CSA : Milestone for Smallholders and Returning Migrants

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CSA : Milestone for Smallholders and Returning Migrants

As Nepal sees huge number of migrant workers returning home, CSA model can help rejuvenate the agricultural sector in Nepal.

--BY SANDEEP SHRESTHA AND DR PRADYUMNA RAJ PANDEY

The monsoon season is loved in Nepal, especially by the farmers. The sound and smell of Asar (June-July) rain is just as beautiful as the sight of cheerful farmers planting rice in their fields. The planting season begins on Asar 15 (June 30) of the Nepali calendar and traditionally celebrated with the delicacy of ‘Dahi Chuira’ (yogurt and beaten rice). With the Covid-19 pandemic, an old debate of making Nepal self-reliant has reemerged, especially in the agriculture sector from areas ranging from farm to food.

According to Nepal Labour Force Survey (NLFS, 2008 and 2018), 74 percent of the country’s workforce was engaged in agricultural activities in 2008, both formal and informal. However, this number had sharply declined to 22 percent by 2018. As tens of thousands of migrant youths have returned home during the plantation season due to the adverse situation created by the global health emergency, the opportunity of building back agricultural economy is bigger than ever before. This is also an opportune time for youths to reengage in agriculture as currently only 12.36 percent of youths aged 15 to 44 years are working in this sector.

Plight of Farmers
Infrastructure development has gathered momentum after the 2015 earthquake and focus has shifted towards disaster resilient communities. Yet the farmers continue to face climate induced risks and chaos of unplanned development. Thousands of hectares of land in the Terai plains are flooded annually and hundreds of landslides damage arable lands in the hills. More recently, farmers in Bungamati protested the under-construction Kathmandu-Nijgadh Fast Track road project. It was basically a protest against development projects negatively impacting the livelihood of affected families. It also brought to light the lack of transparency in land acquisition, compensation, and resettlement of families impacted by the project. There are no legal requirements in Nepal to conduct social impact assessments in development projects which hinders agricultural growth in the country.

Likewise, the sub-standard seeds and unavailability of timely and adequate fertilizers and pesticides have resulted in lower grade produce and a drop in production annually. The lockdown revealed the plight of the farmers as their produce rotted in the fields while truckloads of Indian produce reached the big city markets. The farmers have very limited access to logistics services or storage facilities, and their woes are multiplied as they are not able to afford agro-insurance. This directly attributes to how market driven enterprises are focused on profitability rather than building sustainable agricultural production and distribution in Nepal. These were the challenges faced, for instance, by Gaurav Devkota, a small-scale farmer and entrepreneur who continues to struggle to build his agricultural business in Karnali due to lack of access to finance, market and high-quality supplies.

Agriculture requires upfront investment in quality seeds, fertilizers, pesticides, labour and equipment. Often times, smallholder farmers have financial limitations to invest in the plantation season. Even though micro-credit loans are accessible, the cost of financing is high. Any loss during the harvest season due to the unsystematic development, climate-induced disaster, low quality seeds and fertilizers can result in an additional financial burden to the farmers. Nepal’s GDP more than doubled in a decade from USD 12.55 billion in 2008 to USD 29.04 billion in 2018, with 6.7 percent annual growth rate (World Bank Group, 2019). But a decade of economic growth does not reflect the dying state of the agricultural sector in Nepal. Once termed as an agricultural nation, with fertile land and abundant water supplies, GDP contribution from the agricultural sector was at 68 percent in the 1970s but has continued to sharply decline to 27 percent in 2019.

Consumer Awareness and Technological Revolution
A credible undertaking in the agricultural sector is the advancement of technology and rise of agricultural entrepreneurs, with technological disruptions in the agriculture sector brought around by startups creating an enabling environment and linkages between farmers with financial institutions, insurance providers, logistic suppliers, vendors, and consumers. On the other hand, the role of social media to disseminate the agricultural issues to the public media has also helped to boost agricultural economy. This has also connected the farmers to the market, and eateries promoting farm fresh and organic produce have created sustainable demand for local production.

For instance, Organic World, which is part of Fair Trade, an eco-social company, has been working with marginalised farmers and has created a brand and marketplace locally and internationally for their line of products. In this connection, Metro Tarkari is one of the leading online marketplaces to connect farmers with consumers through their ecommerce platform. Likewise, Kheti connects farmers directly to the consumers and has an integrated system to provide agricultural supplies and a farm management system. Modern agricultural practices like aeroponics, hydroponics, vertical farming and rooftop farming have boosted productivity and raised awareness on locally produced food. A startup company Aeroroots provides hi-tech agricultural system to eradicate usages of toxic pesticides. Farmers are able to interact and engage directly with consumers with the popularity of farmer’s market in major cities of Nepal.

These technological innovations and consumerism have created a paradigm shift towards the youth taking agriculture as a mainstream career. In recent years, to enable managerial and entrepreneurial aspects in the agricultural sector, King’s College and other colleges and Universities in Nepal have launched an MBA in Agribusiness programmes.

Commercialisation
As consumers look for ‘Produced in Nepal’ brand names in physical and online stores, the commercial scope and industrialisation of agri-business has started to pay dividends. The ‘Sunaulo’ brand has become a household name in urban areas which is raising awareness about nutritional intakes of consumers. In rural communities, the brands ‘Shreenagar’ and ‘Shree Kisan’ are synonymous with an agricultural conglomerate that provides entire value chain services to the farmers. While ona commercial scale, Shreenagar Agro Farms provides day old chicks, high-quality feed to a range of livestock, and direct market access and branding through Shreenagar Cold Stores, the company has always prioritised sustainable production and consumption for improved food security and resiliency.

The value that Shreenagar has added to Nepal’s agricultural sector is evident with thousands of farmers that have benefitted through trainings and technical programmes provided by Shree Kisan Innovation Hub. The success of companies such as Shreenagar shows what farmers and entrepreneurs can strive to be. However, if we are to see a revolution in the agricultural sector in Nepal and to really uplift small-holder farmers to economic growth and address food security and resilience, Community Supported Agriculture (CSA) model must be piloted in Nepal.

Upliftment through Community Supported Agriculture
As farmer face upfront financial burden and a long gestation period to recuperate their finances, consumers also suffer due to price fluctuation, limited choices, and low-quality produce. There is an increasing demand for sustainable farming and consumers are more aware of where their food comes from. Likewise, farmers are exploring opportunities to become more sustainable and provide higher grade produce to the market. A collaborative model to create a win-win proposition and value addition for farmers and consumers, showcasing firsthand farm to table experience, could be by introducing Community Supported Agriculture (CSA) in Nepal.

CSA emerged in the 1960s in Europe when women neighbourhood groups approached farmers to develop direct relationships between farmers and producers. It gained popularity in the United States in the 1980s as workers left their jobs in the East Coast and moved back to their fields to cater and revitalise abandoned and barren fields. As Nepal sees millions of migrant workers returning home, CSA model can help rejuvenate the agricultural sector in Nepal.

CSA is a concept where consumers buy or invest in local farms for the growing season which provides capital to the farmers to operate their farms. In return, consumers receive the harvest from the farms. By buying ‘CSA Shares’ from farms, consumers become a part of the local food system, creating an enabling environment and market for locally produced goods. By investing prior to the growing season, the farmers benefit by receiving working capital to finance expenses incurred during the growing season and has a consumer base to supply the harvest. This enables farmers to invest in better seeds and fertilizers with improved techniques to boost their production and quality control.

CSA shares also benefit the farmers as a risk management tool as part of the seasonal risk is transferred to the consumers. As shareholders, consumers can harvest the produce and the rewards of a good season, but also take on risks in case the farming season is spoilt due to natural disasters, infestation and bad yield. Farmers are motivated to manage risks and produce improved yield, as a successful CSA season will guarantee higher value and increased share subscriptions in upcoming seasons. Traditionally, CSA has been used where consumers invest in the farming season and get seasonal produce in return. The concept has been adapted into a subscription model, where besides the harvest, the consumers can subscribe to additional services from the farm. This will create guaranteed purchase for the farmers and their other produce which could be fruits, dairy, meat, etc. Some farms fundraise from their subscribers to invest in farming equipment also.

In Nepal’s context, CSA model can be further expanded to create a value-chain development effect to boost agricultural productivity and economic activity. This can be achieved with a tiered CSA model between farmers, consumers and engaging and unlocking facilities through public institutions. CSA Shares model would connect farmers and consumers to provide up-front seed capital to farmers at the start of the planting season. By collaborating with smallholder farmers there is an opportunity to cater to larger markets. This will create brand value and open a direct network to household consumers and heavy consumers like retailers, hotels, restaurants, corporations, and food processing industries, eliminating the aggregators.

In a CSA Partnership model, public institutions will be engaged to allocate development and agriculture budget in identifying and establishing logistics, storage, and processing centres. These value-adding services will be jointly owned by the local farmers, consumers and local government. This will create ownership and responsibility in operations and create transparent procedures and access. An enabling factor in a successful operation would be through value mapping to identify CSA farm radius area, production levels and number of farmers, consumer groups, and types of infrastructures and capacity to cater to the geographic radius.

Impact and Contribution to SDG
With proper value mapping, awareness, and technological integration, CSA model can help boost the agricultural sector in Nepal while contributing positively to sustainable development goals. It can directly contribute to SDG 2 and 3 – Zero Hunger, Good Health and Wellbeing; SDG 8 – Decent Work and Economic Growth; SDG 9 and 12 – Industry, Innovation and Infrastructure and Responsible Production and Consumption; and SDG 5 and 10 – Gender Equality and Reduced Inequalities. Sustainable agriculture plays a crucial role in managing and maintaining ecosystem services including life below water and life on land and is essential for climate change adaptation. Most importantly, CSA enables farmers to consistently grow and create and bolster market demand for locally grown produce. Furthermore, it will create new jobs contributing significantly to Nepal’s economic growth. CSA can be developed as an automated and integrated model that can track local communities and their annual production and income, and also be a base model for food security and resilience at the local level.

Way Forward
Community Supported Agriculture can be a truly transformational solution to reintegrate youths and migrant workers in economic reform in Nepal. The existing partnerships and programmes have limited positive and impact-driven results in uplifting small-holder farmers, building ownership, and sustainability. CSA shares create ownership and long-term business relationship between farmers and consumers, and enable in sponsoring farmers with upfront seed capital, increased production and quality. The shareholders in return get sustainable supply in a transparent manner in return for their upfront risk. There are definite economic benefits to the farmers, consumers, and the nation with CSA shares.

Furthermore, the government can foster agricultural development with a strategic policy and an enabling environment by adopting the CSA model to better strengthen the agricultural infrastructures and services in Nepal. Through transparent stakeholder mapping, impact management, and establishing partnerships with smallholders and organisations, infrastructure and agricultural budget must be allocated to build logistics, storage facilities, nurseries, and fertilizer banks. This will enable farmers to have access to quality materials for improved production and facilities to reach consumers and help reduce costs associated with middleman services provided by private companies. With engagement at the community level and creation of an agriculture profile and map, the government can devise capacity development programmes in agricultural value chain, create jobs and enterprises, and ensure food security and nutrition at times of emergency and calamities such as the Covid-19 pandemic.

Shrestha is a sustainability professional currently working at Dolma Impact Fund as ESG and Impact Manager. Dr Pandey is currently working at Food and Nutrition Security Enhancement Project as a Senior M&E Officer.

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