Support for Trade and Economic Capacity Building Trade and Private Sector Development (TPSD) Project Ministry of Commerce Support for Trade and Economic Capacity Building Highlights of Strategic Plan (2016-2021) of NTCDB for Coffee Sub-sector Development Badri P Bastakoti Kathmandu 07 May 2017

Overview of coffee sector in Nepal 2014/15 Production in 2014/15 434.58 mt Green Bean Plantation Area 2618 ha in 41 districts Number of Producers 32,186 Price for Fresh Cherries Rs. 75- Rs 83 per kg Volume Currently exported 99.8 tons of green bean (mainly to South Korea, Japan, China, Germany) Total market value (estimated) – US$ 7.00 per kg for green beans in the domestic/international markets US $ 3,245,060 (NRs. Equiv= 343,976,360) Average Value generated annually by one coffee farmer NRs. 10,687

Comparison of return of coffee cultivation vis-ὰ-vis other crops Net Return (Rs/ha/year) Net returns compared to Maize Millet Maize + Millet Coffee 34,190 4.33 3.3 1.87 Coffee + Banana 61,774 7.83 5.96 3.38 Coffee + Ginger 51,683 6.55 4.98 2.83

Coffee Growing districts in Nepal

District-wise Area and Production of Coffee (2014/15)

Coffee green bean production in Nepal (2004/05 to 2015/15) Fiscal Year Area (ha) Production GB (MT) Productivity (Kg/ha) 2004/05 1078 200 185.5 2005/06 1285 312 242.8 2006/07 1296 270 208.3 2007/08 1450 265 182.7 2008/09 1531 334 218.1 2009/10 1630 419 257.0 2010/11 1752 502 286.5 2011/12 1760 523 297.1 2012/13 1750 457 261.1 2013/14 1911 429 224.5 2014/15 2381 463 194.4 2015/16 2618 434

Coffee in Nepal: An Opportunity Climate and soil condition of Mid-hills of Nepal is suitable for growing Arabica coffee. Coffee in Nepal is 100% Arabica. Opportunity for production of high grown, organic specialty coffee. High international demand (estimated ~6000 mt) Participation of small farmer. Expanding domestic market

Rural employment generation through processing industries. Productivity can be increased up to 1550 kg GB/ha through proper management, adequate shading and manuring practices (AEC 2006) Nepal can enjoy duty free access for coffee beans under trade preferences for LDCs in major coffee importing countries.

Coffee in Nepal: Some Challenges Production Low production volume (may lead to diseconomy of scale) Sporadic plantation rather than pocket area Low attention on shade, irrigation and orchard management Infestation of WSB and CLR (recently) Inconsistent quality (delay in pulping; difficulty in organic certification etc. Complicated certification process.

Processing: Lack of proper infrastructures for processing Lack of monitoring for standard and quality control at different level of processing Marketing, quality and institutional development Lack of institutionalization of marketing through cooperatives (in the interest of smallholders)

Implementation of coffee logo/quality standardization and monitoring Implementation of traceability system Organic and fair trade certification

Strategic Plan of the NTCDB 2017-2022 Vision: “one of the leading producers and exporters of Arabica specialty coffee in the world” Goal: “Farming of organic Arabica specialty coffee in all potential districts of Nepal through commercial orientation”

Strategic Directions and outcomes of NTCDB’s Strategic Plan Strategic Direction 1: High Quality Production and Enhance Productivity Outcome: Increased production of Nepali Arabica Coffee by 100% (to 1000 MT) by the end of 2022 Coffee plants grown healthy and free of pests and any diseases Coffee Production Area expanded (additional 1500 ha) Productivity of coffee plants improved (by 50%) Organic certification process established Smallholders’ cooperatives promoted Dry parchment produced through wet processing (90%) Monitor Mechanism and system established to ensure progress

Strategic Directions and outcomes of NTCDB’s Strategic Plan Strategic Direction 2: Policy Formulation Formulate Enabling Coffee Subsector Policy Revised Coffee Policy made active for promotion of coffee subsector E-commerce Policy developed for coffee subsector All institutions (I/NGOs, traders, producers’ cooperatives associations and any other relevant organisations) working on coffee subsector development -are regulated (one door policy)

Strategic Directions and outcomes of NTCDB’s Strategic Plan Strategic Direction 3: Management and coordination Strengthen Management and Coordination of Coffee subsector Coffee Subsector Working Group reconstituted and made functional Linkages established with Financial Institutions for relevant financial products for coffee subsector A separate Coffee Division made functional within NTCDB

Strategic Directions and outcomes of NTCDB’s Strategic Plan Strategic Direction 4: Market Promotion Sell Nepali Coffee in domestic and international markets with Nepal Coffee Logo Nepali coffee sold in domestic and international markets with Nepal Coffee Logo Organic and Fair Trade Certified (6 and 2 districts) Quality based pricing system made operational National standard for coffee developed and implemented for market promotion

Strategic Directions and outcomes of NTCDB’s Strategic Plan Strategic Direction 5: Institutional Strengthening and Capacity Development of Coffee Subsector Strengthen Technical and Managerial Capacity of NTCDB and Associated Institutions CD plan for NTCDB & stakeholders developed and made operational Technical knowledge and skills of CCUs, DCPA , Traders and other stakeholders enhanced Organisational Management Capacity of stakeholders (CCUs, PCCs) strengthened Management Information System (MIS) Developed and Implemented

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