Building back better, strengthening post disaster agriculture inputs service delivery, lessons from Samarth-NMDP in Crop Protection Inputs (CPIs)

Transcription

1 Building back better, strengthening post disaster agriculture inputs service delivery, lessons from Samarth-NMDP in Crop Protection Inputs (CPIs) By Shilu Shakya and Srijana Rana, Samarth-NMDP 1. Introduction Post disaster, deaths and injuries among technicians, damages to buildings and service delivery stations greatly affected agriculture service delivery. As per the reports of the National Planning Commission, the post disaster recovery needs for the period covering in the agriculture inputs is estimated to be NRs 2755 million. This paper focuses on a business model that is demonstrating promising results in improving the delivery of Crop Protection Inputs (CPIs) through importers and distributers of CPI products and services such as Samrat Traders in Jhapa and Life Seeds Udhyog in Kavre district. The model builds on the successes of Samarth s farmers field based low cost demonstration interventions in Jhapa, Dhankuta and Taplejung. Crop Protection Input (CPI) is a well-used term consisting of chemical/bio-pesticides, micronutrients, vitamins, calcium, and fertilizer including plant protection products. In terms of overuse, around 17% of farmers use CPI especially in highly commercial areas (such as in the Kathmandu valley), and they are overused by an average of four times the optimal level, costing around Nrs per year per farmer in wasted expenditure. That s a total of around 3m that could be saved with no loss of production. 1 There are additional losses due to labour absence and medical expenditure as a result of the toxic effects of CPI overuse. Moreover, while difficult to calculate, long-term soil degradation could have a potentially devastating impact on future productivity. According to official Plant Protection Directorate (PPD) data, CPI use has increased fivefold over the past 15 years from 56,173 kg in 1997 to 345,032 kg in According to the Plant Protection Directorate (PPD), there are 67 firms involved in pesticide import, 5 CPI formulation companies, and 10 commercial CPI management companies in Nepal. Most of these companies import from Indian manufacturers and few from other countries such as China, Japan and Europe, and there is an overall upward trend on imports. However, its use has been limited to commercial areas and some rural areas in terms of its application in Nepal. 3 With limited efforts done in marketing of CPI by importers/dealers and major market players in the CPI value chain, the sales of CPI is dependent on commission flow, tangible assets flow and free samples focused on agro-vets. However, from the consumer side, farmers are least aware about various kinds of crop protection inputs and often times they are found to be misguided by their source of information from the agro-vets, who in a mere whim to earn more profits have the tendency to sell extra inputs. The overall growth in supply however, belies the continued undersupply to large numbers of smallholders in more remote areas. The total import of CPI in 2011/12 worth to 374 million NPR 4. If the untapped 83% market share of non-users of CPI is considered, the market could grow to NRs. 2,200 million including inorganic and organic CPI 5. In such a competitive market, importers like Samrat Traders and Life Seed Udhyog have understood that their business overall will only be sustainable if farmers, consumers, demand more CPI by being 1 SANDEE, 2008, Pesticide Exposure a growth problem for Nepal s Farmers 2 PPD, 2013, List of registered pesticides 3 Crop Protection Inputs sector analysis and vision paper 4 PPD, List of Registered Pesticides, 2013

2 aware about it rather than them pushing the products through distributors every time. After understanding this, the importers have willingly partnered with Samarth-NMDP to conduct cost effective demonstration at farmers level known as Low Cost Demonstration (LCD). LCD acted as a marketing tool to reach out to farmers through agro-vets, where farmers would learn about how to apply different crop protection inputs in their own plots, using their own labor and utilizing available resources. 2. Guiding principles/framework Markets are important for providing income, employment, goods and services to poor people in Nepal. Post disaster, Samarth-NMDP, a UK funded market development program in Nepal initiated a rapid market analysis (RAM) of three main sectors-vegetables, dairy and agri-inputs in the disaster-hit districts. The five-year UK funded program works with the market players to foster well-functioning markets. The systemic changes are brought about through the introduction of innovations, capacity building and through cost sharing mechanisms also known as co investments in promising businesses to ensure that the inventions are market led and also sustainable beyond the life of the project. Importantly, instead of undermining markets through direct aid transfers, the program works with the private sector companies to introduce innovations in the delivery of agriculture inputs in this case Crops Protection Inputs (CPI) to ensure continuous service delivery to the vulnerable communities. In practice, it followed the following principles: a) Understanding, and assisting market players to understand, the impact of the emergency upon key markets that are important for livelihoods, and potentially for early recovery. b) Working with and through market players for the service delivery so that they remain in place for recovery. c) Assisting affected markets to recover so that they can return to normality as quickly as possible to ensure affected households can purchase what they need, and return to their normal income generating activities. 3. Low Cost Demonstration (LCD) model-how it works In the Low Cost Demonstration (LCD) model, smallholder farmers provide land, labor, tools and other existing resources for demonstration of CPI products while the technical knowledge on its use and correct level of application is provided by agro-vets, co-operatives and importers. The importers mobilize their existing network of agro-vets/co-operatives to collaborate with smallholder farmers and conduct field level CPI demonstrations. Farmers are oriented on seed treatment, soil treatment, compost preparation, right application of CPI to increase productivity with less use of harmful chemical pesticides. Under this model since the farmers invest considerable amount of resources to make the demo successful, the importers are confident of running LCD models on their own even with limited resources. The experiences in various districts including in the hardest quake hit district Kavre shows that the model is sustainable without programme support. Due to the low cost nature of the model and vetted improvements in the yield through embedded agriculture inputs services from Life Seeds Udyog, the farmers in Kavre have openly accepted this model. Under the model, the farmers are given two choices to either sell the produce in the open market or enter into the buy back guarantee on vegetable seed production with assured income. Either ways, the farmers have found

3 the model to be practical, replicable and most importantly affordable and have accepted the business model with open arms. 4. LCD in practice in Jhapa, Dhankuta, Taplejung and Kavre In order to conduct LCD, partnership agreements were signed with Samrat Traders and Life Seed Udhyog to conduct LCDs at Jhapa, Dhankuta, Taplejung and Kavre, first three demonstrations were organized by Samrat Traders and the last by Life Seed Udhyog in Kavre. Farmers in all the districts actively took part in the low cost demonstration conducted by importers in collaboration with agrovets. Upon cost calculation and comparison with a convenient method of farming, LCD proved to be very cost effective. It reduced farmer s costs up to NRs A rough cost calculation in case of bitter gourd at Netra Prasad Bhattarai, a farmer from Taplejung demonstrates the cost saving claims as Usual farming Seed cost = Rs500 Cost comparison Low cost farming Seed cost = Rs500 Insecticides = Rs2500 Trichoderma = Rs100 Fertilizer = Rs500 Fertilizer = Rs300 follows: Total Rs3500 Total Rs900 Similarly, Gagan Bahadur Bhandari the lead farmer in Amaltari, Kavre, who is cultivating vegetables in an area of 20 ropanis (1 hectare) by leasing 15 ropanies to complement his 5 ropanies of land. Gangan has successfully increased productivity of his vegetables and seeds through adoption of CPI products and practices using low cost demonstration plot. During the demonstration, his tomato production doubled (increased from 570 kgs last year to 1,100 kgs this year); he noticed exponential growth in the production of cucumber which increased from 350 kg to 1230 kgs and the productivity of beans increased from 100 kg to 500 kgs respectively. A rough calculation in tomatoes, in the plot of Gagan Bahadur Bhandari the lead farmer in Amaltari, Kavre is given in the table below: Cost comparison Usual farming Low cost farming

4 Seed cost = Rs500 Compost = Rs2000 Seed cost = Rs500 Compost= Rs2000 Trichoderma = Rs500 Fertilizer = Rs2000 Pesticide= Rs3500 Vitamin= Rs500 Fertilizer = Rs300 Bio-pesticide: Jeevatu (compost prep)= Rs250 Cow milk used to control virus= Rs100 Drum to make compost = Rs700 Safe pesticide= Rs500 Total Rs 8500 Total Rs4850 Cost Saving: = Rs3650 After seeing the promising results at the farmer s field level, Life seeds Udyog commissioned another survey to capture the trends and the effectiveness of the business model. The table below demonstrates the differences in production and income felt by another vegetable farmer Mr. Ramesh Raj Pant before and after the use of CPI products. The table below depicts the comparisons with clear indications of changes in yield, income and costs. Vegetables Production (Kg) Difference (Kg) Last Year This Year (After LCD) Price received (Rs) Last Year This Year (After LCD) Difference (Rs) Bitter Gourd Tomato Cabbage Total Furthermore, in addition to cost saving, the farmers are also happy that they are able to breathe freely in their fields without the fear of side effects from strong chemical pesticides. By following the climate smart agriculture practices, some of the farmers are also getting more money for same vegetables at high-end shops where consumers preferred less pesticide infested vegetables. Overall, the farmers

5 were able to increase their profits due to increased volume of productivity through judicious and right use of bio pesticides and gradually recover from losses incurred during the earthquake. 5. Evolution of LCD in Kavre with Life Seed Udhyog Samarth-NMDP team having had many success stories on the use of Tricoderma (biofungicide) in ginger, opted to work on the introduction of Tricoderma at the farmer s field level in Kavre district engaging another importer, Life Seed Udhyog. The model built on the lessons from the Eastern region with another importer Samrat Traders proved to be very effective. The model successfully created demand and generated awareness on the use and benefits of bio pesticides at farmers field level. Although, for the importer in Kavre (Life Seeds Udyog), Trichoderma was a new kind of bio-fungicide and he saw its advantages and he immediately adopted it as a new business opportunity. During the Low Cost Demonstration (LCD) the use of Trichoderma resulted in about 20 % increment in fresh vegetable yield to farmers. Additionally, the use of Trichoderma in seed treatment before plantation protected the seedlings from soil borne and seed borne diseases, which is quite common in vegetables. With this successful experiment at farmers field level, Life Seed Udhyog has opted for a new business of selling Trichoderma treated improved seeds in high quality right sized packets targeting the smallholder farmers. Life Seeds Udyog is also offering buy back guarantees to the farmers. At the agro-vets and farmers and the co-operatives level, with the growing demand from the farmers, the market players have started stocking bio-pesticides, pesticides and fungicides like Trichoderma, Krishi chun, Missile and others on a regular basis. The growing demand for quality inputs by the farmers is serving as a sales guaranty for agro-vets and the importers; this has led to greater interest and investments in the sector by the importers and the agro vets. Similarly, at the farmer s level, they are welcoming the new LCD model because it is not only saving costs but is also proving to be helpful in improving productivity. In addition, it is safer to their health than chemical pesticides. 6. Lessons learned Farmers Field Level Demonstration on CPI is easy way to transfer Crop Protection Inputs (CPI) knowledge to smallholder farmers and to keep the farmers updated on the new products and practices that help to improve crop yield and productivity. From the perspective of the private sector (importers and distributors), who were earlier reluctant to stock climate smart agriculture inputs such as bio pesticides and bio fungicides due to its short shelf life, Low Cost Demonstrations (LCDs) is proving to be an effective market penetration tool. LCD model has successfully contributed in demand creation, market penetration and new market development. This has resulted in more importers and distributors stocking the products thus improving its access and use by the smallholder farmers. Adaptation of the model from other successful districts such as Dhankuta and Taplejung to disaster hit district like the one in Kavre proved useful in accelerating agriculture service delivery for early recovery. The importer as well as the farmers benefitted through cost

6 savings, improvement in productivity and yields in sectors like vegetable. With short production cycle and assured market for quality vegetables farmers were able to quickly increase income and recover from the losses of the earthquake. Farmers field level demonstrations adopts the principle of learning by doing. However, in order for the demonstrations to be successful, it also needs to be affordable and easy to apply. Moreover, it should not be vastly different from the ages old farming practices to ensure its regular application and sustainability. In conjunction with the LCDs, some importers are also using media to create demand and awareness about judicious use of CPI products using media channels such as the radio, television, brochures, pamphlets, free samples and discounts to boost demand in the districts. Often times, the importers and agro vets that have invested in media in conjunction with LCD models were more successful in generating demand for the CPI products than the importers that are just doing LCDs without additional promotional support. However, the risk is that without carefully planning on the technical capability and the cash flows of the service providers, such decisions could backfire due to the inability of the importers and agro vets in meeting the growing demand for CPIs sustainably. Nonetheless, use of media in the marketing and promotion of agriculture inputs accelerated its demand and use. Seeing new opportunities in the market, besides importers, distributors and agro vets some lead farmers are also taking LCDs to new villages, communities and districts. Although, we should encourage knowledge sharing, we must also be mindful of their skills and qualification in administering sale and safe use of CPI products since these farmers are not registered or licensed. Furthermore, lack of sufficient knowledge and capacity among Plant Protection Officers and agro vets is already a long-standing constraint and a policy issue in the production and marketing of appropriate CPI products in Nepal. Under this backdrop, the project strategies and support services should encompass issues from the grassroots to the policy level. 7. Conclusion LCD is a proven model to increase productivity, improve income of the beneficiaries, and foster early recovery. However, to address the over use, wrong use and the correct use of pesticides, it is important to adopt a multi prong strategy. Taking a multi-tier approaches and ensuring coordination amongst private, public and civil societies such as NGOs and Cooperatives is helpful in strengthening the linkages among actors operating in the area to advance CPI demonstration, multiplication and dissemination activities. At the policy level, outdated knowledge being the main constraint, Samarth is working on increasing the knowledge and skills of agro-vets, in coordination with the Plant Protection Directorate (PPD), of the Department of Agriculture. The Plant Protection Officers in 30 districts of Nepal are currently undergoing refresher trainings. The curriculum for license renewal is updated to incorporate new products and services. At the market level, the main constraints for importers and distributors for not stocking appropriate CPI products were high costs and the low efficacy of the imported products. In order to address these constraints, Samarth has partnered with Phytocare - a private company with national reach and a strong Research and Development (R&D) capacity - to produce bio-pesticide locally. Lastly, at the farmer level, to ensure proper use of CPI, Samarth has been successful in supporting the importers and distributors of CPI products by

7 developing a successful LCD model. The model is being used as a marketing tool to promote CPI products and services. The LCD business model has proven to be efficient and effective. Under the LCD model, the farmers provide land and compost while the agro-vets provide technical inputs and training in collaboration with the importers of CPI products. More importantly, in the market centered approaches to recovery (Samarth-NMDP), choice of right private sector partners (e.g. importer, distributor or the agro vets) is the key in successfully facilitating and supporting linkages among private enterprise, Government Offices, NGOs and cooperatives operating in the disaster hit areas. The goal is to foster innovations to address both the demand and the supply side constraints so that companies like Life Seeds Udyog with the support of Samarth-NMDP are able to build back better.