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Livelihood Based Agri Business and Market
Studies for North East Rural Livelihood
Project
Final report, Sikkim
April 2011
Submitted by
MART
A-32, 1st Floor,
Sector 17, Noida - 201 301 Tel: 0120-2512140, Fax: 0120-4273995
www.martrural.com
Livelihood based Agri Business and Market Study in Sikkim
MART, Noida 1
Acknowledgement
At the onset, we extend our thanks to DoNER for giving us this opportunity to undertake this important
livelihood study under NERLP.
We thank Mr. Alok Kumar Shrivastava, Project Director, NERLP and his entire team at Guwahati for their
constant guidance and unconditional support during the entire study period. A number of meetings with
him and his team at Guwahati and Delhi helped in smooth completion of the assignment. We would again
like to thank him for his and team support for facilitating the stakeholders’ workshops in states. NERLP
feedback on draft report has helped us improve it suitably to make it a useful project document.
We would like to sincerely thank Mr. Biswajit Sen, Senior Rural Development Specialist, and Mr. Nathan
M. Belete, Senior Rural Development Economist at World Bank for their constant support in ensuring
completion of the study; the first meeting at World Bank office along with PD, NERLP helped finalize the
report templates. Subsequently, the initial feedback after the first field visit has helped in finalizing
selection of 5 economic activities for undertaking detailed value chain analysis in the state. We would also
like to thank Mr. Varun Singh, Social Development Specialist at World Bank and Dr. Amarendra Singh for
their valuable feedback on the study.
We would also like to thank Shri A. K. Ganeriwala, Secretary RMDD, Dr. S. Tambe, Special Secretary
RMDD and Shri D. T. Bhutia, State Coordinator NERLP for their critical support and wonderful
coordination to make the study a reality. We would like to thank all state level officials and resource
persons including Mr. A. K. Singh, District Collector, Namchi, Mr. J. S. Raje, SDM, Soreng, Dr. P. Senthil
Kumar, MD, Sikkim Milk, Mr. B. Swaroop, MD, SIMFED, Mr. R. Gurung, CEO, ECOSS, Mr. Raj Basu of
Help Tourism Private limited, Mr. J. C. Biswas DDM, NABARD, Mr. B. K. Rai, Joint Director HCCD, Dr.
K.C. Bhutia, Joint Director, AHVS, Mr. B. Subba of VHAS, Mr. Vishal Mukhia, BDO, Sikkip and Ms.
Chandrakala Rai, Deputy Director, SIRD who spared their valuable time to provide us important
information and relevant documents. We particularly thank all the stakeholders present in the two highly
informative and fruitful workshops conducted at Gangtok on 23rd August 2010 and 9th February 2011 for
their invaluable contributions and feedback in guiding and finalizing the study.
We would also like to thank all SIRD, HCCD and AHVS staff who facilitated and organized village
meetings and also accompanied us in villages.
We would like to thank a large numbers of villagers, SHG members, cooperative society office bearers,
entrepreneurs who spent their valuable time with us in field and also a number of market players
including wholesalers and retailers, processing units, transport services and various other support
services at Gangtok and district markets.
MART Team
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Contents Abbreviations and Glossary of terms ...................................................................................................... 5
Executive Summary ................................................................................................................................... 6
Chapter 1: Background and methodology ............................................................................................. 12
1.1. Background ................................................................................................................................. 12
1.2. Objectives of the study ............................................................................................................... 12
1.3. Approach of the study ................................................................................................................ 13
1.4. Key features of study methodology ............................................................................................ 14
1.5. Limitations of the study .............................................................................................................. 15
Chapter 2: State Profile and Livelihood Issues .................................................................................... 16
2.1 State profile ................................................................................................................................. 16
2.2 Key indicators for project districts .............................................................................................. 17
2.3 Rural livelihood and poverty issues ............................................................................................ 17
Chapter 3: Livelihood Profile .................................................................................................................. 20
1.1 Overall Livelihoods Profile .......................................................................................................... 20
1.2 Infrastructure and Resource Profile ............................................................................................ 22
1.3 Banking and SHG Profile ............................................................................................................. 24
1.4 Market Profile ............................................................................................................................. 25
1.5 Land based livelihoods ................................................................................................................ 27
1.6 Floriculture .................................................................................................................................. 32
1.7 Live stock based livelihoods ........................................................................................................ 33
1.8 Service based livelihoods ............................................................................................................ 35
1.9 Rural tourism............................................................................................................................... 37
Chapter 4: Value Chain Analysis ............................................................................................................ 38
4.1 Introduction ................................................................................................................................ 38
4.2 Summary of suggested interventions ......................................................................................... 40
4.3 Value Chain of Dairy .................................................................................................................... 43
4.4 Value Chain of Ginger ................................................................................................................. 54
4.5 Value Chain of Pig ....................................................................................................................... 68
4.6 Value chain of Floriculture .......................................................................................................... 78
4.7 Value chain of Homestay Rural Tourism ..................................................................................... 90
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List of secondary sources/references .................................................................................................. 103
Annexure ................................................................................................................................................. 104
Annexure 1: Some Steps taken by the State Government ................................................................... 104
Annexure 2: List of participants for the stakeholder consultation workshop ..................................... 107
Annexure 3: List of select stakeholders met during the field visit ....................................................... 108
Annexure 4: Support plan for Dairy development in the NERLP Project Area .................................... 110
Annexure 5: Sikkim State Stakeholders Consultation Report ............................................................... 116
List of Tables
Table 1: Key Indicators for project districts ................................................................................................ 17
Table 2: Surveyed Villages .......................................................................................................................... 20
Table 3: Infrastructure Profile ..................................................................................................................... 22
Table 4: Market Facilities ............................................................................................................................ 25
Table 5: Market Profile ............................................................................................................................... 26
Table 6: Cropping Pattern vis a vis Households .......................................................................................... 28
Table 7: Seasonality of Crops ...................................................................................................................... 29
Table 8: Average Investment size ............................................................................................................... 30
Table 9: Average Selling Prices of crops ...................................................................................................... 32
Table 10: Household Involvement in livestock based livelihoods .............................................................. 34
Table 11: Household involvement in service based livelihoods ................................................................. 35
Table 12: Skill levels in service/nonfarm based livelihoods ........................................................................ 36
Table 13: Summary of suggested interventions ......................................................................................... 40
Table 14: Extension services in Dairy .......................................................................................................... 47
Table 15: Constraint Solution Matrix for Dairy ........................................................................................... 49
Table 16: Financial plan for Dairy farming .................................................................................................. 51
Table 17: Sensitivity Analysis forDairy ........................................................................................................ 52
Table 18: Implementation plan for Dairy .................................................................................................... 52
Table 19: Constrain Solution Matrix for Ginger .......................................................................................... 62
Table 20: Financial plan for Ginger cultivation ........................................................................................... 64
Table 21: Sensitivity analysis for Ginger ..................................................................................................... 65
Table 22: Implementation plan for Ginger ................................................................................................. 66
Table 23: Comparative weight gain analysis of 2 pig varieties ................................................................... 71
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Table 24: Constraints Solution Matrix for Pig rearing ................................................................................. 72
Table 25: Financial plan for pig rearing ....................................................................................................... 74
Table 26: Sensitivity Analysis for pig rearing .............................................................................................. 75
Table 27: Implementation plan for pig rearing ........................................................................................... 76
Table 28: Comparative analysis of different flowers .................................................................................. 80
Table 29: Constraints Solution Matrix for Floriculture ............................................................................... 84
Table 30: Financial plan for Floriculture (Alstroemeria) ............................................................................. 86
Table 31: Sensitivity analysis for Floriculture ............................................................................................. 87
Table 32: Implementation plan for Floriculture ......................................................................................... 88
Table 33: Constraints Solution Matrix for Homestay.................................................................................. 96
Table 34: Financial plan for Homestay ........................................................................................................ 98
Table 35: Sensitivity Analysis for Homestay ............................................................................................... 99
Table 36: Implementation plan for Homestay .......................................................................................... 100
List of Box items Box 1: Study Framework ............................................................................................................................. 13
Box 2: MART's 3M Model ............................................................................................................................ 15
Box 3: Value chain analysis framework ...................................................................................................... 38
Table of Figures
Figure 1: Sikkim: Area and landuse Map ..................................................................................................... 21
Figure 2: Cropping Pattern .......................................................................................................................... 27
Figure 3: Consumption vis a vis Marketable Surplus .................................................................................. 30
Figure 4: Crop Marketing Channels ............................................................................................................ 31
Figure 5: Sikkim milk production estimate ................................................................................................. 43
Figure 6: Value chain map of milk ............................................................................................................... 45
Figure 7: Production trends of Ginger ........................................................................................................ 54
Figure 8: Value chain map of Ginger ........................................................................................................... 57
Figure 9: Value chain map of Pig ................................................................................................................. 70
Figure 10: Value chain map of Flowers ....................................................................................................... 81
Figure 11: Value of Tourism Projects in Sikkim ........................................................................................... 91
Figure 12: Value chain map of Homestay rural tourism ............................................................................. 94
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Abbreviations and Glossary of terms APRLP Andhra Pradesh Rural Livelihood Project
AHVS Animal Husbandry and Veterinary Sciences Department
DoNER Ministry of Development for North Eastern Region
DRDA District Rural Development Agency
FGD Focus Group Discussion
FYM Farm Yard Manure
GPU Gram Panchayat Unit
GNP Gross National Product
GSDP Gross State Domestic Product
HCCD Horticulture and Cash Crop Development Department
HDI Human Development Index
Hul Unit of land
Ishkus Squash, a fruit bearing creeper used as vegetable
Kg Kilogram
Kms Kilometers
MART A leading livelihood and marketing consultancy agency
MFI Micro Finance Institution
MPDPIP Madhya Pradesh District Poverty Initiatives Project
MT Metric Ton
NABARD National Bank for Agriculture and Rural Development
NERCRMP North Eastern Region Community Resource Management Project for
Upland Areas
NERLP North East Rural Livelihood Project
MGNREGA Mahatma Gandhi National Rural Employment Guarantee Act
NREGS National Rural Employment Guarantee Scheme
NSDP Net State Domestic Product
OTELP Orissa Tribal Empowerment and Livelihood Program
RBI Reserve Bank of India
RGVN Rashtriya Gramin Vikas Nidhi
ROI Return on Investment
RMDD Rural Management and Development Department
Rs Rupees
SGSY Swarnjayanti Gram Swarozgar Yojana
SHG Self Help Group
Sikkim Milk Sikkim Cooperative Milk Producer’s Union Limited
SIMFED Sikkim State Cooperative Supply and Marketing Federation Limited
SIRD State Institute of Rural Development
SISCO Bank Sikkim State Cooperative Bank Ltd
SHRA Sikkim Hotel and Restaurant Association TASS The Travel Agents Association of Sikkim (TASS)
VAT Value Added Tax
WORLP West Orissa Rural Livelihood Project
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Executive Summary
The North East Rural Livelihood Project (NERLP) of the Ministry for Development of North Eastern
Region (DONER), Government of India, aims to address rural poverty in the region through creation
of sustainable livelihood for the rural poor, particularly for women. The project has commissioned
‘Livelihood Based Agri Business and Market study’ in Sikkim, Mizoram, Nagaland and Sikkim to
MART, a leading livelihoods and marketing consultancy, which was selected to conduct the study in
all four states. MART signed a MoU with DoNER and closely coordinated with Project Director,
NERLP based at Guwahati for finalizing study design, plan, fieldwork and information to key state
stakeholders. The primary objective of the study is to assess economic opportunities in both farm and
non-farm activities in the project area. NERLP assumes that intensive and innovative use of these
local opportunities can result in enhanced livelihood opportunities and incomes for the communities.
MART used 3M approach for the study that looks at ecosystem at the village level, market and
enabling environment to analyze the livelihood scenario and challenges. Study looked at existing
resources, skills, infrastructure and support services, markets for poor, major livelihoods of poor
involved in agriculture, livestock and non-farm activities to suggest practical interventions.
Study followed an 8-step approach involving secondary literature review, stakeholders’ consultation,
preliminary field visits, village and market survey, writing draft report and final report after receiving
feedback from NERLP and the World Bank. MART covered 13 villages with DRDA support and
conducted FGDs and individual interviews with villagers, state and district officials. Market study
involved interviews with wholesalers and retailers, traders, transporters, entrepreneurs, cooperatives
and processing units based at South district, West district and Siliguri. MART coordinated with
Project Director, NERLP during the entire study period for finalizing study design, plan, fieldwork
and information to key state stakeholders. MART used 3M approach for the study that looks at
ecosystem at village level, market and enabling environment to analyze the livelihood scenario and
challenges and accordingly suggest practical interventions.
Sikkim is rich in natural resources and one of the most sought after tourist destinations of India. In
2015, the number of tourists visiting the state is expected to be around 7.93 lakhs (Department of
tourism) which is more than the existing population. The community consists mainly of Nepalese,
Lepcha and Bhutia community with Hinduism and Buddhism being the major religions.
Land ownership in Sikkim is restricted to two types only; government land and private land with no
common land or panchayat land. The NERLP project area of South and West districts of Sikkim is the
most poverty stricken area with acute water shortage. Almost 1/3rd land of the project area is unfit for
agriculture. There is a strong need for land development activities to promote cultivable crops. The
area is also prone to natural disasters like landslides which affect the transport and communication
very severely.
There are about 2000 SHGs formed by State Rural Development Agency and other NGOs all across
the state of which around 1300 are in the NERLP project area with almost 100% coverage of the poor
under SHGs. The SHGs are also federated in some cases although the linkages and institutional
structure of these federations are reported to be weak and needs strengthening. The poor in Sikkim is
also reported to have low levels of business and marketing skills.
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MGNREGA is reported to be functioning satisfactorily in the state with a very high (around 80 days)
average person days of work being generated. All 163 panchayat units of the state have gone through
social audits. The government has taken up a drive towards financial inclusion by promoting business
correspondent models using biometric cards for payments and other financial service extension in
rural areas. Under the Sikkim Universal Financial Inclusion Project, the government has taken a
target to open savings account for 7500 married rural women across Sikkim and provide doorstep
banking services including health, life and property insurance through the business correspondent
model.
The government is also implementing a unique housing policy to make the state free from “kachha
houses” by 2011. It is also worth mentioning that Sikkim is one of the few states in the country to have
received “Nirmal Rajya” award following achievement of almost 100% sanitation. The Government
also has a special focus on promoting organic agriculture/horticulture/milk produce through Sikkim
Organic Mission. The State Institute of Rural Development (SIRD) is also actively implementing
livelihood schemes on Apiculture and floriculture under SGSY special projects.
The extension departments of the government provides free of cost training and exposure apart from
inputs like seeds, bio fertilizers, cattle feed and also infrastructure support like poly-houses, tools,
implements etc. It was also observed that most government schemes routed through the line
departments of Agriculture, Horticulture, Animal Husbandry etc. do not have specific schemes for the
poor and and thus there is little pro-poor focus in the implementation of these schemes.
All surveyed villages have mobile network coverage, bank, post office, milk collection centre, roads,
skill training centres, transport services, drinking water, electricity, school building, veterinary
department, agro cooperatives and haats. While 80% villages had marketing cooperatives and access
to nurseries, 90% of the surveyed villages had community buildings, too. About 40% of the villages
had irrigation facilities in the form of springs and rivulets. However, access to cold storages and forest
godowns is low; around half of the surveyed villages had access to market yards. Recently a few
floriculture cold storages are also opened in the state. Since paddy is sparsely grown paddy hullers are
found in only 20% villages.
About 90% of the surveyed villages are connected by all weather roads which are frequented by
private jeeps and taxis along with occasional buses run by Sikkim Nationalized Transport. While all
surveyed villages had access to 24 hour electricity, approximately 80% population in all the villages
had mobile phones.
The stakeholders feel that in spite of the progressive actions from the government regarding
livelihood promotion, the participation of the poor in the aforesaid programmes is less and there is an
ardent need of community level institutions like cooperatives, farmers’ groups, producers’ company
etc. The government has also taken policy level decisions to promote and encourage cooperative
systems in the state by awarding all government contracts and tenders for supply of materials and
construction to registered cooperatives only. However, the participation of the poor and the needy in
these cooperative institutions are still areas of improvement.
There are five apex level cooperative bodies in the state which are Sikkim State Cooperative Supply
and Marketing Federation Ltd (SIMFED), Sikkim State Cooperative Bank Ltd (SISCO Bank), Denzong
Agriculture Cooperative Society Ltd, Sikkim Cooperative Milk Producers’ Union Ltd and Sikkim
Consumer Cooperative Society Ltd.
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There are 16 bank branches in South District and 9 in West District. While deposits have registered a
healthy growth rate in 2009-10 (19.66% in South District and 25.94% in West District), the growth
rate of loan outstanding is surprisingly low (10.32% in South District and 3.99% in West District).
SISCO bank is a major stakeholder in extending financial services to the rural poor and Kisan Credit
card being the major financial product for on-farm credit. Credits to farmers are routed through
primary agriculture credit societies at the village level. The credit portfolio of SISCO bank in the South
District has been mainly for financing Ginger cultivation, dairy and piggery and also SGSY and non
SGSY activities.
The major SGSY activities sanctioned by the South district branch are floriculture, goat rearing and
vegetable cultivation. Other activities supported and financed through SHGs and SHG federations are
marketing of hill broom, piggery, ginger cultivation, wool knitting etc. The rural community has been
found to be more or less financially disciplined with around 6.7% NPA of the South district branch of
SISCO Bank. However the banks and financial institutions were found to be very conservative in
extending adequate and timely loans to poor. Activity specific funding based on practical return on
investments need to be promoted.
Government administrative officials stated that implementation costs of central government funded
schemes are very high in Sikkim due to extremely difficult terrain, high cost of transportation, inputs
and labour. Although an allowance for hilly areas exist for some schemes, they are found to be largely
inadequate. It is also worth mentioning that Sikkim has the highest per capita central assistance in the
country (planning commission).
It was also suggested by the stakeholders that NERLP needs to promote certain potential activities in
a cluster based approach to achieve economies of scale and build cost effective aggregation and
marketing models around the same. The cluster approach will also help in minimizing costs of
support service extension and reduce transport costs for input supply and output marketing. It was
also suggested that local level resource persons be engaged in motivating community for enhanced
participation in the project.
There are no regulated markets or mandi for farm based produce in Sikkim. The major feeder and
terminal market of Sikkim is Siliguri which is in West Bengal. Jorethang, due to its strategic border
location between South District, West District and West Bengal is the next important market after
Siliguri. Other important town level markets are Namchi, Namthang, Ravongla etc. Permanent shops
exist in all villages, vendors and traders all villages in deal in agriculture, allied and non-farm
activities. Most GPUs have access to weekly markets all across the state which offer producers the
opportunity of selling directly to consumers.
A wide range of crops under agriculture and horticulture are cultivated all across Sikkim. Maize is
chiefly cultivated in the area but as a fodder crop. Paddy is cultivated only in patches. 100% paddy
and maize are consumed at the household level. The project area cultivates ginger as a principal cash
crop. A shift in the winters and prolonged summers in the state is being attributed for the downfall in
quality and quantity of large cardamom produced in the state. Sikkim otherwise is the largest
producer of large cardamom in the country. All types of vegetables like cabbage, cauliflower tomato,
potato, peas, cherry chilli, Squash etc. are also cultivated. While most vegetables are primarily for self
consumption potato, tomato, chilli and Squash are regularly sold in the market. While high valued
cash crops are sold through town level traders, vegetables and other crops are often sold through
weekly haats and village level traders. Floriculture has picked up pace in the state with the
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government putting a lot of effort in promoting the activity by providing free of cost inputs,
infrastructure development, capacity building and handholding. SIRD is also promoting a special
SGSY scheme around floriculture in the project area. The major markets for flowers are SIMFED and
Mainam Gardens which are currently absorbing most of the produce.
Sikkim has a strong base of Livestock based rural livelihoods. Around 73% of population engaged in
animal husbandry sector is women. Animal husbandry and fisheries sectors together engage 3.7 lakh
populations. The total employment in animal husbandry and fisheries is around 9.05% of the total
work force. All villages surveyed were found to have 60-65% dairy and pig farmers. Sikkim is a milk
surplus state with Sikkim Milk producer’s Co-operative Limited (Sikkim Milk) being the biggest
player in Dairy in the State. More than 12,000 dairy farmers through nearly 280 co-operative
societies are registered members of this cooperative. More than 15,000 litres of milk are being
processed everyday by the cooperative resulting in incomes to the tune of Rs 60 lakhs per month to
dairy farmers. An average household has 3 cows of local variety with average 6 litres of milk output
per day. After a household consumption of 1-2 litres the average household sells off the surplus to the
milk collection centres in the GPUs. The state government has launched dedicated missions on
Poultry and Dairy to enhance livelihoods promotion initiatives under these activities.
The poor in Sikkim are reported to have low levels of business and marketing skills. The rural youth of
Sikkim was reported to be mostly literate but lacking in specialized vocational or employability skills.
As a result most vocational jobs like that of cook, plumber, electrician, barbers etc in the state
constitute of non locals. The state and district level stakeholders interacted shared the view that there
is a lot of potential for the local youth to be absorbed in the hospitality industry provided they acquire
required skills. Apart from targeting to be a poverty free state by 2015, there has been substantial
focus of the government to create employment avenues through creation of Livelihood Schools
(vocational training centres) for youth in all constituencies of the state. These Livelihood Schools are
to be managed by the State Institute of Capacity Building headquartered at Jorethang and having
state of the art infrastructure for imparting trainings. Most surveyed villages had people in
government service, teaching and army etc. fixed jobs. Incidence of private jobs is very low.
Carpentry, construction and driver are certain skills in which a considerable number of households
were engaged. Women possess traditional skills like food processing and knitting but very few use
these skills for business purposes.
Rural tourism is one of the most upcoming sectors in Sikkim which has potential to provide
employment and address poverty.
Most SHGs in Sikkim have less than nine members and no age bar. The members of SHGs make
average monthly savings of Rs 50 to 100, and are found to be actively involved in inter-group loaning
at rates of interest ranging from 24% to 60% per annum. However, there is a risk aversive behavior
when the same loan is routed from banks at lower rates of interest. SHG members were found to be
taking loans from SHG funds primarily for consumption purposes with a section of productive loans
for ginger cultivation, piggery and poultry activities. Most activities taken up by SHGs under SGSY are
at individual levels only. Many SHGs have experimented with activities like paper bag making, pickle
making, knitting, mushroom cultivation etc. but have faced marketing problems for their produce.
There are number of activities that project can promote among the poor that includes potato
cultivation, vegetable cultivation, fish culture, pineapple cultivation, piggery, goatery, pulse
cultivation, cow rearing, rubber plantation, and areca-nut cultivation. However, five activities namely
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potato, vegetables, fish culture, pineapple and pulses have been shortlisted in consultation with PD,
NERLP and the World Bank staff for a detail value chain analysis using criteria such as interest and
capacity of poor, possibility of engaging large number of poor, project mandate, market demand and
gestation period. Value chain helps to identify opportunities for poor at every stage of product
movement from producers to consumers based on which intervention strategies can be designed.
The supply for select five products in the state is less compared to their demand and therefore, these
can be promoted in the state. All five products are feasible from technical, market and economic point
of view. The key constraints involved in value chain products are high costs of initial investment, use
of traditional practices, low productivity levels, and low affinity among farmers for collective inputs
sourcing and output marketing.
The suggested interventions and size of investments along with partnership potential regarding the
selected products are as follows:
Produce / Product
Intervention Suggested
Size of activity suggested Convergence and partnership potential
Unit of activity
Fund requirement (Rs)
RoI (%)
Cow Milk Improved practices in dairy farming both project districts
3 cross bred cows per house hold
151598 29.43
AHVS department and Sikkim Milk union.
Ginger Improved package of practices for Ginger cultivation in both project districts
1 acre 24300 73.6 Wholesalers, HCCD Department, SIMFED, Progressive farmers and Financial institutions
Pig Rearing of American Hampstead variety of pig by adopting improved package of practices
6 pigs (5 female and 1 male) per household
209234 36.2
Wholesalers and retailer, Inputs suppliers , Progressive farmers, Financial institutions And AHVS department
Floriculture
Cultivation and marketing of Alstroemeria flowers
400 saplings under 1 poly house of 90 ft by 22 ft
263200 10.9 HCCD Department, SIMFED, Mainam Gardens, Other Wholesalers and retailers, Inputs suppliers , Financial institutions and Progressive farmers
Rural tourism
Promotion of Homestay based Rural Tourism
1 household constructing additional room for 4 persons
462400 20.3 Tourism Department, various cooperative societies involved in rural tourism, ECOSS, Help tourism, TASS etc
The activities to be performed by the project involves selection of beneficiaries and cluster, social
mobilization and institution building of poor, preparation of business plan with the community,
organize technical and business trainings, market exposure visits, establish backward and forward
linkages with resource agencies, facilitate market linkages and monitoring and evaluation, and
promoting higher order institutions such as federation and producer groups for collective actions.
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Project needs to create a chain of marketing professionals at head office, state level and district level
and para professionals at the village level to execute the implementation plan.
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Chapter 1: Background and methodology
1.1. Background
The North East Rural Livelihood Project (NERLP) of the Ministry for Development of North Eastern
Region (DONER), Government of India, aims to address rural poverty in the region through creation of
sustainable livelihood for the rural poor, particularly for women. The project has commissioned
‘Livelihood Based Agri Business and Market study’ in Sikkim, Mizoram, Nagaland and Sikkim.
MART, a leading livelihoods and marketing consultancy, was selected to conduct the study. MART held
discussions with DONER team at New Delhi and signed a MoU. MART placed a two member team for
each state to coordinate the study. MART maintained close coordination with Project Director, NERLP
based at Guwahati to facilitate the study.
1.2. Objectives of the study
The primary objective of the study is to assess economic opportunities in both farm and non-farm
activities in the project area. NERLP assumes that intensive and innovative use of these local
opportunities can result in enhanced livelihood opportunities and incomes for the communities.
The study evaluates livelihoods and opportunities on the basis of the following two components:
1.1.1 Infrastructure, resources and support services
Identify major livelihood occupations of the rural community, categorize them according to
geographical, ecological and watershed clusters and assess their viability based on local resources,
infrastructure, support services, technology, policy environment and potential for growth.
Suggest strategies to enhance income and nutritional security from the existing livelihoods
through improved productivity, access to inputs and markets, capacity building, and collective
action in marketing to achieve economic scale.
Provide guidance in agriculture and horticulture development, changing demand and supply
scenario, projection of future trends to ensure that farmers are able to face the challenge of
negotiating on an equitable basis with market players.
1.1.2 Value chain analysis
Shortlist major high growth subsectors and commodities for value chain analysis where the
project can intervene to benefit the poor.
Prepare value chain map for key products/commodities/services reflecting economic return at
every stage, product movement from the rural producers to the final consumers.
Identify major players in technology, markets, finance, and inputs contributing to value chain,
and explore partnership possibilities with them.
Identify infrastructure availability and institutional arrangements for input supply and output
marketing.
Identify constraints and institutional obstacles, social process, vulnerabilities and risks
hampering benefits to the poor along the value chain.
Identify critical investment needs in the value chain that can accrue better income to the poor.
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Prepare techno economic feasibility guideline for setting up small, viable and sustainable
processing units to impart value addition and longer shelf-life to-farm products.
1.3. Approach of the study
Box 1: Study Framework
Activities Key Steps Outputs
Reviewed of project literature and reports
Studied livelihoods initiatives such as NERCRMP in north east states.
Studied secondary reports
Met World Bank and Project Director, NERLP at New Delhi to discuss study design
Step 1
Pre study preparation
Developed better understanding of the study and project states
Finalised study design and plan
Project Director sent intimation to state rural development office regarding MART field visit and coordination support
Met state nodal officer, rural development department officer at Agartala
Meeting with DRDA and line department officers
Shared study approach and methodology
Understand NERLP objectives
Step 2
Initiation meeting at state and
district level
List of key stakeholders finalised for meeting
Feedback on livelihood constraints and opportunities in the state
Finalized approach and methodology
Interacted with key stakeholders from line departments such as agriculture, horticulture, animal husbandry, resource agencies, and key market players
Visited three villages in two project districts
Generated list of livelihood activities
Step 3
Fieldwork -1 (Interactions
with key stakeholders)
Shortlisted 10-12 major products for promoting in the state and value chain analysis
Prepared list of stakeholders and value chain players and service providers
Finalized plan for Fieldwork-2
Met with World Bank staff and Project Director, NERLP at New Delhi to share fieldwork-1 observations and experience
Discussion to finalise products for taking up value chain analysis
Step 4
Initiation Report
Finalised five products i.e. Ginger, Dairy, Pig rearing, Floriculture, and Rural Tourism for value chain analysis
Submitted initiation report containing livelihood profile and issues, overall approach and methodology, and field visit plan
Finalized field visit plans
Placed field teams
Visited 10 villages in two districts and interviewed producers/farmers
Met market players in wholesale and retail markets at Agartala and project districts.
Step 5
Fieldwork -2 (Interactions
in villages and markets)
Completed livelihood survey in villages and markets
Collected information for value chain analysis of 5 products by meeting value chain players
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Met line-department officials
Livelihood analysis
Value chain analysis for 5 products
Data analysis
Report writing
Step 6
Draft Report
Draft report as per study objectives and feedback of World Bank and PD, NERLP
Share draft report through power point presentation to World Bank, DoNER staff and other stakeholders as suggested by the PD, NERLP
Step 7
Stakeholders consultation workshop to share Draft
Report
Agreed feedback of stakeholders on the draft report
Content for final report finalized
Stakeholders consultation workshop report
Feedback incorporated from stakeholders consultation workshop report
Step 8
Final Report
Final report as per study objectives defined earlier
1.4. Key features of study methodology
MART coordinated with Director, Ministry of DoNER and Project Director, NERLP, Guwahati for
finalizing study design, plan, fieldwork and intimation to key stakeholders.
The Project Director, NERLP intimated the state government’s rural development department about
the proposed study to seek their cooperation during the field visit. Additional Secretary, Rural
Management and Development Department introduced MART team to district level officials of both
project districts and also facilitated meeting with heads of government agencies at state level.
MART team got in touch with officials of both project districts to finalize village selection for
undertaking village survey and meeting with state line department officials. Line department, NGO
and SIRD staff accompanied MART for village visit and facilitated meetings with villagers.
Livelihood based Agri Business and Market Study in Sikkim
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3M is a systematic approach to
livelihood based on the three tenets of
micro finance, micro market and micro
planning. The model primarily provides
a tool to systematically map the local
resources, skills, support services,
markets and enabling environment for
developing business plans. This
process of 3M is as follows: surveys are
conducted to assess the current
available resources as well as the
existing market demand. Once
established, the levels of supply and
demand determines the selection of
appropriate livelihoods activities.
Analysis of information collected from villagers, market players and enablers leads to field based practical strategies to
successfully launch and manage the activities. MART has extensively used 3M (Micro Finance, Micro Market and Micro
Planning) Model for livelihood promotion, for resource mapping under various poverty alleviation projects across India such as
APRLP, WORLP, OTELP, APDPIP, MP-DPIP and Rajasthan-DPIP. Based on its successful implementation a User Manual has
been prepared with support of DFIDI and CARE India for its replication by agencies engaged at grass root level in poverty
alleviation. The model has been presented at national and international seminars in USA, Philippines, Sri-Lanka and Thailand.
MART used 3M approach to capture the existing livelihood scenario
as described in Box 2.
The fieldwork was planned in two phases: in the first phase knowledge of major livelihood activities
was gathered through discussions with stakeholders at the state and district levels and popular
activities were selected for the study; in the second phase, value chain analysis of the livelihood
practices, productivity and marketing challenges was done.
Ten villagers were visited in two project districts and information was collected from villagers through
Focus Group Discussion (FGD). Individual interviews were conducted with farmers/villagers engaged
in shortlisted activities for value chain analysis. List of villages are mentioned in Chapter 3.
Interviewed value chain players like the producers, wholesalers, retailers, traders, transporters,
entrepreneurs, processors, cooperative agencies and government institutions at village, block, district,
and state level. List of stakeholders met is annexed.
1.5. Limitations of the study
The information from villagers was collected using FGD approach and therefore primary data
collected from them may not exactly match with data available with government department.
Market related data has been collected from wholesalers and retailers in the wholesale and retail
markets by conducting interviews. Therefore, accuracy of data may not be entirely reliable.
Discrepancy has been noticed in various state level data available from various secondary sources. Self
judgment has been used while using the data from a particular source.
The value chain analysis of each products and the intervention plans have been worked out after
interactions with entrepreneurs, best practitioners, market players and enabling agencies. The unit
costs and return on Investments may vary from circulated and published unit costs and return on
Investments by different agencies like the line department and NABARD.
Box 2: MART's 3M Model
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Chapter 2: State Profile and Livelihood Issues
2.1 State profile
The Location: Sikkim is placed between latitudes of 27° 5' N to 20° 9' N
and longitudes of 87° 59' E to 88° 56' E. Positioned in north-east, Sikkim
is the second smallest state of India. Sikkim is sandwiched between
Nepal in the west and Bhutan in the east, China in the north and West
Bengal in the south. The Indian border of Sikkim is shared only with the
state of West Bengal.
The Land: Oblong in its shape, Sikkim lengthens 114 kms approx.
from north to south and broadens 64 kms approx from east to west.
Sikkim covers an area of 7,096 km². Highly dominated by mountainous
terrain, Sikkim gets water from rivers like Teesta and Rangeet. The
State receives an Annual Rainfall of 2000mm to 4000mm.Roughly
three-quarters of its perimeter, enfolds the east and the west,
incorporating the complete northern borderline. The southern fringe of
Sikkim is the only liberated edge that is open to West Bengal.
The whole setting makes a horseshoe corral, which acts as a trap for moisture-laden winds from the Bay of
Bengal. Consequently, Sikkim receives plenty of rain showers round the year. With the elevation ranging
from 280 m (920 feet) to 8,585 m (28,000 feet), Sikkim has diverse climate ranging from tropical to
tundra. The geographical statistics of Sikkim is probably the reason for the rich collection of flora and
fauna in this small state.
The People: The population of Sikkim is 540851 (2001 Census) with around 20.6% Scheduled Tribe
population and 5% Scheduled Caste. The population density of the state is 76 persons per square
kilometer with 36.55% population below poverty line. 68.8% Sikkimese are literate.
Sikkim has an interfusion of diverse communities, cultures, religions and customs. In Sikkim, the leading
communities are the Lepchas, Bhutias and Nepalese. However, the municipal areas are dominated by the
plainsmen, who have settled there, owing to their businesses and Government services. The
developmental activities in Sikkim like construction of roads, bridges, buildings etc, have informally
invited migrant laborers from the plains and Nepal.
The Lepchas: The Lepchas are said to be the original inhabitants of Sikkim. They used to reside in Sikkim,
long before the migration of Bhutias and Nepalese. The original Lepchas were believers of the bone faith
or mune faith. The faith was essentially based on spirits, good and bad. They used to worship spirits of
mountains, rivers and forests. Constituting only 13% of the total population of Sikkim, Lepchas are
concentrated in the central part of Sikkim. Lachen, Lachung River and Dickchu are the prominent places
of Lepchas.
Map 1: Sikkim District Map
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The Bhutias: The Bhutias are people of Tibetan origin. After the 15th century, these people migrated to
Sikkim. The northern part of Sikkim is basically inhabited by the Bhutias. These people speak 'Sikkimese'
language. If compared with the Lepchas, the Bhutias are dominating large number of villages constituting
around 16% of the total population of Sikkim,
The Nepalese: In Sikkim, the Nepalese came long after the Lepchas and Bhutias. They migrated to Sikkim
in huge numbers and rapidly, emerged as the leading community. In the present day, the Nepalese
constitute 67% of the total population of Sikkim. These people commenced terrace farming in the state.
Cardamom is an important cash crop that was cultivated by the Nepalese. The Nepalese are sub-divided
into various castes and tribes like Bawans (Brahmans), Chhetries, Gurungs, Tamangs, Rais, Limbus,
Magars, Damais, Kamis etc.
The Economy: The State is one of the most bio-diverse areas in the country, suitable for a large variety
of Agro/horticultural crops. Approx. 11% of the total geographical area is under agriculture. Cultivators
account for the greater majority of the people in the state with 57.84%. The importance of agriculture can
be judged by the high percentage of population approx. 65% engaged in it Agricultural labourers as a
whole constitute only 7.81% of the workers in the state. Animal husbandry is also an integral part of the
house hold economy of the region. The past one and half decade has witnessed a tremendous upward
swing in various development programs giving a new thrust to the Sikkim economy. This process has
increased wage employment opportunities. Though most of the inhabitants are basically agriculture, they
have diversified into tertiary jobs such as Government services.
2.2 Key indicators for project districts
Table 1: Key Indicators for project districts
Indicator State South District West District
Population (Census 2001) 540851 131525 123256
Total area (square kilometers) 7096 750 1166
Percentage of total population 100 24.31 22.79
Total Number of Households (2009) 76813 20380 23851
Households who have availed no
benefits from Government schemes
5973 1827 1397
Number of SHGs (as per SIRD) 2000 737 537
Number of bank branches 80 13 10
Average population per branch 6761 10117 12326
Source: “Sikkim in Brief 2005”- Government of Sikkim, RMDD census 2009, NABARDs
2.3 Rural livelihood and poverty issues
(Source: Rural Management and Development Department and Human Development Report 2001)
Being the highest, steepest and remotest state in the country poses unique challenges for sustainable
development. Inaccessibility, marginality, fragility in physical terms lead to a limited base for sustaining
livelihoods and result in a higher degree of vulnerability, risks and uncertainty in realizing the outcomes
of livelihood activities. Any activity conducted by the poor is restricted in terms of access to markets and
Livelihood based Agri Business and Market Study in Sikkim
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support services. Market information is also restricted in remote villages where the markets are mostly
controlled by middlemen. The major feeder and terminal market of Sikkim is Siliguri which is in West
Bengal. The state is also dependent upon West Bengal for the major railway junction of the area which is
New Jalpaiguri and the only airport in the area which is Bagdogra. Though per capita resource is high,
productive resource or asset base is limited.There are a total of 26 Developmental Blocks, 163 Gram
Panchayat Units, 891 Gram Panchayat Wards (GPW) in the State.
Primary sector employs about 50% of the working population, 12% are in government jobs and about 10%
are self employed. Slightly more than 5% of the total rural population was found to be unemployed, which
along with the issue of underemployment is a matter of concern. Unemployment is highest in villages with
higher levels of education and those that are adjacent to urban areas. The multifarious development
schemes of the government are omnipresent and 5973 households (less than 8%), have indicated in the
State census 2009 that they have not received any benefits from the state government so far.
Of the total rural area of 1633 square kms, dry land farming constitutes 53%, 21% is wasteland, 19% is
under large cardamom plantations, and 7% is irrigated and is under paddy cultivation. Taking into
account the sharp decline in large cardamom production, nearly 40% of the private land is non-productive
and mostly a waste land as far as rural livelihoods is concerned. The productive resource base in rural
areas is only a fraction of the total resource owned. Ninety percent of the State population is rural and
agriculture is the primary source of livelihood for the villagers. However, the contribution of agriculture to
the state GSDP has been showing a declining trend, indicating a stagnation and reduction in incomes due
to reduction in productivity and production of the major cash crops, namely, ginger, large cardamom and
orange which are facing pathological problems leading to low income levels in the villages. The sectoral
contribution of agriculture to the GSDP has been declining from 52% (1980-81) to 21% (2004-09).
Limited irrigation coverage, mostly rain fed farming, high percentage of wasteland, coupled with
reduction in production and productivity of horticulture crops has resulted in stagnation in farm income.
Consequently, the demand for non-farm employment from the rural households has been sizeable and
nearly 52,000 rural households out of 90,000 were provided employment under MGNREGA during
2008-09. There are limited employment opportunities in the urban areas as well to attract seasonal
migration. Also, there is a general reluctance amongst the simple hill folks to venture outside the state in
search of employment. The demand for non-farm employment is during the period October to March,
which is the dry season as well as agriculturally lean season. Employment opportunities for educated
youth in secondary and tertiary sectors are very limited resulting in high scale of unemployment.
Population projections indicate that the annual growth rate will continue to be almost double that of the
national average during the period from 1991 to 2016. As per these projections, the population of Sikkim
would be 739,000 by 2016 . This high rate of growth points to the need for interventions in the area of
population management in the State. A positive feature, however, is that Sikkim has a very young
demographic profile, with only 4.5 per cent of its population in the 60+ age group . Population in the 0–14
age cohort is 39 per cent of the total population, while 60 per cent of the total population is below 24
years. Thus, State policies should focus more on the youth who, if properly motivated and trained, could
be of tremendous value to the State building process
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Of the total 76,813 rural households, 3106 (4%) are vulnerable ( vulnerability being defined as Single
woman headed household, Old age headed household and Minor headed household), out of which more
than half were old aged households i.e. these old aged were staying alone. There is a need to provide a
selective robust social safety net for these vulnerable households specially for those among them who are
economically challenged.
More than two fifth (42%) of the rural houses were found to be pucca or permanent type, which had both
the walls as well as the roof made of pucca material. The government is implementing a special mission to
make the state kuccha house free by 2015.
At the state level, of the total 76,813 households, 24,397 households (32%) were found to be educationally
backward with educationally backward households being defined as those who have no family member
above 30 years of age, who has passed fifth grade.
There is an acute water shortage during winter which is the dry season. November to March is the dry
season, and due to the reduction in the discharge of the mountain springs during these 5 months, the
rural water security is adversely affected. The East, South and West districts are the most affected since
village springs here are dying up due to insufficient recharge. 13 of the 26 blocks namely, Duga, Rakdong,
Pakyong, Rhenock, Khamdong in East, Namthang, Jorethang, Melli, Namchi, Wok and Temi in South and
Kaluk, Soreng and Gyalsing in West are facing the maximum shortage in drinking water.
In terms of sanitation, the State has made tremendous progress and only 797 (1%) of the total 76813
households do not have toilets. These are mostly in the labour camps of BRO, hydel power developers,
transition camps, temporary herder sheds and others. The state is the only state to have achieved “Nirmal
Rajya” award from the president of India.
The persistence of poverty in this hill State is in stark contrast to its relatively high achievement in the
social sectors as compared to the national average. However, this could be explained by considering that
Sikkim remained marginalized from the development activities that characterized mainstream India.
Prior to its merger with India, its very political economy did not, in fact, permit Sikkim to entertain
development interventions of a democratic variety. Only in the last 25 years, the philosophy of growth
with equity and self-reliance in the planned development of the State has become important.
The per capita GSDP at current prices for 2003-04 was Rs 23786 while that of India was Rs 23492. Also
the BPL population as per 2001 census of Sikkim was 36.55% while that of India was 26.1%. The high per
capita GSDP vis-à-vis a very high poverty status implies that income distribution is very skewed in
Sikkim. The coexistence of extremely affluent segments with the astonishingly poor overwhelming
majority is hard reality for Sikkim, although there are no incidences of abject or extreme poverty.
Secondly, since most of the poverty-stricken people are concentrated in rural areas, the urban-rural gap,
in terms of both distribution of income and asset creation, could emerge in a very precarious manner. In
the long run, this may go against environmental security and socio-economic sustainability of the State.
Thirdly, the syndrome of income concentration indicates a deviation in the fundamental principle of
objective governance and management of the economy wherein the guiding philosophy has been to
distribute national wealth across the State in an increasingly equitable manner.
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Chapter 3: Livelihood Profile
The success and growth of poor’s livelihood depends on enabling environment in terms of support
services provided by government and private players, availability of basic infrastructure facilities, training
and skills promotion facilities, marketing information and infrastructure, private sector participation,
promotion of micro, small, and medium enterprises, supportive legal and policy framework, and overall
entrepreneurial environment.
At an individual level viability of a livelihood is influenced by entrepreneurial attitude of the community,
organization and management practices and decisions related to input sourcing, adoption of package of
practices, technology, market access, access to finance, and access to government support for the
sustainability of livelihoods.
The following section presents findings from the field survey for existing infrastructure and support
services used by villagers, markets availability and linkages, existing livelihoods pursued by villagers, and
livelihoods pursued by SHGs.
1.1 Overall Livelihoods Profile
Table 2 is a list of the villages surveyed under the study along with the number of households and average
landholding per household for each village.
Table 2: Surveyed Villages
Sr.
No Village Name District
Number of
households
Average number
of members per
household
Average
landholding per
household
(units in acre)
1 Mellidara Ward
-1 South 150 6 2
2 Salghari Upper South 80 6 3
3 Sallebong South 69 6 2.5
4 Biriang Ward South 1600 4 3
5 Ramaram Kali
Khola South 160 6 2
6 Darap Lagay West 40 5 3.5
7 Samsing Ward
– 5 West 100 7 2.5
8 Tinzerbong West 107 6 1.5
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9 Rodhu Khandu
Sanku West 300 6 1.5
10 Lower Okharey West 65 5 7
The data above was collected during focused group discussions in the respective villages and may vary
with data from other sources.
Villages in Sikkim are referred as wards and each ward generally constitutes of 100 – 300 households;
each household has average of 6 members in the surveyed villages. A cluster of 4 -5 wards make a Gram
Panchayat Unit (GPU) , and a group of 4-5 GPUs make a Block Administrative Unit (BAU).
Land holding in Sikkim is classified into private land or government land. The average land holding in the
surveyed area is around 2.5-3 acres per household. The average arable land per household is 70% of the
total land holding per household.
About 90% of the state population is rural and agriculture is the primary source of livelihood. However,
contribution of agriculture to the state GSDP has
been showing a declining trend, indicating a
stagnation and reduction in incomes.
The farm productivity and income has been
declining due to limited availability of irrigation,
which is largely rain fed, and high percentage of
wasteland. The sectoral contribution of agriculture
to the GSDP has declined from 52% in 1980-81 to
21% in 2004-09.
NERLP PIP document states that though the
average land holding is 3.25 acre, the operational
holding is only a fraction of this. Out of the total
cultivated land of 2.75 lakh acre only 11% is
irrigated, while 58% is rainfed. The maximum dry
land rain fed farming area is in the West District
(35%), followed by South (33%).
Figure 1 depicts a GIS map of Sikkim (Source:
Rural Management and Development
Department, Govt. of Sikkim) showing the dry
areas of the state. The project area of South and
West Sikkim is the driest part of the state with minimum rainfall and no perennial water sources.
Figure 1: Sikkim: Area and landuse Map
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1.2 Infrastructure and Resource Profile
Being an entirely hilly state, people in Sikkim face difficulties in commutation and information access.
However, being one of the most frequented tourist destinations, infrastructure development in Sikkim is
quite regular. The state is rich in natural resources and lays special focus on protecting them. The
government is also implementing a unique housing policy to make the state free from “kachha houses” by
2011. It is also worth mentioning that Sikkim is the only state in the country to have received “Nirmal
Rajya” award for 100% sanitation. Through its Organic Mission the government promotes organic
agriculture/horticulture/diary produce.
Table 3 displays the accessibility of various infrastructure and resources from the surveyed villages. It
needs to be appreciated that compared to plains covering even seemingly small distances can be arduous
in hills.
Table 3: Infrastructure Profile
Infrastructure Accessibility (%)
Distance travelled to Access
Infrastructure
At own
Village
Less than 5
km
More than 5
km
Telephone (mobile) 100 10 0 0
Bank 100 1 2 7
Post Office 100 4 4 2
Skill training centre 100 2 2 6
Milk collection centre 100 9 0 1
Road 100 9 0 1
Irrigation 40 4 0 0
Nursery 80 5 0 3
School Bldg 100 10 0 0
Drinking Water 100 9 1 0
Com. Building 90 7 2 0
Transport 100 10 0 0
Electricity 100 10 0 0
Cold storage 20 0 0 2
Veterinary dept. 100 7 1 2
Agro. Co-operative 100 10 0 0
Marketing co-operative 80 8 0 0
Market Yard (RMC) 50 0 0 5
Haat 100 3 1 6
Forest Go down 10 0 0 1
Rice mill (Hullers) 30 2 1 0
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All surveyed villages have mobile network coverage, bank, post office, milk collection centre, roads, skill
training centres, transport services, drinking water, electricity, school building, veterinary department,
agro cooperatives and haats. While 80% villages had marketing cooperatives and access to nurseries, 90%
of the surveyed villages had community buildings, too.
About 40% of the villages had irrigation facilities in the form of springs and rivulets. However, access to
cold storages and forest godowns is low; around half of the surveyed villages had access to market yards.
Cold storages located at Singtam and Gangtok in East District are accessed mainly for potato. Recently a
few floriculture cold storages are also opened in the state. Since paddy is sparsely grown paddy hullers are
found in only 20% villages.
There are five apex level cooperative bodies in the state , Sikkim State Cooperative Supply and Marketing
Federation Ltd (SIMFED), Sikkim State Cooperative Bank Ltd (SISCO Bank), Denzong Agriculture
Cooperative Society Ltd, Sikkim Cooperative Milk Producers’ Union Ltd (Sikkim Milk) and Sikkim
Consumer Cooperative Society Ltd. The cooperative movement has picked up momentum in the state as
all the villages have multipurpose cooperative societies dealing in agriculture and horticulture produce.
Sikkim Milk is found to have milk collection centres in 90% of the surveyed villages. Similarly SIMFED
and Denzong Cooperative, dealing in marketing of agri-produce and horticulture commodities, are
functional all across the state. SIMFED in particular plays a very important role in marketing of ginger
and flowers from the surveyed villages.
Dairy and piggery are popular occupations in all surveyed villages, and there is a good network of
extension services from the animal husbandry and veterinary services department. About 70% villages
have department representatives servicing their villages. Also there are artificial insemination centres in
almost all GPUs, which are run by private paravets trained by the department.
About 90% of the surveyed villages are connected by all weather roads which are frequented by private
jeeps and taxis along with occasional buses run by Sikkim Nationalized Transport. Since ward or village
level households are scattered there are foot paths connecting these households to the main road. Travel
from nearest road points to households is often difficult as foot paths are often steep and narrow.
Sometimes mules are also used for transportation from these roads to respective households.
The state government has opened livelihood schools (vocational training centres) in all the constituencies
of the state to create employment. These Livelihood Schools are managed by the state-of-art State
Institute of Capacity Building headquartered at Karfectar. The major capacity building institutions
accessed by the surveyed villagers, apart from the livelihood schools, are village level training centres
operated by the Department of Handloom and Handicrafts. About 40% of the surveyed villages were
found to have such training facilities either in their villages or within 5 km from their villages.
Sikkim is an electricity surplus state and all the surveyed villages are not only electrified but electricity
supply was reported to be regular and very satisfactory.
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Sikkim has one of the highest mobile phone densities in the country. The surveyed villages were no
exception. An average of approximately 80% population had mobile phones in the surveyed villages.
Banks and Post Offices are accessed by all villages with around 70% surveyed villages having banks at a
distance at more than 5 kilometers from villages.
The line departments of the government provides free of cost training and exposure apart from inputs like
seeds, bio fertilizers, cattle feed and also infrastructure support like poly-houses, tools, implements etc.
However, it was observed that most government schemes, routed through the line departments of
agriculture, horticulture, animal husbandry etc., do not have specific measures for the poor and thus there
is little pro-poor focus in the implementation of these schemes.
The government officials stated that implementation costs of central government funded schemes are very
high in Sikkim due to extremely difficult terrain, high cost of transportation, inputs and labour. Although
an allowance for hilly areas exist for some schemes, they are found to be largely inadequate. It is also
worth mentioning that Sikkim has the highest per capita central assistance in the country (Planning
Commission).
1.3 Banking and SHG Profile
There are about 2000 SHGs in the state, of these around 1300 are in the NERLP project area with almost
100% coverage of the poor under SHGs. The SHGs are also federated in some cases although the linkages
and institutional structure of these federations are reported to be weak and needs strengthening. The poor
in Sikkim are reported to have low levels of business and marketing skills.
Most SHGs have less than nine members and no age bar. The members of SHGs make average monthly
savings of Rs 50 to 100, and are found to be actively involved in inter-group loaning at rates of interest
ranging from 24% to 60% per annum. However, there is a risk aversive behavior when the same loan is
routed from banks at lower rates of interest.
SHG members were found to be taking loans from SHG funds primarily for treatment of illness, marriages
and festivals etc. A major section of productive loans was for ginger cultivation, piggery and poultry
activities. Most activities taken up by SHGs under SGSY are at individual levels only. Many SHGs have
experimented with activities like paper bag making, pickle making, knitting, mushroom cultivation etc.
but have faced marketing problems for their produce.
As informed by NABARD, there are 16 bank branches in South District and 9 in West District. While
deposits have registered a healthy growth rate in 2009-10 (19.66% in South District and 25.94% in West
District), the growth rate of loan outstanding is surprisingly low (10.32% in South District and 3.99% in
West District).
Sikkim State Cooperative (SISCO) Bank is a major provider of financial services to the rural poor and
Kissan Credit Card for farm credit. The credit portfolio of SISCO bank in the South District indicates loan
financing for ginger cultivation, dairy and piggery. The bank also finances SHGs directly for SGSY and
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non SGSY activities. Credits to farmers are routed through primary agriculture credit societies at the
village level.
The major SGSY activities sanctioned by the South district branch are floriculture, goat rearing and
vegetable cultivation. Other activities supported and financed through SHGs and SHG federations are
marketing of hill broom, piggery, ginger cultivation, wool knitting etc. The rural community is found to be
more or less financially disciplined. The NPA of the South district branch of SISCO Bank was about 6.7%.
To support the financial inclusion of the women, the government is promoting business correspondent
models based on biometric cards for payments and other financial services. Under Sikkim Universal
Financial Inclusion Project, the government has set a target to open savings account for 7,500 married
rural women across Sikkim to provide them doorstep banking, health, and life and property insurance
services through the business correspondent model.
1.4 Market Profile
Sikkim is characterized with scattered villages and extremely difficult terrain. .. There are no regulated
markets or mandi for farm based produce in Sikkim. The major feeder and terminal market of Sikkim is
Siliguri which is in West Bengal. This restricts access of the primary producer to the terminal market.
Furthermore, the entry into the regulated market signifies movement of the produce from one state to
another, which necessitates further expenses like Sikkim Nationalized Transport (SNT) tax, West Bengal
government tax, bribes to policemen and regulated market tax. Thus, only large volumes of produce in
units of truck loads are economically viable to be transported to Siliguri. This is in particular difficult for
any primary producer due to absence of economies of scale and lack of market information.
Jorethang, due to its strategic border location between South District, West District and West Bengal is
the next important market after Siliguri. The area has overwhelming number of town level traders. These
town level traders are mainly from Marwari and Bihari community with a few Sikkimese traders.
Table 4: Market Facilities
Table 4 showcases percentage of surveyed villages having different types of marketing facilities. All
surveyed villages have around 3-4 permanent shops selling products ranging from utensils, grocery items,
cosmetics to vegetables, tea stalls, mobile recharge vouchers etc. 20% of the surveyed villages had vendors
residing in them while another 20% villages recorded presence of temporary shops. About 80% of the
surveyed villages are frequented by vendors dealing in steel utensils, clothes, scrap, shoes, cosmetics, toys,
mattress and razai making, etc.
Types of Market Facilities Availability in percentage of village
Permanent shops in the village 100
Temporary Shops in the village 20
Vendors of the same village 20
Vendors coming to village/day 80
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Most villages however have village level traders who procure village produce of ginger, Squash etc and sell
them off to town traders. However, most villagers prefer to sell their produce to town traders themselves
or to village level multipurpose cooperative societies.
Traditional rural weekly markets (haat), held on specific days of week all across Sikkim, form the main
retail markets for primary producers. The Haats are often frequented by both town level and village level
traders, where producers sell their agro produce.
Haats are generally held at all GPUs. Certain places are exclusively named after the day it hosts the haat
e.g. Sombarey named after Sombar (Monday), Mangalbarey named after Mangalbar (Tuesday) etc. The
town markets like Namchi, Jorethang etc. also host haats one or two days a week. Town level markets in
each district function for six days a week.
Table 5 showcases the major town level markets of South and West District and profile of commodities
traded
Table 5: Market Profile
South District Markets West District Markets Products traded
Town level markets
Jorethang, Namchi, Melli,
Ravongla
Gyalshing, Geysing Legship,
Ginger, Cardamom, Orange,
Chilli, Vegetables, Milk
products, Poultry, Pork,
Mutton, Clothes, utensils,
consumer goods, Agri
implements, Agri inputs, Cattle
Feed, service centres,
departmental stores etc.
Weekly (Haats) and village level markets
Simchuthang (Mangley),
Majhitar, Temi Bazar,
Damthang, Namthang
Kewzing, Yangyang, Ralang.
Reshi, Hee, Sombaria, Soreng, Daramdin,
Dentam,
Rinchenpong, Kaluk, Mangalbarey,
Shreebadam, Bermiok,
Pelling, Tashiding, Chakung, Nayabazar.
Ginger, Cardamom, Orange,
Chilli, Vegetables, Poultry,
Pork, Mutton, Clothes, utensils,
Agri inputs, Cattle Feed, etc.
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1.5 Land based livelihoods
Ginger is the principal cash crop grown in the project area. Apart from this, a wide range of agriculture
and horticulture crops are cultivated all across Sikkim. Vegetables are grown primarily for local
consumption. Paddy is cultivated in relatively plain and irrigated areas. The agriculture and horticulture
yield in the project area is seemed to be affected by recurring spells of freak climatic conditions.
Figure 2: Cropping Pattern
Shown in Figure 2 and Table 6 is the percentage of households involved in the cultivation and marketing
of various crops in the surveyed villages. Maize is the most prevalent crop; it’s grown by all landholding
households. The crop is however exclusively for consumption at the household level and cattle feed.
Paddy was found in only one surveyed village although rice is the staple food of the region. Large
cardamom, one of the most expensive produce, was grown in 40% of the surveyed villages, whileginger,
another cash crop, is grown by 60% villages. Tomato is commercially cultivated in around 50% of villages.
Squash, locally called Ishkus, is found in all villages but commercially grown in 30% of the surveyed
villages. This creeper crop is also a regular source of income to villagers. Likewise Chilli (Cherry Chilli
locally termed as Dalle) is found in all villages and mainly consumed at the household level was found to
be commercially grown in 30% surveyed villages.
Orange is also cultivated in a few patches of West District in particular. Less than 20% households of the
20% villages are involved in orange cultivation.
0
20
40
60
80
100
120
Availability Percentage in surveyed village
Percentage of Households involved
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Peas and pulses were commercially grown in only 10% of households.
Table 6: Cropping Pattern vis a vis Households
Table 6 (a)
Table 6 (b)
Table 6 (c)
As mentioned in Table 6 (a) maize has the maximum area under cultivation per household – nearly 5
acres per household. Ginger, the main cash crop in 60% of the surveyed villages, has average cultivation
over 0.8 acres per household.
As mentioned in Table 6 (b), while Squash and chilli are commercially cultivated in 30% of the villages, an
average of around 68 quintals of Squash is produced per household every season.
Orange and large cardamom yields are recorded on the basis of yield per tree. Table 6(c) shows that in
40% of the surveyed villages, where cardamom is a major crop, each household had average of 524 trees.
Crops Prevalence in
surveyed villages
(Percentage)
Average Area per
village (acres)
Average crop
area /
Household
(acres)
Average
Yield/acre
(quintals)
Ginger 60 42.6 0.81 17.6
Maize 100 146 5.4 1.73
Paddy 10 30 6 24
Tomato 50 23.35 0.628 16.2
Potato 20 90 0.96 16
Peas 10 3 0.48 6
Pulses 10 2.5 0.1 3.2
Crops Prevalence in surveyed
villages (Percentage)
Average no of households
per village cultivating the
crop
Average Yield/Household
(Quintals)
Squash 30 108.3 68.6
Chilli 30 25.8 1.8
Crops Prevalence in
surveyed villages
(Percentage)
Average number of
trees per village
Average trees /
Household
Average Yield/
Tree
Orange 20 450 101 1050 pieces
Large
Cardamom
40 17950 524 0.031 quintals
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However, during recent years, the production of cardamom has decreased drastically due to degeneration
of old plants and various diseases.
Information from Spice Board of India reveals fall in the production of large cardamom in Sikkim from
5401 tons in 2003-04 to 3833 tons in 2006-07. Long summer spells in the state are being attributed to
deterioration in quality and quantity of large cardamom in the state. Sikkim is traditionally the largest
producer of large cardamom in the country.
Seasonality of the major crops are mentioned in Table 7
Table 7: Seasonality of Crops
Crops Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Ginger P P PM P P PM M M
Maize P P P P P P
Paddy P P P P P P
Tomato PM PM P P PM PM P P PM PM P P
Potato P PM P P PM M P P P P PM P
Pulses P P P P PM
Squash PM PM PM PM PM PM PM PM PM PM PM PM
Chilli P P PM PM PM
Orange P PM PM M
Large Cardamom P P PM PM PM PM M M
P: Production phase, M: Marketing Phase
The mother rizhome of ginger, locally called Mau, is harvested and sold in May; it fetches around Rs 55-
65 per kg.
While maize is grown during the summer and rainy season, paddy in irrigated patches is grown twice a
year. Tomato and potato have three seasons per year while Squash is produced and marketed throughout
year. Orange and cardamom being plantation crops starts bearing fruit from November and May,
respectively. While the marketing season of Orange is during the winters, cardamom has a long marketing
period of around six months starting from July.
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Figure 3: Consumption vis a vis Marketable Surplus
Figure 3 denotes the approximate percentage of domestic consumption and marketable surplus of major
crops in the surveyed villages.
Maize and paddy are fully consumed while around 30% of total pulses (Yellow) production is sold off.
While around 15% of peas production was locally consumed ginger, orange, potato, Squash and chilli were
found to have less than 10% domestic consumption. This signifies a unique cropping pattern in Sikkim –
one that prefers cultivation of cash crops to that of consumption crops.
Table 8: Average Investment size
Crops Average investment per unit (Rs) Value addition at the village level
Ginger Rs 10000 per acre Cleaning by few farmers
Grading by few farmers
Maize Rs 2500 per acre Cleaning
Drying
Grading
Crushing into flour
Paddy Rs 8000 per acre Cleaning
Threshing
Husking into Rice
Tomato Rs 5000 per acre Grading by few farmer
Packing in Baskets
5
100
0
100
10 5 10 5 8 15
70
95
0
100
0
90 95 90 95 92 85
30
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Percentage consumed Percentage Surplus
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Potato Rs 7000 per acre Cleaning by few farmers
Peas Rs 3000 per acre Grading by few farmers
Pulses Rs 2500 per acre Cleaning
Drying
Squash Rs 5000 per household None
Chilli Rs 2000 per household Grading and drying for consumption
Orange Rs 5000 per household Grading
Box packing
Large Cardamom Rs 20000 per household Cleaning
Kiln drying
Grading
Table 8 presents the amount of investment for major crops and value addition after harvesting. While
products like paddy, maize, and chilli undergo value addition for consumption purposes, cardamom is the
only crop which undergoes market led value addition. Cardamom is dried in wood kilns and graded as per
quality and size. A few progressive farmers only however clean and grade ginger before selling.
Figure 4 depicts approximate percentage of produce sold by the primary producer through different
channels viz. village trader, haat and town trader.
Figure 4: Crop Marketing Channels
While large cardamom, orange, peas, pulses, ginger and Squash are largely sold to town traders, chilli and
tomato are largely sold at retail through haats. Important markets for ginger are Namchi, Naya bazaar,
Namthang, Reshi, Legship etc. Cardamom farmers generally take their produce to town level markets
including Gangtok and sell them to Marwari and Bihari traders. Oranges are sold per piece and often
0
10
20
30
40
50
60
70
80
90
100
Large Cardamom
Orange Pulses Ginger Peas Quash Potato Tomato Chilli
Sale percentage of major crops through different channels
Village Trader Haat Town Trader
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traded before production. Traders often visit orange farmers and pay an advance amount for the
forthcoming production. Nowadays, some multipurpose cooperative societies and agro cooperatives at the
village level are also procuring ginger.
The role of village traders is prominent though small in turnover. They generally procure from marginal
and small farmers who do not have enough produce to achieve economies of scale for selling their produce
directly to the town level trader.
The produce collected by town level traders and even by some village level traders is transported to
Siliguri. Cardamom and ginger are supplied to all across the country from Siliguri. Some produce like
potato, Squash, chilli, peas, pulses and tomato have a minor but remunerative marketing channel ending
at Gangtok.
Average producer sale prices of the major crops, as per information collected from the surveyed villages,
are mentioned in Table 9.
Table 9: Average Selling Prices of crops
Crop Unit Average Selling Price (Rs per unit)
Ginger Quintal 4050
Tomato Quintal 1760
Large Cardamom Quintal 45000
Squash Quintal 466.6
Chilli Quintal 9666.6
Orange Per piece 2.12
Potato Quintal 5900
Peas Quintal 2500
The prices of cardamom and ginger have escalated over the last 3 years due to reduction in production
and increase in demand. Average price of cardamom have increased from Rs 100 per kg in 2007 to Rs 200
in 2008 and finally Rs 450 in 2010. Similarly average prices of ginger in 2007 were Rs 15 which increased
to around Rs 20 in 2008 and Rs 40 in 2010.
However, the prices of vegetables like Squash and peas have a marginal increase in average prices over the
last three years.
1.6 Floriculture
Floriculture is a new but common activity in almost all villages. Although the number of farmers currently
involved in this occupation is low as compared to ginger or cardamom farmers, the number is growing
fast. The activity attracts heavy investments and has long payback period and so the state government is
extending extensive support to promote the activity.
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Cultivation of cymbadium orchids, zantedeschia (cala lily), alstroemeria, lilium, gervera, rose etc. is being
promoted by the horticulture and cash crop development department across Sikkim. The department
regularly imports seed bulbs and tubers from New Zealand, Netherlands etc through suppliers in Pune
and Bangaluru and provides them free of cost to a number of farmers. The major suppliers are Kumar
Florists of Pune and Florence Flora of Bangaluru. A number of poly houses are also provided along with
training, irrigation facilities and implements.
A model floriculture centre is being set up by the department to develop floriculture in the state. It
disseminates technical knowledge, provides support services and inputs for floriculture. The centre is also
equipped with a cold storage. Apart from this, cold storages have come up in Daramdin and Soreng. One
is also sanctioned to be constructed in Seleb.
Rose village near Daramdin in the West district has around 70 households with 91 poly houses in the area
along with a cooperative society for cultivating and marketing different varieties of roses. It also has a cold
storage for storing rose sticks. Around 3000 to 4000 sticks are produced daily from the area, which are
transported to Namchi and Siliguri. The activity is entirely supported by horticulture department and calls
for huge investments and efficient irrigation facilities.
Sikkim State Institute of Rural Development (SIRD) is also implementing a special SGSY project on lilium
and glorecia plant nursery. The seeds are provided by SIRD along with buyback support for saplings. A
nursery spread over 1 hul or ¼ th acre of land is expected to yield Rs 30,000 per year. SIRD has also
facilitated SHGs to be linked with State Bank of India for SGSY loans.
It is worth mentioning that some private nurseries and floriculture companies are also supporting
floriculture venture of the state. ‘Mainam Gardens’ of Namchi is one of the most prominent private
institutions functional in the area. Owned by Mrs. Tika Maya Chamling, it procures flowers from farmers
and supplies them all over India. Zopar Exports Private Limited, having more than 80 poly-houses in
Sikkim and Darjeeling district of West Bengal, supplies multiple varieties of roses.
SIMFED is a major stakeholder in providing marketing support to the farmers of Cymbidium and Lilium.
It has buyers and agents all across the country. Any procurement by SIMFED is however only done at
Gangtok and thus needs special transportation from the project area.
1.7 Live stock based livelihoods
Sikkim has a strong base of Livestock based rural livelihoods. Around 73% of population engaged in
animal husbandry sector is women. Animal husbandry and fisheries sectors together engage 3.694 lakh
populations, including 2.088 million women. Thus, the total employment in animal husbandry and
fisheries is around 9.05% of the total work force. According to estimates of the Central Statistical
Organization (CSO), the value of output from livestock and fisheries sectors together at current prices was
about Rs. 2, 82,779 crores during 2007-08 (Rs 2,40,601 crores for livestock sector and Rs 42,178 crores
for fisheries) which is about 31.6 percent of the value of the output of Rs. 8,94,420 crores from Agriculture
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& allied sector in the state. The contribution of these sectors in the total GDP of Sikkim during 2007-08
was 5.21%.
Milk and meat (beef, chicken, pork and mutton) contributes largely to the food plate of Sikkim. The
contribution of milk alone (Rs 1,62,136 crores) was higher than paddy (Rs 95,038 crores), wheat (Rs
71,579 crores) and sugarcane (Rs 33,691 crores). The value of outputs from meat group as per estimates of
Central Statistical Organization (CSO) at current prices in 2007-08 was Rs 40,399 crores. The present
demand of pork in Sikkim is around 550 Metric tonnes per annum, while the production is about 150
Metric Tonnes per annum showcasing good scope.
Sikkim is a milk surplus state with marketable surplus milk being sold to neighboring state of West
Bengal. The per capital milk availability is Sikkim is 243 grams per day. Sikkim Milk producer’s Co-
operative Limited (Sikkim Milk) is the biggest player in Dairy in the State. More than 12,000 dairy
farmers through 270 co-operative societies are registered members of this cooperative. More than 15,000
litres of milk are being processed everyday by the cooperative resulting in incomes to the tune of Rs 60
lakhs per month to dairy farmers. Sikkim Milk Union is reported to be earning profits since last two years.
(Source: Sikkim Livestock Policy document 2009-10).
The state government has launched dedicated missions on Poultry and Dairy to enhance livelihoods
promotion initiatives under these activities. Almost all households practice backyard poultry for
household level consumption of eggs and chicken. Broiler is also practiced by some villagers whose
marketing networks are present in towns like Jorethang or Namchi. Incidence of disease and
geographically restricted immediate support service is a bottleneck for broiler.
3.7.1. Status of Livestock based livelihoods
Table 10: Household Involvement in livestock based livelihoods
Major Livestock Availability in percentage of
villages
Percentage of households involved
Dairy 100 65
Piggery 100 60
Goat rearing 70 25
Poultry 100 50
As mentioned in Table10, Dairy, Piggery and Poultry (backyard and broiler combined) are by far the most
important Livestock based activities found in the surveyed villages with all villages having 65%, 60% and
50% households involved in these activities respectively. Goat rearing is prevalent in 70% villages but
involving 25% houses.
In Pig rearing, the majority of poor farmers rear local and indigenous breeds, a few progressive farmers
have adopted American Hampshire and Yorkshire breeds also. An average of 7-9 piglets is produced every
6 months in case of the American Hamstead variety while the local variety generally produces 5-6. The
mortality in local varieties is also high.
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While poultry farming is mainly consumption based, some SHG members have taken internal SHG loans
for piggery and poultry activities. The presence of functional milk cooperatives in the villages have
boosted the dairy activity a lot and mostly surplus milk is sold at the village level through milk collection
centres facilitated by Sikkim Milk Union.
The AHVS department has a good network of veterinary doctors and staff for providing extension services
free of cost in the villages. Sikkim Milk also has its own veterinary care centre at Karfectar.
3.7.2 Marketable surplus and selling dynamics
Average of 3 indigenous variety cows are assets to all households who keep cows. The average milk output
per cow in the surveyed villages is 6 litres per day and the average milk output per household is 11 litres
per day. 1-2 litres are consumed at the household level while the rest is sold.
Sikkim milk has a minimum procurement price of Rs 16 for standard milk with 3.5% fat and 7.5% SNF.
However, the quality of the milk in the surveyed villages have seldom reached the desired level in terms of
fat and SNF. The average price at the village level that is fetched by the dairy farmer is around Rs 13 to Rs
15 per litre. Maximum price of milk at the village level was reported to be around Rs 19 per litre. (as per
primary survey)
Price of piglets vary between Rs 2000- 2500 per animal while full grown pigs sold for pork are sold at an
average price of Rs 100-110 per kg. Piglets pigs are generally sold from the farm gate to butchers and other
farmers.
3.7.3 Seasonality
All the major Livestock activities do not have any fixed season for production or marketing. However, the
festive seasons sees an increase in demand of livestock. Prices for some products are elevated during this
period. Sikkimese people being primarily non-vegetarian, their food plate includes livestock products all
year through.
1.8 Service based livelihoods
Table 11: Household involvement in service based livelihoods
Livelihoods Availability in
percentage of villages Average number of
households involved
Army 70 6
Permanent govt. job 100 17
Permanent private job 40 5
Electrician 50 2
LIC agent 20 1
Driver 90 8
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Plumber 60 1
School teacher 100 8
Hotel jobs 10 2
Government temporary 20 10
Table 11 clearly depicts that government service, Army, teacher etc fixed income based livelihood are more
or less consistent in the surveyed villages. 90% villages had drivers from around 8 households. The apt
transport system of Sikkim through shared taxi jeeps and vehicles explains the finding.
Only a few other households are engaged in other service based occupation like electricians, insurance
agents etc.
The different skill levels of villagers in the surveyed villages have been mapped in table 12.
Table 12: Skill levels in service/nonfarm based livelihoods
Skill
Available in % of villages
Avg. no of persons
possessing skill
Use skill for
Business purpose
Tradition skill/ acquired skill
Stitching 60 4 Few Acquired / Traditional
Food processing 40 All women No Traditional
Handicraft 40 6 Yes Acquired / Traditional
Weaving 30 7 No Traditional
Knitting 50 All women Few Traditional
Electricals 40 2 Yes
Acquired
Carpentry 100 9 Yes
Traditional
Construction 70 12 Yes
Traditional
Driver 100 9 Yes
Acquired
Insurance agent 10 1 Yes
Acquired
Beauty Parlour 20 2 Yes
Acquired
Electronic Repair 30 1 Yes
Acquired
While women of 40-50% surveyed villages were traditionally skilled in knitting woolen garments and food
processing (primarily pickle making and making fermented food products), very few of them are actually
using the skill in business generation. Construction and carpentry related skills are high in villages. Both
of these skills are traditional in nature and 9 households of every village are engaged in the crafts of wood
carving.
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As mentioned earlier, the state government has opened livelihood schools (vocational training centres) in
all the constituencies of the state to create employment. These Livelihood Schools are managed by the
state-of-art State Institute of Capacity Building headquartered at Karfectar. The major capacity building
institutions accessed by the surveyed villagers, apart from the livelihood schools, are village level training
centres operated by the Department of Handloom and Handicrafts. About 40% of the surveyed villages
were found to have such training facilities either in their villages or within 5 km from their villages.
1.9 Rural tourism
Around 40% of the villages visited had villagers interested in homestay based village tourism.
As mentioned in the Tourism sector Policy 2010 of Sikkim Tourism department, the number of Domestic
tourists in 2003 were about 1, 76,659 while in 2008 more than 5, 00,000 tourists have visited the state.
The estimated number of domestic tourists in 2009 is around 6,00,000. This signifies a growth of around
3.5 times within a time span of 6 years.
The boost in the growth of tourism in the state is also attributed to the growth in the associated sectors.
Sikkim since last 5 years is following a strict Organic policy and is also the first state in the country to
achieve total Sanitation. A Green Mission program has been launched by the government under which
every individual, agency and the Department contributes towards the planting of trees all over the State.
Village tourism is being specially encouraged to preserve culture, heritage & handicrafts and to create
better economic and employment opportunity in the rural area. Floriculture is being promoted at large in
the State and Sikkim has earned its place as a major orchid and exotic flower producer in the country.
Use of polluting plastic is also banned in the State. All the ethnic Communities have different and distinct
festivals, which are celebrated all over the State. Tourism Department plays a major role in promoting
these festivals in order to showcase Sikkimese culture and heritage.
The ability of rural tourism to contribute directly to the village economy and the growing industry of
tourism can be capitalized to mitigate poverty by promoting rural tourism in pockets of poverty. The
interventions regarding home stay based tourism mentioned in Chapter 4 is an attempt to include the
poor in the larger ecosystem of Tourism.
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Chapter 4: Value Chain Analysis
4.1 Introduction
Chapter 3 captured community’s engagement in long list of livelihoods across agriculture, livestock and
non-farm sectors. Field experience shows that there is very little value-addition taking place at the
producer level in villages leading to a large chunk of produce moving out of the village in the raw form.
Value addition is generally taken up by players with high capital base located at higher order markets.
However, simple aggregation at village level with rudimentary value addition activities like cleaning,
sorting, grading, drying etc. can fetch higher price to the poor rural community.
Value Chain development is a process, which analyses every stage of the product or services i.e. from
production to the end consumer and endeavours to build the competitiveness across the chain. Value
chain analyses involves identifying product movement, number of channel partners involved and roles
performed by them, value received by each of the channel partners, constraints faced by each player in the
chain. Value chain analysis helps to identify opportunities for value addition at every stage of the product
from production to its marketing, prices at every stage and corresponding value addition possibilities,
assess infrastructure requirement and capacity building needs of producers to achieve higher value in the
chain.
Activity selection for value chain analysis
Following is the flow of key steps performed to select the five potential products for conducting value
chain analysis;
Box 3: Value chain analysis framework
Task performed Key Steps Shortlisted activities
Review of regional implementation plan provided by World Bank
Study secondary reports and concerned websites
Step 1 Literature review
Small holder dairy farming, piggery, poultry, village tourism, land development, horticulture (large cardamom, ginger, fruit plants, floriculture (rose, cymbidium), offseason vegetable, bee keeping, handicrafts, fodder development, Vocational trainings, entrepreneurship seed funds, placement support
Meeting with state nodal officer
Stakeholder consultation workshop with line department officers, bankers and NGOs at Gangtok
Meeting with govt. officials, SHG members and NGOs at District levels
Village visits in both districts
Step 2
Stakeholder consultation in
Sikkim
Dairy, Ginger cultivation, Floriculture, Pig rearing, Homestay (Rural Tourism), Hill grass trading, Poultry farming, cardamom cultivation, offseason vegetable farming, bee keeping, goat rearing and wool knitting.
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Review of secondary reports
Meeting with World Bank staff and Project Director, NERLP at New Delhi
Analysis of secondary reports
Step 3
Consultation with PD, NERLP and World Bank staff
Dairy
Ginger cultivation
Floriculture
Pig rearing
Homestay (Rural Tourism)
Based on the discussion with Project Director, NERLP and World Bank staff at New Delhi criteria
(engagement, interest and capacity of the poor, possibility of engaging large number of poor, market
demand, gestation period) was shared to shortlist five products i.e. milk, ginger, pig, flowers and
homestay for carrying out value chain analysis. All the five shortlisted produce are suitable for both
project districts. Summary of the recommended products and interventions are mentioned in Table 13.
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4.2 Summary of suggested interventions
Table 13: Summary of suggested interventions
Produce / Product
Intervention Suggested
Size of activity suggested Convergence and partnership potential
Key support to be provided by the Project
Unit of activity
Fund requirement (Rs)
RoI (%)
Cow Milk Improved practices in dairy farming both project districts
3 cross bred cows per houshold
151598 29.43 AHVS department and Sikkim Milk union.
Organise poor in SHGs, federation and producer group Introduce collective action for input sourcing Capacity building on improved package of practices, Finance linkage Handholding support Institutional support to Sikkim Milk
Ginger Improved package of practices for Ginger cultivation in both project districts
1 acre 24300 73.6 Wholesalers, HCCD Department, SIMFED, Progressive farmers and Financial institutions
Organize poor in SHGs, federation and producer group Introduce collective action for input sourcing and output marketing Capacity building for improved package of practices Finance
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Produce / Product
Intervention Suggested
Size of activity suggested Convergence and partnership potential
Key support to be provided by the Project
Unit of activity
Fund requirement (Rs)
RoI (%)
linkage Market linkages Market exposure Handholding support
Pig Rearing of American Hampstead variety of pig by adopting improved package of practices
6 pigs (5 female and 1 male) per household
209234 36.2 Wholesalers and retailer, Inputs suppliers , Progressive farmers, Financial institutions And AHVS department
Organize poor in SHGs, federation and producer group Introduce collective action for input sourcing Capacity building for improved package of practices Finance linkage Market linkages Handholding support
Floriculture Cultivation and marketing of Alstroemeria flowers
400 saplings under 1 poly house of 90 ft by 22 ft
263200 10.9 HCCD Department, SIMFED, Mainam Gardens, Other Wholesalers and retailers, Inputs suppliers , Financial institutions and Progressive farmers
Convergence with HCCD department Organize poor in SHGs, federation and producer group Introduce collective action for input sourcing and output marketing
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Produce / Product
Intervention Suggested
Size of activity suggested Convergence and partnership potential
Key support to be provided by the Project
Unit of activity
Fund requirement (Rs)
RoI (%)
Rural tourism
Promotion of Homestay based Rural Tourism
1 household constructing additional room for 4 persons
462400 20.3 Tourism Department, various cooperative societies involved in rural tourism, ECOSS, Help tourism, TASS etc
Formation of homestay collectives Capacity building for improved package of practices Finance linkage Market linkages Market exposure Handholding support
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4.3 Value Chain of Dairy
4.3.1 Background
It is well known that India is the world’s largest milk producer. In 2006-2007, it celebrated reaching to
the magical figure of 100 million tonnes. The growth of the milk production has been consistently high
since 70s. For example, since the inception of the “Operation Flood” program (1971-1996) by the National
Dairy Development Board (NDDB) Anand, the average annual growth rate of milk production has been
over 5 percent during the period. In 2005, the size of India’s dairy sector was estimated at Rs 2300 billion,
with a production of 95 million tonnes. Dairy India 2007 estimates that by 2011 the value of the dairy
industry will more than double, reaching Rs 5200 billion, with annual milk production of 120 million
tones. (Source: IIMB Management Review, Volume 20, Number 1 Article by Vinod K Huria March, 2008)
Figure 5: Sikkim milk production estimate
Sikkim has been a major milk producing state in the North eastern region of the country. Figure 5 shows
that while the increase in milk output since the last decade in Sikkim has been more or less slow, it has
also been consistent and steady. The growth in the sector has been brought about not by enhanced milk
productivity but by the formalization of milk marketing channels through cooperatives. Unlike most
heavy milk producing states, milk in Sikkim is primarily sourced from cows. The current average milk
yield per cow in the state is 6.5 litre per day. There is thus scope of productivity enhancement in milk in
the state.
The per capital milk availability in Sikkim is 243 grams per day. At present total milk production in
Sikkim is around 49000 MT per annum and milk procurement and processing in the organized sector is
15000-17000 litre per day which is meeting the requirement of the state. The marketable surplus milk is
being sold to the neighboring state of West Bengal. The government has a target to process at least 40,000
litres of milk in the milk unions and other organized sectors by the year 2015.
Since the last 5 years Sikkim has been following organic practices in cultivation of maize and other fodder
and as so the milk being produced in Sikkim is more or less organic. However, proper certification of the
35 35 35 35 37
45 48 46 48 49 49 49 49
0
10
20
30
40
50
60
Estimates of Milk Production in Sikkim ('000 tonnes) from 1997-98 to 2009-10
Source: Ministry of Agriculture, Govt. of India
Livelihood based Agri Business and Market Study in Sikkim
MART, Noida 44
milk as organic and positioning of the same as organic milk is yet to be done. (Source: Sikkim Livestock
Policy document 2010)
4.3.2 Feasibility of the activity
Technical feasibility
The agro climatic conditions of West and South districts of Sikkim (project area of NERLP) are
suitable for dairy farming. The dairy practiced in Sikkim is primarily of cow milk since the climatic
conditions of the state do not encourage keeping buffalos.
The basic skill for dairy farming is available with the poor community since most housholds keep
animals. Dairy is a part of the Livelihoods basket of almost all rural households of Sikkim.
There are also no social taboos or caste preference for Dairy in Sikkim and the activity is practiced by
all ethnic groups across all sections of the farmer community, big or marginal alike.
There is an strong enabling environment in the state for Dairy farming with the Department of
Animal Husbandry Livestock Fisheries and Veterinary Services (AHVS) of providing regular
trainings, required extension services and inputs. Research agencies like the ICAR and KVKs are also
conducting research to enhance productivity in Dairy farming.
The importance of the dairy subsector in Sikkim is also accounted by the fact that Sikkim has been
following organic practices in agriculture which has banned the use of chemical fertilizers and cow
dung is the single most bio-fertilizer that is being used.
Market feasibility
The Sikkim Cooperative Milk Producers Union Ltd. (Sikkim Milk) formed in the year 1980 is an apex
body of the primary milk producers’ cooperative societies formed at the village level on Anand Model
Milk Cooperatives. The milk union is a profit making entity and has more than doubled its turnover in
the last 4 years. Sikkim has a very good network of village level milk marketing cooperatives at all
GPUs. There are functional milk collection centres in all of the surveyed villages which are operated
by Sikkim milk.
The Milk Union offers a minimum price of Rs 16 per litre at the village level for standard milk with
3.5% fat and 7.5% solid non fat (SNF). This minimum rate is one of the highest in thye country for
cow milk.
Sikkim Milk has a wide network of retailers and milk parlours all across Sikkim for marketing milk
and milk products.
Unlike other tribal areas, Milk is a part of the daily diet of Sikkimese people. There are various value
added milk products like curd, paneer, churpi, butter, ghee etc. which are in high demand in urban all
across Sikkim.
The toursim sector in Sikkim is pretty evolved with a large number of hotels and restaurants all across
the state. This secor is one of the highest absorber of milk and milk products.
Economic feasibility
The ideal investment is Rs 55000 per unit. The overall income per household is around Rs 44699
with 29.4 % return on investment.
Finance is available from SISCO bank, other commercial banks and Micro finance institutions like
BASIX and Bandhan. However, the available finance from banks is often not adequate for the dairy
farmer and special financial support in Dairy farming is expected from the project.
Livelihood based Agri Business and Market Study in Sikkim
MART, Noida 45
The Potential Linked Credit Plan prepared by NABARD outlays Rs 62.1 lakhs for West District and Rs
40.5 lakhs for South District for bank loan on Dairy farming for the year 2011-12. This target
allocation has increased by 20% in South and 4% in West district signifying a thrust on the activity.
4.3.3 Production Cluster
The dairy activity by virtue of the well networked milk collection centres at almost all GPUs of the state
are suitable to be implemented in both the project districts of South and West. There might be some
constraints for villages with water shortage to take up dairy activity since the activity requires adequate
water. However, since almost all rural households keep cattle, Dairy farming can be easily taken up by the
poor of both the districts.
4.3.4 Value chain map of Milk
Figure 6 is a depiction of the value chain of Milk from the surveyed villages in Sikkim.
Figure 6: Value chain map of milk
The two most prominent players in the value chain of milk especially in Sikkim are the dairy farmer and
Sikkim Milk. Around 65% of the households of the surveyed villages keep milching cows. Average of 3
indigenous variety cows are assets to all households who keep cows. The average milk output per cow in
the surveyed villages is 6 litres per day and the average milk output per household is 11 litres per day. 1-2
litres are consumed at the household level while the rest is sold.
Franchise / Retailer
margin: Re 0.5/litre
Unprocessed: Rs 13–18/ litre
Unprocessed: Rs 24-30/ litre
High cream: Rs 36 / litre
Toned: Rs 25/litre
Processing by Sikkim Milk
Dairy Farmers
Retailers
and milk
parlors
(Inside
Sikkim)
Consumers Consumers, Hotels,
Restaurants
Input Supply
Fodder, Cattle feed, nutrient supplements, dairy implements, equipment, etc.
Milk Collection centre run by Milk producer’s
Cooperative Societies
Milk unions
outside
Sikkim
(side Sikkim)
Consumers
Franchisee
(Outside Sikkim) Institutional
supply. e.g.
Army, IRCTC
Commission to
Cooperative
Societies: 3.3%
of value of milk
Livelihood based Agri Business and Market Study in Sikkim
MART, Noida 46
4.3.5 Fodder and feed
The major fodder for cows constitute of wild grass, maize stocks, paddy straw, maize dust (Bhoosa) and
paddy husk. Green fodder in the form of wild grasses is sourced locally. Most farmers also grow fodder on
their fields in the form of Napier and C1 grass. 22% of the total area of Sikkim is reported to be available
for fodder cultivation (NABARD Potential Linked Credit Plan 2011-12). Milk output of the project area
decreases after the rainy season due to shortage of green fodder and water in some areas during winter.
During this period substitutes are used or fodder is purchased from Jorethang and other places. Oil cakes
(locally called pina) and common salt is also used as mineral supplements.
Cattle feed like Hemul Dana constitutes an important part of input supply for Dairy farming other than
fodder. Feeds and supplements for Dairy, Poutry and Piggery are commonly available in special shops
selling in major towns of Namchi, Jorethang, Namthang etc. There are cattle feed factories in Siliguri
producing cattle, poultry and pig feed in bulk. At Chompasari in Siliguri, West Bengal Dairy and Poultry
Development Corporation (a unit of Government of West Bengal) manufactures Hemul Dana, a highly
sought after feed in Sikkim. Samrat Feeds Private Limited and Apic Feeds Private limited are two private
players with factories at Fulbari and Mallaguri respectively. The feed from all these companies are
brought in regularly to these towns from the respective factories. Apart from these companies, Anmol and
Amrit feeds from Bihar are also available in these markets. Although cattle feed is exempted from VAT in
West Bengal, the transportation costs from the factory at Siliguri to the town level markets are high. Each
bag of cattle feed (sizes vary between 50 kg, 65 kg and 70 kg) incur around Rs 50-60 for transportation
including Sikkim Nationalized Transport tax, regulated market charges of Siliguri, market charges of the
local market, loading, unloading and miscellaneous charges. The retailer margin on each bag is around
8%. Around 9-10 such retailers are present in Jorethang market.
Some entrepreneurs use waste of beer factory as a cheap substitute for cattle feed which is sourced from
the beer factory at Melli.
4.3.6 Extension Services
The AHVS department has a good network of veterinary doctors and staff for providing extension services
free of cost in the villages. Sikkim Milk also has its own veterinary care centre at Karfectar. However,
accessibility of these services in far flung villages is restricted. While big farmers and entrepreneurs are
regularly visited by the veterinary doctors, poor farmers often spend around Rs 300 -500 per visit for
transport of the doctor. Vaccinations and de-worming are done free of cost from the respective
cooperatives and AHVS department. The department also forwards cattle insurance facilities to farmers in
association with Oriental Insurance Company wherein 50% insurance premium of each cattle insured is
borne by the department. Under a tribal sub-plan, there is a provision for distributing 1 cow per every BPL
household along with 5 day training on cattle management after the formation of a cooperative society
with at least 10 members. The scheme, however, has not been implemented satisfactorily since
community mobilization was inadequate and the process required a recommendation from the local
MP/MLA. The department also provides a subsidy of 33.33% in association with various banks for
procurement of animals under SGSY. Cows are procured by department of AHVS from other states like
West Bengal, Haryana etc. Some local dairy based entrepreneurs reported sourcing cows from Kurseong
and also Pashupati in Nepal through the Sukhia border between Nepal and Sikkim. Generally price paid
for a good HF breed is around Rs 25-30 thousand while a Jersey breed is expected to cost around Rs 15-
20 thousand. Cross bred animals are expected to cost around Rs 10 -12 thousand.
Table 14 showcases the strength of the extension services in the two project districts.
Livelihood based Agri Business and Market Study in Sikkim
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Table 14: Extension services in Dairy
Particulars Number in South District Number in West District
Veterinary hospitals 2 3
Veterinary Dispensaries 6 6
Disease Investigation
Laboratories
1 1
Artificial Insemination
centres
27 38
Stockman Centres 21 16
Rinderpest checkpost 1 1
Source: NABARD Potential Linked Credit Plan 2011-12 for South and West Districts
The AHVS department has trained educated youth in the area to run Artificial Insemination (AI) centres
at the GPU level. Semen, liquid Nitrogen and other equipments are regularly made available with these
para-professionals. The charges for AI are paid after the cow gives birth, which is Rs 300-500 for a male
calf and Rs 800-1000 for a female calf.
The KVKs located in each of South and West Districts also conduct various capacity building programs for
dairy farmers on Dairy in association with external experts, best practitioners and AHVS department.
A recent drive by the AHVS department in promoting good breeds is expected to increase the number of
cross bred cows with Holstein Frisian (HF) or Jersey variety. The department has established a Brown
Swiss Farm at Ravongla and a State Bull Rearing Farm at Karfectar for promoting good breeds. However,
as per the feedback of senior scientists of the department promotion of dairy among the poor should be
focused on cross breed cows only since pure breed HF and Jersey are expensive, more prone to diseases
and difficult to maintain under the known constraints of green fodder shortage during winters, water
shortage and low capacities of the poor dairy farmer. The milk of pure breed HF is also low in fat and
hence is expected to yield lower returns when marketed through the formal cooperative milk marketing
channel. As per the department, a properly maintained cross breed jersey cow can yield around 20 litres
of milk under ideal conditions.
The department recommends construction of Silage pits for storing fodder to address the shortage of
green fodder during winter along with following special winter package of practices. The department also
has completed an exercise in mapping mineral potential of entire Sikkim to find out mineral deficient
areas and supplement adequate mineral mixture for these areas for enhanced milk productivity all year
round.
4.3.7 Milk Marketing and role of Sikkim Milk
A majority of dairy farmers in each village are members of the milk producer’s cooperative society at the
GPU level. These collection centres are equipped with electronic lactometers and necessary equipments
for accurate measurement of fat and SNF in milk. There are generally 2 staff of the respective cooperatives
for each collection centre who are trained in testing milk. Payment registers are maintained by the staff
according to an index chart which determines due payments as per fat and SNF content. Payments to
members are done weekly. Collection of milk occurs twice a day and the collected milk is transported by
milk vans to nearest milk chilling units to be transported to the milk processing plant at Karfector near
Jorethang. There are also around 40 deep freezers provided by Sikkim Milk to various cooperative
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societies. While the centre at Karfector caters to South and West districts, East and North districts are
catered by a bigger unit at Tadong in Gangtok.
Sikkim milk has a minimum procurement price of Rs 16 for standard milk with 3.5% fat and 7.5% SNF.
However, the quality of the milk in the surveyed villages have seldom reached the desired level in terms of
fat and SNF. The average price at the village level that is fetched by the dairy farmer is around Rs 13 to Rs
15 per litre. Maximum price of milk at the village level was reported to be around Rs 19 per litre. (as per
primary survey)
Sikkim Milk is associated with 286 cooperative societies all across Sikkim with 114 in the South and West
Districts. Sikkim Milk has an association with West Bengal Dairy and Poultry Development Corporation
for bulk procurement of Himul dana. The annual report of Sikkim Milk signifies that in 2008-09
procurement of milk was 2213048 litres and 718201 litres from South and West District respectively.
Sikkim Milk has the following products under its belt:
o Pasteurized Fresh Cow Milk
o Toned Milk (3% fat and 7.5% SNF)
o High Cream Milk
o Butter
o Paneer
o Curd
o Lassi
o Chhurpi
Sikkim Milk has institutional tie ups with the Army cantonments in Sikkim for regular supply of milk and
milk products. Linkages with IRCTC are also in the process. Apart from this a chain of retailers and milk
parlors are associated with Sikkim Milk for marketing of the aforesaid products. Sikkim Milk is also
supplying surplus milk to West Bengal.
The cooperative societies associated with Sikkim Milk gets the following benefits from Sikkim Milk:
o Commission to the societies at 3.3% of the value of milk procured.
o Societies received bonus in the year 2009-10 at 50% of the average monthly milk
supplied.
o Supply of Cattle feed at cost price to the farmers with transportation costs being borne by
Sikkim Milk.
o Provision of milk cans at subsidized cost.
o Provision of mineral mixture, de-worming and medicines free of cost according to
availability under different projects/grants.
o Provision of Bulk Milk coolers and deep freezers under various projects / grants.
o Emergency veterinary support
o Free Capacity Building to members and functionaries
While a majority of the milk nowadays is collected by the milk collection centres, a few dairy farmers with
enough scale directly sell milk to consumers, hotels and restaurants in major markets of Namchi,
Jorethang etc. This milk is not processed (although adulterated with water in some cases) is often sold
twice a day to fixed consumer households, hotels, restaurants, sweet shops etc. The price of milk ranges
between Rs 20-30 per litre based on the quality of the milk. In some cases, the farmer also collects milk at
Livelihood based Agri Business and Market Study in Sikkim
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the village level to achieve scale and then supplies the same in the market. The payment for regular
household level or hotel supply is generally made monthly.
There are a few milk producer groups which have come a long way in manufacturing of milk products and
marketing the same. Naya Bihane SHG (men SHG) of Lower Okahare procures milk at the village level
and uses a cream separator to make paneer, butter and Chhurpi. The products are packed and branded
“Naya Bihane” before marketing through different channels (retailers based at Gangtok, Jorethang,
Sombarey and Dharamdin). The SHG is selling around 4 kgs of paneer every day at Rs 140 per kg to these
retailers. However, the SHG is restricted to scale up due to the need of advanced machinery and
refrigerators.
An Alpine cheese factory at Dentam has been set up under the Indo –Swiss project. The factory is
administered by a cooperative society which also procures around 2500 litres of milk everyday from local
dairy farmers. Amul is currently marketing the cheese manufactured by the factory.
4.3.8 Constraints-Solution Matrix
Table 15: Constraint Solution Matrix for Dairy
Factor Constraints faced by small and poor dairy farmers
Critical Intervention points
Input sourcing and Production
Availability of adequate water and
green fodder round the year.
Low productivity of cows.
Availability of good cross breed cows.
Dairy farmers different qualities and
quantities of cattle feed resulting in
non standardization of practices
Establish a formal arrangement with
the AHVS department and Sikkim
Milk for ensuring availability of good
quality cross bred cows.
Promote Silage pits for storing green
fodder.
Identify and promote specific cluster
of villages for specially producing
fodder.
Ensure adequate availability of
mineral mixtures and nutrition
supplements at all project village
levels.
Create village level cadre of technical
persons to provide technical services
to dairy farmers regarding
productivity enhancement.
Regular training on best practices and
exposure visits to best practitioners in
the local area.
Access to finance
Availability of timely and right amount
of credit for working capital and
sourcing cows is an issue. Bank loan
also requires a lot of paper work.
MFIs and banks working in the area
provide loan but their loan products
don’t match expectations of dairy
farmers. Even established dairy
Organize poor famers in SHGs to link
them with local banks to ensure their
financial inclusion.
Develop partnership with existing
MFIs and banks encourage them to
develop specific loan products for
commercial dairy farming and
expansion
Livelihood based Agri Business and Market Study in Sikkim
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Factor Constraints faced by small and poor dairy farmers
Critical Intervention points
entrepreneurs face problems in scaling
their activities due to lack of adequate
bank finance.
The Project can also fund the activity
directly.
Marketing Payment for milk is based on fat and SNF content which is low in cow milk. The niche value for cow milk is not accrued to the producer.
Although the milk produced in Sikkim is primarily organic, there is no premium price to producers for being organic.
The project can facilitate proper organic certification of milk and develop niche markets for cow milk to enable premium prices for the poor producer.
Cooperation among farmers and institutions building
There is low affinity among farmers
for collective action for sourcing of
feed and fodder in higher operating
costs.
Guide dairy farmers for collective
sourcing of feed and fodder to reduce
operational costs.
Govt. policies and external ecosystem
Low outreach of schemes for dairy
promotion among poor.
Blockage of roads and landslides may
lead to market failure making dairy
activity unviable.
Appoint implementing agencies and
develop village level service providers
to help famers link with need based
government schemes and services.
Development of adequate milk chilling
and storage mechanism at village level
to withhold milk from perishing
during roadblocks due to landslides.
4.3.9 Project Interventions
Project can promote Dairy farming to be taken up by SHGs and dairy groups in a cluster. Individual
farmers will be keeping cattle for milk production but sourcing of feeds and fodder can be done
collectively. Marketing can be done through the cooperative societies associated with Sikkim Milk.
Special marketing infrastructure can be build and existing infrastructure of Sikkim Milk can be
enhanced by the project to facilitate efficient marketing of milk once the total volumes of milk in both
the district enhances due to project interventions.
Project need to work on strategies and capacity building inputs suggested in the previous section and
by adopting an implementation plan described later.
Project can facilitate funding to individual farmers on the basis of unit cost described below.
4.3.10 Economics of Dairy farming (for 1 houshold keeping 3 cross breed cows)
a. Assumptions
Calculations have been done for 3 cows with 1 acre of land for fodder cultivation. Cost of various
inputs and outputs are based on information collected from villagers, entrepreneurs, market
players, Sikkim Milk and AHVS department. A silo pit for storing green fodder will be constructed
at Rs 40,000 per year for 10 dairy farmers.
The rate of interest for bank loan is taken @ 12% per annum. The average price of milk is assumed
to be Rs 18/ litre after following best practices. 3 cows will produce 20 litres of surplus milk per
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day. Income from selling 2 calves per year and selling dry cow dung has also been taken into
account.
Table 16: Financial plan for Dairy farming
Sr. No Particular Unit Quantity Unit Price (Rs)
Total Amount
(Rs)
1 Fixed capital
1.1 3 cross breed cows including transportation numbers 3 15000 45000
1.2 Shed Reinforcement with locally available materials lumpsum 1 5000 5000
1.3 Milk Cans and implements lumpsum 1 5000 5000
1.4 Total fixed capital
55000
2 Yearly Revenue generation
2.1 Sale of Milk at Rs 18 per litre for 20 litres per day Days 365 360 131400
2.2
Sale of dry Cowdung at Rs 100 per bag (3 cows produce 15 bags per month) Bag 12 1500 18000
2.3 Sale of 2 calves at Rs 5000 per calf lumpsum 2 5000 10000
2.4 Total Income 379
159400
3 Yearly Expenses
3.1 Cultivation Expenses for fodder (Napier) in 1 acre land lumpsum 1 5000 5000
3.2 Cattle feed (Hemul dana) at Rs 14 per kg (1 kg per cow per day) Days 365 42 15330
3.3 Maize dust (Bhoosa) or paddy straw at Rs 10 per kg (2 kg per cow per day) Days 365 60 21900
3.4 Oil cake (pina) at Rs 14 per kg (1 kg per cow per day) Days 365 42 15330
3.5 Mineral Mixture at Rs 15 per kg (0.5 kg per cow per day) Days 365 22.5 8212.5
3.6 Calcium Supplement at Rs 100 per litre (1.5 litre per cow per month) Months 12 450 5400
3.7 Labour Charges at Rs 15 per cow per day Days 365 45 16425
3.8 Silage pit for Fodder storage (Rs 40,000 for 10 farmers) lumpsum 1 4000 4000
3.9 Artificial Insemination charges lumpsum 1 4000 4000
3.10 Insurance lumpsum 1 1000 1000
3.11 Total running cost
96597.5
4 Profit before interest
62802.5
5
Interest (12% per annum on Total investment including fixed capital) 12% 151,598 18191.7
6 Net profit
44,611
7 ROI
29.43%
8 Payback period Year
2.413877
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b. Sensitivity Analysis for Dairy
Table 17: Sensitivity Analysis forDairy
Sr. No Parameters Revenue
(Rs) Expenses
(Rs) Profit before interest (Rs)
1 What if labour utilized is family labour 159400 80172.5 79227.5
2 What if running expenses go up by 10% 159400 106257.3 53142.75
3 What if running expenses fall by 10% 159400 86937.75 72462.25
4 What if average price of milk decreases by Re 1 152100 96597.5 55502.5
5 What if average price of milk increases by Re 1 166700 96597.5 70102.5
6 What if average productivity of milk goes up by 1 litre 165970 96597.5 69372.5
7 What if average productivity of milk falls by 1 litre 152830 96597.5 56232.5
4.3.11 Implementation plan for Dairy promotion
Table 18: Implementation plan for Dairy
Key steps to be
followed
Activities to be performed by project
Phase I – Preparedness at the community level
Cluster selection Select the right cluster for initiating dairy promotion based on technical
feasibility.
Identify target block, village and the community.
Social mobilization
and institution
building
Sensitize poor dairy farmers on potential of dairy using the findings of value
chain analysis described earlier and their impact on livelihood.
Share various possibilities of Dairy, its cost benefit analysis, and assess
community interest level to take up the activity.
Identify the members/groups to start Dairy as a new unit. Initially only a
limited number of groups should be encouraged to start the activity. Based
on the results of pilots add more members. List out members separately who
are already doing the activity and want to either expand or strengthen the
activity.
Initiate participatory discussion to arrive at consensus on roles and
responsibilities of members and group leaders to take up the activity.
Preparation of
business plan
Prepare a proper business plan for Dairy in consultation with the
community detailing the economics of the activity, sourcing of inputs,
linkages with market players, production practices and technology to be
used, and government schemes to be availed.
Capacity building Leadership training for group members–functions and responsibility to
interact with external players.
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Training in business and marketing skills (costing, pricing, accounting, sales
and marketing, negotiation, market analysis) to members using
participatory techniques.
Technical training on better practices, exposure visits to nearby best
practitioners and outside the states as well.
Identify suitable government and private agencies that can provide need-
based technical and business training at the community level. Identify local
level best practitioners.
Phase II - Launching of the unit
Backward linkages Counsel farmers to procure feed and fodder collectively in bulk to reduce
operational costs.
Systematize training management.
Establish finance support for Dairy on unit cost basis.
Production Implement best practices.
Clarity of roles, specialization and continuous skill improvement
Bring quality control in production to achieve efficiency, higher productivity
at lower costs.
Better record keeping and financial management.
MIS development and multidimensional intervention opportunity.
Market access Identify suitable and multiple markets and prepare list of market players
with their contact details for sourcing inputs. Identify niche markets for cow
milk and organic milk.
Clarify on profit sharing and funds rotation among members in case of
group activity.
Understand organic certification norms and methodology to obtain organic
certification. Prepare special action plan for the same.
Build System for collaborations and employment
Possibilities of Partnership
Partnership possibilities exist with AHVS department and Sikkim Milk union.
As mentioned earlier, Sikkim Cooperative Milk Producers Union Ltd. (Sikkim Milk) is already functional
in the project area and can act as a ideal stakeholder in promoting cluster based interventions around
Dairy for the project. However, the institution needs support in strengthening its infrastructure and
building appropriate capacities to specially include the project beneficiaries under its umbrella. A 3 year
plan jointly prepared by Sikkim Milk and MART, for the project to support Sikkim Milk is annexed with
this report.
Possibility of setting up processing unit
There is a possibility of processing milk into milk products like ghee, butter, churpi etc. However, setting
up such processing units at the village level would require sufficient entrepreneurial skills among poor,
marketing and technical skills, and ensured market linkages with bulk buyers to sustain such units. The
demand at the village level is low and marketing of products outside would require successful marketing
interventions such as proper packaging and branding. Sikkim Milk is already processing the same. It is,
therefore, suggested that for first couple of years poor (both individuals and groups) should encouraged
Livelihood based Agri Business and Market Study in Sikkim
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for milk production, productivity enhancement and market linkages. After a couple of years project can
identify few individuals with entrepreneurial skills to experiment setting up few processing units.
4.4 Value Chain of Ginger
4.4.1 Background
Ginger (Zingiber officinale) is an herb that is native to South East Asia and has been used as a food
additive for more than 4,000 years, and for medicinal purposes for more than 2,500 years. Originaly
cultivated in China ginger is now equally spread around the world. It is the "root" of the ginger plant
(which is actually not a root, but a rhizome) that is most useful for medicine and for flavoring food.
The eight North Eastern states of India accounts for 49% of India’s Ginger producing area and 72% of
India’s ginger production. Ginger is an important cash crop of Sikkim. It is grown by all section of farmers
including small and marginal farmers. The ginger available in Sikkim is less fibrous with high moisture
content. Ginger produced in these parts are reported to have higher oil (5.9-8.56%) than ginger from
other parts of India (5-8%). (Source: Traditional practices of ginger cultivation in Northeast India; H
Rahman, R Karuppaiyan, K Kishore & R Denzongpa; Indian Journal of Traditional Knowledge).
Figure 7: Production trends of Ginger
Figure 7 shows the trend of ginger production in India from 1997-98 to 2008-09 which clearly shows a
fall in productivity and production since the last 5-6 years.
The last five years have been crucial for ginger production in Sikkim as well, since the state has stopped
using chemical fertilizers and pesticides for ginger cultivation. Use of chemical fertilizers and pesticides
75.6 77.6 80.8 86.2 91.3 88.2 85.1 95.3 110.6 106.1 104.1 108.6
252.1 263.2 282.6 288.0
322.1
280.2 301.9
359.0
391.2 393.4 382.6 380.1
0
100
200
300
400
500
600
Year wise area under Cultivation and Production of Ginger in India (Source: Ministry of Agriculture and National Horticulture Board)
Production ('000 Tonnes) Area under cultivation ('000 hectares)
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has been banned all across the state. Currently only preventive organic pesticides like Neem is being used
by farmers. The most common problem faced by ginger farmers of Sikkim is soft rot, which is the most
destructive disease of ginger resulting in total loss of affected clumps. Different research agencies like
Indian Council for Agriculture Research (ICAR) and Krishi Vigyan Kendra (KVK) are still in the process of
developing curative organic pesticides for the same. This has resulted in a marked decrease in production
and productivity of ginger due to high incidence of diseases.
However, in-spite of the problems faced, ginger remains as one of the most important cash crops of the
state.
4.4.2 Feasibility of Activity
Technical feasibility
The agro climatic conditions of West and South districts of Sikkim (project area of NERLP) are
suitable for ginger cultivation.
Ginger available in Sikkim is less fibrous with high moisture content. Ginger produced in these parts
are reported to have higher oil (5.9-8.56%) than ginger from other parts of India (5-8%). This
attributes to the good quality of ginger that ios produced from this state.
Sikkim has around 7000 hectares under Ginger cultivation which annually produces around 377000
tonnes. This accounts for around 9.8% of India’s production. (Source: Ministry of Agriculture, Govt.
of India - 2007-08)
The basic skill for ginger cultivation is available with the poor community. Ginger is also cultivated
across all sections of the farmer community, big or marginal alike.
There is an enabling environment in the state for ginger cultivation with the horticulture department
providing regular trainings and inputs for ginger cultivation. The department supports around 300
hectares of ginger cultivation every year in the two project districts of South and West alone with
seeds, bio fertilizers etc. Research agencies like the ICAR and KVKs are also conducting research to
enhance productivity and counter diseases in ginger cultivation.
Market feasibility
The quality of ginger produced in Sikkim is one of the best in country as per market demand. Thus the
Sikkim’s variety of ginger fetches the best prices in the market.
There is well organized market network in the state for ginger. Villages of South and West districts are
connected to various assembled markets like Namchi, Jorethang, Soreng, Singtam, Reshi etc. Ginger
from all these markets are traded through Siliguri regulated market.
There are multi purpose cooperative societies formed in almost all Gram Panchayat units which deal
in ginger. These societies either trade by themselves or pass on their produce to Sikkim State
Cooperative Supply and Marketing federation Ltd. (SIMFED). SIMFED has a counter at the Siliguri
regulated market and also linked to various national and international buyers.
Siliguri, the main regulated market of the area is a major ginger hub of the country which supplies
ginger to Delhi, Mumbai, Kolkata etc National markets as well as international markets like
Bangladesh. There are around 150 national and international level traders dealing in ginger having
counters at the Siliguri regulated market. As estimated by ginger traders, an average of 1500 tonnes of
ginger is traded out of Siliguri every day.
Economic feasibility
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The ideal investment is Rs 23300 per acre. The overall income per acre is around Rs 17844 with 73.6
% return on investment.
Finance is available from SISCO bank, other commercial banks and Micro finance institutions like
BASIX and Bandhan. However, the available finance from banks is often not adequate for the ginger
farmer and special financial support in ginger cultivation is expected from the project.
The Potential Linked Credit Plan prepared by NABARD outlays Rs 444 lakhs for West District and Rs
740 lakhs for South District for bank loan on Ginger cultivation for the year 2011-12. This target
allocation has increased by 57.2% in South and 34.7% in West district signifying a thrust on the
activity.
4.4.3 Production clusters
Sikkim produces one of the best qualities of ginger in the country.Ginger cultivation is generally practiced
throughout the state. The project districts of South and West Districts are ideally suited for ginger
cultivation and almost all villages are well suited for Ginger cultivation. Productivity of Ginger is found to
be best in villages with heights between 2000 feet to 4500 feet.
4.4.4 Major usage and by-products
Ginger has a strong distinct flavor that can increase the production of saliva due to which Ginger is mainly
consumed as a major spice and flavor ingredients all across the globe. Pickles, ginger flavoured tea, candy,
toffees, lozenges etc are also common. A Government Fruit Preservation Factory by the Governemnt of
Sikkim is functional at Singtam which
Compounds in the ginger rhizome, called oleoresins, have anti-inflammatory properties and are also
known to have a positive effect on the muscles in the digestive tract. Thus Ginger is often an important
ingredients in various medicines, chawanprash, syrups, health tonics, cough tablets, digestive tablets etc
various applications.
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4.4.5 Ginger value chain map
Figure 8 is a depiction of the value chain of Ginger in Sikkim.
Figure 8: Value chain map of Ginger
* The rates given are for fresh Ginger and ‘q’ stands for quintal.
Siliguri is the terminal market for ginger not only for Sikkim but also for all other North Eastern
states and West Bengal. Ginger in Delhi, Kolkata, Mumbai and other major cities of India are mainly
sourced from Siliguri. There are also regular international consignments to Bangladesh from Siliguri.
Ginger is sold throughout the year. However the ginger sold through vegetable retailers at Gangtok,
Namchi, Jorethang etc. urban centres of Sikkim often come from Siliguri except during the harvesting
season.
By the time the produce reaches consumers in major cities, almost 3 times value is accrued to Ginger
from the base value that the producers get. High transaction costs also contribute the enhanced value
of Ginger.
SIMFED
Ginger Farmers
Wholesalers
(Siliguri)
Retailers
(Outside Sikkim)
Consumers Consumers
Traders at
Jorethang, Reshi, Namchi,
Namthang,etc.
Retailers
(Outside Sikkim)
Consumers
(Local market)
Input Supply from farmer’s own sources
Seeds, bio-fertilizers, agriculture implements, equipment, cow dung
Rs 2500-3500/q
Village level
traders
Rs 3500-4500/q
Rs 4500-5500/q
Rs 2000-2500/q*
Wholesalers
(Delhi, Mumbai, Kolkata)
Wholesalers
(Delhi, Mumbai, Kolkata)
Wholesalers
(Siliguri)
Traders at
Jorethang, Reshi, Namchi,
Namthang,etc.
Retailers
(Gangtok, Namchi, Jorethang)
Wholesalers
(Siliguri)
Rs 5500-7000/q
Multipurpose
Cooperative
Societies
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4.4.6 Input suppliers
The main inputs required for Ginger cultivation are seeds, organic fertilizers and agri implements. Under
a directive by state government, the farmers of Sikkim have stopped using chemical fertilizers and
pesticides for Ginger production. Chemical pesticides and fertilizers usage is not only banned by all Gram
Panchayat Units, but also sale of such products are banned in markets. The GPUs have a system of
imposing fines in case of non compliance.
Currently, the only fertilizer being used is cow dung. Ash is also applied as a fertilizer. Neem is often used
as a preventive fungicide / pesticide. However, there is a dearth of availability of curative organic
fungicides and pesticides. Horticulture department provides certain bio fertilizers free of cost but only to a
limited number of farmers. As mentioned earlier, research is being undertaken at KVKs and other ICAR
organization for developing suitable bio fertilizers, fungicides and pesticides.
4.4.7 Farmers
Farmers generally keep seeds from previous year harvest. Seeds are also procured from nearby open
markets. Farmers are also provided free of cost seeds and other inputs from the Horticulture department.
Cow dung is often used from farmer’s own sources since almost all farmers keep cattle and bullocks.
Around 70% of the farmers in the surveyed villages had their own bullock pairs for ploughing. Since the
fields are terraces cut out on hill slopes, mechanization of the ploughing process in the form of tractors or
power tillers is either not possible or very difficult. Irrigation is through natural springs (locally called
Dhara) and water tanks specially constructed by Horticulture department or department of soil and water
conservation. However irrigation facilities are very much limited and ginger cultivation in Sikkim is
primarily rain fed.
A collective farming system called Parma system prevails among many communities in Sikkim in which
friends and relatives of individual farmers come together to work in the fields of the farmer free of cost.
Mutual help saves labour costs.
4.4.8 Production practices
In the selection of land for ginger cultivation, fields where water stagnates are avoided. Farmers also
believe that planting the same land every year does not produce a good crop. Chosen fields are cleared of
all vegetation by burning and the ash is also used as fertilizer. The land is then ploughed, dug and hoed. A
second plowing occurs 15 to 18 days later. Cow dung is applied to the fields and they are plowed again to
mix the manure into the soil. Beds 20 to 25 cm high are prepared with drains between them. Just before
planting, the stored ginger seed rhizomes are sorted again. Good healthy rhizomes, that are, large, shiny,
free from spots or marks, and free from bud or eye injury, are selected.
The selected ginger rhizomes are planted in two or three zigzag rows in the beds and covered with up to 8
cm of soil. The spacing between the rhizomes are about 15 cm. Some farmers believe that to increase
production, one can plant three or four rows in a bed. During planting the seed rhizomes are broken into
pieces to ensure that each has two to four sprouts. Immediately after planting, the beds are mulched with
dry leaves up to 8 to10 cm thick. Some farmers use mulch made by putting grasses in the cowshed for a
few days so that it mixes with cow urine and dung. Mulching protects the seedlings from rain, prevents
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weed growth, keeps the soil soft and moist, and accelerates growth. Most farmers, practice intercropping
with maize as maize plants provide shade to the ginger. Maize is planted in the drains in between the
beds.
After about a month, the beds are weeded. Ginger shoots are still very small and the chances of damage to
them are high. Weeds are uprooted and disposed of outside the bed. When the ginger plants have three or
four leaves, the mau or mother rhizome is removed, although if it is too small, it is left in place. Care is
taken not to damage the roots and cause infection. The roots are immediately covered again with soil. The
mau is sold off to traders at Namchi, Jorethang, Reshi etc. markets which fetches anywhere between Rs
3500 to 4500 per quintal. Fifteen days after mau extraction, manure is applied.
To keep the seeds for the next season, healthy looking plants are selected i.e. plants that are not dried,
which are harvested 15 to 20 days before and stored in a dry, shady place. The rest of the crop is harvested
for sale. Some farmers harvest the entire crop and then select healthy rhizomes and store them either in a
pit covered with straw or in a cool, dry place in the house or godown.
If seeds are bought from open market or obtained from government sources, they are stored in house in a
cool, dry place covered with gunny bags or outside in a dry, shady place. The ginger for sale is harvested
depending on the market price. Farmers usually change the seed every two to three years to reduce the
prevalence of disease. A few rich farmers also store the harvest to sell in off season when prices are
comparatively higher.
Bhainse, Gurubathane and Majauli are the three types of Ginger harvest based on their respective sizes of
the harvested rhizomes. However, there are little efforts by farmers to sort the produce according to their
sizes and sell the same. However, the Bhainse variety fetches better prices than Gurubathane and
Majauli.
Farmers have been experimenting with various disease management practices in different villages. Some
Lepcha farmers clean all the mud from the bottom of the diseased plant and expose the roots to the sun.
Rotten plant roots are scratched and ash is applied. Some believe that just exposing the roots of infected
plants to the air and sun can stop further spread of disease. The farmers say that these roots or rhizomes
germinate and grow well. Some farmers cultivate ginger only in sloping fields using traditional methods,
that is, without much land preparation. They just scratch the soil to make a hole and plant the rhizome
seed in it. Many farmers contend that red soil helps control disease.
4.4.9 Market access
Farmers sell Ginger in local weekly haats, to local traders and traders at Namchi, Jorethang, Legship etc.
rural and urban centres. All transactions are done in cash. Sikkim has a very vibrant cooperative system at
the village level and some multipurpose cooperative societies at the GPU level also procure Ginger from
farmers and sell the produce to wholesalers at Siliguri through SIMFED. In the surveyed villages, while
around 20% of the produce was sold through village level traders and cooperative societies, another 20%
were sold through weekly markets and 60% is sold directly to traders at Namchi, Jorethang etc. urban
centres.
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Ginger is generally sold loose by farmers without much cleaning and value addition. The unit of sale is
Mon which is equivalent to 40 kgs. The average price received by farmers is Rs 2000- 3000 per quintal.
When sold directly to town level traders, farmers generally bring their produce in jute bags (borra) via
local jeep transport. After selling the produce the jute bags are taken back by the farmers.
4.4.10Village level traders
Village level traders generally deal in multiple produces and receive advances from wholesalers in Siliguri
for procuring Ginger from farmers at the village level itself. A section of these traders are also linked to
town level traders for passing on the produce to them in the value chain. The village level trader in some
cases were found to undergo basic value addition to the procured Ginger in terms of cleaning, sorting,
grading and standard packing the ginger into jute bag (borra) packets of 60 kgs. Village level traders of
the surveyed villages transport their produce in half trucks at an average cost of Rs 10 per Borra (60kgs)
to town level traders. Sometimes local transport jeeps are also used as transport.
4.4.11 Town level traders
A large section of the town level traders constitute of Bihari community along with Marwari community.
These traders are the major aggregators of Ginger at the town levels and also form the main link with
wholesalers in Siliguri. While Namchi has around 50-60 such traders, Naya Bazaar near Jorethang houses
another 70-80. The town level traders grade the produce according to parameters like size of rhizomes,
quality, moisture content, colour etc. Generally the market area from which the produce has originated
bears much importance in marketing of Ginger. e.g the Melli quality named after the market of Melli in
South Sikkim is one of the best qualities of Ginger. Similarly Reshi and Singtam variety refers to the
market of Reshi of West Sikkim and Singtam in East Sikkim respectively which procures a bulk of the
Ginger of the area but has lower quality attributes. There is a price difference of around Rs 5-8 per kg
between these qualities. The procurement prices of Ginger in these town level markets fluctuate often
according to the demand and supply conditions of the Siliguri market. These traders negotiate with
wholesalers in Siliguri and finalize deals telephonically before sending the produce. Later they themselves
visit Siliguri to collect their due at least once in every fortnight.
The traders store the procured produce in their own godowns and sends off the collected produce to
Siliguri regulated market every week. A primary function of the town level trader is to grade the collected
produce and pack them in standard packing sizes of 60 kg jute bags. The weight of the jute bag which is
around 900 grams and costing around Rs 25 per piece is also included in the weight of the packet. The
labour charges incurred by the trader are around Rs 10 for packing, weighing and loading the packets
onto the vehicles of transport.
The town level traders often deduct 3-4 kgs per packet while paying the farmer his dues by accounting for
impurities in his ungraded produce. There is also incidence of cheating in weights where at least 1-2 kgs
per packet goes unpaid for.
4.4.12 Transportation
All types of transport vehicles are used for transport of Ginger ranging from Half trucks with 2-5 tonnes
capacity to 9 tonnes and 16 tonnes capacity trucks. There are around 8-10 different transporters in
Namchi alone who own trucks. As informed by some interviewed traders around 4-5 trucks of 9 tonnes
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capacity ply every day from Namchi to Siliguri carrying ginger during the harvesting season. A 9 tonne
truck is also reported to carry around 180 packets as an optimum. The transportation charges charged by
transporters are around Rs 40 per packet from Namchi to Siliguri. The same cost varies as per distance
like from Melli it is Rs 30 per packet and from Geyzing it is Rs 45 per kg. This includes various costs of
transport like Sikkim Nationalized Transport tax of Rs 9 per packet, West Bengal regulated market tax of
Rs 6 per packet, charges for crossing over to the state border (often referred as Gunda tax), bribe to
policemen etc.
4.4.13 Wholesalers
There are around 150 wholesale Ginger traders in the regulated market for Agri-Horti produce in Siliguri.
Ginger from Sikkim, Darjeeling, Kalimpong , Dimapur, Shillong, Guwahati, Aizwal etc. converge in
Siliguri to be traded to all corners of the country. In this market the quality of Ginger is differentiated not
only by the area of origin like town level traders but also by the thickness of the Rhizome which are Mota
(thick) or Patla (Thin). While the produce of Sikkim is largely thick, the variety of Ginger from other
North Eastern states of Mizoram, Nagaland and Meghalaya are of thin quality. The thick variety is
reported to be of demand in Delhi and North Indian places while the thinner quality is in demand in the
eastern parts of the country like Kolkata, Patna and also Dhaka in Bangladesh.
The produce after arriving in the regulated market undergoes a washing (in the river or specially
constructed tanks) and grading again to be repacked into packets of 60 kgs. The washing of the produce
brings about a special glaze to the ginger which not only fetches a good price also restores the lost
moisture. However, only the fresh ginger is washed and mother rhizhome (Mau) is not washed. There are
around 15-20 organized players in the regulated market who exclusively performs the washing grading.
Expenses per packet of 60 kgs for each process is as follows;
Unloading charges: Rs 2.5 (charges fixed by labour union)
Washing: Rs 25-30
Sorting and Grading: Rs 3 (done by women and charges fixed by labour union)
Packing, weighing and Loading: Rs 7 (charges fixed by labour union)
There are generally three types of deals that generally occur between town level trader and wholesalers in
Siliguri.
1. The wholesaler acts as a commission agent in selling the produce to wholesalers in other places of
the country. The commission charged is 5% from both parties (seller and buyer) and all other
costs like sorting, grading, washing, weighing, loading, etc are borne by the seller. Unloading
expenses is borne by the buyer. The responsibility of taking the produce to the regulated market
is also with the buyer. The wholesaler plays the mediator between the buyer and seller.
2. The wholesaler acts as a trader and negotiates a deal from the seller by fixing the price of the
produce per quintal such that whatever be the prevailing prices in the market, the deal will be
carried out at the negotiated prices only. Under such circumstances all expenses are generally
borne by the wholesaler himself including transportation charges. The wholesaler decides
himself whom to sell and at what price to sell and the buyer and seller do not come face to face
with each other.
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3. The wholesaler acts as a service provider between two parties (seller and buyer) and does not
charge a fixed commission but a facilitation and service provision charge for arranging
transportation and other services. All expenses are borne by the parties and certain services like
transportation, loading, grading etc are provided by the wholesaler.
Some transport costs per kg as reported from traders in the regulated market are Rs 2.3o for Delhi
(Azadpur Mandi) and Rs 2 for Kolkata (Barabazaar).
There is some weight loss (around 1 -2 kg per packet) reported of the Ginger by the time it reaches its
destination in Delhi or Kolkata. This is due to the loss of moisture that occurs in the fresh Ginger. To
counter this weight loss the packet size is made at 61 kgs instead of 60 kgs. This weight loss is however
very little for mau or the mother rhizome.
The actual produce is often devalued on paper to reduce the imposed sales tax on the item. The financial
transactions that occur between various wholesalers are not always through ethical or legally sound
channels with a majority of them being conducted through Hawala at a commission of 3%. There are also
reported systems of bribes to the tune of Rs 5 lakhs per annum from the regulated market for these
transactions to continue unhindered.
4.4.14 Constraints-Solution Matrix
Table 19: Constrain Solution Matrix for Ginger
Factor Constraints faced by small farmers Critical Intervention points
Input sourcing
and Production
Ginger seeds from the government
department are distributed to only a
handful of farmers who are not
marginal or poor.
Availability of bio fertilizers other
than ash and cow dung.
Availability of organic fungicides and
pesticides.
Incidence of diseases like Poinle or
Soft rot.
Farmers who took one-time training
from agriculture department didn’t
get the desired yield. By hit and trials
approach they develop package of
practices.
Cold storages are very far and few.
Establish a formal arrangement with
the Horticulture department for
ensuring adequate supply of Ginger
seeds and fertilizers to farmers.
Support KVK and ICAR in speedy
research of appropriate organic
fertilizers, fungicides and pesticides.
Appoint implementing agencies and
develop village level service providers
to help famers link with need based
government schemes and private
services.
Create village level cadre of technical
persons to provide technical services
to farmers.
Regular training and exposure visits to
best practitioners in the local area can
help poor farmers.
Set up new cold stores after feasibility
study.
Access to Availability of timely and right Organize poor famers in SHGs to link
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Factor Constraints faced by small farmers Critical Intervention points
finance amount of credit is an issue. Bank
loan requires a lot of paper work and
farmers’ don’t have proper papers
against their land. The loan provided
is also inadequate for ginger farming.
MFIs and banks working in the area
provide loan but their loan products
don’t match expectations of farmers.
them with local banks to ensure their
financial inclusion.
Develop partnership with existing
MFIs and banks encourage them to
develop loan product for Ginger
cultivation based on its economics.
The Project can also fund the activity
directly.
Value addition Farmers do not clean their produce
and sells off the produce immediately
after harvesting without sorting and
grading
Cleaning, sorting and grading should
be taken up at the village level by
farmers to maximize profits.
Capacity building of farmers should be
done in taking up elementary value
addition.
A 7.5 MT/day capacity ginger
processing plant has been
commissioned recently at Jorethang
which will be operated by SIMFED.
The centre can cater to the needs of
the poor farmers in the project area
through convergence by NERLP.
Market access Farmers sell individually to the village
level trader or town trader resulting in
higher overhead marketing costs
Farmers get 1/3 rd of value paid by the
final consumers
There is scope for collectivizing
farmers to sell collectively and directly
to higher order markets at towns and
Gangtok for better price realization.
Cooperation
among farmers
and
institutions
building
There is low affinity among farmers
for collective action for sourcing of
seeds and sale of Ginger resulting in
higher operating costs.
Guide farmers for collective sourcing
of seeds and marketing to reduce
operational costs.
Govt. policies
and external
ecosystem
Blockage of roads and landslides may
lead to increase in input costs and
market failure making Ginger
cultivation unviable.
Development of local market system
will reduce dependence on external
markets.
4.4.15 Project Intervention
Project can promote Ginger cultivation to be taken up by an individual family. Individual farmer will
do the production but sourcing of seeds and marketing can be done collectively.
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Project need to work on strategies and capacity building inputs suggested in the previous section and
by adopting an implementation plan described later.
Project can facilitate funding to individual farmers on the basis of unit cost described below.
4.4.16 Economics of Ginger cultivation (for 1 acre)
a. Assumptions
Calculations have been done for 1 acre of land for Ginger cultivation activity. Cost of various inputs
and outputs are based on information collected from villagers, market players and agriculture
department.
The rate of interest for bank loan is taken @ 12% per annum. Bank loan is considered for 1 year.
The wholesale price of Ginger is taken as Rs 25/kg for Manjali and Gurubathane varieties while Rs
30/kg for Bhainse and Rs 40 /kg for Mau.
Table 20: Financial plan for Ginger cultivation
Sr. No Particular Unit Quantity
Unit Price
(Rs)
Total
Amount(Rs)
1
Fixed capital (Agri-implements,
packing and storing materials) lumpsum 1 1000 1000
2 Revenue generation
2.1
Sale of Majauli and Gurubathane
ginger (Rs 25 per kg on average) Quintal 5.4 2500 13500
2.2
Sale of Bhainse ginger (Rs 30 per kg
on average) Quintal 5.4 3000 16200
2.3
Sale of mother rizhome (mau) (Rs 40
per kg on average) Quintal 3.6 4000 14400
2.4 Total Income 14.4 44100
3 Cultivation Expenses
3.1
Land preparation (2 times ploughing at
Rs 200 /plough) Plough 2 200 400
3.2
Fertilizer Application (raw cowdung
100 baskets at Rs 20 per basket)
cowdung
basket 100 20 2000
4
Seed cost (360 kgs at Rs 35 per
kg) Kg 360 35 12600
5 Labour Expenses
5.1
Labour employed for fertilizer
application and seeding (10
persondays) Persondays 10 100 1000
5.2
3 times weeding (requiring 10
persondays per weeding) Persondays 30 100 3000
5.3
Labour charges for extraction of
Mother rizhome (10 persondays) Persondays 10 100 1000
5.4 Labour charges for harvesting and Persondays 10 100 1000
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Sr. No Particular Unit Quantity
Unit Price
(Rs)
Total
Amount(Rs)
storage (10 persondays)
6 Marketing expenses
6.1
Labour charges for cleaning, sorting
and grading Quintal 10.8 100 1080
6.2
Transport charges to nearest town level
market Quintal 14.4 50 720
6.3 Miscellaneous marketing expenses lumpsum 1 500 500
7 Total running cost 23300
8 Profit before interest 20800
9
Interest (12% per annum on Total
investment including fixed
capital) 24,300 12% 2916
10 Net profit 17,884
11 ROI 73.60%
12 Pay back period Year 1.16
b. Sensitivity Analysis for Ginger cultivation
Table 21: Sensitivity analysis for Ginger
Sr. No Parameters Revenue
(Rs)
Expenses
(Rs)
Total
Investment
(Rs)
Profit
before
interest
(Rs)
1 What if productivity of ginger
goes down by 20%
38050 23300 24300 14750
2 What if running expenses go up
by 20%
44100 27960 28960 16140
3 What if sorting grading is not
done and output is sold at Rs 25
per Kg
41400 23300 24300 18100
4 What if running expenses fall by
20%
44100 18640 19640 25460
5 What if selling price of fresh
ginger goes up by 20%
50040 23300 24300 26740
6 What if productivity of ginger
goes up by 20%
50150 23300 24300 26850
7 What if labour utilized is family
labour and cowdung is used
from own sources
44100 15300 16300 28800
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4.4.17 Implementation plan for Ginger cultivation promotion
Table 22: Implementation plan for Ginger
Key steps to be
followed
Activities to be performed by project
Phase I – Preparedness at the community level
Cluster selection Select the right cluster for initiating Ginger promotion based on technical
feasibility.
Identify target block, village and the community.
Social mobilization
and institution
building
Sensitize Ginger farmers on potential of Ginger cultivation using the
findings of value chain analysis described earlier and their impact on
livelihood.
Share various possibilities of Ginger cultivation, its cost benefit analysis,
and assess community interest level to take up the activity.
Identify the members/groups to start Ginger cultivation as a new unit.
Initially only a limited number of groups should be encouraged to start the
activity. Based on the results of pilots add more members. List out
members separately who are already doing the activity and want to either
expand or strengthen the activity.
Initiate participatory discussion to arrive at consensus on roles and
responsibilities of members and group leaders to take up the activity.
Preparation of
business plan
Prepare a proper business plan for Ginger cultivation in consultation with
the community detailing the economics of the activity, sourcing of inputs,
linkages with market players, production practices and technology to be
used, and government schemes to be availed.
Capacity building Leadership training for group members–functions and responsibility to
interact with external players.
Training in business and marketing skills (costing, pricing, accounting,
sales and marketing, negotiation, market analysis) to members using
participatory techniques.
Technical training on better practices, exposure visits to nearby best
practitioners and outside the states as well.
Identify suitable government and private agencies that can provide need-
based technical and business training at the community level. Identify
local level best practitioners.
Phase II - Launching of the unit
Backward linkages Counsel farmers to procure seeds collectively in bulk to reduce operational
costs.
Systematize training management.
Establish finance support for Ginger cultivation on unit cost basis.
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Production Implement best practices.
Clarity of roles, specialization and continuous skill improvement
Bring quality control in production to achieve efficiency, higher
productivity at lower costs.
Better record keeping and financial management.
MIS development and multidimensional intervention opportunity.
Market access Identify suitable and multiple markets and prepare list of market players
with their contact details.
Engage in bargaining, marketing of produce and realize better price.
Clarify on profit sharing and funds rotation among members in case of
group activity.
Build System for collaborations and employment
Phase III – Up-scaling
Monitoring and
evaluation
Set up regular follow up and monitoring system to evaluate units from
time to time to finds out gaps, take corrective steps and ensure delivery of
appropriate extension services.
Strengthening
Institution
Facilitate secondary institution (producer group) to upscale and sustain
the initiative.
Plan capacity building for strengthening of secondary institutions
Diversify activities to increase income
Create village level cadres to extend technical and marketing inputs to
community at village level.
Provide handholding and technical support to secondary institution
Legal aspects Compliance to legal implications for excise, sales and VAT (once activity
achieves scale it would be required to market Ginger directly to Siliguri
regulated market).
Possibilities of Partnership
Partnership possibilities exist with Wholesalers, HCCD Department, SIMFED, Progressive farmers and
Financial institutions.
Possibility of setting up processing unit
There is a possibility of processing ginger into pickle, candy etc. However, setting up such processing units
at the village level would require sufficient entrepreneurial skills among poor, marketing and technical
skills, and ensured market linkages with bulk buyers to sustain such units. The demand at the village level
is low and marketing of products outside would require successful marketing interventions such as proper
packaging and branding. It is, therefore, suggested that for first couple of years poor (both individuals and
groups) should encouraged for ginger production, productivity enhancement and market linkages as
supply of ginger in the state is going down steadily. After couple of years project can identify few
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individuals with entrepreneurial skills to experiment setting up few processing units. Project staff with
marketing skill could be involved for conducting the detail feasibility study before setting up such units.
4.5 Value Chain of Pig
4.5.1 Background
Pork is naturally low in salt and a rich source of good quality protein. Lean pork is a great source of
protein in your diet. Lean red meat when eaten with starchy carbohydrates, fruit and vegetables form part
of a healthy, balanced diet. A 100g portion of pork provides about half of the protein needed in a day. It is
also a good source of several vitamins and minerals needed for good health including iron, zinc, some of
the B group vitamins, selenium and phosphorus. (Source: http://ireland-guide.com)
Sikkim’ after Orissa is the second state in India to come out with a unified livestock sector policy
framework. Livestock sector contribution to Sikkim’s GDP in 2002 was over 6%. In Sikkim’s context
livestock holds immense potential for diversification in agriculture, offering gainful employment and
incremental incomes to tens of thousands of landless, marginal and small farmers. Livestock sector in
Sikkim is highly livelihood intensive, agriculture along with livestock is the single largest employer in the
state. over 80% of households in the state own livestock and earn supplementary income from them,
distribution of livestock holdings is less iniquitous-over 80% of all species of livestock are owned by
marginal and small holders.
Pigs account for 9% of livestock population in the Sikkim and pork contribute 8.13% to the total livestock
asset value. In Sikkim pig farming has a special significance and can play an important role in improving
the socio- economic status of the weaker community. Pig rearing is very popular among the tribal
community in the State. It is due to food habits of the people in hills, every household reared few herds of
pig to cater to their demands of meat. The State Government has extended a great help to the weaker
sections of the society by arranging subsidy and Bank loan to popularize the pig rearing.
4.5.2 Feasibility of piggery in Sikkim
Technical feasibility
The agro climatic conditions are suitable for pig promotion the state.
There is one state veterinary hospitals in east district, four district veterinary hospitals, 7 sub division
veterinary hospitals, 23 veterinary dispensary, and five piggery farm in the state.
The basic skill for pig rearing is available with the poor community.
Pig farms exist at Gyaba,Chungthang, Mangalbaria, Karfector and Tingvong. Two new pig farms have
been set up; Assam Lingzey in east district and Melli dara in south district to provide sufficient
number of piglets to farmers.
There are also no social taboos or caste preference for Pig rearing in Sikkim except the Brahmin
Chettri community and the activity is practiced by most ethnic groups across all sections of the farmer
community, big or marginal alike.
There is an strong enabling environment in the state for Pig rearing farming with the Department of
Animal Husbandry Livestock Fisheries and Veterinary Services (AHVS) of providing regular
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trainings, required extension services and inputs. Research agencies like the ICAR and KVKs are also
conducting research to enhance productivity in Pig rearing farming.
Government is introducing improved breed of pig such as American Hampshire and White Yorkshire
to improve productivity. The AHVS department has established 1 piggery farms in Gyalsing of West
District and 3 farms in Karfectar and Ralong of South District.
Market feasibility
Pork is an important part of the food plate for Sikkimese.
There is a huge gap between the supply and demand of pork in the state. The current demand is
550MT and supply is only 150 MT per annum.
Government to set up modern slaughter house at the Majitar with a pig line of carrying capacity of 50
numbers in one shift.
There are 30 rural primary markets in the state where farmers can sell pig/pork directly to
consumers.
Economic feasibility
The cost of investment is Rs 124200 per unit. The net income per year is around Rs 75858 with 36.2
% return on investment.
A pig are highly prolific, grows fast and farrows 8- 10 piglets at a time. Pigs convert inedible feeds,
forages, grain by-product and garbage into valuable nutritious meat.
Finance is available from SISCO bank, other commercial banks and Micro finance institutions like
BASIX and Bandhan. A large number of SGSY loans have been disbursed around piggery activity in
the state.
The Potential Linked Credit Plan prepared by NABARD outlays Rs 29.25 lakhs for West District and
Rs 58.5 lakhs for South District for bank loan on Pig rearing farming for the year 2011-12. This target
allocation has increased by 19% in South and 11% in West district signifying a thrust on the activity.
4.5.3 Production Clusters
The Pig rearing activity by virtue of high demand in the state is suitable to be implemented in both the
project districts of South and West. Since almost 60% household in all the surveyed villages keep
pigs, Pig rearing farming can be easily taken up by the poor of both the districts. However, Piggery is
best suited for mid hill and low lying areas in the state and the activity in the higher altitudes may not
yield desired results.
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4.5.4 Value chain map of Pig
Figure 9 is a depiction of the value chain of Pig from the surveyed villages in Sikkim.
Figure 9: Value chain map of Pig
4.5.5 Input Supply and Production
The two most prominent players in the value chain of pig especially in Sikkim are the Pig rearing farmer
and Sikkim Pig. Around 60% of the households of all the surveyed villages keep pigs. Average of 4-5
indigenous variety pigs are assets to all households who keep pigs.
The major fodder for pigs constitute of grasses, maize stocks, millet dust and maize dust (Bhoosa).
Practices differ from farmer to farmer and many farmers do not use pig feeds especially for local variety
pigs. Growth of pigs not fed with Pig feed is also low.
Feeds and supplements for Pig rearing, Poutry and Piggery are commonly available in special shops
selling in major towns of Namchi, Jorethang, Namthang etc. There are feed factories in Siliguri producing
cattle, poultry and pig feed in bulk. West Bengal Pig rearing and Poultry Development Corporation (a unit
of Government of West Bengal) Samrat Feeds Private Limited and Apic Feeds Private limited are feed
manufacturers with factories at Chompasari, Fulbari and Mallaguri respectively. The feed from all these
companies are brought in regularly to these towns from the respective factories. Although pig feed is
exempted from VAT in West Bengal, the transportation costs from the factory at Siliguri to the town level
markets are high. Each bag of pig feed (sizes vary between 50 kg, 65 kg and 70 kg) incur around Rs 50-60
for transportation including Sikkim Nationalized Transport tax, regulated market charges of Siliguri,
Pork seller margin:
Rs 1000/quintal
Pork: 110 - 120/Kg
Pig Farmers
Pork
shops in
Namchi,
Gangtok,
Jorethang
etc
Consumers Pig Farmers
Input Supply
Fodder, Pig feed, nutrient supplements, implements,
equipment, etc.
Temporary
shops in
haats across
Sikkim
Pig for pork: Rs
100-110 per kg
Breeding piglets: Rs
2000-200 / piglet
Piglets for
breeding purpose
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market charges of the local market, loading, unloading and miscellaneous charges. The retailer margin on
each bag is around 8%. Around 9-10 such retailers are present in Jorethang market. Retail prices of pig
feed vary from Rs 550 – 900 per bag.
As informed by a local pig farmer, a mixture of around 15 kgs (1 tin) of fodder ingredients (30% maize
dust, 50% grasses and 20% millet dust) are boiled in 3-4 litres of water. This mix is used as primary
fodder twice a day for each more than 6 months old pig. Apart from this organic household wastes are also
added to the mixture. Around Rs 800 per month is accrued for such a availing such a fodder per month.
The practices of Sushil Subba from Dentam, an entrepreneur rearing pigs are however different from the
one mentioned above. The waste of beer factory in Melli is procured every month and mixed with 2 kgs of
pig feed, whea (locally available from alpine cheese factory at Dentam) and water and fed thrice to the pig
each day. In case the whea is not available, salt water is used as a substitute. Pig feed although available in
Jorethang, Namchi and other towns, is procured in bulk from Siliguri. Separate nutrient supplements are
also used from time to time. While the earlier feeding practice was for local varieties, Subba had sourced 8
American Hampshire breed pigs from the AHVS department in 2009.
An average of 7-9 piglets is produced every 6 months in case of the American Hamstead variety while the
local variety generally produces 5-6. The mortality in local varieties is also high.
Scabies is a common disease in pigs which is countered by application of Sulphur powder (locally
available or sourced from AHVS department) from time to time.
The approximate weight gained in time by the American Hampshire and local varieties are mentioned in
Table 22 which is derived from Field Survey.
Table 23: Comparative weight gain analysis of 2 pig varieties
Months Approximate Weight in Kgs
American Hampshire Local variety
1 6 5
2 10 8
3 12 10
4 15 13
5 25 20
6 35 30
7 45 40
8 55 50
9 65 60
10 75 70
11 85 80
12 95 85
13 100 90
14 105 95
15 110 100
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16 115 105
The local varieties are available in all villages at Rs 2000-2500 per piglet. The American Hampshire breed
is available at Karfectar pig farm at Rs 3000 per piglet. However, prior order has to be placed for the same
at least 2-3 months in advance. Subba sells his piglets at Rs 2000 for female and Rs 2500 for male.
The AHVS department has a good network of veterinary doctors and staff for providing extension services
free of cost in the villages. Pig farms and demo units are established all acoss the project area. However,
accessibility of these services in far flung villages is restricted. While big farmers and entrepreneurs are
regularly visited by the veterinary doctors, poor farmers often spend around Rs 300 -500 per visit for
transport of the doctor. Vaccinations and de-worming are done free of cost from the AHVS department.
The KVKs located in each of South and West Districts also conduct various capacity building programs for
Pig rearing farmers on Pig rearing in association with external experts, best practitioners and AHVS
department.
4.5.6 Pig and Pork Marketing
Pigs are sold either directly to pork shop owners and occasional customers for pork or to fellow farmers
for breeding purpose. While the sale for breeding pigs is assessed per animal basis, price of pigs sold for
pork is assessed by weight. Sale of pigs is often an insurance activity and they are sold whenever there is
need for liquidity. Seasonally, the festive seasons has more demand when the rate of pork also steps up.
The price of pork does not vary on the breed of the pig. There are around 4-5 permanent pork shops in
Namchi while another 5-6 regularly sets up temporary shops on weekly market days. Pigs are seldom
reported to be traded out of state. Butchers and pork shop owners regularly procure pigs from villages at
around Rs 100 -110 per live weight. There are no formal measurements of weight done before selling.
Prices are fixed after negotiations and visual inspection. Payment is in cash and immediate.
The entire pig apart from wastage of around 5-6% of the weight of the animal is sold as pork. As
mentioned by a retailer at Namchi, the main prices of pork items are; Pig legs at Rs 100 per kg
(constituting around 4% of the total weight), pork meat at Rs 120 per kg (constituting around 80% of the
total weight), intestines and guts at Rs 80 per kg (constituting around 5% of the total weight) and pig head
at Rs 120 per kg (constituting around 5% of the total weight).
A pork shop owner has a margin of around Rs 1000 per 1 quintal of pork, which takes approximately 2
days to sell out in a place like Namchi.
4.5.7 Constraints-Solution Matrix
Table 24: Constraints Solution Matrix for Pig rearing
Factor Constraints faced by small and poor
Pig rearing farmers
Critical Intervention points
Input sourcing
and Production
Availability of adequate water and
fodder round the year.
Establish a formal arrangement with
the AHVS department for ensuring
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Factor Constraints faced by small and poor
Pig rearing farmers
Critical Intervention points
Low productivity of local varieties.
Availability of good breed pigs.
Pig rearing farmers use different
qualities and quantities of pig feed
resulting in non standardization of
practices
availability of good breed pigs.
Identify and promote specific cluster
of villages for specially producing
fodder.
Ensure adequate availability of
mineral mixtures and nutrition
supplements at all project village
levels.
Create village level cadre of technical
persons to provide technical services
to Pig rearing farmers regarding
productivity enhancement.
Regular training on best practices and
exposure visits to best practitioners in
the local area.
Access to
finance
Availability of timely and right amount
of credit for working capital is an
issue. Bank loan also requires a lot of
paper work.
MFIs and banks working in the area
provide loan but their loan products
don’t match expectations of Pig
rearing farmers. Even established Pig
rearing entrepreneurs face problems
in scaling their activities due to lack of
adequate bank finance.
Organize poor famers in SHGs to link
them with local banks to ensure their
financial inclusion.
Develop partnership with existing
MFIs and banks encourage them to
develop specific loan products for
commercial Pig rearing farming and
expansion.
The Project can also fund the activity
directly.
Cooperation
among farmers
and institutions
building
There is low affinity among farmers
for collective action for sourcing of
feed and fodder in higher operating
costs.
Guide Pig rearing farmers for
collective sourcing of feed and fodder
to reduce operational costs.
Govt. policies
and external
ecosystem
Low outreach of schemes for Pig
rearing among poor.
Appoint implementing agencies and
develop village level service providers
to help famers link with need based
government schemes and services.
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4.5.8 Project Interventions
Project can promote Pig rearing farming to be taken up by SHGs and Pig rearing groups in a cluster.
Individual farmers will be keeping pigs for production but sourcing of feeds and fodder can be done
collectively.
Project need to work on strategies and capacity building inputs suggested in the previous section and
by adopting an implementation plan described later.
Project can facilitate funding to individual farmers on the basis of unit cost described below.
4.5.9 Economics of Pig rearing (for 1 household keeping 6 American Hampstead pigs)
a. Assumptions
Calculations have been done for 6 pigs (5 female and 1 male). Cost of various inputs and outputs
are based on information collected from villagers, entrepreneurs, market players and AHVS
department. A pig sty will be constructed on the land of the farmer.
The rate of interest for bank loan is taken @ 12% per annum and insurance is assumed to be
12.5% of the stocks.
The average price of pig is assumed to be Rs 3200 per pig including transportation. 5 female pigs
will produce 80 piglets per year with a sex ratio of 50:50.
Male piglets will sell at Rs 2500 while female piglets will sell at Rs 2000 per piece.
Pig feed Gunny bags and pig manure will be sold
Table 25: Financial plan for pig rearing
Sr. No Particular Unit Quantity
Unit
Price
(Rs)
Total
Amount
(Rs)
1 Fixed capital
1.1
5 Female and 1 Male Americal
Hamstead at Rs 3200/ pig
including transportation pigs 6 3200 19200
1.2 Construction 23 by 24 ft Pig Sty lumpsum 1 100000 100000
1.4 Tools, buckets and implements lumpsum 1 5000 5000
1.5 Total fixed capital 124200
2 Yearly Revenue generation
2.1 Sale of 40 male piglets per year piglets 40 2500 100000
2.2 Sale of 40 female piglets per year piglets 40 2000 80000
2.3
Sale of pig feed gunny bags and
manure lumpsum 1 1000 1000
2.4 Sale of Manure lumpsum 1 5000 5000
2.5 Total Income
186000
3 Yearly Expenses
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Sr. No Particular Unit Quantity
Unit
Price
(Rs)
Total
Amount
(Rs)
3.1
Unskilled Labour charges at Rs
2000 per month month 12 2000 24000
3.2
Grower ration concentrate at 1.5 kg
/pig/day (Rs 14/kg) for 6 months days 183 126 23058
3.3
Breeder ration concentrate at 2
kg/pig/day (Rs 14/kg) for 6
months days 182 168 30576
3.4 Medicines lumpsum 1 5000 5000
3.5 Insurance at 12.5% of total stocks livestock 12.50% 19200 2400
3.6 Total running cost 85034
4 Profit before interest 100966
5
Interest (12% per annum on
Total investment including
fixed capital) 209,234 12% 25108.08
6 Net profit 75,858
7 ROI 36.26%
8 Pay back period year 2.07
b. Sensitivity Analysis for Pig rearing
Table 26: Sensitivity Analysis for pig rearing
Sr. No Parameters Revenue (Rs) Expenses
(Rs)
Profit before
interest (Rs)
1
What if labour utilized is family
labour 186000 61034 124966
2
What if running expenses go up by
10% 186000 93537 92463
3 What if running expenses fall by 10% 186000 76530 109470
4
What if average productivity of pig
goes up by 2 piglets/pig/year 208500 85034 123466
5
What if average productivity of pig
falls by 2 piglets/pig/year 163500 85034 78466
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4.5.10 Implementation plan for Pig rearing promotion
Table 27: Implementation plan for pig rearing
Key steps to be
followed
Activities to be performed by project
Phase I – Preparedness at the community level
Cluster selection Select the right cluster for initiating Pig rearing promotion based on
technical feasibility.
Identify target block, village and the community.
Social mobilization
and institution
building
Sensitize poor Pig rearing farmers on potential of Pig rearing using the
findings of value chain analysis described earlier and their impact on
livelihood.
Share various possibilities of Pig rearing, its cost benefit analysis, and assess
community interest level to take up the activity.
Identify the members/groups to start Pig rearing as a new unit. Initially only
a limited number of groups should be encouraged to start the activity. Based
on the results of pilots add more members. List out members separately who
are already doing the activity and want to either expand or strengthen the
activity.
Initiate participatory discussion to arrive at consensus on roles and
responsibilities of members and group leaders to take up the activity.
Preparation of
business plan
Prepare a proper business plan for Pig rearing in consultation with the
community detailing the economics of the activity, sourcing of inputs,
linkages with market players, production practices and technology to be
used, and government schemes to be availed.
Capacity building Leadership training for group members–functions and responsibility to
interact with external players.
Training in business and marketing skills (costing, pricing, accounting, sales
and marketing, negotiation, market analysis) to members using
participatory techniques.
Technical training on better practices, exposure visits to nearby best
practitioners and outside the states as well.
Identify suitable government and private agencies that can provide need-
based technical and business training at the community level. Identify local
level best practitioners.
Phase II - Launching of the unit
Backward linkages Counsel farmers to procure feed and fodder collectively in bulk to reduce
operational costs.
Systematize training management.
Establish finance support for Pig rearing on unit cost basis.
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Production Implement best practices.
Clarity of roles, specialization and continuous skill improvement
Bring quality control in production to achieve efficiency, higher productivity
at lower costs.
Better record keeping and financial management.
MIS development and multidimensional intervention opportunity.
Market access Identify suitable and multiple markets and prepare list of market players
with their contact details for sourcing inputs.
Clarify on profit sharing and funds rotation among members in case of
group activity.
Build System for collaborations and employment
Phase III – Up-scaling
Monitoring and
evaluation
Set up regular follow up and monitoring system to evaluate units from time
to time to finds out gaps, take corrective steps and ensure delivery of
appropriate extension services.
Strengthening
Institution
Facilitate secondary institution (producer group) to upscale and sustain the
initiative.
Plan capacity building for strengthening of secondary institutions
Diversify activities to increase income
Create village level cadres to extend technical and marketing inputs to
community at village level.
Provide handholding and technical support to secondary institution
Possibilities of Partnership
Partnership possibilities exist with Wholesalers and retailer, Inputs suppliers, Progressive farmers,
Financial institutions, and AHVS department.
Possibility of setting up processing unit
There is a possibility of producing and marketing pig meat (pork) directly. However, setting up such
processing units at the village level would require sufficient entrepreneurial skills among poor, marketing
and technical skills, and ensured market linkages with bulk buyers to sustain such units. The demand at
the village level is already fulfilled by local butchers and marketing of pork products outside would require
successful marketing interventions such as proper packaging and branding. It is, therefore, suggested that
for first couple of years poor (both individuals and groups) should encouraged for pig rearing,
productivity enhancement and market linkages. After a couple of years project can identify few
individuals with entrepreneurial skills to experiment setting up few pork processing units. Project staff
with marketing skill could be involved for conducting the detail feasibility study before setting up such
units.
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4.6 Value chain of Floriculture
4.6.1 Background
Sikkim is house to over 4,000 species of plants and shrubs, around 556 varieties of rare orchids and
rhododendrons and mountain flowers of myriad hues and sizes which makes the state a very important
centre for floriculture. Making full use of this natural advantage, the State government has successfully
implemented a multi-pronged strategy for the development of floriculture.
Development initiatives by the government include expansion of land under floriculture, mass publicity
through training and awareness camps, establishment of joint venture companies and market linkage
through market intelligence network.
One of the thrust areas in this sector is the promotion of Cymbidium orchids, Zenderdechia, Alstroemeria,
Rose and Gerbera. For promoting cymbidium orchids, 157 units have been developed covering large areas
of East, West and South districts of Sikkim. A Cymbidium Development Centre has been envisaged at
Rumtek, which will have facilities for research, a full-fledged tissue-culture laboratory for production of
planting materials, and a virus indexing unit.
The high level of investment required makes it difficult for the State government to promote floriculture
in all parts of the State. It has marked out some areas as Floriculture Zones for example Assam Lingzey for
cymbidium orchids, Duga Bhurung for gerbera, Kamrang for Alstroemeria, Gladiolus and Gerbera, and so
on.
Also, for the first time in Sikkim, rose cultivation has been started commercially, for which a complete
pre-fabricated green house with high-quality planting materials have been imported from the
Netherlands, and from reputed nurseries in India.
The government has also established two joint venture companies for the development of floriculture - the
Sikkim Himalayan Orchid Ltd at Assam Lingzey, and the Sikkim Flora Ltd at Mazitar.
4.6.2 Feasibility of Activity
Technical feasibility
Out of the 26 Biodiversity hot-spots in the world, India owns 2, namely the Western Ghats and the
Eastern Himalayas. Sikkim covering just 0.2 % of the geographical area of the country has
tremendous biodiversity and has been identified as one of the these hotspots in the Eastern
Himalayas. There are 10 bio-geographic zones & 25 biotic provinces in Sikkim which have 16 major
forests types and more than 200 sub types(Champion & Seth 1968). As a result the agro climatic
conditions of Sikkim is well suited for a range of floriculture, especially a range of cymbadium
orchids.
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Land availability, young entrepreneurs, capital investments from the Horticulture and Cash Crop
Development Department (HCCD) and convergence of resources are the main factors behind the
success of floriculture in the State.
There is a strong enabling environment in the state for floriculture with the HCCD department
providing intensive support in the form of free of cost poly houses, implements, saplings and bulbs etc
along with necessary training, exposure visits and handholding.Trainings are also organized regularly
by SIMFED and KVKs on floriculture.
SIRD is also implementing a special SGSY project promoting floriculture for enhanced income of poor
households in the project area.
There are many cooperatives and community based institutions that have come up to promote
floriculture at the GPU level in the project districts.
The HCCD department regularly imports bulbs, seeds, tissue culture and tuber bulbs from the
Netherlands, New Zealand etc. countries. The department is setting up its own tissue culture and seed
producing centre at a model Floriculture centre in Maniram.
A Rs 500 crore investment in being planned by the government for setting up such cold chain systems
near the upcoming national airport in Sikkim, near Gangtok for supporting floriculture activity
A wide range of floriculture activities are being promoted by the HCCD department. Howeever
looking at the gestation peiod, availability of resources, amount of investment required and the
heights of the villages the following three types of plants are recommended to be taken up by NERLP
for the poor;
o Alstromeria (Peruvian Lily) and Zanderdeschia (Cala Lily) for villages at a minimum height
of 4000 ft from the mean sea level.
o Gerbera and Carnation for villages below 4000 ft from the mean sea level.
Market feasibility
Nationally and internationally, Sikkim is famous for the quality of its orchids. Sikkim is a sought after
tourist destination and floriculture is very well associated with the tourism industry. A recent
international flower show was organized at Ranipool where around 58 private parties and agencies
from different parts of the country and 17 State Governments and more than 300 floriculturists and
vegetable growers including 12 international florists from 22 countries participated. The HCCD
department had a budget of Rs 19 crores alone for this event to promote Sikkim as a major player in
floriculture (Source: Business Line).
All the floriculture farmers of South and West District are linked to different markets. The largest
procurer of flowers are SIMFED and Mainam Gardens Private Limited based at Namchi. Both
SIMFED and Mainam Gardens has suppliers and agents for their produce all across India. There are
also several small private players at Gangtok and district levels who procures produce from farmers
producers. Low quality floweres are also sent to Siliguri for marketing. Gangtok is also a local market
for flowers and orchids.
The department also has established cold storages for floriculture at Dharamdin, Soreng, Maniram
etc places. Mainam Gardens has also got its own cold storage at Namchi. This ensures longer shelf life
of produced flowers and orchids.
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Economic feasibility
Floriculture is Sikkim without the intensive support of the governemnt would not have been a viable
proposition. However the support provided by the department to not one or two but many villages
have opened up a huge potential for the activity. The activity thus has potential to be adopted as
poverty allieviation tool under the aegis of NERLP.
The ideal investment is around Rs 2 lakhs per household. The overall income per household is
around Rs 28816 with 10.95% return on investment.
Finance is available from commercial bank, other commercial banks and Micro finance institutions
like BASIX and Bandhan. However, the available finance from banks are often not schematized for
floriculture and special financial support in building infrastructure is expected from the project.
Analyses of a few varieties of flowers are mentioned in Table 27.
Table 28: Comparative analysis of different flowers
Sr. Parameters Cymbidium Calla Lilly Rose Anthurium Gerbera
1
Gestation
Period 3 t0 4 yrs 1 yr 6m - 1yr 2 yrs 6m - 1yr
2
Planting
material
Sikkim &
Abroad Abroad Pune Pune Pune
3 Planting Time Feb-March Feb-March March- April Feb- March
March-
April
4 Variety Mixed Mixed Mixed Mixed Mixed
5
Planting
mechanism Seedling Tubers
Budded/
Grafted Seedling Seedling
6 Ideal Elevation 4500 - 6500 ft
4500 - 6500
ft
2500 – 3500
ft
1000 – 2500
ft
2000 –
3500 ft
7
Water
requirement High High High Medium Medium
8 Market Price Rs 50/ flower Rs 5/ flower Rs 3/ flower
Rs 10 per
flower
Rs 3/
flower
9
Production per
plant 4-6 nos 4-6 nos
20 - 25
flowers 6 flowers 20 flowers
10
Total income
per tree Rs 200-300 Rs 30 Rs 60 - 75 Rs 60 Rs 60
11 Season Oct – March July-August All Season All Season All Season
12 Local market Assured Assured Assured Assured Assured
14
Pest and
Disease risk High Medium High High High
(Courtesy: Horticulture and Cash Crop Development Department)
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4.6.3 Production Clusters
Both the districts of South and West can be taken up for floriculture promotion under NERLP.
However, as mentioned before, the following criteria should be kept in mind while promoting
floriculture.
o All villages should have adequate water supply throughout the year. Dry and draught prone
areas should be avoided for floriculture to maintain ecological balance.
o Alstromeria (Peruvian Lily) and Zanderdeschia (Cala Lily) can be taken up for villages at a
minimum height of 4000 ft from the mean sea level.
o Gerbera and Carnation for villages below 4000 ft from the mean sea level.
o Both Altstromeria and Gerbera are relatively simpler to grow, requires less investment, yield
income throughout the year and has a low gestation period.
It is also important that the activity is promoted in clusters to facilitate input supply, service delivery and
marketing.
4.6.4 Value chain map of Floriculture
As under stood from the surveyed villages, Figure 10 is a flow diagram of Alstroemaria (normal stick) as
an example.
Figure 10: Value chain map of Flowers
Rs 8-10/stick
Rs 10-15/stick
Rs 2-3 /stick SIMFED
Floriculture Farmers
Retailers
(Outside Sikkim)
Mainam Gardens Private
Limited, Namchi
Retailers
(Outside Sikkim)
Input Supply
Saplings, NPK, fertilizers, fungicides, floriculture implements, cow dung
Village level
traders
Wholesalers, Agents
(Delhi, Mumbai, Kolkata)
Wholesalers
(Delhi, Mumbai, Kolkata)
Retailers
(Siiliguri, Gangtok,
Namchi)
Consumers Consumers Consumers
Rs 1-2 /stick
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4.6.5 Input Supply
As mentioned earlier, the HCCD department is a prime stakeholder in the value chain if flowers in Sikkim.
The amount of investment made by the department is the primary reason in making the activity viable in
Sikkim. Seeds, tissue cultures, bulbs are often imported from different countries like Netherlands and
New Zealand. The department also procures these inputs from Florence Flora in Bengaluru and Kumar
Florists in Pune. Since most seeds and bulbs are genetically modified and patented, they have to be
procured on a regular basis. However, the department is setting up its own tissue culture and seed
production farm in Maniram of South District. While these inputs are provided by the department free of
cost while they are charged by SIMFED and Mainam Gardens who also procures them from abroad and
the mentioned sources.
Fungicides, pesticides, dolomite and various medium for bed preparation along with various implements
are available in local shops for floriculture in Namchi, Jorethang, Gangtok and other towns e.g.
Tarakeshwar Stores in Namchi is a similar shop.
4.6.6 Quality parameters
The production of flowers is a very intensive activity and requires specific capacity building along with a
lot of attention to the plants. Most harvested flowers and orchids were found to be graded according to
their qualities. The grading is generally done by the procuring agency and vary as per quality. Straight and
long (minimum 2 feet) cut flower sticks with sufficient numbers of equi-directional semi-bloomed flowers
of good appearance generally fetch good prices. The cultivation practices are often non-negotiable for
higher priced orchids since a small variation in the package of practices can bring around a change in
quality of the output. Based on the mentioned parameters, three different types of qualities are judged by
the procurement agencies. Any flower sticks which do not expect these criteria are often rejected which
are sold in the local market. This makes cultivation of Cymbadium, Lilium and Anthurium risky for the
farmer since a slight change in judged parameters can result in a drastic fall in expected price from Rs 15-
20 per stick/flower (best quality) to Rs 5-8 per stick/flower (rejected quality sold in local market or
Siliguri). The Altroemeria and Gerbera sticks which are priced at Rs 2-3 per are relatively safer positioned
since the rate difference between grades is only around Re 0.5-1.
4.6.7 Market Players and Marketing
Mainam Gardens private Limited, an enterprise owned by Mrs. Tika Maya Chamling (wife of Chief
Minister of Sikkim) is based at Namchi with 150 plus employees and having its own cultivation farms. The
company is also planning to set up its own tissue culture laboratory. The company has an outreach for
procurement of flowers from farmers in West and South districts. SIMFED on the other hand has its
operations all across Sikkim in the context of enhanced production of various flowers through NERLP,
SIMFED has the potential to scale up its operations. The biggest bottleneck for marketing of flower is the
delicate and perishable nature of the flowers. SIMFED needs to develop a cold chain transport system to
address this. No regular exports of flowers to other countries were reported from these two agencies due
to absence of cold chain transport system and refrigerated flight containers from Bagdogra airport. The
nearest airport with this facility is Kolkata.
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Cut flower sticks and buds are packed in plastic sheets or cartons in bundles. The packing material is
locally available in the towns of Namchi, Ravongla, Jorethang etc. Mainam Gardens also provide card
board cartons for packing flowers. The transportation of flowers is often through local jeep transport with
charges ranging from Rs 20-50 per carton (containing 80 -100 flowers). In such cases, the driver of the
local transport jeep hands over the cartons (with name and contact details of the farmer mentioned on the
carton) to the representatives of Mainam Gardens at Namchi. Mainam gardens keep exclusive records for
entry of flowers from each farmer. After grading of flowers the due payments are noted down. Payments
are often made in cash to the farmer directly whenever he visits Namchi in a week or fortnight. Some
cooperatives having enough scale use exclusive vehicles for transport which reduces transportation costs.
Around 5-8% of the transported high cost flowers are reported damaged which result in decrease in
quality and/or rejection.
Both Mainam Gardens and SIMFED have suppliers and agents all across India and cut flowers are
regularly sent to them by rail/road or air. Flowers are in high demand during marriage seasons, Christmas
or festive seasons. The demand for roses is also reported to shoot very high during Valentine ’s Day.
SIMFED procures flowers from Gangtok and thus access to SIMFED from far flung areas in West District
turn out to be expensive. The payments of SIMFED were also report to be irregular for Lilium and
Cymbidium to the extent of delay up to 4-6 months. The officials at SIMFED however said that this was a
temporary phenomenon due to rare market failure from their end and currently the system has been
streamlined.
Rose village of Dharamdin in the West district has around 70 households with 91 poly houses in the area
along with a cooperative society for cultivating and marketing different varieties of roses. There is also a
cold storage for storing Rose sticks. Around 3000 to 4000 sticks are produced daily from the area at Rs 4-
5 per stick which is transported to Mainam Gardens in Namchi. The low quality and rejected flowers are
sent to retailers in Siliguri.
Some farmers were also found to sell flowers directly in weekly and daily markets of the Gangtok and
other towns frequented by tourists. There are village level traders of flowers in some villages who procure
flowers directly from farmers and passes the same to different florist chains and retailers in Gangtok and
other towns of Sikkim.
Zopar Exports Private Limited, a private floriculture company having more than 80 poly-houses in Sikkim
and Darjeeling district of West Bengal is dealing in multiple varieties of roses. Although the company has
ploy houses in Dharamdin, there is little convergence with the local cooperative society.
4.6.8 State Institute of Rural Development’s role in Floriculture
State Institute of Rural Development (SIRD), Karfecter, South Sikkim has undertaken a special project of
floriculture under Swarnajayanti Gram Swarozgar Yojna. The project of Rs 695.44 lakhs project from
2006-07 till 2010-11 is aimed to enable 2000 Below Poverty Line families to cross over the poverty line
within a period of two-three years. This includes women, SC/ST and also the physically challenged. Two
hundred new Self Help Groups have been targeted to be formed under the project till 2010-11.
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The project is also designed to assist APL families and educated unemployed youth through schemes of
National Horticulture Board or even State Programs to become an example for BPL families. The project
mostly concentrates in South and West districts and some selected villages of North and East districts.
The villages selected in South are Sadam, Sumbuk, Turuk, Namchi, Singhithang, Boomtar, Kamran,
Perbing, Namthang, Maniram, Salghari, Tenik, Chisopani and Wok. While
in the West District the villages are Tashiding , Yoksom, Hee, Budang, Sombarey, Soreng, Zoom, Sigeng,
Mabong, Suldung and Kamling.
One of the thrust areas of the project is to take up Gladiolus farming which has been found ideal for the
region. Farmers are also encouraged to take up other species like Cymbidium, Lillium, Glorisa, Amaryllis,
Cala Lily, Haemanthus etc. A nursery spread over 1 hul or ¼ th acre of land is expected to yield Rs 30,000
per year. SIRD has also facilitated SHGs to be linked with State Bank of India for SGSY loans.
Training for the farmers and Self Help Groups is conducted at SIRD, Regional Centre and Floriculture
Centre of the Horticulture Departments. The seeds are provided by SIRD along with buyback support for
saplings.
SIRD, also has already received the sanction for an AC refrigerated transport van at the cost of Rs 12 lakhs
for the transport of cut flowers to Siliguri, New Jalpaiguri and Bagdogra airport in West Bengal. A cold
storage facility at the cost of Rs 15 lakhs is also to be built to enable farmers to store the bulbs and also
facilitate the stocking of cut flowers during road blockade in the monsoon season. A collection-cum-
grading centre at the cost of Rs 10 lakhs is to be established near Melli in South district.
4.6.9 Constraints-Solution Matrix
Table 29: Constraints Solution Matrix for Floriculture
Factor Constraints faced by small farmers Critical Intervention points
Input sourcing
and Production
Highly capital intensive activity to be
taken up by small farmers without
assistance and support.
Source of seeds and other inputs are
not only expensive but access to these
sources is restricted by large players
since they have to be imported.
Most floriculture activities involve an
intensive package of practices which
calls for rigorous capacity building.
Although the support from HCCD
department is provided to farmers,
very little poor and marginal farmers
have come up to take up the activity.
Identification of interested poor
farmers and establish a formal
arrangement with the HCCD
department for ensuring adequate
supply of inputs. Convergence of the
department support with the project is
crucial.
Support HCCD department, SIMFED,
KVK and ICAR to take up research for
developing appropriate
seeds/tissues/bulbs for floriculture
which is otherwise very expensive and
have to be imported.
Appoint implementing agencies and
develop village level service providers
to help famers link with need based
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Factor Constraints faced by small farmers Critical Intervention points
government schemes and private
services.
Create village level cadre of technical
persons to provide technical services
to farmers.
Regular training and exposure visits to
best practitioners in the local area can
help poor farmers.
Access to
finance
Availability of timely and right
amount of credit is an issue. Bank
loan requires a lot of paper work and
farmers’ don’t have proper papers
against their land. SISCO bank takes a
mortgage of loans above Rs 60000.
MFIs and banks working in the area
provide loan but their loan products
don’t match expectations of farmers.
Organize poor famers in SHGs to link
them with local banks to ensure their
financial inclusion.
Develop partnership with existing
MFIs and banks encourage them to
develop loan product for Floriculture
cultivation based on its economics.
The Project can also fund the activity
directly.
Market access Farmers sell individually to the village
level trader or Mainam Gardens or
SIMFED resulting in higher overhead
marketing costs.
Promote the activity in a cluster to
optimize input costs and transport
expenses.
There is scope for collectivizing
farmers to sell collectively and directly
to higher order markets through
SIMFED or Cooperative retail outlets
in Gangtok for better price realization.
Cooperation
among farmers
and
institutions
building
There is low affinity among farmers
for collective action for sourcing of
inputs and sale of flowers/orchids
resulting in higher operating costs.
Guide farmers for collective sourcing
of inputs and marketing to reduce
operational costs.
Govt. policies
and external
ecosystem
Blockage of roads and landslides may
lead to increase in input costs and
market failure.
Set up new cold stores for storing
flowers and cold chain transport
system after feasibility study.
A Rs 500 crore investment in being
planned by the government for setting
up such cold chain systems near the
upcoming national airport in Sikkim,
near Gangtok for supporting
floriculture activity
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4.6.10 Project Intervention
Project can promote floriculture to be taken up by an individual family. However, as mentioned
before, cluster based approach needs to be taken to achieve economies of scale. Individual farmer will
do the production but sourcing of inputs and marketing should be done collectively.
Project need to work on strategies and capacity building inputs suggested in the previous section and
by adopting an implementation plan described later.
Project can facilitate funding to individual farmers on the basis of unit cost described below.
4.6.11 Economics of Alstroemeria cultivation (for 1 household)
Alstroemeria, commonly called the Peruvian Lily or Lily of the Incas, is a South American genus of
about 50 species of flowering plants. Each year up to 80 new shoots are produced from the rootstock
and each terminates in an umbel of a few up to 10 or so flowers. Alstroemeria come in orange, pink,
rose, purple, red, yellow, white or salmon colors. The prices offered for a normal Alstroemeria stick by
SIMFED and Mainam Gardens vary between Rs 2 -3.5 per stick as per season.
a. Assumptions
Calculations have been done for 400 saplings planted in a poly house of 90ft by 22 ft dimensions.
Weekly marketable production from the saplings are, 800 sticks from September to February, 1000
sticks from March to May and 900 sticks from June to August excluding damaged and rejected
flowers.
Cost of various inputs and outputs are based on information collected from villagers, market players
and HCCD department.
The rate of interest for bank loan is taken @ 12% per annum.
A separate irrigation tank is being setup for irrigation.
Table 30: Financial plan for Floriculture (Alstroemeria)
Sr. No Particulars Unit Quantity Unit Price
(Rs)
Total
Amount
(Rs)
1 Fixed capital
1.1
90 ft by 22 ft poly house with bamboo
structure lumpsum 1 100000 100000
1.2
Bed preparation, Rack construction
and netting for 400 saplings lumpsum 1 50000 50000
1.3 Irrigation tank with 22 mm poly pipe lumpsum 1 45000 45000
1.4 Tools and implements lumpsum 1 5000 5000
1.5 Total fixed capital
200000
2 Yearly Revenue generation
2.1
Sale of 3200 sticks per month at Rs
3.5 per stick for 6 months (Sept - Feb) sticks 19200 3.5 67200
2.2 Sale of 4000 sticks per month at Rs 2 sticks 12000 2 24000
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Sr. No Particulars Unit Quantity Unit Price
(Rs)
Total
Amount
(Rs)
per stick for 3 months (Mar- May)
2.3
Sale of 3600 sticks per month at Rs 3
per stick for 3 months (Jun - Aug) sticks 10800 3 32400
2.4 Total Income 42000
123600
3 Yearly Expenses
3.1
Labour charges for Trimming,
Weeding and Irrigation at
Rs120/personday for 5
persondays/month
personday
s 60 120 7200
3.2
Sapling cost at Rs 30 per sapling for
200 saplings saplings 400 30 12000
3.3 Packing material at Re 0.75 per stick sticks 42000 0.75 31500
3.4 Medicines lumpsum 1 2000 2000
3.4 Transport costs of sticks sticks 42000 0.25 10500
3.5 Total running cost
63200
4 Profit before interest
60400
5
Interest (12% per annum on
Total investment including fixed
capital) 263,200 12% 31584
6 Net profit
28,816
7 ROI
10.95%
8 Pay back period year
4.35
b. Sensitivity Analysis for Alstroemeria cultivation
Table 31: Sensitivity analysis for Floriculture
Sr. No Parameters Revenue
(Rs)
Expenses
(Rs)
Profit
before
interest
(Rs)
1 What if labour utilized is family labour 123600 56000 67600
2 What if running expenses go up by 10% 123600 69520 54080
3 What if running expenses fall by 10% 123600 56880 66720
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4.6.12 Implementation plan for Floriculture cultivation promotion
Table 32: Implementation plan for Floriculture
Key steps to be
followed
Activities to be performed by project
Phase I – Preparedness at the community level
Cluster selection Select the right cluster for initiating promotion based on technical
feasibility.
Identify target block, village and the community.
Social mobilization
and institution
building
Sensitize Floriculture farmers on potential of Floriculture cultivation using
the findings of value chain analysis described earlier and their impact on
livelihood.
Share various possibilities of Floriculture cultivation, its cost benefit
analysis, and assess community interest level to take up the activity.
Identify the members/groups to start Floriculture cultivation as a new
unit. Initially only a limited number of groups should be encouraged to
start the activity but enough to achieve scales. Based on the results of
pilots add more members. List out members separately who are already
doing the activity and want to either expand or strengthen the activity.
Initiate participatory discussion to arrive at consensus on roles and
responsibilities of members and group leaders to take up the activity.
Preparation of
business plan
Prepare a proper business plan for Floriculture cultivation in consultation
with the community detailing the economics of the activity, sourcing of
inputs, linkages with market players, production practices and technology
to be used, and government schemes to be availed.
Capacity building Leadership training for group members–functions and responsibility to
interact with external players.
Training in business and marketing skills (costing, pricing, accounting,
sales and marketing, negotiation, market analysis) to members using
participatory techniques.
Technical training on better practices, exposure visits to nearby best
practitioners and outside the states as well.
Identify suitable government and private agencies that can provide need-
based technical and business training at the community level. Identify
local level best practitioners.
Phase II - Launching of the unit
Backward linkages Counsel farmers to procure inputs collectively in bulk to reduce
operational costs.
Systematize training management.
Establish finance support for Floriculture cultivation on unit cost basis.
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Production Implement best practices.
Clarity of roles, specialization and continuous skill improvement
Bring quality control in production to achieve efficiency, higher
productivity at lower costs.
Better record keeping and financial management.
MIS development and multidimensional intervention opportunity.
Market access Identify suitable and multiple markets and prepare list of market players
with their contact details.
Engage in bargaining, marketing of produce and realize better price.
Clarify on profit sharing and funds rotation among members in case of
group activity.
Build System for collaborations and employment
Phase III – Up-scaling
Monitoring and
evaluation
Set up regular follow up and monitoring system to evaluate units from
time to time to finds out gaps, take corrective steps and ensure delivery of
appropriate extension services.
Strengthening
Institution
Facilitate secondary institution (producer group) to upscale and sustain
the initiative.
Plan capacity building for strengthening of secondary institutions
Diversify activities to increase income
Create village level cadres to extend technical and marketing inputs to
community at village level.
Provide handholding and technical support to secondary institution
Legal aspects Compliance to legal implications for taxes and VAT (for marketing Flowers
directly to Siliguri).
Possibilities of Partnership
Partnership possibilities exist with HCCD Department, SIMFED, Mainam Gardens, other wholesalers and
retailers, Inputs suppliers , Financial institutions and progressive farmers
Possibility of setting up processing unit
There are little possibilities in processing fresh flowers at the village level. The project can however help
set up a cold chain network for effective and fast transportation of flowers to higher order markets.
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4.7 Value chain of Homestay Rural Tourism
4.7.1 Background
Tourism is one of the priorities and important sector of the State and there is special focus to make
tourism as a major contributor to the State Economy.
The state of Sikkim takes pride in its natural beauty manifested by the snow clad mountains, landscape
dotted with perennial streams & waterfalls, lush green forests, picturesque villages, natives in traditional
dresses and indigenous architecture. The crime rate is low and special focus of the state on maintaining an
eco friendly environment makes Sikkim one of the sought after tourist destination in the country. Being a
prominent place on the Buddhist tourism circuit also contributes to this.
Tourism sector is looked at a creator of a substantial employment, directly or indirectly Eco-tourism in
Sikkim especially has evolved as a non‐polluting, low cost and high return industry where a large section
of the Sikkimese population can be involved.
As mentioned in the Tourism sector Policy 2010 of Sikkim Tourism department, the number of Domestic
tourists in 2003 were about 1, 76,659 while in 2008 more than 5, 00,000 tourists have visited the state.
The estimated number of domestic tourists in 2009 is around 6,00,000. This signifies a growth of around
3.5 times within a time span of 6 years.
Number of foreign tourists in 2003 was reported to be around 11,966 while in 2008 about 23,000 foreign
tourists visited the state.
The boost in the growth of tourism in the state is also attributed to the growth in the associated sectors.
Sikkim since last 5 years is following a strict Organic policy and is also the first state in the country to
achieve total Sanitation. A Green Mission program has been launched by the government under which
every individual, agency and the Department contributes towards the planting of trees all over the State.
Village tourism is being specially encouraged to preserve culture, heritage & handicrafts and to create
better economic and employment opportunity in the rural area. Floriculture is being promoted at large in
the State and Sikkim has earned its place as a major orchid and exotic flower producer in the country.
Use of polluting plastic is also banned in the State. All the ethnic Communities have different and distinct
festivals, which are celebrated all over the State. Tourism Department plays a major role in promoting
these festivals in order to showcase Sikkimese culture and heritage.
Figure 11 depicts the central and state share to different tourism projects taken up between 2004-05 and
2007-08. As is evident the share of central assistance in tourism has shown a sharp increase.
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Figure 11: Value of Tourism Projects in Sikkim
However, the total central sanctioned projects are worth Rs 258.67 lakhs only during this period. (Source:
Lok Sabha un-starred question number 738 dated 23.02.2006 and question number 791 dated
22.11.2007). Thus there was a large scope of central funding particularly in Rural tourism projects.
Moving towards promoting rural and eco tourism, the central assistance in undertaking Eco tourism
projects alone in 2007-08 was Rs 389.54 lakhs which paved the way for a focus on promoting Eco tourism
(Source: Press Information Bureau, Govt. of India).
During the 11th 5 year plan up to September 2009, the Ministry of Tourism had sanctioned a total sum of
Rs 163.44 crores for 63 different tourism related projects for Sikkim making the state to receive the
highest amounts of tourism funds from the centre. Recently the Asian Development Bank (ADB) has
signed an agreement with the union government and the State government for providing a credit of US $
20 million to enhance religious, eco tourism and adventure based tourism in the state. Under the South
Asian Infrastructure Development Project, the ADB has aimed to contribute to sustainable and inclusive
development of this part of Asia by tapping complimentary and contiguous tourism assets. (Source:
Sikkim Express, 5th October 2010)
4.7.2 Homestay
Homestay is a form of tourism that allows visitors to rent a room from a local family to better learn the
local lifestyle as well as improve their language ability. While homestays can occur in any destination
worldwide, some countries do more to encourage homestay than others as a means of developing their
tourism industry – Wikipedia.
1576.83
2687.89 2914.71
6880.21
112 323.25
1031.38
107.36 0
1000
2000
3000
4000
5000
6000
7000
8000
2004-05 2005-06 2006-07 2007-08
Value of Tourism Projects sanctioned in Lakh Rupees (Source Sikkim tourism department)
Central Share
State Share
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Village/Rural tourism in the form of Home stay has emerged as a very new concept in the tourism
industry. This concept is fast growing in Sikkim as a responsible and sustainable tourism product with
critical social objectives through people’s participation. Home stay rural tourism is perceived as an
effective tool in boosting the overall tourism scenario of Sikkim as its rural hinterlands are endowed with
fabulous natural beauty, serene environment, heritage sites and unique cultural flavor. The endorsement
of rural tourism ensure the dispersal of tourists from city congestion to the villages so that they can have a
glimpse of rural Sikkim, familiarize with unique village culture and heritage so that they are mentally
rejuvenated, culturally enriched and spiritually elevated. The objective is therefore to harness vast
untapped rural tourism potential of Sikkim so that their multiplier benefit reaches out directly to the rural
communities. Some of the villages of Sikkim like Kewzing, Hee Bermoik, Yoksum, Lachen, Tumin,
Pastanga, Tinchim, Lunchok, Maniram, Rong, Jaubari, Linjee Payiong, Darap etc. have already taken up
lead in home stay facilities for the tourists.
Under the present purview of NERLP, Home stay rural tourism has been found to be a growing sector
with particular potential for providing Livelihoods to rural poor.
4.7.3 Feasibility of the activity
Technical feasibility
There are well identified tourist circuits in West and South districts of Sikkim (project area of
NERLP). Sikkim is connected by rail, air and road with the rest of the world through Siliguri
/Bagdogra. There are also helicopter services from the Bagdogra Airport to Gangtok.
The flow of tourists continue for the whole year with peak tourist seasons from September to March.
The warm reception of the state, cultural richness of the ethnic groups and peaceful and friendly
environment combines with the natural and beautiful environment of rural Sikkim to attract tourists.
There is an enabling environment in the state for Homestays with the tourism department, NGOs like
Ecotourism and Conservation Society of Sikkim (ECOSS), agencies like Help Tourism Private limited
which provides regular trainings and inputs for establishing Homestays.
There are a numerous cooperatives and community based institutions that have come up to promote
village based tourism and homestays in the project districts. Some of these have already made good
progress in terms of providing quality services to tourists.
South Sikkim Tourism Development Society and West Sikkim Tourism Development Society are two
district level societies established in the two project districts of South and West Sikkim respectively as
apex level institutions for the respective village level societies that have been established.
Market feasibility
The Travel Agents Association of Sikkim (TASS) and Sikkim Hotel and Restaurant Association
(SHRA) are Department of tourism recognized bodies which are associated with homestay rural
tourism. Travel agencies have included home stay packages in their itenaries.
Homestays are positioned as a learning and sharing platform and is thus different from other tourism
concepts. Thus rural homestay has created its own niche which is also often priced at premium rates
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in comparison with budget tourism packages. Help tourism alone has a network of over 6 lakh
tourists worlwide who regularly keep visiting Sikkim and prefer accommodation at village homestays.
Apart from the niche markets the mainstream travel agents in West Bengal, Delhi, Mumbai etc places
along with others in the international circuit also recognize and support homestays.
Economic feasibility
Rural Tourism enables a lot of cash flow at the rural and underdeveloped pockets of the state and
boosts the local economy. Darap Eco tourism Committee of Darap village in West district reports that
in the last financial year, around 3000 tourists have stayed in 10 homestay houses under their society
which have resulted in an average income of Rs 1 lakh per household per season. The Homestay
concept is thus has potential to be adopted as poverty allieviation tool under the aegis of NERLP.
The ideal investment is around Rs 3 lakhs per household. The overall income per household is
around Rs 94,112 with 20.35% return on investment.
Finance is available from commercial bank, other commercial banks and Micro finance institutions
like BASIX and Bandhan. However, the available finance from banks are often not schematized for
home stays and special financial support in building infrastructure is expected from the project.
4.7.4 Promotion clusters
Homestay based rural tourism can be promoted in almost all villages of both the districts of South and
West. However, looking at the potential of tourism and environmental concerns it is advisable to restrict
the activity to a maximum of 20% households in each village. The activity is also different from other
activities in the sense that only interested and adequately capacitated households can be included in home
stays. The activity requires a lot of customization at the household level and is difficult to regularize
through the area.
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Domestic tourists International Tourists
Village based tourism societies in Sikkim
(Kewzing, Hee Bermoik, Yoksum, Lachen, Lunchok, Maniram, Rong, Jaubari, Lingi Payong, Darap etc)
International
Travel agents
Travel agents in Sikkim
Travel agents
outside Sikkim
Travel agents in Sikkim
Web site booking
20% referral
commission
Homestay Households Homestay Households Homestay Households
4.7.5 Value Chain and stakeholders of Homestay Rural Tourism
Figure 12 is a depiction of the flow of tourists for Homestay in Sikkim.
Figure 12: Value chain map of Homestay rural tourism
Around 80% of the homestays surveyed in South and West Sikkim were found to be frequented by
domestic tourists from other parts of the country while remaining 20% constituted of international
tourists.
Various kinds of referrals were found in the form of Travels agents at international level, national level
and at Sikkim level and websites. While almost all international tourists were found to come through
referrals of various forms, a section of domestic tourists were found to be walk in customers directly in
home stays.
The general commission paid by the home stays for any kind of third party referral is 20% of package
charges. In case two or more players exist in the referral chain, the same commission is shared among the
players. In off season, however, there are little referral commissions and tourists directly contact the
homestay societies.
A major facilitating role for tourists visiting home stays is played by the Sikkim Tourism department
which has tourist information offices at all district places across Sikkim and also in Delhi, Kolkata,
Sikkim Tourism department, ECOSS,
Help Tourism Pvt. Ltd
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Siliguri, New Jalpaiguri station, Bagdogra Airport etc important locations. The department also has a
detailed website which provides information and contact details of various home stays across Sikkim.
A similar role is played by an NGO Ecotourism and Conservation Society of Sikkim (ECOSS) and agencies
like Help Tourism Private limited which provide regular trainings and inputs for establishment of
Homestays under various projects. These agencies have expertise in implementation of Homestay
schemes and can be partnered with under NERLP as well.
4.7.6 Home stay packages
The Homestays generally offer tourists a combination of accommodation and food along with certain
cultural packages e.g. cultural shows, traditional attire etc. Each home stay is thus unique in itself due to
the inclusion of the cultural package. The cultural package generally allows the tourist to experience a
slice of life lead by rural Sikkimese people. The cultural package often involves cross cultural learnings
like learning a new recipe of traditional food by the tourist, learning local language, learning various
agricultural practices followed in the village, voluntary teaching of the tourists in local schools, interaction
on maintaining health and sanitation etc. This adds further value to the tourism experience of the tourist
which clearly differentiates home stay from any other kinds of tourism.
Certain other recreational activities are often included in the packages which include angling in the rivers
and streams, bird watching, meditating, jungle walk, yoga, rock climbing, trekking, camping, sightseeing,
etc.
All the family members of a host household are involved in the concept and the tourist is also treated like
a family member. The accommodation is generally modest as per typical rural culture of Lepcha, Limboo,
Bhutia etc ethnic groups. A typical homestay household has 2-3 exclusive and fully furnished rooms for
tourists. The food is also traditional and in some cases customized to the requirement of the tourist as
well. Generally the charges paid by the tourist ranges anywhere between Rs 400-500 to Rs 3000-4000
per person per day depending on the package and amenities provided.
Generally any household opting for Home stays maintain a clean and healthy environment both inside
and outside the house with clean toilets and comfortable beds for tourists. The food is also prepared
hygienically.
4.7.7 Registration and legal formalities
Currently the concept of Home stay is new to Sikkim and clear cut government policies are yet to be made.
There are no legal or registration formalities for conducting homestays. A few homestays hold hotel
license in the absence of any other form of registration. Sikkim is also a state exempted from direct taxes
and thus there are no taxation formalities for conducting homestays also. In order to obtain a hotel license
in a rural area an annual fee of Rs 450 is to be submitted to the department of Urban Development and
Housing along with the annual renewal of no objection certificates from Power department, Fire
department, Forest department, Labour department and Health departments.
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While a drive is in force to promote village based tourism in the state, awareness and interest of rural
people is also on the rise to get involved in homestays. There is urgent need of regulation and policy
framing by the government in this regard.
4.7.8 Institutional Arrangement
The homestays in any village are generally not promoted in isolation. A group of 10-15 homestays
involving same number of households are developed in a Gram Panchayat unit which forms a society at
the village level. Many such societies have been formed in both the project districts of South and West
Sikkim. While South district has at least 15 such village level societies, West district has at least 20. Each
society undergoes different types of promotional strategies to attract tourists through websites,
pamphlets, brochures, tie-ups with different travel agencies in and outside the state, affiliation to various
tourism organizations etc. Once a tourist contacts the society, the society passes on the tourist to its
member households as per preference of the tourist or availability. These societies generally have an
annual membership fee for the facilitation provided.
In some cases certain supporting enterprises like poultry, dairy, provisional stores, handloom and
handicrafts store etc are also developed under the aegis of these village level tourism societies. These
enterprises support each other under conditions of mutual agreement. e.g. in Darap, a poultry enterprise
and Dairy enterprise are members of the tourism society who is also the primary supplier of poultry and
milk or milk products required for homestay households while attending to tourists.
Each district has an apex level Tourism Development Society at the district level for self regulation and
policy advocacy to the government. These societies are also the gateway to various grants and assistance
from the government and other projects regarding infrastructure development and training. As
mentioned earlier, the tourism department and a few agencies also provide support to these societies.
4.7.9 Constraints-Solution Matrix
Table 33: Constraints Solution Matrix for Homestay
Factor Constraints faced by small
households taking up homestays
Critical Intervention points
Infrastructure
development
Homestays require basic
infrastructure in the form of up-
graded toilets, a comfortable bed and
hygienic kitchens. The beneficiaries of
NERLP lack the necessary
infrastructure to set up Homestays.
Access to credit facilities for such
infrastructure development is
restricted for poor households due to
lack of collaterals and also lack of
prevailing unit costs with banks and
Organize poor households into
collectives in the form of societies or
SHGs to link them with local banks to
ensure their financial inclusion.
Develop partnership with existing
MFIs and banks encourage them to
develop loan product for Homestay
based on its economics.
The Project can also fund the activity
directly.
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Factor Constraints faced by small
households taking up homestays
Critical Intervention points
financial institutions.
Capacity
Building of
community
The Homestay promotion requires
adequate capacity building of the
entire household on aspects like
hospitality management and
etiquettes.
In order to attach adventure tourism
concepts to the homestay the
community needs special capacity
building on activities like rock
climbing, facilitating trekking, rafting
etc.
There is also a need for mobilizing the
community on sticking to certain
cultural values in order to make the
homestays culture exclusive and
attractive.
The community also needs special
capacity building on waste
management and environment
protection issues attached with
tourism.
The entire family needs capacity
building on various health and
hygiene issues since the entire
household will be in contact with
outsiders.
Establish formal arrangements with
the Sikkim Tourism department,
ECOSS, Help Tourism Pvt. Ltd etc for
ensuring adequate capacity building
of the target community through
training, exposure visits to successful
cases and handholding. Special
modules can be developed for
delivering special capacity building to
community on various highlighted
issues in tourism
Appoint implementing agencies and
develop village level service providers
to help mobilize the community and
link them with various aspects of
environment, health and sanitation
along with tourism.
Establish proper community managed
waste management systems at the
village level.
Detailed health trainings should be
imparted to community on how to
avoid infection and maintain a
healthy homestay business.
Certain sections of the poor
communities can also be trained in
providing associated services like
porters, cooks, guides etc.
Cooperation
among
households
and
institutions
building
There is low affinity among poor for
adopting the activity and collective
action for forming societies for
homestay
There is constant requirement of
market planning and institutional tie
ups for smooth flow of tourists.
Guide the beneficiaries for collective
action and form societies on village
based homestays through
implementing agencies.
Create village level cadre of
knowledgeable persons to establish
linkages with various institutions
regarding tourism.
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4.7.10 Project Intervention
Project can promote homestays to be taken up by an individual family. 15 – 20 Individual households
in homestay can form a collective for joint marketing initiatives and self regulation.
Project need to work on strategies and capacity building inputs suggested in the previous section and
by adopting an implementation plan described later.
Project can facilitate funding for infrastructure building to individual households on the basis of unit
cost described below.
A traditional village-based Sikkimese Homestay would maintain and share a traditional way of life and its
values, provide traditional food, be based on eco-friendly concepts and require some amounts of
investment for renovation.
4.7.11 Economics of Homestay Development (for 1 household)
a. Assumptions
The Homestay includes accommodation and food for tourists.
Calculations have been done for 1 household with an assumption that the household has enough space
to construct a room accommodating 4 persons. Cost of various inputs and outputs are based on
information collected from villagers, service providers and tourism department.
The rate of interest for bank loan is taken @ 12% per year. Bank loan is considered for the entire year.
The rates charged for Homestay are Rs 700 and Rs 500 per person per day in peak and off seasons
respectively.
Referral commission paid to travel agents is 20% of the earned revenue and is only paid in peak
season. There are no referrals in off season.
The homestay is being registered with a hotel license and at least 10 such homestays are being
promoted in the concerned GPU forming a village level tourism society. The society will develop a
common website and take on marketing activities in the form of brochures, pamphlets etc. The
membership charges per homestay household are Rs 5000 per year.
Table 34: Financial plan for Homestay
Sr. No Particular Unit Quantity
Unit
Price
(Rs)
Total
Amount
(Rs)
1 Fixed Capital
1.1 Up-gradation of toilets and kitchen Lumpsum 1 80000 80000
1.2
Construction of 1 additional room
(wooden) for accommodating 4
persons Lumpsum 1 150000 150000
1.3
Furniture and fixtures including
bed and beddings for 4 persons Lumpsum 1 70000 70000
1.4 Total Fixed capital
300000
2 Revenue generation from
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b. Sensitivity Analysis for Homestay
Table 35: Sensitivity Analysis for Homestay
Sr. No Parameters
Revenue
(Rs)
Expenses
(Rs)
Profit before interest
(Rs)
1
What if number of expected tourists
goes down by 10% during peak
season 286800 151960 134840
Homestay
2.1
Homestay during peak season (6
months) at 4 persons/day/15
days/month persondays 360 700 252000
2.2
Homestay during lean season (6
months) at 2 persons/day/10
days/month persondays 120 500 60000
2.3 Total Income
312000
3 Homestay Running Expenses
3.1
Food expenses at Rs 100 per
person per day for the entire year persondays 480 100 48000
3.2
Labour charges for maintenance at
Rs 50 per person per day for the
entire year persondays 480 50 24000
4
Referral Commission during
peak season at 20% of revenue persondays 360 140 50400
5
Depreciation of fixed assets at
10% of fixed capital per year
10% 300000 30000
6
Yearly Membership to Village
level tourism society for
marketing and website
development Lumpsum 1 5000 5000
7
Miscellaneous expenses
(Hotel registration and other
expenses) Lumpsum 1 5000 5000
8 Total running costs
162400
9 Profit before interest
149600
10
Interest (12% per annum on
Total investment including
fixed capital)
12% 462,400 55488
11 Net profit
94,112
12 ROI
20.35%
13 Payback period Year
3.090909091
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2
What if number of expected tourists
goes up by 10% during peak season 337200 172840 164360
3
What if number of expected tourists
goes down by 10% during off season 306000 160600 145400
4
What if number of expected tourists
goes up by 10% during off season 318000 164200 153800
4.7.12 Implementation plan for Homestay promotion
Table 36: Implementation plan for Homestay
Key steps to be
followed
Activities to be performed by project
Phase I – Preparedness at the community level
Cluster selection Select the right cluster for initiating homestay promotion based on
technical feasibility.
Identify target block, village and the community.
As mentioned earlier a maximum of 20% of households should be involved
in each GPU for the activity.
Section of communities which are already involved in similar activities can
be started with.
Social mobilization
and institution
building
Sensitize interested households on potential of homestays as emerged
from the findings of value chain analysis described earlier and their impact
on livelihood.
Share various possibilities and packages of homestay, its cost benefit
analysis, and assess community interest level to take up the activity.
Identify the households to start homestay as a new unit. Initially only a
limited number of groups should be encouraged to start the activity. Based
on the results of pilots add more members. List out members separately
who are already doing the activity and want to either expand or strengthen
the activity.
Initiate participatory discussion to arrive at consensus on roles and
responsibilities of members and group leaders to take up the activity.
Preparation of
business plan
Prepare a proper business plan for homestay in consultation with the
community detailing the economics of the activity, capacity building
requirements, issues and challenges, linkages with travel agencies, tourism
packages to be developed, and government schemes to be availed.
Capacity building Leadership training for group members–functions and responsibility to
interact with external players.
Training in business and marketing skills (costing, pricing, accounting,
sales and marketing, negotiation, market analysis) to members using
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participatory techniques.
Technical training on better practices, exposure visits to nearby best
practitioners and outside the states as well.
Identify suitable government and private agencies that can provide need-
based technical and business training at the community level. Identify
local level best practitioners.
Phase II - Launching of the unit
Backward linkages List out major components required for setting up the homestay
Guide and oversee appropriate infrastructure development for homestay
promotion.
Systematize training management.
Establish finance support for homestay promotion on unit cost basis.
Service delivery Implement best practices.
Clarity of roles, specialization and continuous skill improvement
Bring quality control in production to achieve efficiency, higher
productivity at lower costs.
Better record keeping and financial management.
MIS development and multidimensional intervention opportunity.
Market access Identify suitable and multiple markets and prepare list of market players
with their contact details.
Engage in negotiation with travel agents, drivers, hotels etc. players to
establish relationship.
Clarify on profit sharing and funds rotation among members in case of
group activity.
Build System for collaborations and employment
Phase III – Up-scaling
Monitoring and
evaluation
Set up regular follow up and monitoring system to evaluate units from
time to time to finds out gaps, take corrective steps and ensure delivery of
appropriate extension services.
Strengthening
Institution
Facilitate secondary institution (district level) to upscale and sustain the
initiative.
Plan capacity building for strengthening of secondary institutions
Diversify activities to increase income
Create village level cadres to extend technical and marketing inputs to
community at village level.
Provide handholding and technical support to secondary institution
Legal aspects Compliance to legal implications in terms of licensing (hotel) and
regulation.
Possibilities of Partnership
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Partnership possibilities exist with Tourism Department, various cooperative societies involved in rural
tourism, ECOSS, Help tourism, TASS etc.
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List of secondary sources/references
1. Addressing Sustainable Livelihoods in Rural Sikkim: Experiences with Participatory Technology
Development in Ginger cultivation; Indo-Swiss Project Sikkim
2. Annual Reports 2005-06, 2006-07, 2007-08 and 2008-09; The Sikkim Cooperative Milk
Producers’ Union Limited (Sikkim Milk)
3. Annual Reports 2008-09, 2009-10; Sikkim State Cooperative Supply and Marketing Federation
Ltd.(SIMFED)
4. Chautare India, East and North-East: TTF 2009-10; Help Tourism Pvt. Limited
5. Eleventh Five year Plan: Volume 1 - Inclusive Growth; Planning Commision, Govt. of India
6. Govt. of India Census, 2001
7. IIMB Management Review, Volume 20, Number 1 Article by Vinod K Huria March, 2008
8. Livestock Self Sufficiency Mission; Animal Husbandry, Livestock, Fisheries and Veterinary
Services Department, Government of Sikkim
9. Lok Sabha un-starred question number 738 dated 23.02.2006 and question number 791 dated
22.11.2007
10. Markets that work, Making a Living from Livestock: 2007 Annual report; International Livestock
Research Institute
11. NERLP Regional Project Implementation Plan document; Ministry of Doner, Govt. of India
12. Potential Linked Credit Plan, South District; National Bank for Agriculture and Rural
development (NABARD), Regional Office, Gangtok
13. Potential Linked Credit Plan, West District; National Bank for Agriculture and Rural development
(NABARD), Regional Office, Gangtok
14. Sikkim Express, dated: 05th October 2010
15. Sikkim Human Development Report 2001
16. Sikkim in Brief 2005; Government of Sikkim
17. Sikkim, Small and Beautiful, Shrivastava, Alok K, Tourism department, Govt. of Sikkim, 2006
18. Sikkim State census 2009
19. Sikkim State Livestock Sector Policy Perspective and Policy Elements; Animal Husbandry,
Livestock, Fisheries and Veterinary Services Department, Government of Sikkim
20. Sikkim, A guide and Handbook; Seventeenth Edition 2009; Rajesh Verma
21. Sikkim…the land of peace and tranquility; Department of Tourism, Government of Sikkim
22. Tourism Sector Policy 2010; Sikkim Tourism department, Govt. of Sikkim
23. Traditional practices of ginger cultivation in Northeast India; H Rahman, R Karuppaiyan, K
Kishore & R Denzongpa; Indian Journal of Traditional Knowledge
24. www.indianspices.com
25. www.indiastat.com
26. www.ireland-guide.com
27. www.pragya.org
28. www.sikenvis.nic.in
29. www.sikkiminfo.in
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Annexure
Annexure 1: Some Steps taken by the State Government
(Courtesy Rural Management and Development Department)
The government of Sikkim has launched a dedicated mission for “Poverty Free Sikkim” by 2013. The five
pronged strategy for becoming poverty free would involve:
Providing universal access to essential infrastructure and services
Improved earned incomes
Increased emphasis on equitable and inclusive growth
Facilitating empowerment
A stronger safety net
Following is a gist of action taken by State government of Sikkim in purview of promotion of Livelihoods.
The State Government has taken up a housing program by placing it at the top end of its development
priorities, thereby imparting great vigour to the implementation process. A plethora of housing assistance
schemes (RHS, IAY and recently MMAY) have been operational for more than 15 years now and have
shown high impact, which can be discerned by the fact that in the year 2001 (9 years back) itself, only
16,487 (18%) of the total rural households were classified as Temporary (kutcha) as per Census of India,
2001.
Based on the physical progress over the last 9 years (from 2001 to 2009) of the ongoing generous rural
housing scheme, it is estimated that in 2009, less than 8,000 (10%) rural households are staying in
Temporary (kutcha) houses. The generous rural housing scheme of the State Government has now been
universalized and has reached all the households. It is proposed to reduce the quantum of allocation
under the saturated housing sector and use it for other need based areas like the wage employment
sector.
After universalizing the Rural Sanitation sector in 2008, the State is now poised to universalize the
important Rural Housing Sector as well. All it needs is a strong policy push by actively involving the
Hon’ble Ministers, MLAs and Panchayats to give this vital sector high priority, to achieve the status of
becoming the first state to become Temporary (Kutcha) house free, where all the rural households reside
in either permanent or semi permanent houses. After achieving the first Nirmal Rajya status in 2008,
this could be the next significant achievement in the rural development sector in 2010-11, and an
important milestone in our journey towards achieving the vision of making Sikkim a poverty free state by
2015.
Under MGNREGA, Sikkim was ranked 2nd in the country in delivering the 100 days guarantee by the
Ministry of Rural Development recently. The assets created in the village relate to minor irrigation
channels, jhora training works, school playgrounds, footpaths, horticulture and pasture development etc.
There is a provision of taking up maintenance of permissible assets that had been created under
MGNREGA. Other than providing employment, the Scheme has been able to create durable assets related
to income generation in the villages. Compared to the national average of 54 persondays per household in
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2009-10, Sikkim was able to provide 80 personday on an average to a household, with 23% of the
households achieving 100 days.
One of the biggest concerns in the Rural Development sector is the maintenance of various Government
owned physical infrastructure, whether it is primary schools, dispensaries, ICDS centers, footpaths, water
supply, panchayat ghars, community halls etc. There is no regular scheme funded by the Union
Government to assist in the maintenance of these physical assets created with sizeable government
investment. Most of the rural households in the State are marginal farmers with fragmented land
holdings and there is limited income from the traditional agriculture and horticulture sector (ginger,
cardamom and orange). Hence of the three factors of economic production namely land, capital and
labour, they are left mainly with the latter to contribute towards their economic development. Due to the
low levels of industrialization in the rural sector, coupled with saturation in government jobs, there are
limited employment opportunities at the government notified minimum wage rate of Rs 100 per day for
unskilled labour. This has resulted in underemployment and unemployment in the rural areas.
It is proposed to initiate a new scheme which will be 100% funded from the State Plan budget as the
“Mukhya Mantri Grameen Rozgar Yojana (MMGRY)”. This program will ensure in utilization of the
existing, underutilized labour force with the rural poor getting productively employed to maintain the
existing physical infrastructure of the Government, thereby giving a major thrust to sustainable
development in the State. The program if implemented in all the 905 GPWs of the State, by employing
30,000 rural households (households expected to demand employment) for 30 days in a year, at the wage
rate of Rs 100/day with a 50:50 wage material ratio, and 5% Administrative expenses will entail a
financial outlay of Rs 19 crore annually from the State Plan.
Primary education has been universalized, and the rural literacy has touched 82
%. Currently 32% of the local rural households are educationally backward i.e. no adult member in the
family above 30 years of age has studied upto class V. Currently the government’s support is in the form
of free uniform and books upto class V and 50% subsidy on text books after that. Some children are
forced drop out in Class VI since the cost of uniform, books, shoes etc which comes to about Rs 3500 per
student forms an economic barrier for their parents.
In human resource development, new and innovative Conditional Cash Transfer (CCT) programs are in
vogue over the last decade all over the developing world. These new methods serve the dual purpose of
poverty reduction coupled with improvement in human capital (education and health). The conditions
are focused on building the human capital of children (rather than simply supporting parents) adds to
CCTs’ political acceptability as an instrument to promote opportunities; after all, it is hard to blame
children for being poor. Making payments to mothers also resonates with well-accepted beliefs that
women will tend to put funds to better use than will men.
The World Bank assessment of this program in several countries (Brazil’s Bolsa Escola, Mexico’s
Oportunidades, Bangladesh’s Female Secondary School Assistance Program, Pakistan Punjab Education
Sector Reform Program, India (Haryana) Apne Beti Apna Dhan) concludes that CCTs generally have been
successful in reducing poverty and encouraging parents to invest in the health and education of their
children. Enrollment rates have increased and dropout rates have reduced. The expected outputs will be
Livelihood based Agri Business and Market Study in Sikkim
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significantly reduced dropout rates, improvement in school attendance, and also poverty reduction and
the outcomes as the overall improvement in the human capital. The Cash Transfer programs have a track
record of bringing about a behavioural change in the recipients, and if rural parents start giving top
priority to their children's education by investing in them, then the human capital would show a
qualitative jump in 5 years as envisioned by the Government.
In order to significantly improve the attendance in government schools and drastically reduce dropout, it
is proposed to initiate a new education incentive program “Mukhya Mantri Gramin Shiksha Protsahan
Yojana (MMGSPY)”. This is a cash incentive program for the mother of the household, to encourage the
parents to invest in the human resource development of their children conditional on 85% attendance and
passing the final exam. The total cost would come to about Rs 15 crore annually and the funds could be
transferred after the declaration of final results into the newly opened Financial Inclusion bank accounts
of the mother directly from the state level.
The Chief Minister’s Rural Universal Financial Inclusion Programme was launched during the
Independence Day Celebration on 15th Aug, 2010. The programme aims to provide universal access to
formal banking services to rural Sikkim, provide easy access to formal financial services, ensure inclusive
and equitable growth, empower rural women and to accelerate economic development in rural areas in
general. It will also provide insurance services related to house and personal accident to the beneficiary
families. Under this programme, about 70,000 rural families in the State will be benefited by opening a
savings bank account in the name of the mother of the nuclear family. They will be able to operate this
account through a composite biometric smart bank card. The facility for savings and withdrawals from
these bank accounts will be provided in the Gram Panchayat Unit itself by opening 163 Points of Service
(PoS) facilities to be operated by Banking Business Correspondents as per the Reserve Bank of India
guidelines.
Sikkim was ranked 3rd by the Ministry of Panchayati Raj recently in the performance and accountability
of Panchayati Raj Institutions (PRIs). The schemes related to MGNREGA, Water Supply and Sanitation
are being implemented bottom up though the PRIs. The Government has also approved the
recommendation of the 3rd State Finance Commission of devolving 15% of the State Plan funds to the
PRIs. It is estimated that the total fund outlay for each Gram Panchayat will be to the tune of Rs 80 lakh
per annum.
The Skill Development Initiative was launched in 2003 and apart from the Directorate of Capacity
Building, the State Institute of Capacity Building at Karfectar with state of the art facilities for residential
training have been established. Under the Chief Minister’s Self-Employment Scheme 5,780 youths have
been covered for self-vocational ventures encompassing various agro-based activities and IT and Tourism
related vocations. As a pioneering step, livelihood schools have been established in every constituency.
Many boys and girls primarily from rural areas are undergoing different kinds of vocational upgradation
trainings in such Institutes across the State.
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Annexure 2: List of participants for the stakeholder consultation workshop
(23rd August 2010, Gangtok, RMDD conference hall)
Sr.
No
Name Designation Contact No Department Email
1 Dr. S. Tambe Special
Secretary
9474059291 RMDD [email protected]
2 Kailash Rai Dy Gen
Manager
9832014342 SIMFED [email protected]
3 L Moorthy Asst Gen
Manager
9474983819 NABARD [email protected]
4 D Tewari Dy. Manager 9434750527 SISCO Bank [email protected]
5 R D Kaleon Asst Manager 9434109713 SISCO Bank [email protected]
6 Dr. Partha
Sarathi Ghosh
Sr. Project
Officer
9775873293 WWF [email protected]
7 Bhupesh
Subba
Project
Incharge
9733149964 VHAS,
Gangtok
8 Gloria
Namchu
Deputy
Secretary
9434037788 DPER NEIAP [email protected]
9 Kiran K
Pradhan
Joint Director 9832017868 Agriculture [email protected]
10 Anupa
Tamling
Under
Secretary
9733012024 RMDD [email protected]
11 T. D. Bhutia Assistant
Directot
9434409281 RHH [email protected]
12 R. P. Gurung CEO 9733088003 ECOSS [email protected]
13 Dr. S. Bhutia Dy. Director 9474350740 AHLF & VS
14 Dr. N.B.
Chettri
Jt. Director 9733255821 AHLF & VS
15 Dr. K. C.
Bhutia
Jt. Director 208483 AHLF & VS [email protected]
16 G. P. Chauhan Add. Director 9573776903 Horticulture
17 Tashi P
Nagyal
Under
Secretary
9547405676 RMDD
18 L. P. Chettri P.D. SKDA 9434406753 RMDD
19 Ghanshyam IT Manager 9647892997 RMDD
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Annexure 3: List of select stakeholders met during the field visit
Sr.
No
Name Designation Place Contact
1 Ajneya Kumar Singh District Collector, South Namchi, 9434201222
2 Jitendra Singh Raje SDM Soreng, West Soreng 9434041007
3 Vishal Mukhia BDO Sikkip(Wok) Jorethang 9733064606
4 Chandrakala Rai Deputy Director SIRD 9733240418
5 J C Biswas DDM NABARD Namchi 9434089765
6 B. K. Rai Joint Director,
Horticulture
Namchi 9434063536
7 D. B. Tamang Jt. Director, Horticulture Namchi 9434103504
8 H. Kuchay Consultant for Fabric
Namchi 9647642198
9 D. T. Bhutia Ex Director SIRD Namchi 9434063279
10 Noveen Subba Branch Manager, SISCO
Bank, South District
Namchi 9775461855
11 Subha Mukhiya BDO, Tinik Jorethang 9593886965
12 C. B. Rai Jt. Director, Soil and
Water Conservation
Namchi 9434063566
13 Nandalal Subba Rose Farmer, Rose
Village
Dharamdin
14 L. B. Vijay Rose Farmer, Rose
Village
Dharamdin
15 Sujan Subba Rose Farmer, Rose
Village
Dharamdin
16 Smriti Pradhan Kanchenjunga Floratech
Cooperative Society Ltd,
Rose village
Dharamdin
17 Pemdoma Bhutia Rose Farmer, Rose
Village
Dharamdin
18 Milan Chettri Rose Farmer, Rose
Village
Dharamdin
19 Shyam Kumar Field Staff, Horticulture
department
Dharamdin
20 Sai Patri SHG Tinik
21 Neel Kamal SHG Sisupani
22 Pragati SHG Ambote
23 Lilium SHG Samsebung
24 Gulab SHG Poklok Denju
25 Dr. P. Senthil Kumar
IFS
MD, The Sikkim Co-
operative Milk Producers
Gangtok 94341-91883
03592 – 204133
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Union Ltd - Sikkim
26 C B Subba Former Speaker, SLA Gangtok 98320-34822
27 Noveen Subba Sikkim State Co-
operative Bank ltd
Namchi 97754-61855
28 Rajendra P Gurung CEO, Ecotourism &
Conservation Society of
Sikkim
Gangtok 02592-232798
29 John Shankar AGM Marketing, Sikkim
Tourism Development
Corp ltd
Gangtok 94341-27252
30 Pavan Kumar Yangaldas Chief Executive, Srikar
Knowcon Services
Gangtok 94340-76102
31 Karan Souvenir Tours & Treks Gangtok 97332-59355
32 Chewang Chojar Travel Sikkim Gangtok 94341-69615
33 Bijendra Swaroop IFS MD, Sikkim State Co-
operative Supply and
Marketing Federation
Ltd
Gangtok 94341-69208
34 Kailash Rai Dy GM, Sikkim State Co-
operative Supply and
Marketing Federation
Ltd
Gangtok 98320-14342
35 Sushil Tamang MD, Cherry Village
Resort
Darap 97332-35441
36 Indra PD Shivakoti Subject Matter
Specialist, Krishi Vigyan
Kendra
Namthang 94343-18310
37 L Moorthy Asst GM, NABARD Gangtok 94749-83819
38 A P Sherpa Owner, Sherpa Lodge Varsey 94745-27836
39 Prasun Majumdar The Silk Route Tour &
Travel
Kolkata 94335-07902
40 Suresh Patel Patel Ginger Company Siliguri 94324-02267
41 T N Sharma President, Hee-Bermiok
Tourism Development &
Heritage Conservation
Society
Hee - Bermiok 94340-60563
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Annexure 4: Support plan for Dairy development in the NERLP Project Area
Dairy as an activity has been analyzed in section 4.3 and individual level plans have been shared for implementation. As mentioned earlier Sikkim
Cooperative Milk Producers Union Ltd. (Sikkim Milk) is already functional in the project area and can act as a ideal stakeholder in promoting
cluster based interventions around Dairy for the project. However, the institution needs support in strengthening its infrastructure and building
appropriate capacities to specially include the project beneficiaries under its umbrella. A 3 year plan jointly prepared by Sikkim Milk and MART,
for the project to financially support Sikkim Milk is as follows.
1. ACTION PLAN AND FINANCIAL OUTLAY:
Rs in Lakhs
S. No.
Key Activity Details Unit Cost
Units
Year 1 Year 2 Year 3 Total
Phy Fin Phy Fin Phy Fin Phy Fin
A Research and Training
A.1 Dairy Research Small Grants Initiative for PhD Scholars in the State in Collaboration with national and international experts from ICIMOD, SDC, IC, Amul etc
1. Approaches to understanding Farmers cattle feed strategies and identifying ways to improve fodder supply that involve farmer and village-level initiatives in different agro-climatic zones. 2. Study of the contribution of the smallholder dairy sector to poverty alleviation. 3. Indigenous knowledge system for tree fodder using a multi-method on-farm research approach 4. Institutional, technological and marketing systems, gaps and prospects in the smallholder dairy sector of the state 5. Status, potential and strategies for improving fodder supply from Goucharan forests of the state 6. Documenting the nursery techniques for fodder trees and grasses by compiling existing research studies in the region and documenting indigenous knowledge system using on-farm research approach.
3.0 Rs per Study
5 15.00
5 15.00
0 0.00 10 30.00
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Rs in Lakhs
S. No.
Key Activity Details Unit Cost
Units
Year 1 Year 2 Year 3 Total
Phy Fin Phy Fin Phy Fin Phy Fin
A.2 Training Workshops in Collaboration with National and International Experts from ICIMOD, SDC, IC , AMUL etc
3 day Workshops, Designing the study and program in collaboration with national and international experts from ICIMOD. Outcomes would include books along the lines of "Smallholder Dairy in Mixed Farming Systems of the Sikkim Himalayas: Issues and Prospects for Development" and "Livestock in mixed farming systems of the Sikkim Himalayas: trends and sustainability, training material and knowledge sharing.
4.00
Rs per workshop
2 8.0 2 8.0 2 8.0 6 24.00
A.3 Training of Technicians for Extension
One month long training to be conducted at SIRD followed by annual week long training programs. These technicians will in turn support the Milk Producers Cooperative Societies
2.00
Rs per month
1 6.00 1 6.0 0 0.0 2 12.00
B Strengthening Local Dairy Marketing Infrastructure
B.1 Strengthening Local Milk Collection Infrastructure
To include milk transport cans, milk testing equipments, milk collection utensils and milk collection centers in the relative poverty hotspots of the state
5.00
Rs per unit
0 0.0 13 65.0 13 65.0 26 130.00
B.2 Strengthening Local Milk Chilling infrastructure
To include commissioning of bulk milk chilling machines of 1000-2000 liter capacity with gen set, deep freezes and toolkits for operators in the relative poverty hotspots of the state
9.50
Rs per unit
0 0.0 5 47.5 13 47.50 18 95.00
B.3 Strengthening the existing Dairy Processing Plant
Capacity expansion of the existing Dairy plants are required to make it capable of handling increasing milk production from the implementation of the project 1
90.0 120.0
90.0 300.72
1 Please refer to Support in Plant expansion as Point 2 of Annexure 4
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Rs in Lakhs
S. No.
Key Activity Details Unit Cost
Units
Year 1 Year 2 Year 3 Total
Phy Fin Phy Fin Phy Fin Phy Fin
C Cattle Improvement
C.1 Artificial Insemination Equipment
To provide artificial insemination equipment, including two liquid nitrogen containers, for 26 centres involved in cattle programmes to improve productivity of existing cattle.
2.00
Rs per Equipment Set
0 0.0 13 26.0 13 26.0 26 52.00
C.2 Vaccination Against Major Diseases
Comprehensive Vaccination of All Dairy cows in the Project area - Annual Vaccination - 20000 cows
0.80
per 1000 doses
20 16.0 20 16.0 20 16.00 60 48.00
C.3 Technical Extension Service
Extension services, including basic animal disease-prevention inputs, technical advice, artificial insemination services and veterinary drugs, to be provided at a fee cost, which motivated technicians to improve the quality of their services. 26 Technicians to be paid honorarium of Rs 5000 per month for 3 years
15.60
Rs per Year
1 15.6 1 15.6 1 15.60 3 46.80
C.4 Crossbreed Milch cattle for Poor Households
Crossbreed Milch cattle to be provided to each household as per economics provided under section 4.3.10 of main report
0.55
Rs per Household
0 0.0 2250
1,237.50
2250
1,237.50
4500
2475.00
D Tree Fodder Development
D.1 Promoting Tree Fodder Development in Privately Owned Marginal Lands
Incentive of Rs 50 for every healthy seedling of permissible fodder tree species on attaining 2 feet height, with an upper limit of Rs 2500 (50 trees) per household
0.15
Rs per Household
0 0.0 5000
125.0
5000
125.0 10000
250.0
E Project Management
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Rs in Lakhs
S. No.
Key Activity Details Unit Cost
Units
Year 1 Year 2 Year 3 Total
Phy Fin Phy Fin Phy Fin Phy Fin
E.1 Project Management
Hiring staff, Project office, Project coordination, monitoring, evaluation and reporting. Project administration, travel costs and financial accounting
20.0
Rs per Year
1 20.0 1 20.0 1 20.00
3 60.0
F Total
170.60
1,701.60
1,651.32
3,523.52
B.3 SUPPORT IN PLANT EXPANSION
Rs in Lakhs
Sr. No Particulars Units Cost/ Unit
Total Cost
Remarks
1 Pasteurizer 5000 litre capacity 2 18.00 36.00 Two Units to replace the old ones - one is already unserviceable and the other is critical
2 Milk Chiller - 5000 litre to 10000 litre 1 5.00 5.00 To support existing old chiller
4 Storage Silos -10000 2 8.00 16.00
5 Milk Tanker Tank -8KL with Chasis 3 18.00 54.00 To meet milk transportation from Jorethang/ from outside the state
6 TATA 407 for Marketing 1 6.00 6.00 to meet the increasing marketing
7 Pouching Machine - Double Head 1 9.00 9.00 to cope up with increased pouching
9 Piping and realigning 3 6.00 18.00 stainless steel piping needs of the plant
11 Plant Communication Systems 1 2.00 2.00
12 Inspection Vehicles for Procurement and Marketing 1 7.00 7.00
13 Curd Making Unit 1 22.00 22.00 1000 litre Capacity with incubator and packaging machine
14 Dairy Dock Automation System 1 14.00 14.00 Including Hardware and software
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Rs in Lakhs
Sr. No Particulars Units Cost/ Unit
Total Cost
Remarks
15 Generator 1 8.00 8.00 for standby
16 Revamping of HT Electrical Fittings for the Dairy Plant at Gangtok
1 9.00 9.00 To Repair the Existing Electrical System to cope up with the expansion plans
17 Total 206.00
18 Installation, Commissioning and Contingencies- 12% of the total
24.72
19 Repairing and Civil Works to accommodate the above expansion including the Cold store
1 70.00 70.00 Lump sum
Grand Total 300.72
2. TOTAL BUDGET
Rs in Lakhs
Sr. No. Sector Budget
A Research and Training 66.00
B Strengthening Local Dairy Marketing Infrastructure 525.72
C Cattle Improvement - Total 2621.80
Contribution from Farmers as loan (as per section 4.3.10 of report) 2475.00
Contribution from NERLP 146.80
D Tree Fodder Development 250.00
E Project Management 60.00
Total 1048.52
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3. SUGGESTED IMPLEMENTING AGENCIES
Sr. No. Sector Implementing Agency
A Research and Training Research by Dept of Science and Technology and Training by State Institute of Rural Development, Government of Sikkim
B Strengthening Local Dairy Marketing Infrastructure
The Sikkim Cooperative Milk Producers Union Ltd, Tadong, Gangtok, Sikkim
C Cattle Improvement The Sikkim Cooperative Milk Producers Union Ltd, Tadong, Gangtok, Sikkim
D Tree Fodder Development Panchayati Raj Institutions
E Project Management NERLP unit, Rural Management and Development Department, Government of Sikkim
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Annexure 5: Sikkim State Stakeholders Consultation Report
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Background:
The North East Rural Livelihoods Project (NERLP) is a World Bank funded poverty alleviation initiative
by the Ministry for Development of North Eastern Region (DoNER) which is planned in the 4 North
Eastern states of Sikkim, Mizoram, Nagaland and Tripura. The project envisaged conducting Livelihood
Based Agri Business and Market study in each of its project states.
MART a leading Livelihoods and Marketing Consultancy was commissioned to conduct the aforesaid
studies through a contract signed between DoNER and MART on the 4th of August 2010. MART
submitted draft report of Sikkim state to NERLP and World Bank by email to receive their feedback on
the report. This report is the documentation of the feedback received on the draft report submitted by
MART to NERLP. The feedback to be incorporated by MART in the final report is mentioned separately
under section 3, later in this report.
Three kinds of consultations took place that gave feedback on the draft report are;
Written feedback from NERLP (23rd December 2010) and discussions with PD, NERLP in
Delhi.
Feedback from World Bank via forwarded email from NERLP on 26th January 2011
Stakeholders consultation workshop in Sikkim on 9th February 2011
Stakeholders’ consultation workshop
Objective : To share findings and recommendations of draft report
Date : 9th February 2011
Venue : RMDD Conference hall, RMDD, Gangtok, Sikkim
Time : 3:00 pm to 5.00 pm
MART has been conducting “Livelihoods based agribusiness and market study” in all four states under the
purview of NERLP. In order to finalize the draft report of the aforesaid study in Sikkim, a multi
stakeholder workshop was organized at RMDD conference hall of Gangtok at 3 PM on 9th February 2011.
Organized and coordinated by RMDD and SRDA, the workshop was attended by senior representatives of
government department and state level resource agencies along with representatives of NERLP and
MART. The workshop was chaired by Mr. A. K. Ganeriwala, Secretary RMDD. Secretary RMDD opened
the workshop by welcoming all participants to the workshop and sharing the objectives of the workshop
which were as follows:
Sharing of findings of the ‘Livelihoods based agribusiness and market study’ by MART
Feedback and suggestions on the findings and recommendations by stakeholders in the
context of implementation by NERLP.
Secretary RMDD also highlighted the timeliness of NERLP in the context of Sikkim and that the project
had all the ingredients to eliminate poverty in the state. He mentioned that the project actually covers a
large section of the poor in Sikkim and thus will be a major contributor to the state government’s mandate
of “poverty free Sikkim by 2013”. He reasserted the fact that the role of all stakeholders in the form of line
departments, cooperatives, banks, NABARD, resource agencies, NGOs etc. will be crucial in rendering
success to NERLP. He then invited Mr. D.T. Bhutia, State Coordinator, NERLP for the opening remarks to
the workshop. Mr. Bhutia, highlighted the salient features of NERLP in Sikkim and its coverage area. He
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also mentioned the premises under which the Livelihoods study was conducted by MART, a leading
national level livelihoods consultancy agency and requested participants to actively participate in the
workshop.
Post remarks by Mr. Bhutia, Secretary RMDD invited Mr. Sanjay Gupta and Mr. Nirmallya Mandal of
MART to share the methodology adopted and the findings of ‘Livelihoods based agribusiness and market
study’ conducted in Sikkim.
Mr. Nirmallya Mandal, presented the detailed 8 step methodology of the study followed by major findings
in the context of existing rural Livelihoods in Sikkim like infrastructure and resources available, markets,
land based activities undertaken in villages, Animal husbandry and livestock based activities undertaken
and also Non-farm and service based activities undertaken. The detailed value chain analysis of milk,
ginger, flowers, pigs and homestay (rural tourism) were shared with reference to value chain maps of each
product, stakeholders and their roles, salient features of each value chain, constraints and gaps in the
value chain in terms of inclusion of the poor and critical intervention points suggested. The power-point
presentation is annexed with this report for reference.
In course of the presentation by MART, various comments were received from the participants which are
as follows:
NERLP Project Manager, Ms. Sanchyeeta Gohain commented that value chain maps should be
comprehensively drawn to include all necessary information in the map itself. She mentioned that
the consumers should be highlighted in oval shape and separation of processes with stakeholders is
required in the value chain map for better understanding. Percentage of product movement through
different channels also needs mention.
As per the findings of the dairy value chain, Mr. Gurung of ECOSS inquired reasons for low fat
percentages in cow milk in Sikkim which was later answered by Dr. Senthil Kumar, MD Sikkim Milk.
Dr. Senthil Kumar mentioned the reasons of low quality fodder and lack availability of green fodder
are prime reasons along with the fact that milk from hilly areas have low fat content as compared
with that of plain areas.
Dr. Senthil Kumar highlighted the following points;
o Dairy is Sikkim is traditional and people have the skills for practicing dairy activity. However,
clusterization of the milk producing areas is required to achieve viability in terms of scale.
Hence the project needs to be set up dairy clusters across the project area. Sikkim milk can be
a major stakeholder in the same.
o Although various schemes have distributed good quality cows in the rural hinterlands to poor
beneficiaries their productivity often decrease after the initial milk cycles due to lack of good
management of the cows along with shortage of good quality green fodder all the year round.
Thus NERLP needs to take up special programmes on fodder development along with
appropriate capacity building in the project area. Good quality cross bred cows should also be
arranged by NERLP.
o In order to maintain a proper milching cycle, strengthening of artificial insemination (already
initiated by the AHVS department) needs to be supported by the project.
o Marketing of milk is an area which needs proper support from the project and since Sikkim
Milk is already functional in the project area supporting dairy farmers in providing marketing
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support, Sikkim milk can be a major stakeholder in implementing marketing systems for milk
under NERLP.
o Sikkim Milk already has a milk processing plant in Jorethang catering to the project area.
However, the infrastructure of the plant needs serious and immediate renovation to be able to
continue the marketing support. NERLP needs to support such infrastructure development in
order to create robust marketing systems for milk in the project area.
After the findings of the complexities in the traditional marketing channel of Ginger in Sikkim was
shared, marketing through SIMFED was proposed as an option for small and poor farmers.
It was also shared that bank credit in Ginger has increased during the last two years and banks are
anticipating a rise in ginger cultivation
Mr. P. Tshering, Director Food Security and Agriculture department also shared that a 7.5 MT/day
capacity ginger processing plant has been commissioned recently at Jorethang which will be
operated by SIMFED. The centre can cater to the needs of the poor farmers in the project area
through convergence by NERLP.
When a major bottleneck of absence of cold chain networks was highlighted for floriculture activity,
Mr. Tambe, DGM NABARD shared the information that a Rs 500 crore investment in being planned
by the government for setting up such cold chain systems near the upcoming national airport in
Sikkim, near Gangtok.
Mr. Gurung, CEO ECOSS suggested some action by NERLP to include the poor in Rural Tourism
through creation of porter, guides, cooks etc. service delivery mechanisms and linking them with
mainstream tourism initiatives. He stated that marketing is a major issue in the area of homestays
and that as mentioned in the livelihoods study, NERLP should facilitate in setting up and running
websites for marketing. He also highlighted the upcoming government policy of registering and
certifying rural homestays for better monitoring and standardization.
After the end of the presentation, Secretary RMDD congratulated MART for completing the study
successfully and satisfactorily. He mentioned that the study will largely help NERLP in planning and
implementing the project in Sikkim. He also thanked all participants for participating in the workshop.
The closing remarks and vote of thanks to the workshop was presented by Ms. Sanchayeeta Gohain, PM,
NERLP Guwahati.
Feedbacks to be incorporated in the final report
The following is a list of relevant feedback on the draft report received from various sources and their
corresponding responses by MART;
Feedback received from NERLP
Observations Response
In the step 4 of Chapter 1, the examples of five
products should be relevant to a particular state as
indicated in respect of other two state studies
already.
Taken note of for addressing it suitably
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Observations Response
Regarding Chapter 4
The process of short listing of products has to be
elaborated and justified.
Justifications for short listing of products will be
included under value chain analysis section
All the products should cover the national and
international market status and overall scope of the
products.
Available data from secondary sources have been
already included under background sections of
each product value chain. However, will include
additional relevant data if available.
The economic feasibility of the selected products
has not been mentioned
Economic feasibility of all the selected products
are already mentioned under feasibility of the
product (refer to sections 4.3.2, 4.4.2, 4.5.2, 4.6.2
and 4.7.3)
The study has suggested dairy farming at cluster
level, whereas, the economics of the sub sector has
been given according to individual basis.
The study proposes that the project should
promote Dairy activity in a cluster to achieve
economies of scale. However, the activity needs
to be conducted by each individual participating
household hence the plan is given at the
individual level.
The action plan for the cluster level sub sectors has
to be suggested.
Since Sikkim Milk is already functional in the
area at the cluster level, a separate plan for
supporting Sikkim Milk will be shared.
The economics of all the sub sectors should be
more broad, covering all aspects, including
marketing.
Although most aspects have already been
accounted for in the economics relevant
explanations or additions will be provided for
each economics.
The study has not identified the major players of
the products within and outside the region.
Major players of all value chains are already
mentioned in the value chain map of the product
with role of each in the subsequent paragraphs.
Major players met during field survey will be
annexed.
Similarly, the possibilities of partnership with the
identified players of the sub sectors have not been
explored.
Taken note of for integrating the same separately
under each product value chain, although
possibilities of partnership have been accounted
in the strategic action points of the constraint
solution matrix of each value chain.
The study has not identified the critical Critical intervention points are presented as
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Observations Response
intervention points in the value chain of the
products. Resultantly, it did not cover the
investment planning for those critical points.
strategic action points in tabular form under
constrain solution matrix for each product value
chain. Economics of each value chain activity
covers investment points for raw
material/inputs, transportation, marketing, fixed
cost and working capital requirement wherever
relevant.
The study should provide guidance for setting up
small, viable and sustainable processing units.
Taken note of for integrating it under each
product value chain
The study must also highlight the changing
demand and supply scenario as well as projection
of the future trend to ensure that the farmers are
able to trace and face the challenges of negotiation
with market players and ultimately get full benefits.
Additional information from secondary sources
will be collected and reflected if available.
However, based on the market scenario given in
introduction part of each value chain activity and
field survey challenges for small and marginal
famers are already included under each product
value chain analysis.
Feedback received from World Bank feedback (26.01.2011)
Observations Response
The UNIT costs/investment required for each
livelihood activity studied by them is put in a
tabular form starting from the household/SHG/
and cluster level, so that we are clear what is the
allocations for investments to be made from the
various funds within the project
The details will be given in tabular form in the
executive summary also.
Also, for each activity in each state they should
clearly identify one agency who can be the overall
resource/ sector support agency which can be
contracted in.
Potential partners will be mentioned in tabular
form in the executive summary also.
Relevant feedback received from State level consultation workshop (09/02/2011) and
Special Secretary RMDD
Observations Response
Annexure 1: Some steps taken by the State
Government needs to be updated with recent
developments
Taken note of for integrating the same in the final
report.
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Observations Response
Section 4.7.12, Table 34: One criterion for selection
of clusters can be areas where already similar
community driven activities have been initiated.
Taken note of for integrating the same in the final
report.
Section 4.7.5, Figure 12: Linjee Payiong village to
be added
Taken note of for integrating the same in the final
report.
Section 4.6.2, Table 27: Courtesy to be in the name
of HCCD
Taken note of for integrating the same in the final
report.
Section 2.3: BPL percentage is around 20% as per
DESME 2005
The 2001 census has been referred for most
demographic data in the report. The section
concerned in particular projects the findings of
the HDI report 2001.
The report should highlight strong decentralization
of the state with good PRI systems
Taken note of for integrating the same in the final
report.
The report should highlight the significance of
safety net programs in the state ensures that there
are no abject poverty situations in the state
Taken note of for integrating the same in the final
report.
Value addition of Hill Grass as broom stick as a
potential activity
The activity although significant in terms of
livelihoods of the rural population, has little
scope of value additions and thus the project’s
interventions and investment potential is low.
Hence it has been excluded as a major value
chain activity.
Inclusion of Poultry as a potential activity The activity has already been included in the
potential activity list for the state. However,
being a risky activity in the hilly areas and
bottlenecks in marketing and service delivery of
poultry, piggery has been preferred to poultry.
Inclusion of Large Cardamom as a potential
activity
The said activity although important for Sikkim,
has a high gestation period, declining production
trend in the state and generally excludes the
poor. Hence the activity has not been preferred to
be included in the top 5 list.
Water is often a constraint in rural Sikkim and the
activity plans shared in the report also assumes
water availability.
Point taken; however water crisis is an universal
cross cutting issue in Sikkim which has a bearing
on the successful implementation of the
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Observations Response
livelihood plans. Hence the project needs to
implement special water harvesting plans
through NRM related activities.
Value chain Analysis maps need to be more
comprehensive with all information
The value chain analysis sections of each
potential product already cover all necessary
information and simplicity in maps have been
purposely maintained to ensure better visibility.
NERLP should support Sikkim Milk for ensuring
better market linkages and processing of milk
A separate plan to support Sikkim Milk is shared
in the final report
Marketing of Ginger can be proposed through
SIMFED since the other channels were found to be
complex
Already proposed in the report
A 7.5 MT/day capacity ginger processing plant has
been commissioned recently at Jorethang which
will be operated by SIMFED. The centre can cater
to the needs of the poor farmers in the project area
through convergence by NERLP.
Taken note of for integrating the same in the final
report.
A Rs 500 crore investment in being planned by the
government for setting up such cold chain systems
near the upcoming national airport in Sikkim, near
Gangtok for supporting floriculture activity
Taken note of for integrating the same in the final
report.
Include the poor in Rural Tourism through
creation of porter, guides, cooks etc. service
delivery mechanisms and linking them with
mainstream tourism initiatives.
Taken note of for integrating the same in the final
report. However, from amongst all these options
to include poor in rural tourism, homestays is
discussed in detail in the report.
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Annexure A: Presentation by MART in stakeholder consultation workshop (9th
February 2011)
A-32, 1st Floor, Sector 17, Noida - 201 301
Tel: 0120-2512140, Fax: 0120-4273995www.martrural.com
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Objectives of stakeholder workshop
Recap of study methodology and process adopted Share findings on livelihoods status Facilitate discussion on
• Proposed implementation• Envisaged roles and responsibilities of project
partners
Background The Ministry for Development of North Eastern
Region (DONER), Government of India proposesNorth East Rural Livelihood Project (NERLP) toaddress the issues of rural poverty and creation ofsustainable livelihood for rural poor particularly forwomen.
Project states include Tripura, Mizoram, Nagaland andSikkim.
MART, a leading Livelihoods and MarketingConsultancy signed agreement on the 4th of August2010.
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Livelihood based Agri-Business and Market study
Assess economic opportunities in farm, off-farm and non-farm sectors Understanding existing infrastructure, resources ,
support services, major occupations, production systems, technology, policy environment and potential for growth
Conduct market assessment and value chain analysis for potential livelihood activities
Suggest viable income enhancement strategies for potential farm, off-farm and non-farm sectors
Suggest business plans for appropriate livelihood interventions for potential activities
Approach of the studyActivities Key Steps Outputs
Review of project literature and
reports
Study livelihoods initiatives/project
such as DONER, NERCRMP in north
east states.
Secondary reports and website
Draft study design and plan
Step 1
Pre study
preparation
Develop better understanding of the
study and project states
Draft study design and plan
State wise meeting with state
nodal officer and stakeholders from
line departments and resource
agencies
To understand NERLP objectives
and process, and key stakeholders
in the region
Generate list of livelihood activities
Share study approach and
methodology
Share outline of draft report
Step 2
Initiation
Meeting at
state level
Develop better understanding
keeping project objectives in mind
List out key stakeholders for meeting
during field visit
Feedback on constraints and
opportunities in the state
Finalize approach and methodology
Finalize study villages based on
availability of key products/services
Finalize field visit plan
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State wise data information
collection, compilation and analysis
of initiation meetings
Step 3
Initiation Report
State wise initiation report. It contains:
Existing livelihood profile and issues
SWOT analysis of the region
Overall approach and methodology
List of villages to be visited
List of key stakeholders shortlisted
Field visit plan
Discussion guides
10-12 potential list of products for
value chain analysis
Interaction with key stakeholders
from line departments such as
agriculture, horticulture, animal
husbandry, resource agencies, and
key market players
Analysis of secondary reports and
market analysis
Step 4
Fieldwork -1
(Interactions
with key
stakeholders)
Shortlist 4-5 products/commodities/
services per state for undertaking
value chain analysis
List of stakeholders/VC players and
products/commodities/ services
villages finalized for Field Work-2
Finalized discussion guides for
Fieldwork-1
Finalize study design
Finalize field visit plans
Finalize field teams
Undertake field visit
Finalize list of stakeholders to be
met
Step 5
Fieldwork -2
(Interactions in
villages and
markets)
Fieldwork involves
Livelihood survey in villages and
market and meeting with enablers
Value chain analysis of 4-5
products/commodities/services and
meeting with value chain players
Data compilation and analysis
Prepare draft strategies Step 6
Draft Report
Draft report as per objectives listed
out earlier
Share draft report though power
point presentation to World Bank,
DoNER staff and other stakeholders
as suggested by the project
Step 7
Stakeholders
consultation
workshop to
share Draft
Report
Agreed feedback of stakeholders on
the draft report
Content for final report finalized
Stakeholders consultation workshop
report
Additional data analysis and
information collection from
secondary sources
Feedback incorporated from
stakeholders consultation workshop
report
Step 8
Final Report
Final report as per study objectives
defined earlier
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Identification
of Viable
Activities
Sustainable
Activities
Matching Supply & Demand
Handholding
services
Training
Exposures
Infrastructure
Survey in
Villages
Resources
Skills
Technology
Finance
Infrastructure
Support
Services
Market survey
• Own Village
–Shop
–Trader
–Vendor
• Haat Bazar
• Town Market
Supply Possibilities Demand Pattern Project SupportIncome Opportunity
3M Concept
District Villages
South
Mellidara Ward -1, Salghari Upper,
Sallebong, Biriang Ward, Ramaram Kali
Khola
West
Darap Lagay, Samsing Ward – 5,
Tinzerbong, Rodhu Khandu Sanku,
Lower Okharey
Study villages
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Key Informants Place
Villagers (Farmers, SHG Members,
youth, Panchayat members etc.)
10 villages in South and West
districts
Secretariat & Directorate Officials Gangtok, Soreng, Namchi
Govt. Line Dept. Officials Gangtok and Dist. HQs
Support Institutions (NABARD, SIRD,
SISCO Bank, SIMFED, Sikkimilk etc.)
Gangtok, Jorethang, Dist.
HQs, blocks, GPUs
NGOs (ECOSS, VHAS, Help Tourism
etc.)Gangtok, Siliguri, Dist. HQs
Processors, Traders, Transporters etc.Gangtok, Siliguri, Dist. HQs,
Jorethang etc.
Others (Mainam Gardens, GPU level
Cooperatives, eco-tourism societies)
Namchi, Geyzing, Daramdin,
Gelling, Varsey, Seleb, Darap,
Hee-Bermiok
Key Stakeholders consulted
Livelihood Profile
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Infrastructure and Resources
100% surveyed villages had
mobile network coverage, bank, post office, milk collection centres, roads, skill training centres, transport services, drinking water, electricity, school building, veterinary department, agro cooperatives and haats.
80-90% of the surveyed villages had community buildings, marketing cooperatives and
access to nurseries
40% of surveyed villages had
access to irrigation facilities in the form of rivulets and springs
MarketsSouth District
MarketsWest District Markets Products traded
Town level markets
Jorethang, Namchi,
Melli, Ravongla
Gyalshing, Geysing Legship, Ginger, Cardamom, Orange,
Chilli, Vegetables, Milk
products, Poultry, Pork,
Mutton, Clothes, utensils,
consumer goods, Agri
implements, Agri inputs,
Cattle Feed, service centres,
departmental stores etc.
Weekly (Haats) and village level markets
Simchuthang
(Mangley), Majhitar,
Temi Bazar, Damthang,
Namthang
Kewzing, Yangyang,
Ralang.
Reshi, Hee, Sombaria, Soreng,
Daramdin, Dentam,
Rinchenpong, Kaluk, Mangalbarey,
Shreebadam, Bermiok,
Pelling, Tashiding, Chakung,
Nayabazar.
Ginger, Cardamom, Orange,
Chilli, Vegetables, Poultry,
Pork, Mutton, Clothes,
utensils, Agri inputs, Cattle
Feed, etc.
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Land based Livelihoods
0
20
40
60
80
100
120
Availability Percentage in surveyed village
Percentage of Households involved
SeasonalityCrops Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Ginger P P PM P P PM M M
Maize P P P P P P
Paddy P P P P P P
Tomato PM PM P P PM PM P P PM PM P P
Potato P PM P P PM M P P P P PM P
Pulses P P P P PM
Quash PM PM PM PM PM PM PM PM PM PM PM PM
Chilli P P PM PM PM
Orange P PM PM M
Large Cardamom P P PM PM PM PM M M
P: Production phase, M: Marketing Phase
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Consumption pattern
5
100
0
100
10 5 10 5 815
70
95
0
100
0
90 95 90 95 9285
30
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Percentage consumed Percentage Surplus
Marketing channels
0102030405060708090
100
Sale percentage of major crops through different channels
Village Trader Haat Town Trader
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Animal Husbandry and LivestockMajor
Livestock
Availability in
percentage of villages
Percentage of households
involved
Dairy 100 65
Piggery 100 60
Goat rearing 70 25
Poultry 100 50
• Animal Husbandry and Fishery contributes to 31.6% value in the entire Agri allied sector of Sikkim.
• Highly women centric activities• Dedicated Poultry and Dairy Mission by the Govt.• After farmers, Sikkim Milk and AHVS dept. largest
stakeholders in Dairy.
Non-farm and Services Women are traditionally skilled in knitting woolen
garments, stitching, pickle making and making fermented food products. Very few use skills for income generation.
Construction (70%) and Carpentry (100%) related skills are high.
90% villages had drivers while 70% villages have Defense personnel.
Low specialized skills like mobile repairing, electronics repairing, insurance agents etc.
Livelihood Schools by Govt. to enhance skill development 40% surveyed villages interested in Homestay based Rural
Tourism
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Value Chain Analysis
Dairy
Franchise /
Retailer margin:
Re 0.5/litre
Unprocessed: Rs 13 –18/ litre
Unprocessed: Rs 24-30/ litre
High cream: Rs 36 / litre
Toned: Rs 25 / litre
Processing by Sikkim Milk
Dairy Farmers
Retailers
and milk
parlors
(Inside
Sikkim)
Consumers Consumers, Hotels,
Restaurants
Input Supply
Fodder, Cattle feed, nutrient supplements, dairy implements,
equipment, etc.
Milk Collection centre run by Milk
producer’s Cooperative Societies
Milk unions
outside
Sikkim
Consumers
Franchisee
(Outside
Sikkim)Institution
al supply.
e.g. Army,
IRCTC
Commission to
Cooperative
Societies: 3.3% of
value of milk
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Salient features of Dairy 65% of HHs keep milching cows. 2-3 cows /HH. 8-10 litres/
HH
• Different package of practices by AHVS, Entrepreneurs and local villagers.
Marketing by Sikkim Milk, Entrepreneurs, SHG (NayaBihane)
Constraints Water availability Green Fodder availability round the year Low productivity of cows Cow milk is low in fat content no organic premium Access to credit Road blocks and market failure risks
Critical Intervention Points Formal arrangement with the AHVS department and Sikkim Milk for ensuring availability of
good quality cross bred cows.
Promote Silage pits for storing green fodder.
Identify and promote specific cluster of villages for specially producing fodder.
Ensure adequate availability of mineral mixtures and nutrition supplements at all project
village levels.
Create village level cadre of technical persons to provide technical services to dairy farmers regarding productivity enhancement.
Regular training on best practices and exposure visits to best practitioners in the local area.
Organize poor famers in SHGs to link them with local banks to ensure their financial inclusion.
Develop partnership with existing MFIs and banks encourage them to develop specific loan products for commercial dairy farming and expansion
The Project can also fund the activity directly.
The project can facilitate proper organic certification of milk and develop niche markets for cow milk to enable premium prices for the poor producer.
Guide dairy farmers for collective sourcing of feed and fodder to reduce operational costs.
Appoint implementing agencies and develop village level service providers to help famers link with need based government schemes and services.
Development of adequate milk chilling and storage mechanism at village level to withhold milk from perishing during roadblocks due to landslides.
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Ginger
SIMFED
Retailers
(Outside Sikkim)
Consumers Consumers
Traders at
Jorethang, Reshi,
Namchi, Namthang,etc.
Retailers
(Outside Sikkim)
Consumers
(Local market)
Input Supply from farmer’s own sources
Seeds, bio-fertilizers, agriculture implements, equipment, cow dung
Rs 2500-3500/q
Village
level
traders
Rs 3500-4500/q
Rs 4500-5500/q
Rs 2000-2500/q*
Wholesalers(Delhi, Mumbai, Kolkata)
Wholesalers
(Delhi, Mumbai, Kolkata)
Wholesalers
(Siliguri)
Retailers
(Gangtok, Namchi,
Jorethang)
Wholesalers
(Siliguri)
Rs 5500-7000/q
Multipurpose
Cooperative
Societies
* The rates given are for fresh Ginger and ‘q’ stands for quintal.
Traders at
Jorethang, Reshi,
Namchi,
Namthang,etc.
Ginger Farmers
Wholesalers
(Siliguri)
Salient features of Ginger Siliguri’s regulated market is the terminal market with year
round trading. Farmers get 1/3rd price paid by end consumers.
Bhainse, Gurubathane and Manjali are different varieties at the farmer level. Reshi, Melli and Singtam are qualities at the market level.
Trading of Ginger (by the book) to Siliguri is often not viable
Constraints Diseases, soft rot, availability of organic curative solutions
Lack of basic value addition
Inadequate market infrastructure
Availability of credit
Roadblocks and market failure risks
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Critical Intervention Points Formal arrangement with the Horticulture department for ensuring adequate supply
of Ginger seeds and fertilizers to farmers.
Support KVK and ICAR in speedy research of appropriate organic fertilizers, fungicides and pesticides.
Appoint implementing agencies and develop village level service providers to help famers link with need based government schemes and private services.
Create village level cadre of technical persons to provide technical services to farmers.
Regular training and exposure visits to best practitioners in the local area can help poor farmers.
Set up new cold stores after feasibility study.
Organize poor famers in SHGs to link them with local banks to ensure their financial inclusion.
Develop partnership with existing MFIs and banks encourage them to develop loan product for Ginger cultivation based on its economics.
The Project can also fund the activity directly.
Cleaning, sorting and grading should be taken up at the village level by farmers to maximize profits.
Capacity building of farmers should be done in taking up elementary value addition.
There is scope for collectivizing farmers to sell collectively and directly to higher order markets at towns and Gangtok for better price realization.
Guide farmers for collective sourcing of seeds and marketing.
Pig rearing
Pork seller
margin: Rs
1000/quintal
Pork: 110 -
120/Kg
Pig Farmers
Pork
shops in
Namchi,
Gangtok,
Jorethang
etc
Consumers Pig Farmers
Input Supply
Fodder, Pig feed, nutrient supplements,
implements, equipment, etc.
Temporary
shops in
haats across
Sikkim
Pig for pork: Rs
100-110 per kg
Breeding piglets:
Rs 2000-200 / piglet
Piglets for
breeding purpose
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Salient features of Pig rearing
60% of HHs keep indigenous variety of pigs. 4-5 pigs per HH.
The current demand of Pork in Sikkim is 550MT and supply is only 150 MT per annum.
Constraints
Availability of water and fodder round the year
Non standard package of practices
Low productivity of indigenous pigs
Availability of good breed pigs
Access to Credit
Critical Intervention Points Establish a formal arrangement with the AHVS department for ensuring
availability of good breed pigs.
Identify and promote specific cluster of villages for specially producing fodder.
Ensure adequate availability of mineral mixtures and nutrition supplements at all project village levels.
Create village level cadre of technical persons to provide technical services to Pig rearing farmers regarding productivity enhancement.
Regular training on best practices and exposure visits to best practitioners in the local area.
Organize poor famers in SHGs to link them with local banks to ensure their financial inclusion.
Develop partnership with existing MFIs and banks encourage them to develop specific loan products for commercial Pig rearing farming and expansion.
The Project can also fund the activity directly.
Guide Pig rearing farmers for collective sourcing of feed and fodder to reduce operational costs.
Appoint implementing agencies and develop village level service providers
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Floriculture
Rs 8-10/stick
Rs 10-15/stick
Rs 2-3 /stick SIMFED
Floriculture Farmers
Retailers
(Outside
Sikkim)
Mainam Gardens
Private Limited,
Namchi
Retailers
(Outside Sikkim)
Input Supply
Saplings, NPK, fertilizers, fungicides, floriculture implements, cow
dung
Village
level
traders
Wholesalers, Agents
(Delhi, Mumbai,
Kolkata)
Wholesalers
(Delhi, Mumbai,
Kolkata)
Retailers
(Siiliguri,
Gangtok,
Namchi)
Consumers Consumers Consumers
Rs 1-2 /stick
Alstroemaria (normal stick)
Salient features of Floriculture
High investment and technically intensive activity. Very strong support system by HCCD. Alstromeria (Peruvian Lily) and Zanderdeschia (Cala Lily) proposed
for villages at a minimum height of 4000 ft from the mean sea level. Gerbera and Carnation for villages below 4000 ft from the mean sea
level.
Flowers from the project area mostly sent to domestic markets with very little or no exports.
Constraints Access to direct sources of seeds and tubers Inclusion of poor in the activity Lack of adequate marketing infrastructure (cold chain) for exports Access to credit Road blocks and market failure risks
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Critical Intervention Points Identification of interested poor farmers and establish a formal arrangement
with the HCCD department for ensuring adequate supply of inputs. Convergence of the department support with the project is crucial.
Support HCCD department, SIMFED, KVK and ICAR to take up research for developing appropriate seeds/tissues/bulbs for floriculture which is otherwise very expensive and have to be imported.
Appoint implementing agencies and develop village level service providers to help famers link with need based government schemes and private services.
Create village level cadre of technical persons to provide technical services to farmers.
Regular training and exposure visits to best practitioners in the local area can help poor farmers.
Organize poor famers in SHGs to link them with local banks to ensure their financial inclusion.
Develop partnership with existing MFIs and banks encourage them to develop loan product for Floriculture cultivation based on its economics.
The Project can also fund the activity directly.
Promote the activity in a cluster to optimize input costs and transport expenses.
There is scope for collectivizing farmers to sell collectively and directly to higher order markets through SIMFED or Cooperative retail outlets in Gangtok for better price realization.
Guide farmers for collective sourcing of inputs and marketing to reduce operational costs.
(Rural tourism)Homestay
Domestic tourists International Tourists
Village based tourism societies in Sikkim
(Kewzing, Hee Bermoik, Yoksum, Lachen, Lunchok, Maniram,
Rong, Jaubari, Darap etc)
International
Travel agents
Travel agents
in Sikkim
Travel agents
outside
Sikkim
Travel agents
in Sikkim
Web site
booking
20% referral
commission
Sikkim Tourism department,
ECOSS, Help Tourism Pvt. Ltd
Homestay
Households
Homestay
Households
Homestay
Households
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Salient features of Rural Tourism 80% domestic and 20% international toursists
20% referral commission
No registration and legal norms by govt. yet
Constraints Infrastructure bottlenecks for the poor
Access to credit
Capacity building of entire family on various aspects like waste management, ettiquettes, etc.
Associated sectors like health care, law and order, environment etc.
Sensitivity of tourism Market, road blocks etc.
Critical Intervention Points Organize poor households into collectives in the form of societies or SHGs to link
them with local banks to ensure their financial inclusion.
Develop partnership with existing MFIs and banks encourage them to develop loan product for Homestay based on its economics.
The Project can also fund the activity directly.
Establish formal arrangements with the Sikkim Tourism department, ECOSS, Help Tourism Pvt. Ltd etc for ensuring adequate capacity building of the target community through training, exposure visits to successful cases and handholding. Special modules can be developed for delivering special capacity building to community on various highlighted issues in tourism
Appoint implementing agencies and develop village level service providers to help mobilize the community and link them with various aspects of environment, health and sanitation along with tourism.
Establish proper community managed waste management systems at the village level.
Detailed health trainings should be imparted to community on how to avoid infection and maintain a healthy homestay business.
Guide the beneficiaries for collective action and form societies on village based homestays through implementing agencies.
Create village level cadre of knowledgeable persons to establish linkages with various institutions regarding tourism.
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SummaryProduce /
Product
Intervention
Suggested
Size of activity suggested Convergence and
partnership
potential
Unit of
activity
Fund
requirement
(Rs)
RoI
(%)
Cow Milk Improved practices in
dairy farming both
project districts
3 cross bred
cows per house
hold
151598 29.43 AHVS department and Sikkim
Milk union.
Ginger Improved package of
practices for Ginger
cultivation in both
project districts
1 acre 24300 73.6 Wholesalers, HCCD
Department, SIMFED,
Progressive farmers and
Financial institutions
Pig Rearing of American
Hampstead variety of
pig by adopting
improved package of
practices
6 pigs (5 female
and 1 male) per
household
209234 36.2 Wholesalers and retailer,
Inputs suppliers ,
Progressive farmers,
Financial institutions
And AHVS department
Floriculture Cultivation and
marketing of
Alstroemeria flowers
400 saplings
under 1 poly
house of 90 ft
by 22 ft
263200 10.9 HCCD Department, SIMFED,
Mainam Gardens, Other
Wholesalers and retailers,
Inputs suppliers ,
Financial institutions and
Progressive farmers
Rural tourism Promotion of
Homestay based Rural
Tourism
1 household
constructing
additional room
for 4 persons
462400 20.3 Tourism Department, various
cooperative societies involved
in rural tourism, ECOSS, Help
tourism, TASS etc
Implementation Phase I – Preparedness at the community level
Cluster selection Social mobilization and institution building Preparation of business plan Capacity building
Phase II - Launching of the unit Backward linkages Service delivery Market access
Phase III – Up-scaling Monitoring and evaluation Strengthening Institution Legal aspects
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Thank You
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Annexure B: List of Participants in stakeholder consultation workshop (9th
February 2011)
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