Chandra Prasad Risal: Rural economic project aims to stimulate development of rural enterprises

Chandra Prasad Risal is the project director of Rural Economic and Enterprise Development Project of the Ministry of Agriculture and Livestock Development (MoALD). ApEx talked with him on strengthening market linkages through productive partnerships between producer organizations and buyers in five economic corridors in 171 municipalities across the country.

The Rural Economic and Enterprise Development Project has launched a productive partnership program and has called for joint proposals from the buyers and producers, what does a productive partnership mean?

Productive partnership refers to the friendly agreement reached between a producer organization and a buyer to achieve a specific offtake (or commercial) agreement. An offtake agreement specifies the product that will be provided by the producer organizations to the buyer in terms of quality, quantity, and delivery. It also specifies the price determination mechanism and payment modality between the two.

There are plenty of challenges in enhancing productivity and promoting sustainable agriculture practices in Nepal. How do you think this productive partnership between producers and buyers will help the development of rural agricultural enterprises?

The Rural Economic and Enterprise Development Project aims to stimulate the development of rural enterprises by strengthening market linkages among smallholder producers and buyers in the agricultural commodity value chain, and by strengthening the enabling environment for the development of enterprises in key economic corridors of the country. 

Under the productive partnership, it aims to establish productive partnerships between producer organizations and buyers based on mutually agreed business plans, specifying product quality, quantity, delivery conditions, and price determination mechanisms. So, for that, we have requested a call for proposals for the joint profiles from producer organizations and buyers for productive partnerships. But in cases of failure to find buyers or producers then we will provide support for prospective buyers and producer organizations to prepare simple joint profiles as well.

Through this partnership, we are hopeful that there will be business benefits through sales growth through access to new markets, increased product volume, better quality, lower costs, fewer losses, more timely delivery, and increased revenues for both buyers and producer organizations.

 Who are eligible to become producer organizations and buyers? What are the products they support?

Producer organizations are the rural entrepreneurs who are the smallholder farmers and rural producers organized in groups, cooperatives, or other forms of association like agribusiness small and micro enterprises and agri-tech start-ups who are growth-oriented. In the case of buyers, they can be national and international big firms, wholesalers, processors, retailers, suppliers, supermarkets, and intermediaries.

The project will support rural-based productive partnerships based on agricultural products, which could include cereals (rice, wheat, maize, millet, and barley), legumes, fruits and vegetables, poultry, milk, meat (goat, pig, buffalo), fish, tea, coffee, spices, honey, medicinal and aromatic herbs and non-timber forest products such as Sichuan pepper, cinnamon, bamboo, etc.), among others.

How will this start-up grant for productive partnership help the buyers and producers? 

A start-up grant will be provided only to a producer organization under an approved business plan. The objective of start-up grant is to assist producer organizations in maintaining the quality of products and ensuring a consistent supply of high-quality goods by offering essential technical support.

Even though buyers will not get any grant funding this partnership will minimize transaction costs, collection and aggregation expenses, and streamline the negotiation process with intermediaries, resulting in considerable savings of time and energy.

When was the call for proposals launched and when is the deadline?

 The second call for proposals for a joint profile for the productive partnership was announced on 1 Jan 2024, with a submission deadline set at 35 days. The deadline ended on Feb 4. The first call for proposals, held from Feb to June 2023, received 1,908 submissions predominantly from producer organizations.