Capacity Assessment - Rural Entreprises

2014 has given a good start for me. In the first month of the year, I got the chance to visit a Lokta paper Enterprise at Deurali-Sankhuwasabha and a Kiwi Farm at Hile-Dhankuta. Me and one of my colleague visited the enterprises and conducted  business assessment and suggested areas to improve. The product offerings of the enterprises are written below:

Tinjure Non Timber Forestry Enterprise:

Founded in 2062, Tinjure is a community based forestry enterprise that makes Non Timber Forestry Products (NTFP) from the forest resources of 14 member community forests. The company now makes lokta paper sheets (Nepali handmade paper sheets) and Japanese paper sheets (made from lokta and argeli). The company currently produces 4 kg, 6 kg and 8 kgs of paper sheets.

The company has also started a nursery farming and has piloted its business model by supplying seedlings to the member community forests itself. After the successful piloting over the past years, the company is now planning to expand the nursery business. It now supplies the seedlings of lokta, load-shalla and is exploring the market of other products.

This company is also piloting in the making of laligurans juice from the wildly harvested laligurans trees in the member community forests. 

The company can be contacted at : 9842219370, 9852051191

Drying of lokta sheets on the sun

Paper production through Japanese tech.

Putting the lokta pulp on the wooden frames

Wooden frames in which lokta sheets are dried

Indra Traders:

Frustrated by the subsistence farming done by his parents, Mr. Indra Tamang decided to open a farm and be involved in the agriculture in a commercial level. Thus in 1993, he started farming of cardamom in 0.75 Hectare. Now, with time, he has expanded his product portfolio to  kiwi farming (1st commercial level kiwi nursery in Nepal), ground apple nursery, big cardamom farming, chiraito farming etc in over 50 hectares of land.

Mr. Tamang is very keen in agricultural experimentation and is now piloting the commercial production of tomato in his farm at Hile. Mr. Tamang, producer, sourcer, processor, marketer is curreclty supplying his products to the Indian market and is  looking for opportunities to collaborate with other entrepreneurs and enablers who could help him tap the foreign markets for his products. 

He is a good resource person for buying and selling of aforementioned products. He can be contacted at: +977- 02-6540113

dried leaves of ground apple

Tunnel farming of tomato

kiwi nursery

Mr. Tamang in his nursery

Cardamom Farming in Nepal

Introduction: Large Cardamom (Amomum subulatum Roxb.) or Alainchi in Nepali, is a perennial herbaceous plant with subterranean rhizomes that give rise to several leafy shoots and panicles. Large cardamom was introduced into Ilam (Nepal) in 1865 AD, nearly 143 years ago by Nepalese laborers from Sikkim. Its commercial cultivation started in Ilam much later in around 1953 AD only. The establishment of Cardamom Development Centre at Fikkal in this district in 1975 paved the way for the development of this crop.

Most of the cardamom producing areas is located in  Ilam, Panchthar, Taplejung, Sankhuwasabha, Terhathum, Bhojpur and Dhankuta districts. While the area has expanded to include more than 37 districts covering all development regions of the country.  Today, Nepal is the top producer of large cardamom followed by India and Bhutan (Large cardamom is produced by only these three countries). In 2012, Nepal  exported 5902 mt. ton of large cardamom worth Rs. 3,892,651,271.

Production: Cardamom is generally reproduced by vegetative propagation using suckers.  Economic yield starts from 3rd years onward after planting and its optimal yield period is 8-10 years. The total life span of Cardamom plants is about 20-25 years.There are sixteen varieties of Cardamom in the world. Among them five types of Large Cardamom are in farming practices across Nepal-Ramsey, Golsey, Sawney, Chibesey, and Dammersey. Although it varies from place to place, and variety to variety, about 26 kg of Cardamom (dry) is produced from 500 sq m (a ropani) of land.

Harvesting: The yield starts from 3rd years onward after planting. Fruit is ripened during August to November. Harvesting is done with the help of mechanical instruments e.g. knife. After harvesting, Cardamom capsules are separated manually by hands. The harvested fruits are processed mainly using traditional or improved drying technology (bhatty). The existing traditional practice of curing and drying the Cardamom is age-old types, where the capsules are dried by direct heating in the traditional bhatty. Under this system the Cardamom comes in direct contact with smoke and turns the capsule to dark brown black color with a smoky smell. To reduce smoke and produce light purple capsules, improved bhatties are being introduced.

Drying and Curing: After 18 to 24 hours of drying, the capsules are removed. But the total time of drying varies depending on factors such as fire management, initial moisture content of the capsules,weather condition and bhatty structures. There is no clear indicator to decide if the drying process is complete or not. In some cases, the capsules are either over-dried or under-dried at the same condition of fire and weather. Sometimes the farmers feel that the product is over-dried and they sprinkle water to increase weight. This practice leads to difficulty in maintaining consistent quality. In Taplejung district, there is a provision of premium price for improved bhatty products but prices also vary depending on tail-cut, moisture content, color and the level of dryness.

Packaging of cardamom: There is no specialized packaging and handling systems. Cardamoms are packed in jute sacks with capacity of 40 to 100 Kg. The packaging practices, however, differ with the intended duration of stocking.

• If the storage period less than 15 days, cardamom is packed in jute bags and left unstitched.
• If the storage period is more than 15 days, it is packed in jute bags with plastic sheet lining.
• If the storage period is more than one month, it is stored in bulk and is covered by Hessian sheets.

Marketing Channel: Cardamom makes its more than 90% of its sales to India without value addition. The Large Cardamom produced in is exclusively sold to Indian markets (Siliguri). Delhi and Amritsar are the potential markets in . After reaching India, the large cardamom are value added and sorted to export abroad. The typical market channel is:

Collector – District Traders – Regional Trader – Indian Traders  – Export to third countries

Market price of Cardamom:

The market price however is greatly influenced by the following major quality considerations:

• Size – the bigger the size of the capsules, the higher the price obtained. No grading is in vogue at present and mixing of all sizes and different cultivars is quite common.
• Color – more prices are offered to the capsules having a light pink color in international markets.
• Moisture contents – the products with high moisture fetch comparatively low price. The  moist capsules are also subject to easy fungal infection.

Cost of Cardamom at various market channels:

Farmers		Local Traders		Wholesaler		Exporter
Item	Cost	Item	Cost	Item	Cost	Item	Cost
Production Costs		Assembling Costs		Assembling cost		Assembling cost
Seed materials	8.63	Cleaning/Sorting	0.25	Sorting/Tail cutting	3.00	Cleaning/ Sorting	1.50
Fuel Wood	4.00	Packaging (in jute bags)	0.14	O'head Cost	2.00	O'head Cost	1.00
Labor	55.98
Others	3.43
Total Production Costs	72.04	Acquisition Cost	195.00	Acquisition Cost	210	Acquisition Cost	225
		Transfer Costs	0.75	Trucking Costs	1.04	Trucking Costs	0.71
Post Production Costs	1.50	Total Assembling Costs	196.14	Total Assembling Costs	216	Total Assembling Costs	228
Miscellaneous	0	Miscellaneous	0	DDC  & other tax	4.57	DDC & other tax/levy	5.00
Total Farm Level Cost	73.54	Total Trading Cost	196.14	Total Wholesale Level Cost	221	Total Export Level Cost	233
Losses	9.75	Losses	4.88	Losses	3.21	Losses	1.61
Margin	111.71	Margin	8.98	Margin	1.18	Margin	15.18
Avg Farm gate Price	195	Assembler level price	210	Wholesale level price	225	Wholesale level price	250

Export Figure:

S.N.	Country	Unit	Quantity	Value(NRS)
1	India	Kg.	5879702	3875674562
2	U.A.E.	Kg.	18000	15501059
3	Canada	Kg.	1000	1177650
4	China P. R.	Kg.	3000	240000
5	Nicaragua	Kg.	50	58000
Total			5901752	3892651271

From Date: January 2012 - December 2012

Production Yield (at farm level):

Country Average: 0.61 mt/ha; 30kg per ropani

Production Cost (Per Ropani): 73.50 * 30 = 2205

Sales Price: 195 * 30 = 5850

Profit per ropani: 5850-2205 = Rs. 3645

The Product HS Code of Large Cardamom is 09083010

The Product HS Code of Small Cardamom is 09083090

For more information visit these pages:

http://www.agripricenepal.com/newsdoc/20090716150653.pdf

http://www.cadp.gov.np/Document_Uploads/Reports/dd1d5812506492836355.pdf

http://www.snvworld.org/en/regions/asia/publications?filter=agriculture

http://208.67.23.5/~itsoftc/projects/tepc/

Helping Farmers in Nepal

If you are a farmer and stuck in a problem, you don't know what to do? Here is an agriculture counselling team ready to help you at free.

Established about a month ago, Agri-Care Nepal Private Limited (ACNPL) through the service 'Kisan Call Centre' has started toll-free counseling service for farmers.

With this service, farmers from any part of the country can get counseling on farm diseases from experts by making free calls to 1660-56-52999. Farmers can register their problem and nature of diseases through phone calls at the call center. Then the team of agro-technicians studies the case and provides technical counseling to farmers.

Vegetable Seed Production and Current Situation in Nepal

•   Over the last decade, around 50% of the domestic demand for the vegetable seeds was met by the domestic formal (government and private seed companies) sector.

•   The gap in demand of vegetable seeds is mostly met by imports and to some extent domestic informal sector  (farmer to farmer exchange, saved seeds, cross border informal seed supply)

•   Of the 2,000+ MT of vegetable seeds demand, around 3/4th of the total domestic demand in volume term is accounted by peas, (French) bean, onion, radish, cow pea and okra.

•   Cauliflower, cabbage, onion, radish and tomato are the top five vegetables in terms of area under cultivation, account for around 50% of the total area cultivated for vegetables in Nepal.

•   Radish and onion are important (in terms of vegetable seeds); in terms of cultivated area for vegetables and potential volume demand of commercial seed.

•   The current production of vegetable seeds (formal sector) would be less than half of the mentioned figure of around 950 mt (in 2008/9), i.e., around 400-450 mt. A trade survey in 2008/9, carried out by CEAPRED indicates that Kathmandu–based seed businesses bought not more than 340 mt of domestically produced vegetable seeds.

•   If five crops namely radish, broadleaf mustard, cress, peas and bean are excluded then it is estimated that over 80% of the domestic demand for seeds is met through imports.

•   Informal sources could account for anywhere from 30%-45% of the total vegetable seed consumed in Nepal, depending upon situation and circumstances

•   Most of these are introduced varieties of vegetables (cabbage, carrots, coriander, onion, spinach, tomato and zucchini) depend highly on imports. Indigenous varieties such as peas, cowpeas, radish, cucurbit crops, beans and rayo are lesser dependent on imports for seeds supply.

•   Taking an example of 2008/09:

•       Total estimated demand was 1,932 mt (VDD/ DoA),

•       Private / government sector supply was 957.3 mt (49.5%) (VDD/ DoA),

•       Formal imports: 407.8 mt (21.1%) (TEPC),

•       Data Gap comes to  566.9 mt (29.3%), which is met by informal channels and cross-border imports.

New Vegetable Market in Shantinagar-Kathmandu

A breakthrough has been made in the monopoly of Kalimati Fruits and Vegetable markets through the initiation of private sector led alternative market development at Shantinagar.

Five partners have started the project with an initial investment of Rs. 5.3 million (53 lakhs) in 3 ropanis and plan to extend the market in 2 more Ropanis. Along with vegetables and fruits, the markets will sell food commodities, spices, meat and fish products, products of Dairy Development Corporation, organic vegetables and fruits, and cooking gas directly from the farmers. The market opens from 5.30 in the morning till 8.30 in the evening.

This may not be a panacea to the middlemen involvement  in the agricultural sector but this private sector  intervention with price competition in the market is  showing a way of hope to the end farmers by  introducing competition to end the state owned three decades of Agrimarket  Monopoly. 

Handmade Paper Production Process

Nepalese Handmade Lokta paper is made with from the barks of the wild grown shrub (Daphne Bholuwa and Daphne Papyracea) that is grown at most coniferous forests in Nepal at an altitude of 2000m to 4000m.

 Lokta paper is known for its durability and inherent resistance to insects. The lokta fiber is possibly one of the longest and strongest natural fibers in Nepal. Thus, paper made from lokta fiber is very strong. The uneven distribution and length of fibers gives lokta paper a unique texture. Most papers dissolve when put into colour solutions; lokta paper does not Therefore, lokta paper can be dyed using the dip dyeing process. The flexibility of this process gives enormous possibility for designs and colours in lokta paper.

Making paper from lokta barks constitutes manual and indigenous process. 

1. The collectors peel the raw bark from the lokta bush in the forest and dry it in the sun to reduce the weight. 
2. The dried bark is carried to the village by porters where paper is produced. 
3. The lokta is immersed in water to soften and it is cleaned to remove the black spots and impurities. Lokta soaking operation is usually done at night to save  the time. 
4. The cleaned lokta is cooked in a 100 litre drum in a mixture of water and caustic soda. The cooked lokta is washed with clean water to remove the caustic soda. 
5. The clean lokta is then beaten with a wooden mallet to make it into pulp. (In some villages where electricity is available they are using mechanical beater now a days.)
6.  The softened pulp is then moulded in 20 inch x 30 inch wooden frames by spreading the thin pulp (with a proper mix of  water and pulp) to make flat sheets of paper. 
7. The frames are dried in the sun, after which the paper is taken out of the frame.and the lokta paper sheet is ready.

Nepal earns through Carbon Credits

What is Carbon Credit?

In 1992, the United Nations Framework Convention on Climate Change (UNFCCC) fixed a certain parameter beyond which developed countries cannot emit greenhouse gas (GHG). Later, in 1996, the Kyoto Protocol, which is linked to the UNFCCC, set a binding target for the developed countries to reduce GHG emissions within a certain timeframe.

However, irrespective of how environment-friendly they make their industries, the developed countries cannot significantly reduce GHG emissions. In this context, by way of compensation, the developed countries need to pay money to the developing countries for reducing carbon emission. In short, if a project avoids emitting one ton of carbon through clean-energy projects, we are entitled to US$7 (Although the price of one ton of carbon credits is $20 in the international market, we are ended up with a low price). There are several clean-energy projects running in Nepal which fetch us money for reducing GHG emissions. This is how Nepal is making money through carbon trading.


Communities Earning through Carbon Credit Sales:

Under the first-ever pilot Forest Carbon Trust Fund in Nepal, representatives from three watersheds in Dolakha, Gorkha, and Chitwan districts received a total sum of US$ 95,000  on behalf of community forest user groups at a ceremony organised at the International Centre for Integrated Mountain Development (ICIMOD) on 15 June 2011.

The 5,996 hectare Charnawati watershed in Dolakha sequestered a total of almost 4.6 million tonnes of carbon dioxide in 2011, an increase of 51,483 tonnes of carbon dioxide compared to 2010. Based on the above criteria, this watershed received an amount of US$45,535.
The 1,888 hectare Ludikhola watershed in Gorkha sequestered slightly less than 1.5 million tonnes of carbon dioxide in 2011, an increase of 36,680 tonnes over 2010. This watershed received an amount of US$ 27, 560.
The 2,382 hectare Kayarkhola Watershed in Chitwan sequestered slightly more than 2.5 million tonnes in 2011. This represented an increase of 12,087 tonnes over 2010. The lower increase in carbon sequestration in this watershed does not indicate lesser efforts by the communities to enhance the carbon stock – but rather, the high existing forest stock and the maturity of the forest, which means slower tree growth. The payment was adjusted to take this circumstance into account and the watershed received an amount of US$ 21,905.




Some Maths on Carbon Credits:

(1 US $ = NRs. 80 )

For Biogas plant

1 biogas plant (on an average) = 7 CER (annually)

This implies, 1 biogas plant's revenue = 7 * 10$ per ton

= 70 Dollars

= 70 * 80 =  Nrs. 5600.

Forest Calculation:

1 Hector = 10 ton = 10 * 10 * 80 = Nrs. 7000 

Thus, 10,000 m2 = Nrs. 7000

Talking from the viewpoint of private/individual applicant:  Since, AEPC got the consent for all biogas households regarding getting the amount generated through the sales of CER, individual households can not claim for it and even if they claim, mathematically, they are subject to huge loss. And in the case of forest credit, mathematics shows the trade is not profitable enough  even to pay the credit certifying consultant.