Report on Subsector Analysis Non Timber Forest Products (NTFP) (Herbs and Spices… Nepal Non... · 2005-03-30 · Subsector analysis for BDS MaPS – A report: March 2004 7 1 Background

Report on Subsector Analysis

Non Timber Forest Products (NTFP) (Herbs and Spices) Mid Western and

Far Western Nepal

BDS-MaPS March 2004

Subsector analysis for BDS MaPS – A report: March 2004 2

Acknowledgement Lotus Intellect acknowledges the support of BDS-MaPS project for giving us the responsibility and entrusting us to carry out the subsector analysis on NTFP products and spices. We would like to thank regional BDS-MaPS office in Nepalgunj for necessary support during the conduction of the subsector analysis while the study team was in the field visit. We would also like to acknowledge the outright support from District teams of Banke, Bardiya, Kailali and Surkhet for their cooperation and warm hospitality while the team was visiting the aforementioned districts. We also like to take this opportunity to express our gratitude for Mr. Mrinal Sircar, Director, Center for Micro-enterprise Development, International Development Enterprise, Bangladesh for sharing his knowledge and experience on conducting subsector analysis. We would also like to specially mention Mr. Frank Lusby, Executive Director, Action For Enterprise, USA for his continual guidance and support during the course of the study. Similarly, we would also like to acknowledge the continual contribution and guidance of BDS-MaPS team: Mr. Robert Nanes, Team Leader, Mr. Rajiv Pradhan, Deputy Team Leader, Mr. Ram Hari Subedi, Director of Operations, Mr. Pradip Maharjan, Marketing Tem Leader. Similarly special mention goes to Mr. Mahendra Thapa, Area Coordinator, Regional Office, Nepalgunj, Mr. Rameshwor Maharjan, Regional Program Manager for their untiring support given to us. Along with them special thanks also goes to Mr. Suhrid Chapagain, Assistant Manager, Network Development from Lotus Opportunities and Ms. Sugandha P. Gurung, Documentation Assistant, BDS-MaPS for their inputs and help in compilation of the report. We are also grateful to Mr. Neeraj Nepali, Executive Director and Mr. Sanjay Karki, Manager, Product Development from Lotus Intellect in successfully carrying out the assignment for conduction of the subsector analysis and preparing this report. And finally, we are thankful for all the organizations and people of Banke, Bardiya, Kailali, Surkhet and Kathmandu who took time of their busy schedule to give us their valuable inputs and suggestions for the study.


Acronyms AEC Agro Enterprise Center ANSAB Asia Network for Sustainable

Agriculture and Bioresources BDS Business Development Services BDS-MaPS Business Development Services-

Marketing, Production, Services B2B Business to Business CBO Community Based Organization CCI Chamber of Commerce and Industry CF Community Forests CFUG Community Forests User Group DADO District Agricultural Development Office DAO District Agricultural Office DFO District Forest Office DDC District Development Committee DPO District Plant Office FECOFUN Federation of Community Forest Users

Group Nepal FGDs Focus Group Discussions FIs Financial Institutions HH Households HJSS Himalaya Jadibuti Sarokar Samuha HPPCL Herbal Production and Processing

Company Limited IDE International Development Enterprise JABAN Jadibuti Association of Nepal NGO Non Governmental Organization NTFP Non Timber Forest Product SSA Subsector analysis VDC Village Development Committee


Executive Summary Usually, a sub sector is described by a meticulous final product and includes all firms engaged in raw material supply, production, and distribution of that product. Many of the diagnostic tools used in the sub sector analysis come from the early sub sector studies on agricultural commodities conducted in Western Africa and South East Asia. Sub sector offers analysis framework for rapidly appraising MSE dynamics and the prospects for cost effective intervention. It does not anticipate the nature of intervention. Sub sector analysis can lead to projects involving technology development, input supply, marketing, management assistance, or credit. In perspective to above insights on subsector analysis, BDS-MaPS in its approach to initiate a significant impact on poverty in its target districts by increasing income of 22,000 smallholder farmers and gatherers through the gathering and production of NTFP’s and other selected high value crops, decided to conduct a subsector analysis of NTFPs (herbs and spices) in the target districts. The motive was to practically look at the prevailing constraints in the subsector, the services available, the role of the current providers and their constraints and the interventions that BDS-MaPS as a whole could look into to cater to meet their objective and goal. The subsector analysis was conducted through a ‘step by step’ approach as enumerated in GEMINI, Field Manual For Sub Sector Practitioners (Steven J. Haggblade, Matthew S. Garnser) and Sub Sector/Business Service Approach to Program Design (Frank Lusby and Henry Panlibuton). The practical experience with Smallholders Irrigation Management Initiative (SIMI) also contributed to customizing the analysis to match local needs. The methodology pertaining to this analysis included capacity building of district and regional teams on conducting subsector analysis, assisting them to conduct the analysis in the field, focus group discussions, interaction, and interviews with existing and potential stakeholders. The district team members and regional teams were continually back stopped during the conduction of the analysis, preparation and compilation of the report, Subsector analysis was simultaneously conducted at the central level (Kathmandu) and the four districts (Banke, Bardiya, Kailali and Surkhet). The analysis from the study outlines the constraints for services looking at both the demand and supply side and also looked at in purview of different actors and NTFP products. Major constraints included limited awareness of NTFPs at all levels – (farmers/cultivators, processors, traders, exporters), limited technical skill and know-how (sustainable harvesting/post harvesting), dependency of single market (India), inferior quality in international market ,limited linkages in domestic and international markets and limited standardization and uniformity in government policies and regulations. The potential services to counter the constraints like access to international market, opening up of quality testing labs, linkage to training institutes, advocacy with related government organization came up in the pursuing discussions, interactions and focus group


discussions. Major providers identified were private providers (Agrovets, training institutions, seed suppliers etc), Government Organizations - in the range of Department of Forestry, Department of Plants, Department of Customs, Department of Agriculture, DADO, Agriculture Input Center, Associations/Federations in the likes of CCIs, JABAN, HJSS, I/NGOs, CBOs. Major constraints of the providers included limited resources - qualified human resources, capital, quality raw material and adequate knowledge and skill to provide services in the sector. Finally the team looked at numerous interventions with the help of focus group discussions, interaction, interviews with experts and other stakeholders and listed down thirty two possible intervening points for the project. The interventions were then ranked with the help of experts and the executives of BDS-MaPS team. Altogether nine interventions were finalized through the discussions that are – � facilitate in developing capacity of mediators for establishing international/national

linkages and coordination at national and international levels � facilitate service providers to develop and maintain database on NTFP – suppliers,

inventory, quality, quantity, price and timely dissemination of market information through use of public media

� facilitate group formulation and effective operation of participants enhancing their managerial, marketing competence

� facilitate establishment of lab testing facilities and develop the capacity of existing laboratories for R&D and quality tests

� facilitate in setting up of Nepal Standard for NTFP, � promotion of sustainable harvesting � facilitate in establishing suitable processing plants for locally available NTFPs and

develop local competency, and access to supply, maintenance and repair of the technology

� promote initiation and awareness in cultivation of commercially viable NTFPs/Spices � advocate together with stakeholders and government officials for formulation of

preferential one-window policy on clear definitions of NTFPs processing, rational regulatory framework for collection, production and trade.

During the conduction of the study, each district prepared a report in a format prepared and given to them by the team from Lotus Intellect. The reports once received were compiled at the regional office and given back to district teams which they presented* and used for the development of the action plan. The report is presented in a sequence for the reader to easily follow and divided into eight sections: - background of the project, the purpose methodology of subsector, information on area of subsector, product analysis and ranking, identification of service and solutions, ranking of services, service-solution assessment and ranking of interventions. _________________________________ *Separate district reports are available


Table of Contents Acknowledgement .............................................................................................................. 2 Acronyms ............................................................................................................................ 3 Executive Summary............................................................................................................ 4 Table of Contents................................................................................................................ 6 1 Background ................................................................................................................. 7

1.1 Synopsis of BDS-MaPS ...................................................................................... 7 1.2 Project Approach................................................................................................. 7 1.3 Project Partners ................................................................................................... 8

2 Why Subsector analysis? ............................................................................................ 8 3 Methodology for subsector analysis ........................................................................... 9 4 Information on potentiality of pocket areas .............................................................. 10

4.4 Pocket Areas ..................................................................................................... 10 4.5 Major NTFP Products in the Pocket Area ........................................................ 11 4.6 General description of NTFP market in the pocket area................................... 12

5 NTFP product analysis and ranking.......................................................................... 16 5.1 Ranking Grid of the Products ........................................................................... 17

6 Subsector Analysis .................................................................................................... 18 6.1 Identification of Services and Solutions ........................................................... 18

7 Listing of Services .................................................................................................... 23 7.2 Ranking of Potential Services........................................................................... 24

8 Service/Solution Assessment .................................................................................... 24 9 Ranking of Interventions ........................................................................................... 28 10 Matching Services with Interventions .................................................................. 32 11 Annex.................................................................................................................... 34

11.1 Annex 1: Constraints –Interventions Table ...................................................... 34 11.2 Annex 2: Subsector Map of NTFPs in the Mid and Far Western Nepal .......... 37 11.3 Annex 3: Pocket Level Report Format ............................................................. 38 11.4 Annex 4: Photos................................................................................................ 41


1 Background The subsector analysis of Non-timber Forest Products (NTFPs) (herbs and spices) have been conducted for BDS- MaPS project in the four districts – Banke, Bardiya, Kailali, Surkhet encompassing the mid and far western regions of Nepal. However the project is being implemented in six districts – Syangja and Dolpa were omitted from the first phase of the analysis. The study took place in the month of March, 2004. The synopsis of the project is highlighted below:

1.1 Synopsis of BDS-MaPS The BDS-MaPS Project is envisaged to have a significant impact on poverty in its target districts by increasing income of 22,000 smallholder farmers and gatherers through the gathering and production of NTFP’s and other selected high value crops. It will accomplish this through a three-pronged strategy which focuses simultaneously on:

Marketing Production Services Increasing the demand for selected commodities through targeted marketing interventions at the international and national levels.

Increasing production of selected commodities through targeted production/gathering interventions at the farm/forest level

Increasing quality and sustainability of the whole system through the development of a network of business service providers focused on the selected commodities.

1.2 Project Approach � The project will take a Market Development approach by looking at interventions

along the whole value chain of the selected commodities, and the associated business service markets.

� The project will particularly focus on women and disadvantaged groups during

implementation, and will promote environmentally sound gathering and production systems.

� Through fostering market linkages up and down the value chain, the project will

assure that production and markets are well linked in terms of commodity selection and quality standards.

� The six target districts are Banke, Bardiya, Kailali, Surkhet, Dolpa, and Syangja. � Initial study was conducted in four districts (Banke, Bardiya, Kailali, Surkhet)


1.3 Project Partners BDS-MaPS is being implemented by a consortium of INGO’s and private businesses which consists of IDE (as lead agency), Winrock International, ANSAB, Lotus Opportunities, and WWF Nepal.

2 Why Subsector analysis? The focus of the BDS-MaPs project is to increase the marketability, access and sustainability of the Non Timber Forest Product (NTFPs) with respect to various stakeholders in the districts of Banke, Bardiya, Kailali, Surkhet, Dolpa and Syangja (coffee). The sub sector study has been carried out and the findings enumerated herewith for the project to enable to identify constraints and possible interventions it can undertake to promote NTFPs in the selected districts and ultimately raise the subsistence level of income of the stakeholders. The analysis conducted over the course of time is believed to have given a ‘road map’ and identify gaps for possible intervening mechanisms the project can undertake. It is believed that the sub sector analysis can identify constraints to small enterprises /entrepreneurs growth and competitiveness in a given sub sector. The subsector being an iterative process, gives the project the detailed understanding of a given production and distribution system. The report portrays a ‘detailed analysis’ at the field level – outlining constraints and interventions stated by various stakeholders of the sub sector.


3 Methodology for subsector analysis Lotus Intellect takes a participative approach while conducting a subsector analysis as it is believed the actors and participants of any subsector are the key informants and the major resource for the analysis. The iterative steps taken by Lotus Intellect to conduct subsector analysis are as follows: STEP 1: Literature review of the sub sector to be analyzed and simultaneous capacity building of filed level staff. RAPID SUBSECTOR ANALYSIS TO BE DONE STEP 2: Scheduling for the subsector analysis – development of reference guides – the guide included the step by step instruction on conducting subsector analysis and tips at field level STEP 3: Identification of constraints/opportunities – various actors and potential products – through site visits, one-on-one interviews, group discussions, interactions and Focus Group Discussions: analyze from the demand and supply side STEP 4: Identification and selection of services – through interactions and Focus Group Discussions with selected actors and experts STEP 5: Assessment and selection of business service – use of ranking grid and attractiveness matrix STEP 6: Identification of Service Providers and their constraints to provide services – interaction and discussion with Service Providers. STEP 7: Identification and selection of interventions – final ranking of interventions: interaction and discussion with various stakeholders STEP 8: Action Plan – involving all stakeholders The following approaches were taken to conduct the sub sector analysis of NTFPs for BDS MaPS: � Training on subsector analysis with orientation on BDS approach was provided to all

field level staff of BDS-MaPS project staff before they embarked to the fields to identify pocket areas (February 21 onwards)

� The approach to subsector analysis (scheduling) was designed in consultation with Mr. Frank Lusby and the BDS-MaPS central level team (Team Leader, Deputy Team Leader, Director of Operations)

� Literature review on various subsector studies done in and out of the country


� Reference guide was prepared for the conduction of subsector analysis and distributed to the central team, each district and regional team

� Subsector analysis was conducted in each district from March 3-9 2004. The team from Lotus Intellect visited each district and guided the field teams for conduction of subsector analysis, hold focus group discussion, interaction and interviews. The step by step approach taken were:

� Identification of constraints with respect to actors (cultivators/collectors, processors, traders, exporters, facilitators/ service providers) and potential products.

� Identifications and selection of services and service providers rendering the services.

� Constraints for the service providers rendering the services � Identification of interventions to counter the constraints � Ranking and finalization of interventions

� Focus Group Discussions were held in Nepalgunj with various stakeholders of NTFP

subsector � A simultaneous process was being followed by the team in Kathmandu � Consolidation of findings from the field, central team and various focus group

discussions, interaction and discussions � Formulation and ranking of interventions with the central level team of BDS-MaPS � Presentation and finalization of constraints, services and interventions in the planning

workshop in Nepalgunj � Presentation of report to BDS-MaPS central office

4 Information on potentiality of pocket areas

4.4 Pocket Areas

District Pocket Areas VDC Mahadevpuri Kamdi Binauna

Dhakeri, Mahadevpuri

Kachanpur Kohalpur Nababasta Rajhena Samshergunj

Banke Kohalpur

Chisapani

Thakurdwara

Bardiya

Thakurdwara Surya Patuwa (Buffer zone area)


Dhodari Dhodari Surya Patuwa (Outside buffer zone)

Malakheti Godabari Geta

Kailali

Attariya

Shripur

Chhinchu Maintada Kalyan

Chhinchu

Ramghat Mehalkuna Gumi Sahare Dahachaur

Surkhet Mehalkuna

Ghumkhahare

4.5 Major NTFP Products in the Pocket Area

District Pocket Area Major NTFP Products Dhakari/Mahadevpuri • Satawori

• Pipla • Amala • Kurilo • Termeric

Banke Kohalpur • Satawari • Tulsi • Pipla • Termeric • Sarpagandha • Mushroom

Bardiya Thakurdwara • Mentha

• Bet • Kurilo • Pipla • Sarpaganda • Babiyo


Dhodari • Shikakai • Pipla • Bet • Bel • Sarpagandha • Piyar • Amala • Babiyo

Kailali

Ataria

• Kurilo • Sarpagandha • Lemongrass • Pipala • Sikakai • Amala

Chhinchu • Ginger

• Kurilo • Garlic • Amala • Pakhanbedh • Tejpat • Turmeric

Surkhet

Mehalkuna • Ginger • Timoor • Kurilo • Amala • Pipla • Turmeric • Lemongrass • Churi

4.6 General description of NTFP market in the pocket area The sources for the information below are from district report prepared by each district – the information below gives the reader a ‘general idea’ on the subsector market in the area and will give a framework on the constraints and services to be followed.

BANKE Dhakeri/Mahadevpuri Kohalpur

� About 20 products are currently being harvested and traded.

� Satawori, Kurilo Shikakai, Pipla, Amala are

� One of the major sources of NTFPs in Banke district due to its proximity to chure area and forest lands


the major products. These products are mainly collected or harvested from near churia hill and Rapti river side or northern side of Banke district and are harvested annually.

� Collectors\users collect some products from the community forest and sell to CFUGs and local traders.

� Dealer/Nepalgunj Traders sometime buy directly from local trader and collector when market price is high.

� Due to limited knowledge for NTFP collection, cultivation sustainable harvesting, the marketed quantity of major NTFPs in the forest is decreasing.

The payment system/transaction of NTFPs is: advance payment, cash payment and credit. If the market demand is high, the Nepalgunj traders also provide advance to the local traders and collectors. More than 80% of these NTFPs marketed to India. The price of products governed by the Indian market.

� Major traded products in the area are Satawari, Shikakai, Pipla

� 10% of NTFPs are consumed by self and Shaman (faithhealers/Baidya/Jhakris) while 90% is traded to India through Nepalgunj.

� The demand and price for the products are determined by the market in India.


KAILALI Atariya

� Attariya is that central market for 4 VDC in which the collected NTFP from farmers/collectors are bought by large-scale collectors and sale to businessmen and exporter. Generally businessmen are working as an exporter. They export the major jadibuti to India; and traders of Nepalgunj & Kathmandu demand the rest jadibuti

� Attariya is also a suitable market center for other district like: Doti, Baitadi, Surkhet,

BARDIYA Thakurdwara Dhodari

� Limited traders and buyers in relation to the farmers, -majority of traders reside in Nepalgunj.

� Marketing of the products and price rate is under the control of these traders leading to fluctuation in price.

� Farmers/cultivators themselves take the products to the traders in Nepalgunj – adding the burden of transportation.

� The downward fluctuation in price has had a negative impact on farmers and thus the number of HH involved in cultivation has decreased by 75% (i.e. from 40 HHs to around 10/12 HHs).

� Farmers usually gather (hoard) the product at one place and then market it.

� Regarding Bet, CFUG sells it on contract to the contractor/trader on the basis of area of Community Forest (CF) and quantity of Bet. Bet is later exported to Pokhara and Nepalgunj. One Bet that measures the length of 10 feet is sold at Rs. 3 by the CFUGs to local furniture entrepreneurs. The furniture in turn is sold to Royal Bardiya National Park (for encouragement) and BSP New Era (market linkages and selling).

� Regarding Babiyo, the same is processed into ropes and sold at the rate of Rs. 25 per kg to retail outlets in Gulariya.

� Major NTFPs with respect to trading in the pocket is Sikakai (sold raw at the rate of Rs. 3/kg by the collectors while dried Sikakai fruits are sold at the rate of Rs. 15 – 16/Kg. by the local traders.

� Same scenario Same scenario


Dadeldhura, etc. The traders of Kailali demand the valuable jadibuti from above mentioned district. The collectors of other district collect the jadibuti and sale to middlemen or wholesale collectors of Kailali.

� Businessmen & Exporter of Kailali buy the products from wholesale collector and export to Tanakpur, India.

� The traders of Nepalgunj & Kathmandu also demand the Jadibuti and export to India. Businessmen of the Kailali have recommended that Jadibuti found in this district is not enough for sustainable jadibuti market. Therefore, they demand the Jadibuti from other district for continuation of their business.

SURKHET

Chhinchu Mehalkuna � The major portion of NTFPs of

Chinchhu (Kalyan VDC) are sold to traders of Ramghat while comparatively less are traded directly by traders of Kalyan

� The majority of the spices are directly collected by traders of Nepalgunj

� In Jahare (Maindada VDC) the local traders sell majority of the NTFPs to traders in Nepalgunj and comparatively less to traders of Butwal and Kathmandu

� The traders of Chhinchu – comprising of various VDCs (Ramghat, Maindada, Kalyan, Neta, Lekpharsha, Chhinchu, Dasrathpur, and neighboring districts of Rukum, Jajarkot, Salyan, Dailekh, collect NTFPs and sell majority (90%) of them to Nepalgunj traders and 10% to traders in Butwal and India.

� The majority of the collectors are women – and some school going children on Saturdays.

� There are mainly 3 local markets - Butechaur, Mehelkuna and Jahare

� Mainly women are involved in collection of herbs and cultivation of spices however in holidays even students collect herbs .

� Selling of herbs and medicine is taken as socially discriminated job as the rich and upper-class people feel awkward to sell their product by visiting local market themselves.

� The mode is that the single person who is termed as local trader, collects from every household and takes it to the district trader.

� The majority of involved households are non-CFUG. Moreover households with low financial resources accept this trade to meet their daily needs.

� The collectors comprise form nearby VDCs and from neighboring districts like Salyan ,Jajarkot and to some extent from Rukum.

� Surkhet can be consider as transit(transaction hub) for trading NTFPs to Nepalgunj from Salyan, Jajarkot, Dailekh, Rukum, Jumla and Kalikot

� Minimum 250gm-500gm of fodder are collected from this area.


5 NTFP product analysis and ranking Based on the information received from the pocket areas and the ensuing focus group discussion with various actors and participants of the subsector the finalized products have been highlighted below:

Name Overall Dolpa Focus

Nepali

Gin

ger

Tu

rmer

ic

Gar

lic

Men

tha

Sat

awar

i

Am

ala

Pip

la

Tim

oo

r

Su

gan

dh

awal

Tej

pat

Tu

lsi

Sh

ikak

aki

Bo

jo

Lem

on

gra

ss

Har

ro

Bar

ro

Be

l

Sar

pag

and

ha

Yar

sagu

mba

Guc

chi C

hyau

Shi

bakt

horn

Jata

mas

i

Pad

amch

al

Shi

lajit

Marketing 4 3 3 3 3 3.5 3 3.5 4 2.5 2.5 3 2 2.5 2.5 2 2 2 4 4 3.5 4 3 3.5

Production 3 3 3 3 3 2.5 2.5 2.5 2 3 2.5 2.5 3 2.5 2 2.5 2 1 3.5 3.5 3.5 2.5 3 2

Services 3 3 3 3 2.5 2.5 2.5 2 2 2 2.5 1.5 2 2 2 2 2 1.5 3 3 3 3 3 3

TOTAL 10 9 9 9 8.5 8.5 8 8 8 7.5 7.5 7 7 7 6.5 6.5 6 4.5 11 11 10 9.5 9 8.5RANK 1 2 2 2 3 3 4 4 4 5 5 6 6 6 7 7 8 9 1 1 2 3 4 5

NOTES: � The above product have been ranked in the scale from 1-4, with 1 being the low end and 4 the high end. � The factors on which the scale were exercised were marketing, production and services i.e. three strategical focus of the project � The preference of above came from the deliberations of the focus group, consultation with NTFP and agro experts and data and

findings from the field.


5.1 Ranking Grid of the Products The products were also ranked on the basis of attractiveness matrix with two variables – potential to increase rural income and potential number of beneficiaries with its relative volatility – high, medium and low. Potential to Increase Rural Income

HIGH Jatamasi Padamchal

Shilajit

Ginger Yarsagumba Guchhichyau

Satabari Turmeric

Garlic Shibakthorn

MEDIUM Pipla Timoor

Sugandhawal Sarpagandha

Mentha Amala Tejpat Tulsi

LOW Harro/Barro Lemongrass

Bojo Shikakai

Bel LOW MEDIUM HIGH

Potential No. of MSME Beneficiaries Notes:

� The shaded box represents the most potential NTFPs in the project areas – forbearance of the holistic approach

� However specific NTFPs may be ranked differently by each district – depending on the conditions thereof for ex: mentha is very important in Bardiya while you may find none in Surkhet

� The above represents the clubbing up of the ranking from the districts and that of focus group discussions and expertise views


6 Subsector Analysis

6.1 Identification of Services and Solutions District Level

CONSTRAINT SOLUTION/SERVICE 1. The collectors have stopped collecting NTFPs due to lack of demand and market information on price for the products

1. Timely information on price in various markets through radio, publication and other means (TV) 2. Continual interaction and discussion between the various actors of NTFPs which will help in building trust 3. Access to database of NTFP resources/suppliers/Inventory/Quality supply/Prices

2. The selling of NTFPs is heavily dependent on the Indian traders leading to very low bargaining power of local trader has affected in acquiring proportionate price– final price is controlled and determined by the Indian counterparts

4. Knowledge on alternative market-international market (in addition to India) 5. Exposure to knowledge/ information on Collective transaction 7. Effective rapport building between buyers and sellers

3. Lack of need assessment for the demand of NTFP products in the international market for exporters – this has limited on delivery of need based products – matching of demand with supply is missing limiting the dimension of exports of the NTFPs

8. Market Assessment 3. Access to database of NTFP resources/suppliers/Inventory/Quality supply/Prices

4. The products sold by the traders yet to meet international quality and standard – this has reduced the demand of Nepalese NTFPs in international markets

9. Access to information on international quality standards, quality Certification 10. Provision of International linkages with a) foreign labs, b) alliances and partnerships, c) international seminar and conferences 11. Provision of the accredited certifying agency in the country that provides certificates to the products and the actors

5. Limited irrigation facility for cultivation of NTFP products for cultivators – the quality of the products is not of desired specification and are of inferior quality – the cultivation is also very seasonal and not as per the aforementioned time by the traders – ultimately minimizing sales

12. Provision of Irrigation facility

6. There are insufficient number of processing plants operating for the processing of NTFP products cultivated and/or collected by the farmers which has not been able to exploit the higher price potentiality of NTFPs

6. Re/establishment of standard processing plants

7. Inadequate knowledge on storage techniques and storage facilities for traders–this has brought forth the problem of unable to store the products for the long time and compelled to sell the products at whatever the price demanded by the exporters etc.

13. Storage facility and its knowledge on its importance

8. Inadequate land with the farmers to cultivate NTFPs has reduced the potential supply from the farmers – although the desire and demand may be

14. Assist farmers in acquiring public land (leasehold forestry) for cultivation


there because of limited land farmers are compelled to cultivate with limited land at their disposal 9. Land Transportation providers do not prefer to transport NTFPs which has been hindering and adding cost to both at the trader and the farmer level

15. Preferentia l facility for NTFPs transport

10. There is no preferential provision for air transportation of NTFP products – this has hindered timely delivery of products and deteriorated the quality

15. Preferential facility for NTFPs transport

11. Illegal exports of NTFPs – has affected the traders who are paying customs and also limited their bargaining power compared to others who are using back end delivery and also the government in revenue collection and control of trade of restricted products

16. Effective Monitoring of trade practices and clarity on policies and procedures regarding NTFPs

12. Absence of clear legal definitions on various levels of processing to the cultivators and processors has limited on the understanding the price for the products

17. Exposure to clear legal definitions at various levels of processing

13. There are certain trading principles followed by Indian traders – such as fixed credit policies (no. of credit days) and Nepalese traders are compelled to abide by such principles and territorial governance has limited the traders to bargain for the desired price

18. Information on trading provision 7. Effective rapport building between buyers and sellers

14. Less profit margin to farmers and traders due to heavy taxation/royalty burden on certain NTFP products

19. Advocacy with the service providers for a) lowering the transitional cost, b) congenial regulatory processes for registering new products c) low taxes d) Single window system e) Foreign Direct Investment

15. Frequent and Contradictory decisions by the government has hampered trade practices at the trader and exporter level


16. Issue of quarantine /custom duties /taxes not standardized and spelt out has hindered exports


17. Concerned authorities do not have clear cut policies, regulations, budget regarding NTFPs which has affected all the stakeholders of this sector


18. Lack of availability of seeds for farmers to cultivate NTFPs has affected farmers on cultivating NTFPs on a timely basis

20. Timely Supply of quality seeds and seedlings

19. Inadequate supply of complementary /secondary materials –packaging, additives, diluents have minimized value addition at all levels

21. Timely availability of complementary and secondary materials at local levels

20. Very few farmers come to visit Agro-vet for services and materials regarding NTFPs and their

22. Demand Stimulation and creation for NTFPs – looking at the cultivator and the trader perspective


cultivation- reducing demand for services at the service provider level

23 Access to knowledge and information on sustainable production and collection techniques cultivation season and quantity to be cultivated

21. Lack of organized farmer groups for better bargaining power with traders has limited the capacity of the farmers to bargain for better price and margin

24. Formulation and or strengthening of NTFP specific sub-groups within CFUGs and groups that are directly working with priority products

22. Though processing units have been handed over to CFUGs, they lack management and operation skills. For instance, there is no shade hut to protect the plant, no any sustainable fund raising mechanism, no record keeping, technical know how (temperature and quality control) and others

26. Technical and managerial information on operation of processing plant

23. Problem with clearance and collections have added legal problems (like paying taxes as per plan, documentation of trade etc.) to the traders

27. Hassle free clearance service

24. Inadequate knowledge and technical know-how on collection, storage, management and market information of NTFPs have hindered on maintaining the desired quality for the product

28. Technical knowledge on collection, storage management and market information

25. The CFUGs have inadequate knowledge on feasibility, resource identification, collection and management of NTFPs

29. Technical knowledge on resource identification

26. Limited number of farmers cultivating/collecting NTFPs on a commercial basis leading towards insufficient demand for service providers

30. Exposure to knowledge and information on sustainable production and collection techniques cultivation season and quantity to be cultivated

27. Limited knowledge on cultivation techniques to the cultivators /farmers has resulted in low production and low quality products

30. Exposure to knowledge and information on sustainable production and collection techniques cultivation season and quantity to be cultivated 31. Information on importance of available resources also insights on technology

28. The farmers / cultivators have inadequate knowledge on pre-harvesting techniques (seasonal significance/ timing and sustainable harvesting practices) and post harvesting (value addition and processing before final trading, storing) – has brought forth lower quality NTFPs and timely delivery in the market

30. Exposure to knowledge and information on sustainable production and collection techniques cultivation season and quantity to be cultivated 31. Information on importance of available resources also insights on technology

29. Collectors / cultivators do not have appropriate machine, tools and equipment for harvesting & processing purpose obstructing supply of desired quality products and timely delivery of the same

32. Development and supply of product specific tools

30. Traders are unable to get the desired quality from the collectors / cultivators as agreed upon- mixing of products and extensive requirement of grading and sorting needed


31. Traders are unable to process into finished product – hindering on farmers getting appropriate price

34. Technology availability


32. Cultivators and traders are unable to afford processing plants – which has limited on final processing of the product as per the requirement of the market – result in lower profit and sales

35. Access to alternative finance

33. Low profit margin on the product for all the participants – not much interest on cultivating and trading of NTFPs

36. Appropriate price margin

34. Seedlings are getting spoilt due to less demand and input suppliers are compelled to sell in very low cost or in free of cost. It is also because there is no any initiation of NTFPs cultivation both in private and community land

30. Exposure to knowledge and information on sustainable production and collection techniques cultivation season and quantity to be cultivated 20. Timely Supply of quality seeds and seedlings

35. The farmers have very limited access to finance – the availability of finance in NTFP sector is very low or not clearly spelt out in micro finance institutions and cooperatives


36. Collectors/Cultivators are paid only after 45-60 days by the traders – this has shifted the interest of this group to agro products underutilizing the supply strength of NTFPs

37. Timely payment by the traders

37. Limited access to finance – as M/FIs are hesitant to finance traders involved in NTFPs


Additional from Kathmandu Majority of the constraints derived from Kathmandu have been clubbed with the constraint above – some specific constraints and services related to Kathmandu and at the Central level have been highlighted separately below:

CONSTRAINT SOLUTION/SERVICE 38. High cost in growing genetic material and unavailability of Hybrid product in Nepalese prevalent market. Result - the materials are imported from the third world country and the growing of these ask for the in depth research on the possibility of genetic materials in agro-climatic condition of Nepal

10. Provision of International linkages with a) foreign labs, b) alliances and partnerships, c) international seminar and conferences

39. Lack of International marketing links to popularize the Nepali products available for centuries .The unavailability of quality products and unable to supply in the large quantity hinders the international marketing linkage. The absence of the international linkages in various aspects of the NTFPs hinders to penetrate in the global market


40. Lack of accreditation and linkages to the international lab hinders the possibility of testing the product in Nepal. The testing facility for the product that will be internationally certified in International market are absent .The compliance with

11. Provision of the accredited certifying agency in the country that provides certificates to the products and the actors


international standards asks for going to rigid test procedures which are being even done in overseas. This result for the high cost involved in testing the product and the danger of returning the consignment if the product is not to the standards.

41. Lack of activities from the association, federation and research organization - the activities carried out like coming out with magazine , website (by one of its member ), holding conferences and seminars has not been in full swing due to lack of fund and less number of the member in the association

38. Capacity building training for the association , federation and research organization

42. Lack of impetus on making research organization, federation and Association as the certifying agency and absence of international networking in Certification hinders research organization, federation and association to act as Certifying Agency


43. Inadequate laboratory and research facilities and the laboratory facilities are old and conventional and cannot meet the standards required for EU/USA market. The huge cost involved in establishing these laboratories hinders the businesses for quality control of the products Some of the Instruments are not functioning like QLC in one of the industry

41. Provision research and laboratory facilities


7 Listing of Services The services below have been listed from the impetus of the Focus Group Discussion where constraints were presented in Nepalgunj and Kathmandu and are not the views of the analysts and consultants. The ranking to follow were also the outcome of discussion with various actors of the NTFPs subsector:

1. Timely information on price in various markets through radio, publication and other means (TV) 2. Continual interaction and discussion between the various actors of NTFPs which will help in building trust 3. Provision of database on NTFP resources/suppliers/Inventory/Quality supply/Prices 4. Knowledge on alternative market-international market (in addition to India) 5. Exposure to knowledge/ information on Collective transaction 6. Re/establishment of standard processing plants 7. Effective rapport building between buyers and sellers 8. Market Assessment 9. Information on international quality standards, quality Certification 10. Provision of International linkages with a) foreign labs, b) alliances and partnerships, c) international seminar and conferences 11. Provision of the accredited certifying agency in the country that provides certificates to the products and the actors 12. Provision of Irrigation facility 13. Storage facility and its knowledge on its importance 14. Assist farmers in acquiring public land (leasehold forestry) 15. Preferential facility for NTFPs transport 16. Effective Monitoring of trade practices and clarity on policies and procedures regarding NTFPs 17. Exposure to clear legal definitions at various levels of processing 18. Information on trading provision 19. Advocacy with the service providers for a) lowering the transitional cost, b) congenial regulatory processes for registering new products c) low taxes d) Single window system e) FDI

20. Timely Supply of seeds and seedlings 21. Timely availability of complementary and secondary materials at local levels 22. Demand Stimulation and creation 23. Knowledge and information on sustainable production and collection techniques cultivation season and quantity to be cultivated 24. Formulation and or strengthening of NTFP specific sub-groups within CFUGs and groups that are directly working with priority products 25. Access to short-term training, workshops 26. Technical and managerial information on operation of processing plant 27. Hassle free clearance service 28. Technical knowledge on collection, storage management and market information 29. Technical knowledge on resource identification 30. Exposure to knowledge and information on sustainable production and collection techniques cultivation season and quantity to be cultivated 31. Information on importance of available resources also insights on technology 32. Development and supply of product specific tools 33. Provision of access to sustainable supply of raw material 34. Technology availability 35. Access to alternative Finance 36. Appropriate price margin 37. Timely payment by traders 38. Capacity building training for the association, federation and research organization 39. Advertising linkage service to promote effective communication among stakeholders (cultivators, processors, traders, exporters) 40. Access to training on regulatory system 41. Provision for research and laboratory facilities


7.2 Ranking of Potential Services The ranking of products are for those that are considered of importance to the project based on interaction with the various stakeholders of the project. Potential to Increase Rural Income

HIGH 2,14,22,23 4, 9,17,33 1,3, 12, 19, 20,30 MEDIUM 10,16,28,21,

25,31,32,40 5,24,26

LOW 18,27 6,7,11,13,15, 29,38,39

8

LOW MEDIUM HIGH Potential No. of MSME Beneficiaries

8 Service/Solution Assessment With reference to the above ranking matrix, the following 24 services are selected for assessment:

Services Provider (s) Constraint to service/solution

1. Access to timely information on price in various markets through radio, publication and other means (TV)

FECOFUN /DDC/VDC/DFO Private Entities/ANSAB

Inadequate contact and network to acquire knowledge and information on NTFPs

3. Provision of database on NTFP resources/suppliers/Inventory/Quality supply/Prices

Associations/Federations/Private organizations

Very little and irrupted access with information generator and providers of NTFPs

4. Access to alternative market –international market (in addition to India)

JABAN, CCI, Entrepreneurs Financial institutions do not provide service providers with fund to conduct research and market assessment Inadequate knowledge, technical know-how, limited financial access and initiation on research and product development of NTFPs

5. Exposure to knowledge information on collective transaction

JABAN CCI Entrepreneurs

No practice of group transaction has limited orientation and initiation towards collective transaction Current practice of individualistic approach rather than groups have


limited the return on investment

6. Re/establishment of standard processing plants

Processing Plant Owners Traders

Insufficient technical knowledge on operation and timely management of processing plants Insufficient finance provision by financial institutions for investing into such processing plants

9. Information on international quality standards, quality certification

JABAN, DFO, FECOFUN, Private Companies

Information base on international quality standards is weak due to inadequate network with international buyers Certification authority yet to formulate resource base for NTFPs in the country


JABAN, Federations, Government Organizations –DFO, DADO, Financial Institutions, Private Consultants, Bilateral and Multilateral organization

Certification authority yet to formulate resource base for NTFPs in the country Information base on international quality standards is weak due to inadequate network with international buyers Absence of effective alliances with concerned international parties is hindering required assistance interms of lab facilities, market demand and other information sharing


DFO, Department of Customs, JABAN

Certification authority yet to formulate resource base for NTFPs in the country


District Irrigation Office/Dealers/ DADO/Private Companies/Projects

No provision of finance by the financial institutions for NTFPs irrigation Service providers don’t have knowledge and network with appropriate technology and it’s suppliers


16. Effective Monitoring of trade practices and clarity on policies and procedures regarding NTFPs

Department of Customs/DFO/Quarantine offices

Neither there exists clearly defined policy on NTFPs, nor the government officials are sound on technical understanding NTFPs to facilitate commercial transaction

17. Exposure to clear definitions on various levels of processing

Government Offices Clearly stated definition on various levels of processing doesn’t exist and thorough understanding of existing one is also lacking amongst government officials

19. Advocacy with the service providers for a)Lowering the transitional cost b) Congenial regulatory processes for registering new products c) Local taxes d) Single window system e) FDI

FECOFUN, JABAN, HJSS, Nepal Herbs and NTFP Coordination Committee AEC

NTFPs standards at the national and local level have not been clearly set Preferential and specific policies to NTFPs are lacking hindering optimal production and commercial transaction

20. Timely supply of seeds and seedlings

AGRO VETS/Nurseries Service providers lack contact with suppliers of Quality seeds and saplings and adequate demand of the same

21. Timely availability of complementary and secondary materials at local levels such as additives, packaging, diluents

AGRO VETS/Nurseries/ Very low number of suppliers exist with inadequate demand for them to commercially survive, which has limited the potentials of NTFPs

24. Formulation and or strengthening of NTFP specific sub-groups within CFUGS and groups that are directly working with priority products

DADO/FECOFUN/ NGOs-CBOs

Service providers lack commercial orientation along with skill and knowledge on optimizing potential of NTFPs

25. Access to short-term training, workshops

DFO/FECOFUN, JABAN/DADO/NGOs-CBOs

Insufficient interest from the cultivator/farmer level due to unaware of market possibilities of NTFPs Inadequate resources (fund) and resource person for training and workshops on NTFPs Available trainers are not aware of market possibilities


with NTFPs actors 26. Technical and managerial information on operation of processing plant

Private Providers/DFO and related government bodies

Insufficient technical knowledge on operation and timely management of processing plants


Ranger – District Forest Office District Plant Office DADO, Private Technical Consultants

Technical knowledge of service providers on NTFPs is insufficient and effective network with information providing centers is lacking

31. Information on importance of available resources and also insights on technology

Ranger – District Forest Office DPO, DADO, Private Technical Consultants

Service providers lack commercial orientation along with skill and knowledge on optimizing potential of NTFPs and technological aspects

32. Development and supply of product specific tools

Private providers, DADO/NGOs-CBOs/Farmers

Insufficient supply of appropriate product specific tools on NTFPs due to less demand of the same

33. Provision of access to sustainable supply of raw material

Input Suppliers – Agrovets, DADOs, DFO, FECOFUN

Service providers lack commercial orientation on optimizing potential of NTFPs and are not active on supplying raw materials

38. Capacity building training for the association , federation and research organization

Government Bodies Inadequate resources (fund) and resource person for training and workshops on NTFPs Available trainers are not aware of market possibilities with NTFPs actors

39. Advertising linkage service to promote effective communication among stakeholders (cultivators, processors, traders, exporters)

NGO-CBOs, Private entities, FECOFUN, JABAN

Very little and irrupted access with information generator and providers of NTFPs with service providers and producers

40. Access to training on regulatory system

DFO, Department of Customs, DADO, FECOFUN, JABAN

Neither there exists clearly defined policy on NTFPs, nor there exists effective mechanism of disseminating such policies


9 Ranking of Interventions The interventions below looked at the services selected, providers for the services, constraint for the providers and the matching interventions. Interventions were ranked gauging at six variables: income, MSEs, cost effectiveness, sustainability, BDS MaPS capacity and time frame. The scale used was 1-4, where 1 is ranked the lowest and 4 the highest preference under each variable. The ranking of the interventions was made in discussion with the Team Leader, Deputy Team Leader, Director of Operations and Marketing Team Leader of BDS MaPS – who looked at the available resources and the overall strategic approach of the project. The views from the Focus Group Discussions and interactions were also discussed during the ranking.

SN

INTERVENTIONS

Inc

om

e

MS

Es

Co

st E

ffec

tive

Su

stai

nab

ilit

y

BD

S M

aPS

C

apac

ity

Tim

e F

ram

e

TO

TA

L

1 Facilitate service providers (FECOFUN, DDC, VDC, DFO, etc.) to develop and maintain database on NTFP -suppliers, inventory quality, quantity, price and timely dissemination of market information through use of public media 3 3 3 4 3 4 20

2 Facilitate in carrying out assessment of NTFPs in view of its demand in domestic and international market to develop appropriate market insights

3 2 2 3 3 3 16 3 Promote setting up and maintenance of web site for B2B information 2 2 2 3 3 3 15 4 Facilitate group formulation and effective operation of participants

enhancing their managerial, marketing competence 4 3 4 3 3 3 20 5 Facilitate coordination and linkage between Indian and Nepalese

buyers and sellers of NTFPs by promoting interaction forums on regular intervals

2 2 3 3 3 3 16


6 Facilitate in developing capacity of mediators for establishing international /national linkages and coordination at national and international levels

3 3 4 3 3 2 18 7 Facilitate establishment of lab testing facilities and develop the capacity

of existing laboratories for R&D and quality tests 2 3 3 4 3 3 18 8 Promote awareness campaigns on the importance of the specialized labs

and carrying out need survey for the services 2 2 2 2 2 3 13 9 Facilitate in setting up of Nepal Standard for NTFPs 2 3 3 4 3 4 19 9 Promote appropriate irrigation technology for NTFPs 3 3 2 3 3 3 17 10 Facilitate in establishing suitable processing plants for locally available

NTFPs and develop local competence, and access to supply, maintenance and repair of the technology

4 4 3 3 2 3 19 11 Facilitate to establish and operate commercially viable storage facilities

for NTFPs by introducing such practices to entrepreneurs, traders, processors, exporters

2 2 2 3 2 3 14 12 Facilitate development and optimized usage of ‘Resource-Inventory’ for

sustainable and commercially viable NTFPs 2 2 3 3 3 3 16 13 Facilitate CFUGs in acquisition of leasehold and community lands

for NTFPs (cultivation and collection) 3 2 2 3 2 1 13 14 Facilitate consultative and business negotiation meetings between traders,

transporters (surface and air) and cultivators/collectors for prioritized transportation services

3 3 3 2 3 3 17 15 Facilitate in enhancing technical competence of government officials

and farmer groups to effectively monitor trade of NTFPS to prevent illegal trade 2 2 2 3 2 2 13


16 Advocate together with processors and government officials for formulation of preferential one-window policy and clear definitions on NTFPs processing, rational regulatory framework for collection, production and trade

2 3 4 4 3 3 19 17 Educate participants of NTFPs on government policies and

related legislations 2 2 3 3 2 3 15 18 Promotion of nurseries and agro vets for production and sales of quality

NTFPs seeds for farmers and market exploration for seed and seedlings 3 3 2 3 3 2 16 19 Promote input suppliers for timely availability of complementary

and secondary materials at local levels for processing 3 3 3 3 2 3 17 20 Promote initiation and awareness in cultivation of commercially viable NTFPs

4 4 3 4 3 3 21 21 Identification of NTFP groups and strengthen with facilitation

through training program on strategic price bargaining and create demand for NTFPs cultivation

2 2 2 2 2 3 13 22 Facilitate in incorporating NTFP priorities and programs in CFUGs’

operation plan 3 2 3 3 3 3 17 23 Promote awareness on importance and benefits of NTFPs at farmer level

to attract them in cultivation and collection 3 3 2 3 2 2 15 24 Promotion of sustainable harvesting 4 4 3 4 3 3 21 25 Promote introduction of appropriate machine, tools and equipments for

harvesting & processing of NTFPs 2 3 2 3 2 3 15 26 Enhance knowledge on research and development and delivery ability

of technology suppliers of NTFPs 2 2 3 2 2 2 13 27 Enhance professionalism of collectors and cultivators in terms of timely

delivery, quality and quantity of NTFPs as per the requirement of traders 3 3 3 3 2 3 17


28 Provision of alternative financing for NTFPs by linking financial institutions with cultivators/traders and processors 2 3 3 2 2 3 15

29 Enhance knowledge of participants on production cost reduction and beneficial commercial transaction 3 2 2 3 2 3 15

31 Enhance awareness of financing institutions on commercial viability of NTFPs 2 2 2 2 2 3 13

32 Enhance trust and linkage between trader and collectors, cultivators on advance and/or down payment mechanism 3 2 3 2 3 3 16

Note: The shaded boxes represents the higher ranked interventions and selected by the team from BDS MaPS

Pocket Level Sub Sector Analysis Report

Pocket Level SSA Report Format –BDS-MaPS 32

10 Matching Services with Interventions The table below shows the relativity while matching of selected services and interventions:

Services Interventions 4. Knowledge on alternative market –international market (in addition to India) 10. Provision of International linkages with a) foreign labs, b) alliances and partnerships, c) international seminar and conferences 38. Capacity building training for the association , federation and research organization

6. Facilitate in developing capacity of mediators for establishing international /national linkages and coordination at national and international levels

1. Timely information on price in various markets through radio, publication and other means (TV) 3. Provision of database on NTFP resources /suppliers /Inventory /Quality supply /Prices 39. Advertising linkage service to promote effective communication among stakeholders (cultivators, processors, traders, exporters)

1. Facilitate service providers to develop and maintain database on NTFP -suppliers, inventory quality, quantity, price and timely dissemination of market information through use of public media

5. Exposure to knowledge information on collective transaction 24. Formulation and or strengthening of NTFP specific sub-groups within CFUGS and groups that are directly working with priority products 25. Access to short-term training, workshops

4. Facilitate group formulation and effective operation of participants enhancing their managerial, marketing competence

9. Access to information on international quality standard, quality certification 10. Provision of International linkages with a) foreign labs b) alliances and partnerships c) international seminar and conferences

7. Facilitate establishment of lab testing facilities and develop the capacity of existing laboratories for R&D and quality tests

11. Provision of the accredited certi fying agency in the country that provides certificates to the products and the actors

9. Facilitate in setting up of Nepal Standard for NTFPs

12. Provision of Irrigation facility 20. Timely supply of seeds and seedlings 30. Exposure to knowledge and information on sustainable production and collection techniques cultivation season and quantity to be cultivated

24. Promotion of sustainable harvesting

17. Exposure to clear legal definitions on various levels of processing 26. Technical and managerial information on

10. Facilitate in establishing suitable processing plants for locally available NTFPs and develop local competency, and access to supply,



operation of processing plant 32. Development and supply of product specific tools 31. Information on importance of available resources also insights on technology

maintenance and repair of the technology

21. Timely availability of complementary and secondary materials at local levels such as additives, packaging, diluents 30. Exposure to knowledge and information on sustainable production and collection techniques cultivation season and quantity to be cultivated 33. Provision of access to sustainable supply of raw material

20. Promote initiation and awareness in cultivation of commercially viable NTFPs/Spices

16. Effective Monitoring of trade practices and clarity on policies and procedures regarding NTFPs 40. Access to training on regulatory system 19. Advocacy with the service providers for a)Lowering the transitional cost b) Congenial regulatory processes for registering new products c) Local taxes d) Single window system e) FDI

16. Advocate together with stakeholders and government officials for formulation of preferential one-window policy on clear definitions of NTFPs processing, rational regulatory framework for collection, production and trade



11 Annex

11.1 Annex 1: Constraints –Interventions Table

Constraints Services Providers Constraint for Services

Interventions

The collectors have stopped collecting NTFPs due to lack of demand and market information on price for the products

1. Timely information on price in various markets through radio, publication and other means (TV) 2. Continual interaction and discussion between the various actors of NTFPs which will help in building trust 3. Access to database of NTFP resources/suppliers/Inventory/Quality supply/Prices

FECOFUN /DDC/VDC/DFO

Limited access to information

Facilitate service providers (FECOFUN, DDC, VDC, DFO, etc.) to develop and maintain database on NTFP -suppliers, inventory quality, quantity, price Promote setting up and maintenance of web site for B2B information Facilitate service providers like FECOFUN, DDC, VDC, DFO for timely dissemination of market information through use of public media

The market is heavily depended on the Indian traders, comparative bargaining power of local trader is very less – price controlled and determined by the Indian counterparts

4. Knowledge on alternative market -international market (in addition to India) 5. Exposure to knowledge/ information on Collective transaction 6. Establishment of processing plants

JABAN CCI Entrepreneurs

Limited collective orientation and feeling

Facilitate group formulation and effective operation of participants enhancing their managerial, marketing competence and price bargaining capability with the buyers

The export market is mainly oriented towards India and consequently the exporters are dominated by their overseas counterpart – the price and margins controlled by their international counterpart – the Nepalese exporters are left with very less margin and sometimes also have to face losses

7. Effective rapport building between buyers and sellers

Traders Limited trust and effective communication

Lack of need assessment for the demand of NTFP products in the international market for exporters

8. Market Assessment ANSAB CCI JABAN

Limited information base

Facilitate coordination and linkage between Indian and Nepalese buyers and sellers of NTFPs by promoting interaction forums on regular intervals Facilitate in developing capacity of mediators for establishing international linkages and coordination at national and international levels Facilitate in carrying out assessment of NTFPs in view of its demand in domestic and international market to develop appropriate market insights

The product from the traders yet to meet international quality and standard

9. Access to information on international quality standards, quality Certification 10. Provision of International linkages with a) foreign labs, b) alliances and part nerships 11. Provision of the accredited certifying agency in the country that provides certificates to the products and the actors

As Above Certification authority yet to formulate resource base for NTFPs

Facilitate establishment of lab testing facilities and develop the capacity of existing laboratories for R&D and quality tests Promote awareness campaigns on the importance of the specialized labs and carrying out need survey for the services

Limited irrigation facility for cultivation of NTFP products for cultivators


District Irrigation Office/Dealers/ DADO

Limited Finance Lack of appropriate technology

Promote appropriate irrigation technology for NTFP



There are limited number of processing plants for the processing of NTFP products cultivated collected by the farmers

6. Establishment of processing plants

Entrepreneur Limited Finance Limited specified policy related to processing Limited exposure to processing plants availability of machines and after sales services (maintenance)

Facilitate in establishing proper processing plants for locally available NTFPs

Facilitate develop and introduce appropriate processing technology and develop local competence for maintenance and repair of the technology

Limited knowledge on storage techniques and storage facilities for traders–this has brought forth the problem of unable to store the products for the long time and compelled to sell the products at whatever the price demanded by the exporters etc.

13. Storage facility and its knowledge on its importance

Entrepreneur CFUG

Limited finance for operating and maintaining storage facilities Limited knowledge on benefits of storage

Facilitate to establish and operate commercially viable storage facilities for NTFPs by introducing such practices to entrepreneurs, traders, processors, exporters Facilitate development and optimized usage of ‘Resource-Inventory’ for sustainable and commercially viable NTFPs

Inadequate land with the farmers to cultivate NTFPs

14. Assist farmers in acquiring public land (leasehold forestry)

CFUG, Local Government, Government Agencies

Reluctance among farmers due to existing bureaucracy and hassles in the system Incomplete operational plan

Facilitate CFUGs in acquisition of leasehold and community lands for NTFPs (cultivation and collection)

Land Transportation providers do not prefer to transport NTFPs which has been hindering and adding cost to both at the trader and the farmer level


Transport companies

Limited understanding on importance of NTFPs transaction

Facilitate consultative and negotiation meetings between traders, transporters (surface and air) and cultivators/ Collectors for prioritized transportation services

There is no provision for air transportation of NTFP products


Airlines Limited understanding on importance of NTFPs transaction

Facilitate consultative and negotiation meetings between traders, transporters (surface and air) and cultivators/ Collectors for prioritized transportation services

Illegal exports of NTFPs 16. Effective Monitoring of trade practices and clarity on policies and procedures regarding NTFPs

Department of Customs

Limited technical information on identification of species

Facilitate in enhancing technical competence of government officials and farmer groups to effectively monitor trade of NTFPS

Lack of clear definitions on various levels of processing to the cultivators and processors

17. Exposure to clear definitions various levels of processing

HMG Do not feel the importance to defining clearly

Advocate together with processors and government officials for formulation of clear definitions on NTFPs processing

There are certain trading principles followed by Indian traders – such as fixed credit policies (no. of credit days) and Nepalese traders are compelled to abide by such principles and territorial governance

18. Information on trading provision

JABAN Limited control on trading policies and limited bargaining power

Facilitate coordination and linkage between Indian and Nepalese buyers and sellers of NTFPs by promoting interaction forums on regular intervals

Less profit margin to farmers and traders due to heavy taxation/royalty burden on certain NTFP products

19. Advocacy with the service providers for a) lowering the transitional cost, b) congenial regulatory processes for registering new products c) low taxes d) Single window system e) FDI

CCI JABAN NHHPA HJSS (Himal Jadibuti Sarokar Samuha)

Weak network/support

Advocate together with stakeholders and government officials for formulation of preferential one-window policy on clear definitions of NTFPs processing, rational regulatory framework for collection, production and trade



Frequent and Contradictory decisions by the government has hampered trade practices at the trader and exporter level

19 FECOFUN Trader Associations – JABAN, HJSS

Weak networking/ support

Same as above

Issue of quarantine /custom duties/taxes not standardized and spelt out has hindered exports

19 JABAN, Department of Customs

Yet to standardize on taxes, policies, duties and tariffs regarding NTFPs

Same as above

Concerned authorities do on have clear cut policies, regulations, budget regarding NTFPs which has affected all the stakeholders of this sector

19 Line Agencies Development Organizations NGOs - CBOs

Limited Knowledge on NTFPs

Same as above

Lack of availability of NTFPs seeds for farmers to cultivate

20 Timely Supply of seeds and seedlings

AGRO VETS/Nurseries

Limited availability of Quality seeds and saplings

Promotion of nurseries and agro vets for production and sales of quality NTFPs seeds for farmers Promote initiation on opportunities for market exploration for seed and seedlings

Lack of complementary /secondary materials –packaging, additives, diluents has restricted value addition at all levels

21 Timely availability of complementary and secondary materials at local levels

Input Suppliers

Supplies through only limited places and yet to explore

Promote input suppliers for timely availability of complementary and secondary materials at local levels

Very few farmers come to visit Agro-vet for services and materials regarding NTFPs and their cultivation- deteriorating demand for services at the service provider level

22 Demand Stimulation and creation 23 Access to knowledge and information sustainable production and collection techniques cultivation season and quantity to be cultivated

Nursery Community nursery AGROVET DFO

Yield period long due to perennial crop

Promote initiation of cultivation of appropriate NTFPs in fallow land as: Demonstration Land Distribution of mini kit box

Lack of organized farmer groups for better bargaining power with traders

24 Formulation and or strengthening of NTFP of specific sub-groups within CFUGs and groups that are directly working with priority products

DADO/FECOFUN/ NGOs-CBOs

Limited commercial orientation

Identification of NTFP groups and strengthen with facilitation through training program on strategic price bargaining Facilitate in incorporating NTFP priorities and programs in CFUGs’ operation plan

Though processing units have been handed over to CFUGs, they lack management and operation skills. For instance, there is no shade hut to protect the plant, no any sustainable fund raising mechanism, no record keeping, technical know how (temperature and quality control) and others

26 Technical and managerial information on operation of processing plant

Private Providers

Limited knowledge on details of processing – usage/technology –levels of processing not clearly defined

Facilitate in enhancing technical competence of providers

Problem with clearance and collections have added legal problems to the traders

27 Hassle free clearance service

DFO, Revenue Office

Limited clarity on identifying NTFPs

Facilitate in enhancing technical competence of government officials of NTFPS

Limited knowledge and technical know-how on collection, storage, management and market information of NTFPs

28 Technical knowledge on collection, storage management and market information

Farmers/Traders/Processors

Limited knowledge on benefits of storage and limited information on markets

Facilitate in enhancing technical competence and knowledge of participants of NTFPs (through training programs and exposure visits)

Limited access to finance – as M/FIs are hesitant to finance traders involved in NTFPs

35 Financial Institutions

Limited awareness on potential of NTFPs

Provision of alternative financing for NTFPs traders by linking financial institutions with traders



11.2 Annex 2: Subsector Map of NTFPs in the Mid and Far Western Nepal

Note: Pls. refer district report for detail district SS Map

Traders in Nepalgunj / other urban centers

Commercial cultivator/

farmer

CCFFUUGGss

Wild household

gatherer / women DAGs

Exporters in Kathmandu

10-15% Domestic Consmp.

Other Countries –Germany, Korea

USA

Private Companies

Ind

ian

T

rad

ers

75%

Rural Traders

Mentha Processing Unit

Local Agrovets vvvetsvvvvetsvet

Local saving & lending groups

Forest officers

Major Importers

located in India

Devt. Projects

NGOs Input supply

Agronomic advice, seed dist.. Mone

Off farm activity; Raw NTFP collection from forest Grading, Drying

Semi processing of

Semi (final) NTFP products

Processing

Semi processed NTFP export to Kathmandu

Semi (final) NTFP

Processing

Supply of raw NTFP

Collection & Supply of raw NTFP

Producing

Input

Trading

Processing

Exporting

Trading

Importing



11.3 Annex 3: Pocket Level Report Format I. Introduction District: Pocket Area: Members: Date: March - , 2004 Rationale (why is this pocket area chosen?): ☺ ☺ ☺

Appendix 1 –Criteria for Pocket Area Selection under BDS-MaPS II. Major NTFP Products in the Pocket Area [products having greatest -market growth potential, number of collectors/cultivators, potential for profit for collectors/cultivators, presence of women collectors/cultivators, opportunities for linkages, potential for adding value to raw material at the collector level and least policy restrictions]

B. General description of NTFP market in the pocket are C. Ranking grid comparing products and project criteria (Attractiveness Matrix)

Potential to Increase Rural Income

HIGH

MEDIUM

LOW

LOW MEDIUM HIGH Potential No. of MSME Beneficiaries III. Information on Specific NTFP Products in the Pocket Area [Availability, status, profitability, potential -for cultivation and to be processed, etc.] Appendix 2 –Ranking Grid of Product Selection under BDS-MaPS IV. Subsector Information for the Pocket Area [this section might need to be presented separately for different product groups –if the subsector participants for these groups are different (eg. medicinal plant products might have a different subsector map than essential oils products)] A. Description of subsector participants in the area (how many of each, who they buy and sell

from, how much do they buy/sell per year, what distinguishes them from the others, etc.)


1. Small-scale collectors, 2. Large-scale collectors 3. Small-scale traders 4. Larger traders 5. Government extension offices/agent 6. Etc.

Appendix 4 –List of Service Actors and their Constraints under BDS-MaPS B. Description of the different kinds of buying and selling relationships (including how

advances are made, etc.) Examples: Trader Collectors Trader Trader agent Collectors Trader FUG leader Collectors Trader Trader FUG leader Collector Etc… Remarks on payment mechanism (especially on how money is paid, etc.)

C. Subsector map for the pocket area Appendix 3–Subsector Map with numerical data (no. of participations and volume of transaction)

V. Subsector Constraints in the Pocket [Should be clear enough to identify a solution, should mention who is affected by the constraint, should be clear why it is a problem. Should reflect the different categories in the interview guide but they don’t need to be presented according to category]

Appendix 3 –Subsector Map with numerical data (no. of participations and volume of transaction)

Functions MAP Retailing Wholesaling Production (Final Product) Input Assembly Input (Raw Materials)



Appendix 4 –List of Service Actors and their Constraints under BDS-MaPS Constraints Actors

Product A Product B Product C

Product D

1. 2. Cultivator/Collector 3. 1. 2. 3.

Processor

4. 1. 2. Trader 3. 1.

Exporter 2. 1. 2.

Facilitator / Service Provider

3. Note: Appendix 5 –List of People Interviewed and their Contact Information Date SN Name Contact Address Note:



11.4 Annex 4: Photos

CD Rom

Documents

Report on Subsector Analysis Non Timber Forest Products (NTFP) (Herbs and Spices… Nepal Non... · 2005-03-30 · Subsector analysis for BDS MaPS – A report: March 2004 7 1 Background