CROP DIVERSIFICATION IN NEPAL - K. C. Sharma*

* Project Coordinator, Crop Diversification Project, Ministry of Agriculture, Kathmandu, Nepal.

1.1 Agriculture as a Complex Profession

Actually agriculture is a complex profession in the sense that it is an outcome of the efforts from different types of institutions including farmers. Technology developed by research institutions is transferred to the farm community though extension. Before an appropriate technology is evolved, a lot of efforts from different institutions need to be made. After the technology reaches the field, the farmer requires integrated services from different technical units. How to grow a new variety in the field is a challenge for the farmer. Agronomic knowledge, pathological knowledge, soil related knowledge, irrigation knowledge, post-harvest knowledge and marketing knowledge should exist as preconditions for the farmers; then they can go along with a new variety of crop in the field. Credit and necessary inputs are also preconditions.

1.2 Agriculture is Basically Traditional

The main actor in any agricultural development system is the farmer. The farmer is basically a traditional person. It is easier to go along with what he is doing rather than having to change. When we say change in technology, the farmer has to adopt a lot of new practices for the change to occur. He requires more money to buy more inputs needed by new technology. In many cases, he needs to employ more skilled labour for which training is required. For high production technologies, irrigation should be ensured, fertilizers should be available, seeds should be of good quality and management should be skilled. Having received all these the production, which is the main focus of high technologies, may still remain low or may not meet expectations. Agriculture in Nepal is always risky and therefore if you try to change something it becomes more risky. Because of this the farmer tries to stick with traditional agriculture.

1.3 The Farmer

The farmer is the key player in farming. Whatever the scientists may do, if the farmer does not adopt it, no progress takes place. The farmer is surrounded by different circumstances in which there may be a lot of problems, constraints and opportunities. The farmer therefore needs motivation first and then facilitation on the way to adopt new practices.

The farmer or any person undergoes different stages before he adopts new things. For example, one should require the information first followed by rising interest. Then he starts evaluating the new information or technology. Positive evaluation leads to trial and then adoption if perceived good and rejection if bad. If the farmer is forced to adopt a new practice without his own evaluation or willingness, there is a likelihood that it might not continue, but if he is motivated and convinced, the practice will be well taken.

1.4 Technology

Technology is another important aspect on which the adoption by the farmer depends. There are certain attributes of technology such as the cost, simplicity, profitability, divisibility, immediate return and so forth. If the technology is difficult or complicated and it is of high cost, the farmer will be reluctant to accept while on the other hand if the technology is highly profitable and cost effective, it is likely to be adopted.

On the other side the technology should be suitable to the locality in terms of climate, topography and local need. A technology which is not feasible in the area should be avoided.

People these days have become result oriented. Anything you adopt should give positive impact. It should be an environmentally friendly, economically viable, socially justifiable and locally satisfying type, otherwise people will reject it. In this view, researchers should take note that the technologies generated should be suit the farm community as well as the local climate of course, with the qualities mentioned.

1.5 Ecology

Nepal can be divided into three ecological zones, namely: Terai (plain), Mid-hills and High hills. Terai is the main area where cereal crops can be extensively grown. Because of the tropical and sub-tropical climate in the region, food crops, vegetables and fruits of tropical and sub-tropical nature are the main agricultural produce. As we go higher we have mid-hills where different types of crops can be grown. This is the region where different climates are available. For example, at the foot of the hills the climate is sub-tropical whereas at the top of the hills it is temperate. Food crops at the foot and fruits as well as potato at the top of the hills are the main crops in this region. High hills is a region where a snowy (alpine) climate is prevailing. Potatoes, temperate fruits, livestock (sheep and goat) are the main commodities of this area. So it is the ecology that creates a lot of differences in temperature and commodity and these create a possibility for crop diversification.

Crop diversification represents the growing of a variety of agricultural commodities that are commercially viable and locally acceptable. The farmer has limited land where he wants to grow everything possible for home consumption. Whatever may be the crop intensity, this type of approach is not commercially viable. These days the farmer has to be commercialized for sustained livelihood. Commodities having higher comparative advantage and higher marketability should be grown on a commercial basis. In order to encourage commercialization, the production pocket concept and farmers group approach as encouraged by the Agriculture Prospective Plan (APP) should be fully implemented.

Selecting the crops or commodities with higher comparative advantage and higher marketability and growing them on a commercial basis is defined as crop diversification. Commodities grown on hills can be off-season for Terai. If this is the case, why not encourage hill farmers to grow these types, such as off-season vegetables?

We know hill farmers face many problems and constraints. They are simply on a subsistence level and hence they cannot talk of commercialization as such. They have to have a group attitude, production pocket approach, commercial outlook, and innovative ideas. Similarly, Terai farmers have also several constraints of different nature. They have to change the existing agricultural system drastically. Before they change the system they should be changed mentally, meaning that they should develop the mentality of entrepreneurship and learn a trading mechanism, so that their agricultural system is guided by commercialization.

In this context, it seems we have a lot of choices or options in selecting agricultural commodities. Because of different climatic conditions, we can grow a lot of crop species in the country. At the same time we have different commodities at our disposal. The only thing we need is to develop innovative ideas towards commercialization.

Considering this, crop diversification is defined as an instrument by which the farmers can grow the best profitable commodities on their land and earn money from it. For this, they should know which commodities are suited to their locality and earn more profit. They should also know how these commodities can efficiently be produced for the market and how these commodities can be efficiently sold on the market - both internal and external.

2. CROP PRODUCTION AND ECONOMICS SCENARIO

The productivity of cereal crops is very low. Rice is the most important cereal crop and its productivity in the mountains averages 1.7 to 2.0 t/ha while in the hills it ranges from 1.6 to 2.3 t/ha. The yields are higher in the Terai, being 2.6-2.9 t/ha, but are still lower than those of other countries in South and Southeast Asia.

Maize being the second most important staple food commodity in Nepalese agriculture and economy, covers nearly 80 percent of the hill area. It is totally grown under rainfed conditions and mostly on marginal land with very little use of commercial fertilizers. Maize is commonly grown with millet, mostly in a relay system. Other important cropping systems are maize associated with soybeans, legumes, radish, potatoes and upland rice. The Terai region, which has high potential for winter and spring maize, accounts for 20 percent of the maize area and this is increasing, particularly in the winter due to accessible markets. Under rainfed conditions, pulses can play an important role in crop diversification. Lentil is the most important pulse crop in the western part of the country. Soybean accounted for about 7 percent of the area and 7 percent of the production of legumes in Nepal, with the hills accounting for 80 percent of area and production. The average yield is about 0.7 t/ha. Intercropping with maize gives good yields. Oilseed crops such as rapeseed, mustard, toria, groundnut, sesame and sunflower have potential in the country particularly in western regions. They are both oil producing and income generating crops. Millet is predominantly planted with minimal inputs other than household labour, and is often grown under stressful conditions and on marginal lands where other crops do not succeed. Despite these constraints the average yield is surprisingly high at around 1.1-1.2 t/ha.

The area, production and yield of maize has improved marginally over the last 25 years in the Terai, whereas in mid and high hills the area has increased by 200 percent, but yields have declined by 17 percent. In the case of grain legumes, there is a big yield gap between research stations and farmers' fields. This may indicate that the generated technology still needs to be refined and/or verified in farmers' fields and conditions. The major constraints identified for other potential crops such as oilseed, sugar cane and millets, include lack of irrigation, fertilizer, and improved varieties as well as pest and disease infestation. The area, production and productivity of major crops during 1998/99 are shown in Table 1.

Table 1. Area, Production and Yield 1998/99 (Nepal)

	Crops	Area (ha)	Production (MT)	Yield (kg/ha)
1.	Paddy	1514210	3709770	2450
2.	Maize	802290	1345910	1678
3.	Millet	263950	291370	1104
4.	Wheat	640802	1086470	1695
5.	Barley	31843	31798	999
6.	Oilseeds	190429	119731	629
7.	Potato	118043	1091218	9244
8.	Sugar cane	53894	1971646	36584
9.	Pulses	308008	228840	743

Source: Statistical Information on Nepalese Agriculture 1998/99, Agriculture-Statistics Division, Nepal.

Within the agriculture, forestry and fisheries sector, the long-term growth rate of 2.8 percent per annum masks considerable fluctuations between groups of commodities. Growth in food grains has averaged only 1.9 percent, while that of cash crops has been 4.3 percent, and other crops (including pulses, fruits and vegetables) 3.5 percent. Within these categories individual commodities vary even more, with paddy recording an average growth of only 1.9 percent per year compared to wheat at 4.0 percent. Production of oilseeds remained fairly static, increasing by only 1.3 percent per year compared to 5.7 percent for potatoes and 4.0 percent for pulses. The growth of individual commodities is indicated in Table 2.

Table 2. Growth of Agricultural Commodities 1998/99 (Nepal)

	Agricultural Commodities	Annual/Growth (%)
1.	Paddy	1.9
2.	Maize	2.3
3.	Wheat	4.0
4.	Millet	3.5
5.	Barley	1.7
6.	Sugar cane	11.6
7.	Oilseed	1.3
8.	Potato	5.7
9.	Pulses	3.5

Source: Economic Survey FYP of 1998/99, Ministry of Finance, 1999 HMGN/Nepal

National mustard oil demand is in deficit by an estimated 27,000 tonnes. Sales are reputed to be increasing by 25 percent per year. The local crop has higher oil recovery rates than the imported one.

The lentil's export markets are India, Bangladesh, Pakistan and Sri Lanka. Nepalese demand is 122,000 tonnes, which exceeds the supply of 113,520 tonnes per annum.

Potato production has increased by 8 percent over the last three years to 972,000 tonnes per annum, which amounts to 80 percent of the country's requirement. Similarly, Nepal's sugar production was estimated at 95,000 tonnes in 1998/99. Domestic production has increased by 250 percent over the last four years. Fifty percent of the domestic requirement is being met by imports from India.

In the Terai, maize is emerging as a commercial crop for processing into glucose, breakfast cereal, animal food and corn oil. The demand for maize is expected to grow by 4 percent per year over the next 20 years as a result of increased demand for food in the hills and in the Terai.

The demand for fresh ginger can be termed as optimistic. Export earnings from ginger have doubled over the last three years and domestic household consumption is rising. However dried ginger exports are declining. With regards to dried chillies, imports from India amount to 7,933 tonnes. The study shows that 67 percent of the vegetables consumed in the country originates from India. Off-season vegetable production is considered the solution for increasing farmers' income.

Apart from bananas, the demand for fruit is not optimistic. Bananas are exported to India in considerable quantities.

The quantities of marketed vegetable seed vary from 350 to 400 tonnes, of which 30 percent is exported mainly to Bangladesh. The export and import status of the various commodities is indicated in Table 3.

Table 3. Export-Import Situation of Agricultural Commodities 1998/99 (Nepal)

	Commodities	Production (Mt)	Import (Mt)	Export (Mt)
1.	Paddy	3640860	8489	-
	P. Rice	2076122	4499	20197
	P. Bran	256035	-	10500
2.	Wheat	1030320	7858	1112
	Wheat flour	836731	970	22000
	Loaf and others	59105	255	1392
3.	Maize (corn)	1367340	10334	-
4.	Millet	285120	872	398
5.	Barley	37150	66	38
6.	Other cereals	-	890	60
7.	Potato	971680	105649	1368
	Processed potato	-	40	40
8.	Sugar cane	1762580	40	46
	Sugar	64541	20197	648
9.	Lentil	113520	-	2292
	Black gram	17674	308	-
	Chick peas	13512	-	150
10.	Vegetable	1449472	98589	1712
11.	Fresh fruits	415167	28736	24258
	Proceed fruits	1800	2807	1320
	Dried fruits	-	-	-

Source: Agricultural Marketing Information Bulletin (Special Issue, 1999) DOA, Marketing Division, Nepal

Nepal is a land locked country bordered by India in the east, south and west, and China in the north, with a total of area of 147181 km². The average length (east to west) is 885 km, while the breadth (north to south) is 193 km. The country is broadly divided from east to west into three agro-ecological zones of approximately equal area. The Southwest zone is the Terai or plains, which are the northern extension of the Gangetic Plains of alluvial soils and have an elevation of 100-300 meters above mean sea level (mmsl). The middle zone comprises the less densely populated hills, which are cut by a series of valleys. Attitude ranges from 250-4,000 mmsl, and the zone is characterized by steep valleys that are often terraced for extensive agriculture. The topography of the hill zone results in different microclimates that can be suited to specific crops. To the north is the mountain zone which extends to over 8,000 mmsl. The mountain zone is the least populated and has the lowest intensity of agricultural activity.

Accordingly, if we try to see the country from the climatic point of view, in the plains or Terai there is hot and humid or subtropical to tropical climate, while in the hills both subtropical climate in the foothills and temperate climate on the top of the hills prevail. The mountains have very cold climate. Based on the prevailing climatic conditions, different types of crops can be grown. Primarily, rice, wheat, legumes and oilseeds are the major commodities of the Terai, rice, maize, wheat, pulses and oilseed are major commodities in the hills and potato, barley, buckwheat and amaranthus are the commodities suitable for the mountains. Potato and vegetables can be grown in every ecological zone. Among the fruits, mango, litchi, banana, pineapple and guava are major commodities, while in the hills citrus is the main fruit. Banana, guava, pears, and peaches can also be grown in this belt. In the high hills or mountains temperate fruits such as apple, apricot, walnut etc., are appropriately cultivated. Based on the above conditions the cropping patterns are as follows:

a) Terai (Plains)

Irrigated Lowland

Rice - Wheat - Maize
Rice - Potato - Vegetables
Rice - Peas - Rice
Rice - Lentil - Vegetables
Rice - Mustard/Peas - Vegetables

Unirrigated Lowland

Rice - Wheat - Fallow
Rice - Mustard/Peas - Fallow
Rice - Lentils - Fallow
Sugar cane

Upland

Maize - Mustard

b) Hills

Irrigated Lowland

Rice - Wheat - Maize
Rice - Potato - Maize
Rice - Wheat - Vegetable
Rice - Lentils - Vegetables
Rice - Vegetables - Rice

Upland

Maize + Millet - Black gram - Fallow
Maize - Millet - Vegetables
Maize + Legumes - Potato - Fallow
Maize + Ghaiya - Vegetables - Fallow
Ghaiya - Legumes - Fallow

c) Mountains

Maize - Vegetable - Fallow
Potato - Potato - Fallow
Maize - Wheat - Fallow
Niger - Potato - Fallow
Maize - Fallow - Fallow

Similarly, maize is the second most important food crop in the hills. This is mainly grown for family consumption. Farmers also sell it if they have surplus production. In many hill areas, millet is another important food item. Hill farmers feel that millet is highly nutritious for them.

In high hills or mountains, potato is the main crop taken as food followed by maize, buckwheat, barley etc. Because of the cold climate, farmers of this area harvest mostly one crop in a year.

In every agro-ecological zone, priority is given to food crops first and then to cash crops. People need food crops for meeting household needs and cash crops for income generation. Traditionally, farmers grow every sort of possible crop needed for home consumption. This is the reason why there are mainly two types of cropping patterns, namely rice based in the lowlands and maize based in the uplands.

With regard to success stories of crop diversification, many farmers have successfully adopted cultivation of different off-season vegetables like cabbage, peas, cucumber, tomato etc., using modern technologies. Bananas are becoming very popular in the Terai region, where they are grown on a commercial basis. Other important commodities that are being adopted by farmers are cauliflower, sunflower, lentils, mushroom and soybean. These commodities have high demand locally and farmers therefore can sell these items easily.

4. CROP DIVERSIFICATION AS A STRATEGY FOR ACHIEVING VARIOUS GOALS

The Agriculture Prospective Plan (APP) is a 20-year plan on which the whole agricultural strategy of the country lies. The main objectives of APP are to reduce poverty by 35 percent over a 20-year period; and to increase the rate of growth of agricultural GDP from the current low level of 3 percent per annum to about 5 percent, thereby using agriculture as the growth engine for the rest of the economy. The government has established a strategy for implementation of the APP, such as the pocket package strategy, and GO-NGO-Private sector partnership etc. Pockets of commercially feasible commodities will be developed and a suitable package of technologies will be provided.

Considering the climatic conditions, the following commodities for diversification have been identified:

a) Vegetables:

- Summer vegetables - lady's finger, squash, beans, tomato, etc.
- Winter vegetables - cauliflower, cabbage, radish, carrot, peas, etc.

b) Fruits:

- Summer fruits - mango, litchi, guava, pineapple.
- Winter fruits - apple, walnut, apricot, peach etc.
- Citrus fruits - mandarin, orange, lime etc.

c) Spices - ginger, turmeric, cardamom, garlic, etc.

d) Vegetable seeds

e) Sugar cane

f) Soybean

g) Pulses - lentil, gram, pigeon pea, etc.

h) Potato

i) Chilli

j) Maize

k) Oilseeds - mustard, sunflower, etc.

- Pocket areas as defined by the APP is the strategy for implementation.

- Within the pocket areas farmers groups will be formed, comprising mixed groups of men and women farmers, and specific women farmers groups particularly in areas and for crops where women are the key decision makers.

- To make the farmers groups sustainable, appropriate measures will be adapted.

- In order to make the groups independent, the formation of cooperatives and higher level organization are being encouraged.

- The approach will be demand driven with the demand coming from the farmer groups. The research and extension services are provided on the basis of farmers' needs.

- The needs and requirements of the farmers are identified through group meetings in the pocket area itself.

- The farmers are being encouraged to undertake marketing through demonstrations, training and workshops.

- The private sector involvement is encouraged in appropriate areas, such as processing, marketing etc.

- In every potential district, a joint forum for traders and producers is being encouraged.

- Besides technical and input services, credit services are being made available to farmers.

Crop diversification does not only addresses food security and commercialization, but also makes judicious use of land, water and other resources. Any commodity which is locally feasible commercially and has higher comparative advantage can be taken into consideration so that there will be income growth which contributes to poverty alleviation. Even small and marginal farmers come into groups and can have a commercial type of farming. In this way the system can be made economically sustainable, environmentally friendly and ecologically sound.

As regards the implementation, besides the concerned agencies, there are different committees at different levels i.e., District level, Regional level, Central and National level. These committees have representations from line agencies, NGOs, private sector, and farmers etc. Problems encountered are taken to these committees and discussed thoroughly to bring out solutions. They also provide guidelines to implementers and suggestions to policy makers. Crop diversification programmes if implemented properly help improve the whole agricultural system.

5. CHALLENGES, OPPORTUNITIES AND PROSPECTS OF CROP DIVERSIFICATION

Crop diversification is a popular strategy to maximize the use of land, water and other resources. It can meet different requirements of people's food supply and can generate earnings for farmers. However, there are several constraints to crop diversification, which can be summarized as follows:

Policy Constraints

- Due to ineffective linkage mechanisms between extension and research no joint planning is practiced. As a result no prior commitment is made for the supply of seeds and other planting materials.

- There is no policy to test, verify and multiply seeds introduced by farmers in the border area of India.

- Seeds distributed by Aggrovate centres are reported to be not always of good quality or not recommended by the districts.

- The regional seed, soil and plant protection laboratories have limited authority and support to test and verify the quality of seeds, fertilizers and pesticides.

- Research centres recommend cereal varieties without sufficient foundation seed. As a result recommended varieties cannot be made available in all districts.

- Seed potatoes are not available for production due to lack of storage facilities.

- Quality is not monitored during distribution.

- In the case of fruit tree plant distribution, the fruit development division of the Department of Agriculture (DOA) allocates the number of nursery plants to be purchased by the District Agricultural Development Office (DADO) from the recommended resource centres, farms and registered nurseries. DADO reports that nursery plants are either not available or not of proper quality standards predetermined by the fruit development division.

- The price of Agricultural Inputs Corporation (AIC) seeds increases due to handling and management charges, even though subsidized.

- There are no special arrangements for seed multiplication, local collection and distribution.

- In the case of plants to be produced by private farms and nurseries, there is no certification system.

- There is an open distribution of plants from India in the border districts. However, there are doubts about the quality of this planting material.

- Transportation: The transportation network is very weak, particularly in the hill areas. Thus, transportation of planting materials to production sites and of produce to the markets is usually difficult and expensive.

- Budgetary: In APP, there is a provision that the production pockets will be connected with agricultural roads, so that the produce can be transported to nearby markets and the planting materials can be sent to production sites easily. But for this, the allocated budget is not enough.

· Existence of climatic diversity, as a result of which many high value crops can be successfully grown.

· The farmers group approach, in which the farmers can be united to produce as well as to sell and tackle the problems.

· Initiation of a bottom-up planning process.

· Small and marginal formers can be included in the groups for farming. This means even small and marginal farmers can practice farming on a commercial basis to generate income from their small piece of land.

· The Ministry of Agriculture and Cooperatives has a good network of extension services and motivation measures for farmers.

· Women farmers' proactive involvement in mainstreaming.

· GOs + NGOs + Private sector are encouraged to work hand in hand on the same platform.

· Representation of farmers in agricultural committees at different levels.

· Expanded market centres and marketing technologies. Also, development of entrepreneurship thinking of farmers.

Policies and strategies for crop diversification go along with the policies and strategies of the whole agricultural system. The following are some of the major policies and strategies of the Government, which are indicated clearly in the Agriculture Prospective Plan (APP) and the Ninth Agriculture Plan. The APP provides the central focus for agriculture and rural development.

It recognizes the need for a different strategy for the Terai region and a different strategy for the hills and mountains. The Terai strategy is technology driven with the objective of providing year round irrigation for most of the cultivated area and thus enables rapid growth in the basic food staples. The strategy for hills and mountains is demand driven with the objective of increasing production of high value crops.

The Ninth Agriculture Plan is giving due attention to crop diversification and commercialization. Fifteen to twenty years ago farmers were not aware of the advantages of crop diversification and the government paid little or no attention to it. Consequently, farming was mostly traditional. In the lowlands the farmers used to grow rice followed by wheat and in the uplands maize followed by millet. At the most they used to grow 2 crops in a year whether lowland or upland. Cropping intensity was very low. Gradually, diversification started and farmers could judge which crops to grow in their field for optimum benefit. Many farmers changed their cropping system from traditional to modern. An income generating type of agriculture was initiated among small and marginal farmers. Big farmers started commercialization. Due to the enhancement of technological development, farmers had several options for the commodities. In the meantime, the farmers' group concept was initiated and pocket strategy came into implementation. The group and pocket approach in agriculture accommodated all farmers (small, marginal and big), and because of group spirit they were oriented towards commercialization. Crop diversification contributes:

- To increased cropping intensity.

- To generation of employment opportunities.

- To commercialization of farming.

- To growing high-value crops in order to derive higher profits.

- To reduction of migration of male household members for work because of on-farm income earning opportunities.

- To engagement of women farmers in income generating activities.

Crop diversification is an important strategy for overall agriculture development in the country. It provides the farmers with viable choices of commodities to grow on their land. Nepal has different agro-ecological zones with a variety of climates ranging from tropical in the Terai to alpine in the high mountains. Besides the climatic factors, the farmers need options on high value exportable commodities. Crop diversification can meet this type of need of the farmers.

Previously, the farmers used to concentrate on a few major crops such as rice, maize and wheat. A considerable area in the hills and high hills was left fallow because of the fact that there was no diversification in practice. With the increase of population traditional agriculture could not meet the food requirements and therefore diversification was introduced. Crop intensity was thereby increased and annual per unit production was raised.

Crop diversification should continue with due emphasis on the following:

· Technological packages should be provided to the production pockets based on their level of development i.e., whether the pocket is a basic pocket, or a commercializing pocket or a commercial pocket etc.

· Exportable high value commodities should be identified for each of the districts and production cost should be reduced so that Nepalese produce can compete with Indian produce (which has very low price).

· The focus should be on priority commodities such as off-season vegetables, vegetable seeds, citrus, apple, mushroom etc., which can have good markets (both domestic and external).

· The production pocket area and farmers group approach which has been initiated in the country should be strengthened and, in order to make it sustainable, the following activities should be conducted regularly:

- Workshops to support the development of pocket area activities.
- Orientation towards cooperative groups.
- Promotion of mass communications.
- Conduct of regional technical working groups (RTWG) meetings regularly.
- NGOs to be active in facilitating the group formation process.

· Women must be identified as full members of community groups. This will enhance their self-confidence and social status and can be effective in introducing a large number of women to decision making processes.

· Efforts of line agencies and resource centres should concentrate on the production pockets, so that the pockets become stronger and more effective.

· A forum among traders, producers and extension agents should be established. This approach will help farmers to have direct exposure in marketing aspects.

· Regular training to production pocket area farmers on production technologies particularly on selected commodities and on marketing aspects including processing, packaging, grading, etc., should be provided.

· Nepal is expected to become a member of the World Trade Organization (WTO) by the year 2001 and this would require more focus on crop diversification.