iDE project spices up earnings for Nepali entrepreneurs

Standing over a huge pot of bubbling red liquid, Himanta Bahadur Singh, 42, rhythmically stirs the mixture with a long wooden handle. Made from tomato, pumpkin, and water, over the next few hours, he adds salt, food acid and red dye, producing an even textured, sweet-tasting sauce. “First I buy good quality produce from the market,” says Singh, a father of three. “I bring it here and clean it. I boil it and then extract the juices using a machine. Then I boil it again and add the other ingredients.” 

In this small factory in south west Nepal, Singh and his family also make red and green chili sauce, soy sauce and vinegar. Named after his wife, the family business, Nanda Kumari Food Production, altogether produces more than 20 bottles of household condiments every day. The family packs 12 bottles at a time into cardboard boxes, drives them to a market in their box truck and sells them to wholesalers. Singh says the family produces about 600 to 700 bottles of sauce a month and demand is always high. “I am very content with the way things are going.”

But business wasn’t always so good. Singh lost serious money on a previous venture bottling mineral water. He got a second chance after he met with iDE staff. The organization provided him with business training at a nearby city where he learned about product marketing, managing credit and food quality control. iDE has since helped him acquire more equipment, including a steel storage tank, allowing him to expand. “I’m teaching my son about food technology. He’s only 12 but he already knows how to drive the truck!”

Project set up to rebuild key elements of Nepal’s agri-food sector

Singh is one of thousands of small scale entrepreneurs who were powered by an innovative project set up to rebuild key elements of Nepal’s agri-food sector, which was severely impacted by the COVID-19 crisis. With funding provided by the US Agency for International Development (USAID), the Cereal Systems Initiative for South Asia (CSISA), targeted 8 million low income people in rural areas across India, Bangladesh and Nepal. The project was led by the International Maize and Wheat Improvement Center (CIMMYT). 

In Nepal, cereal and pulse yields fall well below the regional averages and present rates of increase won’t meet long-term domestic requirements. Scarce farm labor, poor agricultural management practices, lack of irrigation and mechanization, all contribute to low staple crop performance. Here, iDE worked with CIMMYT to implement business-enhancement interventions within the project. The project covered seven west Nepali lowland and mid-hills districts and concluded in late 2023, after being extended to support women, returning migrant laborers, and marginalized groups, disproportionately impacted by the second wave of the COVID-19 pandemic.

Specifically, the Nepal project focused on powering small- and medium-scale agricultural input and services providers in the postharvest value chain, with an emphasis on financial products to benefit businesses involved in perishable farm product marketing and distribution. The project also focused on scaling-out agricultural mechanization services and digital banking services, while working to increase national food security and boost agricultural economies. Ensuring the agricultural sector recovered from the COVID-19 shock, and, at the same time, building resilience of key elements within the agri-food system to better withstand future shocks, was also a project priority.

Charge card helps farmers access the supplies they need

Using oxen, it took husband and wife Dilbhadur and Phampa Thapa an hour and half to plow a small field. The work animals were lashed to a double yoke and driven around, sometimes going over the same field three times to till it properly. Phampa said the chore was slow, and the oxen were expensive to keep fed. But these days, preparing the farm for planting is much easier for the couple, who have four daughters. The family recently purchased a gasoline-powered mini-tilling machine and can now plow the same field in under 10 minutes. The machine quickly chews through the dirt, driving itself forward, as the operator steers from behind using two long handles. “We have to tell the ox to go, go, go! With the mini tiller, we don’t have to do that,” says Phampa with a laugh.

Dilbhadur and Phampa purchased the mini-tiller using a QR-coded, mobile digital card known as a KISAN Card. Under the CSISA project, Nepalis issued with the card could purchase products related to farming, including small machinery from pre-identified vendors. The cards were distributed to women farmers and farmers from marginalized ethnic groups in partnership with Mega Bank, a local women-led financial institution. The cards were meant for farmers with simple mobile phones as the QR codes were scanned by the vendors, sending a code to the phones owned by low-income farmers, providing them digital access to banking, in regions were banks are few, using low cost technology.

Some card holders also took out loans credited to the cards themselves, with interest rates set by the Nepal government's interest rebate scheme of 5 percent and 6 percent for women and men borrowers, respectively. iDE assisted farmers in gathering documents required to take out the loans, as was the case with Dilbhadur and Phampa, a process that took months to complete. As a requirement to get a loan, farmers were also obligated to prepare business plans, and attend training sessions, facilitated by iDE, on bookkeeping, pest management and commercial farming techniques. “iDE explained the procedure on how to apply for the card,” said Phampa. “They also connected us with a distributor to get all the fertilizer and supplies we needed.

Supplying machinery reduces need for slow hand labor

On the flat lands, with mountains to the north, a group of Nepali farmers gather to watch the demonstration of a gasoline-powered reaping machine. As brightly dressed women use sickles to cut rice by hand in the next field, the farmers are impressed as a representative from the company that supplies the noisy machine quickly drives its blades through the dry stalks, harvesting the crop in a fraction of the time it takes the women in the adjacent field. “This machine is a good investment because it will reduce your labor costs, increase productivity and save you time, which you can use to do other work,” the representative tells the group, which includes farmers, government officials and staff from nonprofits, who organized the demonstration. Under CSISA, machinery supply companies were engaged to demonstrate and sell both reaping and tilling machines to farmers across western Nepal. The cost of the machines was offset by the government, which provided 50 percent of the funds, while farmers paid the remainder.

To ensure the value chain was sustainable, project staff also facilitated training for local people to work as mechanics, with an emphasis on training women and youth, and particularly returning migrant workers, who were taught how to repair and maintain the machines. “iDE Nepal has supported women farmers from disadvantaged castes and marginalized ethnicities by improving their access and exposure to modern technological innovations, knowledge, and entrepreneurial skills,” says Prajuna KC, iDE Nepal country director. “At the same time, the promotion of agricultural mechanization by the project has reduced the labor burden placed on Nepali families, and particularly women.” She added that CSISA has helped reduce the stigma associated with farming among young people, who have been leaving the sector, by introducing technologies that resonates with them such as machinery and credit cards.