A Value Chain Analysis of Apple
from Jumla
MINISTRY OF
AGRICULTURE &
COOPERATIVES
DEPARTMENT
OF
AGRICULTURE
Foreword
Apple is one of the key fruits with potential to generate income and employment in the high mountain
districts of Western Nepal, especially with road constructions gaining pace in these areas. However,
a systematic value chain analysis for apple was not yet carried out till date to diagnose constraints and
identify the opportunities. We are pleased to report that this knowledge gap has been filled and that
this information can now be shared with a wider audience.
The study analyses the existing situation of apples in terms of their geographical spread, area coverage
and production. It provides a good understanding on the value chain of apple and its constraints that
need to be overcome to realise its potential contribution to pro-poor impact. Finally, it provides specific
value chain solutions and recommendations to the actors involved in this specific value chain, and to
the District Agriculture Development Office (DADO) Jumla, SNV Nepal and other interested organisations
on possible interventions to realise enhanced production, income and employment for the rural poor.
As the DADO Jumla, SNV Nepal and other organisations started facilitating and supporting the Jumla
apple farmers in a more structured way from 2008 onwards, already quite some positive changes have
taken place in the value chain, which are also described in this report. It is encouraging that prices for
the farmers have more than doubled since, that the Jumla organic apple is starting to get a name in
the market.
While the present publication will be of immediate value to implement programme activities for
the further development and promotion of the apple value chain in Jumla, it will also be useful for
government policy makers, planners, and extension workers at both central, regional and district levels
to develop the apple sub-sector in other potential districts of Nepal.
January 2011
Vijay Kumar Mallik
Director General
Department of Agriculture
Hans Heijdra
Country Director
SNV Nepal
Acknowledgement
Firstly, we would like to express our gratitude to all the apple growers, farmers, traders, private sector,
development organisations and governmental organisations in Jumla who gave their valuable time for
interviews, as well as to those who actively participated in multi-stakeholder workshops in Khalanga,
Jumla and Kathmandu.
We are very grateful to Mr. Suresh Kumar Verma, Joint Secretary and Chief of the Planning Division
of Ministry of Agriculture and Cooperatives (MoAC) for his encouragement and moral support to carry
out this study. We would also like to acknowledge Mr. Ram Prasad Pulami, former Regional Director of
Regional Directorate of Agriculture, Mid-West for his moral support and feedback.
Several staff of SNV in Nepal have contributed to this value chain analysis and finalising it into this
report. Special thanks for their efforts go to Dr. Pradeep Tulachan, Monisha Rajbhandari, Chandra
Regmi, Chhabi Lal Paudel, Padam Bhandari who undertook the analysis in 2008. Thanks also to Solution
Consultants Pvt Ltd which provided useful information on the national apple market dynamics. Ananta
Ghimire and Rik van Keulen updated the analysis to include the latest insights and developments and
finalised it into this up-to-date publication. Although a lot of analysis work was already done in 2008,
by including the interventions and various lessons learned, we hope this becomes a more useful and
interesting publication.
Mr. Dila Ram Bhandari, DADO Jumla has been involved and cooperated throughout the study. Without his
efforts this study would not have been successful.
Finally, we are very thankful to Keshab Datta Joshi, West Portfolio Coordinator of SNV in Nepal who took
the initiative for this study, and constantly facilitated and supported it.
The views expressed in the publication are those of the value chain analysis team and not necessarily of
SNV and the Department of Agriculture. Similarly, the findings, interpretations and conclusions herein are
those of the author(s) and do not necessarily reflect the views of SNV or the Department of Agriculture.
SNV Netherlands Development Organisation
Nepal
Abbreviations
APP
AEC
AFE
AP&MDD
CSP
CSIDB
DADO
DCCI
DDC
DFID
DoA
EIG-CM
FDD
FNCCI
ha
HH
HVA-IB
IEDI
IFAD
JAPC
JAPEC
JHRF
KAC
KFC
LARF
m.a.s.l.
MDGs
MEDEP
MoAC
MSMEs
MT
NARC
NGO
NHPC
NRP
OCN
OWF
PIE
REAP
SEDA
SHCC
SNV
VCA
VCD
VDC
WUPAP
WV
Agricultural Perspective Plan
Agro-Enterprise Centre
Action for Enterprise
Agribusiness Promotion and Marketing Development Directorate
Community Support Project
Cottage and Small Industries Development Board
District Agriculture Development Office
District Chamber of Commerce and Industry
District Development Committee
Department for International Development
Department of Agriculture
Education for Income Generation and Conflict Mitigation Project
Fruit Development Directorate
Federation of Nepalese Chambers of Commerce and Industry
Hectares
Households
High Value Agriculture-Inclusive Business Pilot Project
Industrial Enterprise Development Institute
International Fund for Agricultural Development
Jumla Apple Processing Centre
Jumla Agricultural Producers’ and Entrepreneurs’ Cooperative
Jumla Horticulture Research Farm
Karnali Apple Company
Karnali Fruit Cooperative
Local Agricultural Resource Farmers
Metres above sea level
Millennium Development Goals
Micro Enterprise Development Programme
Ministry of Agriculture and Cooperatives
Micro Small Medium Enterprises
Metric Ton
Nepal Agricultural Research Council
Non-Governmental Organisation
Nepal Horticulture Promotion Centre
Nepalese Rupee
Organic Certification Nepal
Organic World & Fair Future Pvt. Ltd.
Production, Income and Employment
Rural Enterprise Assistance Programme
Sustainable & Equitable Development Academy
Small Holder Cash Crops
SNV Netherlands Development Organisation
Value Chain Analysis
Value Chain Development
Village Development Committee
Western Upland Poverty Alleviation Project
World Vision
Summary
Apple is one of the agricultural products with a good potential in the mountainous districts of Mid- and
Far-Western Nepal. In contrast to the other districts, apples were already introduced in Jumla in the
1970s. But it was only since 2006 when the Surkhet-Jumla road – the Karnali Highway – was opened as
a seasonal road that the people of Jumla suddenly saw apple production as one of the major, or even the
major income source for the near future. Since 2008, farmers have been planting more than 100,000
saplings per year. Operating apple nurseries has become a lucrative and fully commercial business.
According to the DDC Household Survey of 2008, nearly 10,000 households were already engaged in
apple production in 2008, producing together more than 1800 MT. The production will increase year by
year, because in 2008 most trees (70%) were still in a non-fruiting stage. On top of this, farmers are
expanding their orchards large scale.
Although a large part is already being blacktopped, the Karnali Highway is still a seasonal road, and
remains closed during the monsoon season, which is also the harvesting season. Therefore, nearly all
apples ‘exported’ out of the district need to be flown out by air, which is the single most important factor
impeding increased apple sales. Possibly only 10% is sold, while the rest is used for household purpose or
remains on the trees. With this oversupply, farmers logically have not invested in orchard management like
pruning, use of manure, pest control, etc.
Jumla declared itself an organic district in 2007, and in 2009, the District Agricultural Development
Office initiated organic certification of apples for three Village Development Committees, with support of
organisations like SNV Nepal and World Vision. Also nursery improvements, pruning, professional apple
packaging materials, grading and market linkage with wholesalers were promoted from 2009 onwards.
One major success was the apple price increase in Jumla from NRP 10/kg in 2008 to NRP 35 and NRP 25/
kg for organic certified and non-certified respectively. Partially, this was also caused by high prices in the
apple market in general. In 2010, the prices went down respectively to NRP 30 and 26/kg for grade A –
the first year with price differentiation for different grades.
Progress has also been made on the organisational side. In 2009 the three certified farmer groups
undertook joint marketing, and in 2010, nine Jumla cooperatives did so under the umbrella of the Jumla
District Cooperative Federation. A major factor in this development was not just the price increase in
the year before, but also a change in the agricultural policy, as for the first time only cooperatives were
allowed to apply for the air transport subsidy.
Although progress has been made, still more needs to be done if apple is to become the major
agriculture sub sector and the major source of income for Jumla and surrounding districts. The Jumla
apple will need to compete with the Chinese and Indian apples, which now have a market share of nearly
90% and 10% each in Nepal. One way to create a niche is to further promote the Jumla apple as organic,
with or without certification. The price premium received by producers for their organic certified apple
still is not sufficient to cover the extra costs coming with organic certification.
Various improvements still need to be made. Modern high-yielding varieties need to be introduced, those
which will do well in Jumla from the perspective of organic production, dry area with little irrigation, less
required chilling hours because of climate change, etc. Nurseries must be able to provide disease free
saplings and provide advice to farmers. Commercial supply of bio-pesticides and bio-fertilisers through
agro-vets and also piloting of home-brewed bio-pesticides are necessary for pest control, which will even
become more urgent with the climate change. Further promotion of pruning, irrigation, compost making
– lack of available bio-mass being a problem here, and handling of apples during the harvest, especially
on-farm, to avoid bruises are important to be able to supply large apples with good appearance for
which most consumers are looking for. Well trained Local Agricultural Resource Farmers could be a way
to provide on–farm advice and services. Further on, strong cooperatives or other forms of producer
organisations are needed to manage post-harvest and marketing activities.
Although the price increase in 2009 was a great success, still marketing is not sufficiently working in
favour of the Jumla apple farmers. Margins upstream are high, limiting sold volumes and still many
consumers with an interest in organic apples cannot find the Jumla apple. Linkage to more wholesalers
would widen the distribution network, increase sales and should especially reach those consumers who
want to pay a premium for organic products.
Table of Contents
Abbreviations
6
Summary
7
1.
INTRODUCTION
10
2.
OBJECTIVES, METHODOLOGY & LIMITATIONS
11
2.1
Objectives
11
2.2
Methodology
11
2.3
Limitations
11
3.
4.
5.
6.
SELECTION OF THE APPLE VALUE CHAIN
13
3.1
Comparison of Value Chains from Jumla
13
3.2
Jumla Apple in a National Perspective
14
JUMLA APPLE VALUE CHAIN
16
4.1
Value Chain Map
16
4.2
Nursery Management and Input Supply
17
4.3
Apple Production
19
4.4
Harvesting and Post-Harvest Management
22
4.5
Trade and Marketing of Jumla Apples
23
4.6
Organic Certification
26
4.7
Apple Processing
29
4.8
Trend of Apple Production
30
4.9
Income Generation
30
4.10 Social Inclusion and Gender
31
NATIONAL APPLE MARKET DYNAMICS
34
5.1
34
Market Shares of Suppliers
5.2
Physical Apple Flows in Kathmandu
34
5.3
Description of Market Actors
35
ENABLING ENVIRONMENT AND SUPPORTING AGENCIES
37
6.1
District Development Committee
37
6.2
District Agriculture Development Office
37
6.3
Jumla Apple Processing Centre
38
6.4
NARC – Jumla Horticulture Research Station
38
6.5
District Chamber of Commerce and Industry
39
6.6
NGOs and Projects
39
6.7
Ministry of Agriculture and Cooperatives
40
7.
VALUE CHAIN CONSTRAINTS AND OPPORTUNITIES
41
8.
FUTURE VISION AND RECOMMENDATIONS
45
8.1
Towards Sustainable Solutions
45
8.2
Future Vision of the Jumla Apple Value Chain
45
8.3
Recommendations
48
ANNEX A: References
50
ANNEX B: VDC-wise Apple Production Data
51
ANNEX C: Cost/Benefit Calculation
53
1. INTRODUCTION
Nepal is predominantly an agrarian society: the agricultural sector provides employment opportunities
to 66 per cent of the total population (MOAC Web site, 2008) and contributes about 36 per cent to
GDP. Presently, production of deciduous fruits (apple, pear, peach, plum, apricot and walnut) in Nepal
is limited compared to tropical fruits. As a result substantial quantities are imported to meet domestic
demand. However, there appears to be tremendous potential for further development of deciduous
fruits in Nepal and for import substitution as also mentioned in the Agricultural Perspective Plan and
the first Three Years Interim Development Plan.
Among deciduous fruits, apple is the most important crop in terms of area, production and household
economy in remote mountain districts. But most production units are small and often located in
isolated and inaccessible areas where infrastructure such as roads, irrigation and storage facilities
are inadequate or completely lacking. With the present increasing trend in the connectivity (road
network) in remote high mountains and inaccessible districts such as Mustang, Jumla and Kalikot,
there is a great potential for increasing area and productivity of these fruit crops.
In view of the significant potential contribution of the apple sub-sector in terms of enhanced
production, income and employment of rural poor in high mountains, SNV in Nepal and District
Agricultural Development Office (DADO) in Jumla decided to jointly undertake this value chain
analysis of apple.
8
A Value Chain Analysis of Apple from Jumla
2. OBJECTIVES, METHODOLOGY & LIMITATIONS
2.1 Objectives
This apple value chain analysis aims to:
a) Provide a sufficient contextual analysis of apple in Nepal and especially from Jumla District in terms of
present status (geographical distribution, area coverage and production) and future potentials.
b) Provide a concise picture of the entire value chain of Jumla apple in order to identify the constraints
and opportunities that can be exploited for promoting income and employment for the rural poor of
Nepal.
Because of the time between the actual analysis and this publication, this report also provides some of the
results already achieved by the interventions in 2009 and 2010 which followed the analysis. New insights
and lessons learned have also been included.
2.2 Methodology
SNV Nepal utilised and adapted the value chain development approach developed by Action for Enterprise.1
First the apple value chain was selected from a range of possible products and crops by using various
criteria to select the most potential product from Jumla. Also on the basis of literature study, the apple
sub-sector in Jumla was compared with other deciduous fruits and other districts. This is described in
chapter 3, which shows that the apple value chain from Jumla is indeed an important deciduous fruit
crop for Jumla and even from a national perspective.
For the actual value chain of apple from Jumla, the methodology involved the collection and review of
existing literature and secondary data on apples, followed by primary analysis through various checklists
and rapid survey questionnaires, interviews and group discussions at various levels and functions of the
apple value chain.
Three multi-stakeholder workshops were conducted during the analysis: twice in Kathmandu (16 May 2008
and 1 August 2008 with a total of 48 participants) and once in Khalanga, Jumla’s district headquarters
(14 June 2008 with 50 participants). These workshops have helped in verifying and deepening the value
chain constraints and opportunities analysis, and finding potential solutions and suitable service providers.
2.3 Limitations
Due to constraints of resource and time, the data and information collected and analysed in the report
cannot provide sound statistical insights into the different parts, levels and functions of the value chain.
Thus, the results rather provide a qualitative picture of various functions and actors at various levels in the
chain, where possible elaborated with quantitative data.
This value chain analysis also provides a snapshot of the current situation. While Jumla is an upcoming
apple production district, new developments and changes are to be expected. By incorporating
interventions taken on the basis of this VCA, results and lessons learned of the last two years, it provides a
clearer picture and more understanding in which direction this value chain is developing itself.
1
Action for Enterprise, 2007. Value Chain Programme Design: Promoting Market-based Solutions for MSMEs.
9
A Value Chain Analysis of Apple from Jumla
3. SELECTION OF THE APPLE VALUE CHAIN
This chapter gives a justification for the selection of the Jumla apple value chain for analysis and for the
following interventions supporting its development.
3.1 Comparison of Value Chains from Jumla
REAP of IEDI2 did a rapid sub-sector assessment conducted from 28 December 2005 to 3 January 2006 in
Jumla district.3 In a multi-stakeholder workshop the following potential products were identified:
1) bee-keeping, 2) wool processing, 3) potato, 4) poultry, 5) seed production, 6) apple, 7) herbal processing,
8) beans, 9) seabuckthorn, 10) vegetable production, 11) angora rabbits, 12) dhatelo (Prinsepia utilis),
13) walnut, 14) guchhi chyau (Morchella sps.).
A prioritisation matrix was used to narrow down the sub sectors, using ‘market demand’ and ‘potential to
increase rural income’ as the main criteria for further selection.
Increase in rural
income
Table 1: Prioritisation matrix
High
potato
apple
honey
Medium
seabuckthorn
poultry, herbal processing
vegetables, beans
Low
angora rabbit,
dhatelo
Walnut, wool
processing
guchhi chyau,
seed production
Low
Medium
High
Market demand
Prioritised products with high market demand and high potential to increase rural income were considered:
1) honey, 2) apple, 3) vegetable production, 4) beans, 5) poultry, and 6) herbal processing. The latter
related to extraction of essential oils from herbs through distillation.
The next ranking exercise focused on market demand and growth potential, potential for increase in income,
social inclusion and potential for employment generation were considered as criteria for ranking of sub sectors
using scores.
Table 2: Ranking sub sectors
Criteria
honey
Proposed sub sectors
apple vegetable/beans
Market demand and related growth
potential (weighted 3×)
12
15
9
Potential for increase in income
(weighted 2×)
8
8
9
Social inclusion (weighted 2×)
10
8
8
Potential for employment (weighted 1×)
3
4
2
Total
33
35
28
This led to the following ranking: 1) apple, 2) honey 3) vegetable production. Because of the requirement of
high value - low weight due to transport by air, the report also suggested to develop apple-based products.
In 2007, the Surkhet-Jumla road was opened as a seasonal road, which even more increased the expectations
from the apple sub-sector.
2
IEDI: Industrial Enterprise Development Institute. REAP: Rural Enterprise Assistance Programme, a project of IEDI
(phased out in 2008). SNV Nepal provided advisory services to REAP.
3
REAP, 2006, Rapid Sub-sector Assessment Report Jumla.
10
A Value Chain Analysis of Apple from Jumla
3.2 Jumla Apple in a National Perspective
Apple is a deciduous fruit and is grown successfully in mid and high mountainous areas from the East to
the Far West of the country. Sub-humid and dry temperate areas in the mountains with elevations ranging
from 1800-2800 m.a.s.l. are considered most suitable for high quality apple production. The rain shadow or
low rainfall areas are located in the Western and Mid Western mountainous regions. Some low chilling apple
cultivars are being grown at low altitudes, as low as 1200 m.a.s.l.
Total of 54 districts grow apple, however, there are only 12 major apple producing districts mainly from
high mountain regions (see Table 3). The data for Jumla does not correlate well with that of the DDC Jumla
household survey of 2008 (see later in the report), it gives an indication about how districts compare. Also
one has to take in consideration that the production is very scattered, a considerable part not with much
commercial value and only consumed locally. Only Jumla and Mustang have an organised export to major
towns in Nepal. Table 4 also shows that apple is the leading deciduous fruit, while Table 5 shows that apple
has a potential to contribute to poverty reduction in the poorer parts of Nepal.
Table 3: Area (ha.), production (MT) and share (%) of major apple producing districts of Nepal (2006/07)
District
Jumla
Mustang
Solukhumbu
Kalikot
Dolpa
Rukum
Rasuwa
Sindhupalchowk
Humla
Mugu
Bajhang
Baitadi
Total
Area (ha.)
900
304
281
236
225
218
185
155
137
136
115
111
3003
%
30.0
10.1
9.4
7.9
7.5
7.3
6.2
5.2
4.6
4.53
3.8
3.7
100.0
Production (MT)
4557
2888
2495
2179
2070
1897
1610
1349
1260
1251
1001
966
23523
%
19.4
12.3
10.6
9.3
8.8
8.1
6.8
5.7
5.4
5.3
4.3
4.1
100.0
Table 4: Area and production of deciduous fruits in Nepal (2006/07)
Deciduous fruits
Apple
Area (ha.)
%
Production (MT)
%
4266
37.3
34546
36.3
35.5
Pear
2834
24.7
33800
Walnut
1147
10.0
4522
4.8
Peach
1919
16.8
13263
13.9
Plum
1283
11.2
9041
9.5
Total
11449
100.0
95172
100.0
Table 5: Area (ha.) and production (MT) of apple by development regions of Nepal (2006/07)
S. No.
1
2
3
4
5
Development Regions
Eastern
Central
Western
Mid Western
Western
Area (Ha)
536
587
587
2046
509
Production (Mt)
4,707
5,107
5,407
14,902
4,428
Table 3, 4 and 5 are based on: Statistical Information on Nepalese Agriculture 2006/2007. Ministry of
Agriculture and Co-operatives, Agribusiness Promotion and Statistics Division. Kathmandu, Nepal, and
DADO Jumla.
11
A Value Chain Analysis of Apple from Jumla
4. JUMLA APPLE VALUE CHAIN
This chapter begins with an overview of the whole value chain of the Jumla apple in a value chain map.
The rest of the chapter focuses on the functions and the primary value chain actors, which are the private
sector actors making this value chain function. This chapter ends with paragraphs on organic certification,
apple processing, trends in apple production, income generation and social inclusion aspects of the apple
production in Jumla.
Organisations which support the further development of the value chain, covering the whole range of
government, business membership organisations, (I) NGOs and projects but which do not get involved in
the apple business directly are described in the next chapter.
12
A Value Chain Analysis of Apple from Jumla
4.1 Value Chain Map
Figure 1 illustrates the value chain map of various actors involved in the Jumla apple value chain, from input
suppliers and producers at the bottom all the way to the final consumers. On the left, various functions are
shown of these primary value chain actors, while on the right-side the various service providers or support
organisations can be seen. Especially, the government support organisations have a strong role in determining
the enabling environment through policies, subsidies, etc.
Chart 1: Value chain map for Jumla apples (as per situation of 2010)
Function
Primary actors
Support organisations
enabling environment
Final consumers in major towns and Jumla district
Consumption
Retail
Apple retailers regional
and national markets
Apple retailers
Jumla market
MoAC
Kalimati
Fruits &
Vegetable
market,
Fruit
Business
Association
Wholesale
Apple importers
Kathmandu-based
wholesalers Terai-based
regional wholesalers
Export
Collection,
grading,
packaging,
processing
AP & MDD
FDD
District apple
traders
Karnali Apple
Company
Cooperatives
Apple
processors
Local/village
traders
Production
Apple farmers
OCN
NHPC
Input supply
Agro-vets,
JAPEC
(I)NGOs/
Projects:
SNV
WV
CSP
EIG-CM
RDA-MW
JAPC
DADOJumla
NARCJHRS
Private apple
nursery owners
13
A Value Chain Analysis of Apple from Jumla
Box 1: A success story of a nursery
owner in Jumla5
4.2 Nursery Management and Input Supply
Apple nursery owners
Mr. Govinda Bahadur Rawat, a
Chhetri farmer is a successful
apple nursery farmer in Jumla.
During the year 2007, he
raised 20,000 apple saplings
in 5 ropanis of land and he
sold 19,000 apple saplings
earning Rs 380,000. From these
earnings, he planned to send
his son and daughter to college,
to buy a solar panel for light,
to purchase a colour TV and
to send his youngest son to a
boarding school.
There are a total of 32 registered apple nurseries. Most registered
nursery owners are organised in a “Fruit Nursery Association” since
February 2008. However, more than double the numbers of apple
nurseries have not been registered and many of them are supported
by NGOs and INGOs.
During 2005, the private registered nurseries in Jumla produced a
total of 103,000 apple saplings. During 2007 those private nurseries
receiving DADO subsidies sold a total of 96,800 apple saplings and
earned cash income of NRP 1,934,000. They sold 11,000 to Kalikot,
4500 to Dolpa, 6000 to Bajhang, 6000 to Rolpa and 61,700 in Jumla
itself. In 2009, just two nurseries in Talium VDC together produced
60,000 saplings. See Box 1 for a success story of an apple nursery
operator. This evidently indicates that there is an increasing trend of
cultivating more apple trees in the western region.
For several years apple saplings were sold at NRP 2, with the NRP
18 subsidy from DADO, the apple nursery received NRP 20 for their
saplings. But when the Surkhet-Jumla road (Karnali Highway) opened
in 2007, still as a seasonal road, this came as a surprise to many and
from 2008 onwards people started buying unsubsidised saplings, with
prices even going up to NRP 25 per sapling. DADO-Jumla continued
subsidising saplings but these saplings were reserved only for the
poorest farmers.
Major challenges for the nurseries are related to improving
the quality of their saplings :
1)
Most nursery owners are not aware which varieties they
have in stock: some are early varieties, some late; some are
self-polinising while others need polinisers to polinise them.
Nursery owners are not able to advise farmers, nor do most of
the latter have much idea about these issues.
2)
Currently the nurseries do not have access or possibilities to
supply new and improved varieties: they are mostly the same
varieties which entered Jumla in the 1970s and 1980s.
3)
Nurseries could well be contributing to the spread of diseases,
especially when the saplings are produced within existing
orchards.
4)
Most common rootstock is the edimel and surkilo plant (both wild
apples, the latter is without thorns), but some farmers (estimated
at 5%) try to save on the edimel seed costs which are collected
from the forests and have a price of 5,000-6,000/- per kilo. Use
of modern apple varieties as rootstock can lead to root rot.
5
DADO Jumla, 2007. Agricultural Programme and Statistics.
14
A Value Chain Analysis of Apple from Jumla
In 2009, DADO-Jumla, SNV and Jumla Agricultural Producers’ and Entrepreneurs’ Cooperative (JAPEC)
organised trainings for registered nursery owners on the above and on the Department of Agriculture “Nursery
Guidelines”, but more needs to be done to really increase the quality of sapling supply. It is hoped that the
Fruit Nursery Association will expand their influence over the many still not registered nurseries. Increased
monitoring by DADO-Jumla would be another way towards quality production of saplings.
Box 2: Nursery registration
Till 2007, a farmer interested to establish an apple nursery in Jumla had to go all the way to the
Department of Agriculture in Kathmandu to obtain a permit –spending at least NRP 25,000-30,000 on
travel and board, thus creating barriers for entry. Now the nurseries can be registered at the Cottage and
Small Industries Development Board (CSIDB) office in Jumla after being recommended by DADO-Jumla.
Other input suppliers
Only a few private input suppliers are in place for supply of other types of inputs (e.g. organic pesticides,
good quality sprinklers, and other inputs). These agro-vets need to be trained in delivery of organic services
as farmers regularly seek their advices. Otherwise these agro-vets will remain a major opponent to the DDC’s
decision of 2007 to declare Jumla an organic district.
In 2009, DADO-Jumla provided the contract to Jumla Agricultural Producers’ and Entrepreneurs’ Cooperative
(JAPEC) for distributing apple saplings to poor farmers, but this is JAPEC’s only activity related to apple
production.
It has been involved in the marketing of high value agriculture commodities such as carrot, cauliflower
and potatoes. It also supplies agro-inputs to local farmers – especially to farmers who are growing fresh
vegetables and vegetable seeds.
Box 3: Shifting from chemical to organic inputs
Organic Certification Nepal (OCN), Nepal’s only national certification agency at least till end 2010, found
in 2009 that till a few years ago the 3 or 4 agro-vets of Jumla’s district headquarters used to be stocked
for two thirds with chemical inputs, for mainly rice and vegetable production. In 2009, chemical inputs
for agriculture were not available on the shelves and had been replaced by veterinary inputs. A few
bio-inputs could be found, but according to the agro-vets there was no demand, nor could they give
sufficient advice on their use. The only thing which is selling well for apple production is Bordeaux paste,
which is allowed by most organic certification systems if used on a limited scale. Training agro-vets on
organic production will be necessary to support and improve Jumla’s organic apple production.
15
A Value Chain Analysis of Apple from Jumla
4.3 Apple Production
Here the focus is on the practices of apple producers and their constraints to improve production. As
explained, apple production is increasingly becoming popular among Jumla farmers and now apple is being
produced in all the VDCs of Jumla.
Varieties
There are about 10 varieties of apples being cultivated in Jumla – mostly the Delicious varieties: Red,
Royal and Golden Delicious – which constitute approximately 70% of the total production. The rest includes
Jonathan, Chocolat, Torikulu and Macintosh varieties.
Cultivation practices
While some apple trees are grown on fertile and irrigable lowlands, most have been planted on the slopes with
low soil fertility and little irrigation. With the large amount of degraded slope land, this is not per se a bad
development, but of course it will not automatically lead to improved production. Apple is mostly inter-cropped
with beans and wheat, but also with soya beans, potatoes, buckwheat, etc. Even before announcing Jumla an
organic district in 2007, pesticides were only used by the larger famers, an estimated 5%, and mainly limited
to Rogar – a pesticide against sucking insects, like Woolly Aphid and San Jose Scale.
The average annual cultivation cycle looks as follows:
Table 6: Annual cultivation practices
S.N.
Month
Activity
1.
June-July
Sapling planting
2.
Jan-Feb
Pruning & manure application
3.
March-April
Weeding
4.
April-June
Irrigation
5.
Aug-Sept
Harvesting
The present apple orchard management is very poor. One of the reasons is that farmers do not have adequate
knowledge on when or how to efficiently irrigate, fertilise, and prune their apple trees. Many also complain
that there are inadequate services of apple experts in Jumla and that a big campaign is needed to promote
improved technologies to apple growers.
But very important factors for the farmers’ “indifference”, often worded by the farmers as “we are too lazy”,
are :
1)
Most of the produce can currently not be sold and people are waiting for the Karnali Highway to be
improved which would boost sales. In the mean time they do not see enough incentive to invest too
much in orchard management except for planting more saplings (area expansion).
2)
Till 2010, there was also no price differentiation between different grades: whatever the quality or
size, the price remained the same; around NRs. 10/- per kilo in 2007 and 2008. Even an attempt to
differentiate prices per grade by the traders in 2008, was protested by the farmers, who mostly have
preferred a cost-minimising strategy till now.
In 2010, for the first time a price differentiation was agreed. Grade A received NRP 30 and 26 for organic
certified and non-certified respectively and grade B received NRP 24 and 22 respectively (prices at the Jumla
airport). Although an important factor was the request of the wholesaler for high quality, also the pruning
competition held in three VDCs made farmers more aware and enthusiastic. Unlike before, now more and
more apple farmers can be heard discussing the status of each others’ orchards and that pruning had had a
considerable effect on the apple size. Grading is still a matter of size and of course of appearance. There is still
no difference in price between the different varieties or the time of supply (early or late varieties).
16
A Value Chain Analysis of Apple from Jumla
Climate
Two important climatic factors for a good production are sufficient chilling hours in the winter (snowfall) and
sufficient rains during the flowering season in April. Because of lack of these two, the 2009 apple production
was at least reduced by 50%. As the Indian apple suffered the same problems, this led to high apple prices
in August.
This also raises questions about the impact of climate change. The expected climate change – less winter
rain or snow and more unpredictable starts of the monsoon (starting date) will probably lead to less chilling
hours, dryer spring seasons and more pests. This could mean that Jumla would need to import varieties
which require less chilling hours, or only start new orchards at higher altitudes. Irrigation will become
more important, which is now virtually lacking. Pest management or pest resistant varieties will become
increasingly more important. Pest management will not be as easy for organic production as for conventional
production.
Diseases and pests
The common diseases reported are: Stem Black, Powdery Mildew, Scab, Nectaria Twig Blight, Alternative
Twig Blight, Peppery Bark/Pink Disease. Similarly, some of the common pests reported are: Woolly Aphids,
San Jose Scale, Stem Borer, Root Borer, and Bark Borer.
The common diseases reported are: Stem Black, Powdery Mildew, Scab, Nectaria Twig Blight, Alternative
Twig Blight, Peppery Dark/Pink Disease. Similarly, some of the common pests reported are: Woolly Aphids,
San Jose Scale, Stem Borer, Root Borer, Bark Borer.
Labour
During peak agricultural seasons, the wage rate for both male and female is around NRP 250-300 per day
plus three meals. However, during off-seasons, women tend to get slightly lower wages than males. Now,
only large farmers are employing wage labourers, but this is expected to increase once sales increase when
the Karnali Highway will become an all-weather road.
17
A Value Chain Analysis of Apple from Jumla
Organic production
Another important factor which has limited quality production is that
the declaration of Jumla as an organic district was not sufficiently
combined with awareness and knowledge on organic-permitted
growth stimulants (like Servo oil to be sprayed to increase apple
size and shininess), bio-fertilisers, compost making and bio
pesticides. Half of the organic matter (dry weight) of Farmyard Manure
is currently pine needles, which increases acidity and lowers nutrient
availability, but currently there is little other unused biomass available.
Increased soil fertility is not only good for production but also a
requirement for organic certification. Taking Jumla’s current low soil
fertility levels into account, OCN advised extensive use of cradle
pits in orchards which gather moisture and organic matter. In a
similar manner, NARC-Jumla advised to have one compost pit per
ropani and to massively grow beans around the apple trees and use
the plants as green manure after the bean harvest. Whether organic
certified or not, increasing apple quality will require a large scale,
structured campaign to increase quality and quantities of composting.
Organisation of producers
Till 2009 apple producers in Jumla were hardly organised and
are selling apple independently: therefore, they did not have
much bargaining power for better prices. They also did not have
direct contact with major apple wholesalers in urban markets and
depended on apple sales to local traders.
Due to the organic apple certification initiative by the DADO Jumla
and the High Value Agriculture-Inclusive Business Pilot Project
(HVA-IB pilot project)6 , more formal organisation of farmers
became necessary to receive group certification as this reduces
costs compared to certification of each individual farmer: three
organic apple producer groups were initiated in 2009 (Kartikswami
Organic Group, Malika Organic Agriculture Production Group and
Janachetana Organic Group). For the marketing in 2009, these
three groups organised an apple management committee which
signed a contract with the DCCI-Jumla sub-committee (about seven
Jumla apple traders) for supply of organic certified apple.
Then in 2010, with the change in DoA’s subsidy on transport and
packaging material, formation of cooperatives became an urgent
matter. As per the new directive only cooperatives would be able
to receive the subsidy, and not organisations like the DCCI, which
received the subsidy in 2009. The above farmer groups largely
merged with existing cooperatives which were either inactive or
only did saving and credit activities. Another six cooperatives, not
active in the apple sub-sector before the new directive, also joined
the marketing activities of the three cooperatives and collaborated
under the umbrella of the District Cooperative Federation. They did
not join in the organic certification activities.
These nine cooperatives represented around 460 active commercial
apple producers in 2010 and accounted for about half of total apple
export from Jumla. The other half is exported by non-organised
farmers. Although no data exists about them, quite likely this part
exists out of more farmers, each exporting fewer apples.
6
Implemented by SNV Nepal and the local NGO Surya Social Service Society.
IFAD provided programme funding for the project.
18
A Value Chain Analysis of Apple from Jumla
Box 4: Karnali
Fruit Cooperative
The Karnali Fruit Cooperative
started up from discontentment
that DADO transport subsidy only
went to traders, not to the farmers.
After initiation it was found out
that DADO, by law, can only give
subsidy to individual companies, not
to cooperatives, so it still couldn’t
benefit from the subsidy.
The cooperative was set up in a
very inclusive manner and soon
had 167 members: more than 30%
were Dalits, membership fees could
be paid in apples (in kind), big and
small apple farmer members supply
an equal amount to sell collectively
- only if there is still space left over,
larger farmers could contribute
more.
In its second year, it transported 10
MT through Surkhet to Kathmandu’s
Balaju Industrial Area’s cold store.
Out of it, 70% got damaged on
reaching Kathmandu, due to
long transportation time and bad
packaging, and the cooperative
ended up with a loss of NRP 70.000.
Also members were blamed of
providing low quality apples, while
trying to sell their better apples
elsewhere. They had tried to make
a business plan before hand, but
reality turned out totally different.
After this bad experience the
cooperative has remained inactive.
4.4 Harvesting and Post-Harvest Management
Harvesting
Jumla apple producers do not have much knowledge on the
appropriate techniques for proper picking, grading and packing.
Apples are harvested in a most haphazard manner – including
shaking the tree and picking from the ground. Without grading
they are transported to Jumla airport, in dokos and bags. The latter
is especially a role for women. One of the challenges to improve
harvesting is that damage to the apple often only becomes visible
after a few days, especially when it arrives at the heat of the Terai,
the bruises quickly become visible.
Grading
Grading was done by the traders – usually two grades depending on
size alone for export to the Terai till 2008. In 2009 grading (A, B, C,
D) was introduced but without price difference. In 2010, this was
done by the earlier mentioned nine cooperatives which collaborated
under the umbrella of the District Cooperative Federation Jumla.
It was agreed to only export A and B grades. Grade A received
NRP 30 and 26 for organic certified and non-certified respectively
and grade B received NRP 24 and 22 for organic certified and noncertified respectively. There are no grading standards for apple in
Nepal, and the definition of the different grades is based on mutual
understanding between the stakeholders.
As nearly all apples are transported by plane, which is also a
challenge because flights get rather unpredictable in the monsoon
weather, grading, pricing and packaging all happen close to the Jumla
airport.
Sometime Golden Delicious, a late variety, gets packaged separately.
The district headquarters traders will use the apples other than grade
A, B and C for processing or for the local market. When there are no
flights available to transport the apples to Nepalgunj or Surkhet, from
where the transport can continue by road, also A and B grades start
flooding the local market.
Packaging
Till 2008, traders had not properly prepared themselves by bringing
packaging material before the monsoon starts. A lot of losses
occurred due to improper packaging: old boxes were used without
any wrapping or separation material and a considerable amount got
damaged. Often the bruises only started to show after a few days,
especially when the apples arrive in the heat of the Terai.
Due to collaborative efforts from DADO-Jumla, DDC, DCCI-Jumla,
World Vision, SNV Nepal, various new developments took place in
2009. A total of 285 farmers were trained in improved harvesting
and post-harvest management, investment was made into improved
packaging (boxes and foam nets/wrappers). Grading also improved,
although price differentiation was initially resisted by the farmers
and only took place in 2010. People’s vision has widened of what
is necessary (and possible) to be competitive in the market. In
2010, even the nine cooperatives managed to organise and pay for
packaging material from Nepalgunj, which can be seen as a strong
proof of increased local capacities.
19
A Value Chain Analysis of Apple from Jumla
Storage
Traditionally farmers stored apples inside the house in cool dark rooms. Now some improved zero-energy
apple stores (rooms) have been developed, but without proper humidity and temperature control, these stores
can only extend the commercial life span of apples with one or two months.
The road access problem would be greatly minimised if proper storage would exist. Unfortunately the nearest
cold storage is in Kohalpur in the Terai. Jumla currently does not have sufficient electricity supply for its
current needs, let alone the local micro-hydro power that can manage an energy-consuming cold store. The
current zero-energy storage (cellar stores) allows for storage, but still causes losses which often outweigh
possible price increases.
Another issue is that the Jumla apple does not have a long keeping quality. Although this needs further
research, probably there is due to shortage of a certain micro-nutrient in the soil, possibly Calcium.
4.5 Trade and Marketing of Jumla Apples
Harvesting already starts during the monsoon and makes transport over the Karnali Highway impossible. This
makes costly air transport the only option, but the same weather makes flights very unpredictable. There is
also considerable competition between cargo and passengers, especially before Dashain as many non-Jumlis
want to go home for the holidays. If the road opens early, transport by tractor becomes possible increasing
district headquarters apple prices. For example, in 2008 the prices increased from NRs. 10/- to 20/- but with
losses of up to 50% due to the bad road conditions.
The 232 km Karnali Highway opened as barely a track in 2007. This has greatly increased the perceived future
perspectives for the Jumla apple sector. The World Bank is supporting the blacktopping of the first 132 km
(up to Khidkijiula) which is expected to be completed by the end of 2011. Improvement of the next part is
expected to start in 2011. But the chances of landslides blocking the road during monsoon will remain large
for the years to come.
Those 10% apples which do reach the market outside Jumla largely serve the cheaper market segments in
the Terai: poor management, all the way from orchard management to packaging and transport, make these
relatively small and often bruised apples less attractive. Nevertheless, in comparison to Chinese and Indian
apples, Jumla apples are widely recognised as tasty and crunchy apples in Nepal, but size, colour and general
condition have a big influence on consumer choices.
The different marketing or trade modalities are currently in operation in Jumla:
1) Large apple producers who bring their produce to Surkhet and Nepalgunj themselves.
2) Growers – especially in Jumla’s Sinja belt – who collect from other farmers as well and send the produce to
the Terai.
3) District headquarters traders with a storage at the Jumla airport who either a) ‘rent’ orchards and organise
the harvest themselves, or b) buy at the airport from farmers.
4) For the first time in 2010, nine Jumla cooperatives did joint marketing under the District Cooperative
Federation.
20
A Value Chain Analysis of Apple from Jumla
The third category took the largest volume in 2009, while the fourth category took the largest volume in 2010,
increasing the area of influence of the apple producers (vertical integration). The transport and packaging
subsidies provided by the DADO form part of the profits (for transport NRP 7 in 2009 and 75% on transport
and on boxes in 2010). As the subsidy is provided on reimbursement basis, it was quite a surprise that the
nine cooperatives managed to collect sufficient working capital internally to bridge the gap between actual
payment of transport and boxes and the reimbursement later in the form of subsidy. Another significant feat
by these cooperatives in 2010 was management of air transport, not an easy task seen the competition for
air transport and the monsoon weather limiting flights. Due to these flight problems, marketing apple and
the coordination between different actors is not easy. Every year a few metric tons of apples loose their
marketability while waiting for flights for too long, increasing the costs for the traders or cooperatives.
Table 7: Transport costs
Route
Mode of transport
Transport cost (NRP) per kg
Jumla-Nepalgunj/Surkhet
Air
Jumla-Surkhet
Truck/tractor
21/- (excluding possible
transport subsidies).
4/-
Nepalgunj/Surkhet-Jumla
Air
82/- (Excess luggage)
55/- (Cargo separate)
42/- (Charter)
Surkhet-Jumla
Truck/tractor
the volume
8/- to 24/- depending on
After agreeing on a deal with actors in Jumla, wholesale traders from elsewhere collect their apples in Surkhet
or Nepalgunj and put their product on night buses to various destinations, where they sell to retailers. Before
the market linkage interventions of HVA-IB pilot project, most apples were sold in the Terai, from Naryanghat
to the West. With the project larger volumes started reaching Kathmandu.
The year 2009 saw high prices early in the harvest season, which helped the farmers make a good deal with
the DCCI-Jumla (NRP 35/kg), but early September the Chinese apples arrived on a large scale after which the
apple price in Kathmandu dropped sharply. On the basis of this experience, the above mentioned pilot project
argued for a pricing system for Jumla apples based on the general apple market price in Kathmandu, for
example agreeing on the apple price in Jumla as a percentage of the general apple market price in Kathmandu
and with a certain minimum price also included. But in 2010, the Jumla cooperatives had little interest in such
a system: they preferred a fixed price and left the risks (and possible gains) for the wholesaler.
Box 5: Karnali Apple Company
The Karnali Apple Company (KAC) was supported by a USAID/AEC
project from 1996 to 1999. The project also linked Jumla apple
traders with apple traders in Bangladesh by supporting the visit of
Bangladeshi traders to Jumla, in order to convince them that Jumla
apples were superior to Indian apples. The project also organised an
exposure visit of apple farmers and traders to Himachal Pradesh in
India and even provided management support to KAC.
KAC exported 12 MT of apples to Bangladesh in one year. Apples got
damaged as airplanes did not arrive on time and also farmers did not
bring their best quality apples. KAC bought at NRP 16/kg from Jumla
farmers and sold at a price of NRP 50/kg in Bangladesh. Of the 50 MT
delivered, only 14 MT was suitable for export. It rented a cold store in
Biratnagar to deliver to Bangladesh which demanded 50 MT per week,
which KAC could not deliver, after which the Bangladeshis lost their
interest. One important impact of this project was on the price: before
this project the price of apple was only NRP 2/kg in Jumla, while
afterwards the price settled at NRP 10/kg (up to end 2008).
21
A Value Chain Analysis of Apple from Jumla
Box 6: Issues for future consideration
Two issues which are worth considering for the near and distant future:
•
Although politically difficult to change, the current transport subsidy is actually not promoting
increased availability of air transport. It does increase the profit margins for cooperatives and possibly
also profit sharing towards members, but as airplane companies do not receive any extra margin from
this subsidy it will not stimulate them to bring their planes to Jumla at the cost of other destinations.
•
Although there were substantial subsidies involved for transport and packaging to achieve the current
level of competitiveness, the impact of the opening of the road during the harvesting period is still
unclear. Traders will enter Jumla with trucks and possible even with cheaper wage labourers from
the Terai and they will try to make deals with individual farmers to rent their orchards. Hopefully the
cooperatives will cover more and more apple producers and will have sufficient capacity to bargain
with incoming traders in a collective manner. The cooperatives should make sure that they have
other advantages to offer to incoming traders than volume alone (e.g. good storage facilities, a cargo
terminal), otherwise it might be too easy for traders to break this collectiveness and start dealing with
individuals which could drive down the apple price.
4.6 Organic Certification
At least 95% of Jumla apples are organic by default, as the marketing opportunities for Jumla apples have
been limited and only a few larger farmers are willing and capable to invest into expensive chemicals. The
10% of the total apples which did reach the market outside Jumla was mostly used to serve the cheaper
market segment in the Terai: poor management, all the way from orchard management to packaging and
transport, made these relatively small and often bruised apples less attractive.
This was rather unfortunate, as
usually organic products serve
the top-end markets. With this in
mind, the HVA-IB pilot project,
implemented by SNV Nepal, and
DADO-Jumla agreed to support
organic certification in 2009 and
2010. Later World Vision and
other organisations also agreed to
contribute.
In 2009 three organic apple
producer groups were formed in
Mahat, Kartikswami and Patmara
VDCs respectively: these 207
farmers went through various
trainings and were inspected by
Organic Certification Nepal (OCN)
in August 2009 and were certified
“Organic in Conversion”. OCN
is a Nepali certification agency
which applied the Government of
Nepal’s Organic Guidelines for this
certification. These guidelines were
only approved in May 2009, and
the certification of Jumla apples
was probably its first successful
application. Also marketing
was supported with posters,
banners and “certified organic in
conversion” stickers for each apple
to create demand and trust among
consumers. In a similar manner,
Photo : Certificates provided by OCN to the three producer groups after certification.
22
A Value Chain Analysis of Apple from Jumla
in 2010 these farmers organised themselves into three cooperatives, and 200 farmers were certified
fully “organic’ and another 150 as “organic in conversion”, together exporting 38 MT. Another 30 MT was
exported by six cooperatives with the same market linkage support from the HVA-IB pilot project. Although
not organic certified, these apples where still sold as organic (‘truthful labelling’), benefiting from a slowly
increasing awareness among consumers about Jumla being an organic district.
This certification was one of the reasons why
the price of organic apple in Jumla increased
from NRP 10 in 2008 to NRP 35 per kg in 2009
(ungraded) and was marketed through at least 6-8
supermarkets in Kathmandu. Other reasons for
the price increase was caused by the better post
harvest management, most tangible the improved
packaging. Another important factor was the
general increase in market price due to the reduced
production in the Himalayan belt :7 the price for
uncertified, but well packaged apple rose to NRP 25
per kg.
In 2010, the price difference between certified and
non-certified organic apple decreased: respectively
NRP 30 and 26 for grade A and respectively NRP
26 and 24 for grade B. If this price difference does
not increase, this small difference will not justify
organic certification from a financial perspective.
There appears to be quite some interest for organic
apple, but demand and supply are not meeting
each other in an effective manner. One reason is
that the organic market is not yet well organised
in Kathmandu: several places have a few organic
products but it remains all very scattered. There
are no places where consumers can buy a whole
variety of organic products. The other reason is
that in 2009 and 2010 the Jumla apples were
mainly distributed through a fruit wholesaler which
has no expertise and also little interest in organic
products. Although there is one organic vegetable
wholesaler in Kathmandu, this company did not
manage to make a substantial deal with the Jumla
cooperatives and the latter preferred the offer of
the fruit wholesaler: larger volumes, more advance
money, etc.
Even though the Ministry of Agriculture and
Cooperatives has published its set of guidelines for
organic production, Nepal still has no accreditation
body which can accredit certifiers as complying
with an agreed set of policies and guidelines.
Therefore, OCN is not an accredited certifier and
its certification remains of a private nature. In
other words, the certification of organic apples
is based on the trust that OCN is doing its work
professionally and there is no accreditation body
to guarantee that certain guidelines or standards
are met.
Photo : OCN sticker for on the apples
Photo : Cooperative representatives offer Jumla organic
apples to the President of Nepal (September 2010)
7
Just like in Jumla, other main apple producing areas like Kashmir and Himachal Pradesh suffered from little snow fall (too little
chilling hours for the apple) and reduced rainfall during the flowering season. In that year production was reduced up to 50%.
23
A Value Chain Analysis of Apple from Jumla
Box 7: Group certification
Two systems of certification exist: individual and group certification. Group certification has been
developed to support small producers with its reduced certification costs. Annual inspection, the main
recurrent cost of certification, takes place for the whole group of organised organic producers. Group
certification requires the organic producers to be organised and to have internal inspectors who monitor
whether other group members are applying the organic guidelines and are properly documenting all
farm activities in their “diaries”. This is called the Internal Control System. When the external inspector
from the certification company comes, he/she first checks whether the internal inspectors are properly
doing their work and randomly inspects several farms. If all guidelines are applied at both levels, it is
possible to provide a group certification, which is much less costly than individual certification where
each farm would need to be inspected.
Already some lessons have come forward from the 2009 and 2010 certification experience:
•
Large scale introduction of use of permitted bio-pesticides and organic compost making need to be
introduced. Especially pest control is become a large concern among the farmers. DADO-Jumla and the
Jumla Horticulture Research Farm are doing some experiments, while the HVA-IB pilot project have
provided trainings to farmers. Micro Enterprise Development Project might support the initiation of a small
bio-pesticide production unit making use of locally available herbs.
•
Although there is demand for organic apples in Kathmandu the distribution needs to be better organised
to reach out to many consumers. This is related to the fact that there is hardly an organised market for
organic products in general in Kathmandu. And preferable a wholesaler should be involved which already
has experience and networks to serve the fragmented organic market. Without this a sufficient premium
price cannot be achieved and the certification will not be financially sustainable.
•
As OCN certified the upland fields of the farmers (not the irrigated rice fields where they still found some
evidence of [illegal] pesticide use), also other non-irrigated crops can be produced under the present
certification, like beans, buckwheat, etc. These extra incomes will increase the financially sustainability of
the certification.
4.7 Apple Processing
Processing of apple is important as a considerable part of the produce will always remain of too low grade to
sell for fresh consumption. At the same time, this is even more urgent for Jumla as market access will remain
problematic during harvesting time: processed apples into whatever product can often be better stored and/or
have less weight or volume which reduces transport costs.
Several enterprises - including the largest called RN Organic - have started production of dried apple slice on a
commercial scale – both for local consumption and ‘export’ out of the district to major markets in Nepal. Other
products have not seen any commercial up-scaling, except for apple cider production. Of course, production
of local apple rakshi for district or household consumption remains a long term favourite. Another local
entrepreneur is ready with distillation equipment to start the production of apple brandy. It is still waiting for
a licence, but licence provision for strong alcoholic drinks is - at the time of writing this report - banned by the
central government.
The general opinion is that dried apple has the most potential (easy processing, light weight), but they have to
compete with the good quality apples coming from Mustang. If these various products are to be promoted on
a larger scale, separate value chain analyses of these products would be worthwhile.
24
A Value Chain Analysis of Apple from Jumla
4.8 Trend of Apple Production
Apple was introduced in Jumla during the 1970s from Himachal Pradesh, India by the Government of Nepal
(GoN). In 2008, a total of 953 hectares of land was under apple cultivation. With more then 1,00,000 new
saplings planted each year from 2006 onwards, the area is rapidly increasing. The future improved road
access is the driver of expected market access and sales increases.
Similarly, over the years there has been an increasing trend in apple production in Jumla with a production
of approximately 1900 MT in 2008 (although some estimate it as high as 5,500 MT but much of this would
not have commercial value). Only about 10% of all produced apples are ‘exported’ from the district, actual
production data are not available. About another 20% is used for local or household consumption and
processing.
In the past, saplings were distributed by DADO Jumla at NRP 2 per sapling (with a subsidy of NRP 18 per
sapling) and is still doing so for the most disadvantaged households. From 2008 onwards farmers bought
saplings at the rate of NRP 20 to 30 from private nurseries. The demand was so high that even the production
of saplings by private nurseries could not meet the demand of local farmers. Even poor Dalit farmers bought
apple saplings at NRP 20 to 25 per sapling from these private nurseries. Every farmer met during the studies’
field trips in Jumla mentioned that they were planning to double the number of trees in the next 5 to 7 years.
The most recent data come from District Development Committee (DDC) Household Survey of 2008
(see Table below and Annex B for more details).
Table 8: 2008 data on apple production
Total apple Mature apple
tree (ha)
area (ha)
953
278
# of total
apple trees
Matured apple trees
(apple producing)
Total apple
productions
annum (MT)
Total apple
producing
households
286,000
83,500
1,836
9,913
Whether the Jumla apple can take a serious domestic market share once the Surkhet-Jumla road is upgraded,
does not only depend on production, but more importantly also on demand and whether it can compete with
Chinese, Indian and Mustang apples (see Chapter 5, National Apple Market Dynamics) and/or whether Jumla
is able to forge a niche market based on ‘organic’.
25
A Value Chain Analysis of Apple from Jumla
4.9 Income Generation
Annex C provides an overview of the cost structure of the apple production as prepared on a focus group
discussion with Jumla farmers. It shows that with 20 trees per ropani (and other assumptions), the net annual
income opportunity per ropani from apple production and the inter-copping is NRP 57,000 when the production
is in full swing (with ten-year or older trees). This calculation8 is on the conservative side: it assumes high
labour costs (which are increasing steadily) and apple prices at least NRP 5 below those received in 2010. With
the same assumptions but only a price of NRP 25 instead of the assumed NRP 20, it would already mean a net
income opportunity of NRP 77,000 per ropani. The wage labour cost of NRP 400 per day is also on the higher
side. Nearly all work is done by family members and is not paid for. Net income opportunity increases to
NRP 83,000 per ropani if wage labour cost is taken at NRP 300 per day.
With an average of 0.42 ropani 9 per HH with fruiting apple, this provides on average net income opportunity
between NRP 24,000 (USD 320) to 35,000 (USD 466) per households (depending on various assumptions).
This income opportunity for 9913 households can only be realised if the apples produced can actually be sold
which is not yet the case. This number of households will double (to nearly all households in Jumla) in the
coming 10 years, and with more than 1,00,000 samplings being planted each year in the last 5 years and
based on the 2008 available data showing that only around 25% of the trees that time were in a fruiting
stage10, the income effect of an all-weather road will be tremendous.
Making use of the cost-benefit calculation mentioned before, the 68MT sold by 460 households in 2010 would
have led to a net income of NRP 3050 (USD 40) per household excluding cooperative profit sharing.11
Information from a 299 household survey by DADO-Jumla, given in the table below, shows that large majority
have small apple orchards while only a few people have substantial orchards and who could consequently
specialise in and rely on apple production. For the large majority, apple production will, for the time being
remain part of a wider livelihood strategy.
4.10 Social Inclusion and
Gender
Table 9: Size of apple orchards 12
Apple Trees
Number of Farmers
Percentage
As the poor and disadvantaged
15 - 75
193
65%
have less land, apple production
> 75 - 200
81
27%
was not seen as sufficiently
> 200 - 500
25
8%
pro-poor. But as poor Dalits have
started growing apple trees, this
is an indication that they are also capable to enter this sub-sector. Besides, there are hardly any landless
in Jumla district. Dalits are aware of the fact that in the future apple production will be their main source of
income (See Box below). Poor households are not only characterised by smaller land holdings but even more
importantly with less irrigation opportunities or facilities. Due to land pressure, people are bringing more and
more slope land under cultivation. Compared to annual crops, apple cultivation on slope lands can be relatively
sustainable with limited soil erosion.
Box 8: A Dalit farmer’s story on apple farming
Bhakta Bahadur Nepali (a Dalit farmer) has presently 50 apple trees. He plans to double it in the next five
years. He said that now Dalits in his area have complete awareness of the fact that “Apple farming alone
can sustain their livelihoods” and they are increasingly planting apple saplings in their farms. However, the
farmers in his area do not have knowledge on improved technologies of apple growing and post harvest
management. “Dalit farmers have great interest in apple growing, but they need be trained in improved
technologies of apple growing and marketing”.
8
Certification costs are not included, neither the extra costs for maintaining the internal control system nor the premium price for
organic certified apples. Also costs for land are not included. There is no practice of renting land, which would be an easy way to
estimate land costs.
9
Average ropani per HH fruiting: 83500 fruiting trees / (20 trees per ropani * 9913 total number of HH doing apple production) =
0.42 ropani per HH (based on DDC 2008 Household Survey).
10
Apple trees usually start fruiting after 5 years, but large volumes only come after 10 years and the maximum production only takes
place at a tree age of 15 to 25 years.
11
Assuming trees are all mature, producing 200kg apples per tree and 20 trees per ropani. A total of 68.000kg apples comes from
17 ropanis, leading to a net total income of around NRP 14,00,000 depending on the various assumptions (NRP 3050 [USD 40] per
HH). Profits by cooperatives is substantial, they received a price of NRP 62 to 68 at Surkhet in 2010 and also a subsidy of 75% of
the transport costs.
12
DADO Jumla, 2008. Agricultural Development Programme and Statistics.
26
A Value Chain Analysis of Apple from Jumla
Data from the DDC HH survey 2008 in the box below, give an idea of the social inclusiveness of apple
producers. It reveals that disadvantaged groups like Dalit and Janajati are indeed adopting apple production
– although slightly less than the higher castes.
Table 9: Social group wise apple production in Jumla
Social group
Total Households
Apple production HH
Dalit
Janajati
Brahmin/Chhetri
Muslims
Total
#
3,212
258
13,476
2
16,948
#
1442
127
8,303
1
9,913
%
19
2
80
0,01
100
%
15
1
84
0,01
100
Reports on the relationship between caste/ethnicity and quantity of apple production are not available.
It would probably show that higher castes own more land, own more apple trees and consequently produce
more apples.
Although access to land is one important factor, investment-wise (see Annex C), the preparation of a boundary
wall is another larger investment in the beginning - although currently there are quite a lot of apple trees
especially higher up on the slopes without this protection. Intercropping gives some respite for the farmers
during the first 5 or 10 years, the non-fruiting stage, probably not unimportant for poor farmers to enter this
sub-sector.
Another important aspect, is that if the Jumla apple sector follows a similar development as Himachal Pradesh,
there could be huge opportunities for poor wage labourers to work on orchard management, harvesting and
post-harvest opportunities. Seen the high labour costs in Jumla, NRP 300 per day in 2009, combined with a
future increased and more dynamic apple sector could also cause a large influx of cheap daily wage labourers
from the Terai.
Box 9: A local farmer’s
prediction on the future
of apple farming
Krishna Kathayat (a Chhetri
farmer) has 62 apple trees.
He worked for six months in
an apple orchard in Himachal
Pradesh (H. P.), India. According
to him: “In H. P., majority of
the apple orchards are being
managed by poor people, and
the owners live in the cities.
If there are marketing
opportunities, apple production
in Jumla could increase by 3-4
times in ten years’ time.
The present rice fields could
be planted with apple trees in
the next ten years’. If
this happens, like in H.P.,
the poor will benefit the most
by getting employment in apple
production and marketing”.
This would indeed be good news
for Jumla’s poor.
27
A Value Chain Analysis of Apple from Jumla
Gender
Another important aspect of the social exclusive or inclusive nature of apple production is that of gender task
distribution. The table below shows that apple is not an exception to the traditional labour division between
male and female. As mainly women carry apples in dokos to the local market or the Jumla airport, this
provides them opportunities to engage in the cash economy, and possibly increase decision-making power of
women on use of cash/money.
Table 11: Gender work distribution (based on a focus group discussion)
S.No.
Description of activities
Estimated work load (%)
on activity basis
Male
Female
1
Land preparation including pit filling
65
35
2
Collection, transportation & planting sapling
60
40
3
Annual weeding, manuring
40
60
4
Training & pruning of apple tree
80
20
5
Management of plant protection measures
80
20
6
Harvesting, grading & packaging at farm level
70
30
7
Local transportation
25
75
8
Apple processing (dried apple, cider, brandy)
50
50
9
Selling at the local market
25
75
28
A Value Chain Analysis of Apple from Jumla
5. NATIONAL APPLE MARKET DYNAMICS
5.1 Market Shares of Suppliers
Apples for Kathmandu and other major urban markets are mainly supplied through imports from China
and India with the domestic production contributing negligible amounts – although apples from Mustang
and Jumla are starting to make a name.
Although reliable data is not available, the indications are that China is increasing its market position
in Nepal: in 2008/09, China supplied around 70%, followed by India with 29%. In 2009/10, China’s
market share was around 90%, with only 9% for India. The rest comes from domestic production. These
percentages are indicative as reliable data is not available. Although government statistics show an apple
production which could even fulfil the national apple demand, still most of the domestic produced apples
are consumed locally due to lack of transport opportunities, go to waste or do not even have sufficient
commercial value at all (too small, not good-looking enough).
China will continue to dominate the market, even at a global level. Apparently it already produces 70%
of the world apple volume, with still many trees in pre-flowering stage. Its high-quality storage facilities
make it even more powerful: it can flood world markets when it wants and influence prices at its will.
India’s market share is only seasonal, just like that of domestically produced apples: only during or right
after the harvest period. Indian apples are relatively expensive: compared to the Chinese apples, they are
smaller and less well packaged. Apparently the price of Indian apples is being driven up by the increased
power of retail chains in the apple value chain in India.
“Premium” quality apple is also being imported from overseas countries such as USA, Australia
and New Zealand, but in very small volumes. Most of the domestic apples are still consumed in local and
regional markets. With roads to Mustang and Jumla improving in the coming years, the domestic apple
market share in Kathmandu is expected to slowly increase, probably at the expense of the Indian market
share. A lot will depend on support of the Government of Nepal to this sub-sector (e.g. in the form of
transport subsidies).
29
A Value Chain Analysis of Apple from Jumla
5.2 Physical apple flows in Kathmandu
Apples are considered to be the fruit most in demand in Kathmandu and other city centres of Nepal and
unlike many other fruits, it is available all year round. There is an increasing demand for apple of around
10% a year, following indications given by wholesalers, due to urbanisation and income growth of urban
populations. Sufficient demand for apple exists throughout the year with noticeably higher demands during
the harvest season as prices are low and during the festival seasons. The total annual traded volume in
Kathmandu is estimated at around 27,000 MT: around 9,000 MT for consumption in the Kathmandu Valley
and 18,000 MT is transported to different regions of Nepal.
There are two main trade hubs in Kathmandu: the Balkhu Fruit Wholesale Market already has a market
share of above 90% and that trend seems to be continuing at the cost of the other hub, the Kalimati Fruits
& Vegetables Market.
Numerous dealers in these wholesale markets supply the apples to the various retailers and traders in the
country. Around 65% of the apples supplied from these markets are transported to other markets outside
the Kathmandu Valley which include markets in Pokhara, Naryanghat, Hetauda, Butwal and Nepalgunj. The
rest of the apples are supplied to the consumers of the Kathmandu valley and surrounding areas. The value
chain map below shows the physical flow of apples.
Chart 2: Value chain map of apples in Kathmandu
(With apple prices in NRP per kilo, estimated quantities in MT and number of actors between brackets.
Quantities and number of actors are estimates.)
Kathmandu
Consumer
Outside Valley
18,000 MT
Wholesale
Importers/
Suppliers
Retail
Consumers (households, restaurants, hotels)
9,000 MT
Cycle Vendors
NRP. 80-100
4,500 MT
(300-400+)
Balkhu Fruit Market
NRP. 55-120+
26,000 MT
(60+)
China
NRP. 50-60
24,500 MT
(40-50)
30
A Value Chain Analysis of Apple from Jumla
India
NRP. 60-70
2,500 MT
(5-10)
Ret. Shops
NRP. 90-150+
3,500 MT
(500+)
Dep. Stores
NRP. 150-200+
800 MT
(10+)
Agents
NRP. 70-150+
100 MT
Kalimati Vegetable and Fruit Market
NRP. 60-120+
1,000 MT
(5+)
Domestic
NRP. 70-80
50 MT
Overseas
NRP. 80-100+
25 MT
5.3 Description of Market Actors
The market actors in the value chain of apples inside Kathmandu are:
Importers/suppliers
Wholesalers
Retail traders
Consumers
•
•
•
•
Importers/suppliers
As mentioned above the majority of the importers import apples from China, as it has become a perennial
source of apples, at the cost of the market share of Indian apples. The actual importers are transport/cargo
companies which are specialised in importing many different kinds of goods, including apples. Because of
regular apple imports, some fruit wholesalers have invested into this part of the value chain as well and have
become (co-)owners of cargo companies.
Wholesalers
Balkhu Fruit Wholesale Market, fully dedicated to the import and supply of fruits, is considered the main
wholesaler hub for supply of fruits and the place where most wholesalers are based. They act as the main
wholesale hub not only for the valley but for the rest of the country. There are more than 60 traders inside the
wholesale market who are involved daily in the sales of different fruits. This market handles or supplies over
2,500 cartons (11kg each) of apples everyday to various buyers which include cycle vendors, shopkeepers,
department stores and hotels.
Table 12: Number of wholesalers in major towns of Nepal
Towns
Bhairahawa
Biratnagar
Birgunj
Butwal
Dhangadhi
Dhankuta
Dharan
No. of wholesale
Dealers
1-2
4-5
2-3
5-6
3-4
2-3
2-3
Towns
Itahari
Janakpur
Kakarvitta
Kathmandu
Lahan
Nepalgunj
Pokhara
No. of wholesales
Dealers
3-4
7-8
2-3
65-70
2-3
3-4
8-10
Kalimati Fruits and Vegetable
Market is increasingly becoming a
hub for vegetables. Still it supplies
an estimated around 150-200
cartons of apples every day, mostly
to the retailers in the nearby areas.
Several of these wholesalers
immediately transfer the apples
from the trucks of cargo companies
on to night buses selling it off to
regional wholesalers elsewhere in
Nepal.
There are many wholesale traders of fruit in Kathmandu and other market hubs of Kathmandu, who trade
mainly in Indian and Chinese apples.
At the central level, apple wholesalers are organised under a national umbrella called “Nepal Fruits
Association”.
Retail
The retail level buyers in Kathmandu, include:
Cycle vendors, supplying an estimated half of the apples to the consumer market
Retail shopkeepers, supplying around 40-45% of the apples
Department stores and/or super markets, supply less than 5% of the apples to the consumer market; and
Supply agents, who provide supplies to the institutional buyers, such as restaurants and hotels, also with
less than 5% of the total volume consumed in Kathmandu.
•
•
•
•
Cycle vendors: These vendors travel around the city in cycles providing fruits and vegetables to consumers
in different areas. Typically being from a Madeshi background, they purchase apples everyday from dealers of
the wholesale market and supply it to the consumers. On the one hand they have low costs (don’t pay rent),
but also have no storage facilities, and therefore they generally tend to have the lowest price range among
different retailers. According to the wholesale dealers, cycle vendors comprise a majority of the daily sales
from the wholesale market, they number anywhere from 300-400. During availability of seasonal and popular
fruits like orange, grapes and banana, their purchase of apples decreases.
31
A Value Chain Analysis of Apple from Jumla
Retail shopkeepers: These are retailers who are mostly dedicated to the sales of different kinds of fruits
and spread across different locations and areas of the valley. They also sell value added fruit products such
as fresh fruit juice and cut fruit assortments. They source their apples mostly from Balkhu Fruit Market,
the purchase cycle being once a week or once in 10 days depending upon the sales. The daily sales vary
depending upon the location and season, however on average each of these sell anywhere from 5 to 25 kg
of apples every day. There are an estimated 500 or more fruit retail shops and vendors spread across the
Kathmandu Valley. They consider Chinese apples to be the most popular mainly because of its size, taste and
packaging. These shopkeepers reported of keeping a margin of NRP. 10-20 per kg of apples.
Department stores: Fruit selling in department stores (supermarkets) is a recent phenomenon which started
only a few years back. Few of the stores bring in fresh apples from the wholesale market every day. The
apples they sell are well packaged and look attractive and appealing to the consumers charging fairly more
than other retailers. They also sell apples imported from Western countries (Australia, New Zealand, USA).
Their margins are considerably higher, up to NRP 100 per kg.
Supply agents: Institutional buyers such as hotels and restaurants usually have supply agents that provide
them with various supplies, including food, vegetables and fruit. These supply agents purchase from the
wholesale market and usually put in a margin of 10-15%. However, there are supply agents who work on a
fixed supply price for a period of time, with an obligation to supply at that price irrespective of the market
prices.
Consumers
These are the final consumers of apples: they can be individuals, households or institutions. Consumers
in lower income bracket consider price as the critical factor. They prefer cheaper variety of apple for
consumption, as well as for other purposes such as use during religious events for offering. Higher income and
upper middle class consumers prefer quality apples (colour, appearance and taste) and price is not the critical
factor for their purchases. During festival seasons, the demand for apples increases at the individual consumer
level.
Another group of consumers consist of institutional buyers, mostly the hotels and restaurants. They either buy
directly from wholesalers, but the majority buy through their supply agents (see above).
32
A Value Chain Analysis of Apple from Jumla
6. ENABLING ENVIRONMENT AND SUPPORTING AGENCIES
This chapter describes a number of supporting agencies and facilitators that are contributing to the enhanced
production and marketing of quality apples from Jumla. Together with the relevant policies, they form the
enabling environment in which primary actors of the Jumla apple value chain operate.
6.1 District Development Committee
The District Development Committee (DDC) has a key role in the formulation of district level policies, plans
and programmes for the district in coordination of various government line agencies and NGOs working in
the district. In view of the significant potential contribution of the apple sub-sector to the economy of Jumla,
the periodic District Development Plan of Jumla “First Five Year Plan” (FY2002/03 – 2006/07) has an overall
slogan saying “Employment through Apple, Tourism, Transportation and Herbs; Development of Jumla with
Equitable Norms”. Similarly, it has declared Jumla an “Apple Zone” and has also adopted DADO’s policy
initiative of “Each household one apple orchard”. In 2007, Jumla declared itself an organic district and banned
import of chemical fertilisers and pesticides.
6.2 District Agriculture Development Office
District Agriculture Development Office (DADO) Jumla has been very active in promoting the apple sub-sector
and has taken lead in coordinating with other agencies. The DADO-Jumla policy on apples is summarised in its
slogan “Every household, one apple orchard”.
Some of the major activities and policies of 2008-2010 related to apples include:
• Provision of subsidised apple saplings to poor, Dalit and woman headed households.
• Promoting Jumla as an organic district.
• Promotion of organic certification, for the first time in 2009, with support of SNV, World Vision, etc.
• Improved packaging by introducing boxes and nets.
• The initiation of Local Agricultural Resource Farmers (LARFs): one each for the 285 wards, all to be
trained in apple orchard management and organic agriculture. They will also be provided with some
basic equipment like spray and pruner.
• Taking lead with SNV support in formulating a Jumla Apple Upgrading Plan to be adopted by the DDC in
2011.
• Training of registered nursery operators in improved production of apple saplings.
• Some experiments with bio-pesticides.
• Managing the DoA’s subsidy policies at district level.
33
A Value Chain Analysis of Apple from Jumla
6.3 Jumla Apple Processing Centre
Jumla Apple Processing Centre (JAPC) is a processing training centre and does not process for marketing. It
provides training and input packages for processing (into dried apple, jam, jelly, cider, brandy, squash, and
juice) and other necessary materials/instruments/equipments. Processing of apple is an important aspect:
many apples are below grade A and B and cannot be marketed for fresh consumption.
Box 10: Processing Centre13
The Apple Processing Centre Jumla, under Department of Food Technology and Quality Control (MoAC)
has processing facilities for apple farmers. However, the processing is limited for household consumption
and gift purposes, not for commercial purposes. In 2064/2065 the centre processed 360 MT of apple and
760 farmers got services (50 farmers for jam; 150 for juice; 250 for dried apple slice; 50 for cider; 50 for
titora (apple sauce); 25 for apple candy and remaining for other services.
6.4 NARC – Jumla Horticulture Research Station
Nepal Agricultural Research Council (NARC) has been established as an autonomous organisation under
the “Nepal Agricultural Research Council Act – 1991 “with the prospect of having an efficient, effective and
dynamic agriculture research system in Nepal in order to uplift the economic level of the people”.
One of NARC’s centres is the Jumla Horticulture Research Station (JHRS), which has some well proven apple
technologies available. The farm has successfully nursed apple trees with the proper pruning, training and
management systems – including administering other technologies such as Amali (parasite) to eat aphids,
which suck young trees and dry the branches. Still these improved techniques need to be spread among
farmers. One of the issues is how to multiply the Amali within Jumla. JHRS has also provided various trainings
like nursery and orchard management.
Box 11: Improving varieties
NARC and the Indian Council for Agricultural Research (ICAR) signed a MoU in 2009 for import of new
varieties from the Regional Fruit Tree Research Station, Mahshobra, Shimla. This will include varieties
with improved colouring, regular bearing, high yielding and suitable for high density planting. Varieties
will include Maling (M-) series as root stock – which lead to slightly better fruits compared to the current
root stock types - and Spur (Golden, Red) varieties as scion, both still not in Jumla except perhaps for a
few smuggled in by some innovative farmers with working experience at Indian orchards. Also Jumla’s
special conditions need to be taken into account: 1) as an organic district it will require varieties resistant
to diseases which cannot be easily tackled with bio-pesticides; and 2) drought resistant varieties, as Jumla
will never be able to achieve the scale of irrigation as currently available in Himachal Pradesh and Kashmir.
But it will take another 5 to 10 years of evaluation on NARC’s horticulture farm in Jumla before these
imported varieties can be distributed via the nurseries.
13
Apple Processing Centre, 2008, Annual Report, Jumla.
34
A Value Chain Analysis of Apple from Jumla
6.5 District Chamber of Commerce and Industry
District Chamber of Commerce and Industry (DCCI) was established in 1995, but only became active from
2002 onwards. It has 450 members, most of which are shop keepers, and the rest (50-70) are contractors,
processors, mill owners, herb traders and furniture producers. Only 15-20 are apple farmers and apple
traders. It also runs a Koseli Ghar (‘souvenir shop’), which sell various local produced food stuffs like dried
apple, apple juice, etc.
In 2009, the DCCI’s sub-committee on apple trade was involved in 1) organising for professional apple
packaging material, for the first time in Jumla’s history; 2) a contract was signed with the management
committee of the three organic certified apple producers; 3) apple business was done with wholesalers in
Kathmandu and Naryanghat. With its link to Federation of Nepalese Chambers of Commerce and Industry
(FNCCI) and its Agro-Enterprise Centre (AEC), it has possibilities to quickly search for business partners.
6.6 NGOs and Projects
Various (I)NGOs and projects are promoting and supporting the sub-sector of apple in Jumla. Below follows
a list of most of the (I)NGOs and projects which supported the sub-sector in 2009 and 2010:
• SNV Netherlands Development Organisation, supporting with capacity building support to
DADO-Jumla, this value chain analysis report, various trainings related to nursery operators, orchard
management and organic certification (through the HVA-IB pilot project). SNV is currently supporting the
facilitation of a Jumla Apple Upgrading Plan.
• World Vision supported with organic certification, promotion and training of Local Agricultural Resource
Farmers (LARFs).
• Community Support Programme (CSP), implemented and funded by DFID, also supported the
promotion and training of LARFs.
• Education for Income Generation (EIG) project, implemented by WINROCK and funded by USAID,
provided support for apple packaging.
• Western Upland Poverty Alleviation Project (WUPAP), implemented by Ministry of Local Development
and funded by IFAD. This project mainly focuses on promotion of apple production in leasehold forestry, an
important component of the project. Within WUPAP, DADO is the key implementer of agricultural activities
at district level.
• Micro Enterprise Development Programme (MEDEP), funded by UNDP, is looking into ways to promote
the production of bio-pesticides in Jumla.
• Nepal Horticulture Promotion Centre (NHPC), a national-level NGO, has provided nursery, orchard
management and harvest/post-harvest management trainings through SNV.
• Organic Certification Nepal (OCN) is a private company which provided organic certification for
three apple producing cooperatives in Jumla. As long as Nepal has no accreditation body and OCN is not
accredited, its certification remains of a private nature.
6.7 Ministry of Agriculture and Cooperatives
The ministry is the central body of the Government of Nepal that oversees agriculture in the country. The
ministry has several sections, departments, directorates which are related to the apple sub-sector. The most
relevant ones are:
• Section Gender and Environment at the ministry has recently developed the organic guidelines.
The next step would include an accreditation system.
• Department of Agriculture (DoA) is the lead government organisation in agriculture development in
the country whose broad objectives have been to support and help achieve food security and poverty
alleviation by the transformation of agriculture through diversification and commercialisation. The DoA
implements its programmes across the country through its Regional Directorates (RD) and District
Agriculture Development Offices (DADOs) situated in the districts. These offices provide extension services
and training services to local farmers in improved agricultural technologies and other services. The DoA
has its experts under various divisions at the central level (including the three below).
35
A Value Chain Analysis of Apple from Jumla
Important subsidies provided by the DoA to cooperatives in 2010 for apple promotion are that for
transport (75% of air transport costs) and packaging (75% subsidy on costs of carton boxes). With
some changes every year, this kind of support is expected to continue.
•
Fruit Development Directorate (FDD) carries out various activities aimed at developing the
fruit sector, including apple, in the country.
•
Agribusiness Promotion and Marketing Development Directorate (ABP&MDD) is the major
government institution responsible and entrusted for carrying out various activities relating to
agribusiness promotion and marketing of various agricultural commodities like vegetables, fruits,
species, cash crops and other agricultural products within the country.
•
Agribusiness Promotion and Statistics Division transmits required information and agridata for programme planning, monitoring and evaluation and acts as a coordinator in policy
formulations for agribusiness and trade promotion. They also act as the focal point of agricultural
sectors’ programmes associated with World Trade Organisation and as the National Notification
Authority.
36
A Value Chain Analysis of Apple from Jumla
7. VALUE CHAIN CONSTRAINTS AND OPPORTUNITIES
The previous chapters have mentioned various constraints and opportunities within the Jumla apple value
chain to become more competitive in the national apple market and to generate more income for poor
producers.
Table 12: Constraints and opportunities
1
Type
Value chain constraint/opportunity
Input supply
Quality of saplings
• Nursery operators are unable to provide advice to the buyer. The former
is unaware of the varieties and their characteristics, e.g. need for
poliniser, early or late variety. Also practices to limit spread of diseases
through nurseries are minimal. Many of the nurseries are unregistered,
increasing the difficulty to monitor them and improve quality of sapling
supply. Still every year more than 100,000 old varieties are being
planted by farmers.
Organic input supply
• Jumla announced itself organic in 2007, but services to farmers to
support this decision are still minimal. Knowledge on organic production,
bio-pesticides, etc. among agro-vets and DADO extension workers is
equally minimal. Also the permitted commercial bio-pesticides and biofertilisers are not available in Jumla.
2
Production
3
Harvest &
post-harvest
Orchard management
• Still a large part of the apple producers has not yet adopted pruning,
irrigation and compost making, causing small apples with less market
demand.
Harvest & post harvest management
• Grading and careful handling has taken off, but especially on-farm
handling still needs to be improved.
Packaging material
• 2009 saw great improvements in packaging, but this was mostly
subsidised through DADO-Jumla and other supporting organisations. In
this aspect, Jumla producers and traders should become less dependent
on subsidies and on organising capacities of supporting organisations.
4
Technology
development
& research
Local bio-pesticides
• Knowledge on locally producible bio-pesticides is still limited, but there is
an opportunity for low-cost inputs.
New apple varieties
• Although some new varieties have been ‘smuggled in’ by farmers,
basically the main varieties are the same as those brought in by the
government 15 years ago or more. These are not necessarily the best
varieties for the little irrigation available in Jumla and neither for organic
production. Currently new improved varieties have been imported from
India for evaluation.
Storage quality
• It is unclear whether micro-nutrient deficiencies are the cause of
the poor keeping quality of Jumla apples.
37
A Value Chain Analysis of Apple from Jumla
Bio-mass
• There is limited suitable bio-mass available for compost-making. The most
available, pine tree needles, are not very suitable because of its acidity.
Climate change
• Further understanding is needed on the impact of climate change and the
possible climate change adaptation strategies. Currently awareness among
farmers is extremely limited.
5
Marketing
Transportation
• As long as the Surkhet-Jumla road is not all-weather and will be closed
during the apple harvest, apple transport will remain dependent on costly
and unreliable air flights limiting volume of trade.
Marketing channels
• The number of wholesalers interested in Jumla apples remains low.
Efficient apples trade has not yet taken place. Too many consumers
interested in organic are not able to find the Jumla apples. The trade
is controlled by one wholesaler who is not much interested in organic
products. Also relying on one wholesaler can be risky and limits the chance
to benefit from other marketing opportunities.
Organic certification
• The year 2009 saw the first organic certification of three apple producing
groups, which are now organised into cooperatives. The premium price
received by these organic certified farmers is not sufficient to cover the extra
costs coming with certification, and thus will not be financially sustainable.
6
Organisation &
management
Coordination
• Coordination within the apple value chain in Jumla district has greatly
increased, but is still dominated by supporting agencies, which ultimately
will not be sustainable.
Cooperative strengthening
• To increase their bargaining power and not to become too dependent on
the goodwill of other farmers should increase their degree of organisation.
Benefit sharing within cooperatives is one way to measure the degree of
good governance within cooperatives.
7
Regulatory (policy)
Accreditation
• There is no national accreditation system recognised by the Government of
Nepal to accredit Nepali organic certifiers.
Transport subsidy
• The current subsidy policy does reduce the transportation costs, but does
not increase the number of flights which is the actual limiting factor.
8
Value chain
governance
Pricing in wholesale structures
• Trade till now has been focusing on large profit margins and high
consumer prices. This limits volumes of trade and limits benefits to
farmers. The pricing system (prices of Jumla apples are fixed for
the whole season) is also not flexible enough to adapt to the volatile
market.
38
A Value Chain Analysis of Apple from Jumla
8. FUTURE VISION AND RECOMMENDATIONS
8.1 Towards Sustainable Solutions
It is important to work towards solutions which are sustainable and that means that they are performed
within the value chain system and that services to be performed are in one way or the other paid for in a
commercial manner by the primary actors (the private sector) of the value chain. And not by GOs or NGOs
who will not pay or subsidise forever and who will sooner or later move into new priorities. This means
working towards market-based solutions
There must be a clear vision of how the value chain should work in the future, and this should be a shared
vision of the primary value chain actors. Box 12 shows ‘sustainability matrix’ as developed by Springfields
Centre. “Development agencies should not be included in the future vision. Their role is regarded as
facilitative and short-term without a valid longer-term rationale. Of course, foreign-funded aid agencies
may continue to be active in developing countries but building them into a picture of sustainability as longterm players runs the risk of cementing developing countries into debilitating dependence”.14 In the current
situation services and goods (the ‘who does?’ column) are often provided by outsiders and subsidised or
paid for by outsiders (the ‘who pays?’ column), but in the future vision both, ‘doing’ and ‘paying’ should be
sustainable. Either it should be done by the primary actors themselves or by commercial service providers.
Payment of, or reward for the activity, services or goods should be done in a commercial manner.
Box 12: Sustainability matrix15
Current situation
Players
Functions
Who does ?
Future vision
Determined by :
Players
Functions
Who pays ?
Who does ?
CORE
RULES
SUPPORTING FUNCTIONS
Who pays ?
CORE
Capacity
Incetives
Nature of market system
History
Innovation landscape
RULES
SUPPORTING FUNCTIONS
14
DFID and SDC, 2008. The Operational Guide to the Making Markets Work for the Poor (M4P) Approach.
DFID and SDC, 2008. The Operational Guide to the Making Markets Work for the Poor (M4P) Approach.
15
39
A Value Chain Analysis of Apple from Jumla
8.2 Future Vision of the Jumla Apple Value Chain
Following the sustainability matrix as presented in the Table 13 shows a possible future vision developed
on the basis of the information in the previous chapters and based on inputs collected during the
implementation of this study. This is a vision which needs to be re-discussed with all actors involved
and should be adjusted accordingly and also adjusted over time as the markets are dynamic and new
developments, positive or negative need to be incorporated into the future vision.
Table 13: Sustainability matrix; towards a future value chain vision.
JUMLA APPLE VALUE CHAIN 2009
Functions
Actors/Players
Who does?
Who pays?
Core
Input supply
a) saplings
b) organic inputs
Production
Harvest & post-harvest
management
a) harvesting
b) grading & packaging
c) packaging materials
Marketing
a) transportation
b) market channels
Organisation & management
a) apple nurseries
b) hardly available
a) farmers
Farmers: little pruning,
irrigation, manuring
Traders:
did not pay per grade
a) farmers
b) Jumla traders
c) DCCI
a) Jumla traders
b) Jumla traders
c) DADO-Jumla
a) DCCI & Sub-committee
b) Airlines (to Surkhet/Nepalgunj)
and wholesalers
(to major markets)
a) Jumla traders
SNV w/marketing support
(posters, banners, media)
& market research
b) Jumla traders, transport
subsidy from DADO
DADO-Jumla: coordination and
Jumla Apple Upgrading Plan
a) DADO-Jumla, DCCI, SNV,
WV, etc.
a) DDC: Jumla Organic District
Policy and One Household One
Orchard Policy
b) DADO/DoA: subsidies for
transport, packaging
a) DCC
Rules
Regulatory (policy)
b) DADO, EIG
Supporting Functions
Technology development
& research
a) Local bio-pesticides
b) New apple varieties
c) Storage quality
d) Bio-mass
e) Climate change
a) DADO: experiments
a,b) JHRC: testing new varieties,
organic pest control experiments
c,d) No agency
e) ICIMOD/ADB
Technical training providers
JHRC
NHPC
DADO-Jumla, SNV, WV, CSP
Organic certification
OCN
SNV, WV, DADO Jumla
40
A Value Chain Analysis of Apple from Jumla
a,b) DADO, JHRC
e) ADB
VCD
In the current situation, as presented in the box on the left, many activities towards developing the value
chain are funded and organised by supporting organisations, whether government or non-government. In
the long run, this will not be a sustainable situation: government priorities might change while NGO funding
and projects will end and both move on to other sub-sectors. In 2015, or which ever other agreed date,
as presented in the box below, the aim is that most constraints identified in this study, have been solved
and that further development of the sector is largely paid for by the primary actors of the value chain.
The process to bring this vision into reality is called the value chain development (VCD), which of course
requires the involvement of the various actors, proper planning and coordination, etc.
JUMLA APPLE VALUE CHAIN 2015
Functions
Actors/Players
Who does?
Who pays?
Remarks
Core
Input supply
a) sapling
b) organic inputs
a) apple nurseries
b) agro-vets
a) farmers
b) farmers
a) Improvement still required
b) Agro-vets need training,
linkage to suppliers
Production
All farmers: pruning,
manuring, more do irrigation
Traders: pay different
price per grade
Price differentiation already
started in 2010
Harvest & postharvest management
a) harvesting
b) grading & packaging
c) packaging materials
a) farmers
b) Jumla traders/
cooperatives
c) Jumla traders/
cooperatives
a) farmers
b) traders
c) wholesalers
/traders/
cooperatives
Marketing
a) market linkage
b) transportation
a) DCCI , apple
cooperatives
b) Airlines (to Surkhet/
Nepalgunj) and wholesalers
(to major markets)
a) DCCI apple
cooperatives b)
Jumla traders/apple
cooperatives.
b) DADO subsidy is
currently not increasing
number of flights: should
be applied in a different
manner.
Organisation &
management
DADO-Jumla, DCCI,
cooperative federation
DADO-Jumla,
DCCI, cooperative
federation.
Jumla District Cooperative
Federation already involved
in 2010
b,c) Cooperatives already
involved in 2010
Rules
Regulatory (policy)
a) Organic District Policy
should have supportive
measures/activities.
b) Current subsidy policy is
not increasing the number of
flights. Will stop once road
opens. Subsidies for packaging
should reduce over time.
a) DDC: Jumla Organic
DCC
District Policy and One
Household One Orchard
Policy
b) DADO/DoA: Subsidies for
transport, packaging
Supporting Functions
Technology
development & research
a) Local bio-pesticides
b) New apple varieties
c) Storage quality
d) Bio-mass
e) Climate change
a) local bio-pesticide
enterprises
a,b,c,d,e) JHRC – for new
varieties and organic pest
control;
a) farmers
a,b,c,d,e) NARC/
JHRC
Although most research
cannot be done by primary
actors, but cooperatives,
cooperative federation, DDC
should lobby for increased
research support from
central level
Technical training providers
LARFs
Farmers
Fee for service.
Organic Certification
OCN, others
Cooperatives
Fee for service.
41
A Value Chain Analysis of Apple from Jumla
8.3 Recommendations
The constraints and opportunities and the suggested possible future vision of the apple value chain already
give strong indications for possible solutions to solve constraints and realise opportunities to move towards the
future vision.
General
• Further develop the future vision with all primary and supporting organisations involved.
• Detail the road ahead in an agreed multi-stakeholder Jumla Apple Upgrading Plan.
• Regularly update the vision and the Jumla Apple Upgrading Plan in adjustment to new developments in the
value chain, the market and local and national contexts. Also important is that Jumla prepares itself for the
opening of the Karnali Highway when traders will come with trucks and will try to make separate deals with
individual farmers.
Input supply
• Apple nurseries should improve their supply: increasing skills and knowledge of operators will already
make a big difference. Which varieties do they have in stock? What are their specificities? What are the
basic practices to limit spread of disease through nurseries? Registration, training and monitoring should be
taken on more strongly by DADO-Jumla. For supplying new varieties, the nurseries cannot take lead on this
and are now relying on Jumla Horticulture Research Farm (JHRF) for selecting and testing new varieties.
• Organic supplies should be provided by the private sector, mostly logically be the agro-vets already active
in the district. These need to be trained in organic methods and probably need some facilitation to
establish new supply chains for organic fertilisers, bio-pesticides, etc. JHRF should increase its work on
testing bio-pesticides and other pesticide control mechanisms. With the climate change at hand, pest
control will even become more urgent.
Production
Farmers need to improve their orchard management:
• Improve and expand pruning to achieve larger apples as per market demand. Several rounds of trainings
will be required and certain people – for example the Local Agriculture Resource Farmers (LARFs) - could
specialise in this and sell their services to other farmers.
• Production of home-brewed organic pesticides: this is still an area which needs research and development.
• Compost-making to increase soil fertility: technically it is not difficult, but finding sufficient biomass supply
could be a challenge and will need research. Green manure could be a good alternative.
• Increasing irrigation facilities will require substantial investments. Low cost water harvesting systems will
need to be piloted and applied.
Harvest and post harvest management
• Appropriate picking and transport to the market still needs considerable improvement to limit
damage/bruising.
• Improved packaging has taken off in 2009. Weighing and labelling needs to be more accurate to generate
trust between sellers and buyers.
• Supply of packaging material should be well organised, which is difficult for Jumla producers and traders
as boxes have to be ordered from Kathmandu (and nets even have to come from China). Cooperatives are
increasing their capacity to manage this and should be slowly “weaned off” from massive subsidies.
42
A Value Chain Analysis of Apple from Jumla
Marketing
• Jumla district traders and cooperatives should work towards several reliable market channels – not
just relying on one wholesaler. Competition between wholesalers could increase prices, lead to a larger
distribution network and sales volumes, and reduce risks.
• Even without certification, Jumla should continue promoting its apples as organic, as it is starting to make
a name. As competing directly with the Indian and Chinese apples will be difficult, promoting the ‘organic’
brand will help to create a niche market.
Organic certified apple
• A stable marketing channel for organic certified apples still need to be developed to reach the niche
markets where these apples can fetch premium prices. Too many buyers in organic can still not find the
Jumla apples. Prices in the end market should not be so high that only a few consumers will buy: a balance
between price and volume would be in the interest of the farmers, with the condition that they also receive
a premium price themselves for their ware, otherwise organic certification will not be financially viable.
• Organic farmers should be well organised and be able to financially manage their certification independently
within a few years. This requires sufficient internal saving and maximising the benefits of certification by
also including other marketable organic products like beans, rice, buckwheat, etc.
Research and development
• If Jumla and later other surrounding districts really are to become an important supplier of apples for
Nepal, investment into research and development will be necessary. Already mentioned are the need
for appropriate bio-pesticides and other pest control measures, ways to increase bio-mass for compost
making, ways to improve the storage or keeping quality of Jumla apples, introduction and testing of apple
varieties suitable for organic production, resistant to increasing droughts, requiring less chilling hours, etc.
Currently, it is only the Jumla Horticulture Research Farm doing initial R&D, but this will not turn Jumla and
surrounding districts into the Himachal Pradesh of Nepal. Apple is one of the agricultural products to be
prioritised for Mid- and Far-Western Nepal and should receive adequate resources and attention for R&D
so that the potential it has for these regions can be brought to fruition. Here is really a role for NARC and
other government institutions, as projects and (I)NGOs will not easily invest into R&D.
Others
• Cooperatives are already playing an increasing role, mainly in the marketing. Further strengthening
in entrepreneurship, marketing and delivery of other services to their members is required. Good
governance, leadership and sufficient benefit sharing are important for long term functioning of these
farmer organisations. Cooperatives will also need to play a more important role in lobbying towards various
services providers and research institutions to support the apple sector in Jumla in more substantial ways.
• Processing of low grade apples, or in case of oversupply which is already an issue, will also need attention.
Further analysis of various options need to be undertaken and then developed accordingly.
43
A Value Chain Analysis of Apple from Jumla
ANNEX A: References
1
A Report (undated) on the investigation of apple disease in Jumla, submitted to the Director,
Crops and Horticulture Research, Nepal Agricultural Research Council, Kathmandu (in Nepali).
2
Action For Enterprise, 2007. Value Chain Program Design: Promoting Market-based Solutions for MSMES.
3
Agricultural Development Programme and Statistics (2062/63). District Agriculture Development Office,
Jumla.
4
Agricultural Development Programme and Statistics (2064). District Agriculture Development Office,
Jumla.
5
Nepal Planning Commission 1995. Agricultural Perspective Plan (APP) of Nepal, Singh Darbar,
Kathmandu, Nepal.
6
District Development Committee, Jumla. Annual District Development Plan: FY 2064/065.
7
Apple Processing Centre, 2008, Annual Report, Jumla.
8
Bhandari, D.R., 2064. An Action Plan for Developing Jumla as an Organic Agricultural Production
District. Department of Agriculture, Mid-west Regional Agricultural Directorate and District Agricultural
Development Office, Jumla. (in Nepali).
9
Bhandari D.R., 2065. Feasibility and Its Great Opportunity in Jumla of Organic Agriculture Development.
District Agricultural Development Office, Jumla. (in Nepali).
10
Devakota, L.N. (undated). Deciduous Fruits in Nepal.
11
DFID and SDC, 2008. The Operational Guide to the Making Markets Work for the Poor (M4P) Approach.
12
ICIMOD, 1997. Districts of Nepal. Indicators of Development. International Centre for Integrated
Mountain Development, Kathmandu.
13
MOAC, 2006/2007. Statistical Information on Nepalese Agriculture 2006/2007. Agribusiness Promotion
and Statistics Division. Kathmandu, Nepal.
14
Nepal Planning Commission, 2008. Three Years Interim Plan (2007/08-2009/10). National Planning
Commission, Government of Nepal. Singh Darbar, Kathmandu.
15
Periodic District Development Plan of Jumla: First Five Year Plan (FY2002/03 – 2006/07), District
Development Committee, Jumla (In Nepali).
16
REAP, 2006. Rapid Sub-sector Assessment Report Jumla.
17
SEDA (undated). Possibility and Challenge in Apple Farming. Jumla (in Nepali).
18
Nepal Planning Commission, 2002. Tenth Five Year Plan (2002-2007) of Nepal, Singh Darbar, Kathmandu,
Nepal
19
UNDP, 2004. Nepal Human development Report 2004. Empowerment and Poverty Reduction. UNDP.
Kathmandu.
20
www.doanepal.gov.np (2008)
21
www.moac.gov.np (2008)
44
A Value Chain Analysis of Apple from Jumla
ANNEX B: VDC-wise Apple Production Data
(Source: DDC HH survey 2008)
#
%
Total
Number
of apple
trees
(‘000)
Chandannath
677
46.5
Mahat
298
Talium
Number of apple
producing HH (%
of total HH)
VDC
Total number
of apple
producing
trees (‘000)
Total apple
production
(MT)
Apple
tree
/HH
Apple
producing
tree per
HH
#
%
31.7
10.5
23.7
262.5
21.7
5.1
48.3
28.8
8
16.7
200
20.7
379
45.8
27.2
7.5
25.7
187.5
Kartikswami
342
78.3
16.5
6.8
41.5
Depalgaun
253
59.8
15.2
5
Garjankot
556
86.1
15.6
Dillichaur
578
81.5
Chumchaur
116
Patrasi
Apple
Production
/HH (kg)
#HH with
other fruits
Production
of other
fruits (kg)/
HH
Total
# HH
#
%
2818
52
4
241
1457
3.5
1547
47
8
154
617
14.2
3.6
1811
69
8
166
828
136
37.7
15.6
15137
0
0
0
437
18.0
110
24.0
4.3
2004
5
1
1
423
6.1
50.5
134.2
15.4
7.8
6009
0
0
0
646
28.5
7.1
14.9
142
26.1
3.9
1792
2
0
9
709
32.2
6.7
3.3
46.5
66
7.5
3.5
3778
9
3
14
360
168
29.8
3.5
1.4
40.6
25.2
6.1
2.5
1238
7
1
47
564
Haku
277
71.6
6.3
0.8
18.6
20
11.1
2.1
1105
13
3
121
387
Tamti
421
65.3
3.9
0.1
2.2
2
6.0
.1
0
0
0
645
Lamra
258
50.5
7
2.7
14.7
54.5
9.8
1.4
799
23
5
131
511
Gutichaur
147
33.4
1.8
0.4
22.9
8
4.0
.9
304
21
5
57
440
Tatopani
486
48.1
16.8
3.9
11.2
78.5
16.6
1.9
1079
0
0
0
1011
Kudari
414
52.3
5.6
0.9
16.4
18
7.0
1.2
766
50
6
100
792
Raralihi
229
51.9
1.8
0.3
18.8
6
4.1
.8
464
5
1
10
441
Malikathata
368
72.3
1.7
0.1
6.6
2
3.3
.2
93
0
0
0
509
Ghodemahadev
233
72.1
2.6
0.3
21.1
6
4.8
1.0
338
0
0
0
323
Mahabaipatarkhola
297
66.0
4.2
0.5
10.7
10
9.3
1.0
321
55
12
153
450
Kalikakhutu
275
72.0
3.9
0.4
13.3
8
7.6
1.0
856
0
0
0
382
Badki
432
57.9
6.2
1.3
5.1
19.5
8.4
.4
147
48
6
159
746
Dhapa
435
71.9
4.3
0.9
20.2
18
5.4
1.1
621
78
13
326
605
Sanigaun
303
44.1
4.6
1.5
20.4
22.5
3.7
.8
410
77
11
214
687
Narakot
395
76.0
5.8
1.9
16.0
38
11.2
1.8
2679
42
8
411
520
Pandabgufa
432
71.1
3.9
1.1
17.7
22
6.5
1.2
731
71
12
148
608
Birat
297
61.7
2
0.9
45.3
18
4.2
1.9
2178
44
9
226
481
Kanakasundari
352
86.9
5.8
2.2
38.7
44
14.3
5.6
3865
202
50
1032
405
Bumbramadichuar
116
53.7
1.8
0.4
24.2
8
8.1
2.0
1738
4
2
36
216
86
40.6
9.5
3.3
57.1
82.5
8.3
4.7
7491
10
5
12
212
293
54.7
12.8
3.9
23.0
87
23.8
5.5
4771
0
0
0
536
9913
58.5
286
83.5
22.9
1835.9
12.6
2.9
2038
934
6
3766
16948
Malikabotha
Patmara
Total
94
45
A Value Chain Analysis of Apple from Jumla
46
A Value Chain Analysis of Apple from Jumla
400
400
100
400
Sapling planting
(Filling & staking)
Weeding
Pruning
Manure application
250
4500
Tools & equipment
(1 secateur, 1
pruning saw, 1
Sprayer & 1 Doko)
1000
600
100
Bordeaux mixture/
bio-pesticide
Fertilisers
Manures (FYM/
Compost)
Saplings
B. Inputs and
materials expenses
Fruit thinning
Micronutrient
application
Application of
Bordeaux mixture /
bio-pesticide
1600
400
Cost of manure
application in pit
Irrigation cost
1600
35.000
1
Pit preparation
(1*1m) cost
Orchard Fencing
(materials + labour)
Rental -land under
cultivation
A. Detail of labour
expenses
Activities
All costs in
NRP
300
1000
200
1600
400
200
400
2
350
1000
400
1600
400
400
400
3
400
2000
600
1600
400
600
400
4
450
2000
800
1600
400
800
400
5
4500
600
2000
1000
1600
400
800
400
6
750
2000
1200
1600
400
800
400
7
750
2000
1200
1600
400
800
400
8
750
2000
1200
1600
400
800
400
9
750
2000
1200
1600
400
800
400
10
4500
750
2000
1200
1600
400
800
400
11
Years
750
2000
1200
1600
400
800
400
12
750
2000
1200
1600
400
800
400
13
750
2000
1200
1600
400
800
400
14
750
2000
1200
1600
400
800
400
15
4500
750
2000
1200
1600
400
800
400
16
750
2000
1200
1600
400
800
400
17
750
2000
1200
1600
400
800
400
18
750
2000
1200
1600
400
800
400
19
750
2000
1200
1600
400
800
400
20
ANNEX C: Cost/Benefit Calculation
47
A Value Chain Analysis of Apple from Jumla
-39.350
7.000
0
7.000
46.350
0
2.900
7.000
0
7.000
4.100
0
1.950
6.500
0
6.500
4.550
0
0
6.000
0
6.000
6.000
0
2.665
11.515
6.000
15
5.500
8.850
1200
1200
Market price= NRP 20/kg at Jumla airport
Transportation = NRP 4/kg
Intercrop = wheat, barley, bean, potato
Number of trees/ropani = 20 tree
Labour rate = NRP 400/day
Without certification costs or premium
price for organic certified apple. Without
costs for land use.
Area: 1 ropani (500 square meter) = 20 trees
Assumptions:
E. Net cash Inflows/
Ropani
Total cash Inflows
(NRP)
Return from sales of
apple(NRP 20/kg)
Estimated
production (@kg/
tree)
Net income from
intercropping
D. Details of Income
Total cash outflows
(NRP)
Storage
Transportation cost
from farm to Jumla
airport
Harvesting, Grading
and Packaging
C. Post harvest
operations &
Marketing
1.930
17.030
12.000
30
5.000
15.100
2400
1400
15.010
28.560
24.000
60
4.500
13.550
4800
1600
33.370
52.120
48.000
120
4.000
18.750
9600
2000
51.730
75.680
72.000
180
3.500
23.950
14400
2400
57.250
83.200
80.000
200
3.000
25.950
16000
2800
52.750
83.200
80.000
200
3.000
30.450
16000
2800
57.250
83.200
80.000
200
3.000
25.950
16000
2800
57.250
83.200
80.000
200
3.000
25.950
16000
2800
57.250
83.200
80.000
200
3.000
25.950
16000
2800
57.250
83.200
80.000
200
3.000
25.950
16000
2800
52.750
83.200
80.000
200
3.000
30.450
16000
2800
57.250
83.200
80.000
200
3.000
25.950
16000
2800
57.250
83.200
80.000
200
3.000
25.950
16000
2800
57.250
83.200
80.000
200
3.000
25.950
16000
2800
57.250
83.200
80.000
200
3.000
25.950
16000
2800
Department of Agriculture
SNV Netherlands Development Organisation
Hariharbhawan, Lalitpur
Bakhundole, Lalitpur
Tel : 977-1-5521323
Kathmandu, Nepal
Fax : 911-1-5524093
Tel : +977 1 5523444
E-mail : doaprabidi@yahoo.com
Fax : +977 1 5523155
Website : www.doanepal.gov.np
E-mail : nepal@snvworld.org
Website : www.snvworld.org
MINISTRY OF
AGRICULTURE &
COOPERATIVES
DEPARTMENT
OF
AGRICULTURE