completed· Education

Improving economic conditions through value chain enhancement and small farmers agricultural cooperatives

Project proposal received on 21 May 2013: NACCFL has its roots in the Small Farmers Development Program which was implemented by the Agricultural Development Bank in 1975 for the development of the small and marginal destitute in rural areas. The sub project office became a Small Agriculture Cooperative Ltd (SFCL) in 1993 moment in which the ownership of the project was handed over to the farmers. In 2008 the farmers felt that they were facing different problems which could be better addressed by a federation and formed the NACCFL in January 2008. Eight district federations triggered its establishment. This is a umbrella organization of Small Farmer Agro Cooperative Limited (SFACL). SFACL are the agriculture microfinance cooperatives (credit for entrepreneurship, i.e investment in agricultural production, transformation and commercialization) which are fully owned and managed by the local community. At the moment 467 SFACL are member of NACCFL. NACCF provide services to SFACL and the SFACL is responsible to provide the services to the groups and cooperatives. The Central Federation is focused on the provision of non-financial services to their members, the services are provided through programs, focusing on capacity building, policy advocacy and co-operative network expansion. The mission of the organisation is: To provide appropriate non-financial services to the member organization for their institutional development and for the socio-economic development of the small farmer and deprived class people. Three objectives aims to achieve: • To improve the efficiency and autonomy of the members cooperatives through capacity building. • To advocate for the inclusion of deprived sector in the national budget • To increase its membership through the establishment of new cooperatives. Agriterra came into contact with NACCFL through the SFACL Dhading (cooperation since mid 2012) in December 2012. The organisation passed the quick scan and was invited to submit a proposal. In April 2013, the LO visited NACCFL and Makawanpur district, to better understand how NACCFL works and interacts with the district and local level.). The way of working is very similar to the PFEIP approach promoted by team 2: individual farmers are organised into into small producer groups, and focus on one particular value chain to improve production and marketing of the product. The producer groups become member of the VDC level cooperative (vertical linkages and through this enhance the opportunities for collective access to finance, services and marketing. The SFACL are members of the District level SFACL. The national level federation is supporting all the districts that are members and is being steered by the small scale farmer. Main target group are women farmers, as they have proven to be more reliable and serious implementers of the activities as individuals but also in groups. What are the goals, expected output and impact? Membership increase: yes Increase of number of organized local groups: yes, with 370 new groups Economic initiatives aimed at market access or production enhancement:yes Clustering (horizontal) (collaboration between producer groups): yes, through FFS and by creating SFACL at VDC level Clustering (vertical) (collaboration with other chain actors): yes, the SFACL become member of the Dhading SFACL. Establishing primary co-operatives (business planning): yes APPLICATIE - STEP 2 Which is the most relevant FFP work area & deliverable WA 4 supported by WA 1 Estimated outreach? Direct beneficiaries (add individual no): 4297 at local level - Men: 250 - Women: 4047 - Vulnerable groups : Y (94% are women) Local and sub national level outreach (tick mark only): Local:X Sub national: X National: only monitoring role Number of local groups involved: (add no)It is expected that 399 existing groups will be further strengthened in their economic activities, and 330 new groups will be established. The groups comprise 6-7 persons on average. So total 729 Groups can be reached Indicate relevant sectors: dairy, seeds (vegetables), goat, bee products Nepal Agriculture Cooperative Central Federation Ltd. (NACCFL) is the umbrella organization of Small Farmer Cooperative Limited (SFCL) and similar other agriculture cooperatives. SFCLs are agricultural microfinance cooperatives which are fully owned and managed by the local community. They have their origin in the Small Farmers Develop¬ment Program (SFDP) which had been implemented by the Agricultural Development Bank Ltd. (ADBL) in1975. As of Aug 2012, local communities in 404 VDCs have formed their own SFCLs spread in 60 districts throughout the country. Among these SFCLs, 11 SFCLs have been performing limited banking operations with the permission of Nepal Rastra Bank (NRB). The formation of the NACCFL was based on the felt need of all local federations to have a national representation and followed a bottom-up approach. Vision: We want to emerge as a leading and capable federation for the self-sufficiency and sustainable development of small farmer run small farmer Agriculture co-operatives and other co-operatives of similar nature so as to reduce existing poverty. Mission: We want to provide appropriate non-financial services to the member organizations for their institutional development and for the socio-economic development of the small farmers and deprived class people. 3. Problem Statement and Objectives: Small farmer’s cooperatives also face challenges in producing above subsistence levels as well as accessing markets for commercialization. With the inability to access markets, many of the cooperative members are forced to sell through middlemen around the country and receive less than adequate prices for the surplus produce. Given that the majority of the producers in Nepal are subsistence oriented, there is a need to support agriculture commercialization where possible. Support is needed for enhancing the scale of production, post-harvest operations, processing and trade. There is a need to link farmers to markets and develop each step in the value chain for various commodities that will eventually connect with domestic, the Indian market, and with other international (niche) markets. Cooperative development completed five decades in Nepal. There are more than 2700 cooperatives societies are in existence in different forms. Despite the existence of cooperatives for more than five decades, these organizations could not meet the objective of cooperatives to promote agriculture activities such as avail seed, agriculture equipment, seed money and appropriate technology and commercialize the agro product. Regular profit and proper utilization of the profit is assurance of sustainability. But unfortunately, most of cooperatives in rural areas fail to adopt this modern concept. They still depend upon grants rather than self dependency. Although the farmers are involved in vegetable, dairy, meat , honey and spices production they are not getting good price compared to the real market price due to low access to proper market and its knowledge Similarly there were abundant bio resources such as butter tree and sugar free potato nearby forest, these are not in use. If farmers get appropriate technology for processing the same, there income generating activities will be increased. Proposed project will be helpful to address the problem by achieving its objectives that is increased income and capabilities of SFACLs engaged in production, processing and marketing on a sustainable way. Objectives: The main objective of the project is to improve the living condition of rural population through smallholder value chain development in order to provide solutions that increase the income and capabilities of Small Farmers Agricultural Cooperatives (SFACL) engaged in production, processing and marketing on a sustainable basis. Sub objectives are: 1. Agriculture Market Development – The aim of this component i