal.

Chapter 3: One Tambon One Product in Thailand

Introduction One Tambon One Product (OTOP) is a Thai version of OVOP. Tambon stands for sub-district. The OTOP is one among many Thai Government projects which aim for the development at the grass root level. The former Thai Prime Minister Thaksin Shinawatra launched OTOP in Thailand in 2001 up to 2006. OTOP is considered as one of the examples of successful programme under OVOP modality.

7

Since the OTOP idea was borrowed from Oita, Japan where village community is the focal point of the movement but, in the case of Thailand, it is a national perspective. In other words, OTOP is a national development policy of the Thai Government. Government announces poverty war and made policy to promote OTOP to confront the most alarmed problem of poverty. The contribution of Japan External Trade Organisation (JETRO) was very worth to promote OTOP in Thailand at its early stage. JETRO launched a one-year programme to support Thailand's development of OTOP and promote OTOP products in the Japanese market from January to December 2002. The targeted industries include textiles, wooden products, baskets, ceramics and mulberry papers. In conducting this programme, JETRO has coordinated with the OTOP committee, Department Export Promotion, and other related organisations in Thailand and Japan.

Philosophy, Activities and Objectives Philosophy The philosophy of OTOP is entirely based on three fundamental principles of Oita movement. The OTOP thus is a mechanism aimed to empower the local villages with the capacity to develop one unique major product of their own to conform with culture in each a locality. Main Activities The OTOP has focused on two main activities described as under: 1. To enlarge local product to marketing Product conforms to local culture and to be prominent point of locality. Including developed quality to enlarge market to local network, province and global market. 2. To produce and create in locality Use knowledge of human in locality to create product while government support equipment and new technology. Objectives The main objectives of OTOP

12 are as follows.

To increase employment and income in community

12 Peace Corps Thailand Volunteer Wiki, http://pcthailand.wetpaint.com/page/OTOP

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To strengthen and revitalise local community to be self-reliance in

area of local development

To promote local wisdom

To promote human resource and human capability, especially in developing local products in accordance with traditional ways of living and cultures

To promote creativity base on local way of life and culture Special Features The OTOP has attempted to discourage the government subsidy policy. The principle of this process doesnt emphasise about subsidy to a locality because it destroys self reliance ability. Government supports technique for developing quality of product. In marketing thought establish One Product Corporation for a way to spread products to market.

Administrative Structure and Committees The OTOP in Thailand has been extended in 70,787 villages within 7255 sub-districts (Tambon) of 878 districts of 76 provinces and Bangkok. In 2001-2002, the Thai Government announced to commence OTOP movement and OTOP Administrative Committee was formed. The committee is responsible for directing, supervising, and assessing all measures and activities regarding OTOP to fulfil its goals and objectives. The committee has formed 9 different sub-committees which were later replaced by 5 new sub-committees in 2003.

The following are the sub-committees

13 formed in 2003.

Administrative Sub-Committee Production Promotion Sub-Committee Marketing Promotion Sub-Committee Product Quality Development and Standard sub-Committee Regional OTOP Sub-Committee 1. Administrative Sub-Committee This sub-committee is responsible for execution and coordination of plans and strategies agreed by the OTOP National Administrative Committee. Similarly, the sub-committee coordinates with concerned authorities in relation to the operational planning and budgeting of the

13 International Relations Sub-Division, Community Development Department, Thailand

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set pals and strategies. It is also responsible to develop OTOP database and create information system with parties involved in the OTOP project. It is also responsible for monitoring and evaluation of the project. 2. Production Promotion Sub-Committee This sub-committee works for entire development of OTOP products. Fostering the quality enhancement, factor of production development, improvement of production process (value addition factors), promotion of local content usage are the major functions of the sub-committee.

3. Marketing Promotion Sub-Committee This committee is formed for the promotion of OTOP products marketing in domestic and international markets. It lay down marketing policies, action plans and marketing directions. It is also responsible for identification of distribution channels. Finding appropriate locations for the setting up of domestic and international distribution outlets is another important function of the sub-committee. Besides that, protecting intellectual property of the OTOP products is another responsible task of the sub-committee. 4. Product Standard and Quality Development Sub-Committee This sub-committee particularly deals in quality matters. The sub-committee foster facilities and provides guidance promoting product standard and quality enhancement. This includes giving advices on production techniques and product upgrading methods.

5. Regional/Provincial Sub-Committee The regional level sub-committee formulates policies and plans essential for the promotion and strengthening of local community. It works for strengthening of the producer's competitiveness through promotion of communities' network. It also helps enhancing producer's knowledge, skill, and expertise. Types of OTOP For product selection, there is no hard and fast rule or restriction in OVOP program. Any type of products like commodity, services, local culture, ways of life, tourism, traditions etc could be a potential product of OVOP. The selected product have local essence or not; local skills have been utilised or not, demand driven or not, globally acceptable or not, are the most important factor to be considered. Considering all these factors, OTOP has been extended in different sectors as under:

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Products Services Local culture/Ways of life Tourist Locations Traditions

OTOP Promotion

The OTOP has set up different activities to promote the project. They are OTOP Registration, OTOP City Fair, OTOP Product champion (OPC), Regional OTOP Fair, Entrepreneurship Development, Young OTOP Camp, Knowledge-based OTOP, OTOP Village Champion (OVC), OTOP Midyear Fair, and OTOP Tourism Village. These activities has been extended for registration of potential OTOP producers and the products, publicity and domestic market promotion, awarding STARS based on quality of the products, business promotion and value addition through, creation of knowledge based OTOP network that includes producers, government agencies, private sector and educational institutions, development of tourism in potential villages.

OTOP Registration There are three different types of producers group registered under OTOP Registration Year 2010 (Table 3). They are Community Occupation group; One-Person Owner group; and Small and Medium Enterprises (SMEs) group and registered producer groups whereupon 33,228 groups are involved.

Table 3 OTOP Producer registration Year 2010 Categories of Producers Number of Groups 1. Community Occupation group 22,200 2. One-Person Owner 10,303 3. Small and Medium Enterprises (SMEs) 725 4. Total 33.228 JICA Bi-Monthly Report, October, 2007, prepared by Orpan Nabangchang-Srisawalak

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Similarly, a total of 85,173 products have been developed under different categories registered in 2010. (Table 4) The products promoted by OTOP come under 5 different categories. They are food, beverage, fabric and dressing wear, furnishing, decoration and souvenir and herbal products.

Table 4 OTOP Product Registration Year 2010 Categories of Products Number of Products 1. Food 20,330 2. Beverage 3,073 3. Fabrics and Dressing Wear 21,386 4. Furnishing, Decoration and Souvenir 31,334 5. Herbal products 9,050 Total 85,173 JICA Bi-Monthly Report, October, 2007, prepared by Orpan Nabangchang-Srisawalak

Quality Assurance The product evaluation for branding of the products is done by the OTOP National Administrative Committee and the Ministry of Interior

14.

Community groups, SMEs and individual entrepreneurs must register their products to participate in this contest. Only one product can be submitted by each producer. The general evaluation criteria for the contest are: The product is exportable and has a brand quality, Production can be sustainable and with consistent quality, The product can provide customer satisfaction, and The product has an impressive background story.

The grading of each product is made at various administrative levels according to established official procedures. First, product quality will be scored for up to 30 points at the local level. Second, the marketing capability measured by the number of obtained markets and the period of group activities will be scored for up to 30 points. Finally, up to 40 points will be scored at the national level by the use of same criteria of quality and marketing. The five-star certificate is granted only to the product having more than 90 points and qualified as good quality and exportable (Table 5).The product scoring 80 to 89 points is branded as 4 Starred products which means a fairly good quality, nationally recognised and make exportable upon further improvement. One star product is defined as a

14 Kiyoto Kurokawa, Fletcher Tembo and Dirk Willem (2008) Challenges for the OVOP movement in Sub-Saharan Africa, ODI Working Paper 290.

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product unable to attain 2 stars due to its many weakness and difficulty for development.

Table 5 OTOP Quality Assurance

5 stars

90 points and above

Good quality, exportable

4 stars

80-89 points Fairly good quality, nationally recognised, exportable upon improvement

3 stars

70-79 points Average quality, able to attain 4 stars upon improvement

2 stars

50-69 points Able to attain 3 stars, periodically assessed

1 star below 50 points

Product is unable to attain 2 stars due to its many weakness and difficulty for development

Source: Adopted from http://www.pcthailandgigs.org

OTOP Product Champion Based on the score, 10,982 products have got star certificate as of OTOP Product Champion (OPC) Year 2000 in Thailand (Table 6). Table 6 Number of OTOP products with Star Category Number of Products 1 Star 477 2 Star 2654 3 Star 2904 4 star 3498 5 Star 1449 Total 10,982

Product Sales Trend The OTOP program was launched in 2001. In the same year, The OTOP product sales have been recorded to 245 million Baht i.e. equivalent to 8 million USD. The sales trend continued to increase in each year till the year 2008. In 2009, the amount of sales has been found slightly decreased. The sales figure again increased in 2010 which accounts 68,484 million Baht equivalents to 2283 million USD (Figure 1). This indicates the successful implementation of the program in Thailand. The sales trend of OTOP products is presented below.

13

Trend of OTOP Product Sales

0100002000030000400005000060000700008000090000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Year

S

a

l

e

s

i

n

T

h

a

i

B

h

a

t

Figure 1 Sales Trend

OTOP focus in 10 years Road Map The OTOP has focused on different development strategies. They had outlined 10 years development road map starting from the year 2002 to 2011 to boost up OTOP program. For each year, they have had a separate plan. The Year 2002 was announced as the year of in search of OTOP. Similarly, the year 2011 is a year for OTOP value creation for creative economy. The 10 year road map is as follows:

Table 7 OTOP 10 Years Road Map Year Categories 2002 In search of OTOP 2003 OTOP Product Champion (OPC) 2004 Standard Campaign 2005 OTOP Market Promotion 2006 In search of excellent OTOP 2007 Knowledge Based OTOP 2008 Entrepreneur Promotion 2009 OTOP Tourism Villages 2010 OTOP Network Promotion 2011 OTOP value creation for creative economy

Conclusion The OTOP Program was launched a decade ago in Thailand. The former Prime Minister of Thailand, Thaksin Shinawatra launched OTOP in 2001. Since the OTOP idea was borrowed from Oita, Japan where village community is the focal point of the movement but, in the case of Thailand, it is a national perspective. In other words, OTOP is a national development policy of the Thai Government.

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The philosophy of OTOP is entirely based on three fundamental principles of Oita movement. The program has focused on skill development, creation of unique products and promotion of market. The OTOP has extended in products, services, local culture (ways of life), tourist locations, and traditions sectors. OTOP in Thailand is a national agenda for economic development from the grass root. Therefore, the role of government including the prime minister is very significant. The stakeholders are very active and and work in an integrated way. The program has given top priority to the community, groups and local wisdom and utilised them very prudently. The participation of local community in the program is very encouraging. The competent government field workers work for the program. Similarly, they are conscious about quality and competitiveness. As a result, they have promoted different OTOP branded products in domestic as well as in the international market. Finally, OTOP of Thailand could be concluded as a successful program.

Chapter 4: OVOP Programme in Nepal

Background Inspired by the successful implementation OVOP in Japan, many Asian, African and the Latin American countries have started adopting the program as such in their respective countries. China was the first nation outside Japan to adopt OVOP movement. In 1980, the city of Shanghai initiated a movement with a slogan One Hamlet One Product OHOP. Similarly, the former Thai Prime Minister Thaksin Shinawatra launched One Tambon One Product or OTOP in Thailand in 2001. Tambon means sub-district in Thai version. OTOP is considered as one of the examples of successful program under OVOP modality. The impact of OVOP has spread widely in Asian countries and Nepal could not remain untouched. As a result, Nepal Government in 2006 spelled out the enforcement of OVOP in Nepal through its Budget Speech.

Initiation The success of OVOP program in many countries including Thailand has inspired the Federation of Nepalese Chambers of Commerce Industry (FNCCI)-an umbrella organisation of the Nepalese private sector to initiate OVOP in Nepal in a form of national prioritised program. The FNCCI had discussed and dialogued with different

15

Ministries in order to launch the OVOP program in Nepal. The Ministry of Industry, Commerce and Supply (MoICS) now The Ministry of Industry was also making its best effort to compliment OVOP program through the possible technical and infrastructural supports from the Government of Japan under its Aid-For-Trade initiatives. In 23rd March, 2006 a meeting was held at Ministry of Agriculture and Cooperatives (MoAC) in the presence of the Minister and the Secretary of the MoAC, President of the FNCCI, Executive Director of Agro Enterprise Centre (AEC)/FNCCI, and the under secretaries to discuss on the concept note about launching OVOP program in Nepal prepared by AEC/FNCCI. It was suggested At the same time, a suggestion was also made to form a working task force under the chairmanship of the President of FNCCI for the implementation of the program. AEC/FNCCI in coordination with Joint Secretary of the Agro Business Promotion and Statistics Division, Directorate of Fisheries, National Citrus Development Program has worked out in detail on product development like Junar (Sweet Orange), Lapsi (Hug Plum), Rainbow Trout, and Bel (Stone Apple) to be promoted in OVOP program. On 14th of May, 2006, a meeting of the High Level Committee of MoAC under the chairmanship of Honorable Minister for Agriculture and Cooperatives took place. The Secretary of MoAC, MoICS, Ministry of Local Development (MoLD), Joint Secretaries, Third Vice President of FNCCI, Chairman of AEC Board, and Executive Director of AEC/FNCCI were present in the meeting. The Committee has principally agreed to implement OVOP program as proposed by FNCCI. It has decided that the High Level Committee of MoAC would direct the program at a policy level and a proposed Working Committee.

OVOP Programme OVOP in Nepal is a Public Private Partnership (PPP) based program which was officially launched in July 17, 2006 for 5 years as a pilot project. The program in its first year with 4 products has extended in 7 districts. In the second year of its operation, the program has been extended in two new additional districts with new products. Similarly, in the fourth year, the program was successful to introduce two new products in two additional districts. By the end of five year of its operation, 8 products in 11 districts have been extended.

16

During the period of 5 years, the program has basically focused on production and marketing side. Different agriculture inputs and technical training had been provided to the producers for the extension of the production area as well as quality production. Similarly, different inputs and technical training had been given to improve market and marketing system development.

OVOP Nepal Products Products supported by OVOP Programme in Nepal

15 are shown in

Table 8.

Table 8 OVOP Products in Nepal Products Districts Introduced

Year 1 Junar (citrus Sinesis (L) Osb) Ramechhap and

Sindhuli 2006

2 Lapsi (choeropondias axillaries)

Bhaktapur 2006

3 Bel (aegle marmelos (Linn) correa)

Bardiya and Siraha

2006

4 Rainbow Trout (oncorhynchus mykiss)

Nuwakot and Rasuwa

2006

5 Cymbidium Orchid Lalitpur 2007 6 Agro Tourism Lekhnath, Kaski 2007 7 Lokta paper Dolkha 2009 8 Coffee (Coffea Arabica /

Coffea canephora) Syangja 2009

Junar (citrus Sinesis (L) Osb) Junar is a typical fruit of Nepal which is also know as sweet orange (tight skin) (Figure 6). Its botanical name is Citrus Sinesis (L) Osb. Lapsi (choeropondias axillaries) Lapsi is a unique fruit of Nepal which is rarely found in other countries (Figure 7). The botanical name is Choeropondias axillaries. The other familiar name is mombin or hug plum.

15 Annual Report of OVOP Nepal 2010

17

Bel (aegle marmelos (Linn) correa) Bel is a wild fruit of Nepal having plenty of Ayurvedic values (Figure 8). It is also known as stone apple or golden apple. The botanical name is aegle marmelos (Linn) correa.

Rainbow Trout (oncorhynchus mykiss) Rainbow trout is scientifically named as oncorhynchus mykiss which was introduced in Nepal from Japan in 1988 (Figure 9). Lokta (daphne papyracea) The botanical name of Lokta is Daphne papyracea also known as Nepali Handmade Paper (Error! Reference source not found.). Lokta is flowering shrub that is non-timber forest species. The inner bark is popularly known as Lokta

16.

Cymbidium Orchid Sunkhari is Cymbidium Orchid. Its botanical name is Orchidacea (Figure 12). The orchid plants are brought in Nepal from Darjeeling, Sikkim and Japan and started commercial farming of orchid in 1996

17.

Agro Tourism Agro Tourism is one of the products of OVOP Nepal (Figure 13). This program is launched in Lekhnath, Kaski district aiming at village tourism promotion. A series of agriculture activities are tied up with the program to attract domestic as well as international tourists. Coffee The botanical name of coffee is Coffea Arabica / Coffea canephora (Figure 10). The coffee produced in Nepal is said to be organic because coffee in Nepal is grown in the altitude of 2500-4500 feet above sea level. Working Procedures For execution of OVOP in Nepal, an especial working procedure called Ek Gaon Ek Utpadan (OVOP) Karyekram Karyanoyen Karyebidhi has been developed which was amended in 2007. This is an official document as a guideline to implement OVOP in Nepal. The working procedures have been drafted by AEC and finally passed by High Level Committee of MoAC in 2006. 16 Ganesh Shakya, OVOP: Lokta Handmade paper in Rising Nepal, 2 June 2009 17 Ganesh Shakya, Cymbidium Orchid Farming in Kathmandu Valley, in Rising Nepal, 28 August 2009

18

Objectives The main objective of the program is to alleviate poverty in local community and to benefit local producers and the business enterprises through promotion of demand driven and export potential local products utilising local resources and the local skills. Other specific objectives include: Quality and Commercial Production Value Addition Brand Promotion Internal and External Market Promotion Overall Economic Development Theses objectives are based and designed on the 3 fundamental principle of OVOP Japan. Working Modality The OVOP in Nepal is a PPP based program. Therefore, the program implementation part is divided into production and marketing sectors. FNCCI as a private sector takes care of market promotion activities whereas the government sector looks after production side. Planning Process Figure 2 represents the planning process of OVOP in Nepal. Since the program is new in Nepal, the planning process is based on top down process in the preliminary stage. For example, products have been selected jointly by the government and the FNCCI in the beginning year. However, the product have selected by the technical experts on the basis of localness, uniqueness, market demand and export potentiality. Later, bottom up planning process has been exercised. The annual program is prepared by the related District Committees in consultation with local producers, local enterprises, related local government organisation and other stakeholders on the basis of budget ceiling given by AEC, the Secretariat of OVOP. The proposed annual program is forwarded to AEC for review. The AEC will examine the proposed program, budget and the activities at length and returned back to the concerned District Committee to make more comprehensive and effective if necessary with suggestions. Then, AEC will present the proposed annual program to the Central Committee for rectification. The rectified program will be forwarded to the Planning Division of MoAC for final approval.

19

Figure 2 Planning Process

Budget Provision This program is totally funded by the government of Nepal under unconditional grants heading called P2 program. Within the period of five years, the government has allocated a total budget of Rs 133.5 million which is equivalent to US $ 2 million (Table 9).

Table 9 Annual budget Allocation Year Budget (Rs million)

2006/07 3.5 2007/08 30 2008/09 30 2009/10 30 2010/11 40 Total 133.5

District OVOP Committee

Planning Division, MoAC

OVOP Secretariat (AEC)

Local Producers

OVOP Central Committee

20

Role, Duties and Responsibilities of the Committees For program implementation, there are 3 major committees two in central level and one in district level. They are OVOP Central Committee, Basket Fund Sub-Committee and District OVOP Program Implementation Committee. The role of each committees and sub-committees has been described below. OVOP Central Committee OVOP Central Committee has 20 members chaired by the President of FNCCI as coordinator. This committee has representatives from 8 different Ministries, National Planning Commission, Central Bank, two departments under MoAC (Annex 2)

18.

The committee endorses the annual budget, does the necessary amendments in the working procedures and directs the OVOP Secretariat for better implementation of the program. The committee reviews the annual progress report and makes necessary improvement. It has right to appoint auditor, fixing the remuneration and forming new sub-committees according to need. The committee is also works as facilitator and establishes coordination among different organisations associated with the program. The committee has right to call the meeting any time as and when needed. There is also a provision of invitees to the committee meeting.

OVOP Secretariat Recognising the role of the FNCCI in the promotion of agribusiness in Nepal and its capacity to play a facilitative/coordination role, the secretariat for the OVOP program is entrusted to the AEC the technical wing of the FNCCI. The Secretariat is solely responsible for the implementation and monitoring and evaluation of the whole program. Basket Fund Sub-Committee This sub-committee is formed to manage the Basket Fund. It has 5 members headed by the Joint Secretary of Agri Business Promotion and Statistics Division, MoAC (Table 10)

19.

Table 10 Composition of Basket Fund Sub-Committee

18 OVOP Working Procedures 2006/07 19 OVOP Working Procedures 2006/07

Organisation Portfolio

1 Joint Secretary - Agri Business Promotion and Statistics Division, MoAC

Coordinator

21

The sub-committee does the program budget expenditure management as approved by the central committee. Rectifying the proposal made by the OVOP Secretary relating to adjustment of budget and to facilitate easy operation of the program is one of the functions of the sub-committee. It has right to examine financial progress report and book keeping. It works for fast releasing of budget and keep transparent. Similarly, it urges for timely auditing of annual budget program and submits the report to the central committee. District OVOP Program Implementation Committee This is a core committee formed in district level to implement the program in the OVOP launched district. This is a five member committee headed by the president of District Chamber of Commerce and Industry (DCCI) as a coordinator (Table 11)

20. The chief of the

District Agriculture Development Office (DADO) represents the committee as a sub-coordinator. The planning officer of District Development Committee and two other persons from related organisations represent as a member of the committee.

Table 11 Composition of District Committee

This committee is sole responsible for execution of the program in local level. The committee prepares the annual budget and program and submits to the OVOP Secretary to get approval. It also works as a coordinator between the local producers/business entities and the

20 OVOP Working Procedures

2 Representative Planning Division, MoAC Member 3 Representative Ministry of Industry Member 4 Representative Ministry of Local Development Member

5 Executive Director Member Secretary

S.No. Organisation Portfolio

1 Chairman District Chamber of Commerce and Industry (DCCI)

Coordinator

2 District Agriculture Development Officer (DADO)

Sub-Coordinator

3 Planning Officer Village Development Committee (VDC)

Member

4 2 Representatives from related local government offices and /or from other institutions

Member

22

OVOP Secretary. The committee can propose for additional program with justification based on local communitys demand. The committee is responsible solving any kinds of problem arises in the field level. Keeping transparent accounts, reporting of the monthly, trimester, and annual report is the duty of the committee. It organises fairs and exhibition in the district and also participate in the inter district fairs and exhibition to promote the OVOP products. The committee also does the monitoring and evaluation of the programme and responsible for making necessary improvement. It works closely with DADO to facilitate local producers in production side.

Programme Partners Since OVOP in Nepal is a PPP based programme, it has different partners in both public and private sectors. Government Partners There are 5 government stakeholders in central level involving directly in the program (Table 12). They provide technical support to the producers. The program formulates the annual program and allocates the budget which follows the same process to get approval as described above.

Table 12 Government Partners

Organisation Level

1 Ministry of Agriculture and Cooperatives Central 2. Department of Food Technology and Quality Control Central 3. Directorate of Fisheries Development Central 4. Directorate of Fruits Development Central 5. Directorate of Post Harvest Management Central 6. Fisheries Development Division (NARC) Central 7. District Agriculture Development Office District 8. Agriculture Service Centre District

Private Sector Partners Similarly, there are three different private sector partners involved in the program (Table 13).

23

Table 13 Private Sector Partners

Organisation Level

1 Federation of Nepalese Chambers of Commerce and Industry

Centre

2 Agro Enterprise Centre Centre 3 District Chamber of Commerce and Industry District

Role, Duties and Responsibilities of the Partners Different partners have different role, duties and responsibilities relating to program development. They are described below. 1. Ministry of Agriculture and Cooperatives (MoAC) Since the products developed under OVOP within the period of 5 years are almost all agro products. Therefore, the role of the MoAC is immense promoting OVOP in Nepal. The Ministry proposes the National Planning Commission for the approval of annual program and gets budget approval from the Ministry of Finance. Similarly, the Ministry approves and finalised the annual budget and program proposed by OVOP Secretariat. It helps formation and implementation of favourable policy. The Ministry does monitoring and evaluation of the program and gives instruction to its line agencies and the OVOP secretariat if necessary to improve the overall program implementation aspect. 2. Department of Food Technology and Quality Control (DFTQC) The DFTQC is responsible for maintaining quality and standard of products specially the processed products. Therefore, it provides practical and technical training to the producers and the processors in the centre as well as in the field. It has right to inspect the products. Beside that, a technical committee has been formed under the chairmanship of the Director of DFTQC. The committee is responsible for developing the quality standard measuring criteria for the OVOP products which helps later for brand promotion of the products. 3. Directorate of Fisheries Development This Directorate is responsible for helping trout farmers through technical supports. It also produces extension manual, posters, pamphlet etc and distributes to the farmers. 4. Directorate of Fruits Development This organisation helps farmers especially in the field of orchard management. It provides technical service and training to the farmers relating to use of pesticides, insecticides, fertilisers and so on. The

24

Directorate monitors the field regularly and gives necessary advice to solve the farmer's problem. Beside that, it produces different technical manuals and distributes to the farmers. 5. Directorate of Post Harvest Management This Directorate is responsible for providing technical aid to the farmers relating to post harvest management. It gives on the spot practical training to the farmers on grading and packaging. 6. Fisheries Development Division (NARC) The Fisheries Development Division of NARC is responsible for undertaking different study on trout fish. This organisation identifies the potential location for trout farming. It helps providing training to the farmers on and about trout feed production, disease control and appropriate trout farming system. It also produces different technical manual and literature for appropriate trout farming system and distributed to farmers. It does regular field supervision and advice the farmers for improvement. 7. District Agriculture Development Office (DADO) DADO is responsible for preparing annual production program, mobilisation of its technical staffs to help farmers, reporting of the program, collection and compilation of production statistics, budget mobilisation, and field supervision in close coordination with District OVOP Program Implementation Committee. 8. Agriculture Service Centre (ASC) The technicians of the centre supervise the field, advice what, when and how to do better farming. 9. Federation of Nepalese Chambers of Commerce and Industry (FNCCI) FNCCI is the prime partner of the program from private sector. This organisation does policy advocacy, meeting and interaction with related Ministry for the extension of the program in new areas. 10. Agro Enterprise Centre (AEC) AEC is the secretariat of the OVOP program. It is solely responsible for implementing the overall program. Preparation and to get approval of annual budget and program, budget releasing to the concerned district and implementing the program are the major function of the AEC. It undertakes different study like feasibility study, impact study, evaluation study and many more as per need. It organises national level fairs and exhibition to promote the OVOP products in the

25

national and international market and works for brand promotion. Identification of new product and new the district is the duty of AEC. Organising committee's meeting, present the periodic and annual progress report to the Central Committee and carry out the activities as instructed by the Committee is the duty of AEC. It appoints the auditor as approved by the Central Committee and finalises the audit report and submits to the Central committee. Publicity is another important function of the AEC. It publishes reports, product-wise technical manuals, brochures, booklets etc. and distributes widely. The AEC suggests making amendment in the working procedures as and when needed. It also organises press conference to acknowledge the status of OVOP program nationwide. It establishes coordination among all the stakeholders of the program. 11. District Chamber of Commerce and Industry (DCCI) The president of the DCCI is the coordinator of the District OVOP Program Implementation Committee (DOPIC). Preparing annual budget and program in coordination with the DADO and the local community, getting approval from the OVOP Secretary, and the implementation of the program in the district are duties of the DOPIC. Besides that, it organises as well as participates in different fairs and exhibition to promote its product. It is also responsible to keep transparent book keeping of the program. The DOPIC can request the OVOP Secretariat for additional activities with justification which is not included in the approved annual program. It prepares periodic and annual progress report and submits to the OVOP Secretary. For extension and marketing promotion, DOPIC extends the publicity works through different media. It does regular supervision of the field for better implementation of the program.

Hiramatsu OVOP Award 2010 In 2010, Agro Enterprise Centre/FNCCI has been awarded with Hiramatsu OVOP Award 2010 for successful extending of the program in Nepal. The message as written and signed by Morihiko Hiramatsu, Ph.D., Oita OVOP International Exchange promotion Committee on14th of December, 2010 is as follows. You have promoted One Village One Product" Movement with wisdom and passion, and contributed toward regional development and peace. I would like to commend you for your great achievement, which will afford boundless courage and energy to the people of the world

26

Support by the Government of Japan Support of the Government of Japan to promote OVOP programme in Nepal has been significant. It provided technical cooperation through JICA for junar orange production in 1980s and 1990s, lokta paper production in 1990s, and rainbow trout in 1990s and 2000s, helping to establish the base for the present OVOP Programme. It has provided a JICA Expert, Junior Volunteers and Senior Volunteers in the field of OVOP promotion and OVOP production. It also provided local staffs and producers working for OVOP Nepal programme with opportunities to participate in short term training courses in Japan. The expert provided policy advice to the OVOP Secretariat and MOAC for the improvement in the programme. The expert and the volunteers had worked in the field of coffee export promotion, lapsi processing and pathology for rainbow trout in Nepal. With their cooperation, the coffee produced in Lekhnath, Kaski under OVOP programme has been successful in entering the Japanese market and is available at OVOP Market in Narita International Airport near Tokyo. The coffee cupping contest recently organised by JICA, MOAC and Helvetas has helped farmer understanding the quality concern in the international market. Similarly, the Embassy of Japan in Kathmandu has helped marketing promotion of OVOP products through festivals such as Japan Festival where the producers had displayed the products for exhibition as well as for sales.

Strength and Weakness AEC, Secretariat of OVOP programme has recently conducted an Evaluation Study of One Village One Product programme in Nepal. The study has been carried out focusing on the major indicators such as Relevance, Efficiency, Effectiveness, Benefits, Sustainability, and the Institutional arrangement. An overall result of the study has been described below

21.

OVOP Programme is observed successful in the field level.

21 Shiva Kumar Upadyaye and the Study team, Evaluation Study of One Village One Product program in Nepal, July 4, 2011

27

Most of the commodities selected in pilot programme are indigenous types that have high potentials for expansion in Nepal due to the suitability of climatic condition.

All commodities have strong market demands both in internal and external markets.

The programme is properly endorsed by the government in its policy and development level documents for its proper implementation.

The programme can be implemented in a highly inclusive manner and for supporting to reduce rural poverty.

The programme by its nature involves a large number of primary and direct beneficiaries.

However, there are weaknesses as follows

22.

Local resource, local skills, local leadership and the local pride

are the most important factors of OVOP Japan philosophy which is not well addressed in Nepal

Production and marketing (Quality improvement, Value addition, Enterprise development, Cooperatives, market promotion etc) has to be developed side by side but the focus on marketing side is least

Dependent on Government Budget Lack of sufficient subject matter specialists Delay in decision making process Delay in budget release Limited budget, increasing demand for new products in new

districts Delay in brand promotion

22 Shiva Kumar Upadyaye and the Study team, Evaluation Study of One Village One Product program in Nepal, July 4, 2011

28

Conclusion OVOP Nepal is a part of national agenda pertaining to poverty alleviation. The programme was designed more or less based on three fundamental principles of Oita movement. Identification of potential local products, value addition, branding and the market promotion are the major objectives of the programme. The OVOP in Nepal is a PPP based programme. MoAC (government programme) and FNCCI (private sector) is the major partner of the programme. The programme is funded by the government. Different line agencies under MoAC provide extension services to enhance production whereas the AEC is responsible for market extension. AEC is designated as OVOP Secretariat which is solely responsible for implementation of the overall programme in grass root level. The whole programme runs as per guidelines of OVOP Working Procedures which is made particularly developed for the implementation of the programme. The programme was started with 4 products in 7 districts. Within the period of 5 years, the programme has been extended in11 districts covering 8 products. The programme has supported the farmers with all the inputs required for orchard management and market promotion activities. With this supports, the quality of the products have been enhanced and the farmers are happy with fruitful returns. The programme is still working for brand promotion.

Chapter 5: Overall Conclusion

The OVOP is a successful community centred and demand driven rural economic development programme of Japan. However, it is entailed with Oyama Towns NPC Movement in 1961. Dr Morihiko Hiramatsu, former governor of Oita Prefecture, considered NPC Movement as a successful model for rural development, and he named it One Village One Product (OVOP) and promoted it as a campaign to all the towns and villages in Oita in 1979. OVOP Japan has no limitation in product identification. Any product or service or event could be the OVOP product. For example, Naoiri town has promoted carbonated hot-springs and cultural exchanges with foreign countries as its traits. Similarly, Beppu Argerich Music Festival and Oita Asia Sculpture Exhibition are the events included in OVOP as products. Whether the selected product have local essence or not, worth to value addition or not, and globally accepted or not is

29

the most important things to be considered while identifying the products. The central government of Japan does not interfere in village development activities. Only the local government assists in institution development, market facilities development and honoured the groups and individuals with rewards. The role of leaders is also equally important. They educate potential leaders through regional training schools

23.

In Thailand, the OTOP is one among several other projects of Thai Government. The philosophy of OTOP is based on fundamental principles of OVOP Japan. The OTOP aims at empowering the local villages with capacity enhancement of the local people and develop one unique product of their own. OTOP is said to be a successful community development programme of Thailand. The Thai Government has developed OTOP as a national agenda. The role of Thai Government to promote OTOP is significant. The OTOP has been extended in 70,787 villages including Bangkok. The programme has been implemented in integrated manner. As a result the OTOP product is now famous not only in Thailand but also in abroad

24.

At a time when OVOP is spreading widely in Asian countries, a thought of OVOP programme development in Nepal was evolved. FNCCI the apex body of private sector took initiation for launching of the programme in Nepal earlier to 2006. Finally, the government of Nepal officially launched OVOP programme in Nepal in 2006. Since Nepal is one of the poorest countries of the world and poverty alleviation is one of the prime challenges to the government. In this context, OVOP programme could be a best tool for alleviating rural poverty. Besides that there are many local resources, cultural traditions and events that could be developed within OVOP concept. This is reason why Nepal introduced he programme. The main objective of the programme is to alleviate poverty in local community and to benefit local producers and the business

23 See also Annex 3. 24 See also Annex 3.

30

enterprises through promotion of demand driven and export potential local products utilising local resources and the local skills. OVOP in Nepal is a PPP based programme. Private sector takes care of market promotion activities whereas the government sector looks after production side. Different activities have been undertaken to enhance production and marketing of the selected products within the period of 5 years. The programme is successful in quality and packaging improvement to some extent. The programme has been extended in the 11 districts which were initially started in 7 districts. But, this is not enough. There are still many challenges the programme has to face. Local resource, local skills, local leadership and the local pride are the vital elements of OVOP Japan philosophy which is not well addressed in OVOP Nepal. Marketing aspect has been given least attention as compared to production side. The existing cooperatives and farmer groups are not active enough. The community is more dependent on government budget. Delay in budget release, decision making and brand promotion are big weaknesses. The budget allocated by the government is not enough to fulfil the increasing demand for new products in new districts. Most of the local people are not yet cleared of the concept of OVOP. They thinks OVOP is simply a just another agriculture project because most of the products selected under OVOP programme are agriculture products which is not the concept of OVOP Japan. In addition to agricultural products, anything products like handicrafts, cultural programme, and tourism could be the product of OVOP. This message should be extended throughout the country through extensive campaigning. Finally, it is up to the local people whether to develop the programme in sustainable way or not which is not possible without their commitments.

31

Annex 1 Examples of the term OVOP equivalents abroad25.

1. One Factory One Product (Shanghai, China) 2. One City One Product (Shanghai, China) 3. One district One Product (Shanghai, China) 4. One Village One Treasure (Wuhan, China) 5. One Town One Product (Jiangsu, China) 6. One capital One Product (Jaingsu, China) 7. One Village one Product (Shanxi, China) 8. One Village One product Jiangxi, China) 9. One Barangay, One Product (The Philippines) 10. One Region One Vision (The Philippines) 11. Satu Kampung Satu Produk Movement (Malaysiya) 12. Back to Village (East Java, Indonesia) 13. One Tambon One Product Movement (Thailand) 14. One Village One Product Movement (Cambodia) 15. Neuang Muang Neuang Phalittaphan Movement (Laos) 16. Neg Bag Neg Shildeg Buteedekhhn (Mongolia) 17. One Village One Product Day (Los Angeles, USA) 18. One Parish One Product Movement (Louisiana, USA)

25 Oita OVOP International Exchange Promotion Committee, OVOP Movement: Fruits of OVOP, at http://www.ovop.jp/en/ison_p/seika.html

32

Annex 2 Composition of Central Committee

Organisation Portfolio 1 President FNCCI Coordinator

2 Joint Secretary - Agri Business Promotion and Statistics Division, MoAC

Sub-Coordinator

3 Chairman - Agro Enterprise Centre Sub-Coordinator

4 Joint or Deputy Secretary Planning Division, MoAC

Member

5 Joint or Deputy Secretary Ministry of Industry Member

6 Joint or Deputy Secretary Ministry of Local Development

Member

7 Joint or Deputy Secretary Ministry of Forest and Soil Conservation

Member

8 Joint or Deputy Secretary Ministry of Culture, Tourism and Civil Aviation

Member

9 Joint or Deputy Secretary National Planning Commission

Member

10 Joint or Deputy Secretary Ministry of Finance Member

11 Joint or Deputy Secretary Ministry of Physical Planning and Construction

Member

12 Joint or Deputy Secretary Ministry of Women, Child and Social Welfare

Member

13 Executive Director Nepal Agriculture Research Council (NARC)

Member

14 Director General Department of Agriculture (DOA)

Member

15 Director General Department of Livestock (DOL)

Member

16 Chief Budget and Program Section, Planning Division, MoAC

Member

17 Realted Officer - Nepal Rastra Bank Member

18 Chief Agri Busness Promotion Section, Agri Business Promotion and Statistics Division, MoAC

Member

19 Representative Non Residence Nepali Association (NRNA)

Member

20 Executive Director AEC Member Secretary

33

Annex 3 Similarity and differences of OVOP in 3 countries26

Oita, Japan Thailand Nepal Year 1979-2003

(continued voluntarily)

2001-2006 (continued voluntarily)

2006-2011 (Phase 1) 2011- (Phase 2)

Covered area

58 cities, towns, villages

22,762 villages 61 VDCs in 11 districts

Objectives / Principles

Local yet global Self-reliance and Creativity Human Resource Development

To create employment and income To strengthen local communities To promote local traditional knowledge To promote human resource development To encourage innovative ideas and product development

To alleviate poverty in local community To benefit local people through their entrepreneurship development

Responsible body

Oita Prefectural Government

Regional Development Department, Home Ministry

MOAC and other ministries

Main actors

Cooperatives Leader farmers Community leaders (mayor etc) Local extension /research

Village groups Individuals Local bodies

Local CCI DADO Farmer groups / cooperatives Technical offices

Number of producers / products

(2002) 338 agricultural products

(2006) 22,200 community group

About 4,000 producers

26 Dr Masahiro Kawamura (2010) OVOP Program in Nepal: Achievements, Issues and Future

34

148 building facilities 133 cultural activities 111 rural development activities 80 conservation activities

10,303 individuals 725 SMEs 38,840 in total

Characteristics

Encouragement oriented Local government led Community development Various products (eg. football team) Any individuals and groups can participate

Production and marketing oriented Central government led Cottage industry development Handicrafts and processed foods Any individuals and groups can participate

Production and marketing oriented Central government and FNCCI led Agricultural development Agricultural and forest products Districts and villages with potentials selected

Results Several villages with strong leadership and commitment were commercially successful

Several products exported abroad Many products traded locally

Production is increasing and marketing development in progress Coffee exported to Japan

Budget ? (Prefectural and village regular budget)

US$ 40.9 million (2006)

US$ 0.4 million (2007)

Economic effect

US$ 1.7 billion for 338 agricultural products only (2010)

US$ 2.1 billion (2006)

? (assessment necessary)

35

Annex 4 Picture Gallery

Figure 3 Shiitake mushroom and distilled barley spirit

Figure 4 OVOP Hiramatsu Award

Figure 5 Nepalese participant with Dr Hiramatsu in Japan

36

Figure 6 Junar orange from Ramechhap and Sindhuli

Figure 7 Lapsi candy and lapsi fruits from Bhaktapur

Figure 8 Bel tree, bel juice stock, bel fruits and bel squash

37

Figure 9 Trout raceway, trout and trout for sale in Nuwakot and Rasuwa

Figure 10 Coffee nursery, coffee trees and processed coffee from Kaski and Syangja

Figure 11 Lokta farmer with Lokta shrubs, Lokta bark, and Lokta Hat

38

Figure 12 Orchid farming in green house and orchid flowers

Figure 13 Agro Tourism in Begnas Lake are (restaurant, fish pond, panoramic view)