ADB support to improve horticulture in the mountainous areas of Nepal

The Asian Development Bank (ADB) has passed $70 million in funding to improve the livelihoods and climate resilience of horticulturists in mountainous areas in five provinces of Nepal.

As part of ADB’s global efforts to address potential food insecurity risks, the project will boost the productivity of 30,000 farming households in Bagmati, Gandaki, Karnali, Province 1 and Sudurpaschchim, primarily through the development of some 10,000 hectares of climate-resilient fruit and nut orchards.

Partial subsidies will be given to farmer groups and cooperatives to cover investment costs, while a credit guarantee fund will be created for farmers who lack guarantees to access formal rural finance.

The beneficiaries, represented by at least 30% women and 20% from disadvantaged groups, will receive training in climate change adaptation practices, such as soil management, crop cultivation and drip irrigation, among others.

The demand for fruits and nuts in Nepal is increasing due to urbanization, increasing national wealth, improved nutritional knowledge and tourism, but the productivity of horticulture has been declining.

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An increasing part of cultivated land in mountainous areas has been abandoned from agriculture as people change jobs and rely on remittances from abroad.

High climatic vulnerability in low hills and mid-mountains also reduces farmers’ livelihood options.

“The ADB loan will support the government’s push to revive horticulture in Nepal’s mountainous areas, which is highlighted in its 2016-2026 declaration as the Fruit Decadesaid ADB Senior Natural Resources and Agriculture Specialist for South Asia Sunae Kim.

“As well as bridging the gap between national supply and demand, the increased profits expected from commercial fruit and nut farming could also help retain younger populations in agriculture and provide income opportunities for women who are heads of households after male emigration.”

The project will also enable farmers to market their products by preparing a collective business plan and promoting cooperatives and marketing associations to aggregate horticultural products and manage their quality.

Other interventions include the formation of cooperatives and associations in food safety control systems, financial management, marketing, entrepreneurship and women’s leadership; support for the preparation of contracts between cooperatives and buyers; and the improvement of value chain infrastructures, such as traceability systems, product storage and collection centers, and the fencing of orchards.

To ensure the quality of planting materials, the project will improve the institutional management capacity of the nursery and horticulture sector.

At the national level, the project will develop standards for nurseries, a certification scheme and an inspection system; upgrade private nurseries and horticultural facilities for testing, cleaning and maintenance of planting materials; train horticultural facility staff to meet global health standards; and will commission research into climate-resistant fruit and nut varieties.

The ADB funding comprises a $60 million concessional loan from ordinary capital resources and a $10 million grant from the Asian Development Fund. The Government of Nepal will contribute about 14.5 million dollars for the project.

The bank will also manage a $9 million grant from the World Program for Agriculture and Food Security. The grant will support an additional 10,000 small farmers, with less than 0.2 hectares and unable to invest in developing commercial gardens, to grow irrigated vegetables during the dry season and nutritious food crops during the wet season.