| Project Detail |
The project will increase agricultural income of approximately 40,000 farm households in 100 municipalities in hilly areas of five provinces: Province 1, Bagmati, Gandaki, Karnali and Sudurpashchim. This will be mainly achieved through the development of approximately 10,000 hectares (ha) of climate resilient fruit and nut orchards providing value-addition to the nuts and fruits produced by at least 30,000 farm households. The project will also improve the institutional capacity for managing the nursery and horticulture sector. For about 10,000 smallholder households, who are not capable of investing in fruit and nut orchard development in the project provinces, the project will assist them to improve their vegetable and other nutritious crop production and its marketing.
Project Name Nuts and Fruits in Hilly Areas Project
Project Number 48218-006
Country / Economy Nepal
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0845-NEP: Nuts and Fruits in Hilly Areas Project
Asian Development Fund US$ 10.00 million
Grant 0846-NEP: Nuts and Fruits in Hilly Areas Project
Global Agriculture and Food Security Program US$ 9.00 million
Grant: Nuts and Fruits in Hilly Areas Project
World Food Programme US$ 3.00 million
Loan 4211-NEP: Nuts and Fruits in Hilly Areas Project
Concessional ordinary capital resources lending US$ 60.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Sector / Subsector
Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Agricultural production - Agro-industry, marketing, and trade
Gender Equity and Mainstreaming Effective gender mainstreaming
Description The project will increase agricultural income of approximately 40,000 farm households in 100 municipalities in hilly areas of five provinces: Province 1, Bagmati, Gandaki, Karnali and Sudurpashchim. This will be mainly achieved through the development of approximately 10,000 hectares (ha) of climate resilient fruit and nut orchards providing value-addition to the nuts and fruits produced by at least 30,000 farm households. The project will also improve the institutional capacity for managing the nursery and horticulture sector. For about 10,000 smallholder households, who are not capable of investing in fruit and nut orchard development in the project provinces, the project will assist them to improve their vegetable and other nutritious crop production and its marketing.
Project Rationale and Linkage to Country/Regional Strategy
Nepal is experiencing a rapid change in its farming systems, particularly in hilly areas that are between 500 and 3,000 meters (m) above sea level. In these areas, agriculture still provides livelihoods to 66% of the population, but the share of agriculture in rural income was merely 11.4% in 2014-2015, and remittance has become the most important source of household income. As outmigration from these areas continuously rises, about 30% of cultivated land has now been abandoned from farming. Also, climate change is shifting crop cultivation altitude, and increasing diseases, insect pests and wet days. Climate vulnerability index is highest in the West, Northwest and Northeast with mountain regions in the Northwest having the lowest adaptation capacity. These land abandonment, outmigration and climate vulnerability result in less livelihood options, further accelerating youth outmigration to urban areas and abroad.
The effective exploration of Nepals horticulture potential has been constrained by a wide range of factors including: (i) lack of business and marketing channel; (ii) high post-harvest losses up to 40% of production due to poor quality planting materials, poor post-harvest management techniques and inadequate equipment and infrastructure for grading, packaging, and climate-controlled storage; (iii) limited access to loans, particularly the medium term loans required for horticulture production, due to complex loan acquisition and collateral valuation processes; (iv) shortage and high cost of seasonal labor; and (v) steadily declining farm productivity by 20% over the last 15 years.
The declining fruit and nut crop productivity has led to Nepals orchard productivity falling below the world average in 2017. This is a result of: (i) poor quality planting materials in the absence of nursery regulations such as Nursery Act; (ii) old and senile orchards with limited use of machinery; (iii) small landholding farms, characterized by land fragmentation, with an average size of 0.6 ha; (iv) limited water storage in hilly areas preventing year-round farming; and (v) lack of resilient varieties to climate change induced diseases. Also, female farmers in hilly areas are more likely to face a lack of equitable access to, and control over, productive resources such as land, credit, and technology.
Yet, there are new opportunities emerging for farmers in hilly areas. Nepals diverse agro-climatic conditions and geophysical locations provide a wide range of opportunities for tropical, sub-tropical and temperate fruit and nut production. Between 2008-2018, both the total area and the volume of fruit production has increased by more than 70%.4 Still, domestic fruit and nut supply is not meeting the fast-growing demand. Fruit and nut demand in Nepal is increasing because of urbanization, rising national wealth, improved knowledge of nutrition and increased tourist flow. Between 2013-2017, nut importation rose by 43% and apple importation rose by 260%. This resulted in a 136% increase in the cost of fruit, nut, and potato importation during the same period.
Higher profits from commercial fruit and nut farming could help retain the younger population. It also offers income generation opportunities for women who are heading households after male outmigration and are disadvantaged in finding off-farm employment. Engagement of women, and excluded and vulnerable groups in less labor-intensive horticulture production, marketing, and processing could help them be economically empowered and socially recognized in the household decision-making process. Through supporting fruit and nut farmers, the project will help the country to meet the horticulture demand, and increase hilly area farmers income, employment opportunities and climate resilience.
Impact
Livelihoods improved for rural households
Resilience of farmers to climate change improved
Project Outcome
Description of Outcome
Beneficiary farmers agricultural income from climate resilient farming of fruits and nuts
increased
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Institutional capacity for nursery and horticulture sector management improved
Fruit and nut production and productivity of project farmers increased
Value addition to fruit and nut enhanced in hilly areas
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Bagmati Province, Gandaki Pradesh, Karnali Pradesh, Province 1, Sudurpashchim Pradesh |
