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National Medium-Term Priority Framework (NMTPF) FAO's Country Strategy (2010/11 - 2012/13) Food and Agriculture Organization of the United Nations Kathmandu, Nepal April 2010 Abbreviations and Acronyms AGDP Agricultural Gross Domestic Product NDSP National Development Strategy Paper NGOs Non-Governmental Organizations NMTPF National Medium Term Priority Framework AEC Agro Enterprise Centre APP Agriculture Perspective Plan CBS Central Bureau of Statistics CCA Common Country Assessment DFID Department for International Development DFTQC Department of Food Technology and Quality Control DPs Development Partners FAO Food and Agriculture Organization of the United Nations FNCCI Federation of Nepalese Chamber of Commerce and Industries GDP Gross Domestic Product GoN Government of Nepal HDI Human Development Index HIPCs Highly Indebted Poor Countries IMF International Monetary Fund INGOs International Non-Governmental Organizations IOM International Organization for Migration IPM Integrated Pest Management LSGA Local Self Governance Act MDGs Millennium Development Goals MoAC Ministry of Agriculture and Cooperatives MoF Ministry of Finance Mt Metric Tons NARC Nepal Agriculture Research Council NLSS Nepal Living Standards Survey NMTPF National Medium Term Priority Agriculture Sector Development Priority Framework NPC National Planning Commission NPFS National Programme for Food Security PRS Poverty Reduction Strategy SDC Swiss Agency for Development Cooperation SPPA Special Area Development Programme for Poverty Alleviation TYIP Three-Year Interim Plan UNCT United Nations Country Team UNDAF United Nations Development Assistance Framework UNIFEM United Nations Fund for Women WFP World Food Programme WFS World Food Summit WTO World Trade Organization Table of Content Page I. INTRODUCTION 1 1.1 Objectives 2 1.2 Guiding Principles 2 1.3 Methodology Followed 3 1.4 Steps of Formulation 4 1.5 Scope for the Use of NMTPF Document 6 II. NMTPF RELATIONS WITH MDGs and PRS 7 2.1 MDGs and NMTPF 7 2.2 PRS and NMTPF 7 III. CURRENT AGRICULTURAL SITUATION ANALYSIS 8 3.1 Importance of Agriculture in the Nepalese Economy 8 3.2 Institutions Serving Agriculture Sector 9 3.2.1 Government 9 3.2.2 International/Non-Government Organizations 10 3.2.3 Private Sector Organizations 10 3.3 Past Interventions and Achievements 11 3.4 MDGs Progress, 2010 15 3.5 Major Challenges of Agriculture Sector and Food Security 16 IV. OVERRIDING NATIONAL DEVELOPMENT POLICIES AND PLANS 21 4.1 Periodic Development Plans 21 4.2 Agricultural Perspective Plan (1995/96 - 2014/15) 23 4.3 Three Year Interim Plan (2007/08 – 2009/10) 24 4.4 Master Plan for Forestry Sector, 1989 25 4.5 National Water Plan - Nepal, 2005 27 4.6 Localization of the MDG Targets 29 4.7 Government Policies, Acts, Rules, Regulations and International 29 Commitments Related to Agriculture Development and Food Security V. EXTERNAL SUPPORT ENVIRONMENT FOR IMPLEMENTING 31 PRIOIRTIES 5.1 Strategies Followed by Multi-lateral and Bi-lateral DPs 31 5.2 Agriculture Sector Related Programmes and Projects Implemented 33 by the Multi-lateral and Bi-lateral DPs 5.3 Collaborations within the UN System 33 5.3.1 Common Country Assessment, 2006 34 5.3.2 UNDAF (2008 – 2010) 35 VI. FAO’S COMPARATIVE ADVANTAGE FOR TECHNICAL ASSISTANCE TO THE GOVERNMENT 6.1 FAO’s Vision and Global Objectives 36 6.2 Attempts to Ensure Food Security 37 6.2 Regional Priorities in Asia and the Pacific 39 6.3 Core Functional Areas of Technical Assistance 41 VII. COUNTRY LEVEL PROGRAMMES AND PROJECTS OF FAO IN 42 NEPAL 7.1 Programmes and Projects Completed between 2000 and 2009 42 7.2 Lessons of Experience from the Programmes and Projects 43 Implemented in the Past 7.3 Currently Ongoing Programmes and Projects 43 7.4 Programmes and Projects Foreseen in the Pipeline 43 7.5 Agriculture Sector Related Programmes and Projects Implemented 44 by Multi-lateral and Bi-lateral DPs (Other than FAO) 7.6 Ongoing Programmes and Projects Implemented Under the 45 Agriculture Sector Related Ministries 7.7 Agriculture Sector Related Ongoing Programmes and Projects 45 Supported by the INGOs VIII. IDENTIFICATION OF COMMON AREAS OF INTEREST FOR THE NMTPF 8.1 Key Priority Areas Guided by the Country Situation and Needs 47 8.2 Possibilities of Mobilizing DPs’ Support to the Priorities Identified 55 8.3 Conceptual Outline of the NMTPF – FAO's Country Strategy 56 IX. PROPOSED NATIONAL MEDIUM-TERM PRIORITY FRAMEWORK (NMTPF) – FAO's COUNTRY STARTEGY 9.1 Selected Priority Outcomes 59 9.2 NMTPF and UNDAF Relations 60 9.3 NMTPF and NPFS Relations 61 9.4 Implementation Approach 61 X. CONCLUSION 63 Annexes Annex – I: Line Ministries, Departments, Development Boards, Corporations and Companies Associated with Different Agricultural Activities Annex – II: Agricultural Extension Support System Annex – III: Adaptation to Climate Change Effects for Agriculture and Food Security Annex – IV: Indicative Priorities of MoAC for the Forthcoming Three-Year Interim Plan (2010/11 – 2012/13) Annex – V: Legal Policies, Acts, Rules, Agreements and International Commitments Made by the Government Annex – VI: Support Areas Covered by Development Partners Working in Nepal Annex – VII: Agriculture Sector Related Programmes / Projects Supported by the International Development Partners Annex – VIII: Agriculture Sector Related Results Matrix of UNDAF Annex – IX: Programmes and Projects Completed by FAO between 2000 and 2009 Annex – X: Ongoing Programmes and Projects of FAO (As of April 2010) Annex – XI: FAO Programmes and Projects in the Pipeline (As of April 2010) Annex – XII: Agriculture Sector Related Ongoing Projects Implemented Under Different Ministries Annex – XIII: INGOs Supported Ongoing Projects Related to the Ministry of Agriculture and Cooperatives Annex – XIV: National Medium Term Priority Framework (NMTPF) – FAO’s Country Strategy Matrix I. INTRODUCTION Due to its political transition, Nepal needs support for re-building national capacities and rehabilitation for long-term development. In this context, it needs to address the issues facing agriculture sector and rural development ensuring food security. Commensurate with these thrust, the Government and other Development Partners (DPs) need planning and implementation of joint programmes with commonly agreed upon priorities. This National Medium-Term Framework (NMTPF) for Agriculture Development has been prepared to facilitate this process, This NMTPF is developed by the Ministry of Agriculture and Cooperatives (MoAC) with technical assistance of Food and Agriculture Organization of the United Nations (FAO) in view of the Government’s medium-term priorities related to agriculture and food security, where the DPs could offer capital and technical support in line with their respective mandates. The NMTPF covers analysis of issues and challenges confronting agriculture. It attempts to capture priorities revealed in the current Interim Plan (2007/08 – 2009/10) and the contexts highlighted by the approach papers being prepared for the forthcoming Interim Plan (2010/11 – 2012/13). With the formulation of NMTPF, the MoAC is expected to make use of necessary assistance in the priority areas. As service providers, it will also help the DPs to extend country level support with a visionary perspective for the medium-term. The NMTPF facilitates the DPs in outlining where they can assist in meeting the Government’s priorities in relation to Millennium Development Goals (MDGs) commitments especially with regard to Goal No. 1 “Eradicate Extreme Poverty and Hunger” and Goal No. 7 “ensure environmental sustainability”. It also contributes to UN Common Country Programming Process of United Nations Development Assistance Framework (UNDAF). Further, it also contributes toward the Government’s commitment on World Food Summit (WFS) Plan of Action and Paris Declaration on Aid Effectiveness. As strategic planning and resource mobilization tool, the NMTPF aims at following outputs: (i) Setting up priorities for a medium-term perspective for the agriculture sector; (ii) Identification of priority areas requiring capital and technical assistance; (iii) Identification of partnership potentials; (iv) Identification of programme areas requiring further actions (e.g. concept paper development, development of proposal, implementation plans etc.); and (v) Identification of DPs likely to support selected priorities. It is believed that the NMTPF facilitates DPs to position themselves for collaboration with the Government, UN Agencies, International/Non-Governmental Organizations (I/NGOs) and the private sector. They can direct their leveraging focus with proper analysis of utilization of scarce resources against various competing needs. Through the aligned priorities, they can coordinate their activities better. While recognizing each other’s comparative advantage, the DPs can complement to add values for the achievement of national objectives. With the priority areas identified, they can make their collaborations purposefully focused as well as effective. This process can contribute to the reduction of scattered mobilization of resources for fragmented planning and implementation of field programmes. The NMTPF encourages triggering of joint commitments by pointing out collective opportunities, which can ultimately enhance investment of more resources on agriculture and food security. Relating to the priority areas of NMTPF, the DPs can add value to food security and agriculture development process in the field of their respective mandates. 1.1 Objectives Major objective of NMTPF is to facilitate planning and implementation of priority activities in coordination between Government and the DPs. It is believed that it contributes to make both national and international DP responsive to the national needs visualized under a medium-term perspective. 1.2 Guiding Principles The formulation of NMTPF is based on the guiding principles that: - It will be reflective of agriculture sector development and food security needs; - It will be selective to the strategic policies and priorities for national development in general and agriculture sector development, in particular; - It will be inclusive of the priority areas involving enhanced resource mobilization at both national and international levels (i.e. in the form of capital assistance, infrastructure development and technical support); - It will be selective to the support interest of UN Agencies, bilateral and multi- lateral DPs. - It will be country needs driven and aligned to the development agenda of current and forthcoming Interim Plans (2007/08 – 2009/10 and 2010/11 - 2012/13); and - It will be complementary to the recognition of each DP’s respective comparative advantage / mandate. 1.3 Methodology Followed The formulation of NMTPF is based on the review of secondary materials as primary studies on 12 thematic areas identified to update information on priority issues related to agriculture. These topics were identified from the Scoping Workshop held in August 2009 and also in the course of review of documents and consultative meetings with different stakeholders. The subject areas covered by these thematic studies were as follows: 1 Agricultural Extension Support System 2 Agricultural Mechanization 3 Climate Change and Agriculture Production System 4 Dairy Development 5 Food Security and Nutrition 6 Hides and Skin 7 Integration of Gender in Agriculture (UNIFEM) 8 Labour Migration and Agriculture (IOM) 9 Land Use Policy and Planning 10 Livestock in High Altitude Areas 11 Market-led Meat Production and Processing 12 Pricing Policies for Agricultural Inputs and Outputs Inter-Ministerial Task Force was established to discuss issues and provide technical inputs. A High Level Committee was also formed to guide the formulation work. This Committee was chaired by the Vice Chairperson of National Planning Commission (NPC). Identified priorities were discussed in the Filed Programme Development Workshop held at Pokhara. This workshop was attended by the FAO staff members and the invitees from the Departments and the Ministry of Agriculture and Cooperatives (MoAC) and Ministry of Forest and Soil Conservation. 1.4 Steps of Formulation Five steps have been followed for the formulation of NMTPF. At Step-1, prevailing situation was assessed with review of past achievements and ongoing interventions. It also covered analysis of contributions made by prevailing policies and procedures. The Scoping Workshop held in August 2009 ascertained thematic areas to be covered. This workshop held discussions on issues, needs and priorities concerning agriculture, livestock, fisheries, forestry and food security. Participants to the Workshop were drawn from Government, NGOs, research institutions and the DPs (bilateral and multilateral). The workshop recommended thematic studies to be undertaken to understand emerging needs and priorities that NMTPF could consider. It also reviewed the roles played by different stakeholders. At Step – 2, priority areas were identified based on the analysis of issues and opportunities. The implementation experience of current Interim Plan (2007/08 – 2009/10) was examined with lessons drawn for the approach papers to be prepared for the forthcoming Interim Plan (2010/11 – 2012/13). These analyses led to the identification of priorities along with the overriding guidance captured by the Agriculture Perspective Plan (APP), 1995/96 – 2014/15. Viewing that too many priorities could mean almost 'no priority', attempt was made to make the list of priorities reasonably shorter to a manageable extent. Attempts were also made to avoid the overlaps. Given that different DPs have different comparative advantages, their respective mandates were honoured, while reconciling the priorities for potential partnerships. During selection of one activity over another, an approach of whether “X” is more important than “Y” was applied (instead of simply listing priorities without examining their relative importance). At Step – 3, the likelihood of complementary support from the DPs was assessed against the priority gaps to be met. In this context, the medium-term / long-term support strategies of the DPs were reviewed along with their resource allocation priorities. It helped to identify the DPs, who could add value to the intervention process based on their respective mandates. At Step – 4, attempts were made to understand the effects of past and ongoing national development strategies and plans. Discussions were held with the NPC and MoAC through meetings and workshops. Consultations were made with the Inter- Ministerial Task Force chaired by the Joint Secretary, MoAC and High Level Committee chaired by the Vice-Chairman of NPC. At Step – 5, the NMTPF was validated. Prior to the validation, comments and suggestions were obtained on the draft report from different stakeholders. Figure 1: Steps Followed for the Preparation of NMTPF Step - 1: Situation Analysis Review of policies and strategies Review of accomplishments made in the past Analysis of current situation (including emerging issues) Step - 2: Prioritization of Issues Identification of priority issues for a medium-term (3 years) Reconciliation of priorities aligned with the areas spotted under for Interim Plans (current and forthcoming) Selection of priorities possible to cover according to the mandates and comparative advantage Step - 3: Matching Priorities with Possible Support from DPs Review of medium and long-term country support strategies followed by the DPs Review of subject areas covered by completed, ongoing and pipeline projects of the DPs Identification of areas for possible collaboration between Government and the DPs Step - 4: Preparation of Draft NMTPF Discussion of issues, opportunities and priorities in the meetings and workshops (including discussions with the Inter-Ministerial Taskforce and High-Level Committee) Identification of common priority areas between GoN and DPs (based on the analysis of current situation, gaps and emerging priorities) Selection of priorities to be addressed in the medium term (3 years) Step- 5: Validation of NMTPF Presentation of Draft NMTPF to key stakeholders (including the DPs) Finalization of NMTPF in response to comments Submission of NMTPF to the NPC through MoAC Coherence, timeliness and assistance to common priorities are important for NMTPF. For effective implementation, it requires mobilization of technical expertise at different levels. 1.5 Scope for the Use of NMTPF Document The NMTPF has attempted to capture key priority areas. However, it is not exhaustive of all concerns. Taking into account the limited resource mobilization potential of the DPs and subsequent absorption capacity of the Government, the priority areas are specified in view of what could be achievable in three years’ time timeframe. It is possible that some subject areas not covered in the listed priorities at present could emerge as new priorities in future, while this NMTPF is implemented. At such situation, this NMTPF should not restrict accommodation of further priorities and subsequent mobilization of resources. In this sense, this NMTPF should be treated as a living document, which should remain open to accommodate emerging priorities. It is also possible that some priority areas might have gone down in the priority order and left outside the current coverage. If such left out priorities emerge as new priority in the future, they should be accommodated as well. The Government and DPs are expected to maintain flexibility in a need responsive way. To ensure this, the NMTPF should be treated as a flexible tool in accommodating priorities. It should be understood that the purpose of preparing NMTPF is not to abruptly terminate or wind down previous commitments that prevail in the form of ongoing or pipeline programmes. However, emphasis is to ensure that such commitments would be maintained till they reach their natural end before it is totally switched over to NMTPF priority umbrella. It is believed that the NMTPF would contribute to the mobilization of more funds at national level. It provides opportunity to the country representation offices of the DPs to play catalytic role for priority actions and enhance investment leverage for large- scale initiatives based on the local experience. II. NMTPF RELATIONS WITH MDGs and PRS The formulation of NMTPF is linked with the national, regional and global frameworks and commitments. It related to MDGs and Poverty Reduction Strategy (PRS). 2.1 MDGs and NMTPF The NMTPF attempts to harmonize technical services related to the MDG No. 1 (Eradicate Extreme Poverty and Hunger) Target 1 “reduce by half the proportion of people living on less than a dollar a day and MDG No. 7 “ensuring environmental sustainability”. It also relates to human rights approach concerning “rights to food”. The NPC has recently prepared Nepal MDGs Progress Report (Draft, 2010), which identifies gaps between the targets and achievements. This NMTPF can be a good tool to revise and refine priority sectoral targets in line with the MDGs. The NPC is planning to develop Simplified Macro-economic Framework (SMF) for the assessment of poverty impact of growth, which contributes to healthy projection of resources needed for the achievement of MDGs by 2015. The NMTPF benefits from such projection in terms ensuring support from the DPs. 2.2 PRS and NMTPF As one of the 80 low-income countries, Nepal is entitled for concessional lending and debt relief facilities of the World Bank and International Monitory Fund (IMF) under the PRS category associated with Highly Indebted Poor Country (HIPCs). With the formulation of NMTPF, the DPs can best place their support for Government’s thrust. As agriculture is a lead sector in terms of employing majority of the poor in the country, the NMTPF provides opportunity to the DPs in enhancing effective implementation of activities under a broader Poverty Reduction Strategy (PRS) framework. It helps to select interventions for positive impact on food security, agriculture and rural development. III. CURRENT AGRICULTURAL SITUATION ANALYSIS Nepal emphasized poverty reduction through private sector-led growth during the Tenth Plan (2002/03 – 2006/07). The Three Year Interim Plan (TYIP) (2007/08 – 2009/10) continued with the same thrust (i.e. growth with poverty reduction) and also highlighted the need of greater presence of the state for development in the remote areas and inclusion of the marginalized groups. Though conflict was intense in the Tenth Plan period, the TYIP enjoyed changed environment after signing of Comprehensive Peace Agreement. Despite such change, the country has still not been able to win private sector's confidence in doing the business so much. Compounded by frequent change of the Governments and their respective policies, the process of building confidence has been considerably hindered. Due to higher rise of petrol price in 2008, the consumer price for basic agricultural commodities mounted significantly making access to food more difficult in the remote areas. As the transportation cost increased, the subsidized food items also became more expensive than before. This situation further marginalized access to food among the poor families. Occasional droughts, floods and other natural disasters added fuel to the problem of food security dismantling the protective cushion for poorest of the poor. All these boil down to the challenge of economic development and appropriate delivery of services. 3.1 Importance of Agriculture in the Nepalese Economy Nepalese economy has been experiencing structural changes over the years, as evidenced by the decline of agricultural contribution to Gross Domestic Product (GDP) by more than 11 percent since 1990s. Nevertheless, the role of agriculture still remains prominent, with around 66 percent of active labour force engaged in agriculture and 38 percent of the GDP accruing from the farming sector. Given the pivotal role of agriculture sector in the Nepalese economy, it has remained in priority in all periodic plans to-date. Nepal’s rural economy with greater number of people dependent on agriculture for their livelihoods demands modernization and commercialization of agriculture. Increasing need of food security and nutrition security further adds challenge to the concerns for developing more irrigation, fertilizer, storage, marketing, improved seeds and improved breeds, quality control, service delivery, research, credit and human resources development facilities. The demand for production of fruits and vegetables is also growing together with increased importance of nutritious food. Though the country has attempted commercialization and modernization of its production system in some pocket areas, there is lot to be done yet. Vegetables growing and goat keeping have appeared as relevant enterprises against poverty as they contribute to the generation of income for small and poor households in the rural areas. Similarly, floriculture is gradually picking up as export item in the recent years (MoAC, 2008). 3.2 Institutions Serving Agriculture Sector The institutions engaged in providing support to agriculture development include: Government, NGOs, private sector organizations and the DPs. 3.2.1 Government Among the government organizations, four types of agencies are involved in providing direct or indirect support to agriculture: (a) advisory body, (b) line ministries and departments, (c) autonomous entities, and (d) public sector institutions outside the government structure. The NPC is an advisory body, which sets national development goals, objectives, strategies and policies. It operates under the National Development Council (NDC) - an apex body chaired by the Prime Minister. This Council is a venue for ensuring political commitment of the Government towards the development process. The design and implementation of sectoral policies, legislative instruments and programmes are carried out through the line ministries. They are approved by the Parliament upon endorsement from the Cabinet. All line ministries have their respective Planning Cells contributing to the design of sectoral and sub-sectoral plans. The plans are formulated both at the national and district levels. At the district level, Local Development Officer (LDO) coordinates the plan formulation process. Around seven ministries contribute to the services concerning agriculture and its associated sectors / sub-sectors. MoAC is mostly engaged in covering crop production, food security, horticulture, livestock, fishery, technology system management, inputs supply and marketing activities. Activities related to rural development, irrigation, soil conservation, watershed management and forestry are covered by other line ministries. The departments of line ministries are implementation wings of planned activities. Selected activities are implemented through the Development Boards, Corporations and Companies as well. Most of these entities have their decentralized offices at the district level, with some of them having offices even at the sub-district level. Some autonomous entities are also engaged in supporting agriculture development activities (See Annex I for further details). 3.2.2 International/Non-Government Organizations The Government has been emphasizing mobilization of NGOs to complement to the implementation of development plans. Their role has increased in supporting backward communities. They contribute to development in collaboration with local government agencies as envisaged under the Local Self-Governance Act 2055 (1999). Around 30,000 NGOs work in Nepal to support income generation, creation of employment opportunities and infrastructure development with mobilization of internal and external resources. The activities of INGOs have increased in the recent years after the country stepped into a new political set-up. They implement programmes focused on alleviation of poverty and hunger including the development of rural infrastructures (e.g. trails, market centres and micro-irrigation systems). 3.2.3 Private Sector Organizations The private organizations contributing to the development of agriculture are: - Farmers (engaged in the production process); - Agro-enterprises (involved in the supply of inputs such as seeds and fertilizers, processing and marketing of the agricultural products); - Commodity marketing groups (e.g. specific groups for fruits, vegetables and milk marketing); and - Cooperative unions (established at the national and district levels such as District Cooperative Union, National Federation of Milk Producers Cooperative, Federation of Community Forestry Unions and Seed Entrepreneurs Association of Nepal). At local level, the traders are organized into district specific Chamber of Commerce and Industries. At the national level, they are organized under the Federation of Nepalese Chamber of Commerce and Industries (FNCCI). The FNCCI includes a wing called Agri-Enterprise Centre (AEC), which is established to support development of agricultural commodities such as tea, sericulture, floriculture and apiculture. 3.3 Past Interventions and Achievements Around 5.5 percent economic growth was targeted under the TYIP. The first year of the plan recorded a growth closer to this target, while it was even more in the case of non-agriculture sector. However, from the second year onwards, this momentum could not be continued because of series of bandas, protests and worsening security conditions. Table 1: Target and Achievement of Three Year Interim Plan (2007/08 - 2009/10) (In percent) Actual Implementation Average Sector 2 Year's Gap TYIP Target 2007/08 2008/09 Average Economic Growth* 5.5 5.3 3.9 4.6 -0.9 Agriculture 3.6 4.7 2.1 3.4 -0.2 Non-agriculture 6.5 5.7 4.9 5.3 -1.2 Inflation 5.6 7.7 9.5** 8.6 3.0 Fiscal deficit (% of GDP) 3.0 4.0 0.04 2.0 -1.0 BOP surplus (% of GDP) 1.0 3.6 1.8** 2.7 1.7 * At base year price ** Revised estimate by NRB Source: National Planning Commission, Central Bureau of Statistics and Nepal Rastra Bank, 2009. Though the plan was reasonable to adopt positive growth projections on the assumptions of political stability and improved security conditions, the action environment took different routes. During planning improvements in political stability and security situation were expected to pave way to the decline of recurrent expenditure and increase in the capital expenditure with better investment climate. However, this expectation went wrong. Though the operational environment during TYIP period was disturbed by occasional political turbulence, Nepal still remains rich in its agro-biodiversity conditions, which enables the country to grow wide range of crops (cereals, pulses, oilseed crops, fruits, vegetables and other cash crops). Animal husbandry is an integral part of mixed farming system. Many farmers raise cattle, buffalo, goat, pig and poultry. Aquaculture is one of the important enterprises in Terai, where around 21 percent of the total land is cultivated (around 3.09 million ha). Of the total cultivated area, around 1.2 million ha. Has access to irrigation facility. The average cropping intensity of this area is 1.8. The agricultural land holding per-capita is shrinking in the recent years due to population increase. Average farm size in the country is less than 0.8 ha. The parcels are scattered rendering difficulty for the management of agricultural activities. Of the total land in the country, around 39.6 percent is covered by forest. As major sector contributing to economic growth, the agriculture sector in Nepal has to transform its subsistent agriculture to a vibrant business-focused commercial and competitive agriculture system. Greater dependency on the monsoon rain has to decrease. The country need to modernize agriculture to boost production with significant industrial base, where people can get access to employment and reduce their poverty. For this to happen, the country needs reforms in policies and strategies to effectively address the issue of modern technology, inputs, credit, year-round irrigation, market and agriculture-friendly infrastructure facilities. Paddy production grew by 16.8 percent. The production of vegetables and fruits also increased. The growth of agriculture sector as a whole was 5.65 percent. Its contribution to GDP reached 32.54 (MoF, 2008). This was the highest level growth recorded in the last seven years. It was contributed by the favourable weather conditions of the year, among others. Production of milk and milk products showed positive results. The Tenth Plan (2002/03 – 2006/07) had targeted per capita production of milk by 50.85 litres. However, the production level achieved was 51 litres per capita by 2006/07. Meat production slightly increased from 8.5 to 8.6 kg per capita. Its target was to achieve 9.94 kg per capita. Poultry meat and egg production could not meet the target due to the bird flu outbreaks. Fish showed an achievement of 1.5 kg per capita at the beginning of TYIP against a target of 1.87 kg per capita (NPC, 2007). Though fishery is emerging as one of the fast growing sub-sector in agriculture, its contribution to GDP is still less than one percent. Growing demand of nutrition-rich food in the urban areas render vast potential for the growth of fish raising. The growth rate accomplished by this sub-sector in 2007/08 was around 7.25 percent. Improved cultivation practices were developed for the high value crops like Chiraito, Allo and Keshar. It contributed to the diversification of crops to some extent. Resource conservation technologies contributed to increase yields with reduced cost of production and timely plantation of crops. They also contributed to the conservation of moisture. Scaling up such efforts would be useful for further diversification of crops with higher yields. Modern varieties were recommended for cereals, pulses, oilseeds and vegetables. However, the rate of adoption by the farmers was low. Numerous micro-climates, lack of availability of quality seeds in time and place and the lack of year-round irrigation constrained application of modern technologies. The hybrid seeds, particularly vegetables and maize seeds, were imported from India despite potentials for establishing production facilities at the national level. Compared to the demand of improved technologies for fruits and livestock, their adoption rate is limited. Annual agricultural loan disbursement was around NRs 14, 650.2 million. Around 44.7 percent loan was advanced for agro-industries, marketing and warehouse construction followed by 24.8 percent for the production of food and cash crops (MoF, 2008). The use of chemical fertilizers (in nutrient terms) went down over the years mainly due to the withdrawal of subsidy from the beginning of 1997. Compared to 38,950 Mt. chemical fertilizers used in 2002/03, the use of fertilizers in 2007/08 was only 25,169 Mt.1 Average use of chemical fertilizers during the Tenth Plan (2002/03 - 2006/07) was 6.3 kg. per ha. which is the lowest in South Asia. The total use of fertilizer has remained far below the level envisaged by the APP. Figure1: Demand, Import and Distribution of Fertilizer (In Mt.) Source: MoAC, 2007 1 Actual use could have been higher because of illegal import from India. Farmers are encouraged for such import because of cheaper price prevailed in India (nearly 1/3 price, especially in the case of phosphate fertilizers). The use of fertilizers is imbalanced specifically in the areas where commercial production of crops begun.2 The use of high yielding crop seeds (mainly rice, wheat and maize) has also been almost stagnated. The transformation process in agriculture remained slow with respect to commercialization, research, marketing, extension services, food technology development, quality control and rural infrastructure development (GoN / NPC, 2008). Agri-business Promotion Policy, 2006; Dairy Development Policy, 2007 and Agriculture Bio-diversity Policy, 2007 were developed after emergence of the National Agriculture Policy in 2004. Other policies such as tea, coffee, irrigation, fertilizer and seeds policies were introduced prior to its emergence. The community forestry programmes have remained almost stagnant in terms of the number of its forest user groups. However, they empowered women with greater participation in the institution development process. The APP envisioned rural electrification as one of the priority inputs to modernize agriculture as it could be instrumental to provide agro-processing power to the households and also pump ground water for irrigation purpose in the Terai at relatively lower cost. Nepal is characterized with lowest Human Development Index (HDI) among the South Asian countries. It is ranked 144th among 182 countries (UNDP, 2008). Per capita GDP at the current price is around US$ 470.- The economic growth rate was 2.5 percent in the lowest among the South Asian countries. To overcome these, Nepal has been emphasizing poverty reduction through broad based economic growth with social inclusion. According to the Nepal Living Standards Survey (NLSS-II) Nepalese people living below the absolute poverty line are 31 percent, which is a reduction from 42 percent in eight years. This reduction can be attributed to increased wage rate, urbanization, development of skills and capacities and the inflow of remittance. However, the gap between rich and poor widened further during the same period as indicated by the increased Gini-coefficient value from 0.34 to 0.41 According to the MDGs progress report, Nepal is likely to meet most of its goals, if the ongoing efforts continue (NPC, 2007). Majority of the poor people live in the rural areas against 9.6 percent living in the urban setting. Around 78 percent of the poor people are farmers and agricultural labourers (NPC, 2007). This indicates increased 2 Pokhrel, Deepak Mani and Pant, Kishor Prasad Pant (2009), Perspectives of Organic Agriculture and Policy Concerns in Nepal, The Journal of Agriculture and Environment, Vol:10, June 2009. need for agriculture production, which would have significant bearing on poverty reduction Creation of self-employment opportunities can be instrumental in reducing rural poverty. In this context, agriculture modernization and promotion of cottage industries (based on the mobilization of local resources) should be attempted. Agriculture sector is constrained because of poor investment in yield-augmenting inputs and infrastructures, while the cottage industries suffer from fierce global competition for the quality products. Therefore, reforms are needed to create rural self-employment opportunities and thereby address the problems of poverty. Against the growing population, the per-capita food availability has been eroding. With the current holdings of cultivated land, only six months’ consumption requirements can be met (CBS, 2003). Fourty-two districts (out of 75) encounter the deficits (WFP, 2006). During shortage, the poor families can hardly hedge against the shocks such as drought, flood and prolonged illness. Five districts in the country are still not connected by road. This makes the movement of food difficult and costly from surplus to the deficit areas. Compared to the surplus available in Terai, people in the hilly and mountainous areas encounter shortages. More than one million prime-age male adults work abroad as migrant workers. They remit about one billion dollars into the country each year. It is one of the important sources for the procurement of food for the families. 3.4 MDGs Progress, 2010 Despite various socio-political difficulties, Nepal appears closer to the achievement of most of its MDG targets except employment, mitigation of climate change effects and the control of HIV/AIDS. Poverty decreased by around 6 percent with subsequent reduction of the chronic food insecurity situation. Underemployment and unemployment rates have decreased. Remittance has contributed as backbone of the rural economy. Gender equality increased with balanced enrolment of girls and boys in the primary schools. As environmental sustainability is linked with the livelihoods, targets related to this component need adequate allocation of resources. Nepal being vulnerable to bio- diversity conservation, it demands community-based efforts for sustainable use of forest and bio-diversity products. The reduction of bio-diversity loss is important in the context of benefiting livelihoods for the poor. The progress report mentions that the policy environment for the achievement of MDG targets is favourable as they are guided by the emphasis for poverty reduction, inclusion and social justice. The Interim Constitution of Nepal 2063 (2007) and its subsequent laws also emphasize inclusive, participatory and decentralized governance. Resource allocations have increased in favour of marginalized groups and the remote geographic areas. Environmental protection and conservation have gained attention compared to the past. The attention has deepened further with adaptation to climate change agenda as a matter of international priority. The poverty monitoring systems and implementation plans have both improved with the Medium Term Expenditure Framework and Results Based Development Management processes. It is expected that the Government would continue to emphasize employment generation, poverty reduction, food security and climate change in the forthcoming Interim Plan (2010/11 – 1012/13) as well. The progress report recommends that meeting the specified MDG targets by 2015 would require attention towards the following priorities: - Pull people up from their below poverty line status; - Create better environment for private sector investments; - Develop and enforce supportive policies; - Address food security and climate change issues; - Strike gender balance in the providing access to development opportunities; and - Ensure support entitlements for the benefit of marginalized groups. 3.5 Major Challenges of Agriculture Sector and Food Security During the TYIP, the overall growth rate targeted for the agriculture sector was around 3.6 percent per year. The growth rates accomplished for different agricultural products during the period were as follows: Table 2: Production Targets, Growth Rates and Current Status of Major Agricultural Products Status SN Agricultural Products Unit Base year TYIP End Average 2008/09** (2006/07) Year (2009/10) Increment (%) 1 Food Crops ‘000 Mt 7329 7778 2.00 8,114 2 Pulses ‘000 Mt 274 285 1.27 255 3 Cash Crops Sugarcane ‘000 Mt 2600 2894 3.64 2,354 Potato ‘000 Mt 1943 2379 8.98 2,424 4 Fruits, Spices, Tea Fruits ‘000 Mt 552 723 8.77 686 Spices ‘000 Mt 227 377 18.44 276 Tea Mt 13650 21180 15.77 16,208 Coffee Mt 360 685 23.89 268 5 Vegetables ‘000 Mt 2329 3001 8.82 2,754 6 Mushroom Mt 400 450 7 Honey Mt 650 850 850 8 Cocoons Mt 47 48 23.3 9 Livestock Meat, Buff ‘000 Mt 113.8 128 4.11 157 Meat, Goat, Sheep ‘000 Mt 83.3 93 3.84 50.1 Meat, Pig ‘000 Mt 12.9 14 2.00 17.0 Meat, poultry ‘000 Mt 17.3 20 4.90 16.7 Milk ‘000 Mt 1351 1547 4.60 1,445 Eggs ‘000 Mt 615 715 5.17 630 10 Fish ‘000 Mt 46.75 56.73 5.95 48.23 Source: Three-Year Interim Plan (2007/08 - 2009/10) ** Statistical Information on Nepalese Agriculture 2008/09 (2065/66) Several issues and challenges surround agriculture development and food security efforts. Major issues confronting development of these subject areas are follows: Increased food insecurity due to low agricultural productivity and production: Majority of the farms in Nepal are small. The use of quality inputs is small due to their short supply and limited adoption of modern technology. Compared to the farmers in India, the Nepalese farmers have to bear higher cost of production. Most of the farms don not have access to year-round irrigation facility. Marketing and credit facilities are lacking. The sector as such suffers from under-investment. As a result of all these, the productivity of agriculture is low. Consequently, the problem of food in-security in the country is increasing. Agricultural commercialization and diversification: Majority of the producers in Nepal are subsistence oriented. The country needs to establish pre-requisites for commercialization. Support is needed for enhancing the scale of production, post- harvest operations, processing and trade. There is a need to develop commodity value chains or internal and international markets. Quality control and safety regulations are to be made effective encompassing the channels of production, distribution, export and import of the agricultural and livestock products. Agricultural extension service delivery system: Agricultural extension service delivery system is not effective in offering enough quality service as demanded by the farmers, which await opportunities for modernization. The service provisions are devolved to the district level but lacks coordinated links. As public sector is the sole service provider of extension services in the country, the participation of private sector has still to begin with. To address the needs of poor and marginal groups living in the remote areas, the services need to be made inclusive with equal treatment to all. However, a move towards this direction is still at the orphan stage. There is greater need of aligning agricultural research, education and extension service with the demands and priorities of farmers. In this regard, introducing institutional reforms for greater involvement of key stakeholders in policy formulation and monitoring process is necessary (See Annex - II for further details). Cooperatives development: The cooperative societies are not effective in absence of adequate training and information flow. They are more inclined to the profit motive rather than applying cooperative principles in its real sense. Their mobilization in addressing problems related to agro-production, processing and marketing is necessary. The cooperatives also need facilitative rules and regulations suitable to farmers’ demand focusing on the emerging agriculture development opportunities. Forest management to support agriculture development: The forest area covers about 38 percent of the total land in the country. When Nepal’s population was relatively small in the past, quality land reserves were available for conversion of forest or grassland into the arable land. During those times, the country not only fed its population but also exported surplus agricultural products. The population pressure has increased in the recent years. It has contributed to rising encroachment of forest areas for cash income to meet the food requirement of families. These pressures have enhanced degradation of qualities of arable land and forest cover. Such situation demands sustainable management of land for both conservation and household income earning purposes, while maintaining the environmental standards at the same time. Land reform and management: Land is the basic resource for agriculture development and food security. It signifies social well-being of a person in the rural setting in Nepal. Dual ownership, poor management, squatter settlements, indiscriminate use and fragmentation are problems associated with the issue of land reform and use. Nepal has to rehabilitate freed bonded labourers. It demands land reform and management system. The database system on land holding, land use, landless population and land tenure is poor. There is also a need for amendment of acts and regulations. The formulation of land use policy and introduction of scientific land management interventions are other priorities to be addressed. Irrigation development: The year-round irrigation services are limited. Even the available systems for such service are less reliable because of poor repair and maintenance. Participation of farmers in the maintenance of public irrigation systems is poor. The country implemented Water Resources Strategy and National Water Plan to encourage their participation but achievement to this effect was poor. These frameworks did not contribute much in creating envisaged impact on agricultural productivity and production. Problems also exist regarding collection of irrigation service fees. Most of the farmers are reluctant to pay irrigation fees because of irregularity of the services they could access. Management transfer to the users is another difficult area. Food quality and consumer protection: Low care about the food quality is common. People are used to unhygienic food consumption habits. The Government lacks food epidemiology database. Acts and regulations need to be updated to maintain food hygiene requirements. Trustworthiness needs to be established on the organic products. Laboratory services should be sufficiently developed. Accreditation facilities should be promoted for access to both internal and export markets. Sustainable management and development of natural resources: Nepalese mountains and hills are prone to soil erosion and landslides. The Terai plains suffer from sedimentation and alluvial deposits. Monsoon torrential rains often wash away top soils in the ill managed crop production systems. Some species such as wild rice, Achhame and Lulu cattle and the medicinal herbs are on the verge of extinction. Excessive pesticides are often used in the commercial farms. There is a need to expand Integrated Pest management (IPM) coverage of crops. Watersheds need to be managed effectively. There is a need to minimize forest fire occurrences. Sustainable farming practices should be promoted. Biodiversity conservation efforts should be enhanced. Agricultural credit and insurance: There are not many formal financial institutions in the rural areas. The non-institutional sources charge exorbitantly high interest rates. There is a need to earmark agricultural credit covering production, processing and marketing value chains. It is also important to reduce the risk in agriculture and livestock through the provision of agricultural insurance. Adaptation to climate change effects: Nepal needs to safeguard vagaries of climate change in agriculture for improved livelihoods of people. The country has been experiencing irregular rainfalls, occasional droughts, cold waves, floods, landslides, pests and diseases that directly affect food production. The loss of lives and famines resulted from food insecurity have pushed local people for out-migration from the rural areas. It pronounces the need for persuading scientific mitigation and adaptation to climate change effects before it becomes too late (For further details See Annex - III). Migration of agriculture labour: Migration from rural to the urban areas and abroad has affected agricultural productivity and food security. Poverty and limited employment opportunities have become a push factor for out migration. It is also induced by frequent occurrence of natural calamities, especially in the disaster- prone areas. Capacity of human resources: Planning and implementation capacity of public institution personnel is inadequate for research and extension services deliveries for producers, processors and traders. The country needs to enhance planning and capacities of the personnel working for key institutions for agriculture development. IV. OVERRIDING NATIONAL DEVELOPMENT POLICIES AND PLANS 4.1 Periodic Development Plans Nepal started planned development efforts since 1956. The First Five Year Plan (1956/57 – 1960/61) allocated 9.7 percent of its resources for agriculture and forestry with an additional 12.9 percent share for village development. The allocations remained above 25 percent for agriculture and related sectors till Eighth Five Year Plan (1992/93 – 1996/97). Though agriculture and rural development continued to remain major source of employment and livelihoods for majority of people, the relative share of allocations gradually declined from the Ninth Five Year Plan (1997/98 – 2001/02) onwards. The proportion allocated for agriculture, irrigation and forest in the current TYIP (2007/08 – 2009/10) is around 12.9 percent. Though the volumes of allocation have increased over the years, the relative importance given for the allocation to agriculture and related sectors indicates declining investment priority. Table 3: Sectoral Allocation under Various Periodic Plans Sectoral Allocation as Total Outlay Percentage of Total Outlay Sectors/Sub-sectors (NRs. Million) Agriculture Other than Related Agriculture First Five-Year Plan (1956/57 - 1960/61) 330 Agriculture and Forestry 9.7 Irrigation and Drinking Water 6.1 Village Development 12.9 Public Works, Transport and Communications 37.6 Electricity 9.1 Industry, Mining and Tourism 7.6 Health 7.6 Education 5.8 Miscellaneous 3.8 Second Three-Year Plan (1962/63 - 1964/65) 600 Agriculture, Irrigation and Forest 13.6 Land Reform, Survey and Statistics and Training 13.2 Transport, Communications and Power 39.1 Social Services 17.1 Industry and Tourism 17.0 Third Five-Year Plan (1965/66 - 1969/70) 2,500 Agriculture and Irrigation 25.9 Transport, Communications and Power 37.2 Industry 17.5 Social Services 16.6 Miscellaneous 2.8 Fourth Five-Year Plan (1970/71 - 1974/75) 3,540 Agriculture, Land Reform, Irrigation, Forest and 33.1 Botany Transport and Communications 35.4 Industry, Commerce, Power and Mining 20.3 Panchayat, Education, Health and Social Services 10.8 Statistics 0.4 Fifth Five-Year Plan (1975/76 - 1979/80) 11,404 Agriculture, Land Reform, Irrigation and Forestry 34.8 Transport and Communications 29.7 Industry, Commerce, Electricity and Mining 17.9 Education, Health, Drinking Water, Panchayat and Social Services 17.6 Sixth Five-Year Plan (1980/81 - 1984/85) 33,940 Agriculture, Irrigation and Forest 31.1 Industry, Mining and Power 26.0 Social Services 25.6 Transport and Communications 17.3 Seventh Five-Year Plan (1985/86 - 1989/90) 50,410 Agriculture, Irrigation and Forest 34.3 Social Services 29.8 Industry, Mining and Power 21.5 Transport and Communications 14.4 Eighth Five-Year Plan (1992/93 - 1996/97) 113,479 Agriculture, Irrigation and Forest 25.7 Social Services 31.6 Electricity 20.9 Transport and Communications 17.7 Industry and Mining 2.0 Trade and Tourism 1.3 Miscellaneous 0.9 Ninth Five-Year Plan (1997/98 - 2001/02) 372,711 Agriculture, Irrigation and Forest 16.8 Electricity, Gas and Water 19.1 Social Services 17.1 Finance and Land (Real Estate) 16.4 Transport and Communications 13.0 Industry (including Quarrying and Mining) 9.5 Trade, Hotel and Restaurant 6.2 Construction 1.9 Tenth Five-Year Plan (2002/03 - 2006/07) 609,823 Agriculture, Irrigation and Forest 13.8 Social Services 21.5 Transport and Communications 20.1 Finance and Land (Real Estate) 15.0 Electricity, Gas and Water 14.1 Trade, Hotel and Restaurant 7.3 Industry and Mining 6.0 Construction 2.2 Three-Year Interim Plan (2007/08 - 2009/10) 280,281 Agriculture, Irrigation and Forest 12.9 Social Services 41.5 Electricity, Gas and Water 19.5 Transport, Communications and Storage 17.9 General Administration and Defence 3.1 Miscellaneous 2.7 Trade (Wholesale and Retail) 1.2 Hotel and Restaurant 0.7 Industry, Geology and Mining 0.6 Three Year Plan (2010/11 – 2012/13) 1,018,831 Agriculture and Forestry 12.8 Fishery 0.3 Industry 15.0 Services 71.9 Note: Classification of sectors / sub-sectors is presented as per the segments categorized under the respective periodic plans. Source: Planned Development in Nepal - A Brief Survey, National Planning Commission, December 1986 and the respective Plan Documents. 4.2 Agriculture Perspective Plan (1995/96 - 2014/15) Nepal developed 20-Year Agriculture Perspective Plan (APP) in 1997. It emphasized focus on four priority input areas (irrigation, fertilizer, technology and the roads and power) for livestock, high value crops, agri-business and forestry sector growth. Poverty reduction and food security are its priorities. The APP emphasized demand-led commercialization of agriculture promotion of lead commodities in the hills and mountains with coordinated production and marketing relationships. Specific objectives followed by the Plan were: - To accelerate growth in agriculture through increased productivity; - To alleviate poverty with expansion of employment opportunities; - To transform the subsistence agriculture into commercial agriculture with diversification of crops through the identification of comparative advantage; - To expand economic transformation opportunities by fulfilling pre-conditions for agricultural development; - To identify short and long term strategies for implementation; and - To establish guidelines for preparing periodic plans and programmes. The Plan believed to achieve 3 percent growth of Agricultural GDP per year and reduce the incidence of poverty to 14 percent by 2015. It envisaged multiplier effects of agricultural interventions on the non-agriculture sector too. Six strategies proposed for ensuring the multiplier effects were: - Accelerated economic growth through technology-driven agriculture development; - Agricultural growth creating production demand with multiplier effects on all sectors of the economy; - Higher employment growth; - Investment on human capital, physical infrastructure and service delivery institutions; - Package approach to development with coordination of activities launched in the Hills, Mountains and Terai; and - Broader participation of key stakeholders including women. Since its adoption in 1997, the APP has remained a major policy document for agriculture and rural development. All successive governments formed thereafter have directly or indirectly endorsed its platform in planning the agricultural activities. It emphasizes implementation of programmes and projects based on the comparative advantage. The APP in a way is a policy framework for the Government in agriculture and rural development to date as it contributes to reiterate consistent aims and approaches for poverty reduction. 4.3 Three-Year Interim Plan (2007/08 - 2009/10 The TYIP encompasses mandates provided by the Peoples’ Movement II and aims to ensure prosperity, peace and social justice in the country. It was developed with a vision for modernizing and commercializing agriculture in line with the APP and National Agriculture Policy (2004). It underlines the importance of broad-based, gender-inclusive and sustainable agricultural growth with the mention of following specific objectives: To increase agricultural production and productivity; To maintain food sovereignty; To transform subsistence agriculture into commercial agriculture; To increase employment opportunities, conservation and promotion; and To ensure sustainable use of agricultural biodiversities. The TYIP adopts PRS and MDG priorities undertaking the responsibilities of reforms that were envisaged but had remained pending in the Tenth Five Year Plan (2002/03 - 2006/07). The NLSS – II reported that the absolute poverty level of the country came down to 31 percent from 42 percent between 1995/96 and 2003/04. The TYIP aims to reduce it further down to below 24 percent. The Plan targeted annual economic growth of 5.5 percent with 3.6 percent and 6.5 percent growths in the agriculture and non-agriculture sectors respectively. The integration of the MDGs into the national development strategy is one of the priorities of this Plan. The country is in the process of formulating another Three Year Plan (2010/11 – 2012/13). It will again be PRS and MDGs focused. The TYIP emphasizes use of quality seeds and raising of improved breed animals. It highlights the importance of sustainable use of productive resources (land and water) and irrigation services. Other aspects underlined are: provisions for access to institutional credit; modern technologies; and marketing capacity development. Similarly, infrastructure development support for productive pocket areas; promotion of agricultural value chains; human resource development; promotion of agriculture biodiversities and maintenance of genetic resources are also emphasized. As the current TYIP terminates in June 2010, the MoAC has worked out indicative priorities for the Forthcoming Three Year Plan (2010/11 – 2012/13). It plans to transform subsistence agriculture into competitive, commercial and employment generating sector for poverty reduction and food security. Stress has been given to agri-business promotion through commercialization of agriculture and utilisation of opportunities available both at the internal and external markets. Modernization of agriculture has emerged as a need of the day. The policy framework of MDGs and National Agriculture Policy also emphasize this aspect among other subject areas. Keeping in view the ongoing priorities, the MoAC intends to adopt following objectives for the agriculture sector in its forthcoming Three Year Plan. To ensure food and nutrition security; To make agriculture sector competitive and business-oriented with increased production and productivity; To reduce poverty by increasing employment and income generating opportunities; To minimize adverse effects of environment and climate change in the agriculture sector; To develop cooperatives for agriculture development; and To develop human resources for sustainable agriculture development process. (See Annex IV for details on the indicative priorities of the agriculture sector in the forthcoming TYIP). 4.4 Master Plan for Forestry Sector, 1989 Nepal developed Master Plan for the Forestry Sector (MPFS) in 1989, which provides 25-years policy and planning framework for the forestry sector in Nepal. The long-term objectives specified by the MPFS are: To meet people’s basic needs for forest products on a sustained basis; To conserve ecosystems and genetic resources; To protect land against degradation and the effects of ecological imbalance; and To contribute to local and national economic growth. For the medium-term, following objectives are specified: To promote people’s participation for forestry resources development, management and conservation; To develop legal framework needed to enhance contribution of individuals, communities and institutions; and To strengthen organizational capacity of forestry sector related institutions. MPFS has laid out 6 primary programmes for forestry by putting greater emphasis on 'community and private forestry' development through collective conservation and use practices. It laid out programmes related to ccommunity and private forestry development; national and leasehold forestry development; medicinal and aromatic plants (MAPs) development; soil conversion and watershed management; conservation of ecosystems and genetic resources; and the policy, legal and institutional reforms. Community and private forestry development: It emphasizes development and management of forest resources through active participation of individuals and communities to meet their basic necessities. . National and leasehold forestry development: It emphasizes development and management of national forest through the government agencies or private sector lessees complementing to the community and private forestry for increased supply of forest products. Medicinal and aromatic plants development: It emphasizes increased supply of MAPs through their conversion and conversion into useful commodities for distribution to the local and foreign markets to contribute to the local and national economy with trade and employment generation. The promotion plantation, managed natural forest and farms could also go a long way in the conservation of forest resource base. Establishment of regional herbal centers, training in herbal farming and sustained yield collection of MAPs could make the resource base strong. Soil conversion and watershed management: It emphasizes protection of land against degradation and conservation of its value by mobilizing national and local resources. It follows preventive, rehabilitation and conservation education to minimize soil erosion and environmental degradation. One of the preventive measures emphasized is the restoration of forest cover on open and degraded land. Conservation of ecosystems and genetic resources: It emphasizes protection of special areas for their ecosystem and genetic resource values. It also highlights the provision of amenities to promote In-situ and ex-situ conservation of plant and wildlife genetic resources. Conserving forest ecosystems and genetic resources through gene banks and botanical gardens is essential with proper management and use of land and forest resources. These conservation measures could become major assets for income generation through tourism. Policy and legal reforms: The need for policy and legal reforms has been felt necessary to enhance contribution of individuals, communities and institutions for forest resource development, management and conservation. The Plan emphasizes the need for adoption of policies on providing long-term support to forest development with sustainable community forestry, enforcement of law for forest protection, production of raw materials for forest-based industries and definition of the role of forestry with regard to pasture. Institutional reforms: Institutional reforms are considered necessary for more efficient and effective development and implementation of the programmes. The Forest Act, 1993 made provision for granting leasehold forest to operate agro- forestry for income generation and poverty reduction. It emphasized facilitation for the production of raw materials required by the industries based on the forest products; sell or utilize forest products by promoting production through afforestation; operate agro-forestry, tourism industry, farm of insects, butterflies and the wildlife in compatibility with conservation and development of forest. 4.5 National Water Plan – Nepal, 2005 Nepal has an average annual rainfall of 1530 mm. with sharp spatial variations. The monsoon rain is intense in the east and goes declining westward. Contrary to this, the winter rainfall is heavy in the west and goes declining to the east. The country has more than 6000 rivers. The southern rivers rising from Siwalik range have little water during dry season but cause floods during monsoon. Annual run-off from all river systems is estimated at 225 billion cubic meters (BCM), while the hydro- geological potential indicates availability of BCM of ground water in Terai. According to an estimate, around 756 million cubic meters (MCM) of groundwater is used for irrigation and 297 MCM for domestic purposes. In the case of other economic purposes, around 15 BCM is used.3 As both conservation and use of water are important for overall development and maintenance of the livelihoods of people, Nepal formulated National Water Plan (NWP), 2005 for systematic management of this resource. The Plan emphasizes 3 The rechargeable groundwater in the Terai is estimated between 5.8 and 11.5 BCM per year. sustainable use, while contributing to economic growth. Aspects like mitigation of hazards, environmental protection and resolving water use conflicts are its priorities. The Plan specifies three output areas: security, utilization and institutional systems for effective service delivery. Security: Disaster management and environmental protection have been emphasized to maintain secured availability of water. Institutional capabilities enhancement for water-induced disasters management have been underlined to mitigate adverse effects. Emphasis has also been laid for institutional arrangements for strengthening watershed / ecosystem protection. The need for sustainable management of full scale watershed / aquatic ecosystem has been considered essential. Utilization: Utilization of water resources for drinking purpose, irrigation development, hydropower generation and the uses for other economic development activities has been prioritized. Emphasis is given for both improvement and expansion of water supply and sanitation services. Sustainable irrigation systems development and effective water management practices have been emphasized to maintain optimal utilization of irrigable land. Priority is given to the development of hydropower to meet domestic energy needs, industrial needs and the potential export of power. Promotion of economic activities through the development of fisheries, aquaculture, recreational service, tourism, navigation and industrial water uses have also been considered important. Institutional systems for effective service delivery: Priority is assigned for information systems development, policy reforms and legal reforms. To enhance access to information, strengthening of functional water-related information collection and dissemination system has been planned. For maintaining equitable water use rights, design of necessary policies and legal frameworks has been proposed. The Plan also highlights the need for adjustments to respond to the changing circumstances as necessary. Strong institutional mechanisms have been considered necessary for efficient as well as integrated water management systems development. Priority has also been given to the promotion of regional / bilateral cooperation for mutual benefits. Overall objective of the NWP is to contribute to economic development, poverty alleviation, food security, public health and safety and the protection of national environment. The Plan follows doctrines of integration, coordination, decentralization, popular participation and implementation of water-related programmes within the envisaged framework of good governance, equitable distribution and sustainable development. 4.6 Localization of the MDGs Targets While preparing Progress Report on the MDGs in 2005, the Government recommended development of supportive policies and programmes to overcome the institutional gaps against the envisaged progress. A comprehensive MDG Needs Assessment was carried out in 2006, which suggested supportive national development strategies to make the targets achievable (NPC and UNDP, 2006). The Needs Assessment Report indicated requirements for new investments and effective service deliveries above the “business-as-usual” position (NPC and UNDP, 2006). This invites the need for enhancing both national and international development initiatives for the coordinated actions achieve the MDG targets. For the MDG – 1 (eradicate extreme poverty and hunger) the need for improving agricultural productivity; market access / linkage development; rural employment; targeted food assistance and the control of food quality have been highlighted. Following its commitment to achieve the MDG targets by 2015, the Government intends to fully align its periodic plans with the MDGs. In view of the gaps to be filled, the Government has updated existing status on each MDG and identified the way forward to expedite achievement process within the remaining 5 years. The update covers assessment of the progress made towards reduction of poverty (related to Goal - 1) and the extent of supportive nature of the policy environment, risks and challenges. This assessment contributes to the identification of gaps with concrete policy recommendations for inclusive growth to be attained in the next 5 years. 4.7 Government Policies, Acts, Rules, Regulations and International Commitments Related to Agriculture Development and Food Security Nepal aims to transform subsistence agriculture into a competitive and commercial one. The National Agriculture Policy, 2004 of the country holds long-term vision of developing sustainable agriculture with emphasis on food security and poverty reduction. Specific objectives followed by the Policy are: To increase agricultural production and productivity; To make agriculture competitive with regional and world markets by developing commercial agriculture system; and To protect, promote and utilize natural resources, environment and biological diversities. The Policy intends to cover all kinds of farmers including those with or without access to adequate means and resources. It emphasizes production and productivity increase, while protecting, promoting and utilizing the natural resources. Sub-sector policies, acts, regulations and guidelines are developed on various subject areas related to agriculture (e.g. food, feed, pesticide, livestock, meat, aquatic species, fertilizers, dairy, tea and coffee, seeds, research, agriculture service, consumer protection, forest and wildlife, environment, water, irrigation and electricity, land, bank). International commitments are made and the conventions are ratified as they relate to agriculture development (See Annex – V for details). V. EXTERNAL SUPPORT ENVIRONMENT FOR IMPLEMENTING PRIOIRTIES 5.1 Strategies Followed by the Multi-lateral and Bi-lateral DPs Nepal has access to generous support of multiple agencies (See Annex – VI for their diverse areas of support). Both multi-lateral and bilateral DPs have been providing financial and technical assistance. World Bank: The Country Assistance Strategy (CAS-2004-07) of World Bank emphasizes two pronged approach for its assistance to Nepal: (a) Bringing resources closer to the beneficiaries, where they are most likely to be productively used, and (b) Collective donor action to foster strong governance of the resources to reduce their waste and mismanagement. The Bank implements activities in line with decentralization. It underlines importance of involving local stakeholders including the private sector in preparation and implementation of the plans. It emphasizes donor cooperation, while formulating and implementing programmes. The Bank’s priority-lending to agriculture emphasizes ground water development (in Terai), rural development and investments in the public irrigation systems including their operation and maintenance. Other areas covered are: land tenure, off-farm employment and agriculture marketing. Asian Development Bank (ADB): The Country Strategy and Programmes (CSP- 2005-09) of the ADB emphasizes capacity building of stakeholders for sustained impact of investments. Support is extended for policy reforms and institutional capacity building. It emphasizes increased production with diversification of opportunities as its two-pronged development strategy. The Bank has been supporting fertilizer trade, irrigation development, food grain marketing and rural credit. It emphasizes community mobilization during identification, design, implementation and maintenance of the irrigation systems. It accords priority to planning and implementation capacity building at all levels. International Fund for Agricultural Development (IFAD): Nepal is one of the first countries to benefit from IFAD loans since 1978. It anticipates bilateral contributions in its lending process (i.e. for one dollar lent by IFAD, equivalent one dollar should be arranged from the Government either on its own or in collaboration with other donors). IFAD supports development of policies and programmes in relation to peace-building, reconciliation, reconstruction and economic recovery. Its deals with poverty issue that lie at the heart of conflict. IFAD preferably directs its support to the hills and mountains, where poverty levels are relatively high and the access to infrastructure services and markets are extremely limited. Its interventions are often designed to: Provide infrastructure and services; Target marginalized groups; Improve income-generating opportunities; and Promote community cohesion and resilience. Department for International Development (DFID): The Country Assistance Plan (2004 - 2008) of DFID emphasizes broad based sustainable growth; human / social sector development; social inclusion; improved governance and peace-building. Priority is assigned for poverty reduction and inclusion to establish lasting peace in the country. Keeping in view the uncertain political environment, DFID maintains flexibility in the implementation of planned activities. It believes that such flexibility would effectively contribute to respond emerging development needs and opportunities. Japan: The Government of Japan emphasizes support to poverty reduction and political stability. Its Country Operation Plan is aligned with Nepal’s recent priorities. It advocates pro-poor growth strategy as basic approach to economic development. Accordingly, the short, medium and long-term goals for collaboration are identified. As a short-term goal, emphasis is given for poverty reduction with local initiatives. For the medium-term, emphasis is given for sustainable growth. As a long-term goal, industrial growth has been identified as a priority. Human resource development and environmental conservation are adopted cross-cutting themes relevant to the accomplishment of these goals. Food and Agriculture Organization of the United Nations: FAOs’ vision is “a world free of hunger and malnutrition, where food and agriculture contribute to improving the living standards of all, especially the poorest, in an economically, socially and environmentally sustainable manner”. Its mandate is to raise the level of food and nutrition securing sustained agriculture production and productivity for improved living conditions free from the hunger. FAO’s comparative advantage lies in offering policy assistance, technical capacity building, early warning for food security alerts, exchange of policy dialogues, promotion of good practices, monitoring progress on aspects highlighted by WFS and natural resource conservation as well as management to support agriculture development and food security. Others: Norway, Denmark, Finland, Switzerland and German Governments emphasize support to democracy, human rights and economic development in Nepal. They contribute to natural resource conservation and adaptation to climate change (e.g. Government of Finland). Support is also extended for agriculture development (e.g. SDC and Norway for IPM). As one of the least developed countries in the region, Nepal’s case is appealing for support attraction. The donors have been positively responding to its position as the country is in the thrust of reviving its lost development position because of conflict. 5.2 Agriculture Sector Related Programmes and Projects Implemented by the Multi-lateral and Bi-lateral DPs Various DPs have been supporting programmes and projects directly or indirectly related agriculture and rural development. They cover the subject areas such as food security, conservation and utilization of agricultural bio-diversities, commercialization of agriculture, management of forest resources, irrigation development, conservation of land productivity, land reform and management, fisheries development, water induced disaster management, environmental development, technical capacity building and cooperatives development. They also cover multi-sectoral / cross-cutting areas such as gender, environment and adaptation to climate change etc. (See Annex – VII for the list of programmes and projects supported by various DPs). 5.3 Collaborations within the UN System The UN development partners commonly prioritize effective mobilization of support to the country’s need-based development for peace building. In the activities related to agriculture and food security, they highlight the relevance of APP and Special Area Development Programme for Poverty Alleviation (SPPA). 5.3.1 Common Country Assessment, 2006 The Common Country Assessment (CCA), 2006 emphasizes support for reconstruction, reconciliation and peace building. In this context, the reduction of poverty and hunger has been considered essential. It highlights the need for maintaining environmental sustainability, increased agricultural productivity and generation of employment opportunities through the following measures: - Crop diversification with adoption of improved technologies (including improved seeds, fertilizers and agro-forestry) that suit Nepal’s agro-ecology; - Commercialization of agriculture; - Farmers’ access to inputs; - Market infrastructure development in line with the recommendations of APP; - Accountability of service providers to the local people; - Incentive to service providers for their priorities targeted to the poor; - Collection and management of disaggregated data for improved policy making and planning; - Community irrigation schemes alongside the larger-scale schemes; - Reduction of post-harvest losses with adoption of improved food storage and processing technologies; - Targeted involvement of private sector in the distribution of food to the remote areas; - Establishment of marketing links (with improved roads and market information system) between the production sites and market centres); - Agrarian reform for access of farmers to the land and other natural resources; - Food or cash for work / activities for the vulnerable people; - Development of small enterprises for non-farm employment opportunities; - Micro-credit services; - Skills development for better wage earning; - Gender equity in workload sharing; and - Integration of nutrition education and related support services with agricultural extension services. The CCA gives priority to balanced development interventions across the regions targeting the socially excluded groups (e.g. poor, Janajati, Dalit, women etc.). Likewise, it emphasizes environmental sustainability through: - Increased participation of vulnerable people in the decision making process for sustainable access to natural resources; - Recognition of people’s rights for a reasonable access to the national forests, water sources and other non-privately owned natural resources; - Improved governance in the organizations involved for environmental / natural resources management responsibilities; - National standard for sustainable forest management; - Environmental conservation with reduced reliance on firewood; and - Generation of more off-farm income opportunities. For the achievement of MDGs, the CCA has suggests four possible areas of cooperation (UNCT, 2007): - Strengthened human rights, rule of law and good governance; - Improved access to quality education and health services; - Opportunities generation for sustainable livelihoods; and - Protection of natural and cultural wealth for the future generation. The CCA, 2006 hoped to expand operational space for development, which was otherwise narrowed down during the security threats in the past. It considers that the problem of underemployment, low income and lack of secure jobs should be uprooted through sustainable economic growth oriented towards the poor (UNCT, 2007). It emphasizes irrigation development with users’ participation for better management of farm water. Increased access of to land; income generation skills development; gender-sensitive development and adaptation to climate change are other priority areas focused. 5.3.2 UNDAF (2008 – 2010) UNDAF (2008 - 2010) was designed in line with the planning cycle of current Three- Year Interim Plan and extended up to 2012. It recognizes that the exclusion of people from participation in the political, social and economic spheres has become one of the root causes of decade long conflict in the country. To overcome this, it emphasized inclusive transformation focusing on the following (UNCT, 2007). - Consolidating peace; - Delivery of quality basic services; - Ensuring sustainable livelihoods; and - Establishing human rights, gender equality and systems for social inclusion. To accomplish these, following strategies are followed (UNCT, 2007): - Improve policies, institutions and programmes for poverty reduction: Strengthen state capacity for poverty reduction; MDGs monitoring and economic opportunities development for the benefit of excluded groups. - Improve household food security: Support local resource mobilization and income generation processes with increased agricultural production based on the supply of improved seeds, fertilizers and irrigation services (as recommended by APP) and also develop market access. - Improve equitable access to energy and environmental services: Support conservation efforts; and increase the access to environmental as well as energy services (especially for the benefit of women, poor and other socially excluded groups). - Be prepared for natural disasters: Support gender-responsive disaster preparedness activities; and capacitate partners to mitigate impact of droughts, floods, earthquakes and other calamities. UNDAF promotes partnership with a range of Government counterparts (central, district and local), donor agencies, NGOs, civil society organizations and community based organizations (CBOs). As its commitment to UNDAF, FAO has been supporting activities related to poverty reduction, rural employment generation, food security, institutional capacity enhancement, delivery of improved inputs, conservation of bio-diversities, disaster preparedness and adaptation to climate change effects (See Annex - VIII for further details). VI. FAO’S COMPARATIVE ADVANTAGE FOR TECHNICAL ASSISTANCE 6.1 FAO’s Vision and Global Objectives FAO has a mandate to raise the level of nutrition and secure improvements in the agriculture production and thereby enhance living conditions of the rural population. It emphasizes ensuring humanity with sustainable freedom from hunger. The 35th Special Session of FAO Conference in November 2008 approved FAO’s vision and global goals as follows. FAO’s vision is “a world free of hunger and malnutrition, where food and agriculture contribute to improving the living standards of all, especially the poorest, in an economically, socially and environmentally sustainable manner”. FAO aims to build a food-secure world for the present and future generations. It is committed towards quality services, holding high standards of integrity and transparency with mutual respect among the development partners. FAO values the diversity of ideas to foster respectful working environment, team work and knowledge sharing for mutual learning. FAO’s working practices are based on sound ethical standards, while fulfilling its commitment towards the mandate. The global objectives of FAO are: To reduce absolute number of people suffering from hunger ensuring that they have sufficient safe and nutritious food to meet their dietary needs and food preference for an active and healthy life at all times; To eliminate poverty and drive forward economic and social progress for all with increased food production, enhanced rural development and sustainable livelihoods; and To ensure sustainable management and utilization of natural resources, including land, water, air, climate and genetic resources, for the benefit of present and future generations. 6.2 Attempts to Ensure Food Security The World Summit on Food Security, 2009 unanimously pledged a renewed commitment of eradicating hunger at the earliest possible. In line with this, FAO has been contributing to enhance production and productivity. Its Special Programme for Food Security (SPFS) has remained a flagship initiative to reach the goal of halving the number of hungry people by 2015 as a part of its commitment towards the MDG- 1. FAO has been helping small producers through "initiatives on the soaring price". It helps them to raise output and earn more. Support is also extended for the work of UN High-Level Task Force on Global Food Crisis, which produced Comprehensive Framework for Action. FAO has contributed to monitor food and agriculture situation through the Global Information and Early Warning System. Policy advice is provided to the Government, while supporting their continued efforts for increasing food production. As has been mentioned earlier, it has been advocating for more investment in agriculture. FAO emphasizes national ownership of all these efforts with necessary empowerment support. The European Union has set up "Food Facility" with €1 billion as its initial aid package. It intends to support mall farmers who are hit hard by the rising food price. This aid package is offered in line with the priority assigned by the UN Secretary- General’s High-Level Task Force on "Global Food Crisis". FAO makes use of this facility focusing on quick result areas, while maintaining a lasting impact on food security. To prevent the adverse effects of food crisis, FAO has been supporting preparedness capacities against the disasters. Through such preventive support, it expects to minimize the emergency support needs against food insecurity. FAO's effort is to bridge transition from relief to reconstruction and then development. In this context, it examines underlying causes of crisis and builds strengths to cope against the risks. The crop prospects and possible food security situation is assessed through the FAO’s Global Information, Early Warning and Information System (GIEWS). It examines demand and supply of food with prompt access to information. In the impending food emergency situations, FAO joins hands with the WFP for a rapid crop and food supply assessments to estimate the assistance needs. FAO has been assisting for the prevention of spread of pests and plant diseases through International Plant Protection Convention (IPPC). It has been tracking the pest outbreaks. Technical assistance is provided for the promotion of Integrated Pest Management with the adoption of "Farmer Field School" training approach. For the control of trans-boundary animal diseases and plant pests, FAO has established "Emergency Prevention System". It contributes to control the diseases like rinderpest, foot-and-mouth disease and the avian flu. In Nepal, the Global Rinderpest Eradication Programme remains at an advanced stage. The programme has successfully removed cattle rinderpest for an extended period of time already. To increase plant breeding capacity and improve crops for food security, FAO has established Global Initiative for Plant Breeding (GIPB). It has created critical mass of plant breeders, leaders, managers, technicians, donors and partners linked with plant breeding activities. It is contributing towards the reduction of poverty and hunger. The GIPB has been useful for plant breeding with widening of the genetic and adaptability bases of the cropping systems. It combines both conventional techniques and modern technologies. FAO and WHO work together through Codex Alimentarius Commission. They develop food standards, guidelines and code of practices to protect consumers’ health with coordinated food standard based fair trade. FAO supports to maintain statistics on agriculture, nutrition, fisheries, forestry, food aid, land use and population through FAOSTAT. It produces data on World Agricultural Trade Flows. The Investment Centre of FAO promotes investment in agriculture and rural development. It assists the member countries in identifying and formulating sustainable agricultural policies, programmes and projects. It contributes to mobilize funds from various bilateral and multilateral donors. FAO has been attempting to raise awareness about the problem of hunger through its TeleFood campaign. Contributions raised from the campaign are channeled to small and sustainable projects that help the farmers to produce more food. FAO has been emphasizing "Rights to Food". Its Strategic Framework (2000-2015) specifies "rights-based approach to food security". Its mission is to "help build a food- secure world for the present and future generations". In its effort to eradicate hunger, the World Food Summit, 2002 has formed International Alliance Against Hunger (IAAH). Launched on the World Food Day of 2003, it attempts strengthening of the political will for concrete actions by building partnership among the governmental, non-governmental and private sector organizations. The IAAH emphasizes advocacy, accountability, resource mobilization and coordination. It is made up of the Rome-based UN Food Organizations (FAO, IFAD and WFP) and some representatives of other inter-governmental and non- governmental organizations. FAO has been mobilizing some Goodwill Ambassadors to attract public attention for support to people suffering from food insecurity. These Ambassadors advocate for basic human rights - primarily the rights to food. To break out the vicious circle of chronic hunger and malnutrition, pooling more resources is necessary. Given that the Government alone cannot end hunger, there is a need for promoting public-private partnership. Under its vision of "a food-secure world for present and future generations", FAO is keen to build synergy among various stakeholders (Government, technical organizations and donors). Its ultimate aim is to make "food for all" - a reality in the 21st century and beyond. It is hoped that the components of NMTPF proposed for technical assistance in this document would be useful to make the dreams come true. 6.3 Regional Priorities in Asia and the Pacific The FAO Regional Office for Asia and the Pacific (FAORAP) emphasizes crop production, livestock, forestry and fisheries development in the agriculture sector as a whole. It intends to promote rural development distilled from emerging experiences and trends in view of the challenges and opportunities related to its member countries. It emphasizes sustainable reduction of food insecurity and poverty as the rationale behind the focus of rural development. Design of suitable policies and contributing towards institutional reforms continue to remain its major concerns. Viewing the prevailing condition of member countries, FAORAP highlights the capacity improvements required for food production, storage, processing and distribution. Investment in human resources and social services in the rural areas to enhance availability, stability, accessibility and utilization of food are underscored. It works for reducing pressures on the degraded land, forest and water resources, while contributing to minimize future threats on livelihoods, food and nutrition security. It emphasizes sustained investment in agriculture and rural sector. FAORAP supports coping with the external shocks (e.g. reduced production, soaring food prices etc.) to maintain food and nutrition security. It attempts coping with the impact of climate change and minimizing threats of droughts, floods and forest degradation on the livelihoods of people. Ensuring sustained mitigation of hunger and poverty reduction through productive agriculture and rural development, while fostering natural resource base are its priorities. The aim of FAORAP is to translate strategic objectives into actions in relation to the member country specific situations. As part of its decentralized effort, it emphasizes formulation of country-focused NMTPFs contributing to the Government and UN collaborations under UNDAF. It lends support for the deployment of expertise in capacity development, policy support and technical assistance process. It also contributes to exchange of ideas and dissemination of information to build necessary knowledge on the efforts for development interventions. As has been discussed earlier, strengthening food and nutrition security is a major goal of FAORAP. It is the need of all of its member countries as well. The food and nutrition security is a development goal subscribed to and affirmed by the FAO’s Asia-Pacific member states under the MDGs, WFS and Declaration of High-Level Conference on World Food Security: the Challenges of Climate Change and Bio- energy. The 29th APRC meeting held in 2009 has renewed FAO.s commitment towards reducing the number of hungry and poor people in line with the MDGs. Following this, the components of RPF has been aligned with major focus on food and nutrition security as follows: Strengthening food and nutrition security; Fostering the agriculture and rural sector’s optimum contribution to growth and equity; Enhancing equitable, productive, and sustainable natural resource management and utilization; Improving capacity to respond to food and agricultural threats and emergencies; and Adapting climate change effects on agriculture, food and nutrition security. 6.4 Core Functional Areas of Technical Assistance Nepal aims to halve the hunger incidence by 2015 and its total eradication by 2025. FAO has been supporting Government’s initiatives to this end through its technical assistance process. It articulates coordinated and harmonized planning for implementation of the agriculture and rural development activities in cooperation with related stakeholders. It follows interdisciplinary approach to development and works for enabling environment for increasing investments in the agriculture sector. It extends rural support services for the development of human resource capacities. Core functional areas of FAO's comparative advantage include the following: Policy Assistance: FAO provides assistance for policy and field programme development focusing on food security. It contributes to employment generation through small scale agri-business activities for the benefit of marginalized groups. Supporting bio-safety practices and other food safety measures are its priority to maintain the demand of market quality standards. SAO promotes practical ways of linking small stakeholders with the modern value chain processes. Technical Capacity Building: FAO supports technical capacity building process through training. It contributes to the replication of best practices and sustainable use of natural resources. Maintaining food safety standards and adaptation to climate change effects are other priorities followed. FAO contributes to analyse externalities. Support is extended for incentive- compatible policies to promote sustainable management of resources. Assistance is provided to empower people for the preparedness against disasters and coping with the adversities in agriculture. Consultations are held among the stakeholders on issues of common interest such as food and nutrition security. FAO promotes application of mechanized technologies in the agricultural value chains. It supports to enhance efficient and effective on-farm water management practices. Support for sustainable management of forest is another area covered. Information Dissemination and Management: FAO assists in the management of information systems. It contributes to announce early warning and food insecurity alerts. Possible threats of crisis are prevented with necessary coping mechanisms. Meetings and workshops are organized to communicate issues and approaches to solve food security issues. Agricultural practices suitable for the flood-resistant crops are suggested to adapt climate change effects. Advocacy: FAO promotes advocacy work for agriculture and rural development. It offers arguments for food security, while publicizing the need of mainstreaming gender for equitable access. Campaigns are launched to increase agricultural research, sustainable use of natural resources, application of IPM and bio-security conservations. Voices are raised for increased investment in agriculture. FAO emphasizes adoption of flexible methods for agriculture development. It makes farmers prepared against disasters in the risk-prone areas. It makes an attempt to minimize effects of emergencies through a productive safety net programme. Partnership Development: FAO collaborates with other DPs. It is a team player, which fully recognizes and respects their relevant mandates. It works with donors, NGOs, private sector and the communities working for agriculture and rural development. It is pro-active in exchanging policy dialogues and promoting best practices. It promotes safety net supports to the benefit of small producers, landless people, rural workers and other vulnerable groups. Monitoring: FAO monitors progress achieved towards the WFS and MDGs as they relate to agriculture and rural sector development. It remains alert about food insecurity and helps to cope with shocks when encountered. VII. COUNTRY LEVEL PROGRAMMES AND PROJECTS OF FAO IN NEPAL 5.4 Programmes and Projects Completed between 2000 and 2009 Between the year 2000 and 2009, FAO implemented 79 projects covering agriculture, livestock, forestry, livelihoods development, food security, agricultural marketing, poverty reduction, agro-processing, animal disease control, high altitude rice cultivation, mitigation of soaring price of food etc. Of these projects, 56 have been completed already. Around 10 of the 23 ongoing projects were initiated in 2008, while 9 projects begun in 2009. This reveals that the number of projects has increased in the recent years. These projects have continued to focus on the activities related to agriculture, natural resources conservation and management, food security, leasehold forestry and adaptation to climate change effects (See Annex-IX for details). 5.5 Lessons of Experience from the Programmes and Projects Implemented in the Past It is quite natural that some development programmes and projects implemented in the past were more successful than others. Such experience could become a source for future improvements. Some programmes contributed to economic growth but could not reduce poverty and improve food security among the marginalized groups. For careful interventions in the future, following lessons have been drawn from their implementation experience: - Political stability of the Government is necessary to maintain consistency in making important decisions (i.e. to facilitate development); - Effective implementation of the development interventions needs strong commitment from the Government; - Good governance in the delivery of institutional services is necessary to enhance production and access to food; - Programmes and projects should be anchored with the realities of adequate availability of resource; - Timely implementation of planned activities needs coordinated commitment of all stakeholders; - Monitoring is necessary to guide implementation towards the right track; - Decentralization of implementation process is necessary for effective local development; - Broad-based economic growth is necessary to reduce poverty; - Incentives are necessary to encourage participation of private sector; and - Inclusive approach is necessary to accommodate the needs of poor, vulnerable and socially excluded groups into the mainstream development. 5.6 Currently Ongoing Programmes and Projects Around 23 FAO projects are ongoing. They cover the subject area such as adaptation to climate change effects, land reform, bio-diversity conservation, modernization of integrated water resource management system, participation of vulnerable groups in development, food security and nutrition, on-farm water management, agricultural commercialization, agro-processing (papaya, chilli and ginger), policy assistance for bio-secure agro-food supply chain for enhanced market access, combating citrus problems and food security for small holders in the rural sector (See Annex-X for details). 5.7 Programmes and Projects Foreseen in the Pipeline Around 13 programmes and projects are in the FAO pipeline. Efforts are ongoing to make them implementable (See Annex-XI for details). 5.8 Ongoing Programmes and Projects Implemented Under the Agriculture Sector Related Ministries The MoAC and other ministries related to the agriculture sector are currently implementing around 40 projects with the support of different DPs. Some of them are also supported by the INGOs (See Annex – XII for details). 5.9 Agriculture Sector Related Ongoing Programmes and Projects Supported by the INGOs The INGOs are supporting around 13 programmes and projects related to the agriculture sector. They represent the subject areas such as food and nutrition, disaster management, rural finance, market linkage development, livelihoods development and poverty reduction (See Annex – XIII for details). VIII. IDENTIFICATION OF COMMON AREAS OF INTEREST FOR THE NMTPF The Agriculture Perspective Plan (1995-2015) follows twin objectives of poverty reduction and sustainable agricultural growth envisaging multiplier effects on the non- agriculture sector. The National Agricultural Policy 2004 lends from APP and outlines implementation mechanism to achieve the goals set. The Three-Year Interim Plan (2007-2010) encompasses the objectives of ensuring food security with enhanced agricultural productivity and commercialization. Emphasis is also led for inclusive delivery of the extension services and agro-biodiversity conservation for sustainable environment. Further, it highlights greater attention towards some cross cutting issues such as gender integration, migration of agricultural labour, adaptation to climate change and reforms on land utilization policies with incentives for increased investments. These priorities coincide with the concerns for support revealed by various DPs as well. 8.1 Key Priority Areas Guided by the Country Situation and Needs The reconciliation of complementarities between the Government’s priorities and FAO comparative advantage for technical assistance including the areas of support potentials from other the development partners suggest following priority outcomes for the NMTPF: Productivity Enhancement for Access to Income, Ensured Food Security and Nutrition: The agriculture system in Nepal represents fragmented land holdings, small size, poor irrigation facility, inadequate use of inputs and low quality seed. The production largely suffers from the lack of access to basic agricultural inputs, improved animal breed and adequate animal feed. Pasture land for livestock rearing is declining over the years together with an increase in the encroachment of forest. The access of farmers to the institutional source of credit is limited. Agriculture development has been accorded high priority in relation to other activities but budgetary allocation is still low. Commensurate with the importance of this sector for fo9od security, it demands increased investment. For more production and increased productivity, it also needs increased transfer of technology to farmers ensuring delivery of basic inputs (i.e. seeds and fertilizers). Compared to other areas, the production pockets of the remote areas substantially need improvements in the access to such services. This subsequently means that the delivery of the services (technology and inputs) should be enhanced. There is a wide gap between demand and supply of artificial insemination services for cows and buffaloes. Same is the case in the delivery of quality veterinary services. Commercialization of Agriculture with Product Diversification and Sustainable Market Linkage Development: The Nepalese agricultural production system is not so much market-oriented yet. Though the country is emphasizing commercialization of agriculture it lacks adequate infrastructural support. Beside this, the access to markets also suffers from higher cost of production and frequent price fluctuations. Nepal is import-dependent for the raw materials and inputs (e.g. feed for the livestock, seeds and fertilizers). The open border import of chicks and eggs make the sale of local products unfavourably competitive as the local products are already affected by higher cost of production.4 The livestock sub-sector also involves the risk of trans-boundary disease (e.g. swine flu and bird flu that affect the raising and hatching cycles). Making Nepalese products competitive in the international market is a major challenge against higher cost of production. Gap also exists between the selling price of inputs in India and Nepal. To promote commercialization, Nepal needs to access competitive as well as comparative advantage based international markets. With this perspective, the Nepalese farmers may require support on inputs and marketing of products. Strengthening sustainable links between the production and marketing system is therefore necessary. Support is also necessary for increased adoption of processing technology. Establishing quality control and safety mechanisms in production, distribution, import and export of agricultural products including livestock is necessary. The policies, regulations and institutional competency should be made compliant to the provisions of the WTO (in the context of country’s membership to WTO). The consumers want to secure confidence on the quality of products be they national or international. Market demand largely depends on the quality of products at all value chains. With the market based economic policies, involvement of private sector is important. However, its participation is still constrained by the arbitrary and discretionary nature of authority of the public sector. Therefore, there is a need for policy interventions that contribute to their competitive participation in the labour and product markets. The private sector is often focused on a myopic profit-oriented vision. As they are mostly family based, they hardly participate without incentives. They may be keen for 4 The market price of Nepalese product is often high compared to similar product made available from the Indian market. The Indian products benefit from subsidy, while the Nepalese farmers are deprived of such facilities. As a result, they cannot compete with Indian commodities produced across the border. farm level micro-interests, which often overshadows the macro perspective and priorities. Instituting Enabling Environment for Effective Agriculture Development: There is a need for improving governance systems and processes for better performance of the agriculture sector. Aiming at efficient and effective management of the development interventions, Nepal has developed several policies, acts, rules and regulations. Their effective implementation demands adoption of good governance practices both at the macro and micro levels. In one hand, the Government should take up the challenge of filling the policy and legislation gaps 5, while on the other it should streamline effective implementation of already existing provisions. The Government also needs effective implementation of Local Self-Governance Act, 1999 in the context of devolved activities of agriculture. All these necessities suggest that the country has greater need for strengthening related institutional capacities. It is necessary that the policies and strategies should be backed up by subsequent acts, rules and regulations to make the planning and implementation process more operational and effective. This demands consistency in the priorities and political commitments. Without such support, the policies, strategies and legislations developed in the country simply remain unattended and get crashed before they become operational in the current Nepalese situation, which is compounded by frequent changes in the Government.6 Lack of transparency in the utilization of financial resource is an area subjected to occasional criticisms. The adoption good governance practices should attempt greater transparency and accountability. Another critical lacuna related to the enhancement of efficiency and effectiveness in planning and implementation of the development interventions is lack of monitoring system. In the context of contributing towards evolution of sustainable development process, the monitoring of both periodic progress and impact are essential. Sustainable Management of Natural Resources for Food Security: Agriculture development is dependent on the conservation and utilization of natural resources. However, owing to the population pressure, the watershed areas in the country is on serious stress. The deforestation rate is estimated at 1.7 percent per year due to 5 For example, some subject areas are covered by already designed policies and legislations, while many other areas still need to design similar measures. . 6 For example, almost all Governments talked about private sector participation as one of the priorities but practical implementation of such priority has still to be realized yet. This kind of situation does not give good message to the private sector, which often plans its investments with fairly long-term consideration. increased forest encroachments. Occurrence of flood, landslide and soil erosion have been adding hazards each year at various locations. The natural resources are over exploited than their retaining capacity. However, their environmental effects are hardly monitored. The forest land is increasingly degrading. People are increasingly cultivating marginal lands with no adoption of environment-friendly technology. Research on the environmental effects of such land does not exist. Every year more than 400,000 youths enter into the labour market but employment opportunities to accommodate them in jobs are limited. As a result, the unemployment rate is increasing against the desperate need of many poor people demanding food security. Due to deteriorating forest and watershed conditions, the conservation of bio- diversities has suffered too. The depletion of rare and native resources is on rise. Because of the need for meeting the livelihood pressure as a matter of priority, the poor people are unable to balance the harvest of forest resources. They are hardly aware about the sustainable ways of bio-diversity management. There is a greater need in the country to conserve and effectively manage watersheds. It requires enforcement of necessary environmental quality standards and sustainable management of forest. Keeping in view the increasing number of food insecure people each year, Nepal needs to sustainably manage the natural resources (land, water and bio-diversity) to provide access to income generating opportunities. It this process, the country needs to enhance income generating opportunities consistent to sustainable conservation and utilization of natural resources. Promotion of leasehold forestry has become one of the ways of supporting livelihoods, poverty reduction and food security for the poor families. Similar efforts should be expanded with pro-poor / marginalized people friendly forest management practices. The forest areas should be productively used for their sustainable livelihoods. Institutionally, developing a federation of leasehold forestry groups would be useful. Promoting plantation of NTFPs, medicinal and aromatic plants (MAPs) in the private land, CF and LF would be useful for the generation of more employment opportunities. In this regard, developing private investment friendly policies and guidelines for NTFP would be useful. There is a need for action research on sustainable utilization of forestry resources for the benefit of agriculture sector, while maintaining its sustainability at the same time. The bio-diversity rich areas should be delineated and conserved. Rare and native species should be protected. Establishing a gene bank at the National Agricultural Research Council (NARC) would be useful. Development and Management of Support Infrastructure for Agriculture: Nepalese agriculture is largely rain-fed.7 Because of higher dependency of cultivation on the uncertainties of rainfall, the farming system is less predictable due to increasing climate change effects. The timings of cultivation are uncertain thus affecting the level of productivity. Nepal being a rich country in terms of availability of water resources, there are potentials for the development of more number of irrigation infrastructures. However, the progress towards this end is still limited. In addition to the development of gravity flow and ground water use systems, the country could also promote water harvest techniques as another option to increase the command area of irrigation. The country needs to develop and rehabilitate irrigation infrastructures, while reducing sedimentation problems and enhancing overall water management efficiency. Low road density8 or no road connection9 in the district is another problem area affecting mobility of inputs to the farms and outputs to the market. Due to higher transport cost of inputs to be applied and the unfavourable price for farm products, there is no market-oriented production incentive among the farmers. To overcome this situation, the country needs to connect farmers with market by increasing rural road connections, especially in the production pocket areas as a matter or priority. Further, new market centres should also be developed. Preparedness against Natural Hazard and Climate Change Risks with Safety Nets for Food Insecure Vulnerable Population: Both human-induced and natural hazards affect production and productivity of agriculture and subsequently at the level of food security. People in the country are not fully aware about the effects of climate change at different levels (national, district and community). The rainfall deficit is often triggering intensive emergency operations in the country (e.g. in 2006 7 Only around 35.4 percent of the cultivated land has been recorded as irrigated in 2008/09. 8 Only around 30 percent of the rural population have access to all weather roads. More than 60 percent of such road network falls in the lowland area. 9 Around 15 out of 75 districts are still not connected by all weather roads. and 2009). The country seriously needs adaptation to climate change effects in agriculture. It requires promotion of environment-friendly production practices.10 The institutional and technical capacities should be strengthened for disaster risks management. Assessments and monitoring of adverse effects should be carried out to protect vulnerabilities through early warning system. People are to be made aware about the climate change impacts, methods of adaptation and disaster risks management. Enterprises should be diversified where possible.11 Bio-engineering approach should be promoted.12 The country needs to utilize benefit of the National Adaptation of Action Programme (NAPA) process. It should be used as a vehicle to establish coordinated interventions among different stakeholders (e.g. Government, non-state actors and international communities). Further, it should upscale climate change adaptation and disaster management system experience gained from piloted activities.13 The technical capacity of MoAC, DoA and DoLS should be strengthened to pro-actively address the climate change risks management and disasters prevention / preparedness activities from the agricultural perspectives. The Disaster Risk Management (DRM) system should be introduced in planning sustainable agriculture and rural development activities of the MoAC People holding small size of land (less than 0.5 ha.) or having no land (landless) are largely food in-secured in Nepal. The vulnerable groups of this category are: sharecroppers, non-tourist porters, agricultural labourers and the so-called lower caste groups. Currently, 42 hill and mountain districts (out of 75) in the country encounter food deficit. Ensuring food safety nets for these vulnerable groups is very much necessary. There is a need for increasing their access to farm and non-farm employment opportunities. At the farm level, involving them into a collective agricultural system through farmers' organization could remain one of the options. In relative terms, the marginalized communities such as Kamaiyas, Baadis, Deukis and other poor families are the most affected ones by food insecurity problems. Most of them are poor farmers or landless. The country lacks mapping of such vulnerable groups living in the hazard-prone areas. To prevent from the effects of natural and human-induced disasters, these groups should be provided with access to productive 10 By developing drought / heat stress tolerant varieties and supportive technologies. 11 For example, by changing farming of food grains to vegetables, 12 For examples, by planting trees to protect the soil from erosion. 13 For example, FAO has tested some location specific pro-poor adaptation interventions already at the local level in the risk-prone districts. incentives (e.g. seed, fertilizer support etc.) and NTFP-based leasehold forestry activities. For this, the country should assess natural resource endowments associated with the livelihoods of vulnerable households. Alertness should be enhanced against the possible disasters, while developing agricultural research suitable to the adaptation of climate change effects. Priorities Related to Cross-cutting Areas: The situation analysis of the agriculture sector in Nepal reveals the need of tackling migration of agriculture labour, enhancing capacity for the integration of gender in agriculture and improving reform measures for better land utilization practices. Accordingly, these subject areas have been selected as the cross-cutting priorities. Coping with the push and pull factors of out-migration for the benefit of agriculture sector: Nepalese people in the remote areas are affected by food deficit for about 6 to 8 months in a year. As the productivity of agriculture is low and also that there are no adequate off-farm employment opportunities at the local level, the poor people14 often tend to migrate outside. For the past many years, the country has not been able to enhance the rate of agriculture growth as compared to the rate of population growth taking place. As a result, it is adding fuel to the push and pull factors of migration. Subsequent to the out-migration people from village, the shortage of agriculture labour is increasing in the country. It has added drudgery on the family members who do not migrate (mostly women).15 The increasing trend of migration has not only caused labour shortage in the agriculture season but also added risk to the inter-generational transfer of agricultural knowledge from the elders to rural youths. Nepal needs to correct this situation by attracting youths to agriculture. Value chain activities should be promoted to generate more employment opportunities in the country. Increased adoption of mechanized technologies would also be useful to prevent the withdrawing tendency from agriculture. As investment in agriculture is limited, there is a need to enhance investment of remitted money in this sector with more packages of productive incentives.16 14 Around 22 percent people in the rural areas are poor, while their proportion is around 8 percent in the urban areas, In the Mid-western Development Region their proportion is 37.4 percent as the highest. 15 The migration of village youths for foreign job indicates that around 90 percent of the migrants are male, while the female migrants are only 10 percent. 16 Currently, around 30 percent households receive remittance of around NRs 65,755.- in average per year. Of this, they invest only one percent in agriculture. Employment opportunities should also be made youths-friendly. In this regard, the expansion of agro-based activities managed by the groups would be useful for self-employment. Enhancing capacity for effective integration of gender in agriculture: The women in Nepal are not only marginalized in accessing resources but also getting benefit from the development opportunities when compared to men. As the HDR puts it "unequal human development is both a cause and result of their exclusion". To overcome this situation, the country needs strong socio-economic transformation to close the gap between excluded and the privileged. According to the CBS 2009, women's participation in economic activities is 55.2 percent as opposed to 71.6 percent men. Since women’s access to the household assets and other productive resources is limited, the poor women outnumber the figures of poor men (HDR 2009). The number of female-headed households is on the rise in the rural areas.17 Nepal has been emphasizing commercialized agriculture, which is possible only by transforming the current production oriented economy into a market economy. This demands equal and effective participation of both men and women. Women contribute significant proportion of labour force in the economy. They are the real contributors to agriculture production. To improve human capital, there is a need for empowering women. It needs a conducive gender friendly environment. Some factors that contribute to such environment are: involving women equally in the agricultural training programmes; incentives for women's involvement in agri-business; application of the women friendly modern tools and technologies; introduction of drudgery reducing technologies; and promoting women’s groups in the productive activities and linking them with market. In view of the distracted interest of youths from agriculture, the country needs to make the agriculture sector more glamorous and so that the trends of out- migration could be minimized, to some extent. To reduce feminization of poverty, emphasis should be given for gender budgeting accompanied by the capacity building process for gender planning, implementation and auditing. Emphasis should also be laid for planning the initiatives for reallocation and redistribution of household level work between men and women with the economic valuation of women’s contribution to household work. 17 It has reached 22 percent in 2008 from 14 percent in 2001. More extension and training activities should reach to women. Their entrepreneurship skills should be developed through result-oriented training on production and marketing. Associated services should be provided for the application of acquired skills at work. It is also important to introduce provisions of reward / incentive for the empowerment of gender targeted to the disadvantaged groups. Among other things, gender needs to be accepted as a social issue and its mainstreaming as a development culture to be promoted. Improving land utilization practices through better reform measures: The production of food per capita has been declining due to low growth rate of agriculture against high increase in population. The country is increasingly facing food shortage.18 To overcome this situation, the country needs to develop proper land use system19 that can contribute to increase agricultural production, achieve environmental sustainability and maintain bio-diversity conservation. In the absence of definite land use plan, the status of land use in the country is less known. The Ministry of Agriculture, Ministry of Forestry and Ministry of Housing and Transportation have done some land use planning but they are not done in an integrated manner.20 The land in Nepal has also been a source of conflict and political instability. Unequal distribution, greater number of landless people and the squatters moving into urban areas are the problem areas associated with land. The confiscation of land, encroachment of the forest areas and the occupancy of open areas in the cities are growing. Plotting of fertile land areas for housing purpose has adversely affected food production. In the recent years, the land in the sub-urban areas is not owned to produce food but to earn more money through price speculation. Considering the importance of land, the Government has formed three high level commissions – Commission on Land Reform, Commission on Providing Solutions to Problems of Resettlement of Squatters and the Commission on 18 About 3.4 million households in the country are facing food insecurity problems (WFP et al 2009). Sixty-six percent of rural households surveyed as part of this assessment are already experiencing food shortages; the worst hit areas are in the Far- and Mid-Western Hill and Mountain Districts. 19 The term "land use system" discussed in this report covers agricultural land, forestland, community forestry, leasehold forestry, pasture and waste land. It also considers the management regime of land such as owner cultivated, user rights, leasehold and management with traditional rights. 20 For example, the Ministry of Forestry maintains 40 percent of the country’s land as area under forest (which is more or less the same as it exists now), while the MoAC maintains agriculture land at about 20 percent of the total area of the country. Solving the Problems of Kamaiyas. A National Land Use Project is implemented to facilitate land use planning. A provision of Land Council also exists under the National Planning Commission. However, this Council, together with its district level committees, is non-functional. Nepal needs to formulate an Integrated Land Use Plan Policy (i.e. an ‘integrated land policy’, which stipulates clear priorities with decentralized process and allows the application of improved technologies through the private agencies. It also needs to reform present legal systems. The country needs ‘integrated land use law’ with specific guidelines. Ground study would be useful to explore unused land (like river beds) and expand cultivation of such areas through the poor and landless communities. The capacity of MLRM should be strengthened on land administrative. Policies should be developed for preservation of pasture, especially in the highland to support animals like yaks, highland sheep and goats. Piloting of different modalities of land consolidation would be useful in reducing land fragmentation. Policies and strategies needs to be developed for the expansion of ‘leasehold forestry’ with provisions for the benefit of landless households. The Community Forestry (CF) activities should be expanded where possible with policies and practices to increase food, especially for the poor and landless people. Appropriateness of the "land tax structure" should be reviewed to discourage misuse of land. 8.2 Possibilities of Mobilizing Support of DPs to the Priorities Identified Various multilateral and bilateral development partners have been continuously supporting development activities led by the MoAC in Nepal. Their past trends and the interests expressed in their respective country strategy documents reveal the potential for further supporting agriculture, poverty reduction, food security, livelihoods development, promotion of agri-business, natural resource conservation and management and other related areas. On the basis of these, it can be hoped that the following DPs would remain active collaborators for the areas of priority outcomes identified, so far. Table 4: Subject Areas of Potential Interest to the Development Partners in Agriculture Sector Related Activities S. N. Development Partners Likely Support Areas* 1 ADB Infrastructure development; agri-business / commercial agriculture; community livestock development; irrigation; agriculture roads. 2 Danida Forest conservation and development; good governance support to local government bodies. 3 DFID Agriculture development (e.g. APP Support Programme); food security, rural development; land reform and use. 4 EU Food security; infrastructure development. 5 FAO Technical assistance for production, food security, rural development; leasehold forestry; natural resource conservation; land use; agriculture marketing; preparedness for disaster management (production incentive provisions). 6 Finland / FINIDA Natural resource management; leasehold forestry; adaptation to climate change. 7 Germany / GTZ Poverty reduction; inclusive economic development; commodity value chains. 8 IFAD Poverty reduction; agriculture and rural development support for hill and mountain areas; agri-business. 9 ILO Agriculture labour; employment. 10 IOM Migration issues; socio-economic effects of remittance. 11 JICA Irrigation and agriculture development ….. 12 Netherlands / SNV Agricultural commodity value chains; forest management; support to the remote areas (Western Nepal). 13 Norway Integrated pest management; climate change 14 SDC Agriculture; natural resources management. 15 UNDP Climate change; land reform and use; UNDAF. 16 USAID Agriculture production (e.g. seed support); food security; infrastructure development. 17 WFP Food security (emergency food assistance). 18 World Bank Commercial agriculture; irrigation development; agriculture roads; agri-business. * Worked out on the basis of past trends of support and the priorities accorded in the recent country strategy documents. 8.3 Conceptual Outline of the NMTPF – FAO's Country Strategy The NMTPF is proposed in conformity to the Government’s priorities and compliance with mandates and comparative advantages of the development partners. It has attempted to capture grey areas identified as priorities and compliance to the capital and technical assistance, which the DPs would like to offer. The priorities have been selected from the review of documents (i.e. overriding policies, plans and the contemporary thrusts) and consultations with the stakeholders. They are derived from the analysis of both current situation of agriculture and complementarities indicated by the past support trends of the development partners. These analyses contributed to funnel down contemporary concerns for both Government and the international support organizations. The results of such exercise are captured as the clustered outcomes in the following conceptual framework: Figure -1: NMTPF – FAO's Country Strategy (2010/11 – 2012/13) Agriculture Perspective Plan Priority Outcomes (1995/96 – 2014/15) Productivity enhancement for access to income, Country Strategies and ensured food security Support Trends Followed by Sector Related Policies and nutrition Multilateral and Bilateral Commercialization of Development Partners National Agriculture agriculture with product diversification and Policy, 2004 sustainable market National Fertilizer Policy, linkage development 2002 Instituting enabling FAO’s Core Functions / Agri-business Promotion environment for effective Areas of Comparative Policy, 2006 agriculture development Advantage Dairy Development Sustainable management Policy, 2007 of natural resources for Food Security and Safety food security National Seed Policy, Development and Information Management and Monitoring 2000 management of support Policy Assistance Irrigation Policy, 2003 infrastructure for Technical Capacity Agriculture Bio-diversity agriculture Localization of the MDGs Building Policy, 2007 Preparedness against Advocacy on Issues Related to Food Security National Tea Policy, 2000 natural hazard and climate change risks Sustainable Livelihoods National Coffee Policy, with safety nets for food Agriculture Development Stakeholders’ 2004 insecure vulnerable Participation Policy and Institutional population Control of Trans-boundary Arrangement for the Priorities related to cross- Disease (Animal and Plant Effective Implementation cutting areas Pests) of APP, 2001 - Coping with the push and Natural Resource Master Plan for Forestry pull factors of out-migration Management Disaster Prevention and Sector, 1989 for the benefit of agriculture sector Management National Water Plan – - Enhancing capacity for Adaptation to Climate Nepal, 2005 Change Effects effective integration of Farm Water Management gender in agriculture - Improving land utilization practices through better Interim Plan reform measures (2007/08 – 2009/10) IX. PROPOSED NATIONAL MEDIUM-TERM PRIORITY FRAMEWORK (NMTPF) – FAO's COUNTRY STARTEGY Under each of the seven priority outcomes identified, expected outputs have also been outlined. It is believed that by accomplishing these outputs, the selected priority outcomes will be attained. 9.1 Selected Priority Outcomes PRIORITY OUTCOME 1: PRODUCTIVITY ENHANCEMENT FOR ACCESS TO INCOME, ENSURED FOOD SECURITY AND NUTRITION Output 1.1: Productivity and production of crop, livestock and fisheries enhanced. Output 1.2: Selective mechanization to ensure timely farm operation, reduce drudgery and to enhance labour productivity. Output 1.3: Agricultural extension, research and support services expanded and diversified to improve access of farmers. Output 1.4: Rural finance and agriculture insurance services promoted. Output 1.5: Inclusive access maintained for adequate and safer food. PRIORITY OUTCOME 2: COMMERCIALIZATION OF AGRICULTURE WITH PRODUCT DIVERSIFICATION AND SUSTAINABLE MARKET LINKAGE DEVELOPMENT Output 2.1: Market-led production process diversified and commercialized. Output 2.2: Price and non-price measures for inputs and outputs made supportive. Output 2.3: Market infrastructure and institutional support arrangements enhanced. Output 2.4: Cross border trade facilitated with institutional / policy reforms. PRIORITY OUTCOME 3: INSTITUTING ENABLING ENVIRONMENT FOR EFFECTIVE AGRICULTURE DEVELOPMENT Output 3.1: Strengthened institutional capacities for the delivery of services demanded by the agriculture sector. Output 3.2: Functional links strengthened among the interrelated policies, acts, rules and regulations. Output 3.3: Sustainable conservation and utilization of bio-diversities promoted. PRIORITY OUTCOME 4: SUSTAINABLE MANAGEMENT OF NATURAL RESOURCES FOR FOOD SECURITY Output 4.1: Watershed conservation and management practices improved. Output 4.2: Forest sustainably managed for income generating opportunities and food security. PRIORITY OUTCOME: 5 DEVELOPMENT AND MANAGEMENT OF SUPPORT INFRASTRUCTURE FOR AGRICULTURE Output 5.1: Irrigation infrastructure developed and efficient water management practices enhanced. Output 5.2: Increased rural road connections for access to market. Output 5.3: Food safety nets maintained for the poor and vulnerable groups. PRIORITY OUTCOME: 6 PREPAREDNESS AGAINST NATURAL HAZARD AND CLIMATE CHANGE RISKS WITH SAFETY NETS FOR FOOD INSECURE VULNERABLE POPULATION Output 6.1: Possible effects of natural and human-induced disasters prevented. Output 6.2: Institutional and technical capacities for adaptation to climate change effects in agriculture strengthened. PRIORITY OUTCOME: 7 PRIORITIES RELATED TO CROSS CUTTING AREAS Output 7.1: Coping with push and pull factors of out-migration for the benefit of agriculture sector. Output 7.2: Enhancing capacity for effective integration of gender in agriculture. Output 7.3: Improving land utilization practices through better reform measures. (See Annex XIV for NMTPF Matrix with further details on activity focus related to the outputs and the potential DPs that may be interested to collaborate). 9.2 NMTPF and UNDAF Relations UNDAF has been developed in view of the national needs and the plans and strategies the UN collaborators could jointly support. The priorities of NMTPF for Government - FAO collaboration are also aligned in the same line. The NMTPF provides input to overall UNDAF Result Matrix, while considering the role of different development partner agencies complementing to the work of United Nations Country Team (UNCT). UNDAF is a key reference document for UN's collaborative support, while NMTPF is the FAO's Country Strategy document contributing to such collaborative process. The NMTPF provides opportunity for FAO and its partner organizations to understand elaborated priorities related to agriculture and rural development needs, which aim at food security. The analysis of issues carried out in the preparation of NMTPF contributes UNDAF to reinstate its collaboration priorities in a wider perspective. 9.3 NMTPF and NPFS Relations The NMTPF has put together the sectoral concerns related to crop, livestock, fisheries and forestry programmes into a national priority framework. To enforce its implementation, it has examined support potential of the donors for necessary technical assistance through FAO. Both NMTPF and NPFS follow common objective of country-driven solutions to food insecurity problem. The NMTPF has dealt with the priority framework, while NPFS concentrates on the development of long-term food security plan. Process wise, the NPFS is expected to be built upon the groundwork of NMTPF. 9.4 Implementation Approach The technical assistance visualized under this NMTPF will be implemented in coordination with related technical divisions of the FAO Headquarters in Rome and FAORAP. Overall managerial leadership for consultations and collaborations with the development partners at the national level will be undertaken by FAOR. Funds will be mobilized for budget allotments in line with the recommended priorities. Technical Cooperation Project (TCP) and Trust Funds will be negotiated with the HQ under the regional priority areas. As the implementation of targeted activities depends on successful actualization of the availability of resources, the possibilities will be regularly sought and monitored. In this process, the NMTPF will be made a reference document for the initiatives to be taken. The document will be made active and dynamic with identification of opportunities necessary to respond to the changing development needs and priorities of the country. The support of technical officers has been foreseen from national, regional and HQ levels. Their professional services will be drawn as relevant. Strong links will be maintained with the programmes of work at these levels. Efforts will be made to maintain consistency, coherence and effectiveness on the technical assistance process as “One FAO”. Participatory approach will be followed in the process of reflecting support to the NMTPF components through the DPs. Coordinated modalities will be applied for both technical and funding assistance process. Attention will be given for the consistency of NMTPF with international conventions and agreements, particularly with regard to the issues related to food security, food safety and the issues of common interest such as adaptation to climate change effects. X. CONCLUSION Nepal has been emphasizing broad based agricultural growth accompanied by inclusive targeting of the vulnerable groups. Emphasis is laid for enhancing implementation capacity of the public service agencies in delivering demand-led services, while promoting participation of the private sector in the areas of their comparative advantages. Agriculture being the area specific development activity, attempts have been made to strengthen the role of local government agencies in the sub-sectors covered by devolution. The prospect for expanding cultivation area for more production is gradually shrinking in the country. Against a low performance scenario of production characterized by low productivity, the redistributive capacity of growth is poor. However, it is a reality in the country that around 80 percent people still rely on agriculture as their primary occupation. Such situation tends to squeeze the domestic market due to low purchasing power of majority of people thus limiting the prospects for further growth. The low productivity and production of agriculture have not only increased the risk of food insecurity in the country but also accelerated unsustainable use of natural resources. The poor people are desperately attempting to cultivate extended parcels of marginal lands to meet their livelihoods. Despite realization of the need of improving performance of agriculture, the country has not been able to do much. One of the problems associated with such situation is frequent change of the Governments, which often shifted their respective priorities. On the other hand, compared to the priority accorded to the sector to support livelihoods of the majority of households, the investments made so far is less promising. It is believed that with the formulation of this NMTPF the Government and other development partners would benefit to promote the performance, of the sector. It would contribute to the design of agriculture friendly policies and approaches leading to the delivery of demand-led services. It is also hoped that the investments would correspond to the priorities and the objectives of food security, poverty alleviation, inclusive growth, commercialization and environmental sustainability would be successfully fulfilled.
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