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Federation of Nepalese Chambers of Commerce and Industry Agro Enterprise Center

(AEC/FNCCI)

A Study Report On

Trade Competitiveness of Off-season Vegetables and Ginger In

Selected Districts in Western Development Region of Nepal

Under Cooperative Grant Agreement Project Between USAID and FNCCI Improving the Policy Environment for Agricultural Trade, Production and Marketing in Nepal

Kathmandu

2005

Mailing Address P.O. Box 7651;FNCCI Building; Kathmandu, Nepal.

Ph: 4622260,4262245, 4267005; Fax: 4261671E-mail: aec-fncci@mos.com.np, Website: www.aec-fncci.org, www.agripricenepal.com, www.b2b.com.np

USAID-Nepal Cooperative Agreement No. 367-A-00-04-00021-00

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ACKNOWLEDGEMENT As of the present context of Nepalese agriculture production pattern have now come up as having comparative and competitive advantages. Similarly, ginger has been traditionally an export commodity, and off-season vegetables for local market as well as export to India. So Agro Enterprise Center/Federation of Nepalese Chamber of Commerce and Industry (AEC/FNCCI) has concentrated on these commodities and interested to find out the "Trade Competitiveness of Ginger Production in Palpa, Syangja and Tanahun". Some possible measures like demand and supply scenario of existing cost of production, policies for trade promotion of these products in the external market, prevailing trend of market price of Nepal would also be reviewed. General implication of WTO, SAFTA, and BIMSTEC has also reflected in these products to be traded. Therefore, any constraints identified in this process due to which these products could have comparative advantage in the course of competitive edge would be viewed as an appropriate policy and promotional measures for the developing and the policy reform. Agri-Business and Trade Promotion Multipurpose Cooperative Ltd. (ABTRACO), has commenced for undertaking this study. This study was based on the secondary information. AEC/FNCCI would like to appreciate Mr. Jagdish Chandra Gautam, Chairman of ABTRACO; Team Leader and Agri-Business Specialist, Mr. Jaganath Thapaliya; Agri-Marketing Economist, Dr. Hari Babu Tiwari; Horticulturist, Mr. Puspa Raj Bhrutel; Agri-Trade Policy Expert, Mr. Sudeep Gautam; Field Enumerators and Research Associate of ABTRACO for their valuable efforts through their professional comments and suggestions in making this study complete.

We hope this study report will be very useful to policy makers and the potential interested traders or entrepreneurs involve in this sub-sectors.

We would also like to acknowledge with thanks the valuable contributions made by President of Executive Members and staff of Syagja Chamber of Commerce and Industry, Palpa Chamber of Commerce and Industry, Tanahu Chamber of Commerce and Industry; Regional Director, Mr. Bharat Upadhaya of Regional Agricultural Directorate; Team Leader Dr. Luke Cola Vito, Team Leader, Mr. Bob Nanas of BDS Maps; and also to the President and Executive member of producers/farmers cooperatives, and traders/exporters of Pokhara Wholesale market and also thanks goes to Pokhara Chamber of Commerce and Industry in facilitating workshop for this purpose.

Last but not the least; I would like to thank Director of Agro-business Policy Mr. Kiran Raj Pandey, and Program Manager of Agro-business Policy Santosh Regmi, AEC/FNCCI painstaking efforts in successfully accomplishing in the finalizing this report. Further, I like to appreciate other officials of AEC/FNCCI involved direct or indirect in this report preparation.

Finally, AEC/FNCCI would successful implementation of the recommendations put forwarded by the study team.

Dr. D. B. Shakya Executive Director AEC/FNCCI

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Table of Content

Pages List of Abbreviations..………………………………………………………...I Executive Summary…. ………………………………………………………………….............II-XVI 1. Introduction……..…………………………………………………………………..……...…1

1.1 Background ………………………...………………...………………………..…….….1 1.2 Objectives of Study ……………………………………………………………….…..…1 1.3 Scope of Study ……………………………………………………………….…………1 1.4 Methodology ………………………………………………………………….……..….2 1.5 Limitations ……………………………………………………………….……………..3

2. Off-season Vegetables Production ………………………………………………...…………3 2.1 Concept of Off-season Vegetable ……………………………………………………….3 2.2 Status of Vegetables in Palpa, Kaski and Baglung and Scope for

Off-season Vegetables………..………………………………...…………………..……4 2.3 Commercial and Off-season Vegetable Production Pockets……………………….……5 2.4 Existing Production Technology………………………………………………………...6 2.5 Cost of Production and Productivity…………………………………………………….13 2.6 Social and Gender Aspects of Off-season Vegetable production……………………….14 2.7 Problems and Issues of Off-season Vegetables…………………………………………15

3. Ginger Production………………………………………………………………….……......17 3.1 Production Trend……………………………………………………………………...…17 3.2 Status of Ginger production in Palpa, Syangja and Tanahu…………………….........….19 3.3 Existing production Technology………………………………………………...…….…19 3.4 Some Characteristics of Ginger Production Pockets………………………………….…22 3.5 Cost of Production and Productivity………………………………………………….….23 3.6 Problems and Issues……………………………………………………………….......…25

4. Off-season Vegetable Marketing …………………………………………………...……….26 4.1 Palpa …………………………………………………………………...………………...26 4.2 Kaski………………………………………………………………………………...…....36 4.3 Baglung/Parbat ……………………………………………………………………..……49 4.4 Overall Marketing Competitiveness in Study Area………………………………...……57

5. Ginger Marketing ……………………………………………………………………...........59

5.1 Palpa …………………………………...…………………………………………….…59 5.2 Syangja……………………………………………………………………………….…64 5.3 Tanahu ……………………………………………………………………………….….71 5.4 Overall Marketing Competitiveness of Ginger……………………………………….…77

6. Infrastructure and Institutional Support………………………………………………...........77 6.1 Infrastructure………………………………………………………………………….….77 6.2 Institutional Support System……………………………...………………………..….....80

7. Policy Support……………………………………………………………..…………………83

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7.1 National, Regional and World Trade Policies……………………………………….......83 7.2 Legislative System……………………………………………………………….……....88

8. SWOT Analysis…………………………..………………………………………...…..........91 8.1 Off-season vegetables……………………………………………………………......…..91 8.2 Ginger……………………….……………………………………………………...……93

9. Conclusion and Recommendations………………………………………………………….95

9.1 Conclusion…………………………………………………………………………..…...95 9.2 Recommendation………………………………………………………………………...95

Annex-1 Supply of Agro-inputs/Agro-vets in Kaski……………………………………………98 Annex-2 Sales of Farmers at Different market places in Kaski, 2061 …………………………98 Annex-3 Shortage Vegetables in Nautanuwa (India), 2061……………………………………98 Annex-4 Ginger Sales of farmers at different markets in Kaski, 2061…………………………99 Annex-5 Ginger sales on wholesale and Retail Prices by Farmers in Tanahu………………....99 Annex-6 Ginger Quality sold in wholesale and Retail Prices, Syangja………………………..99 Annex-7 Data about Shantiban, Pokhara Wholesle Market Center …….………………….…99 Annex-8 Traders in Sri Complex………………………………………………………………99 Annex-9 Permanent Traders in Pokhara, Kaski………………………………..………………99 Annex-10 Issues and Problems of Infrastructural Support ……………………………………..100 Annex-11 Cost of Production of Different Crops Per Ropani (508.5 m2) ……………………....101 References ………………………………………………………………………………………130

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Abbreviations

APP Agriculture Perspective Plan AEC Agro-Enterprise Center AIC Agricultural Inputs Company Limited AOA Agreement on Agriculture BDS-MAPs Business Development Service-Marketing, Processing and Production Support BIMST-EC Bangladesh, Bhutan India, Myanmar, Nepal, Sri Lanka, Thailand Economic

Cooperation CCI Chamber of Commerce and Industry CBS Central Bureau of Statistics CBO Community Based Organization CR /CDR Central Development Region DADO District Agricultural Development Office DAP Double Ammonium Phosphate DCRDC Dhawalagiri Community Resource Development Center Baglung DDC District Development Committee DOA Department of Agriculture EBA Everything But Arms ER Eastern Development Region FNCCI Federation of Nepalese Chamber of Commerce and Industry FWR/FWDR Far-Western Development Region GI Geographical Indication Ha Hectare HVC High Value Crop ICD Inland Container Depot IDE International Development Enterprise IEC Importer-Exporter Code JICA Japanese International Cooperation Agency LISP Local Initiative Support Program LDC Least Developing Countries MC Municipality / Municipal Corporation MDD Marketing Developing Directorate MFN Most Favored Nation MOAC Ministry of Agriculture and Cooperatives Msl Meters above the sea level mt Metric Tons MWR/MWDR Mid-Western Development Region NARC Nepal Agricultural Research Council NGO Non Governmental Organization NSC Nepal Seed Company Limited ODCs Other Duties and Charges PAN Permanent Account Number PRA Pest Risk Analysis REDA Rural Economic Development Association SAFTA South Asian Free Trade Agreement SIMI Small Irrigation Market Initiative SPS Sanitary and Phytosanitary SSMP Sustainable Soil Management Program TBT Technical Barriers to Trade TRIPS Trade Related Aspects Intellectual Property Rights VAT Value Added Tax VDC Village Development Committee WR/WDR Western Development Region WTO World Trade Organization

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Executive Summary 1. Introduction

The Agriculture Perspective Plan (APP, 1995) has emphasized agricultural growth through agricultural productivity, crop diversification and commercialization of high value agricultural commodities. In this connection, various diagnostic studies carried out have indicated that Nepal has comparative advantages in producing number of agricultural products. But, the growth of such commodities is limited due to low farm yield, weak infrastructure and institutional support, transaction delay, high transportation cost, unclear regulatory framework and poor investment climate etc. Present study attempts at exploring the status and issues relating to competitiveness of off-season vegetables and ginger and suggest corrective measures to resolve them. Three districts of Western Development Region, namely Palpa, Kaski and Baglung were selected for the study of off-season vegetables. Farse of Parbat was also selected for the study purpose. Tanahu, Syanja and Palpa were selected for ginger. Two commercial production pockets were selected from each district. Fifteen commercial farmers were interviewed from each production pocket. DADO, CCI, cooperatives, (I)NGOs, key traders including exporters and farmers groups were contacted for carrying out discussions and collecting information. Secondary information was collected from DADOs annual publications and other sources. 2. Off-season Vegetable Production High temperature associated with excessive moisture both in soil and atmosphere due to prolonged flooding condition during the rainy season in the plain areas (Terai) of Nepal and India are unsuitable not only for mild/cool temperature requiring vegetables but also for most of the summer vegetables. But almost all kinds of vegetables can be successfully produced during rainy/summer conditions utilizing the mild and cool environments prevailing in the mid hills and mountains of these districts. Drainage of excess water during rainy season is also not a problem in the hill condition as the natural slopes help gravity runoff of water. These vegetables can be produced successfully with little amendments in the growing techniques by the use of plastic sheets and drainage of excess soil moisture in the mid hills and mountains from rainy summer to autumn seasons. Off-season vegetables are cultivated in about 90 ha (15% of commercial production) in Palpa, 155 ha (15 % of commercial production) in Kaski and 40 ha (12 % of commercial production) in Baglung. Dobhan area in Palpa incured Rs 3952, Rs 2942, Rs 2727 and Rs 3252 as cost for producing tomato, cauliflower, cabbage, and cucumber while the earning was Rs 7073, Rs 3558, Rs 3153 and Rs 6348 per Ropani respectively. In Madan Pokhara area, cost of producing tomato, cauliflower, cabbage and cucumber was Rs 5736, Rs. 3555, Rs 3430 and Rs 3352 per Ropani and their earnings were Rs 14064, Rs 5145, Rs 4170 and Rs 7448 per Ropani respectively. In Hemja of Kaski, cost of production for off-season tomato, cauliflower, cabbage and cucumber was Rs 7690, Rs 4522, Rs 4047 and Rs 5080 per Ropani. In another production pocket Bharatpokhari, costs for the same produces were Rs 6634, Rs 4525, Rs 3828 and Rs 4880 per Ropani respectively. Farmers from these produces, however, earned Rs 16310, Rs 7538, Rs 5153 and Rs 12496 per Ropani in Hemja and Rs 13166, Rs 6525, Rs 3522 and Rs 10520 per Ropani in Bharatpokhari respectively. Profitability of off-season vegetables is attractive in the study areas. In Kudule of Baglung, cost of production for off-season tomato and radish were Rs 6905 and Rs 3094 with the earnings of Rs.12295 and Rs 4256 per Ropani. Likewise, farmers of Farse incurred Rs

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6982, Rs 4037, Rs 3782 and Rs 4831 as cost of production and earned Rs 14618, Rs 5713, Rs 4218 and Rs 6719 per Ropani in tomato, cauliflower, cabbage and cucumber respectively. It is a known fact that the cost of production of off-season vegetables in terms of per unit area is generally higher than the cost of production of cereals and seasonal vegetables. The reason for higher cost in producing off-season vegetables is the use of improved/hybrid seeds, plant protection materials such as plastic, higher doses of chemicals/materials and labor intensive cropping operations.

Another factor determining competitiveness of the off-season vegetables is productivity. In producing tomato, farmers achieved the productivity of about 21.5 mt per hectare in Palpa whereas it was much higher attainng about 36.5 mt per hectare in Kaski.

In producing cabbage, productivity remained about 19.5 mt per hectare in Palpa, whereas it was about 22 mt per hectare in Kaski. In cucumber, the productivity was about 17 mt per hectare in Palpa. In Kaski, the productivity of this commodity remained about 22.5 mt per hectare. The higher productivity indicates better competitive edge that enables to attain higher profits.

Major issues/problems faced by the farmers in production are: unavailability of suitable/adequate seeds and varieties, unavailability of appropriate production technology and slow adoption rate, small size of production pockets and inadequate support for marketing extension. 3. Ginger Production Ginger is a highly potential spice crop being grown in commercial scale for cash income due to its climatic suitability across the whole east-west length along the Siwalik and mid hill ranges extending up to the altitudes of 1500 meters in Nepal. It can be grown in the uplands of Terai also. Nawalparasi had the highest area coverage of 1,255 ha of ginger in the year 2003/04 and Palpa had the highest production at 18,452 mt achieving the productivity level of 15.9 mt/ha as compared to 9.7 mt/ha in Nawalparasi. The ginger production in Syanja was 3201 mt from 380 hectares and in Tanahu it was 4280 mt from 305 hectares (MoA, 2004).

Farmers are cultivating different landraces named Nase, rhizome containing more fibers and Bose which is fibreless or with negligible fibers. Ginger Research Program, Kapurkot for the first time released a ginger variety named Kapurkot Aduwa-1 in 2001 but the seed of this variety is not adequate to cater the need of the farmers demanding this variety even now.

Climatically, ginger thrives well in warm and humid conditions during the initial stage of growth. But it needs little bit dry atmosphere and mild temperatures in time of the harvest. Frost and heavy dews are not favorable for growth. Slightly sloppy uplands with orientation towards south or east in the hills are found suitable. The intercropping of ginger with maize is a traditional method and it is continuing ever since as a suitable crop combination. Some farmers of Palpa are intercropping ginger with pigeon pea and okra. Ginger is being grown in coffee and orange orchards as well.

In Arya Bhanjyang of Palpa, the net income from ginger is Rs 9,008 per Ropani (Rs 180,160/ha) compared to Rs 2,348 and Rs 2,677 from tomato and cauliflower. In Tanahu (Majhakot), net income from ginger is Rs 10,678 per Ropani (Rs 213,560/ ha), which is very high compared to the returns of Rs 2,888, Rs 1,665 and Rs 271 per Ropani from cauliflower, potato and wheat respectively. The cost of production of ginger is higher than the cost of production of cereals and seasonal vegetables. The reason for higher cost incurred in producing ginger is the use of seed rhizomes in

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bulk, use of plant protection materials like mulch, higher dose of compost and labor intensive agronomical operations.

Productivity of ginger has been around 850 kg/Ropani (17 mt /ha) in Palpa (Bhairabsthan) and 940 kg/Ropani (18.8 mt/ha) in Syanja (Putalibazar) and 1000 kg/Ropani (20 mt/ha) in Tanahu (Majhakot). These productivity levels are higher compared to the national averages and even comparable to other countries. Some of the major issues associated with ginger production are: high soil fertility degradation, losses due to rhizome rot, lack of good quality/varieties, high cost of production and long crop duration. 4. Off-Season Vegetables Marketing Marketing Functions About 66 percent farmers in Baglung, 43.33 percent farmers in Kaski and 66 percent farmers in Palpa practiced cleaning of off-season vegetables by removing the dirts. Among the off-season vegetables, only tomatoes were graded in big and small sizes before bringing them to the market centers. Other vegetables were not graded as both the traders and consumers were not specific about the grades. Farmers mostly used Doko for transporting and retail selling tomatoes, cauliflower, cabbage, cucumber and beans on the retail markets. Few plastic crates were also used for this purpose. However, while transporting the larger quantities of cabbage, beans and cucumber to the distant markets, jute bags were used. Tomatoes transported to the district markets in Dokos had nearly 5% wastage, while it was almost double or 10 percent during transportation to the distant markets. The off-season vegetables were supplied to the consumers either directly by the producers or through the wholesalers and retailers. Cooperative society participated in the marketing channel in Baglung whereas exporters were involved in Palpa district. Marketed Surplus Nearly 75 %, 90% and 80 % of the off-season vegetables production was marketed by the producers and the rest consumed at household level in Baglung, Kaski and Palpa districts respectively whereas the farmers in Bharatpokhari, Kaski sold their total produce at Pokhara market, farmers from Hemja pocket sold only 95% of it. In Palpa, nearly half (49%) of the marketed volume was sold at the distant market of Butwal and about one-third (30.75%) was sold at collection center to the collectors, who in turn, supplied both to the domestic and export markets. Pricing system In Baglung, the prices of other market centers, prices of last year and supply situation were taken as major responsible factors for determining the prices. As farmers were aware of prices and supply situations of Pokhara market to a great extent, their knowledge on this information helped in determinig the prices. In Kaski, total of 23.33% responded that farm gate prices of off-season vegetables were determined by the interaction between traders and farmers, and 46.67% reported that farmers had minor influence on farm gate prices due to the lack of access to the required level of market price

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information. Only 30% respondents reported absence of interaction on price determination, as they were not aware about the market information system. In Palpa, more than two-thirds of farmers were aware of prices prvailing at Tansen and Butwal. They maintained regular telephone contacts for market prices of off-season vegetables of Tansen and Butwal. There were also few telephone lines around some of the production pockets enabling the producers collect price information from Tansen and Butwal. These price information linkages strengthened their bargaining power to determine prices at the farm gates. Marketing Costs and Margins Although, the marketing costs among the districts vary, net marketing margins range between Rs 119 and Rs 541 per quintal for farmers/suppliers, Rs 212 and Rs 294 for wholesalers and Rs 222 and Rs 465 for retailers. In the farm gate level, farmers received Rs 1150 to Rs 2000 for Cauliflower, Rs 750 to Rs 1600 for cabbage and Rs 1250 to Rs 3000 for tomato per quintal. Consumers have paid Rs 3000 to Rs.3500 for Cauliflower, Rs 2500 to Rs 2700 for cabbage and Rs 4000 to Rs 5000 for tomato per quintal. (Table 44) Farmers supplying the off-season vegetables from the production areas of Dobhan and Madan Pokhara of Palpa to Tansen and Butwal markets have fetched nominal net marketing margins. This nominal profit and a very limited volume of production of off-season vegetables in this area have apparently discouraged other suppliers to participate in the trading activities. The period when large quantity of vegetables like cabbage, cauliflower and tomato are not supplied from the production areas in India, the prices in Butwal and surrounding markets usually remain high in summer and early winter season. Owing to this reason, farmers can have opportunities for high returns, if substantial volume is produced in summer and early winter season. This will also enable the supplying agents to be benefited from the increased volume of trade. Traders of India who supply summer and winter season vegetables from production pockets in Nepal to Gorakhpur market could also be benefited with high profits. Demand and Supply In Baglung, there were about 10 traders transacting off-season vegetable, including one cooperative association. Quantity of sales in the local market was limited, whereas it was substantial in Pokhara. The Agriculture Wholesale Market Center at Shantiban transacted about 40 mt of vegetables daily on an average. Supply of output from Kaski district was estimated to be about 7 mt (17.5%) per day. Of the total vegetable supply in Pokhara city, nearly 90 percent of the volume is estimated to be supplied through the wholesale market of Shantiban. Remaining 8 percent volume is supplied through Sri Complex retail cum wholesale market center and 2 percent is supplied through other retailers. Off-season vegetables mainly cucumber is supplied to the market from production pockets of Makwanpur and Dhading during the winter season. As local variety of cucumber is tastier, it fetches about Rs. 2-3 higher per kg compared to the prices of those supplied from Terai and the imported ones. A high-income segment of population, which is relatively large in Pokhara, preferred hill produced cucumber due to its taste that enabled it to gain competitive strength at the local market.

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In northern markets of India, supply situation of cauliflower was very low at 20 mt/day during the off-season (June-September) compared to 400 mt/day in the main season. Similarly, the supply of cabbage was 3 mt/day during off-season (March-August) compared to the supply of 20 mt/day in the main season. Prospects therefore remain high for increased supply of cauliflower and cabbage during this period. The existing sales of merely 30 mt of tomato per day during off-season (August-October) as compared to 200 mt/day in the main season shows high level of supply potentials in the off-season. Gender in Marketing Women’s contribution in off-season vegetable selling activities constituted 54.16%, 52.5 5% and 60 % in the districts of Baglung, Kaski and Palpa respectively. Marketing decisions were made jointly by men and women in most of the cases. Issues and Problems Basic issues/problems of off-season vegetables include: cooperative marketing system not yet effectively functioning due to the lack of knowledge, marketing skills and experiences, products not supplied uniformly and on daily basis, farmers having little or no knowledge about marketing techniques and information, scarce as well as expensive porter/labour charges, inability of farmers in assessing market fluctuations and make adjustments accordingly, lack of market places available, no means of transport available for transporting small quantities to the distant markets, high damage of tomato during transportation and selling, no facilities of telephone in some of the production areas, no awareness and knowledge about quarantine measures such as SPS (Sanitary and Phytosanitary), PRA (Pest Risk Analysis) and overall extension system not oriented to export marketing. 5. Ginger Marketing

Marketing Functions All the ginger producers cleaned ginger immediately after harvest. Farmers cleaned this product by removing dirts as per the preference of buyers and consumers. In Syanja, only one farm household graded ginger into small and big sizes. In Bhairavsthan area of Palpa, the system of grading ginger as whole ginger and piece-ginger was developed by majority of farmers to cater the demand of India's markets. Nearly half of the farmers surveyed did not store ginger because they sold it immediately after harvest and the rest stored by two methods: storing inside house/ godown in jute bag and storing in the pits. In Syanja, only about 5% of the farm households have started using plastic crates, whereas, the majority used Doko and jute bags. The loss recorded was about 1 percent during transport and selling of produce packed in Doko whereas it was about 3% when packed in jute bags. In Tanahu, both the production pockets had no road access, which resulted in higher transportation costs. In Syanja, the transportation cost is efficient because the product could be transported in trucks either hired by the individual or by groups of farmers. Though both the production pockets were connected with roads in Palpa, the farmers had to hire porters for a period of about 15 to 20 minutes (about 1 Km) to bring their produce to road heads. Marketed Surplus and Markets

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In Syanja, large portion of the production goes to the market. A smaller portion of production, however, is stored by producers for the purpose of seed and household consumption. In selected production pockets of Syanja, 2.19 percent of ginger production was consumed at households, 17.0 percent was kept for seeds and the remaining 80.81 percent was marketed. In Palpa, 667.2 Kg (77.92%) ginger was marketed after meeting the requirements of each household consumption (2.65%) and seeds (19.43%). In Tanahu, farmers sold large portion of ginger at their farm gates, which was then collected and supplied to Kathmandu and Butwal markets. Traders of these markets either sold the products around the city areas or exported to the northern border markets of India. A small volume of production is sold at nearby/local markets. In Syanja, with the presence of ginger collectors and retrailers in the local markets, most of the farmers marketed their produce at the local collection centers. Only few (4) farmers from Putali Bazar sold their products at Syanja Bazar. They were also much more aware about the market prices and other aspects associated with marketing. In Bhairabsthan of Palpa, all the 15 farmers sold ginger at the collection center run by the Ginger Cooperative Society which is supported/facilitated by REDA.However all the 15 farmers of another production area sold their products at the local market. In both the cases, all the farmers sold their produce on wholesale prices. Quality of Ginger Nearly two-thirds (66.67%) farmers knew that quality of their produce was rated as 'good' by the domestic consumers and the rest one-third of the farmers knew that their produce was ranked as 'satisfactory'. Ginger Processing Traditionally, dry ginger (Sutho) is prepared by heating ginger keeping on a plate above the fire which is then converted into ball shaped structures. This technique of processing, however, could not be popular owing to its low quality of processed products. In this survey, only 8 farmers (26.66%) of Majhakot (Tanahu) were involved in ginger processing but in small scale. It is found that a person engaged in ginger processing could earn a net profit of Rs 1380 in 1½days. Although, the profit in ginger processing is attractive, due to the low quality of the processed product its marketability is confined in the local markets. Pricing In Tanahu, farmer’s prices were influenced by the wholesalers and their prices in turn were influenced by the buying prices at the destined markets. In the last harvesting season, farmers of the surveyed areas sold their ginger at Rs.22 to Rs 24 per kg. In Syanja, farmers had price information of Syanja Bazar and some of them even had information of Pokhara agriculture wholesale market. These farmers interacted with the traders on equal footing in determining the prices. In one production pocket of Palpa, 73.33 percent of the farmers interacted well with traders in determining the prices, whereas they could not do so in another production pocket.

Information System

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In Tanahu, the farmers had no access to market information relating to prices, demand and supply situation and the export prospects. In the production pockets, the mechanism of market information were not developed that would support farmers in making the best possible decisions. Farmers in Syanja are educated and are also well aware about market information and pricing systems. Prior to selling, they negotiate with the traders in a way that prices are determined through the interaction of the traders and farmers. Palpa producers found that the consumers in India such as Gorakhpur, Lucknow, Banaras and Delhi preferred ginger produced in Nepal. It was very much liked by consumers due to its hotness/pungency suitable to prepare Chatni (Sauce). Marketing Cost and Margins The data regarding marketing competitiveness are processed in such a way that a comprehensive table is prepared that includes the marketing cost components and the net marketing margins of the selected districts (Table 69). The farm gate prices, marketing costs and sales price vary among the production pockets. Marketing margins on ginger range from Rs 170 to Rs 360 per quintal which indicates the trade profits. However, the tariffs levied by municipality and DDC and expensive truck fares have inflated the marketing costs. Prospects, therefore, appear that there are opportunities for lowering the marketing costs that makes ginger more competitive and sustainable. Demand and Supply In Tanahu, about 95% of ginger production was exported to India and the rest supplied to the domestic markets. Among the domestic markets, largest quantity is supplied to Birgunj and then to Bahirhawa and Kathamndu respectively. New trade policy of India restricted ginger export to India. In Syanja, the discussions in the District Agriculture Development Office revealed that the farmers also supplied ginger to Butwal markets, in addition to the district markets. Traders in the collection centers supplied the product to Kathmandu (Kalimati Fruits and Vegetables Market Centre) and cooperative collection center in Tansen. Last year, local collectors supplied nearly 105 mt of ginger to Kalimati agriculture market and 132 mt to Tansen cooperative collection center, as informed by BDS- MAPs.Farmers of this area were interested to produce dry ginger (Sutho),inspite of the fact that technology for producing quality Sutho was lacking with the farmers. In Palpa, ginger needs to be collected at the strategic points making easy to export in bulk to the markets of Gorakhpur, Lucknow, Banaras and Delhi. If the micro entrepreneurs engaged in processing ginger in Palpa are strengthened, it is likely that the marketability of ginger within the country is enhanced. Dabar Nepal is also a potential buyer for the good quality Sutho.

Gender in Marketing

In 47% households of Tahaun, selling activities were performed by women and in Syanja, 33.5% selling activies were performed by women. In Palpa, women were more involved in harvesting and cleaning/packaging activities shouldering major share of 62.5% and 68% of the work load respectively. Issues and Problems

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Major issue and problems are: farmers limited technical know how about the development of enterprises, unavailability and scarcity of porter resulting in high labour cost for transporting, unavailiability of transport vans, Sutho of no good quality, collection centers not linked with wholesale market centers, marketing information lacking in commercial production pockets and existing collection centers, solar drier available in the market but not within the affordable reach of the micro producers and entrepreneurs and lastly a long duration requiring couple of days to even weeks for plant quarantine test in India. 6. Infrastructural and Institutional Support 6.1 Infrastructures Palpa In production pockets of Dobhan and Madan Pokhara, Arya Bhanjyang and Bhairabsthan, many farms are either along the roadways and/or are about 1-3 kms away from the road heads. In the farms without road connection, farmers face difficulties finding porters for transporting their produce to the nearest road head. In Madan Pokhara (Nayapati) and Tansen (Tundikhel) agriculture market centers are developed by the local agencies. Large numbers of farmers bring and sell their produce in the morning. In other production areas, physical facilities such as collection centers are not developed. Likewise, market places, stalls and information and related services are also non-existent. Except a few production pockets, telephones lines are unavailable. In production pockets, there are local suppliers of inputs and agrovets. But, farmers have to visit Tansen for purchasing packaging materials like jute bags and Doko. Plastic crates are not available in Tansen for which farmers have to visit the distant markets ultimately adding up to the cost on packaging. Kaski Most of the commercial vegetable production pockets in this district have access to vehicular roads. But, most of them are lacking bus services. Till date, no large commercial vegetable production schemes are developed in the form of enterprises that, among others, could make economy of scale production and help remove constraints arising due to lack of vehicular means of transportation whenever needed. All these production pocket areas are served with electricity facilities. This district possesses Agriculture Wholesale Market Center in Shantiban (Pokhara). Wholesalers in the market center purchase the produce from farmers on wholesale price and the produce from other wholesale markets on commission basis. Traders/wholesalers charge 10 percent as commission to the producers over the sales value in selling the products supplied from other organized market centers. In private sector, Sri Complex a retail cum wholesale agriculture market center, spread in an area of 10 Ropaniis, is established in Chipledunga (Pokhara).This market has linkages with commercial production pockets of the district. Mostly retail sales are carried out in this market center. Adequate institutions/infrastructure for input supply has been developed by the private sector. In Pokhara municipal area, there are about 16 input/ agro vet suppliers. These suppliers also supply inputs to the commercial production pockets in the district.

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Baglung

Both the production pockets under this study have transport links with the highways. But, in these production areas, transporting vehicles are not available at the times when farmers and traders are needy. All other production pockets in this district are far away from the district headquarters and roadways. In both the production areas, there are no cellar and cold storage facilities. As the off-season vegetable is immediately sold after harvest, farmers seem not to have felt the requirements of such storages. Electricity is not available in both of the production pockets. The organized wholesale market and collection center are not developed in this district. Nearest organized agricultural wholesale market at Pokhara is about 70 km away. There are about 10 vegetable and fruit traders in Baglung. The meeting point between the producers and the wholesalers has still not developed which could provide an assured trading outlet for disposing large quality of marketable surplus in competitive prices. Nearly half of the cultivated land in these production pockets is irrigated and the rest is unirrigated therby limiting the cultivation area under off-season vegetables. Syanja All the ginger production pockets in this district are along the roadways. Production pockets on highways have access to buses and trucks for transporting produce to the markets. Other production pockets with rural roads can get buses or other vehicles for transportation as per the requirements. Telephone services are available in many market centers and ginger production areas that help provide farmers in collecting information from other markets. Although, permanent market centers are available nearby the production areas, the weighing facilities are not reliable and the marketing information system not well established. All the production areas have input traders who purchase or sell inputs within close vicinity. Tanahu Among the two production pockets of ginger under survey, Majhakot is proximate to road, whereas, Kaun Shivapur has no road links. Many production pockets have no road access in the absence of which transporting ginger has become expensive. Although, there are traders as well as permanent market centers in Damauli, Bandipur, Dumre, Bhimad, Kotre, Dulegaunda, Khairenitar, Khalendi, Jamune and Tharpu, the management services of the market centers including weighing facility services and information system are not well organized. Wholesale market center in Pokhara is about 28 km from the Majhakot area but the absence of telephone lines in Majhakot and other production pockets, access to marketing information of ginger at major markets in the country is seriously constrained. In Majhakot production area, there is an agro-input and packaging materials supplier. In Kaun Shivapur, there are no input suppliers and the farmers have to walk about 2 hours to reach Damauli to purchase these materials. Buying such inputs becomes costly in nearly half of the production pockets of this district which is, by and large, constrained due to the absence of road.

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6.2 Institutional Support system

Extension System The DADO service centers at the field level provide production-oriented extension services to the farmers. Agricultural offices deliver 50% subsidy in small-scale irrigation projects and 25 % subsidy on crates for fruits/ vegetables packaging. Likewise, subsidies are being provided on activities relating to transportation of seed and saplings, pesticides for diseases and insects, demonstration kits containing seeds and necessary inputs to the leader farmers, agricultural equipments, construction of collection centers in the pocket areas along with weighing machines/equipments and on conducting farmers' tour to other vegetable production areas.

Research System Agriculture Research Station Lumle and Agriculture Research Station Malepatan have outreach sites in these districts with the aim of demonstrating the new technologies. Horticulture farm under DOA located at Tansen is also serving the farmers of these districts both by making seeds available and by providing technology support for vegetable production. NGO Li-Bird and SIMI-Nepal are supporting vegetable enterprises in Kaski and Palpa. BDS-MaPS and LISP-Helvetas are supporting in Palpa. In Baglung, SSMP and DCRDC are supporting farmers for off-season vegetable production. Private sector Farmers' cooperatives have started marketing of vegetables both at village level and in Baglungbazar. In Kaski district, the CCI/Pokhara has formed Agriculture Sub-committee to look after the issues on agri-enterprises. Palpa CCI has also formed such Agricultural Sub-committee. 7. Policy Support Presently, the policy measures on facilitating trade being introduced by the government indicates that the trade is to be diversified through the identification, development and production of new exportable products by promoting the backward linkages in the process of making export trade competitive and sustainable. Further the trade is to be expanded on a sustained basis by gradually reducing the trade imbalances.

The trade policy reforms thus marks a fundamental departure from the earlier regime of trade restrictions. This has resulted Nepal having a higher degree of openness than most other South Asian countries.

Government has promulgated National Agricultural Policy in 2004 (2061 BS) that emphasizes the agricultural development initiatives that enhances competitiveness of the agro-products both in the domestic and export markets. This policy reccomends strengthening and expanding of group approach and developing necessary marketing infrastructures and subsidy support to the small and poor farmers.

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WTO The agreements that directly influence the agriculture sector are Agreement on Agriculture (AOA) SPS, TBT and TRIPs. Being a LDC, Nepal is allowed to continue the domestic support as in the past. Nepal has given no export subsidies and is not supposed to bring about any new kinds of subsidies as per the legal provision. The agreements like SPS, TBT and TRIPs will have both positive and negative impacts on Nepalese agriculture sector. Of these, we have to be more cautious about the negative impact as the SPS and TBT measures could be imposed as trade barrier by other member countries. Similarly, the provisions in the TRIPs Agreement are likely to increase the cost of acquiring the much needed technology. Therefore, Nepal has to be very sensitive, alert and careful in amending and or formulating the respective laws. SAFTA SAFTA is based and applied on the principles of overall reciprocity and mutuality of advantages in such a way as to benefit equitably to all SAARC members. This takes into account of the respective levels of economic and industrial development, the pattern of their external trade and tariff policies and systems of these nations. SAFTA involves the free movement of goods between countries through; inter alia, the elimination of tariffs, para tariffs and non-tariff restrictions on the movement of goods, and any other equivalent measures. It entails adoption of trade facilitation and other measures, and the progressive harmonization of legislations by the Contracting States in the relevant areas; and special needs of the Least Developed Contracting States are clearly recognized by adopting concrete preferential measures in their favour on a non-reciprocal basis. It has provisioned sensitive list so as to protect the selected products by LDCs. BIMST-EC According to BIMST- EC, Nepal has to apply MFN tariff rates gradually deduced / eliminated in accordance with the specified rates to be mutually agreed by the member countries within 1st July 2006 to 30th June 2009 including for Bhutan and Myanmar and for the rest of the members till 30th June 2011 for the product listed in Fast Track, and for the product listed in Normal Track within 1st July 2007 to 30th June 2010 and within 1st July 2007 to 30th June 2017 respectively. BIMST- EC member countries has to negotiate to establish Free Trade Area which can be subject to several limitations such as tariff reduction or elimination programs, rules of origin, treatment of out of Quota rates, modification of party's commitments under the agreement on trade goods based on Article XXVII of the GATT 1994., non tariff measures barriers imposed on any product covered under the agreement, procedural safeguard based on GATT principles etc. 8. SWOT Analysis 8.1 Off-season vegetables Strengths Off-season vegetables have various strengths and they are as follows:

? adoption of different methods of off-season production, ? government policy supportive to off-season vegetable production, ? abundance of suitable and potential microclimatic pockets, ? cooperative marketing system in the developing process, ? women contributing equally in marketing activities,

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? grading gradually being introduced, such as tomatoes are graded into two grades (small and big ones),

? cucumber grown in hill are found competitive in the domestic market due to its appealing taste, farmers becoming more aware about the domestic market potentials,

? farmers started establishing linkages with the wholesalers and retailers in the local markets etc.

Weakness The weaknesses of off-season vegetables are as follows:

? lack of year round irrigation, lack of all season agricultural roads, ? lack of access to inputs and credits, ? inadequacy of internally grown high quality seeds of suitable varieties, ? lack of continuous support of improved technologies, ? inefficiency of farmers on production techniques, ? unavailability of proper packaging materials (eg. tomato packed in Doko is damaged both

qualitative and quantitative), ? no access to market information systems, ? farmers not aware about tomato processing technology, ? farmers not aware about market potentials of off-season vegetables in various northern

markets of India, ? unorganized market centers at the production areas, ? lack of marketing education, marketing extension system and farmers more often becoming

lossers in price determination process. Opportunities Opportunities are as follows:

? increasing demand of off-season vegetables in the domestic markets, possibility of export market to different countries,

? climatic suitability of hills to produce some unique vegetables with specific taste and quality, production potentials of cauliflower, tomato and beans in the early winter months,

? supply potentials at attractive prices of cauliflower, cabbage, capsicum, and tomato in the summer and early winter months in tarai and northern border markets of India,

? government's provisions include various facilities such as technically capable agriculture extension department, research agengy to deliver services to the farmers,

? presence/availability of exporters and various stakeholders, ? availability of commerce and trade related department to provide facilities and advise to the

exporters/traders, availability of the technical institutions related to processing and packaging technology ,

? availability of plastic crates in the market, ? existing opportunities to trade at local regional and global levels and government liberal

policy support in providing more open export markets to the farmers/traders. Threats Threats of these commodities include:

? possibility of over supply of (even better quality) such cool season vegetable products both from Tibet of China and hilly regions of northern India.

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? Nepal if emerged as a transit passage between India and China likely to loose both its comparative edge and competitive advantage unless backed by more efficient production, marketing and trading system with strong institutional and infrastructural support.

8.2 Ginger Strengths Ginger has following strengths:

? preferable to the consumers taste at domestic and export markets, ? Northern Indians liked the taste of Nepali ginger to prepare chatani (sauce) - as a favorite

food item for them. ? easily packed into jute bags with nominal physical losses during transportation and

retailing/selling, ginger farmers (are) educated and aware of market prices, ? linked with wholesalers at local and distant markets, ? existence of farmers developed cooperative society as an outlet to market the product, ? easy and less costly pit storing adapted by the framers, ? women actively participated in ginger marketing and decision making, ? market potential survey conducted prior to planning and marketing, ? ginger production pockets linked with roads in Palpa and about 13 ginger based micro

entrepreneurs developed. Weakness Weaknesses of ginger are as follows:

? collection centers not organized and supported with necessary infrastructure and market/price information,

? Sutho processed by traditional technology lacking in quality, ? prices received lower from cooperative marketing, ? farmers lacking essential services (inputs/outputs marketing, credit, market/price information

year round irrigation facilities and farm road) at all the production pockets, ? very high porterage cost, ? transportation very difficult owing to lack of transport vehicles/ vans around the production

areas and road heads, ? transport cost of ginger high due to small volume of transportation by buses ? porters and farmers and traders having no access to ginger marketing information,

knowledge and market extension services. Opportunities Opportunities of ginger are as follows:

? high market demand in the northern cities of India for Nepalese ginger, ? government supportive to provide facilities to the farmers/traders, ? prices of ginger attractive compared to the production costs and the domestic prices, ? DFTQC capable to provide technical support on ginger processing ? Agro-business and Marketing Development Directorate in providing market and price related

information services to producers/traders in collaboration with Agro Enterprise Center in some of the cases.

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Threats Threats of these commodities include:

? possibility of over supply of (even better quality) such cool season products from Tibet of China,

? Nepal if emerged, as a transit passage between India and China likely to be affected unless more efficient production, marketing and trading is assured.

9. Conclusion & Recommendations 9.1 Conclusion (off-season vegetable and ginger) Off-season vegetables such as tomato, cucumber, cauliflower and cabbage produced in selected districts of Western Development Region have potentials for production and meeting the demand of tarai areas of Nepal and northern border markets of India from summer to the early winter months. Ginger, likewise, has especial quality to satisfy the consumers of some parts of northern India and Nepal. Ginger has high prospects of production in hill areas to meet the potential demand of both domestic and export markets. To fully exploit the opportunities and potentials, the farmers and even the extension agents are yet to be well aware about the appropriate production technologies and the marketing prospects. The critical issues that are hindering the production, marketing and trade of these commodities need to be addressed and constraints removed/ reduced to make these products competitive. 9.2 Recommendations Off-season Vegetables To improve competitiveness of off-season vegetables, following suggestions are recommended:

? prepare a detail situational information about vegetable pockets, ? explore demand of domestic and potential export markets, ? standardize production techniques and quality of the product, ? introduce technological norms for producing standard product, ? introduce plastic crates for packaging, ? develop marketing information system at pocket sites/ level, ? operate transport vans through cooperatives and market committees wherever felt necessary, ? strengthen cooperative capacity in marketing vegetables at domestic and export markets, ? introduce tomato processing technology to the potential entrepreneurs, ? accord high priority in constructing rural agricultural/rural roads by DDC, DOA, and

Department of Rural Infrastructure and Rural Roads, ? familiarize farmers in commercial production pockets about export potentials, ? organize vegetable collection centers by involving farmers groups,local government, DOA

and private sector with public private partnership approach, ? introduce three grades in tomatoes into small, medium and big sizes, ? introduce Marketing and Contract Act, ? educate farmers and traders about the quality and procedural requirements in SAFTA and

WTO, ? remove local taxes on vegetables ? avoid harassments during transport and export for all the primary products in general and

more importantly for quickly perishable nature commodities in specific.

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Ginger To improve competitiveness of ginger following suggestions are recommended:

? organize collection centers by involving farmers groups, local government, DOA and private sector along the line of public private partnership approach,

? conduct business meetings of potential entrepreneurs, investors, farmers and technicians to explore various aspects of production and trade related matters,

? review pricing structures and management practices of cooperative society, ? develop marketing information system at production pocket level by involving cooperative

societies, market committees, local government units and CCI, ? arrange special transport vans/trucks services for agro-products by involving cooperative

societies and market committees, ? develop cooperative societies for marketing ginger, ? conduct demand assessment in northern markets of India ? disseminate market/price information to farmers and agro-entrepreneurs, ? sensitize farmers and agro-traders about the improvements required in raw ginger and dry

ginger in the context of SAFTA and WTO requirements, ? remove local taxes , ? remove the harassments during transport and in the check points and custom points.

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1. Introduction to the study 1.1 Background

The Agricultural Perspective Plan (APP, 1995) implemented in Nepal has emphasized accelerated agricultural growth through agricultural productivity, crop diversification and commercialization in agriculture. It has recommended on the production of vegetables, fruits, ginger, honey and vegetable seeds and high value crops suitable for hills.

In the liberal trade environment created under the WTO regime, only the products that have comparative advantages can compete and survive in the international market.Various studies carried out in this regard have diagnosed that Nepal has comparative advantages in number of labor intensive manufacturing and agricultural products that relate to horticultural commodities, medicinal and aromatic plants, livestock, fisheries, fibers etc.

Over the last few years, it is witnessed that cultivation of off-season vegetables has taken an important position in the cropping pattern. A large number of off-season vegetables have been produced and marketed at the domestic and export markets. In this context, the efficiency of these vegetables to compete in the markets determines its exports and sustainability in the future. Despite the fact that Nepal has comparative advantages in producing off-season vegetables, competitiveness of such commodities are impeded by various constraints such as low productivity, weak marketing infrastructural support, transaction delays, high transportation cost, insufficient/unclear regulatory framework and poor investment climate etc. Aiming at pursuing the measures to resolve issues on competitiveness of off-season vegetables and ginger, this study has been conducted by Agribusiness and Trade Promotion Multipurpose Cooperative Limited (ABTRACO) as per request of Agro Enterprise Center (AEC) of FNCCI. 1.2 Objectives of Study General objective of this study is to assess the status and analyze issues regarding competitiveness of off-season vegetables and ginger produced in the selected districts of Western Development Region. Specific objectives are as follows.

? Find out the status on competitiveness of off-season vegetables and ginger in the selected districts.

? Find out the roles played by various factors of in the competitiveness of off-season vegetables and ginger in the selected districts.

? Identify key issues and potentials in the competitiveness of selected crop commodities produced in the selected districts.

? Suggest measures to make the production, marketing and trade of these products competitive.

1.3 Scope of Study Thematically, present study aims at finding out the trade competitiveness of off-season vegetables and ginger produced in the selected districts of Western Development Region. Major factors that contribute to the competitiveness of selected commodities in the domestic and export markets are considered to be: (i) productivity, (ii) cost of production, (iii) marketing functions (cleaning, grading, packaging, transporting) and product quality (iv)

2

marketing costs, (v) trade margins (marketing margins), and (vi) the support system (policy, infrastructural and institutional). The competitiveness of off-season vegetables produced in Palpa, Kaski and Baglung/Parbat and ginger produced in Tanahu, Syanja and Palpa are analyzed within the scope of these parameters. Based on the information derived from the concerned agencies and their publications, cauliflower, cabbage, tomato and cucumber were selected as commercial products in the sample districts of Palpa, Kaski, Baglung and Parbat. Keeping this in view, present study covers the competitiveness of these four off-season vegetables. Since the study covers limited number of production pockets and markets in a selected district the findings of this study may, therefore, not be generalized beyond similar production pockets and marketing conditions. 1.4 Methodology Four districts of Western Development Region namely Palpa, Kaski and Baglung/Parbat were selected for the study of off-season vegetables. Production pockets were selected in consultation with the District agriculture Development Office and Chamber of Commerce and Industry. Production pockets in the SIMI project areas, however, could not be selected for field survey because the project was in the initial stage of implementation. Two pockets selected from Palpa were Madanpokhara VDC and Dobhan VDCs both along the Siddartha Highway. Pockets selected for Kaski are Bharatpokhari and Hemja. In Baglung, one pocket selected is Kudule, connected with a fair-weather road along the proposed Baglung-Mustang highway. Another pocket selected is Farse which, in fact, lies in Parbat district but is closely connected for market with Baglung bazaar at a distance of 4 km. along Baglung-Pokhara Highway. Thus, one pocket each from Baglung and Parbat district has been grouped as one study domain. Three districts selected for the study of ginger were Tanahu, Syanja and Palpa. Majhakot and Kaun Shivapur were the 2 production pockets selected from Tanahu, Putalibazar and Jagat Bhanjyang were the 2-production pockets selected from Syanja and, Bhairabsthan and Arya Bhanjyang were the 2 production pockets selected from Palpa districts respectively. These districts and production pockets share substantial quantity of ginger production and have marketing systems linked with domestic and export markets. Based on their relative efficiency in production and marketing and to further explore the systems, these districts were selected purposively. Questionnaire was prepared for farm household survey. Fifteen households were selected randomly in each production pocket and interviewed. Two producers groups were interviewed from each pocket. District Agriculture Agricultural Development Office, two traders including exporters, cooperative societies, Chamber of Commerce and Industry were visited and discussed covering the subject matters in each district, as per the check-list prepared prior to the field survey. Secondary information was collected from DADO annual publications, reports available from AEC/FNCCI, reports from the Department of Agriculture and other sources. Based on the primary and secondary sources, the data were collected and analyzed.

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1.5 Limitations The main focus of study was to explore the competitiveness of off-season vegetables and ginger produced in the selected districts. In this study field survey did not include study team to visit the neighboring country markets to collect primary information/data on cost of production and marketing of the products.Also this information could not be collected from the secondary sources.The data relating to the competitiveness of off-season vegetables and ginger were analyzed within these limitations. 2. Off-season Vegetable Production 2.1 Concept of Off-season Vegetable There is a wide fluctuation in the availability of vegetables in the market. In winter there is a surfeit of supply and a deficit in the rainy season. Generally, there is shortage of vegetables from July to September, which is caused by heavy rains all over the country, and flooding of cultivable lands/ fields particularly in Terai and lowland valleys. Vegetables planted in May to August generally grow poorly since heavy rains disturb their germination, growth and development, including fruiting. Moreover, vegetable crops suffer from pests due to the existence of alternate hosts and high incidence of diseases as a result of high temperature and humidity. There are many types and varieties of vegetables that need different temperature and climatic conditions favorable for their growth and development. If the temperature of a production area is higher than the maximum limit, it needs lowering for successful production. If the temperature is lower than required, the need would arise for providing artificial warmth. The climatic manipulation of a crop for its demand driven commercial production can be termed as off-season vegetable production. According to Yamaguchi (1983), production of vegetables at times other than during normal season is known as off-season vegetable production. Thompson and Kelly (1957) had used a different terminology, i.e. vegetable forcing and have defined it as growing of vegetables out of the normal seasons of outdoor production. This definition holds good for both high and low temperature conditions. In other words, production of vegetable crops at times other than during normal season is known as off-season vegetable. The principle underlying off-season production is that vegetables can be grown at any time of the year if they are provided with required/suitable temperature and other climatic conditions that prevail during their normal growth season. Off-season vegetable farming can be referred as the production of vegetables before or after their normal season of production by:

- using different agro-climatic conditions, - adjusting the planting time, - modifying the horticultural techniques, - exploiting the genetic variability, - creating the controlled environment by making plastic tunnels, plastic houses,

glass houses, etc., and - physiological manipulation.

By making the use of diverse climatic conditions and natural resources in Nepal, many of the vegetables can be grown/produced in particular agro-climatic areas as off-season vegetables where these vegetables cannot normally be grown under the uniform climatic conditions during that period of time. This type of off-season production holds price advantage for the

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total off-season production of vegetables in Nepal. Use of plastic tunnels and plastic houses also is in increasing trend. All the above-mentioned techniques, except the glasshouses, of off-season vegetable production are more or less practiced nowadays. One of the major emphases of Agriculture Perspective Plan (APP, 1995) has been to exploit the climatic advantage of the North-South Highway corridors for the production of vegetables, which would mostly be off-season vegetables. The government has also initiated several programs related to off-season vegetable production and marketing. Nepal has tremendous potentiality of producing off-season vegetables for domestic consumption as well as for export particularly to the neighboring countries. But up till now the off-season vegetables are produced in limited peri-urban areas and are marketed in the respected urban centers. However, some attempts were made in the past to export tomatoes and capsicum in India and Bangladesh but due to lacks of quantity, supply regularity, infrastructure facility, institutional and legal support and adequate volume of production, it could not be accelerated in the subsequent years. One of the main impediments in exporting to Bangladesh is also the high tariff imposed on Nepalese vegetables and fruits making it less competitive as compared to India and Bhutan. 2.2 Status of Vegetables in Palpa, Kaski and Baglung and Scope for Off-season

Production Vegetables are considered to be protective food since they are rich in vitamins and minerals with medicinal values. As per the standards laid down by the dieticians and nutritionists, the minimum per capita requirement of vegetables is 300 g per day, i.e. 109.5 kg per year (Sah et al, 2004). The per capita vegetable consumption (excluding potato) in Nepal is 166 g per day or 60.6 kg per annum/year (JICA, 2001). These figures show that the vegetable consumption in Nepal is much lower than the prescribed minimum requirement level. The current vegetable production level and requirement of Palpa, Kaski and Baglung districts with their urban population has been shown in Table 1. Table 1: Requirement of vegetables in Palpa, Kaski and Baglung, 2002/03

District Population of the

district

(Nos.)

Requirement of vegetables

per year

(mt)

Annual production

of vegetables

(mt)

Surplus (+) or

Deficit (-) in vegetables

(mt)

Urban population

(Nos.)

Requirement of vegetables

for urban population

(mt)

Palpa 268,558 29,407 15,100 -14,307 20,431 2,237

Kaski 380,527 41,667 19,470 -22,197 197,691 21,647

Baglung 268,937 29,448 19,236 -10,212 20,852 2,283

Sources: - 1. DADO's Annual reports 2002/03 & 2003/04, 2. MoAC, Annual production of the year 2002/03, and 3. CBS, Population monograph of Nepal, 2003

Table 1 shows vegetable production in these districts far below than the minimum requirement level. In Kaski, the vegetable production of the district is lower even to fulfill the requirements of the urban population. Usually seasonal vegetables are produced in abundance to meet the market demand of urban population in Palpa and Baglung. But the demand of vegetables for the large urban population of Pokhara particularly during the off-season has to

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be imported from the distant collection centers/production areas of Nepal and sometimes even from India. It, therefore, indicates ample opportunity existing to produce off-season vegetables in these districts as well as the neighboring districts by bringing pocket sites accessible with transport facilities under cultivation. Vegetables in these districts if produced in sizeable quantity with required quality and grade of the clients/consumers it can be supplied to the urban centers of Terai and neighboring towns and cities in India particularly during the rainy and autumn seasons. 2.3 Commercial and Off-season Vegetable Production Pockets The vegetable production pockets developed in Palpa, Kaski and Baglung with their tentative area and production volume of off-season vegetables as estimated by DADOs are presented in Table 2. The detail information on soil types, land elevations, micro-climatic conditions, etc. could not be available from the DADOs. However, some information on these characteristics was extracted from the household surveys through research assistants involved in this study.

Table 2: Area and Production of Off-season Vegetables in Kaski, Palpa and Baglung, 2004

Major off-season vegetables

District

Pocket areas of off-season vegetables Type of

vegetables Production

time

Estimated area of off-season vegetables

Area and prodn of commercial vegetables

Cabbage Year round Cauliflower Jan.-March French beans Year round Cucumber April to Nov. Tomato May to August Radish Jan to March Brinjal Year round

Palpa

Dobhan, Masyam, Madanpokhara, Telagha, Tansen Nayarnamtales, Khasyauli, Argali,

Other: gourds, capsicum, etc.

Different times

90 ha, which is15 % of com. vegetables

592 ha 7,998 tons

Cabbage Year round Cauliflower Year round Cucumber May to Nov. Zucchini March to May Tomato Year round Cucurbits May to Nov.

Kaski

Bharatpokhari Lekhanath Chowk, Ritthepani, Moharia, Sisuwa, Chauthe, Tutunga, Dhunge Sanghu, Chhinedanda, Malepatan-Masbar, Hemja, Pumdi-Bhumdi,

Other: Beans, Broccoli, etc.

Different times

155 ha, which is 15 % of com. vegetables

970 ha 12,804 tons

Cauliflower Jan.-March Tomato Year round Cabbage Year round Radish Jan. to March Leafy veg. Year round Cucumber April to Nov. Carrot Jan. to March

Baglung

Burtibang, Harichaur, Paiyunpata, Bihu, Gualichaur, Singana Bhakunde, Malika, Kundule (Baglung Municipality)

Other: gourds Different times

40 ha, which is12 % of com. vegetables

330 ha 4,158 tons

Source: - DADOs of Palpa, Kaski and Baglung, and field survey 2005. Palpa

Area under commercial vegetable in Palpa is about 592 hectares producing about 7998 metric tons of vegetables (Palpa DADO, 2005). The pocket areas producing seasonal vegetables in

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commercial scale are Madanpokhara, Masyam, Dobhan, Telgha, Nayarnamtales (Arya Bhanjyang), Argali and Khasyauli VDCs and some part of Tansen Municipality. Off-season vegetables are also being produced by the farmers in these pocket areas. Although the figures on area coverage and production of off-season vegetables are not hitherto officially available, as per the discussions with technicians in the DADO office and farmers in the production sites, it could be roughly estimated that about 15% of the commercial area is under off-season vegetables in Palpa which comes to be about 90 hectares.

Kaski

Kaski is a potential district from both consumption and production point of views of the off-season vegetables. The major vegetable production pockets in Kaski are Malepatan (Ward-5), Masbar (Ward-7), Chhinedanda (W-14), Tutunga (W-15), Batulechaur (W-16) and Bijayapur Chauthe (W-18) of Pokhara Sub-metro Municipality; Sisuwa, Lekhnath Chowk, Arghaun Chowk, Lamatara and Khudi of Lekhnath municipality; Hemja VDC, Arba VDC, Bharatphokari VDC and Pumdi-Bhumdi VDC. Of the total land area, 1947 hectares is under commercial vegetables in Kaski. Out of this, 744 hectares is under winter vegetables, 1041 hectares under rainy season vegetables and 162 hectares is covered by spring season vegetables (Kaski DADO, 2004). According to Kaski DADO (2004) Hemja and Bharatpokhari are the two major pockets of tomato producing about 219 metric tons of off-sesason tomato during summer/rainy season from about 18 hectares of land. Sisuwa, Ritthepani and Lekhnath Chowk of Lekhnath Municipality; Malepatan, Masbar, Chhinedanda, Tutunga and Chauthe of Pokhara Sub-metro Municipality and some areas of Bharatphokhari, Hemja and Pumdi-Bhumdi VDCs are the major off-season vegetable production pockets in the recent years. However, as there were no exact figures available on area and production of off-season vegetables, Kaski DADO upon request made estimation on the area under off-season vegetables to be about 155 hectares during the year 2005. This figure represents about 15 percent of the total area under commercial vegetables in the district.

Baglung In Baglung district, about 330 hectares of land is under commercial vegetables with the production of about 4158 metric tons (Baglung DADO, 2004). The major commercial vegetable production pockets are Datundada, Burtibang, Harichaur, Paiyupata, Gwalichour, Singana, Bhakunde and Malika VDCs, and Baglung Municipality. The off-season vegetables are being produced in Burtibang, Harichaur, Paiyupata, Bihu, Bhakunde, Singana and Gwalichour VDCs, and some parts (including Kundule) of Baglung Municipality. As estimated by Horticulture Section of Baglung DADO, the area covered under off-season vegetables in the recent years is about 40 hectares producing about 520 metric tons of vegetables. This area comprises about 12% percent of the total area under commercial vegetables in the district. 2.4 Existing Production Technology The vegetable production technology in the peri-urban areas is somehow keeping pace with the changing food habit of higher consumption trend of vegetables among the people in the urban areas. Some of the vegetables that are produced throughout the year use modern technologies. The changing scenario in vegetable production has been briefly mentioned hereunder.

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2.4.1 Trend of Vegetable Production and Initiation of Off-Season Production Vegetable cultivation in homestead garden in Nepal is being produced since time immemorial. However, the government vegetable development program was initiated only during the 1940's. Commercialized vegetable production in special production pockets took pace only after 1980's as government priority program. Generally it has been observed and even experienced that the technologies and commodity specific production programs in Nepal came mainly with the support of foreign agencies and experts. A Japanese volunteer/expert Mr. M. Oijumi was the first to introduce the technology of plastic bags and plastic tunnels to produce vegetables particularly for cucurbits and few other vegetables in the 1970's at places such as Dhunibesi, Yagyapuri, Sindhuli, and so on. Then another Japanese vegetable expert Mr. Junji Takahashi tested the different off-season vegetable production under plastic house made with Japanese materials at Khumaltar in the early 1980's. During the 80's, HMG/FAO Fresh Vegetable and Seed Production Project also made significant contribution in disseminating vegetable production technologies. It included seeds and plant protection materials/inputs as program package to help develop commercial production pockets at different places in the country. Later on, these technologies along with some additional new technologies and seed inputs slowly disseminated among the farmers at different vegetable production pockets by the government agencies, neighboring farmers and I/NGOs. Fig 1: Area, Yield and Production of Vegetables in Nepal

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1991/92 1993/94 1995/96 1997/98 1999/00 2001/02 203/04

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ion

Area '000 ha Yield t/ha Production '000 ton

Source: - Statistical Information on Nepalese Agriculture, MoAC 2004. In the base year of 21st century, i.e. in 2000/01, the area coverage under vegetables according to MoAC estimations was 157,162 hectares producing 1,652,979 tons with the average productivity of 10.52 t/ha (MoAC, 2004). According to MoAC statistics there is increasing trend (Fig. 1) in area, production and productivity of vegetables in Nepal during the recent years. As the consumption level of vegetables among the urban residents has increased, the year round demand of certain selected/choosy vegetables as per Nepalese taste such as tomato,

8

cauliflower, capsicum, chili, cabbage, radish, carrot, cucumber, beans, peas, etc. is also increased. Even though the available national technologies and production programs were not fully geared to strongly backstop farmers need for sustainable production, the innovative farmers of different vegetable production pockets, however, have started producing off-season vegetables from the 1990's captivating it as a very profitable enterprise to raise their income level in a short period. Slowly more farmers were found adopting off-season production of vegetables with required information available from various sources such as, government research system and extension services, I/NGO's, mass information media and the neighboring farmers. Farmers of Kaski, Baglung and Palpa received information and technical support from the government extension agents, research stations, I/NGO's and seed dealers regarding the off-season vegetable production from 1990's. From a survey made in these districts, it is known that the off-season vegetable production in commercial scale, excluding some exceptional cases, was initiated in Kaski, Palpa, Baglung in the years 1990 (2047 BS), 1995 (2052 BS) and 1997 (2054 BS) respectively.

2.4.2 Some Characteristics of Off-season Vegetable Production Pockets Surveyed

Information on microclimatic conditions, elevations and type of land with soil characteristics is very important for off-season vegetable production. The details recorded on such information were not available from any source in the districts. However, some of the important characteristics of off-season vegetables producing pockets noted during the survey in Palpa, Kaski and Baglung districts are presented in Table 3.

9

Table 3: A Scenario of Land Use by Crops in the Survey Areas

Palpa Kaski Baglung/Parbat

Parameters

Unit Madan- pokhara Dobhan Bharat-

pokhari Hemja Kundule (Baglung)

Farse (Parbat)

Altitude of farmland

Meters

900 300-400 650 1100 1100-1300 750

Soil type: Texture Color pH

Type - pH

Sandy loam Grey Not av'ble

Sandy loam Black/Grey NA

Sandy loam Grey NA

Sandy loam Grey NA

Sandy loam Red NA

Sandy loam Yellow NA

Irrigation: Partial Perennial

Months All yr.

Rain fed & water harvesting -

- All year

5-6 months -

- All year

8 months -

- All year

Cultivable land per household

Ropani

9.13

13.5

16.06

12.93

4.30

7.98

Chances of hailstones

Times /year

In some of the years

In some of the years

3-4 2-3 Rare No

Principal cereal/staples

Descending order of area

Potato Rice Maize

Rice Maize Potato Wheat

Potato Rice Maize Mustard Wheat

Rice Potato Maize Wheat

Maize Rice Wheat

Rice Maize Wheat

Principal vegetables

Descending order of area

Tomato Capsicum Cabbage Cauli. Others

Tomato Cabbage Cucum. Cauli. Broccoli Others

Tomato Cabbage Cucum. Cauli. Others

Tomato Cauli. Cabbage Garlic Others

Tomato Sp. gourd B. gourd Cauli. Others

Tomato Cabbage Cauli. Cucum. S. gourd Others

Off-season veg. start'd in commercial scale

Year

1995 (2052 BS)

1997 (2054 BS)

1990 (2047 BS)

1992 (2049 BS)

1998 (2055 BS)

1997 (2054BS)

Average area under vegetables last year

Ropani / house hold

5.73

1.97

5.99

5.8

1.8

4.9

Growth in area from last five years

- Increased Increased Slightly

increased Slightly increased Not increased Not increased

Annual rainfall mm

1903 mm in Tansen 80% during Jeth-Bhadau

4404 mm in Pokhara 6333 mm in Lumle

1400 mm in Baglung

Source: Field survey, 2005 and DADOs of Palpa, Kaski and Baglung.

In all three districts surveyed, there is tremendous potentiality of expanding off-season vegetable production in the existing pockets as well as developing new pocket areas by involving more and more farmers either on individual basis or in groups. However, production pockets though cannot be expanded or developed indiscriminately covering the whole of the areas of these districts but some of the selected areas based on soil and climate suitability with road linkage, irrigation facilities and other necessary infrastructures can be considered for this purpose. This alone would be sufficient to scale up off-season production by more than ten folds of the present production in these districts. At the same time, it should be well considered that in the process of increasing the economy of scale and quality of productions, haphazard and unsafe use of pesticides and other agrochemicals should be mitigated in harmony with quality improvement and grading of the products.

Palpa Off-season commercial scale vegetable production in Palpa was started since 1995. Some of the innovative farmers of Madanpokhara took initiative producing off-season vegetables with information reaching them from researchers, extension workers and from their own visits to different places. The higher price received from off-season vegetables attracted more and

10

more farmers and the production is presently being expanded to Masyam, Argali, Dobhan, Telgha, Nayarnamtales (Arya Bhanjyang) VDCs and some parts of Tansen Municipality. The leading pockets Madanpokhara and Dobhan of Palpa are located at elevations ranging from 300 to 900 meters. Other pockets Argali, Nayarnamtales and Tansen are at slightly higher altitudes. Irrigation facilities are lacking in most of the places except Dobhan. But Dobhan cannot be considered as an ideal place for off-season vegetable production due its low altitude of about 350 meters with very high temperatures prevailing during summer. In Madanpokhara, water-harvesting technique is used to collect water from rainfall and other small sources into a pond lined with plastic film. This stored water is then utilized for vegetables through drip irrigation method during dry period. The average land holdings per household in production pockets of Dobhan and Madanpokhara are 13.5 and 9.13 Ropanis respectively. The average area per household under off-season production last year was 5.73 Ropanis at Madanpokhara and 1.97 Ropanis at Dobhan among the respondents. According to the respondents, area under off-season vegetables is in increasing trend in both the sites. The soils in both places are sandy loam with grey color. Tomato, capsicum, cabbage and cauliflower are the major off-season crops grown at Madanpokhara whereas tomato, cabbage, cucumber, cauliflower and broccoli are at Dobhan. Kaski In Kaski district, the off-season vegetable production was started in early 1990's at Baumara of Bharat Pokhari VDC. This was not initiated as a program based project from any government and non-government organization but by some of the innovative farmers themselves. Initially, a few farmers noticed some tomato plants grown spontaneously in their kitchen gardens and some other areas producing good quality tomatoes in the summer season. This led some of the farmers start producing tomato during rainy season for which they received very high price. However, in production pockets like Hemja, Lekhanath, Sisuwa, Tutunga and Pumdi-Bhumdi and so on, various government and non-government organizations have started providing technical support to the farmers. From Table 3 it is obvious that the major part of off-season vegetables in Kaski district are produced in areas with the elevations ranging from 650 to 1100 msl in sandy loam soil of grey color. Irrigation is abundant at Hemja whereas it is scarce at Bharatpokhari. The average land holding per household in production pockets of Hemja and Bharatpokhari is 16.06 and 12.93 Ropanis respectively. The average area per household under off-season production last year was 5.99 Ropanis at Bharatpokhari and 5.8 Ropanis at Hemja among the respondents. As per the respondents, areas under off-season vegetables in both the places have been slightly increased. Tomato, cabbage, cucumber and cauliflower are the major off-season crops at Bharatpokhari whereas tomato, cauliflower, cabbage and garlic are at Hemja.

Baglung Baglung farmers started off-season vegetable production in commercial scale from 1995 onwards with the inspiration from Lumle Agriculture Research Station. The higher price obtained from off-season vegetables attracted more and more farmers from Baglung district and also the farmers from the neighboring Parbat district. Presently, production in Baglung district has expanded to Datundada, Burtibang, Harichaur, Paiyupata, Gwalichour, Singana, Bhakunde and Malika VDCs, and Baglung Municipality. Kundule of Baglung district and Farse of Parbat district are close to Baglung market and are the leading pockets in these areas. The off-season vegetable production area of Kundule has stretched on elevations ranging from 1100 to 1300 meters whereas Farse is a low basin site with an elevation of only 750

11

meters. Vegetables in Kundule are produced under rain fed and residual moisture conditions from summer to early winter for about 8 months. The method of water harvesting and drip irrigation has recently been introduced in Baglung with the help of DADO. Farse receives all the year round irrigation to grow vegetables intensively. The average land holding per household in production pockets of Kundule and Farse is 4.30 and 7.98 Ropanis respectively. The average area per household under off-season production last year was 1.8 Ropanis at Kundule and 4.9 Ropanis at Farse among the respondents. As per the respondents, area under off-season vegetables is not increased in the recent years in both places. The soil of Kundule is sandy loam with red color and that of Farse is also sandy loam but with yellow color. Tomato, sponge gourd, bitter gourd and cauliflower are the major off-season crops at Kundule whereas, tomato, cabbage, cauliflower, cucumber and sponge gourd are the major vegetables at Farse. 2.4.3 Off-Season Vegetable Production Technologies Adopted by the Farmers Innovative farmers of accessible areas nowadays are in search of different production technologies aimed at raising their income. If the technologies are cost effective and profitable in terms of input-output ratio and are provided with assured market, farmers are ready to adopt any new technology. The existing production technologies are almost similar in these three districts with little differences depending on the access to the recent technologies and availability of resources. In general, farmers of Kaski are found to be more proactive towards new technologies, which could be due to the advantage of being closer to Pokhara municipality for information sources. Availability of technologies such as plastic tunnels and plastic houses, early and late seed varieties, growth regulators, pesticides, fertilizers, etc. are the added advantage in all these three districts. The followings are some of the technologies used by the farmers of these districts as observed from the household survey and discussions made with the farmers groups:

Use of plastic tunnels and plastic bags

Farmers producing off-season vegetables of all the production pockets are using plastic tunnels and plastic bags for early production of vegetables whether it is for winter or for early summer production. Farmers use plastic tunnels for protecting plants from excess rainwater moisture in soil and excessive wetness of foliage, which may otherwise subject to leaching of plant nutrients, incidents of more diseases and insects in early autumn planting in order to harvest their crops in early winter. Similarly they use plastic tunnels and plastic bags during winter to raise the seedlings early by providing warmth and harvest the crop in spring or early summer. Farmers fill soil and manures mixed media in small-perforated bags. Seeds are sown in them and kept inside the plastic tunnels. For preparing tunnels, bamboos are cut into pieces of about 2 meters long and two sharpened tips of each bamboo pieces are inserted into the soil bending them in a shape of semicircle. Then the plastic film is stretched over it, the length depending on the requirement of the land size. The soil media filled in plastic bags are put under the plastic tunnels thus made

Use of plastic houses Innovative farmers of these districts, particularly Kaski and Palpa, have started producing high value vegetables such as tomato and cucumbers and sometimes even other vegetables during off-season under the plastic houses. By the use of plastic houses farmers can produce tomato, cucumbers and several other vegetables throughout the year. Farmers make use of

12

plastic houses to produce vegetables when and where they can fetch higher prices. The plastic houses are found of different sizes in length, breadth and height. Generally, the plastic houses are made of bamboo frames to support plastic films at a height of about 2 meters in the center. The breadth varies from 5 to 7 meters and the length 12 to 25 meters. There were about 300 plastic tunnels being used for off-season production in Kaski during 2005. The major vegetable produced under plastic is tomato. But cucumber intercropped with other vegetables was also observed in Lekhnath and Hemja under plastic. In Madanpokhara of Palpa, two farmers have exceptionally made very big plastic houses covering an area of about 500 m2 (Ropani). They are the commercial/professional tomato growers and have covered their entire land (about 0.5 hectare each) with such plastic houses. In Baglung, few farmers have started the use of plastic houses. Supporting materials for plants Farmers are using bamboo and dried branches of trees as supporting materials for most of the cucurbits, peas and tomatoes. Farmers use the plastic ropes along with wooden/bamboo stakes as trellis materials. Without support with stakes and heavy spray of pesticides rainy season crops of cucurbits, peas and tomatoes can not be taken for a good harvest. In Bharatpokhari of Kaski, some farmers are practicing the use of raised horizontal frames for supporting rainy season tomato without plastic cover. Use of different varieties

Now, with the availability of early and late varieties of different vegetables, farmers are making profit by planting them according to the time of their climatic suitability. For instance, in case of radish, Forty Days an early variety is planted during late rainy season for autumn season harvesting, whereas Tokinashi is a late variety and is planted in spring season for harvesting in summer. The main season varieties of radish are planted in autumn and winter. In pole bean, variety Four Season can be planted any time of the year in mid hill with mild temperature conditions. Use of hybrids

Many imported hybrid varieties of vegetables are available in the market with different climatic adaptabilities and higher yields. The area coverage by hybrid seeds in the commercial production pockets is in increasing trend each year. Farmers are making good profits from the higher yields along with wider adoptability of hybrids. Even though hybrids are generally high inputs and intensive care demanding crops, farmers are more and more attracted towards the hybrids because of their high rate of return. The farmers are using hybrids for the last 5-7 years in tomato, cabbage, cauliflower, broccoli, radish, cucumber, bitter gourd, bottle gourd, hot pepper, sweet pepper, eggplant and okra, etc. The major hybrids used in tomato in the study areas were Manisha, Avinash, Navin, NS 162, Bhim, Shiwa, Tusi, Indom 9505, Nutan, Snehalata, Gita, etc. Similarly in cauliflower these were Snow Crown, Snow Dome, Snow Mystique, Snow King, Snow Queen, White Contessa, Silver Cup, Madhuri, Rami, etc. and in cabbage were Green Coronet, Green Stone, T 621, Zenith, etc.

Use of chemicals and growth regulators

Continuous planting of vegetables in the same field increases higher incidence of diseases and pests. It is being observed in most of the production pockets. Intensive cropping of

13

vegetables is also depleting nutrients from soil thereby compelling farmers to use heavy doses of chemical fertilizers and apply chemical pesticides frequently even up to 10 times or more during a cropping period. They are also using various types of plant growth regulators and botanical products available in the market with the view of increasing yield. Seeds, farm implements and chemical inputs are available from the local agro-vets, government resource centers under DoA and NARC, Agriculture Inputs Company and National Seed Company. 2.5 Cost of Production and Productivity Cost of production, yield and price of any off-season vegetables are the determining factors for their competitiveness in the market. Here the costs of production, yields, gross and net incomes from the potential off-season vegetables are presented in Tables 4-6. It is a known fact that the costs of production of off-season vegetables are always higher in terms of per unit area than the cost of production of seasonal vegetables and or the cereals. The reasons for higher cost incurred in producing off-season vegetables is the need for using higher inputs such as, improved/hybrid seeds, plant protection chemicals, fertilizers, protecting/cover materials like plastic and labor intensive agronomical/horticultural operations etc. Table 4: Cost of production of off-season vegetables in Palpa, 2004/05

Per Ropani Pocket area Vegetables Production

Kg / Rop.

Cost of production

Rs./Rop.

Production cost

Rs./Kg.

Gross income Rs./Rop.

Net Income

Rs./Rop Tomato 1050 3,952 3.76 11,025 7,073 Cauliflower 650 2,942 4.52 6,500 3,558 Cabbage 980 2,727 2.78 5,880 3,153

Dovan

Cucumber 800 3,252 4.06 9,600 6,348 Tomato 1100 5,736 5.21 19,800 14,064 Cauliflower 435 3,555 8.17 8,750 5,145 Cabbage 950 3,430 3.6 7,600 4,170

Madan- pokhara

Cucumber 900 3,352 3.72 10,800 7,448 Source: - Field survey, 2005 Table 5: Cost of production of off-season vegetables in Kaski, 2004/05

Per Ropani Pocket area Vegetables Production

Kg / Rop.

Cost of production

Rs./Rop.

Production cost

Rs./Kg.

Gross income Rs./Rop.

Net Income

Rs./Rop. Tomato 2000 7,690 3.84 24,000 16,310 Cauliflower 670 4,522 6.74 12,060 7,538 Cabbage 1150 4,047 3.51 9,200 5,153

Hemja

Cucumber 1170 5,081 4.34 17,550 12,496 Tomato 1650 6,634 4.02 19,800 13,166 Cauliflower 650 4,525 6.96 11,050 6,525 Cabbage 1050 3,828 3.64 7,350 3,522

Bharat-pokhari

Cucumber 1100 4,880 4.43 15,400 10,520 Source: - Field survey, 2005

14

Table 6: Cost of production of off-season vegetables in Baglung/Parbat , 2004/05 Per Ropani

Pocket area Vegetables Production

Kg / Rop.

Cost of production

Rs./Rop.

Production cost

Rs./Kg.

Gross income Rs./Rop.

Net Income

Rs./Rop. Tomato 1600 6,905 4.31 19,200 12,295 Kundule

(Baglung) Radish 1050 3,094 2.94 7,350 4,256 Tomato 1800 6,982 3.87 21,600 14,618 Cauliflower 650 4,037 6.21 9,750 5,713 Cabbage 1000 3,782 3.85 8,000 4,218

Farse (Parbat)

Cucumber 1050 4,831 4.60 11,550 6,719 Source: - Field survey, 2005 Commercialization of agricultural commodities needs supportive government plan and policy measures with clear program and implementation mandate. Vegetables being highly perishable commodities require immediate post harvest measures such as, storing in cool chambers or cold storage or processing or sale for final consumption. Also most of the vegetables produced during off-season are generally of luscious nature with soft tissues and most of them cannot be stored for a long period. 2.6 Social and Gender Aspects of Off-Season Vegetable Production A house hold survey was carried out in March 2005 in each two off-season vegetable production pockets which were supplying vegetables to the nearby urban centers of Pokhara, Tansen and Baglung municipalities. The information derived from the house hold survey relating to social and gender involvement is presented in table 7.

Table 7: Gender and social aspects in off-season vegetable production Palpa Kaski Baglung/Parbat

Parameters observed Unit

Madan-pokhara

Dobhan Bharat- pokhari

Hemja Kundule Pharse

Age of the farmer: Average Range

Years Years

43.46 27-57

46.26 22-69

45.5 35-61

45.3 33-57

41.53 25-55

45.33 26-59

Education of farmer: Illiterate Literate SLC pass Higher education

% % % %

- 40 40 20

6.67 86.67 6.67 -

- 60 27 13

- 66.67 6.6 26.6

6.5 87 6.3 -

100 - - -

Family size (average) Nos. 6.47 6.0 4.93 5.6 5.87 6.67 Popn share of gender: Male (No.&% share) Female

Nos. (%) Nos. (%)

3.06 (47) 3.4 (53)

2.67 (45) 3.33 (55)

2.33 (47) 2.6 (53)

2.47 (44) 3 (56)

2.73 (47) 3.13 (53)

3.46 (52) 3.2 (48)

Family members involved in off-season vegetable production

Nos. (% of tot. members)

3.6 (55.67)

3.26 (49)

2.5 (51)

3.47 (61.9)

2.66 (45.4)

3.13 (47)

Decision making for vegetable production: Farmer (husband) Female farmer (wife) Consent of both All members jointly

(%) (%) (%) (%)

33.33 0 66.67 0

23.33 20 46.67 20

0 0 92.33 6.67

6.66 13.34 80.0 0

6.66 0 93.33 0

40 13.33 40 6.66

Source: - Field survey, 2005

15

The survey data revealed that farmers of versatile age group, ranging from 20s to 60s, are involved in off-season vegetable production. The higher rate of return from the off-season vegetables has attracted even the educated youths of these districts. Among the sample surveyed in these districts, 26.6 percent in Hemja and 20 percent in Madanpokhara were the young farmers with college education. However, in Farse of Parbat all of the farmers surveyed were illiterate. The average family size was comprised of 4.93 to 6.67 members in the surveyed areas. The involvement of women in off-season vegetable production was found almost equal in all the districts, which was the lowest with 48 percent in Farse and highest with 55.9 percent in Hemja. About 2.5 to 3.5 members of the family are engaged in the production process. About the decision-making in production and sale of the product, it was interesting to note that the male domination has been significantly eroding. About 80 to 90 percent of farmers make decisions from mutual consent between husbands and wives. Some farmers consult all the adult family members whereas very few about 6.6 percent farmers decide single handedly. Though not included in the above table still it was observed during the field survey that a big discrimination of wages existed between the male and female labors. The daily wages for women in most of the pockets was Rs.60 per day whereas it ranges from Rs. 120 to 200 for men 2.7 Problems and Issues of Off-season Vegetables The major constraints faced by the farmers in producing off-season vegetables are observed as follows:

( i ) Inadequate availability of suitable variety and seeds Due to lack of hybrid seed production program in the country, its demand is fully met through import. But such seeds are either not available in time to cater the needs of farmers or are very costly to make easily affordable. Ironically, even the supply of certified seeds of the improved varieties is either irregular or not available as and when required. The vegetable seed production programs and systems established in Rukum and Marpha in the late years of 1980's have not been able to cope up with the increasing demand, both qualitatively and quantitatively, due to technical and managerial problems. Therefore, farmers are nowadays compelled to purchase highly expensive imported seeds. And it is likely that such imported seeds are not properly processed through quarantine procedures eventually ending up importation of substandard seed/planting materials with the chances of introducing objectionable organisms. ( ii ) Lack of appropriate production technology The extension workers so far, have not been efficient and able to impart know-how and skills in coping up with the (fast) changing needs of the farmers and markets. The DADOs under DoA have not yet provisioned for the deployment of skilled technicians specialized in off-season vegetable production for the off-season vegetable production pockets. Even more importantly, NARC ability to generate technologies as per the farmers' demand in making them more market competitive by growing other than cereal based commodities has still not proven its worth.

16

( iii ) Slow and inappropriate adoption of technologies by the farmers

Farmers sometimes do not follow the correct and appropriate methods/procedures in vegetable production and consequently they have been suffering from low-grade strength and low price of the product. Farmers need to be motivated for the innovative and commercial agriculture by backstopping through a strong extension program. ( iv ) Selection of production pockets and production technology to meet market

demand Quality and quantity of vegetables need to be maintained as per the market demand. The demand of quality and quantity may, however, vary according to the type of markets and the type of consumers. For instance, the demand of tourists influenced market in Kathmandu and Pokhara may be focused on organic, clean, uniform/well graded vegetables with good appearance and specified variety in some cases. For distant markets, including (export to) India or Bangladesh though some segments of the consumers are now becoming more and more quality conscious, they may still not be very much bothering in quality in terms of whether it is organically produced or not, but would certainly like the product look uniform and appealing, in bulk and free from pesticide residues. Present scattered production areas with weak extension support for technology and inputs are not able to cater the need and demand of off-season vegetables both qualitatively and quantitatively. The production pockets should be bigger and specialized according to the demand of vegetables. The Kaski district and other nearby districts are very prone to the hailstorms; and therefore farmers should be boosted up with appropriate technology and crop insurance measure. ( v ) Support for production technology The production technology support includes availability of and or access to quality seeds, varieties, production inputs, cultivation practices, plant protection measures, harvesting techniques, cleaning, grading and packaging etc. Some of these are within the farmers' reach though thinly spread. But these are mostly in the form supply driven instead of being demand-led. Hence, some shaping up measures are needed to rectify this. (vi ) High cost of production The cost of production of off-season vegetables in Nepal is comparatively higher than that of its neighboring countries mainly due to difficult terrain for mechanized farming, higher cost of inputs, and lower efficiency of available inputs and farm workers. There is no short cut way for reducing cost of production unless the production and land utilization policies are effectively implemented. The government policies need to protect the fertile agricultural lands and utilize them for profitable agriculture. Easy accessibility of inputs with price incentive can also play crucial role in reducing cost of production and increasing efficiency of farming.

17

( vii ) Quality certification and quarantine There is a growing demand of vegetables produced organically or by IPM techniques at both the domestic and international markets. Vegetables being the biological or living entity, the importing countries ask for the phytosanitary certificates and pesticide residue analysis (PRA) reports with every consignment. Therefore, the government should have provision for urgent delivery of such services by establishing well-equipped laboratories with trained manpower. 3. Ginger Production 3.1 Production Trend Ginger (Zingiber officinale) is widely used for culinary as spice and medicinal purposes in Nepal and many of other countries. It is traded in three forms – fresh, dry and processed. In India and other countries, ginger is processed into various forms to add value in the product and make it easier to use in the form such as, ginger powder, ginger oil, ginger oleoresin, and fresh ginger in brine, pickles, candies, syrups etc. Ginger is also used in drinks, confectionary, bakery and processed meat products. Nepal produces a large variety of spices such as ginger, garlic, chili, turmeric, Timur (Xanthoxylum armatum), large cardamom, cinnamon, and many other medicinal spicy herbs. Most of the spices cater to domestic demand and some items like ginger, cardamom, turmeric, garlic, chili, etc. are exported to India and some other countries. Ginger is a highly potential spice crop that is being grown in commercial scale for cash income of the farmers within the preview of climatic suitability across the whole east-west length of the country along the Siwalik and mid hill ranges up to the altitudes of 1500 meters asl. It can be grown in the uplands of Terai also. The estimated production of ginger in Nepal is about 150,593 tons from an area of 4600 hectares in the year 2003/04 with the productivity of 12.73 tons per hectare. The quality of Nepali ginger is lower as compared to Cochin ginger of India, Jamaican ginger and elite varieties of other countries, which has discouraged traders to export to the overseas markets. Table 8: Area, Production and Productivity of Ginger in Nepal

Year Area (ha) Production (ton) Productivity (t/ha)

1999/2000 8314 74994 9.02 2000/2001 8956 84366 9.42 2001/2002 9189 87909 9.57 2002/2003 11480 140056 12.20 2003/2004 11830 150593 12.73

Source: MoAC, Statistical Information on Nepalese Agriculture (publications of 2002 to 2004) The trend of ginger production is increasing over the recent years. The area under ginger has increased to the level of 11,830 hectares in 2003/04 from the previous level of 8,314 hectares in 1999/2000 (Table 8). The growth rate over this period of five years is found to be 42.29 per cent.

18

Fig.2 Trend of Ginger Production in Nepal

0

20

40

60

80

100

120

140

160

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

Pro

duct

ion

'000

mt

Western Development Region covers the highest ginger production area in Nepal followed by Eastern and Mid-Western Regions (Figure 2). It shares about 39 per cent of the country's ginger growing area. Among the districts, it is estimated that Nawalparasi shared the highest area coverage of 1,255 hectares under ginger in the year 2003/04 producing 12207 tons. Although Nawalparasi, had the largest area, the highest production with 18,452 tons was in Palpa with productivity level of 15.9 t/ha as compared to 9.7 t/ha of Nawalparasi. The low productivity of Nawalparasi is known to be due to slow adoption of improved technologies such as the need of using of healthy seeds, necessary inputs and crop rotation, etc. Syanja and Tanahu have also good area coverage under ginger. Ginger production in Syanja was 3201 tons from 380 hectares and in Tanahu it was 4280 tons from 305 hectares.

Fig.3 Regionwise Ginger production

ER28% (3284)

FWR5% (630)MWR

13% (1581)

WR39% (4555)

CR15% (1780)

19

Ginger production areas in Palpa, Syanja and Tanahu and even in Nawalparasi mainly consist of the hills and foothills scattered on either side of Kali Gandaki river. Bhimad town of Tanahu district is the biggest collection center of ginger in Western Development Region where ginger is collected from adjoining parts of Palpa, Syanja, Tanahu and Nawalparasi districts. 3.2 Status of Ginger Production in Palpa, Syanja and Tanahu Ginger production is scattered all over the villages and cultivated areas of Palpa, Syanja and Tanahu in large or smaller quantities for household use and cash income generation purposes. There are no intensified and uniform ginger pockets put under cultivation by the farmers. Farmers don’t want to cover all of their land by ginger basically from two reasons; firstly it needs high inputs such as seeds, compost and mulching materials, and secondly is the lack of any assured market. The general tendency in most of the cases is that farmers plant rice in irrigated land, and they allocate part of their rainfed upland for ginger cultivation for cash income. The increase or decrease in ginger area is based on their interests and capacity to the extent they can afford for the required inputs. Besides they also don’t want to totally depend on it. However, there are some specific areas in these districts where farmers are more attracted towards ginger production willing to extend their areas to the maximum of their land holdings provided there is assured market. The major production pockets and estimated production volume of ginger in the three study districts is presented in Table 9. Table 9: Major Production Pockets of Ginger in Palpa, Syanja and Tanahu, 2004

District Major production pockets Area (ha) Production (ton) Productivity (t/ha)

Support agencies involved

Palpa Bhairabsthan, Khasyauli, Kusumkhola, Devinagar, Rampur, Sahalkot, Archale, Pokarathok, Kaseni, Nayarnamtales, Jhadewa, Devinagar, Madanpokhara, Dobhan, etc.

1155

18452

15.97

DADO, REDA, LISP-Helvetas, District Cooperative Office

Syanja Putalibazar Municipality, Chilaunebas-SetiDobhan, Phedikhola-Pauwegaude, Dahathum, Waling-Jagatbhanjyang, Mirmi, Galyang, etc.

380

3201

8.42

BDS-MaPS, but no production program from DADO in current FY

Tanahu Sundhara, Smung Bhagwatipur, Majhkot, Arunodaya, Rishing Ranipokhari, Kanhun Shivapur, Kotdurbar, etc.

305

4240

13.90

DADO

Source: MoAC 2004, DADOs of Palpa, Syanja and Tanahu, and REDA of Palpa, 2005 The difference in the level of ginger productivity among the districts is due to the differences in the adoption of improved technologies and application of necessary inputs. Farmers of Palpa and Tanahu are using more inputs and harvesting higher yields as compared to the farmers of Syanja. 3.3 Existing production technology Ginger production in Nepal is in practice since long ago and is mostly being cultivated under conventional method. There is not much improvement in the production technology. Improved and high quality varieties are also not available. Farmers are cultivating different landraces named Nase rhizomes containing more fibers and Bose with fewer fibers. Ginger Research Program, Kapurkot released a variety of ginger named Kapurkot Aduwa-1 in 2001

20

for the first time but the seed of this variety has limited supply even among the interested ginger growing farmers. The existing production technologies are almost similar in all these three districts. Some variation, however, lie on the access to the recent technologies and availability of resources. In general, farmers from Palpa were comparatively more proactive towards new technologies of ginger production. A social organization named Rural Economic Development Association (REDA) with the support of Helvetas-LISP is actively involved in helping farmers for production technology and marketing of ginger. The followings are some of the technologies used by the farmers of these districts as assessed from the household survey and discussions made with farmers groups: Climate and soil Climatically, ginger thrives well in warm and humid conditions in the initial stage of growth. But it needs little bit dry atmosphere and mild temperatures during harvest. Frost and heavy dews are not favorable for growth. Slightly sloppy uplands with orientation towards south or east in the hills are found suitable. Heavy soils and water stagnant conditions are harmful for ginger cultivation. Farmers of Palpa, Syanja and Tanahu are cultivating ginger mostly under suitable climatic and soil conditions. Land preparation and manures Farmers make the soil finely pulvorised and friable for planting ginger by plowing 3-4 times and breaking clods. They put a lot of compost or FYM depending on the nearness to its source and availability. The doses of compost may range from 40 to 80 Dokos. One Doko, a bamboo basket used for carrying goods usually in hills, accommodates about 20 Kg of compost. Some farmers also add some other organic materials such as oilcakes, chicken manures, etc. in small quantities. Farmers usually do not use chemical fertilizers in ginger. Seed rate and sowing Farmers of higher elevations or mid hills plant ginger in March and farmers of lower elevations or foothills plant in April. About 200 Kg seed rhizomes are required in one Ropani of land. Varieties In effect there are not many varieties of ginger identified and developed in Nepal. The Ginger Research Program at Kapurkot had 72 entries of germplasm collected from different parts of the country during the year 1998-1999. Out of these indigenous germplasm, one landrace evaluated as superior variety was released in 2001 as "Kapurkot Adhuwa-1" but because of limited seed multiplication program and other reasons this variety has not reached in most of the production pockets for extensive production purpose. Generally Bose ginger is preferred by the traders and consumers and fetches higher prices. But content of fiber has been found affected by soil and climatic condition. The Bose of one place can be converted into Nase when planted under different environment.

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Method of planting Some farmers plant ginger behind the plough to save labors for planting, whereas some others make furrows with spades and plant ginger at uniform depth and distances. The rhizomes are sown about 7-10 cm deep maintaining the distance of about 30 cm between plants. Some farmers also raise the beds by earthing up soils and making furrows during the rainy season to drain out the excess water in low land conditions. Mulching Farmers of this region commonly think that a good ginger crop cannot be harvested without mulching. Therefore almost all of them practice mulching with locally available materials. The mulching material can be dry leaves of trees collected from the forest, green grasses, dry grasses, straw, animal litters, rice husk, previous crop debris, etc. Intercropping The old practice ginger inter cropping is with maize and is continuing up to now as a suitable combination. Some farmers of Palpa are intercropping ginger with pigeon pea and okra. Ginger is also being grown by some farmers in coffee and orange orchards. Crop rotation Most of the farmers do not bother about crop rotation, however, most of them do not plant ginger continuously in the same patch of land. Rotation of ginger every three years by including one legume crop is generally suggested. Harvesting When 75 % plants dry up and fall on the ground, crop becomes ready for harvest. But unlike other crops farmers do not rush for harvesting. They look for the market price and harvest their crop accordingly. Sometimes they harvest crop even earlier than its maturity if they are assured of higher prices. If there is a good demand of ginger in the market, some farmers even take out the mother seed rhizome during rainy season in the month of August, which is just around the middle of crop growing period. Seed Material A farmer, who has cultivated ginger in the previous years, generally does not buy seed. He keeps his own seed. Farmers generally separate a part of the crop area and leave un-harvested in the field, and then they take out the rhizomes for seed whenever they need to plant. But some farmers harvest the entire crop and then select good rhizomes for seed and store in a well-ventilated place.

22

Table10: Summary of Ginger Production Technology

Palpa Syanja Tanahu Parameters / Description

Unit

Bhairab-sthan Nayar-namtales

Putali-bazar Jagat -bhanjyang

Majha-kot Kahun-shivapur

Soil type chosen for ginger

- Any kind of soil

Any kind of soil

Any kind of soil

Any kind of soil

Any kind of soil

Any kind of soil

Seed rate Kg/Ro. 185 187 137 150 175 217 Kg/Ro. 800 800 900 840 900 850 Kg/Ro. - - - - - - Kg/Ro. - - - - - -

Use of fertilizers Compost DAP Urea MoP Kg/Ro. - - - - - - Variety in use Name Nase Nase & Bose Local Local Local Local Mulching Yes/No % Yes 100 % Yes 100 % Yes 100 % Yes 100 % Yes 100 % Yes 100 % Intercropping with

- Maize, Okra, Pigeon pea

Maize, Okra, Pigeon pea

Maize, Citrus, Coffee

Maize, Citrus, Coffee

Mostly sole, maize,

Mostly sole, maize,

Time of planting Month Chait-Baisakh Chait-Baisakh Chait-Baisakh

Chait-Baisakh

Magh-Chait Magh-Fagun

Time of harvesting

Month Magh -Fagun Asar & Mangsir -Fagun

Magh -Fagun

Magh -Fagun

Mansir-Magh

Mangsir-Pus

Major diseases - Rhizome rot, white leaf

Rhizome rot, white leaf

Rhizome rot, white leaf

Rhizome rot, white leaf

Rhizome rot, Yellowing of leaves

Rhizome rot, Yellowing of leaves

Early retrieval of mother /seed rhizome

Yes/No 46.67 % farmers yes

100 % yes No No No No

Production Kg/Ro. 850 825 940

838 1000 950

Processing for Sutho and other products

Yes/No Some farmers make candy and powder

Some farmers make candy and powder

No No Some farmers make Sutho

No

Cleaning - Removing soil, roots, diseased parts, etc

Removing soil, roots, diseased parts, etc

Removing soil

Removing soil

Removing soil

Removing soil

Grading - Separation of good & bad

Separation of good & bad

Separation of good & bad

Separation of good & bad

Separation of good & bad

Separation of good & bad

Household consumption

Kg/year 14.6 30.8 21.58 15.26 41.1 50.83

Selling price Rs. 20 20 15 14 20 20

Source: - 1. Field survey, 2005 2. DADO Annual Reports

3.4. Some Characteristics of Ginger Production Pockets Information on microclimates, elevations and type of land with soil characteristics is very important for quality ginger production. The detail records on this information were not available from any source in the districts. However, some of the important characteristics noted during the survey of Palpa, Syanja and Tanahu districts on ginger producing pockets are presented in Table 11.

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Table 11: A scenario of land use by crop in the survey areas

Source:- 1. Field survey, 2005. 2. DADO Annual Reports In the surveyed areas of Palpa, Syanja and Tanahu, ginger is being produced in the foothills and hills at elevations ranging from 800 to 1400 meters. Ginger is generally grown under rainfed condition in Bariland (upland) in any type of soil available with the farmers. Ginger in these areas for household use was being produced since long time. Commercial production of ginger in these districts was started earlier as compared to other cash crops such as vegetables, fruits, etc. As known from the household survey of the farmers the ginger production on commercial basis started from 2006 BS (1949) in Palpa, from 2023 BS (1966) in Syanja and from 2020 BS (1963) in Tanahu. According to the farmers they have not increased their area under ginger since last five years or so due to the uncertainty of market. 3.5 Cost of Production and Productivity Cost of production, yield and price of ginger are the determining factors for its competitiveness to other agricultural commodities in the market. Therefore, cost of production, yield, gross and net income from ginger and other potential crops were studied in the selected two production pockets each in the three districts and have been presented in Tables 12-14. It was observed that a high cost was incurred in ginger production and the reason for this is attributed to the use of seed rhizomes in large quantity, use of bulky protecting materials like mulch, higher dose of compost, labor intensive horticultural operations, etc.

Palpa Syangja Tanahun Parameters

Unit Bhairab-sthan Nayar-

namtales Putali- bazar

Jagat-bhanjyang

Majha-kot Kahun-shivapur

Altitude of farmland Meters 900-1400 950-1200 840-950 850-1060 - - Chances of hailstones Times

/yr In some year In some year 5-6 5-6 1 1

Soil type: Texture Type Color pH

- - pH

Loam, clay loam Grey, red NA

Loam, clay, clay loam, Grey, red NA

Sandy, sandy loam, loam, clay loam Black, red, brown, yellow NA

Sandy, sandy loam, loam, clay loam Black, red, brown NA

Sandy loam, clay Black, red, brown NA

Sandy loam, clay Black, yellow pale brown, NA

Irrigation availability: Irrigated Rain fed

- -

40 % 60%

46.7 % 53.3 %

- Rain fed

- Rain fed

- Rain fed

- Rain fed

Cultivable land per household

Ropani 10.8 9.93 17.33 13 14.2 26

Principal crops

Average area in Ropani per house hold

Maize 6.53 Mustard 3.8 Paddy 2.67 Wheat 1.73 Potato 0.37 Veg. 0.23 Other 0.37

Maize 5.83 Paddy 2.8 Mustard 1.87 Wheat 0.9 Veg. 0.88 Potato 0.77 Other 0.27

Maize 8.86 Paddy 6.8 Wheat 2.06 Potato 0.96 Mustard 0.3 Other 1.96

Maize 8.9 Paddy 6.76 Wheat 3.26 Potato 1.9 Mustard 0.1 Other 0.86

Maize 7.22 Rice 5.33 Wheat 4.05 Potato 0.97 Mustard 0.05 Other 2.83

Maize 12.2 Paddy 6.83 Wheat 6.83 Potato 2.33 Mustard 0.5 Other 3.66

Average area under ginger cultivation

Ropani per h'ld

1.25 0.98 1.7 1.4 1.6 4.66

Ginger production started in commercial scale

Year

1949 2006 BS

1963 2020 BS

1966 2023 BS

1968 2025 BS

1963 2020 BS

1983 2040 BS

Growth in area in last five years

- Slightly increased Slightly increased Not increased Slightly increased Slightly increased

Slightly increased

Annual rainfall mm 1903 Tansen, (80% during: Jestha-Bhadra)

2665 Putalibazar, (Monsoon from Asar to Asoj)

1792 Damauli 1847 Ramjakot - Ginger area

24

Table 12: Cost of Production of Ginger and some other Crops in Palpa, 2004/05 Per Ropani

Pocket area Crop Production

Kg / Rop

Cost of production

Rs./Rop

Production cost

Rs./Kg.

Gross income Rs./Rop.

Net Income Rs./Rop.

Bhairabsthan Ginger 850 7,710 9.07 17,000 9,290 Ginger 825 7,492 9.08 16,500 9,008 Paddy 136 1,874 13.77 1,710 -164 Maize 116 2,114 18.22 1,924 -190 Tomato 450 5,302 11.78 7,650 2,348

Nayarnamtales

Cauliflower 270 2183 8.08 4,860 2,677 Source: - Field survey, 2005 Table 13: Cost of Production of Ginger and some other Crops in Syanja, 2004/05

Per Ropani Pocket area Crop Production

Kg / Rop

Cost of production

Rs./Rop

Production cost

Rs./Kg

Gross income Rs./Rop.

Net Income Rs./Rop.

Ginger 940 6,207 6.6 13,160 6,953 Paddy 260 2,183 8.39 2,612 429 Maize 126 1,554 12.33 1,893 299 Wheat 116 1,435 12.37 1,667 132 Potato 740 5,063 6.84 8,880 3,817 Tomato 500 4,053 8.10 7,500 3,447

Putalibazar

Cauliflower 562 3,376 6.00 7,093 3,717 Ginger 838 5,892 7.03 10,056 4,164 Paddy 226 2,080 9.20 2,191 111 Maize 112 1,319 11.77 1,668 249 Wheat 90 1238 13.75 1,270 32 Tomato 500 4,053 8.106 7,500 3,447 Cauliflower 512 3,573 6.97 6,275 2,702

Jagatbhanjyang

Cabbage 1180 3,061 2.59 7,862 4,801 Source: - Field survey, 2005 Table 14: Cost of Production of Ginger and some other Crops in Tanahu, 2004/05

Per Ropani Pocket area Crop Production

Kg / Rop

Cost of production

Rs./Rop

Production cost

Rs./Kg

Gross income Rs./Rop.

Net Income Rs./Rop.

Ginger 1000 8,232 8.23 19,000 10,678 Maize 138 1,719 12.45 1,756 37 Wheat 150 1,729 11.52 2,000 271 Potato 338 3,329 9.84 4,994 1,665 Cauliflower 475 2,812 5.92 5,700 2,888

Majhakot

Cabbage 812 2,715 3.34 4,872 2,157 Ginger 950 8,539 8.9 18,050 9,511 Maize 140 1,908 13.62 1,780 -128 Wheat 132 1,644 12.45 1,796 152 Potato 388 3,403 8.77 5,044 1,641 Tomato 450 3,293 7.31 7,200 3,907

Kaun Shivapur

Bitter gourd 262 3,039 11.59 6,550 3,511 Source: - Field survey, 2005

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The cost of ginger production in terms of per unit area is very high as compared to the cost of cereals production and seasonal vegetables; but the ginger production is still a profitable enterprise. The major determining factors that we can make ginger competitive in the domestic as well as in the international markets are: reduction in cost of production, increase in yield, enhancement in quality, and processing into different kinds of marketable products. The price level is always determined by the demand and supply situation. The internal demand of the country is much lower than the present production level; therefore, there is no way other than exporting ginger (in processed form). India has recently listed fresh ginger as a restricted item and perhaps other countries may also put restriction on fresh ginger as a trading commodity. So, the country needs to look at seriously in matter related to export in processed form as well as improve the quality of raw ginger. 3.6 Problems and Issues Problems related to production (to be solved through research ad extension support): - Soil fertility degradation

- Losses due to rhizome rot - High losses in storage - Poor processing technique in practice for making dry ginger (Sutho) - Lack of quality / varieties - High cost of production and long duration crop - Lack of duly regulated and accessible market - Imposition of local taxes and offer under table charge

Problems related to market (to be solved by improving marketing, taxations, trade promotion and legal provisions):

- Inadequate mechanism of high quality seed production and distribution. - Inappropriate marketing system and price negotiating skill. - Lack of processing industries. - Lack of cleaning, grading and processing skills at farmers' level. - High costs of production and transportation.

Bottlenecks in export (to be solved through policy, legal, research and marketing institutions):

- Lack of adequate preparedness to be benefiting from the international trade regime, e.g. WTO, SAFTA, bi-lateral (e.g., Indian, Bangladeshi) trade policy, etc

- Lower quality of the ginger both in appearance and varieties than the main competitors such as, Indian, Chinese, and Jamaican ginger

- Lower grade in qualitative aspects in terms of high fiber content, and low oil and oleoresin content

- High cost of production - Lack of adequate facilities for SPS certification are required by TRIPS - Lack of human resources to frame counter major against TBT & SPS majors

imposed by other countries.

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4. Off-Season Vegetables Marketing 4.1 Palpa

4.1.1 Marketing Functions

Cleaning Nearly two-third of the farmers practiced cleaning the off-season vegetables before disposing it to the markets. Methods adopted in cleaning the vegetables included removing the dirt/soil followed by fresh water cleaning. Table 15: Cleaning of off-season Vegetables in Palpa, 2061

(No. of households) S.N. Cleaning method Dobhan Madan Pokhara Total A Not cleaned 7 (46.67) 4 (26.67) 11 (36.67) B Removing soil 4 (26.67) 10 (66.67) 14 (46.67) C Use of water 4 (26.67) 1 (6.66) 5 (16.66) Total 15 (100.00) 15 (100.00) 30 (100.00) Source: Field Survey Feb. 2005. Note: Figures in the parenthesis indicate percentage. In Madan Pokhara, 11 farmers (73.33%) cleaned vegetables before delivering to the markets, whereas the rest 4 farmers (26.67%) did not clean it. The proportion of farmers cleaning vegetables for marketing is lower in Dobhan. Consumers were seen indifferent to both the cleaned and non-cleaned vegetables. It was also found that the cleaned or non-cleaned vegetables did not create any significant effect on marketing the produce since there was no significant price difference between them. Although, some farmers did not clean the vegetables properly, the minimum level of cleanliness it maintained did not frustrate the domestic market consumers. The level of ceanliness was, however, not sufficient for Indian markets. Grading The grading of tomato into big and small sizes was introduced in the production areas of Dobhan and Madan Pokhara. Table 16: Grading system of off-season Vegetables in Palpa, 2061

(In no of farm household) Graded or not Dobhan Madan Pokhara Total Yes 8 (53.33) 6 (40.00) 14 (46.67) No 7 (46.67) 9 (60.00) 16 (53.33) Total 15 (100.00) 15 (100.00) 30 (100.00) Source: Field Survey Feb. 2005. Feb. 2005. Note: Figures in the parenthesis indicate percentage. Nearly half of the farmers (53.33%) practiced grading tomato. They graded into big and small sizes and removed the rotten ones. Farmers also did not show any concern on storing these off-season vegetables since these were immediately disposed off to market after harvesting.

27

Packaging Doko was used by almost all farmers for packaging and transporting the products to markets and selling. Table 17: Packaging Materials for Off-season Vegetables in Palpa, 2061

(In no of farm household) Packaging Material Dobhan Madanpokhara Total Doko 13 (86.67) 15 (100) 28 (93.33) Plastic Crate 3 (20) 6 (40) 9 (30.00) Jute bag 8 (53.33) 15 (100) 23 (71.19) Source: Field Survey Feb. 2005. Feb. 2005. Note: Figure in the parenthesis indicates percentage of total farmers. On an aggregate, nearly all the 28 (93.33 %) farmers used Doko in transporting and selling off-season vegetables. Two farmers in Dobhan replaced Doko by plastic crates for tomatoes and jute bags for cabbage. Rest of the farmers in Dobhan used all three methods of packaging. Transporting Both production pockets are adjoined to the Siddartha highway. But majority of the farms at Madan Pokhara are not linked with roads and are situated at a distance of about 2-3 Kms from the highway. The porter/transportation costs of agricultural commodities from those farms were added as trucks/vans could not reach there. Table 18: Transport Means used by Farmers in Palpa, 2061

(In no of farm households) Transport means Dobhan Madanpokhara Total Porter (own/hired) 7 (46.67) 10 (66.67) 17 (56.67) Bus/pickup 3 (20.00) 2 (13.33) 5 (16.67) Truck 5 (33.33) 3 (20) 8 (26.66) Total 15 (100.00) 15 (100.00) 30 (100.00) Source: Field Survey Feb. 2005. Feb. 2005. Note: Figure in the parenthesis indicates percent to total farmers Even though, farms are in proximity to the roadways, 7 farmers (46.67%) in Dobhan and 10 farmers (66.67%) in Madanpokhara used porters to transport the products to the road heads. Rest 8 farmers (53.33%) in Dobhan, 5 farmers (33.33%) in Madanpokhara and 13 farmers (53.33%) fully used transport vans for carrying products to the markets. Farmers frequently used trucks for transporting their products. Total of 8 farmers (26.66%) used trucks in transporting the products by forming a group. Transporting the products from the production farms that were not connected to the road heads added more to the marketing costs. The truck transportation of vegetables from the farms would have reduced the transportation costs vis-a-vis the marketing costs ultimately contributing towards competitiveness.

28

Fig.4 Marketing Channels of Off-season vegetables in Palpa

4.1.2 Marketed Surplus and Markets As assessed during the field visit, about 20 percent of the production of off-season vegetables was consumed by the producers at household level and the rest sold in the markets. Farmers in this district are found more informative and responsive to the markets as they put for sale their off-season vegetables at farm gates, local markets, district head quarters and distant markets as per the information on price, demand and supply situations. Table 19: Markets for Selling off-season Vegetables in Palpa, 2061

(In no. of farm households) Market place Dobhan Madanpokhara Total Farm gate 7 15 22 Local market 0 2 2 Collection center 10 14 24 District head quarter market 0 14 14 Distant market 15 10 25 India 0 0 0 Total 15 15 30 Source: Field Survey Feb. 2005. Feb. 2005. Table 19 demonstrates that all the farmers of Dobhan visited distant market of Butwal for selling off-season vegetables. Among them 10 farmers (66.67 %) sold at local collection

Producer

Wholesaler Retailer Supplier (from Nepal & India)

Consumer (Nepal) Wholesaler ( India)

Consumers(India) Retailer(India)

29

center. And 7 farmers (46.67 %) among them sold at the farm gates. Similarly, in Madan pokhara, 93.33 % sold their products at farm gates as well as local collection centers and the district headquarters, while 6.67percent farmers sold at the farm gates. Majority of them reached the distant markets of Butwal as well. Sales Distribution Major portion (75%) of the marketable volume in Dobhan production pockets was sold at the distant market (Butwal). Similarly, largest quantity (49%) of the farmers produce in Madanpokhara was sold at the local collection centers (Nayapati collectors). Table 20: Sales Distribution of Off-season Vegetables in Palpa, 2061

(Sales quantity in percentage of total sales)

Market place Dobhan Madanpokhara Total Farm gate 12.5 10.33 11.42 Local market 0 0.67 0.33 Collection center 12.5 49.0 30.75 District headquarter market 0 16.0 8.00 Distant market 75 24.0 49.50 Total 100.00 100.00 100.00 Source: Field Survey

On an aggregate, nearly half (49%) of the marketed volume was sold at the distant markets. Second major share (30.75%) was sold at collection center to collectors, who supplied at domestic and export markets. In the beginning of off-season vegetable, farmers sold their products in attractive prices to those collectors, who visited the farms. Nearly all the farmers, 14 in each pocket, sold their vegetables on wholesale and retail prices. Volume of wholesale sales was 85.75 percent in Dobhan and 91.33 percent in Madan Pokhara. 4.1.3 Pricing and Information System More than two-third farmers were aware of prices existing at Tansen and Butwal. They collected information about market prices of off-season vegetables of Tansen and Butwal through telephones. There were a few telephone lines in and around the production pockets enabling them to collect price information of markets in Tansen and Butwal. This sensitivity strengthened their bargaining power to determine prices at the farms gates. Table 21: Pricing System in Palpa, 2061

(No. of farmers) S.N. Pricing method Dobhan Madanpokhara Total

A As decided by the traders alone 5 (33.33) 4 (26.67) 9 (30.00)

B Less effect of farmers 8 (53.34) 6 (40.00) 14 (46.67)

C By interaction between farmers & traders 2 (13.33) 5 (33.33) 7 (23.33)

Total 15 (100.00) 15 (100.00) 30 (100.00) Source: Field Survey Note: Figure in parenthesis indicates percentage.

30

As revealed from the data, total of 7 farmers (23.33%) responded that farm gate prices of off-season vegetable were determined the interaction between traders and farmers. In another site, 14 farmers (46.67%) reported that their knowledge on market information had some minor influence on the farm gates price. Only 9 farmers under survey (30.0%) who were not familiar about the market price information of off-season vegetables were reported not being able to influence on determining the prices. Institutional support on price and market information knowledge did not reach to the commercial production pockets, though prices were collected by the concerned District Agriculture Development Offices. Also demand and supply information was not available on the target markets. The commercial farmers, however, were aware of the market prices and also sensitive on the likely price fluctuations. They collected price information of the target markets in Tansen and Butwal with the concerned traders by using the local telephones services. 4.1.4 Marketing Cost and Margins The marketing Cost and Margins of off-season vegetables in Dobhan and Madan Pokhara production pockets to markets of Tansen and Butwal has been analyzed as follows:

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Table 22: Marketing Costs and Margins of Off-season Vegetables in Palpa, 2061 (In Rs. Per quintal in Aswin)

S.N. Description Dobhan Madan Pokhara Production cost Cauliflower 452 817 Cabbage 278 360

1

Tomato 376 521 Farm Gate price Cauliflower 2100 2000 Cabbage 1600 1500

2

Tomato 2600 2500 Farmer’s returns in Production Cauliflower - 1183 (144.79.36%) Cabbage 1322 (475.53%) 1140 (316.66 %)

3

Tomato 2224(591.48%) 1979 (242.22 %) Farmer/ Supplier’s Marketing Cost: Packaging cost (@Doko Rs 100/each, used 30 times, capacity 40 kg) 9 9

Unloading 15 15 Porter cost - 60 Transport cost (bus) Tansen 35 25 Butwal 25 35 Physical loss Cauliflower (3%) 63 60 Cabbage (3%) 48 45

4

Tomato (5%) 130 125 Farmer/Supplier’s Marketing costs to Tansen Cauliflower 122 169 Cabbage 107 154 Tomato 189 234 Farme/Supplier’s Marketing cost to Butwal Cauliflower 112 179 Cabbage 97 164

8

Tomato 120 244 Farmer/ Supplier’s Sales Price in Tansen Cauliflower 2300 2300 Cabbage 1800 1800 Tomato 2900 2900 Farmer/Supplier’s Sales price in Butwal Cauliflower 2300 2300 Cabbage 1900 1900

9

Tomato 3000 3000 Farmer/Supplier’s Gross Marketing Margins in Tansen Cauliflower 200 300 Cabbage 200 300 Tomato 300 400 Farmer/ Supplier’s Gross Marketing Margins in Butwal Cauliflower 200 300 Cabbage 200 400

10

Tomato 400 500 Farmer/Supplier’s Net Marketing Margin in Tansen 11 Cauliflower 78 131

32

Cabbage 93 146 Tomato 211 256 Farmer/ Supplier’s Net Marketing Margin in Butwal Cauliflower 88 131 Cabbage 107 236 Tomato 280 256 Retailer’s Marketing cost in Tansen Cauliflower 330 330 Cabbage 280 280 Tomato 535 535 Rent ( Rs 3000 / stall , sales 1q/day) 100 100 Physical Losses Cauliflower ( 10 %) 230 230 Cabbage ( 10 %) 180 180

12

Tomato ( 15 %) 435 435 Retailer’s Selling price in Tansen Cauliflower 3000 3000 Cabbage 2400 2400

13

Tomato 3900 3900 Retailer’s gross marketing margin in Tansen Cauliflower 700 700 Cabbage 600 600

14

Tomato 1000 1000 Retailer’s Net marketing margin in Tansen Cauliflower 370 (16.08%) 370 (16.08%) Cabbage 320 (16.84%) 320 (16.84%)

15

Tomato 465 (15.5 %) 465 (15.5 %) Retailer’s Marketing cost in Butwal Cauliflower 426 426 Cabbage 378 378 Tomato 672 672 Rent ( Rs 3000 / stall , sales 1q/day) 100 100 Local transport 50 50 Physical Losses Cauliflower ( 12 %) 276 276 Cabbage ( 12 %) 228 228

16

Tomato ( 18 %) 522 522 Retailer’s selling price in Butwal Cauliflower 3000 3000 Cabbage 2500 2500

Tomato 4000 4000 17 Retailer’s Gross Marketing in Butwal Cauliflower 700 700 Cabbage 600 600 Tomato 1000 1000 18 Retailer’s Net Marketing Margin in Butwal Cauliflower 274 (11.91 5%) 274 (11.91 5%) Cabbage 222 (11.68 %) 222 (11.68 %) Tomato 328 (11.31%) 328 (11.31%) Source: Field Survey 2005 Note: NA means sNot Available.

33

Table 22 shows the production costs, farm gate prices and marketing margins of farmers/traders on off-season vegetables. It is seen that the returns on the production of off-season vegetables have been very high due to high farm gate prices. Small marketable production and farmers' firmness in price determination were the basic factors for very high farm gate prices. The price difference between the farm gates and the market centre is low because of the proximity of the market centre. At times wherever the vegetables like cabbage, cauliflower and tomato did not arrive from India (production areas) in adequate quantity, the price in Butwal and surrounding markets were high. This led to earn substantial returns to farmers producing these vegetables during summer and early winter season. Also the supplying agents benefited from this. With the limited production of off-season vegetables, farm gate prices were high for cauliflower, cabbage and tomato, at Rs 21, 16, and 26 per Kg respectively in Dobhan and Rs 20, 15 and Rs.25 per Kg respectively in Madan Pokhara. It is known that traders from India visited production sites/pockets in Nepal during summer and winter seasons and supplied the products to Gorakhpur markets (see Table 23).

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Table 23: Marketing Cost & Margins at Gorakhpur of Off-season Vegetables in Palpa, 2061 ( Rs./quintal in Aswin 2061)

S.N Description Dobhan Collection center

Madan Pokhara collection center

Collection center price Cauliflower 2200 2100 Cabbage 1700 1600 1

Tomato 2700 2600 Packaging Cauliflower/cabbage 7 7 2 Tomato (plastic crate) (120 days use in a year Rs 500/3yrs life) 7 7

3 Loading 2 2

4 Transport cost by mini truck (Rs 14400/60 quintal) 240 240

Physical losses Cauliflower (3%) 66 63 Cabbage (3%) 51 48 5

Tomato (5%) 135 130 6 Unloading 5 5

7 Miscellaneous Cost (including border cost) 17 17

Market change (2.5%) Cauliflower 128 128 Cabbage 65 65 8

Tomato 88 88 Commission to commission agent (5%) Cauliflower 256 256 Cabbage 130 130 9

Tomato 176 176 Wholesale Selling Price Cauliflower 5100 5100 Cabbage 2600 2600 10

Tomato 3500 3500 Gross marketing margin Cauliflower 2900 3000 Cabbage 900 1000 11

Tomato 100 200 Total Marketing Cost (including purchasing price) Cauliflower 2921 2818 Cabbage 2217 2114 12

Tomato 3368 3262 Net Marketing Margin Cauliflower 2199 2302 Cabbage 403 503 13

Tomato 132 238 Source: Field Survey, Sales price adjusted from Indian Border Market Survey Study Adjoining Bhairahawa, Feb, 2004, AEC.

35

4.1.5 Demand and Supply Field survey revealed ample prospect of increasing supply of off-season vegetables to Tansen and Butwal markets. The markets of Nautanuwa and Gorakhpur of India appear to be the potential markets for summer and early winter vegetables from Palpa and the surrounding hill districts. Table 24: Major Vegetable Transaction and Price in Gorakhpur (India), 2061

(Rajya Krishi Utpadan Mandi Parisad, Mahewa) Daily transaction (MT) Price (NRs./Kg) Vegetables Main season Off-season Main season Off-season

Cauliflower 400 20 7 40 Cabbage 20 3 2 20 Tomato 200 30 8 22 Capsicum 4 2 13 64 Peas 40 2 7 48 Brinjal 30 3 8 20 Okra 25 4 4 24 Bitter gourd 20 2 5 24 Parwal 30 3 8 40 Beans 6 1 7 20 Source: Indian Border Market Survey study Adjoining Bhairahawa Feb, 2004, AEC. In the northern Indian markets, supply of cauliflower was very low at 20Mt/day during off-season (June-September) compared to 400 mt/day in the main season. Supply of cabbage was 3 Mt/day in the off-season (march-August) compared to the supply of 20 mt/day in the main season. Although supply in the lean months may not be increased substantially to reach to the level of main season because of high costs and or prices associated with it, among others, there could still to some extent be the prospects of increased supply of cauliflower and cabbage. The supply of tomato was only 30Mt/day as compared to the potential demand of 200Mt/day in off-season (August-October). It therefore indicates potentiality of increasing the production and supply of this product from the surveyed pockets. Similarly, the off-season capsicum and peas with higher prices, indicate further supply potentials. The price spread between wholesale price in Gorakhpur market and the farm gate price in the production pockets of Palpa, the market prices and the supplier’s marketing margins shown in the table above indicate high potential of exporting off-season vegetables in Gorakhpur market. However, prices are likely to decrease as happens with increased supply and the associated competitive nature of the market, there could still be opportunities for reasonable marketing/profit margin to the stakeholders, if the production potentials in the respective production areas are utilized in the coming years. The increasing competition may lower the farm gate prices but would apparently be still higher compared to the production cost bringing entire system of production and trade as a profitable enterprise. 4.1.6 Gender in Marketing

In the overall marketing functions, women shared 52.5% of the marketing activities in Dobhan. And it was 47% in Madan Pokhara. In an aggregate, women were equally involved in marketing activities.

36

Table 25: Women Involvement in Marketing in Palpa, 2061 (In Percentage of total)

Marketing Activities Dobhan Madanpokhara Total

Harvesting 55 55 55 Cleaning/Packaging 67 63 65 Transporting 43 35 39 Selling 45 35 40 Overall 52.5 47 49.5 Source: Field Survey, Feb 2005 In harvesting and cleaning/packaging activities, women involvement was 55% and 65% compared to men. Since women had difficulty in visiting the distant markets, involvement of men in transporting and selling activities was 61% and 60% respectively. 4.1.7 Issues and Problems

? Many farmers do not practice cleaning and grading operation of off-season vegetables which would lead to quality deterioration.

? Due to lack of marketing information mechanism in the pocket areas farmers are not aware of market potentials in India for enhancing the supply level.

? In absence of economy of scale in production farmers often are compelled to transport off-season vegetables in small volumes resulting in high transport cost.

? Transporting vegetables to the collection centers by using human porter inflates the marketing cost.

? Physical damage of vegetables, such as more than 7 percent in tomato, packed in Doko ultimately would be lowering the marketing margins.

? Farmers' production volume during off-season is not high to supply a truckable load every day covering the production period. It has compelled to carry and sell the produce to the collection center/collectors by using human porters or the buses.

? Farmers are not aware about the value of using the plastic crates which is cheaper,safer(for the produce) and better for contributing to a higher marketing margins.

? Farmers are not organized into groups or cooperative marketing activities that would reduce the marketing costs and at the same time increase the marketing margin.

? Farmers are not aware about Plant Quarantine measures (SPS-Sanitary and Phytosanitary Measures and PRA (Pest Risk Analysis etc.), which are critical and important for export markets.

? The government extension system does not provide adequate emphasis on marketing extension linking to commodity/ product markets including exports.

4.2 Kaski

4.2.1 Marketing Functions

Cleaning Though some of the farmers did not clean off-season vegetables after harvest, many of them practiced cleaning by removing soil and flushing by water. This resulted into improved quality product while reaching in the hands of consumers.

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Table 26: Cleaning Technique of Off-season Vegetable in Kaski, 2061

(No of farmers) S.N. Cleaning technique Bharatpokhari Hemja Total A Not cleaned 6 (40.0) 5 (33.33) 11 (36.67) B By removing soil 4 (26.67) 2 (13.33) 6 (20.0) C By removing soil & using water 5 (33.33) 8 (53.34) 13 (43.33) D Others 0 0 0 Total 15 (100.00) 15 (100.00) 30 (100.00)

Source: Field survey, Feb. 2005 Note: Figure in the parenthesis indicates percentage. In the surveyed production pockets, nearly half of the farmers (43.33%) cleaned off-season vegetable. Among them, 5 farmers (33.33%) cleaned the products immediately after harvesting by removing soil and using water in Bharatpokhari and 8 farmers (53.34%) practiced this in Hemja. Hemja production pocket is better since more than half of the farmers (66.70%) practice cleaning the harvested product by removing soil and using water. Such cleaned products provided consumers with better satisfaction compared to the imported vegetables. Grading Tomatoes were graded in big and small sizes before they were brought to the market centers. Otherwise, there were no grading system practiced in cauliflower, cabbage and cucumber. Farmers' did not think it was necessary to grade their vegetables for these produces brought in the market were not greatly varied in sizes. Nonetheless, farmers sorted out the harvested vegetables in a way that very small sized and the deformed ones were removed before bringing it to the market. Packaging Doko made of local bamboo, plastic crates and jute bags were used by the farmers for packaging off-season vegetables during transshipments from the farm to the market places.

Table 27: Packaging Technique of Off-season Vegetables in Kaski, 2061

S.N. Packaging Method Bharatpokhari Hemja Total A Doko use only 0 0 0 B Plastic crate use only 0 0 0 C Doko and Plastic Crate use

only 1 (6.67) 0 1 (3.33)

D Doko,Crate and Jute bag use

14 (93.33) 14 (93.33) 28 (93.33)

E Doko and Jute bag use 0 1 (6.67) 1 (3.33) Total 15 (100.00) 15 (100.00) 30 (100.00) Source: Field survey, Feb. 2005 Note: Figure in the parenthesis indicates percentage.

38

None of the farmers in these production pockets used only Doko or plastic crates for packaging the produce. Most of the farmers have used Doko, crates and jute bags simultaneously. Most of the farmers had few plastic crates used for transporting tomatoes. They mostly used Doko for transporting and retail price selling of tomatoes and cauliflower by themselves. While transporting larger quantities of marketable volume of cabbage, bean and cucumber to the marketplaces, jute bags were used. Very small volume of products (5%) was transported and sold in plastic crates in Bharatpokhari, whereas about 10 percent of the products were packed in such crates in Hemja. Table 28: Percentage/Quantity of Vegetables Packed through Different Methods, 2061

(Packed volume in percent) Package method Bharatpokhari Hemja Total Doko 84 80 82 Plastic crate 5 10 6.5 Jute bag 11 10 10.5 Source: Field survey, 2005 Hemja is a vegetable production pocket, situated at about 5 km from the Pokhara city. Although, this production area is linked by back topped road with Pokhara, the farmers around the pocket still have to engage porter/ human labor for about 10 minutes to 20 minutes to transport their products. In Bharatpokhari production pocket, there is a fair weather road link. Farmers here also have to transport their products by using porters during the rainy season. They have to use human labor for transporting the products from the farms to the road heads for about 15 minutes to 45 minutes. Since, their vegetable products are scattered, the transportation of vegetables from these production pockets is difficult. The vans are also not easily available at times of farmers' need. Also the volumes of products available each day even during the production season are not economically transportable.

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Fig. 5 Marketing Channels of Off-season vegetables in Kaski

4.2.2 Marketed Surplus and Markets

The quantity of vegetables, marketed by the farmers from commercial vegetable production pockets, assessed with the help of concerned DADO are as follows; Table 29: Marketed Surplus of Vegetables by Production Pocket, 2061

Pocket Main vegetables Harvesting months

Marketed Surplus (MT)

Malepatan Cauliflower, All 90 Tutunga Cabbage All 80 Lekhnath Cauliflower,

Cabbage, Cucumber Baisakh-Kartik 150

Hemja Cauliflower, Cabbage, Squash Falgun- Chaitra 48

Shishuwa Cauliflower Cabbage, Beans Baisakh- Marg 138

Bharatpokhari & others Tomato All 370 Source: District Agriculture Development Office, Kaski. Table 29 shows the marketed surplus by commercial production pockets. Some of the vegetables are seen produced in all the seasons.

Producer

Wholesaler Retailer Supplier

Consumer (Local) Wholesaler (Out district)

Consumers (out-district) Retailer

40

Most of the produce was disposed at district headquarter market (Pokhara) by the farmers of both production pockets. Total of 90% of the marketed volume was sold at Pokhara by farmers from Bharatpokhari, whereas, it was 95% sold by farmers from Hemja pocket. Few farmers of Bharatpokhari bring their produce to Syanja market and sell it to the retailers.None of the farmers went to India's market for selling the off-season vegetables. On the whole, half of the farmers (50 %) sold their vegetables on wholesale price and the remaining half (50%) sold their vegetables both on wholesale and retail prices. In Bharatpokhari, 13 farmers (86.67%) sold their vegetables on wholesale prices and the rest sold in wholesale plus retail prices. In Hemja, only 2 farmers (13.33%) sold on wholesale price, whereas, the rest sold on wholesale plus retail prices. 4.2.3 Pricing and Information

The market price indicates the supply situation and price of the products in the market center. In Pokhara, Ministry of Agriculture has established a wholesale market center for vegetables and fruits at Shantiban. The price structure of the market center is as follows.

41

Table 30: Wholesale Price of Vegetable in Pokhara Agriculture Wholesale Market Center, 2060

42

During early winter (Aswin- Kartik), price of cauliflower, cabbage, carrot, radish, okra, French bean and green pea were supplied in smaller quantity compared to other months. During winter months (Marg-Falgun) the prices of capsicum, green pea, cucumber and brocauli were found higher due to the scarce supply in these months. Wholesale price of tomato small was the highest at Rs. 38.00 and Rs. 33.00 per Kg in the months of Aswin and Kartik respectively. Price of tomato big was also at highest during these months. Even in the subsequent months prices of tomato were Rs. 14.50 to Rs. 33.50 per Kg. indicating potential supply in future. Prices of carrot were the highest at Rs. 52, Rs 55 and Rs 80 in Bhadra, Aswin and Kartik. In the following months too, prices were attractive. Prices of green chili were also the highest at Rs 90 and Rs 57.50/Kg in the months of Aswin and Kartik respectively. Price of cauliflower was Rs.49 and 50 per Kg in Aswin and Kartik and the price of cabbage was Rs.21.33 and 29.33 in Aswin and Kartik respectively. Price of green pea was Rs. 37.66 per Kg in Kartik. Even in the following months until Chaitra it ranges on higher side between Rs. 27.50 and 57.50 per Kg. Price of capsicum was Rs. 115.00 per Kg in Kartik and ranged from Rs. 30 to 125 per Kg in the subsequent winter months lasting until Chaitra. Price of cucumber was highest in Marg at Rs 42.50 per Kg. In the following months from Poush to Chaitra, it ranged from Rs. 23 to Rs. 38 per Kg. Price of broccoli was also highest at Rs.57.50 per Kg in Poush and continued to remain higher at Rs. 25 to Rs.32.50 per Kg. in the months that followed. Above instances of high prices existed in Pokhara wholesale market last year indicate potential high level prices of these commodities that could be sold in the market in coming year. Price Determination Major role was played by the wholesalers in determining wholesale prices of off-season vegetables in the agriculture market centre. The prices of other market centers, prices of last year and supply situation were taken into account as major factors in price determination. As farmers, to a great extent, were aware of prices and supply situations of Pokhara market, their access to this information influenced the pricing to some extent. 4.2.4 Marketing Cost and Margins The cost and margin analysis shows the profitability situation of farmers and traders in performing the marketing functions. The marketing cost and margin of off-season vegetables produced in two-production pockets have been analyzed as follows.

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Table 31: Marketing Cost and Margin of Off-season Vegetables in Kaski, 2061 Aswin (Rs. Per quintal)

S.N. Items Bharat Pokhari Hemja Production Cost Cauliflower 696 674 Cabbage 384 351 1

Tomato 402 384 Farm Gate Price Cauliflower 1800 2000 Cabbage 1300 1500

2

Tomato 2500 3000 Farmer’s Returns in Production

Cauliflower 1104 (158.62 %) 1326 (196.73 %) Cabbage 916 (238.54 %) 1149 (327.35 %)

3

Tomato 2098 (521.89 %) 2616 (681.25 %) Farmer/supplier’s Marketing Cost Cauliflower 216 122 Cabbage 201 112 Tomato 359 232 Packaging cost (Doko Rs.100/each, life 90 days, 30 times use, capacity 40 kg)

9 9

Porter cost 100 40 Transport cost (Bus/van) 50 30 Physical loss Cauliflower 54 (3%) 40 (2%) Cabbage 39 (3%) 30 (2%) Tomato 200 (8%) 150 (5%)

4

Market tax 3 3 Farmer/ supplier Sales price in Pokhara Cauliflower 2400 2400 Cabbage 1800 1800

5

Tomato 3400 3400 Farmer/ supplier Gross Marketing Margin Cauliflower 600 400 Cabbage 500 300 6

Tomato 900 400 Farmer/ supplier Net Marketing Margin Cauliflower 384 (21.33%) 278(13.9%) Cabbage 299 (23%) 188( 12.53%) 7

Tomato 541(21.64%) 168( 18.03%) Wholesaler’s Marketing cost : Cauliflower 106 79 Cabbage 88 61 Tomato 374 347

8

Unloading 30 30

44

i)Rent in Pokhara ( @ Rs 3000/month &, sales 50 quintal/day)

2 2

Crate, weighing & others 2 2 ii) Loss Cauliflower ( 3 %) 72 72 Cabbage ( 3%) 54 54 Tomato ( 10 %) 340 340 Wholesaler’s Sales price Cauliflower 2800 2800 Cabbage 2100 2100

9

Tomato 4000 4000 Wholesaler’s Gross marketing margin

Cauliflower 400 400 Cabbage 300 300

10

Tomato 600 600 Wholesaler’s Net Marketing margin Cauliflower 294(12.25%) 294(12.25%) Cabbage 212(11.77%) 212(11.77%)

11

Tomato 226(6.64%) 226(6.64%) Retailer’s marketing Cost Cauliflower 413 413 Cabbage 343 343 Tomato 733 733 Rent (@Rs 3000/momth & 2 quintal sales/day) 50 50

Local Transport 50 50 Loading 30 30 Market Tax 3 3 Loss Cauliflower( 10 %) 280 280 Cabbage ( 10 %) 210 210

12

Tomato ( 15 %) 600 600 Retailer’s Selling price Cauliflower 3500 3500 Cabbage 2700 2700 13

Tomato 5000 5000 Retailer’s Gross Marketing margin Cauliflower 700 700 Cabbage 600 600 14

Tomato 1000 600 Retailer’s Net Marketing margin Cauliflower 288(10.28%) 288(10.28%) Cabbage 257(12.23%) 257(12.23%)

15

Tomato 267(6.67%) 267(6.67%) Source: Field Survey, 2005

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Above table indicates that the off-season vegetables producers could earn good returns. Compared to the production costs, the farm gate prices of off-season vegetables in both the surveyed pockets were found attractive. The porter's cost for carrying vegetables from farm to the road head was Rs.1.00 per Kg in Bharatpokhari and Rs.0.40 per Kg in Hemja. In addition, the transport cost on van was Rs.0.50/Kg in Bharatpokhari and Rs.0.30/Kg in Hemja. The added transport costs were Rs.1.50 in Bharatpokahari and 0.70 in Hemja. Owing to high labor wages for porter and high transport cost on vans used for transporting goods, the total costs for transporting off-season vegetables have been expensive posing great limitations on the trading associated with these enterprises. The net marketing margin for vegetable from Bharat Pokhari to Pokhara Shantiban Market Centre is highest. It is due to low farm gate price in Bharat Pokhari and the oligpolistic nature of market (very few suppliers). These margins/profits are likely to decrease with the level of competition in the market. Construction of collection centre at Bharat Pokhari would be one of such measures for enhanshing market competition. 4.2.5 Demand and Supply Pokhara is the regional trading hub of Western Development Region. Since there is short supply of vegetables in Pokhara, there is high prospect of producing additional quantity of vegetables and its marketing by the farmers in most of the districts in the region. The Agriculture Wholesale Market Center established by the Ministry of Agriculture at Shantiban is the main terminal market in Western Development Region. It was estimated that on an average about 40 mt of vegetables were sold daily here of which Kaski district shared about 7 mt (17.5%). Of the total vegetable supply in Pokhara city, nearly 90 percent of the volume is estimated to be supplied through the wholesale market of Shantiban, 8 percent through Sri Complex retail cum wholesale market center and the remaining 2 percent volume is supplied through other retail sellers. The wholesale market is a hub market, which has backward linkage with commercial vegetables production pockets and collection centres and forward linkage with wholesalers and retailers of the major markets of other districts.

46

Local Pocket

Silguri India

Terai Market

Local Pocket

Local Pocket

Dhading

Makwanpur

Pokhara Market

Makwanpur

Dhading

Gorakhpur (India) Chili

Local Pocket

Early Summer Season

(Cucumber)

Summer Season

(Tomatoes) (Seasonal for hill)

Fig.6: A Supply Chart of off-season vegetables in Pokhara Market

Early Winter Season

(Cauliflower, Cabbage, Tomato

Winter Season

Cucumber, Capsicum, Beans

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Competitive Capability of Local Vegetables for Inflow/Import Substitution Early Winter Fig.6 above shows that off-season cauliflower, cabbage and tomato produced in production pockets of Kaski, Dhading and Makwanpur are supplied to Pokhara market, in the early winter season. As vegetables are largely supplied from similar production areas from the hills districts, the production costs are almost similar. Kaski, however, has comparative advantage for substituting the inflow of off-season vegetables from other districts as the level of transport costs is greatly reduced owing to its nearness to the production pockets. Winter Season Off-season vegetables for Pokhara such as cucumber, capsicum and beans during winter are supplied from the local production pockets in Kaski District, Makwanpur and Dhading. In this season, green chili is imported from India (Gorakhpur). Even if cucumber is supplied from Terai areas or from India, they can not compete with the local products due to the taste preference by consumers. In Pokhara, there is a large segment of such consumers whose price elasticity is not high for consuming vegetables. Hence, there is prospect of capturing this segment of consumers by the local products. Early Summer Season Cucumber is supplied from the local areas and India (Silguri) to Pokhara market in the early summer season. As local cucumbers are tastier, they fetch about Rs 2-3 higher per kg compared to the imported ones. A high-income segment, which is significantly large in this city prefers local cucumbers. This shows the prospect of producing local cucumbers to cater the needs of the quality/ taste conscious consumers. Summer Season In the summer season, the tomato produced in this district can be supplied to Terai markets of Nepal and northern border markets of India such as Gorakhpur, Lucknow and Kanpur. In the rainy months, the Terai areas cannot produce vegetables due to water-logging. On the other, Kaski and other similar hill areas have potential of producing tomato, cabbage and cauliflower even in the summer months. This comparative advantage can be utilized for imort substitution as well as export promotion. Inflow Substitution Potentials The off-season vegetables produced in this district has potential of substituting inflow from other districts as well as imports from India. Import Substitution Potentials A study on import and export of agricultural commodities carried out by MDD/DOA in 2003 revealed that 1044.8 mt of tomato was imported annually at Pokhara Shantiban Wholesale Market centre of which 811.8 mt was imported from Gorakhpur and 233 mt from Raxaul. Likewise, 82 mt of chilli was annually imported at this market from Siliguri and 288.5 mt of onion from Gorakhpur. Data also show that 666.8 mt of potato was annually imported at this market of which 582 mt was imported from Gorakhpur, 54.8 mt from Bhutan and 30 mt

48

from China. Above data substantiate that chilli, tomato, onion; cauliflower and potato are being imported significantly into Pokhara market. It also indicates the potentiality for enhancing domestic production of these vegetables for import substitution in Pokhara market.

Table 32: Inflow Substitution Potential in Kaski, 2061

S.N. Vegetables Months Competing supply sources Potential inflow Substitution

1 Cauliflower Aswin-Kartik/Marg Dhading, Makwanpur Good 2 Cabbage ,, ,, Fair 3 Cucumber Chaitra-Baisakh ,, Fair 4 Beans Marg-Falgun ,, Good 5 Capsicum Marg-Falgun ,, Good 6 Green chili Marg-Falgun Gorakhpur (India) Fair Source: Discussion with Agri. Wholesale Market Traders. 4.2.6 Gender in Marketing On an average, women in Kaski district participated in cleaning/packaging and selling activities representing 51% and 52.5% respectively. Involvement of women, however, is seen less in the harvesting and transport activities. Table 33: Participation of Women in Marketing Activities in Kaski, 2061

(No. Shown indicates percentage) Activities Bharatpokhari Hemja Total Harvesting 45 49 47 Cleaning/Grading 50 52 51 Transporting 50 47 48.5 Selling 52 53 52.5 Source: Field Survey Feb. 2005. Feb 2005. Majority of women have been involved at various household level decision making process. Table 34: Women Involvement in Farm Decisions in Kaski, 2061 (In household number) Crop Planning S.N. Decision by Bharatpokhari Hemja Total A Husband 0 1 (6.66) 1 (3.33) B Wife 0 2 (13.34) 2 (6.67) C Both 14 (92.33) 12 (80.0) 26 (86.67) D Family jointly 1 (6.67) 0 1 (3.33) Total 15 (100.00) 15 (100.000 30 (100.00) Loan Decisions S.N. Decision by Bharatpokhari Hemja Total A Husband 0 1 (100.0) 1 (11.11) B Wife 0 0 0 C Both 8 (100.0) 0 8 (88.89) D Family jointly 0 0 0 Total 8 (100.0) 1 (100.0) 9 Marketing S.N. Decision by Bharatpokhari Hemja Total A Husband 0 1 (3.34) 1 (3.37) B Wife 0 0 0 C Both 13 (92.33) 13 (92.33) 26 (86.67) D Family jointly 2 (6.67) 1 (3.33) 3 (10.0) Total 15 (100.00) 15 (100.00) 30 (100.00) Source: Field Survey Feb. 2005. Feb. 2005. Note: Figure in the parenthesis indicates percentage

49

Very few farmers either husband or wife singally made decisions on crop planning, loan and marketing. The percentages both jointly made farm decisions on crop planning, loans and marketing are 86.67 %, 88.89 % and 86.67% respectively. 4.2.7 Issues and Problems

? Human labor has been scarce in Kaski district resulting in expensive porter cost. ? There is not adequate vehicular traffic involved in the transportation of farm

products. ? The physical damage of tomato during transportation and selling was 8% in

Bharatpokahari and 5% in Hemja, which in turn added up the cost of Rs.1.60 per Kg and 0.65 per Kg to farmers and traders in the marketing process.

? In Bharatpokhari, there is no access to telephone. Some of the farmers receive price information of Pokhara market through their visits prior to vegetable transactions.

? The organized system of information flow to the farmers in pocket areas, which could contribute to enhance capacity of farmers, is lacking. The mechanism of collecting and disseminating of prices to farmers is not adequately developed till date. Other information relating to potential demand, supply and potential markets are also lacking to the producers in the production pockets.

4.3 Baglung/Parbat

4.3.1 Marketing Functions

Cleaning

Farmers cleaned the off-season vegetables immediately after harvest and before disposing it to the markets. The information collected from farmers about cleaning has been tabulated as follows: Table 35: Cleaning Technique of Off-season Vegetables in Baglung/ Parbat, 2061 (No. of Farmers) S.N. Technique Kudule Pocket Farse Pocket Total A Not cleaned 2 (13.33) 7 (46.67) 9 (30.0) B By removing soil 13 (20.0) 6 (40.0) 19 (63.33)

C By removing soil and cleaning by water 0 2 (13.33) 2 (6.67)

D Other methods 0 0 0 (0) Total 15 (100.00) 15 (100.00) 30 (100.00) Source: Field Survey Note: Figure in the parenthesis indicates percentage. Only about two-third of the producers, on an average, cleaned off-season vegetable by removing dirt/soil. Very few farmers (6.67%) cleaned the products by removing dirt using water. About thirty percent farmers though did not practice cleaning vegetables before disposing off to the market, none the less; these products were easily sold as the consumers were not specific regarding the cleanliness of off-season vegetables.

50

Grading Farmers of these production areas sorted out the products in such a way that damaged pieces were removed. Only one farmer in Kudule production pocket practiced grading tomato into two sizes namely, small and big but the rest did not follow it. Even the big-sized tomatoes not separated from the smaller sizes fetched lower prices compared to the graded ones. Packaging Farmers practiced packaging off-season vegetables in bamboo baskets (Doko), plastic crates and jute bags. Generally, tomato, cauliflower, cabbage and beans were harvested and transported to the market in Doko. However, some of the farmers who received training from the District Agriculture Development Office have started using plastic crates for packaging. Mostly, jute bags were used in case of transporting the potato. Table 36: Packaging System of Off-season Vegetables in Baglung/ Parbat, 2061

(% of marketed quantity) S. No. Method Kudule Farse Total A Doko 89 90 89.5 B Plastic Crate 5 5 5 C Jute bag 6 5 5.5 Total 100.00 100.00 100.00 Source: Field survey, 2005 Tomatoes transported to Baglungbazar into vertical shaped Dokos had nearly 5% of the volume wasted. Only the wholesalers of Baglungbazar sorted vegetables including tomatoes and packed into plastic crates. But most often the vegetables supplied to Parbat and Baglung in Doko were wasted by nearly 10 percent. Transporting Most often the transportation from many production pockets to district headquarter markets and the road heads was porter responsible for inflating the marketing cost very high. Both of the production pockets under survey, Kudule and Farse were adjoined with the roadways. But the means of transport was not available in Kudule during rainy season due to poor road condition. Being small volume of marketable vegetables, farmers were compelled to transport the products using human porter (own or hired) from the farm to the district headquarter market ultimately adding up to the marketing costs.

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Fg. 7 Marketing Channels of Off-season Vegetables in Baglung/Parbat

4.3.2 Marketed Surplus and Markets

Nearly 75 percent of the off-season vegetables were marketed by the producers and the rest consumed at household level. Table 37: Marketed Surplus of Off-season Vegetable Baglung District, 2061

S. No. Pocket Marketed surplus (MT) 1 Baglung municipality 100 2 Burtibang 50 3 Harichour 50 4 Paiyubava 20 5 Bihu 29 6 Bhakunde 50 7 Sinjal 50 8 Bhabanichaur 50 Source: Field Survey All farmers of Kudule and Farse sold their products at Baglungbazar market. And in Kudule, nearly half of the farmers (8 farmers) sold their vegetables on retail prices in Baglungbazar. They sold nearly 10 percent of the total volume on retail markets and the rest 90 percent on wholesale prices.

Producer

Wholesaler (Also retailer)

Cooperative society Retailer

Consumer (Local) Wholesaler (Out district)

Consumers (out district) Retailer

52

In Farse, only two farmers (13.33%) sold their produce on retail plus wholesale prices. Only 5 percent of the marketed surplus was sold on retail, whereas, the rest was sold on wholesale price. 4.3.3 Pricing and Information In Baglungbazar, there were 10 traders engaged in vegetable marketing and 4 among them were involved both in retail and wholesale transactions. One Co-operative Association in Baglungbazar is involved in vegetables marketing which comprises of 7 village level societies with 364 members each with Rs. 500 per share. As reported by the farmers, they had virtually no influence on price determination as they lacked access to price information. Table 38: Prices of Vegetables in Baglungbazar, 2061

Unit = Rs per kg. Months S.No Commodity Bai. Jes. Asa. Sra. Bha. Asw Kar. Mar Pou. Mag Fal Cha

Whole. 16 14 10 10 10 8 8 6 6 6 6 6 1 Cabbage Ret. 20 16 12 12 12 10 10 8 8 8 8 8 Whole. 40 40 40 40 50 35 30 30 20 15 10 24 2 Cauliflower Ret. 48 48 45 45 58 40 35 34 25 20 15 30 Whole. 20 20 25 15 20 30 30 25 25 18 10 15 3 Tomato Ret. 27 26 30 20 25 40 40 30 30 22 15 20 Whole. 15 - - - - - - - - - - - 4 Radish Ret. 20 - - - - - - - - - - - Whole. 35 35 30 25 20 20 15 15 - - - - 5 Okra Ret. 40 40 35 30 25 25 20 20 - - - - Whole. 40 40 35 35 30 25 25 20 25 - - - 6 Beans Ret. 45 45 40 40 35 35 35 35 35 Whole. 35 40 - - - 15 15 12 12 16 20 - 7 Carrot Ret. 40 50 - - - 20 20 18 18 20 30 - Whole. 30 30 25 25 20 20 15 15 20 - - - 8 Bittergourd Ret. 35 40 30 30 25 25 20 20 25

Source: District Agriculture Development Office, Baglung Ret =- Retail, Whole=Wholesale Table 38 shows that prices of cauliflower ranged from Rs. 10 to Rs. 50 per Kg on wholesale transactions and from Rs.15 to Rs. 58 per kg on retail transactions. It also shows that even in case of tomato, okra, beans, carrot and bitter gourd prices were found quite high in summer and early summer months. These prices remained very attractive/encouraging in the part of producers.However, it was learnt that farmers did not compare their prices with the production costs incurred on vegetables because of their ignorance about cost and margin potentials. 4.3.4 Marketing Costs and Margins Surveyed farmers growing off-season vegetables in Kudule sold cabbage and tomato in significant quantity. Producers of Farse produced and sold cauliflower, cabbage and tomato in summer season. Marketing costs and margins for selling these products to Baglungbazar in summer season (Ashadh, 2061) is given as follows (Table 39)

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Table 39: Marketing Costs and Margins of Off-season Vegetables in Baglung/Parbat, 2061 (Rs./quintal in Ashadh 2061)

Description Farse Kudule Production Cost Cauliflower 621 NA Cabbage 385 NA Tomato 387 431 Farm Gate price Cauliflower 1150 - Cabbage 850 750 Tomato 1325 1250 Farmer’s Returns in production Cauliflower 529 (85.18 %) - Cabbage 465 (120.77 %) - Tomato 938 (242.37 %) 819 (190.02 %) Farmer/ Supplier’s Marketing Cost from Farm Gate to Market centre: Packaging material (Doko) (Rs 90/ each, 90 days life, 30 times used, capacity 40 kg) 8 8

Cost on porter 100 100 Physical loss Cauliflower (2%) 23 - Cabbage (2%) 17 15 Tomato (5%) 66 45 Farmer/Supplier Marketing Cost (inhancing farm gate price) Cauliflower 1281 - Cabbage 975 873 Tomato 1499 1403 Retail Sales price Cauliflower 1400 - Cabbage 1150 1150 Tomato 1700 1 7 00 Gross Marketing Margins Cauliflower 250 - Cabbage 300 400 Tomato 375 450 Net Marketing Margins Cauliflower 119 - Cabbage 175 277 Tomato 201 297 Source: Field survey, Feb. 2005 Note: NA means Not Available. Figure in the parenthesis indicates profit in percent.

Above analysis indicates that farmers have handsome returns in off-season vegetables production. Traders/ farmers who supplied these products and sold at Baglungbazar also received some profits by involving in the marketing functions. 4.3.5 Demand and Supply Although, there were about 10 traders transacting off-season vegetables including one cooperative association, quantity of absorption in the local market was limited. Pokhara was comparably a bigger market in terms of absorbing higher quantity of off-season vegetables (see Tables 40 and 41 for quantity supply from Baglung and potentials of marketing in Pokhara respectively).

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Table 40: Potential Increase in Supply of Off-season Vegetables by Traders in Baglung, 2061

Commodity Quintal/day Cauliflower 10

Cabbage 10

Tomato 10 Source: Key Traders, Baglung

Table 41: Potentials of Marketing in Pokhara, 2061

Commodity Potentials Cauliflower Very good Cabbage Very good Radish Very good Tomato Very good Cucumber Very good Broad leaf Very good Source: Cooperative Association Estimates of supply of off-season vegetables from Baglungbazar to out-district markets showed that the amount of about 50 quintal and 20 quintal of off-season vegetables was daily supplied to Pokhara and Kusma and 7 quintal each in Ghodebade and Myagdi respectively. Farmers raised the issue on low price received in their share compared to those of the traders. However, this could be enhanced if their participation in marketing activities increased from the farm-gate sales to wholesale and retail distribution at several market chains. In Baglung, it was found that farmers from vegetable production pockets had organized and developed vegetable cooperative societies for both wholesale and retail marketing.

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A Case Study of Cooperative Vegetable Marketing Association, Baglung:

4.3.6 Gender in Marketing

Women contributed equally as their male counterparts in the marketing processes. Their contribution was even higher in cleaning /packaging. Table 42: Women Involvement in Off-season Vegetable Marketing in Baglung, 2061

Operation Farse (%) Kudule (%) Total

Harvesting 50.66 53 51.83 Cleaning/Packaging 51.34 53 52.17 Transporting 52.34 50 51.17 Selling 48.67 43 45.84 Overall 50.75 49.75 50.25 Source: Field survey Women involvement was higher in harvesting, cleaning and transporting of off-season vegetables. Selling vegetables was mostly performed by the males (54.16%).

Established: 2058/59, Members: 364 Share: Rs.500 each Share sold 182,000

List of associates:

DADO Rs.75, 000 DIRDC Rs.106, 000 DDC Rs.25, 000 DFID Rs.25, 000 Municipality Rs.10, 000 Present Credit Balance Rs.185,000

Branches (7 societies) Dhodeni Singam Kudule Malika Bhakunde Tityan Ramrekha Presently, marketing of vegetable is contracted out to cooperative member Khedulal Acharya. The contract agreement is since 2061 for 3 years. Rent: 2750/month, water electricity: 300/month Commission to cooperative association against sales is Rs.0.25/Kg Present sales of Association: Winter 200-500 Kg/day summer 1500Kg/day Outflow to other districts: 200Kg/day Supplied to other districts: Kushma, Pokhara

Wholesale Purchasing Price/Kg: Cauliflower Rs.10 Cabbage Rs.9 Radish Rs.7 Tomato Rs.15

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Table 43: Participation in Decision-making

Cropping decision by Farse Pocket Kudule Pocket Total Husband 6 1 7 Wife 2 0 2 Both 6 14 20 (66.67) Family (jointly) 1 1 Total 15 15 30 Loan decision by Husband 2 2 4 Wife 0 0 0 Both 1 13 14 (77.78) Family (jointly) Total 3 15 18 Marketing decision by Husband 3 2 5 Wife 2 0 2 Both 5 13 18 (64.28) Family (jointly) 3 0 3 Total 13 15 28 Source: Field Survey, Feb. 2005 Note: Figure in the parenthesis indicates percentage. Table 43 shows farm decisions were made by both husband and wife in majority of the farm households. Husband and wife jointly made crop planning decisions in 66.67 % farm households, loan decisions in 77.78 % farm households and marketing decisions in 64.28 5 households. Either husband or wife, made such decisions alone, in few cases only. 4.3.7 Issues and Problems

? Cooperative marketing system is developed for vegetable marketing, but the organization is not yet effectively functioning due to the lack of knowledge and experience of members (farmers) about cooperative society and its marketing functions.

? Production of off-season vegetables comprises of small quantities to account for economy of scales. And also delivering the products to the traders on daily basis during the season is lacking.

? Farmers lack knowledge about marketing such as, market information, grading, packaging, pricing, quantity of demand and quality.

? Both scarcity and high charge of porter/labor is observed inflating the off-season vegetables transport cost from the farm to road heads.

? Farmers are found rigid in price determination as they have no access to the knowledge about market fluctuations and hence have reduced their ability to quickly make necessary adjustments.

? In Baglungbazar, there is lack of marketplaces in smoothly carrying out buying and selling activities of agricultural commodities. Farmers are compelled to sale their products at the roadsides.

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? Farmers and traders do not have easily access to transport for transporting their products in smaller quantities from the road heads to the distant markets.

? All the cooperative members are not selling their produce to the cooperative societies resulting into the rural cooperative societies and district cooperative association in a limbo.

4.4 Overall Marketing Competitiveness in Study Area The marketing margin of agricultural product in question, which is determined by marketing costs and sales prices, is taken as a basic indicator for finding its marketing competitiveness. It is a relative term in the sense the competitiveness of a product can be measured between/among brands or sources. Higher the marketing margin among the competing produces or brands indicates higher level of competitiveness. Better profitability in marketing a product or brand indicates its competitiveness in trade, among other determining factors. Given below is the summary table of marketing competitiveness of off-season vegetables in the study area that covers Baglung/Parbat, Kaski and Palpa districts.

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Table 44: A Comparative Picture of Marketing Competitiveness in Study Areas (Rs/ quintal)

Baglung/Parbat Kaski Palpa Description Kudule Farse Bharat

Pokhari Hemja Dobhan Madan

Pokhari Marketing Cost/quintal 1.Farm Gate price Cauliflower Cabbage Tomato

1150 850 1325

- 750 1250

1800 1300 2500

2000 1500 3000

2100 1600 2600

2000 1500 2500

2. Marketing Cost ( Farm to Market centre) Packaging cost Porter Cost Bus/Van Transport Market Tax

8 100 - -

8 100 - -

9 100 50 3

9 40 30 3

9 - 25-35 -

9 - 25-35 -

3.Total Physical Loss (%) Cauliflower Cabbage Tomato

5 5 15

5 5 15

16 16 33

15 15 30

13 13 20

13 13 20

4.Farmer/ Supplier’s selling price Cauliflower Cabbage Tomato

1400 1150 1700

- 1150 1700

2400 1800 3400

2400 1800 3400

2300 1800 2900

2300 1800 2900

5.Farmer/Supplier’s Net Marketing Margin Cauliflower Cabbage Tomato

NA 277 297

119 175 201

384 299 541

278 188 168

78-88 93-107 211-280

131 146-236 256

6.Wholesaler’s Selling Price Cauliflower Cabbage Tomato

- - -

- - -

2800 2100 4000

2800 2100 4000

- - -

- - -

7.Wholesaler’s Net Marketing Margin Cauliflower Cabbage Tomato

- - -

- - -

294 212 226

294 212 226

-- - -

- - -

8.Retailer’s Selling price Cauliflower Cabbage Tomato

- - -

- - -

3500 2700 5000

3500 2700 5000

3000 2500 4000

3000 2500 4000

9.Retailer’s Net Marketing Margin Cauliflower Cabbage Tomato

- - -

- - -

288 257 267

288 257 267

274-370 222-320 328-465

274-370 222-320 328-465

Source: Field Survey, 2005

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In most of the study areas, farmer/suppliers have to incur additional cost on porters resulting in inflated aggregate marketing cost whereas in the areas with transport facilities, the aggregate marketing cost is relatively low. The physical loss in the process of cauliflower and cabbage marketing is upto 16 percent whereas it is 33 percent in case of tomato. Physical loss is high due to the involvement of large number of intermediaries including farmers in the selected commodities. A big difference is seen in farm gate prices of the production pockets in Kaski, Baglung/ Parbat and Palpa. Farmers in the production areas of Palpa have relatively fetched quite high farm gate prices because of farmers' firmness and greater control on price determination process due to the limited supply. The selected off-season vegetables have potentials for competing in the domestic and export markets mainly due to two reasons: first is the possibility of reducing farm gate prices in most of the production areas and the second the prospect of reducing the physical losses during transactions/ storage and transport costs. Prospects are enormous to enhance production of these off-season vegetables for meeting the increasing demand both in the domestic and export markets. Although, prices of these commodities may decrease with the increasing supply in the coming years, it is likely that the profit margins will still be there due to the potentials of high demand (increasing demand due to increasing income and population) compared to supply. 5. Ginger Marketing

5.1 Palpa 5.1.1 Marketing Functions Farmers cleaned ginger by removing soil immediately after the harvest. Farmers' practices in the surveyed households are tabulated as follows: Table 45: Cleaning of Ginger in Palpa, 2061

(No of farmers)

S.N. Method/Technique Arya Bhanjyang Bhairabsthan Total A No need 0 0 0 B By removing soil 15 15 30 C By removing soil plus using

water 0 0 0

Total 15 15 30 Source: Field Survey, 2005 Table 45 shows that all farmers under survey in both the production pockets cleaned ginger by removing soil after harvesting. Through such products were being sold without complaints in the domestic markets, these were not regarded as clean ginger in Indian markets compared to the ginger supplied from South India and China. Even then, the natural quality of Nepal's ginger with hotness /pungency satisfied the consumers' needs at the households and the need of spice industries.

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Grading System of grading ginger as whole ginger and piece-ginger was developed in this district. It was developed to cater the demand of India's markets. Table 46: Grading of Ginger in Palpa, 2061.

(No of farmers)

Graded or not Arya Bhanjyang Bhairbsthan Total Done 10 (66.67) 13 (86.67) 23 (76.67) Not done 5 (33.33) 2 (13.33) 7 (23.33) Total 15 (100.00) 15 (100.00) 30 (100.00) Source: Field Survey, Feb 2005 Note: Figure in the parenthesis indicates percentage. A total of 23 farmers (76.67%) graded ginger into 2 groups (i) whole-ginger and (ii) piece-ginger. As per the table 69 majority of farmers in Bhairbsthan area graded ginger into 2 grades as per the requirement of buyers for Indian markets. Storing The farmers of Bhairbsthan did not feel necessary to store ginger because the product was immediately sold to the local cooperative society after harvest. In Arya Bhanjyang, farmers stored the product after harvesting. Table 47: Storing of Ginger in Palpa, 2061

(No of farm household) S.N. Storing Method Arya

Bhanjyang Bhairabsthan Total

A No need 1 (6.67) 15 (100.00) 16 (53.33) B In jute bag, in house 10 (66.67) 0 10 (33.33) C Underground 4 (26.66) 0 4 (13.34) Total 15 (100.00) 15 (100.00) 30 (100.00) Source: Field survey Note: Figure in the parenthesis indicates percentage. Nearly half (53.33%) farmers under the surveyed areas did not feel necessary to store ginger, whereas rest of them stored by two methods: (i) inside house in jute bags and (ii) in the pits. Packaging Jute bags and Doko were used as packaging materials in Palpa for transporting and selling the product to the local traders in Arya Bhanjyang. Some farmers used Doko for packaging. Transporting Both production pockets were connected with roadways. But, the farmers surveyed had to bring their product by hiring porter for about 15 to 20 minutes (about 1 Km) to reach the road heads. As their farms were not connected with the roadways, they had to use porters for transporting the products from the farms to road heads, where collection center was being operated.

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Fig. 8 Marketing Channels of Ginger in Palpa

5.1.2 Marketed Surplus and Markets After meeting the requirement of household consumption (2.65%) and seeds (19.43%) 667.2 Kg (77.92% of production) ginger was marketed as surplus per household. Table 48: Marketed Surplus of Ginger in Palpa, 2061

(In Kg per household) Description Arya Bhanjyang Bhairabsthan Total Household consumption 30.8 (4.10) 14.6 (1.52) 22.7 (2.65) Seed requirement 166.67 (22.20) 166 (17.26) 166.34 (19.43) Marketed surplus 553.4 (73.70) 781 (81.22) 667.2 (77.92) Total 750.87 (100.00) 761.6 (100.00) 856.24 (100.00) Source: Field survey, Feb 2005 Note: Figure on the parenthesis indicates percentage In Bhairabsthan, all 15 farmers sold their ginger at the collection center run by Ginger Cooperative Society in Palpa facilitated by Rural Economic Development Association, whereas, all 15 farmers sold the product at the local market in another production area. In both areas, all the farmers sold their products on wholesale price.

Producer

Wholesaler Retailer Cooperative/Collector Supplier

Consumer (Nepal) Importer (India)

Retailer (India) Wholesaler (India) Consumer (India)

Processor (Sutho)

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5.1.3 Pricing and Market Information

Price of ginger was included in the market information bulletin of AEC, which was used as the reference price for the cooperative societies transacting ginger in Palpa. The price of ginger in local area was highly influenced by the cooperative organized by the farmers. In another production area, 73.33 percent farmers interacted with traders effectively in determining the prices. Ginger of Palpa was sold at Rs 160 per Kg in Indian markets one year ago. This year, it fetched only Rs 55/Kg. owing to higher production in India. Compared to the ginger produced in Kerala and China, Nepal's ginger received Rs 7 lower per Kg. As per REDA information, Kerala and China ginger has more oleoresin content suitable for producing preservative, which is paid about NRs 7/Kg higher compared to Nepal product. The consumers in India's market like Gorakhpur, Lucknow, Banaras and Delhi prefered Nepal's ginger. Nepal ginger was very much liked by consumers due to its hotness/ pungency suitable to prepare Chatni (Sausage). Pre- matured ginger was more preferred in making Chatni. Secondly, the spice industries preferred Nepal's ginger because hot ginger is considered more suitable for producing spices as reported in the field survey. 5.1.4 Processing REDA was supporting farmers preparing dry-ginger and other items such as spice powder and candy in Palpa. About 13 micro entrepreneurs have been developed from its support in

A Case Study

Establishment: Rural Economic Development Association (REDA) was established in 1995, Poush 17. Areas: 55 VDCs, 2173 households, 179 groups and 8 cooperative societies. Ginger collection centers: collection center 17, sub center 5; district collection (Tansen). District level organization is District Ginger Production Cooperative Association. There are the Ginger Producer Cooperative Societies at village level. District Association has been established at 9 districts and there is vision of forming regional and national level associations. Of the total 3036 mt equivalent to Rs 960 lakhs outflow of ginger from the district, 55 percent is transacted by cooperatives facilitated and supported by REDA. In the last season, farm gate price was Rs. 24.75 per Dharni of which Rs. 0.25 was charged as commission by the cooperative organization. Market information system: Cooperative Association every year studies the markets of India. It also disseminates the price collected by AEC and based on the information price is determined. There are 13 micro enterprises developed with the support of REDA who produce Sutho, spice dust and candy. Institutional base: Cooperative has well defined rules and regulation.

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Palpa. Candy could fetch as high as Rs 400 per Kg in local areas. However, the low capacity of these enterprises constrained them to supply beyond the local market. 5.1.5 Marketing Cost and Margins Costs and potentiality of trading the Palpa ginger at Butwal market are as follows: Table 49: Marketing Costs and Margins of Ginger in Palpa, 2061

(Rs per quintal including marketing at Butwal in Marg) Description Arya Bhanjyang Bhairabsthan 1.Production cost 908 907 2.Farm gate price 1500 1500 3.Farmer’s returns in production 592 (65.19 %) 593 (65.38 %) 4.Farmer/Supplier’s Marketing from the Farm Gate to Market Centre: Package cost 25 25 Cost on porter 25 25 Physical loss (3%) 45 45 Transport 50 60 Municipality tax 15 15 DDC tax 25 25 5.Farmer/ Supplier’s total marketing cost( including buying price)

1695 1705

6. Farmer/Supplier’s Sales Price 2000 2000 7. Farmer/Supplier’s gross marketing margin

500 500

8. Farmer/Supplier’s net Marketing margin

305 295

Source: Field Survey, 2005 While supplying ginger from the production area to Butwal, suppliers had net marketing margin of Rs 305 and 295 in Arya Bhanjyang and Bhairabsthan respectively. Traders were earning attractive margins due to less competitive markets in Tarai and bulk transportation of the produce. The tariff levied by municipality and DDC have inflated the marketing cost which could be waved to make this product competitive. Long time consumed by Indian authority in the process of plant quarantine test had discouraged the exporters/traders in exporting to India. Moreover, raw ginger has not been allowed to be imported in India as reported by the field respondents. 5.1.6 Demand and Supply If ginger is collected at the strategic locations/points, it may ease to export (including the added quantity) at Gorakhpur, Lucknow, Banaras and Delhi markets. Likewise, good quality Sutho if produced locally there is potential to be sold to Dabar Nepal. If the skill and capacity of entrepreneurs/ginger processors in Palpa are enhanced in terms of quality and quantity production, the domestic absorption capacity of ginger within the country would also be increased. 5.1.7 Gender in Marketing Women were more involved in harvesting and cleaning/packaging activities in this district sharing the workload by 62.5% and 68% of respectively.

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Table 50: Women Involvement in Ginger Marketing in Palpa (In percentage to total work)

Activities Arya Bhanjyang Bhairabsthan Total Harvesting 62 63 62.5 Cleaning/packaging 69 67 68 Transporting 41 53 47 Selling 34 49 41.5 Source: Field Survey, 2005 5.1.8 Issues and Problems

? Farmers of Bhairabsthan are receiving low-prices compared to other production pockets/ areas. They reported lower prices received from the Ginger Producers Cooperatives than existed in the local market prices.

? Lack of processing industry in the production areas has constrained the producers to sell their produce on a regular basis.

? Vehicle could not be made available for visiting the distant markets by producers /traders.

? Organized collection center is also lacking in the vicinity of the production areas.

? Farmers in Arya Bhanjyang are lacking technical knowhow about production, processing and marketing. Likewise, farmers are lacking the market information services.

? Government of India requires a long time for plant quarantine test since the testing facilities are not available in all their check-posts.

5.2 Syanja

5.2.1 Marketing Functions

Cleaning Cleaning of ginger was performed by removing soil and flushing by water. Table 51: Cleaning of Ginger in Syanja, 2061

Cleaning Method Putalibazar Jagat Bhanjyang Total Removing soil 15 (100.00) 15 (100.00) 30 (100.00) Removing soil and applying water

0 0 0

Other technique 0 0 0 Source: Field Survey, Feb 2005 Note: Figure in parenthesis indicates percentage. Data revealed that all the 30 (100%) farm households cleaned ginger by removing dirt/soil after harvest with the purpose of improving the product quality acceptable by the traders and consumers in both the domestic and export markets.

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Grading Only one farm household in Putalibazar, among the surveyed households, graded ginger into small and big sizes and the remaining farmers did not follow this. However, sorting ginger by removing the rotten ones was felt as a matter of concern by majority of the farmers. Most of the farmers sold ginger immediately after harvesting. Farmers, therefore, did not need the storage facility owing to this reason. But, few farmers stored ginger by digging pits for selling their products at a suitable time when prices were up. Ginger stored in the pit was sold at Rs 40 per Kg for seed purpose during the month of sowing. Packaging The jute bags, Doko and plastic crates were used by the farmers to pack the ginger for marketing. Table 52: Packaging of Ginger in Syanja, 2061 Method Putalibazar Jagat Bhanjyang Total Total 15 (100.00) 15 (100.00) 30 (100.00) Plastic crate only 0 0 0 Jute bag only 0 7 (46.67) 20 (66.67) Jute bag + plastic crate 13 (86.78) 3 (20.00) 5 (16.66) Jute bag + Doko 2 (13.32) 5 (33.33) 5 (16.66) Doko only 0 0 0 Source: Field Survey, 2005 Note: Figure in the parenthesis indicates percentage In the surveyed areas of this district, 20-farm households (66.67%) used only jute bags for packaging. About 5% farm households initiated using plastic crates along with jute bags whereas five percent used Doko and jute bags only. Compared to the jute bag packaging, physical loss of marketing was lower in Doko. Furthermore, it was much lower in plastic crates. The loss in transport and selling at local market was nominal in plastic crates. The loss was about 1 percent in transport and selling of produce packed in Doko, whereas it was about 3% when packed in jute bags. Transporting Most of the farm households sold ginger at the local markets where large number of collectors and retailers were present. They used human/ labor porters to transport to the local market. Table 53: Transport of Ginger in Syanja, 2061

(No of households) Means of Transport Putali bazaar Jagat Bhanjyang Total Porter 15 (100.00) 15 (100.00) 30 (100.00) Bus 0 0 0 Truck 4 (26.67) 0 4 (13.33) Pickups 0 0 0 Total 15 (100.00) 15 (100.00) 30 (100.00) Source: Field Survey, Feb 2005 Note: Figure in the parenthesis indicates percentage. All the farmers used human labor porter for transporting ginger from farms to the collection centers. In Putalibazar, four farmers (26.67%) used truck for transporting products to Syanja bazar. As these production pockets are adjoined with the highway, the transport cost from the farm to collection point is nominal. The transportation cost here was efficient because the

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product was transported in bulk by using truck either by a farmer individually or by a group of farmers.

Fig. 9 Marketing Channels of Ginger in Syanja

Processing The surveyed households were not involved in ginger processing. Main reason for this was that no markets did accept the product processed from the traditional method. Appropriate technology for processing was lacking with the farmers. 5.2.2 Marketed Surplus and Markets A small portion of ginger production is consumed at farm households and small part stored for seed purposes. The remaining major portion is marketed by the farmers. Table 54: Marketed Surplus of Ginger in Syanja, 2061

(Quantity in Kg/year) Description Putali Bazar Jagat Bhanjyang Total Household consumption

21.58 (2.46) 15.26 (1.90) 18.44 (2.19)

Seed requirement 162.66 (18.54) 123.33 (15.33) 143.0 (17.0) Used for drying 0 0 0 Sales 693.3 (79.00) 666 (82.77) 679.65 (80.81) Total 877.54 (100.00) 804.54 (100.00) 841.66 (100.00) Source: Field Survey, Feb 2005 Note: Figure in the parenthesis indicates percentage.

Producer

Wholesaler Retailer Collector/Supplier

Consumer (Nepal) Importer ( India)

Retailer (India) Wholesaler Consumer (India)

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In selected production pockets of Syanja, 2.19 percent of ginger production was consumed at households, 17.0 percent was saved for seed and the remaining 80.81 percent was marketed. As there were ginger collectors and retailers in the local markets, farmers sold their produce to them. Only 4 farmers in Putali Bazar visited district headquarter market (Syanja Bazar) and sold their products. They were much more conscious about the prices and other risks associated with marketing. Of the total farm households, 14 farm households (93.33%) sold their produce on wholesale price only, whereas 1 (6.67%) sold on both wholesale and retail prices. 5.2.3 Pricing and Information System The selected production pockets were connected with telephone lines. Farmers and traders were aware of price information. It is reported that they had price information of Syanja Bazar and some of the farmers had information of prices existing in Pokhara agriculture wholesale market also. As the farmers were conscious, they interacted with the traders equally in determining the prices. Table 55: Price Determination System of Ginger in Syanja, 2061

(No of farmers) S.N. Pricing Technique Putali Bazar Jagat Bhanjyang Total A Traders decide 0 0 0 B Little impact of farmers 0 0 0 C Full interaction between

farmers & traders 15 (100.00) 15 (100.00) 30 (100.00)

D Other method 0 0 0 Total 15 15 (100.00) 30 (100.00) Source: Field Survey, Feb 2005 Note: Figures in the parenthesis indicate percentage. Farmers in Syanja are educated and also have access to market information and pricing. Prior to selling, they collect markets information and negotiate with traders in such a way that price is determined through the interaction of both traders and the farmers. Last year, farmers sold ginger at Rs.11 to Rs.19 at the local market and at Rs.15 to Rs.24 per Kg at Syanja Bazar. Farmers' reached upto Syanja Bazar to sell their products. A few farmers beyond the selected production pockets were linked with Kalimati market in Kathmandu to sell their products, as informed by BDS-Map Project. Even then, majority of the farmers were not aware about demand and supply situation of northern markets of India and also were not familiar about group/cooperative marketing. Price information of major markets of Nepal was available with District Agriculture Development Office in the district level. Some of the educated farmers used this information. But, systematic price dissemination process to reach the production pocket was not developed so far. Only a few farmers had recorded the cost of production data. 5.2.4 Marketing Cost and Margins The marketing costs and margins of ginger from the farmers to collection center is analyzed hereunder:

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Table 56: Marketing Cost and Margins of Ginger in Syanja, 2061, Marg Rs/Quintal)

Description Putali Bazar Jagat Bhanjyang 1.Production Cost 660 703 2.Farm Gate price 1400 1100 3.Farmer’s Returns on Production 740 (112.12 %) 399 (56.47 %) 4.Farmer/Supplier’s Marketing Cost from Farm Gate to Market Centre: Packaging Cost 30 30 Truck/transport 32 20 Loss (3%) 42 33 Municipality tax 5 5 DDC tax 14 14 5.Farmer/Supplier’s Total Marketing cost 1523 1202 6.Farmer/Supplier Sales Price 1700 1500 7.Farmer/Supplier’s Gross Marketing 8.Margin 300 400 9.Farmer/Supplier’s Net Marketing Margins 177 (10.41 %) 298(19.86 %) Source: Field survey, 2005 Profitability margin was marked against supplying ginger from the farms to the near by collection centers.There were several collectors around the collection center, who supplied the purchased ginger to the local retailers.Field survey reaveled only a few collectors supplied ginger to the Butwal wholesalers who in the process sold the product to Indian traders. Table 57: Marketing cost and Margins of Ginger in Selling at Gorakhpur, Marg, 2061 Description NRs per Quintal Price at collection center 1400 Loading 2 Packaging 30 Transport by Truck (NRs 14400/truck= 60 q) 240 Loss (5%) 70 Municipality tax (Nepal) 5 DDC tax (Nepal) 14 Miscellaneous (including Custom duties) 17 Market fee (2.5%) at Gorakhpur 35 Unloading 5 Traders’ commission (5%) 70 Total Marketing cost 1888 Sales price 6400 Gross Marketing Margin 5000 Net Marketing Margins 4512 Source: Field Survey Table 57 shows substantial amount of profit against supplying the ginger from Syanjabazar to Gorakhpur. Until last year, supply to Gorakhpur was smooth and suppliers, farmers and consumers were all benefited. But, the marketing system through this channel was blocked recently due to the new trade policy of India that required licensed importers and quarantine clearance. 5.2.5 Demand and Supply The discussions in District Agriculture Development Office revealed that farmers also supplied ginger to Butwal markets, in addition to the district markets. Traders in the collection centers supplied their products to Kathmandu (Kalimati Agriculture Market) and cooperative collection center in Tansen.

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Last year, local collectors supplied nearly 105 mt of ginger to Kalimati Agriculture Wholesale Market Centre and 132 mt to Tansen cooperative collection center, as informed by BDS- MAPs ( Business Development services- Marketing, Processing and Production). It is seen that there is potential for increased supply of ginger at Tansen cooperative collection center and Butwal that can supply to the northern border markets of India. Assessing the potential demand of dried ginger in the market, farmers in this area were interested to produce dry ginger (Sutho). But, the technology for producing quality Sutho was lacking with the farmers. Traders were also not eager to invest in setting up such enterprises. In Syanja, BDS-MAPs project was assessing the processing potential. It was found that there is potential to collaborate among BDS-MAPs, DFTQC( Department of Food Technology and Quality Control) and DOA(Department of Agriculture) in transfering appropriate technology for ginger processing, establishing linkages with industries including Dabar Nepal. 5.2.6 Gender in Marketing

In cleaning/packaging and transporting activities, women' involvement was higher than men at 61.5 and 53.5% respectively. Table 58: Women Participation in Marketing Activities in Syanja, 2061

(Participation percentage to total labor participation) Activity Putali Bazar Jagat Bhanjyang Aggregate Harvesting 37 35 36 Cleaning/packaging 70 53 61.5 Transporting 53 54 53.4 Selling 30 37 33.5 Source: Field Survey, Feb 2005 On an aggregate, women participation in harvesting and selling was 36% and 33.5% respectively. As women farmers had to travel a long distance for marketing their participation in selling activities was marginalized. Women in Decision Making In order to know the women's role, their involvement in crop planning decision, loan decision and marketing decision has been studied and analyzed here.

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Table 59: Women Participation in Decision Making in Syanja, 2061 (No. of farm household)

S.N. Decision Putali Bazar Jagat Bhanjyang Total Crop Planning by A Husband 0 0 0 B Wife 1 (7.14) 2 (13.33) 3 (10.34) C Both 8 (57.15) 7 (46.67) 15 (51.73) D Family jointly 5 (35.70) 6 (40.00) 11 (37.93) Total 14 (100.00) 15 (100.00) 29 (100.00) Loan decision by A Husband 1 (7.69) 0 1 (4) B Wife 0 1 (8.33) 1 (4) C Both 8 (61.54) 7 (58.33) 15 (60) D Family jointly 4 (30.77) 4 (33.34) 8 (32) Total 13 (100.00) 12 (100.00) 25 (100.00) Marketing Decision by A Husband 0 0 0 B Wife 0 1 (8.34) 1 (4.77) C Both 6 (66.67) 7 (58.33) 13 (61.90) D Family jointly 3 (33.33) 4 (33.33) 7 (33.33) Total 9 (100.00) 12 (100.00) 21 (100.00) Source: Field survey, Feb 2005 Note: Figure in the parenthesis indicate percentage In the crop planning decisions, women were very much involved in decision-making process. Decisions were made jointly by men and women in 51.73 percent of the households. In the rest 37.93 percent decisions were made through joint consultation among the family members. In loan related decision also, women involvement was significant. Men and women together made loan related decisions in 60 percent of the households and family members jointly decided in 32 percent of the households. In marketing decisions, men and women together made decisions in 61.90 percent households and family jointly decided in 33.33 percent of the households. All these data above prove that women are actively involved in the decision-making processes in majority of farm households. 5.2.7 Issues and Problems

? Large number of farmers are lacking technical know how about the development of their enterprises and export facilities.

? The collection centers in the roads and near the production areas are not organized. ? These collection centres are not properly managed and have no linkage with

wholesale market centers. ? Although production pockets are connected with roadways, transport vans/trucks are

not available at times of farmers' need. ? Mechanism of marketing/pricing information is lacking in commercial production

pockets and existing collection centers. ? Appropriate technology for processing ginger is lacking with farmers inspite of their

eagerness to adopt it. Industries relating to ginger-based products are not developed.

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? Ginger is not exported to the markets in India as in the past and this has made the farmers worried and concerned as to how to sell their remaining surplus harvests.

? Group and cooperative marketing is not practiced in ginger marketing that has inflated the marketing costs.

? The export potential in the markets of India, Bangladesh and other export markets are not well explored and harnessed by the farmers and traders.

? Although ginger was a highly profitable crop, the required extension and support programs were not proposed for the fiscal year during the survey period.

5.3 Tanahu

5.3.1 Marketing Functions

Cleaning All the ginger producers in Tanahu district cleaned it immediately after harvest. Farmers removed soil as preferred by the consumers. Table 60: Ginger Cleaning in Tanahu, 2061

(No. of farmers) Method Kaun Shivapur Majhakot Total Not cleaned 0 0 0 By removing soil 12 18 30 By using water 0 0 0 Total 12 18 30 Source: Field Survey, Feb 2005 In both the surveyed production pockets, all the farmers cleaned the product by simply removing the dirt as preferred by the consumers in the domestic markets. Grading Farmers did not follow grading system. They simply sorted out the harvested ginger and removed the rotten ones before carrying it to market. Storing Among the surveyed ginger farmers 9 (30%) did not feel necessary to store the product because they could immediately sell it after harvesting. Other 17 farmers (56.67%) kept ginger on the locally produced mat and the rest of the farmers (13.33) stored it by digging the pit. Table 61: Ginger Storing in Tanahu, 2061

(Number of farm households) S.N. Storing Method/need Kaun Shivapur Majhakot Total A Not necessary 5 (41.67) 4 (22.22) 9 (30.00) B Keeping on mat 3 (25.00) 14 (77.82) 17 (56.67) C Storing in underground

pits 4 (33.33) 0 4 (13.33)

Total 12 (100.00) 18 (100.00) 30 (100.00) Source: Field Survey, Feb 2005 Note: Figure in the parenthesis indicates percentage.

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The ginger was stored in the pit in Kaun Shivapur with a view to sell during the lean season. The farmers in Majhakot production pockets, however, did not follow this method. Packaging The packaging in this district is in Doko and jute bag. Doko was used in harvesting and transporting to the local market. But Doko is more useful for selling the product at the distant markets. Table 62: Packaging of Ginger in Tanahu, 2061

(No. of farm household) S.N. Packaging method/

technique Kaun Shivapur Majhakot Total

A Jute bag 8 (66.67) 18 (100.00) 26 (86.67) B Doko 4 (33.33) 0 4 (13.33) C Plastic crate 0 0 0 Total 12 (100.00) 18 (100.00) 30 (100.00) Source: Field Survey, Feb 2005 Note: Figure in the parenthesis indicates percent All the ginger produced in Majhakot production pocket was packed in jute bags for transporting and marketing. No adverse effect was observed on the quality of product in such packaging, since the jute bags permitted required ventilation for the products.

Fig. 10 Marketing Channels of Ginger in Tanahu

Producer

Wholesaler Retailer Collector/Supplier

Consumer (Nepal) Importer (India)

Retailer (India) Wholesaler (India) Consumer (India)

Processor (Sutho)

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5.3.2 Marketed Surplus and Markets Commercial ginger production in this district began some 3 decades ago as informed by District Agricultural Development Office. Currently, most of the ginger production is for commercial purpose. Table 63: Marketed Surplus of Ginger in Tanahu, 2061

(Quantity in mt.)

Source: Field Survey, 2005 Table 63 shows the production and marketable surplus of ginger in the major production pockets. As ginger is a cash crop, large portion of the production goes to the market and only a smaller portion of production is stored by the producers for seed use and household consumption. The household use of ginger and marketed surplus in the surveyed households of Kaun Shivapur and Majhakot are as follows: Table 64: Marketed Surplus of Ginger in Surveyed Households, Tanahu, 2061

(Unit in Kg per household) Description Kaun Shivapur Majhakot Total Household consumption 50.8 41.1 45.9 Seed use 252.5 159.1 205.8 Annual sales 1876 812.2 1344.1 Used in drying 0 550 275 Source: Field Survey, 2005 Market Centers Farmer sell large portion of ginger at the farm gates, which is collected and supplied to Kathmandu and Butwal markets by the suppliers. Traders of these markets either sell the product around the city areas or export to the northern border markets of India. A small part of production is sold at nearby/local markets. Lack of knowledge about the changing market trends of domestic and export markets has hindered the farmers to actively participate in the marketing activities beyond the local markets. Another reason for farmers not being involved in supplying to the distant markets is due to the availability of ginger suppliers in the local areas. Forty percent of farmers sold ginger on wholesale prices whereas, the rests sold on both wholesale and retail prices. The detail picture of sales distribution by wholesale and retail price is given in annex 5 and 6.

S.N. Production pocket Varieties Harvesting months

Marketed surplus

1 Sundhara Nase Marg-Poush 257 2 Ranipokhari ,, ,, 138 3 Kot Durbar ,, ,, 137 4 Sabhung Bhagwati ,, ,, 135 5 Majhakot, Kaun Shivapur &

others ,, ,, 432

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5.3.3 Quality of Ginger The ginger produced in Tanahu is Nase (fibred). The farmers on inquiry whether or not they valued consumers' responses about the quality of marketed product that reached in the hands of domestic consumers is given in Table 50. Table 65: Consumers' response about Ginger Quality of Tanahu, 2061 (No. of respondent) Received Reaction Kaun Shivapur Majhakot Total Very good 0 0 0 Good 4 (33.33) 16 (88.89) 20 (66.67) Satisfactory 8 (66.67) 2 (11.11) 10 (33.33) Unsatisfactory 0 0 0 Total 12 (100.00) 18 (100.00) 30 (100.00) Source: Field Survey, Feb 2005 Note: Figure in the parenthesis indicates percentage Nearly two third (66.67%) of the farmers knew that their product considered as good by the domestic consumers. And one-third (33.33%) of them responded their product considered as satisfactory by the consumers. 5.3.4 Ginger Processing Traditionally, dry ginger (Sutho) is prepared by heating ginger keeping on a plate above fire, which is further converted to ball-shapes. In this survey, only 8 farmers (26.66%) of Majhakot were processing very small quantity of ginger. This technique of processing could not be popular because neither it was an easy process nor could it attain the required quality to be easily sold in the markets. Table 66: Processing Cost of Ginger for making Sutho in Tanahu, 2061

(For processing 1 quintal of ginger) S.N. Description Nepalese Rupees 1 Purchase of fresh ginger 2100 2 Labor for heating/drying (1.5 days) 150 3 Material costs (Doko, mat) 20 4 Firewood 100 5 Total costs (25Kg Sutho) 2370 6 Cost per Kg Sutho 94.80 7 Sales value for 25 Kg Sutho 3750 (@Rs 150/Kg) 8 Profit per Kg Sutho 55.20 9 Net profit for 25 Kg Sutho 1380 Source: Field survey, Feb 2005. Note: It is estimated that 4 Kgs of raw ginger is required for producing 1Kg of Sutho. The cost structure for processing 1 quintal of fresh ginger shows that a person engaged in this industry can earn a net profit of Rs 1380 in 1½days. Although, the profit for ginger processing is attractive, the locally processed Sutho is confined only to a small quantity sale in and around the local areas. It is understood that Dabar Nepal has a capacity to purchase a large volume of Sutho provided the quality produced in Nepal is acceptable to it. To actively pursue this, however, there is a need to introduce appropriate (though may be smaller but effective) technology among the farmers and entrepreneurs. This would in turn greatly

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enhance employment and income generation opportunities for a large number of people in the country. 5.3.5 Pricing and Information Farmer's prices in the production areas were influenced due to the presence of wholesalers, which were linked with the buying prices at their intended markets. In the last harvesting season, farmers of the surveyed areas sold their ginger at Rs.22 to 24 per Kg. Farmers in some of the production pockets did not have access to market information such as, prices of others markets, demand and supply situation and the export prospects. It therefore necessitates marketing information mechanism be developed that helps sensitize and enable farmers in making the best possible marketing decisions resulting into increased returns for them. 5.3.6 Marketing Cost and Margins A few ginger collectors visited the farms and purchased ginger at the existing prices, which were then sold on wholesale price to the retailers at Damauli market. Farmers generally brought this product to the market using porters, own or hired and sold on wholesale price to the wholesalers/retailers and the collectors. Table 67: Ginger Marketing Cost and Margins in Tanahu, 2061, Marg

(Rs per quintal) S.N. Description Majhakot Kaun Shivapur 1 Production cost 823 890 2 Farm gate price 2050 2000 3 Farmers returns in

production 1227 (143.08 %) 1110 (124.71 %)

4 Supplying from farm gates to collection center Packaging cost 30 30 Cost on porter 50 100 Total marketing cost 2130 2040 5 Sales price 2300 (Bhimad) 2400 (Damauli) 6 Gross marketing margin 250 400 7 Net marketing margin 170 360 Source: Field Survey, Feb 2005 The marketing margins for selling ginger from Majhakot to Bhimad and Kaun Shivapur to Damauli were Rs.170 and Rs.360 per quintal respectively. It was too tedious and a time-consuming process in transporting and selling particularly when only a small amount of margin was realized. 5.3.7 Demand and Supply As reported by the local traders of Tanahu, about 95% of ginger production was exported to India and the rest was supplied to domestic markets including the local markets in the district. Among the domestic markets, largest quantity was supplied to Birgunj and then to Bhairahawa and Kathamndu markets respectively. As only a well processed and white colored dry ginger (Sutho) is preferred by Dabar Nepal, Tanahu holds a better potential in producing and marketing better quality Sutho. Chamber of Commerce and Industry in

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Tanahu has, however, initiated collaboration with the government agencies in carrying out educational awareness activities in ginger processing. Farmers had no information about the quality/variety and potential demand of Sutho in the country (needed by Dabar Nepal). Appropriate Sutho processing technology by potential producers/entrepreneurs remained a matter of serious concern so far. Furthermore, new trade policy of India has restricted ginger export to India. It has badly affected the prices and sales of Sutho produced by the Nepalese farmers. 5.3.8 Gender in Marketing Women played a greater role in ginger marketing in Tanahu. They share 52.5% in harvesting and 62% in cleaning activities. Similarly, women in 47% households were engaged in selling activities. Women in decision Making Women's involvement in cropping plan and marketing decision can be demonstrated through Table 68: Table 68: Women Participation in Crop Plan and Marketing Decision in Tanahu.

(In no of farm households) S.N. Decision (Cropping Plan by) Kaun Shivapur Majhakot District Total A Husband 0 1 (5.56) 1 (3.33) B Wife 0 0 0 C Both 9 (75) 15 (83.33) 24 (80) D Family jointly 3 (25) 2 (11.11) 5 (16.67) Total 12 (100.00) 18 (100.00) 30 (100.00) Source: Field Survey Feb 2005 Note: Figure in the parenthesis indicates percentage. Both husband and wife made crop planning and marketing decisions in majority of the households (80%) in the district level. In few households (16.67 %), family head made decisions after discussing with all the family members. 5.3.9 Issue and Problems

? The farmers are constrained by the shortage of labors for transporting ginger from the farms to the nearby road heads. They transported their produce using household labor and at times no ginger could be transported at all owing to the unavailability of porter.

? The labour wage for transporting ginger was high resulting into high transport costs. ? Even in the nearby road heads, farmers and traders could not find transport vans

when required for transporting the product to the targeted markets. ? The locally manufactured Sutho was not white colored as required by Dabar Nepal,

which could be a large buyer of Sutho. ? In local method of ginger processing, the peel or outer coverage was not removed and

the buyer did not like such product. At the same time, however, removing peel in ginger processing is very labor intensive, time consuming, tedious and expensive.

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? The solar drier available in market is not cheap and hence not affordable for small farmers and the micro entrepreneurs.

5.4 Overall Marketing Competitiveness of Ginger Following table provides comprehensive data regarding marketing competitiveness of ginger which includes the marketing cost components and the net marketing margins in the selected districts. Table 69: A Comparative Table of Ginger in Study Areas, 2005

(Rs/ quintal) Tanahu Syanja Palpa Description Majkot Kaun

Shivapur Putali Bazar

Jagat Bhanjyang

Arya Bhanjyang

Bhairab sthan

1.Marketing Cost from Farm to Market Centre Packaging 30 30 30 30 25 25 Cost on Porter 50 100 - - 25 25 Bus/ Van - - 32 20 50 50 DDC/ Municipality Tax

- - 19 19 40 40

Physical Loss (%) - - 3 3 3 3 2. Sales price 2300 2400 1700 1500 2000 2000 3. Net Marketing Margin

170 360 177 298 305 295

Source: Field Survey, 2005 Large amount of cost for porters ranging from Rs 25 to 100 per quintal has contributed to the increased marketing cost. Likewise, the local taxes have also inflated the costs. However, the physical losses of ginger during the marketing processes are nominal due to its low perishable nature compared to the vegetables. The selling prices of ginger in the markets range from Rs 1500 to Rs 2400. The net marketing margin for supplier at Majhakot in Syanja is lowest atRs 170/quintal or 8.29%. The market centre of Bhimad is very close to the production pocket of Majhakot in Tanahu that has resulted in nominal price difference including the net profit for traders/suppliers. However, the net marketing margins for the suppliers in other areas ranges from Rs 177 (12.64 %) to Rs 360 (17.56 %). As depicted by the data in the above table, it is evident that there is prospect of lowering the farm gate prices and marketing costs. And it is expected to enhance the competitiveness of ginger which is essential to augment its production for the growing household and industrial demands in Nepal, India and other potential markets. 6. Infrastructural and Institutional Support

6.1 Infrastructures

6.1.1 Palpa

Roads A few off-season vegetable production pockets are linked with the roads. They can use pick-ups and trucks for transporting the products to the markets centers. These transport means are easy, economical and quick to transport the product to the markets. In production pockets of Dobhan an Madan Pokhara, Arya Bhanjyang and Bhairabsthan, many farms are connected to

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the roadways and some of them are about 1-3 kms far away from the road heads. In the farms without road connectivity, there is difficulty in finding porter for transporting products to the road heads. In the above production pockets, telephone services are available. But, in some other production areas, telephone lines are not available. Farmers cannot collect price information from the traders of the targeted markets. Market centers In Madan Pokhara (Nayapati) and Tansen (Tundikhel), agriculture market centers are developed by the local development agencies. Large number of traders and farmers transact during the morning hours when farmers bring their products. In other production areas, physical facilities such as, collection centers/ marketplaces, adequate number of stalls, marketing information and allied services are still not developed. Inputs In production pockets like Dobhan, Madanpokhara, Bhairabsthan and Arya Bhanjyang, there are local suppliers of inputs and agrovets. Yet, farmers have to visit Tansen for purchasing the packaging materials like jute bags and Doko. Plastic crates are not available in Tansen for which farmers have to visit the distant markets which ultimately adds up the packaging costs.

6.1.2 Kaski

Roads Most of the commercial vegetable production pockets such as, Malepatan, Lekhnath, Bharat Pokhari Naudanda and Arba in this district are connected with roads. But, rest of the production pockets are lacking road links, as a consequence of which local producers could not even supply whatever small marketable surpluses they had. Till date, large commercial vegetable production enterprises are not developed substantially, who could hire trucks/pick ups without having to face any constraints at times of need. All these production pockets are, however, connected with power supply. Agriculture Wholesale Market Center Shantiban, Pokhara It was established in Chaitra, 2056 by the Ministry of Agriculture. Total numbers of stalls are 106 in this market including fruits, vegetables and chicken. Besides, this market is providing yard to about 100 farmers, who could sell their produce in both wholesale and retail prices. Market Management Committee is providing marketing information and other required facilities as well as maintaining sanitation. Wholesalers in this market center purchase produces from the farmers on wholesale prices as well as from other wholesale markets with a 10 percent commission over the sales value.This market has maintained linkages with commercial production pockets in the western and central development regions. It has also trade links with Indian and Chinese wholesale markets.

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Sri Complex Wholesale cum Retail Agriculture Market Center, Chipledhunga, Pokhara Sri Complex is a wholesale cum retail agriculture market center, in private sector, spread in an area of 10 Ropanis. This market has 146 stalls including vegetables, fruits, fish/meat, flower and other consumer goods. There are more than one hundred retail stalls of vegetables and fruits around Pokhara city. Large number of vendors is found engaged in transaction. Agri- inputs and Agro-vets Adequate facilities for input supply and service have been developed in private sector. There are about 16 input/ agro vet suppliers in Pokhara. These suppliers also cover other commercial production areas of the district. 6.1.3 Baglung All the production pockets under this study have transport links with Pokhara. Pokhara-Baglung highway links Farse production pocket under the present study. Likewise, Baglung-Jomsom highway which is under construction is to link Kudule production pocket. These production areas are accessible to the roadways; although access to transport services to Kudule is only available during the winter months.The transporting vehicles are often unavailable at times of farmers’/traders' need. All other production pockets in this district are away from the district headquarters and the nearest roadheads. Both the production areas lack cellar and cold stores facilities. As the off-season vegetable is immediately sold after harvest, farmers quite often do not feel the requirements for cellar/cold storage. Electricity is not available in both the production pockets. Also the organized wholesale market and collection center are not developed in this district. Nearest agricultural wholesale market at Pokhara, is about 70 Kms far away. There are about 10 vegetable and fruit traders in Baglung. The transaction centres between the producers and the wholesalers are not developed which could provide assured outlet for large quality of marketable surplus in the competitiveness prices. Only about half of the cultivated area in these production pockets is irrigated and the rest unirrigated therby limiting the off-season vegetables cultivation. Table 70: Infrastructure in Farse and Kudule Production Pockets of Baglung, 2061 Infrastructure Status Road Distance 0-3 Km Cellar/Cold Storage No Electricity Facility No Input center 3 Km Wholesale markets center 70 Km (Pokhara) Collection center No Transport vehicles Not adequate Irrigation About 50% Source: Field survey, 2005

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6.1.4 Syanja

Roads All the ginger production pockets in this district are along the roadways. Some of these are linked either with the highways or the rural roads. Production pockets along the highways get buses or trucks for transporting products to the markets. Telephone services are available in many market centers and ginger production areas that help farmers access to market and price information from others markets. Although, permanent market centers are available nearby the production areas, some of these market places are not organized. The weighing and other services are either not available or reliable and or the marketing information system not developed. Inputs All the production areas have inputs traders. They can purchase or sell their products without going to a long distant market. 6.1.5 Tanahu

Roads

Among the two ginger production pockets, Majhakot is adjacent to road whereas, Kaun Shivapur has no access to road. Many of the production pockets have no truckable road for transporting ginger in a cost-effective manner. Quite often the transportation vehicles are also not accessible, for transporting the agriculture products even when the production pockets are linked with road, when needed. Market Centers Although, there are permanent market centers in Damauli, Bandipur, Dumre, Bhimad, Kotre, Dulegaunda, Khairenitar, Khalendi, Jamune and Tharpur but the management of these market centres are either not properly organized or lack facilities such as, adequate space, weighing, drinking water, toilet facilities and price/marketing network services. Majhakot is about 28 Km away from the agriculture wholesale market center in Pokhara. Telephone services are also not available at Majhakot and other production pockets. Input In Majhakot production area, there is a supplier for agro-input and packaging materials. In Kaun Shivapur, there are no input suppliers and the farmers have to reach Damauli purchasing these materials by walking for about 2 hours. In nearly half of the production pockets of this district such materials are expensive as these lack access to road/ transportation.

6.2 Institutional Support system

6.2.1 Extension Services

There are various institutional mechanisms evolved in the study areas to support farmers for off-season vegetables and ginger production and marketing.

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Fig11. Interrelations among Development Institutions/Organizations and Farmers

The District Agriculture Development Offices (DADOs) is the major government organizations mandated with the full responsibility of vegetable and ginger development activities in the district.

The DADOs of these districts have the annual programs to support farmers by providing:

? District and service center level trainings, ? Full subsidy in transportation of seed and saplings, ? Measures and means to control diseases and insects during their epidemics, ? 50% subsidy in small-scale irrigation projects such as, water harvesting ponds, drip

irrigation, small community channels, etc. ? Demonstration kits containing seeds and necessary inputs to be provided to the leader

farmers, ? Subsidy in agricultural equipments, ? Construction of collection centers in the pocket area along with the provision of

weighing equipments, ? 25 % subsidy in crates, ? Farmers' tour for exposure to other vegetable production areas, etc. ? Training to the farmers to organize and run farmers cooperatives, etc.

6.2.2 Services/ Supports from Research Organizations and Resource Centers The research stations under NARC and resource centers under DoA are making different vegetable seeds/ varieties and technologies available to the farmers through DADOs and I/NGOs. Agriculture Research Station, Lumle and Agriculture Research Station, Malepatan have outreach research sites in these districts that demonstrate the new technologies and performances of new varieties in farmers field with their participation. Farmers once convinced from the result of such demonstrations, they start adopting the new technologies. In addition to these two research stations, one Horticulture Farm under DoA located at Tansen is also contributing to the farmers of these districts by availing seeds and some technology support.

The Ginger Research Program (GRP), Kapurkot has released one superior variety of ginger named "Kapurkot Ginger-1" by collecting different landraces and germplasm with better performance in yield and quality. Different Agriculture Research Stations (ARS) and Horticulture Centers (HCs) are multiplying seed rhizomes of "Kapurkot Ginger-1" for distribution to the farmers. The test performances of new technologies and new varieties in the farmers' field are generally conducted by ARSs and HCs in coordination with DADOs, NGOs and CBOs. Once the farmers are convinced from the results/demonstrations, they start adopting the new technologies. Horticulture Center located at Tansen is also producing seeds and providing some technology support for ginger production of the adjoining districts.

GOs, INGOs, NGOs, CBOs technolo/input

TRADERS reach to the consumers feedback feedback

FARMERS off-season vegetables

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6.2.3 Other Semi-government and Private Organizations Nepal Seed Company (NSC) and Agriculture Input Company (AIC) are making seeds and other agricultural inputs/equipments available to the farmers. Agriculture Development Bank and other commercial banks are providing loans to the farmers. Besides, agro-vets are supplying seeds, agricultural tools and equipments in the districts. The numbers of agro-vets are 32 in Kaski, 18 in Palpa and 35 in Baglung. There are also some other private shops and dealers for supplying seeds, chemical fertilizers and other plant nutrients. Salt Trading Corporation is exploring the possibilities of exporting seasonal and off-season vegetables to the Gulf countries and elsewhere.

AEC/FNCCI is supporting the business community including the producers by providing price information on vegetables, fruits and spices of the selected 18 market centres in the country. This information is dessiminated through major market committees, CCIs and the respective government offices in the district level. 6.2.4 NGO's and INGOs in Off-season Vegetable Production Several NGOs and INGOs are supporting farmers in raising their income through off-season vegetables production. A few years back MARD and CEAPRED had supported some farmers of Kaski and Palpa to initiate off-season vegetable production. Li-Bird is helping farmers in in-situ conservation of important varieties and local germplasm of vegetables found in Kaski. SIMI-Nepal, BDS-MaPS, IDE-Nepal, LISP-Helvetas and so on in Kaski and Palpa are helping and supporting particularly the poor and marginalized farmers to raise their incomes through off-season vegetable production. They mainly provide seeds, other inputs, production technology, drip irrigation technology and marketing information. In Baglung some I/NGOs such as SSMP, DCRDC and others are also helping farmers to raise their incomes through off-season vegetable production.

Several NGOs and INGOs are supporting farmers in raising their incomes through ginger production. BDS-MaPS, IDE-Nepal, and LISP-Helvetas in Palpa and Syanja are helping particularly the poor and marginalized farmers to raise their incomes through high value crop production. They provide suitable technology, inputs and marketing information about ginger.

6.2.5 Social Organizations The farmers' cooperatives and farmers' production groups are formed in most of the production pockets with the initiatives and support from the District Cooperative Offices and District Agriculture Development Offices. The District Cooperative Offices are providing trainings to the farmers on cooperatives. A farmers' cooperative in Baglung Municipality has started both production and marketing of vegetables. They have also made a permanent structure for selling vegetables produced by the cooperative members in the town in leased land. Currently this cooperative is not functioning well due to some managerial and financial problems.

Nowadays district level Chambers of Commerce and Industries (CCIs) also are taking interest in promoting off-season vegetable production. In Kaski district, the CCI Pokhara has formed an Agriculture Sub-committee to look after agricultural production, agro-business and agro-industry activities. Recently the CCI Pokhara through the coordination of Agriculture Sub-committee has formed a farmers' group in Lekhanath Municipality and organized trainings on organic and off-season vegetable production as pointed out by Pokhara CCI Chairman during

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the survey. Pokhara CCI has started collecting information on off-season vegetables with a view to conduct promotional activities in near future. Similarly, Palpa CCI is also taking interest in agriculture trade/ business including off-season vegetables and has formed an Agricultural Sub-committee. The Baglung CCI has not yet formed Agriculture Sub-committee but it is also keenly observing the activities of agricultural trade/business including off-season vegetables.

REDA in close collaboration with Helvetas-LISP has been heavily involved in technology dissemination, forming farmers' cooperatives, and processing and marketing of ginger in Palpa district. Similarly, CCI-Tansen and government agencies are also cooperating REDA in promotion activities.

7. Policy Support

7.1 National, Regional and World Trade Policies

7.1.1 Nepal Trade Policies

External sector policy reform was initiated towards the end of 1985, which was then followed by the reform programs of 1992. During the first stage of reform, remarkable measures adopted to promote exports were the introduction of duty drawback and bonded warehouse system both for import duties and sales tax. The bonded warehouse system was introduced to promote export by reducing costs and administrative burden related to imports. An all round economic liberalization process took momentum after mid 1991. The new Trade Policy was implemented in 1992. The reform measures encompass all sectors – trade, industry, services, foreign investment, exchange rates, fiscal and monetary policy. The policy reform is aimed at shifting the focus of development strategy from an inward looking import-substitution to export promotion.

The trade policy of Nepal is to enhance trade sector contributions in the national economy by promoting domestic and international trade with the increased participation of the private sector. However, the role of government in trade sector has been confined to a facilitator only. Also the trade is to be diversified through the identification, development and production of new exportable products by promoting linkages for making export trade competitive and sustainable. The trade is to be expanded on a sustained basis through gradual reduction in trade imbalances.

The trade policy reforms marked a fundamental departure from the earlier regime of trade restrictions. This has resulted in a higher degree of openness than most other South Asian countries.

Basic Policy

- The role of public sector will be used as a catalyst to expand the role of private sector in trade.

- A liberal trade policy will be pursued to improve balance of payments by promoting exports.

- Production of quality goods and services will be increased for internal consumption as well as for exports through effective and appropriate utilization of the available economic resources.

- Special efforts will be made to promote and diversify trade in terms of commodities and country destinations.

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- Interactions between trade and industry will be encoursged for sustained export promotion and fulfillment of internal demand through increased domestic production.

- Emphasis will be given in modernizing management and technology for promoting market and and attracting direct foreign investment. It will help identify and develop new products as well as enhance the production and quality of the traditional products.

- The public sector trading corporations will gradually be privatized taking into considerations the efficiency of private sector.

- To support above policy measures, necessary steps relating to foreign exchange, monetary and fiscal policies will be geared to full convertibility of the Nepalese currency. Major changes will be made in the administrative procedures to make them simple, transparent and dynamic.

- Taxation system will be simplified by introducing necessary ammendments in order to foster competitiveness in trade.

- Emphasis will be laid on the development of institution and information network as well as monitoring system for the promotion of foreign trade.

- The existing trade treaties and agreements with various countries and international agencies will be effectively implemented, and new ones will be promulgated.

- In order to facilitate free flow of goods and provide predictable trading environment, amendments on Export Import Act, Export Import Regulation and Customs Act and draft of Competition Law are in progress.

- With regard to infrastructure, steps have been taken to modernize Department of Customs including simplification of customs clearance. Inland Container Depots (ICD) has been made operational in Bhairahwa and Biratnagar.

- The trade and agricultural related policies /programs lack effective implementation plan. ICD, for example, has no facilities for storage and embark of agricultural products. It has made virtually impossible exporting the agricultural products through ICD.

7.1.2 Competitiveness in Indian Markets

- Nepal, to be competitive in fresh vegetable and ginger, in the Indian markets, should concentrate on the various provisions agreed upon in the Nepal-India Treaty of Trade, that provide preferential treatment and duty and quota free access.

- Further, Nepal must discuss with the concerned Indian authorities about the problems, difficulties and negative impact that are created by the Trade Policy 2004-2009, Wood Packing Material Regulation, Import-Export Code Number requirement under Foreign Trade Act 1992 and Bio- Security and Sanitary Import Permit needed under Plant Quarantine Order of India. This will allow easier access for Nepalese vegetables and ginger to the Indian markets, without any complication and harassment.

- The separate body, The Director General of Foreign Trade, created under the Foreign Trade (Development and Regulation) Act-1992, has wide discretionary power to take action or measures through a notification, wherever felt necessary, against an importer in India.

- Similarly, as the market fee of 2.5 percent, trader's commission 5 percent and higher unloading cost in India has increased the costs of Nepalese fresh vegetables and ginger. The concerned sectors, both private and public, of Nepal should discuss this issue with the Indian counter parts.

- As there is restriction in the export of fresh ginger to India, Nepal must try to export more of the dry ginger. It would help not only save transportation cost but also develop processing industries, including drying, and generate employment.

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7.1.3 World Trade Organization (WTO) WTO is a forum, which helps develop the trade related Rules and Regulations and promote the global trade on a rule based system. Nepal, as a member of the WTO, has to abide by the Rules and Regulations therein and fulfill the commitments made. There are both benefits and challenges to Nepal as a WTO member in both the agricultural and non-agricultural sectors.

The agreements that directly influence the agriculture sector are Agreement on Agriculture (AOA), SPS, TBT and TRIPs.

AOA requires WTO member countries to undertake a number of measures towards liberalizing agricultural trade. There are three major areas under this, namely market access, domestic support and export competition. They focus on:

? Market access: increasing market access of agricultural products by tariffication of non-tariff barriers and bringing the tariff to the minimum possible level.

? Domestic support: reducing domestic support, including grants and subsidies, to the agricultural sector to create a level playing field. Nepal, as a LDC, does not need to implement this cut tariffs, productions subsidies and export subsidies immediately.

? Export competition: reducing support that aims at artificially increasing the competitiveness of the agricultural products in foreign markets.

The agreement on SPS, TBT and TRIPs Agreement will have both positive and negative impact on the Nepalese agricultural sector. We have to be more cautious about the negative impact. The SPS and TBT measures could be arbitrarily imposed as trade barrier by other member countries. Similarly, the provisions in the TRIPs Agreement are likely to increase the cost of acquiring the much needed technology. Therefore, Nepal has to be very alert and careful in amending and formulating respective laws, Rules and Regulations and in developing necessary infrastructures.

Nepal has made no commitments in the areas of export subsidy. Nepal has bound its agriculture tariff at 51 percent to be reduced to 42 percent by 2006. Likewise, Nepal has made commitments to implement SPS/TBT/TRIPs by 1 January, 2007, phase out Other Duties and Charges (ODCs) by 10 years and amend/enact 37 legislations and rules.

Nepal has so far fulfilled various commitments. Amongst them those which are related with agriculture are TBT/SPS, inquiry points have been established and New National Agriculture Policy has been announced. However, there are still a large number of legislations to be amended/ enacted like Plant Resources Act, Plant Variety Protection Act, and Access to Genetic Resources Act, Anti Dumping and Countervailing Act etc.

More importantly, Nepal must try to take benefit to the maximum possible extent, from the Special Provision made for the LDCs in the WTO Agreement. The WTO grants various concessions to the LDCs. Some concessions give longer transitional period to meet the different commitments, and requirements. Similarly, institutional set up like Integrated Framework has been established to provide Technical Assistance not only to enhance the capacity to meet WTO obligations but also to increase LDC's export competitiveness. Likewise, European Union (EU) also provides special concessions to LDCs through its Everything But Arms (EBA) initiative. Japan, Norway, Australia and Singapore have also been providing such facilities to LDCs.

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7.1.4 SAFTA During the 12th SAARC summit held at Islamabad, Pakistan on 6th January, 2004 it concluded an agreement on South Asian Free Trade Area (SAFTA) what could also be considered a watershed in the history of regional economic cooperation.

1. It had basically four objectives: a) Elimination of all barrier to trade and facilitation of cross border movement of

goods between the territories of the member states b) Promotion for fair competition in the free trade area and ensuring equitable

benefits to all member states c) For the administration and resolution of disputes it will create an effective

mechanism of implementation and application of the agreement, and d) Establishment of framework for further regional cooperation to expand and

enhance the mutual benefits of the agreement.

2. SAFTA shall be governed in accordance with the following principles:

a) SAFTA shall be based and applied on the principles of overall reciprocity and mutuality of advantages in such a way as to benefit equitably for all Contracting States, taking into account of their respective levels of economic and industrial development, the pattern of their external trade and tariff policies and systems;

b) SAFTA shall involve in free movement of goods, between countries through, inter alia, the elimination of tariffs, para tariffs and non-tariff restrictions on the movement of goods, and any other equivalent measures;

c) SAFTA shall entail adoption of trade facilitation and other measures, and the progressive harmonization of legislations by the Contracting States in the relevant areas; and

d) The special needs of the Least Developed Contracting States shall be clearly recognized by adopting concrete preferential measures in their favour on a non-reciprocal basis.

Under the Trade Liberalisation Programme of SAFTA as mentioned in Article 7 of the agreement, Nepal is related with article 7 (1) (b), and (d) and 7(2) and Article 11, 15 and 16. They run as follows. 7(1) (b) to sensitive list.

The economic philosophy of the SAFTA agreement can be summed up in two statements: - The agreement takes cognizance of the region's specific economic realities in a manner

consistent with its member's global trade-related commitments and obligation, and - It shows an understanding that the causality between trade and development runs in both

directions. Moreover, it displays that the two dimension of its economic philosophy are inextricably interlinked.

7.1.5 BIMST-EC BIMST- EC, which was established by an agreement concluded on 7th August 1998 at Kingdom of Thailand on 8th February 2004, consists of Bangladesh, India, Myanmar, Sri

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Lanka and Thailand. Nepal had joined the group latter. BIMST- EC agreement had basically four objectives a) Strengthen and enhance economic, trade and investment cooperation among the member

countries; b) Progressively liberalize and promote trade in good and services, create a transparent,

liberal and facilitative investment regime; c) Explore new areas and develop appropriate measures for closer cooperation among the

member countries; d) Facilitate the more effective economic integration of the least developed countries in the

region and bridge the development gap among the parties.

According to BIMST- EC, Nepal's applied MFN tariff rates gradually deduced / eliminated in accordance with specified rates to be mutually agreed by the member countries within 1st July 2006 to 30th June 2009. In case of other member states the MFN tariff rates would be deduced by 30th June 2011 for the product listed in the Fast Track. Likewise, for Bhutan and Mynmar and for rest of the member states the tariff rates for the products listed in the Normal Track should be deduced within 1st July 2007 to 30th June 2010 and within 1st July 2007 to 30th June 2017 respectively. BIMST- EC member countries have to negotiate to establish Free Trade Area which can be subjected to several limitations such as, tariff reduction or elimination program, rules of origin, treatment of out of Quota rates, modification of party's commitments under the agreement on trade in goods based on Article XXVII of the GATT 1994, non tariff barriers imposed on any product covered under the agreement, procedural safeguard based on GATT principles etc. The negotiation on rules of origin, list of goods on negative list and disputes settlement mechanism has not been reached so far.

7.1.6 Bi-lateral Treaty with India Indo-Nepal bilateral formal trade is basically regulated by treaty concluded between the two nations. Nepal and India had latest trade treaty effectuated from 6th March 2002. The treaty had amended to Protocol to Art. V, and added new Protocol to Art. IX. India had enacted their new trade policy 2004-2009 on 31st August, 2004 which will remain in force up to 31st March, 2009 unless otherwise specified. All imported goods shall also be subjected to domestic Laws, Rules, Orders, Regulations, technical specifications, environmental and safety norms as applicable to domestically produced goods.

His Majesty's Government of Nepal, realizing the importance of export trade in the economic development of the country has enacted and amended various policies, rules and regulations. HMG/N has also launched different programs that have positively contributed in the development and promotion of exportable products including fresh vegetables and ginger. However, there are still quite a number of areas, which have to be properly addressed to enhance the competitiveness of fresh vegetables and ginger. Among them, the following three areas are important.

a. Increasing productivity to accelerate agriculture growth rate b. Commercialization of agriculture, and c. Promotion of backward linkages in agriculture.

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Likewise, the government must be serious enough to enact and/or amend the Agricultural Marketing Act, Contract Act, Seed Act and Regulation timely. Similarly, the quarantine check points have to be well equipped and trained and skilled staffs deputed. Certification should be strictly followed and monitored in both export and import.

Nepal has to increase the share of vegetables and ginger in the international market. This however, would need to enact the legislation according to the provisions of TRIPs timely, and protect these products under Geographical Indication (GI). As TRIPs is likely to increase the cost of acquiring the needed technology, Nepal must be careful in this regard as well.

7.2 Legislative System

7.2.1 India’s Foreign Trade Policy

Indian Government had enacted Foreign Trade (Development and Regulation) Act, 1992, which has very much impact on trade with Nepal, especially export trade with India. The Act had created separate body called The Director General of Foreign Trade (DGFT). DGFT has wide discretionary power to take any action or measures, through a notification wherever felt necessary:

i Protection of public morals. ii Protection of human, animal or plant life or health.

According to the Foreign Trade (Development and Regulation) Act, 1992, every exporter or importer shall comply with the provisions of the Act. Under the Act no export or import shall be made by any person without an Importer-Exporter Code (IEC) number. The Act also provides for some relaxation on special circumstances. According to the Act, no person may claim licence /certificate/ permission as a right. The Government of India had prescribed long and detail procedure for obtaining such IEC. It is reported that not a single importer of India had obtained such IEC from their government during the time of this study, who were importing agricultural products from Nepal.

7.2.2 Nepal's Policies and Legislative Mechanism National policy is to increase quality production and productivity to meet the ever-increasing demand of the country. It focuses on comprehensive reforms to facilitate for using advance technology. The trade policy of HMG commits to raise production and quality of exportable products to make them competitive in the international market. The document (trade policy) does not deeply focus on the mechanism of export promotion of the agricultural products. The policy further says necessary efforts will be made to increase and diversify exports of goods and services with objective of increasing foreign exchange earnings. Exports will be promoted by raising the quantity and quality of traditional as well as new products. Similarly, more emphasis will be placed on the export of profitable but processed and finished products. New markets will be identified for the export promotion of these products and market diversification. Service-oriented activities will be promoted to increase foreign exchange earnings. Similarly, encouragement will be provided to the export of hydro-electricity on a profitable basis.

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For the effective utilization of manpower, emphasis will be given to the development of appropriate and potential skills to promote service sector as well as export of skilled manpower in an organized way. Appropriate monetary, foreign exchange and fiscal policies will be formulated and necessary changes made in the administrative procedures to make them liberal, simple and effective.

7.2.3 Prevailing Legislative Mechanism on Taxes, government royalties, VAT

Section 215 of Local Self Governance Act is read as follows: 215. Taxation authority of District Development Committee:

(1) District Development Committee can impose tax not exceeding the rate as prescribed, and as per the rate decided by the District Council on the road, bridge, irrigation canal and ponds constructed by it or handed over to it.

(2) District Development Committee can impose tax not exceeding the rate as prescribed, and as per the rate decided by the District Council on wool, raisin, herbs, thatch grass (Khar), wastage material (Kawadi), stones, slates, sands, bones, horns, feathers and skins of animals other than restricted animals by law enforce and other substance as prescribed.

The ambiguity and defects lies on the provision:

- The section has authorized the District Development Committee to levy the tax on certain materials. But the Act itself does not have clear provision whether DDC can impose tax on the goods produced in different districts, therefore, the tax levied by DDCs on products passing through the roads from another districts has no justification.

7.2.4 Implications of Legislative System

On domestic market

Although the trade/business policy of Nepal has also emphasized export of agricultural commodities, the concrete actions at the grassroots have not effectively taken place. Existing Nepalese legislative mechanism relating to export of agro-products is not adequate to address the agricultural commodities including vegetables and ginger. On international market

- As per the requirement of PLANT PROTECTION ACT, 2029 (A. D.1972) and REGULATION 2031, (A. D. 1974) all the agro-products either for the purpose of export or import must obtain permission from Plant Quarantine Office. For purpose of import "Import Permission" and for the purpose of export "Phytosanitary Certificate" should be acquired.

Currently, Nepalese Plant Quarantine Offices are not well equipped with required technical and infrastructural facilities to examine the quality of agro-products. The concerned officials are issuing phytosanitary certificate based on their naked eye examination. This has given space to create doubts on the reliability of the Nepalese Plant Quarantine Offices in other countries.

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Market regulatory mechanism Nepal does not have specific laws to regulate the agri-marketing. A Bill has been drafted to regulate agricultural marketing in 2054. However, the Bill has not yet turned into Act. Some orders have been issued to establish and operate the agricultural market centres in the public sector. In absence of the specific Acts, such orders alone can not provide confidence on regulation and functioning of Agri-marketing. Contract Farming Nepal has a Contract Act to regulate contractual matters. It treats all forms of contractual matter in similar manner. Its procedures are lengthy and time consuming, not sutitable for agricultural contract. Agricultural contract being of special nature requires special regulative mechanism to utilize the agriculture commercially. Realizing this HMG although has prepared a Draft Bill on Commercial Agricultural Contract Farming in the year 2003, it has not been enacted till now. The Bill has aimed to develop agriculture as an industry and establish harmonious relationship among all the related stakeholders. Once the Bill is converted into Act, it may help resolving majority of the problems faced in contract farming. The currently proposed Bill, however, has some defects in it. This may be mentioned as follows: a. Section 2(a) of the proposed Bill excludes conventional farming to be treated

as commercial activity. This restrictive definition will exclude majority of Nepalese farms to be cultivated commercially under the contract. It would then be better if the Bill has been amended to cover both conventional and commercial agricultural farming.

b. The term "Commercial Agricultural Contract" defined on S. 4(3) of the Bill. The definition given in the section is ambigious. Therefore the definition should be made clear.

c. S. 7 Subsections (2) to (5) are not needed. As these are the general rules of contract which are already covered under S. 7(1). S. 7(6) is sufficient to govern the necessary materials.

d. S. 8 has prescribed consultative agency to facilitate the contract concluded under this Act. It has authority to recommend for concession and facility. It however, does not have any clear-cut provision for such concessions or facilities. It should have list of facilitates to be provided for contract farming as far as possible.

e. S. 11 of the Bill has mandated compulsory registration for every commercial agricultural contract farmer. It, therefore, seems restrictive rather than facilitative for contract farming.

f. S. 9 of the Bill has provided provision for compulsory registration to every Commercial Agricultural Contract at the concerned local bodies (VDC/MC) where farming is planned. It also seems to be restrictive than facilitative. This has made center based big entrepreneurs restrain who might like to enter into contracts with many farmers at a time.

g. The dispute settlement mechanism provided under the S. 12 is a lengthy procedure consuming lot of costs and time for mediation as well as resolution, more so, to the farmers and small entrepreneurs.

h. S. 13 of proposed Bill has provided the additional time for submission of reply in case of non-submission within the regular time frame while settling the

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dispute through the arbitration panel. The provision for 15 days extension must be reduced to 7 days for quick dispension of dispute.

i. The contract is required to be registered before the local bodies where there would be no expert on agriculture which may cause difficulty in determining the liabilities of the party who breach the contract.

j. The Bill has no provision to provide special role to the DADO or its service centers in the district in matter concluding the contract as well as settling of disputes.

8. SWOT Analysis

8.1 Off-season vegetables Strengths ? Farmers in Palpa, Kaski and Baglung have already adopted different methods of off-

season production. ? Government strategies and plans such as APP and Tenth Plan are very supportive to

off-season vegetable production. ? There are many potential microclimatic pockets naturally suitable for production of

off-season vegetables without much effort in the manipulation in the growing environments.

? Even many educated youths are attracted to the production of off-season vegetables. ? Some of the farmers have started using plastic crates for packaging off-season

vegetables that has prevented the physical damages and preserved the product quality. ? Majority of farmers use Doko for packaging off-season vegetables that caused small

quantity of losses. ? In one district under survey, cooperative marketing system is developed by farmers to

market their products by themselves in an organized manner. ? Women are equally contributing for marketing activities as men are. ? The tomatoes are graded into two grades (small and big ones) by a number of farmers

that fetch better prices. ? During winter, the off-season cucumber and carrot produced in these districts are

tastier as compared to these produced in Terai area. ? Farmers are aware about the market potential of the domestic markets. ? The tomatoes produced in these districts have long shelf life and can be transported to

long distant markets without much physical damages. ? Farmers have established linkages with wholesalers and retailers in the local markets. ? Large number of traders are transacting in the district headquarter markets as these are

established reliable market outlets. ? Majority of agro-traders in district headquarters have telephone lines and have links

with information about traders in other markets.

Weakness ? Most of the production pockets at present don’t have abundant basic requirements

such as, facilities for perennial irrigation, link to highways, all season agricultural roads and access to inputs and credits, etc.

? Internally produced/grown high quality seeds of suitable varieties are not available as required.

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? Lack of continuous support of improved technologies. ? Inefficiency of farmers, in most cases, in production techniques, grading, packaging

and post harvest handling. ? Majority of Doko packaged tomato is damaged in big volume during transportation

and selling. ? Even in the organized cooperative societies and commercial production pockets, there

is no market information system. ? Farmers are not aware about tomato processing technology for producing sauces etc. ? Great numbers of production pockets are not adjoined with roads, transport

vans/trucks are not available to the farmers/traders when needed. ? The beans, capsicum and carrot are packaged into jute bags. Many farmers' package

tomatoes in Dokos, worsen the quality of product and has made it costlier compared to the products packed in plastic crates.

? Farmers are not aware about the market potentials of off-season vegetables in various northern markets of India.

? Farmers have not developed organized market centers at the production areas. ? There are vegetable collectors at various points, but are not functioning in an

organized way. ? Farmers have little access to market information. ? Farmers have little effect on pricing of off-season vegetables. ? Marketing knowledge/education is lacking among the farmers. Agriculture extension

system available in the field level does not include marketing education. ? The porter’s cost for transportation is very high owing to labor shortage. ? The transport cost is very high owing to small volumes of transport at a time.

Opportunities ? There is increasing demand of off-season vegetables in the domestic markets. ? There is possibility of export market to different countries. ? The climatic suitability of Himalayan hills to produce vegetables with specific taste

and quality is incomparable to many countries bearing to, as a niche market potential benefit.

? In the major domestic markets under survey, there is supply potentials for cauliflower, tomato, and beans in the early winter months.

? There are supply potentials and attractive prices of cauliflower, cabbage, capsicum, and tomato in these months in the northern border market of India.

? The government has defined the off-season vegetables as high value crops and underlined its production by providing various facilities.

? Agriculture extension department of government is technically capable in delivering extension services to the farmers and traders.

? Technology and institution are available to introduce technology for processing of tomato.

? Packaging technology of plastic crates is available in the market. ? The trade is being liberal regionally and globally providing more open export markets

to the farmers/traders.

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Threats ? North Indian hills also have similar climatic production zones and are likely to

produce more cheaply than Nepal due to the availability of incentives/subsidies facilities there.

? Tibet of China is also producing cool season vegetables with better quality. ? The north-south proposed transit facility between China and India through Nepal will

open direct avenues for off-season vegetables between China and India in a large scale affecting the market for locl products.

8.2 Ginger Strengths

? There are many potential microclimatic pockets suitable for quality ginger production,

without much effort in manipulating growing techniques, in Palpa, Syanja and Tanahu.

? Even many educated youths are attracted in ginger farming and its marketing. ? Ginger produced in surveyed districts are preferred by consumers at domestic and

export markets. ? Ginger produced in these areas are suitable for preparing Chatni (sauce) that is a

favorite food in parts of northern India. ? Being less perishable, ginger is easily carried packed into jute bags, which causes

nominal physical losses during transportation and selling. ? Majority of ginger farmers are educated and aware of the market prices. ? Ginger producers are linked with wholesalers at local and distant markets. ? In Palpa - one of the districts under survey, farmers through their organized effort

have established cooperative society market their products. Cooperative carried out market potential survey prior to planning and marketing of ginger.

? Ginger storing practices adapted by farmers in the pit is easy, suitable and less costly. ? Women have actively participated in ginger marketing and other ginger related

household decisions. ? In Palpa, about 13 ginger based micro entrepreneurs are developed. ? Most of the ginger production pockets are linked with roads.

Weakness ? Most of the production pockets at present do not have adequate basic facilities such

as, perennial irrigation, trunk road linkages with all season agricultural roads, access to inputs and credits, etc.

? Domestically produced high quality seeds of suitable varieties are not available to farmers as required.

? Lack of continuous support of improved technologies. ? Farmers in most cases lack knowledge and techniques in production, grading,

packaging and post harvest handling. ? Rhizome Rot disease found prevalent everywhere may be responsible causing up to

30 % loss of ginger in field and during storage. ? The collection centers are not properly organized and supported by necessary

infrastructures and information.. Also they lack adequate numbers of collectors and wholesalers.

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? Sutho prepared by traditional processing technology has not been successful to satisfy the quality requirement of Dabur Nepal, which has potentials to absorb a sizeable quantity.

? Prices received through cooperative marketing were found lower than outside the system.

? Many farmers do not know ginger processing technology related to producing spice, candy among others.

? Most of the farmers sell ginger at the local markets and do not attempt to reach the distant markets including the bordering markets in India.

? Marketing information is lacked by the farmers at all the production pockets. ? Owing to labor shortage the transport cost on porter is very high from the production

pockets to the road heads. ? Ginger transporting has been very difficult owing to the lack of transport vans around

the production areas and road heads.Also the transport cost of ginger has been very high due to transportation of small volume by buses and porters.

? Farmers and traders do not have access to ginger marketing awareness and knowledge, as there are little educational activities relating to ginger marketing.

Opportunities ? The hill climate is very suitable to produce ginger with excellent aroma and other

valuable chemical contents. ? Dabar Nepal is purchasing Sutho from outside of Nepal in substantial volume. If

quality Sutho is produced locally, it could be sold to this company. ? Northern Indian market demand for Nepal produced ginger in large scale indicates

potentiality to enhance supply. ? Government has defined ginger as a high value crop and the policy are also supportive

to provide facilities to the farmers/traders. ? Prices of ginger are attractive in the export market of India, compared to the

production costs and the domestic prices. ? DFTQC has technical capacity to provide technical support on ginger processing. ? Department of Agriculture has set up Ginger and Spice Development Program that is

technically capable of providing services to the farmers. NGO's are supporting, the farmers for ginger production and income generation activities.

? Department of Agriculture has its Agro-business and Marketing Development Directorate providing marketing information services to the producers/traders in collaboration with Agro Enterprise Center.

Threats ? India has listed ginger as a restricted item. ? The government of Nepal has not taken any initiation to take out the Ginger form the

list of Restricted Items ? The government of Nepal has not taken any initiation to take out Ginger from the list

of Restricted Items of India. ? As our power sources (electricity and fossil fuel) are very costly and also the

equipments for processing should be imported from other countries, their establishment and running cost will increase the cost of processing and consequently it may weaken the competitive strength.

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? The hilly areas of India are producing off-season vegetables and ginger. More efficient production and enhanced supply from these areas may capture the markets of India adversely affecting Nepal's supply thereby.

? More efficient and enhanced production in Tibet may adversely affect the market of Nepal's off-season vegetables and ginger.

9. Conclusion & Recommendations

9.1 Conclusion Off-season vegetables such as tomato, cauliflower and cabbage produced in summer and early winter seasons in Western Development Region give substantial returns to the producers and traders. There are high potentials of marketing these vegetables at Pokhara and the surrounding markets and exporting to northern border markets of India, as there are higher and increasing demands compared to supply. Ginger production in this region is also profitable for farmers. It has special quality to satisfy the consumers of India and Nepal. It has prospects of exporting to the northern markets of India. Farmers and extension agents in the western region are not well familiar about the competitiveness of these products. Moreover, the prospects of exporting these products to the markets of India and other neighboring countries are not known to the farmers. This prospect is not reflected in the agricultural development programs as well. 9.2 Recommendations

Off-season Vegetables

? There should be adequacy of seeds of suitable varieties. Suitability of technologies based on soil, climate, acceptability of market and other factors are also important.

? There should be interaction to boost off-season vegetables through seminars/workshops in each big town/city consuming vegetables in a large scale with the representation of 2-3 farmers from each pocket, 2-3 researchers (from central office and local research station), 2-3 extension workers, 2-3 traders and 1or 2 representative from the local CCI, 2-3 representatives from vegetable traders and 2-3 from consumers.

? Detail situational information about the vegetable pockets of the districts should be prepared by DADOs (DADOs may form a Off-season Vegetable Development Committee having representation from the concerned stakeholders).

? Crop calendar as per varieties and altitude should be prepared by DADOs/ horticulture officer.

? Demand of off-season vegetables in the domestic and potential export markets should be explored in every three years and planned for production to meet the estimated demand in order to stabilize the price.

? Standardization of production techniques and quality of the product should be maintained in the identified special production pocket(s) through strict technical supervision by the Off-season Vegetable Development Committee formed by the DADOs. Sub-standard vegetables should not be exported to the international markets in the form as is available in the market. Sub-standard product should also t be discouraged to supply even in the local markets. The products should be

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standardized and once a good sample is sent to the importer of the international market, the standard should always be maintained and tried to further improve it.

? A crop calendar, technological norms for producing a standard product, and grading and packaging categorization should be predetermined and implemented.

? A special care should be taken that the product in any case should be free from hazardous chemicals and pesticides.

? For marketing off-season vegetables at district and distant markets, plastic crates should be used for packaging to prevent from damages and maintain freshness of the product.

? The working capacity of cooperatives in marketing agro-products should be enhanced through technology, training and institutional development.

? It is suggested to carry out research for reshaping Doko from the vertical shape to horizontal/box-size in order to reduce the losses.

? Marketing information system should be developed at pocket level. ? The capacity of cooperatives should be developed in marketing vegetables at

domestic and export markets. ? Tomatoes should be graded into 3 sizes (small, medium and big). ? Tomato processing technology for the potential entrepreneurs needs to be

imparted through entrepreneurship development program. ? Higher priority should be given by District Development Committee, DOA, and

Department of Rural Infrastructure and Rural Roads for constructing agricultural roads at commercial agro-production pockets.

? Government agencies are suggested to provide support to cooperative societies and Agro-market Committees for operating trucks/vans for transporting agro-products.

? Cooperative societies and Agro-market committees should be involved in delivering marketing extension and information services.

? Farmers of commercial production pockets should be familiarized about the export potential of off-season vegetable in domestic as well as northern markets of India.

? Organized vegetable collection centers should be established at the appropriate locations by the collaboration of farmers groups, local government, DOA and private sector.

? Marketing Act should be introduced immediately to attract and protect the investment of private sector in agro-marketing.

? Contract Farming Act has to be reformulated and introduced immediately. ? Farmers and traders should be educated about the quality and procedural

improvements required in the context of SAFTA, WTO and BIMST-EC. ? It is necessary to provide subsidy support on transport and other incentives for off-

season vegetables. ? The local taxes levied on vegetables must be waved. ? The government has to initiate some programs to promote credit facilities on

priority basis to off season vegetables. ? Crop insurance program must be immediately initiated. ? Government of India to get permission on export of ginger. It may, however,

require lobbying and/ or seek special favor from India in this regard. ? Strong and regular monitoring of transport and export of vegetables should be

carried out to avoid harassment during such processes.

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? Agriculture marketing extension services are to be provided for the farmers, agri-enterprenuers, NGOs, CBOs and other stakeholders.

? As per the present decentralization policy of the government, the District

Development Committees (DDCs) have been empowered to formulate and launch the developmental programs in their districts. Therefore, the DDCs have to work out for estimating nutritional requirement and demand-supply situation of vegetables in the respective districts.

? The DDCs have to formulate vegetable production programs especially off-season vegetable production that can contribute to import substitution and export promotion. The CCIs of each district have to be actively involved in this process.

? The DoA/Regional Agriculture Directorate has to provide technical backstopping in formulating off-season vegetable production programs in the districts.

Ginger

? Organized collection centers/market centres should be established with adequate storage facilities in collaboration with farmers group, local government, DOA and private sector.

? Regular business meetings of potential ginger processing entrepreneurs, farmers and technicians are suggested to carry out ginger related trade activities in Western Development Region.

? Extension agencies are suggested to include activities relating to ginger marketing technology transfer to the farmers, agri-enterprenuers and other related stakeholders.

? It is suggested that farmers/entrepreneurs receive support owning ginger drying equipment.

? The price determination system by ginger cooperative should be reviewed and made comparable to other market prices.

? Marketing information system should be developed in the production pocket level in partnership with cooperative societies, market committees, local government units and Chamber of Commerce and Industry.

? Special transport vans/trucks should run for agro-products by cooperative societies and market committees.

? Cooperative societies should be developed for marketing ginger at domestic and export markets.

? It is suggested to assess the demand potential of Sutho in the northern markets of India and disseminate the information to the farmers and agro-entrepreneurs.

? Farmers and agro-traders should be made aware and sensitized about the improvement needs on ginger and dry ginger in the context of SAFTA, WTO and BIMST-EC.

? Local taxes have to be waved on ginger. ? There should be constant monitoring of transport and export of agro-products like

ginger. ? Harassments on the transport and custom points of all kinds should be abolished.

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Annex- 1: Supply of Agro-Inputs / Agro-vets In Kaski Municipality/VDC No of stalls Pokhara 16 Lekhnath 5 Dhikur Pokhari 1 (cooperative) Lwanghalel 1 (cooperative) Lamachaur 1 Hemja 6 Lahachowk 1 Bhalan 1 (cooperative) Total 32 Source: Annual Agriculture Program and Statistics of Kaski, DADO

Annex 2: Sales of Farmers Produce at Different Market Places In Kaski, 2061. (Percent of vegetables quantity sold) S.N. Market Bharatpokhari Hemja 1 Farm 7 1 2 Local market 0 0 3 Collection center 0 0 4 District Headquarter market (

Pokhara) 90 99

5 Distant market 3 0 6 India 0 0 Source: Field Survey, 2005. Annex 3: Shortage of Vegetables in Nautanawa (India), 2061 Vegetables Time Period Expected (NRs./Kg) Cauliflower June-September 22 Cabbage March-August 10 Tomato August-October 30 Capsicum May-September 45 Parwal May-June 35 Radish June-August 8 Source: Indian Border Market Survey Study Adjoining Bhairahawa, 2004, AEC.

99

Annex 4: Ginger Sales of Farmers at different Markets in Kaski, 2061 (Percent of marketable volume) S.N. Markets Kaun Shivapur Majhakot Total A Farm gates 90 86 88 B Local market 10 14 12 C Collection center 0 0 0 D District head quarter 0 0 0 E Distant market 0 0 0 F India's market 0 0 0 Source: Field Survey, 2005. Annex 5: Ginger Sales on Wholesale & Retail prices by Farmers in Tanahu (Percent of marketed volume) Sales Kaun Shivapur Majhakot Total Wholesale 90 86 88 Retail 10 14 12 Total 100 100 100 Source: Field Survey, 2005. Annex 6: Ginger Sold in Wholesale and Retail Prices, Syanja (Sales volume in percent) Sale Putali Bazar Jagat Bhanjyang Total Wholesale transaction

99.33 99.86 99.60

Retail transaction 0.67 0.14 0.40 Source: Field Survey, 2005. Annex 7:Data about the Shantiban Pokhara Wholesale Market Center Area: 2.3ha Total wholesalers: 106 Vegetable wholesaler: 53 Fruit wholesaler: 44 Onion/potato wholesaler: 44

Annex 8: Traders in Shri Complex Vegetable/fruit traders -100. Fish/meat stalls - 16. Other consumption good shops-30 This market has established linkages with the commercial production pockets in the district. Retail sales are performed in large quantity in this market place. Annex 9 : Permanent traders in Pokhara , Kaski Fruit traders (retailers)-135 Vegetable retailers- 145 Doke traders – 150 Thela traders- 350

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Annex 10: Issues and Problems of Infrastructural Support

Baglung

? Off-season vegetables in the production pockets not connected with roads have difficulty of finding porters, which is also expensive.

? The production pockets located along the roadways have buses available to transport produces. But, the cost on bus is more expensive. Though transporting by truck becomes relatively cheaper, truckable volumes of products are not available on regularl basis in these pockets.

? Organized wholesale markets and collection centers are not developed in this district for assured and reliable market outlets.

? Production pockets do not possess telephone lines for linkage with traders at targeted markets.

Kaski

? There are no collection centers near the production pockets. ? Trucks and pickups are not available to the farmers in the production areas. ? There is no market information mechanism in production pockets to support farmers

in obtaining the prevailing prices/incomes.

Tanahu

? In Tanahu also, in the production pockets without road, farmers face the scarcity of porter to transport product to road heads. Transporting the product by porter is also expensive.

? Trucks and price ups are not available in the production pockets with roads. ? There are no organized wholesale market and collection centers. ? Packaging materials are not available in production pockets, which become costly

when purchased at distant markets.

Syanja

? Trucks and pickups are not available in production pockets whenever necessary to the producers/traders.

? Organized wholesale market and collection centers are not developed in the urban centers for ginger marketing.

? The weighing machines/equipments and packaging materials are not available in the local as well as the distant headquarter markets.

Palpa

? The Tansen (Tundikhel) market is inadequate in respect of stalls and other required facilities.

? Plastic crates required for vegetables are not available in Tansen and the surrounding markets. The farmers who know its significance have to travel a long distant for purchasing it.

? In the cooperative managed ginger collection centers, the market yards/places are very inadequate and required facilities not available.

? In many production pockets of ginger and off-season vegetable, there are no roads, which have made the process of transporting difficult and costly.

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Annex 11: Cost of Production of Different Crops Per Ropani (508.5 m2) A. Off-season Vegetables

? Cauliflower ? Cabbage ? Cucumber ? Tomato ? Radish

B. Ginger (Note: details follow)

102

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