PUBLIC-PRIVATE-PARTERSHIP FOR SUSTAINABLE AGRICULTURAL DEVELOPMENT in Nepal

PUBLIC-PRIVATE-PARTERSHIP FOR SUSTAINABLE

AGRICULTURAL DEVELOPMENT IN NEPAL

GOVERNMENT OF NEPAL

MINISTRY OF AGRICULTURAL DEVELOPMENT

Presentation Outlines Agriculture Scenario in Nepal Government Programme and Policies on Agriculture Public Private Partnership for Agriculture Development Some Agricultural Development Program that have PPP Components Potential Areas for PPP in Agriculture Problems of PPP Approach for Effective Implementation in Nepal Provision in ADS (the main policy document 2015-2035) for Small Farmers Activities Included in ADS on Improved Resilience of Farmers to Climate

Change, Disasters, Price Volatility, and Other Shocks Contract Farming Practices Agricultural Value Chains (AVCs) Acts Related to Agriculture Agriculture Subsidy Provision Pro-poor Policy Should Include Glimpses of Nepalese Agriculture

Agriculture Scenario in Nepal

Sustainable agricultural growth is crucial to ensure food and nutrition security in a country like Nepal

Agriculture still contributes about one-third to the country’s GDP and provides direct livelihood to two-third of its population

The Government of Nepal recognizes the importance of agriculture in the Agriculture Perspective Plan, the Nepal Agriculture Policy, and the Three-Year Interim Plan

However, the agriculture sector faces several challenges in Nepal which includes low productivity, high instability, shocks due to climate change, lack of adequate infrastructure and insufficient investment

Agriculture Scenario in Nepal Contd…..

Figure 1. Composition of AGDP

Contribution of Different Sub-sector to AGDP


Total edible cereal production and requirement in different years

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1000000

2000000

3000000

4000000

5000000

6000000

7000000

Production (mt)

Production

Requirement



The

Government Programme and Policies on Agriculture

The Periodic planning for development including agriculture was first started from 1956

government has made increasing efforts, especially in the past decade, to adopt policies appropriate to addressing food insecurity problems, particularly through the Agricultural Perspective Plan (APP) (1995-2015), National Agricultural Policy 2004 and Agriculture Development Strategy (ADS) 2015-2035 and Different periodic plans

The National Agricultural Policy (2004) includes various provisions for marginalized and vulnerable groups having less than half a hectare of land to improve food security

Government Programme and Policies on Agriculture

It has also mentioned to create food storage provisions, a mobilization network on a local participatory basis and to develop food and nutrition safety nets for poor farmers

Nepal offers tremendous opportunities and has great potential for agriculture. It has agro-ecological variations that allow it to growing up to three crops per year, bio-diversity, ample water resources, and market opportunities

Public Private Partnership for Agriculture Development

Government of Nepal (GoN) has recognized Public Private Partnership(PPP) as an important approach for development

Local Self Governance Act 1999, Agriculture Policy 2004, Agro-Business Promotion Policy 2006 and ADS 2015 highlight diversification, service delivery and private sector involvement to transform from subsistence to commercial agriculture

The successful areas of public private partnership are in services delivery, and in infrastructure for post-harvest, marketing and processing have been successful, and could be replicated with further investment

Some Agricultural Development Program that have PPP Components

One village one product (OVOP) and One District One Product Program

Commercial Agriculture Alliance formed for Commercial Agriculture Development Project (CADP)

Project for Agricultural Commercialization and Trade (PACT)Raising Income of Small and Medium Farmers Project ,

(RISMFP), High Value Agriculture Project (HVAP) includes private sector, especially the Federation of NepalesChamber of Commerce and Industries (FNCCI)

Market Management CommitteesMicro-irrigation construction by WUGFUG that have preserved and protected the local forests

throughout the country could also be cited as a general example of the PPP.

Potential Areas for PPP in Agriculture

Agriculture EducationAgricultural Extension ServicesAgricultural ResearchSeed ProductionFertilizer ProductionEstablishing Agro-export processing zoneQuality testing and certification - Lab for TBT & SPSAdoption of good agriculture practiceExport promotionFood security

Problems of PPP Approach

At local level, though the Local Self-Governance Act 2055 (1999) (LSGA) has taken the policy of promoting the private sector in sustainable service delivery, it is silent regarding the operation of PPP projects and PPP procurement

Notwithstanding a decade of experience in the area of PPP, Nepal’s approach to it has had limited success

While there may be a number of reasons for this, such as the protracted political transition and ensuing economic instability and social transformation, a major reason is the lack of an authentic document containing clear-cut vision and a road map of future actions on GoN’s part for systematic uptake of PPP in Nepal

The private sector has also pointed to the lack of clear policy guidelines on PPP by the government

Provision in ADS (the main policy document 2015-2035) for Small Farmers

The ADS activities will have impact on three groups of farmers (commercial, subsistence and landless)

The direct effect is very strong in the case of the ADS measures related to gender, social, and geographical inclusion; land (eg addressing the issues of tenancy, land leasing, cooperative farming, reversing the trend towards degraded land); access to quality and timely inputs (eg vouchers targeted to subsistence farmers, improved resilience); and access to microfinance and agricultural insurance

Landless or near landless will benefit from the ADS measures related to targeted food and nutrition programs; gender and social/geographic inclusion; access to forestry products; and growth of small and medium enterprises.

Activities Included in ADS on Improved Resilience of Farmers to Climate Change, Disasters, Price Volatility, and Other Shocks

Conduct research on stress tolerant varieties and breeds Establish an early warning system Establish climate information and weather indexation systems Promote agricultural insurance Improve capacity of extension staff and farmers in climate smart

agricultural practices through training, FFS, and demonstrations.Strengthen the food reserve system Establish a fund for preparedness and response

Contract Farming Practices

Contract farming so far has not been a common phenomenon in Nepalese agriculture. However, it has been practiced in some cases especially in seed production and procurement in Nepal though the experience is not that encouraging in absence of any regulatory mechanism both in terms of the quantity and the quality aspects of seed production

Contracts Act (2000) has been working for contract farming, however, need of Contract Farming Act is being considered address some of the land use practices prevalent in the rural sector

For this Government of Nepal has prepared a final draft of new Agribusiness Promotion Act-2015, which includes a legal framework for contract farming

Agricultural Value Chains (AVCs)

Agricultural Value Chains (AVCs) have become very important in determining countries’ trade competitiveness in a globalized world

ADS clearly mentions to enhance the development of the value chain through production, marketing and policy/institutional support and

Promote the development of a suite of products for market information and market intelligence using ICT

The ADS has provisioned farmers’ participation in different institutional mechanisms to ensure their functional involvement in center and local level

Acts Related to Agriculture contd……

Critical land issues such as tenancy, fragmentation, degradation, land use planning have been addressed by ADS

Land Act 1964 has clearly mentioned about the equitable distribution of the cultivable land and by making easily accessible the necessary know-how and resources on agriculture and to keep up the convenience and economic interests of the general public by providing encouragement to make maximum increase in agricultural production.

Consumer Protection Act 1997and the Essential Commodities Act 1961 have provision for protecting consumers from irregularities concerning the quality, quantity and prices of food (food safety).

Acts Related to Agriculture contd……

Government has formulated and adopted Natural Calamity

(Relief) Act 1982 focusing to relief

Food Act, 2023 having provisions for the determination of quality on food items

Patent , design & Trade mark Act, 2022

Agriculture Subsidy Provision

Government has subsidization as a strategy to address issues including: (i) supply of fertilizer; (ii) technology, seeds, irrigation; (iii) transport to remote areas

Subsidies are ingrained in the being of the average Nepali farmer and so is the case with Customs Duties and Excise Duties

There is no tax on income from agriculture. In addition, a number of agricultural commodities are exempted from VAT a

Special programme on farming and agri-enterprise development for poor and disadvantage group including Kamaiya, women , Dalit and Raute and Mukta Kamaiya cash and kind subsidies provided

Government provides 75 % subsidy on agricultural insurance premium paid by farmers

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Subsidy on chemical fertilizer, organic industries, and seeds effectively implemented

Special provisions on import custom duties on agri-equipments being provided

Government support for establishing cold stores through cooperative provided

Credit subsidy on tea, coffee, ornamental flower and cardamom

Agriculture Subsidy Provision

Pro-poor Policy Should Include

Smallholder farmers can do farming in their own land if credit

facilities, inputs and technology are provided. But it will not be

sufficient for landless. Due to which provision of contract

farming, land leasing, value chain development and inclusion of

private sector for service delivery and infrastructure

development is important for them

Lumbini, Nepal: The Birth Place of Lord Buddha