Maize market development in Nepal challenges and prospects. Dyutiman Choudhary

1. Maize Market Development in Nepal
– Challenges and Prospects
Dyutiman Choudhary, PhD
Narayan Khanal, PhD
Dilli Bahadur KC, PhD
Shriniwas Gautam, PhD
Hari Kumar Shrestha, PhD
AbduRahman Beshir, PhD
www.cimmyt.org
13th Asian Maize Conference, Ludhiana, Punjab, India
8-10 October, 2018

2. Outline
• Maize production status and trends
• Maize markets trends
• The maize seed sector
• Market Development approach and
strategies
• Core components for maize market
development
• Way forward

3. Maize Sector in Nepal
• In Nepal, maize is the second
most important crop after rice
in terms of area, production
and yield – occupies 43% of
cereal area and contributes
53% production
• Area – 0.89 M Ha & prod 2.2 T
0%
20%
40%
60%
80%
Mid hills High hills Terai
Area Production
74%
14%
12%
Summer
Spring
Winter
2.0 1.6
1.7 2.1
2.5
4.1
5.7
8.6
9.6
11.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
1962 1980 2000 2010 2016
MaizeYield(mt/ha)
Bangladesh China India Nepal
Pakistan USA Viet Nam

4. Area, production and yield of maize (FAOSTAT, 2018)
0
0.5
1
1.5
2
2.5
3
Area (million ha) Production (million tons) Yield (kg/ha)

5. Area and yield of Maize in Nepal
• Eastern, central and
Western region
contribute about 70% of
the total maize
production
• OPVs in Mid Hills
• Low use of soil fertility
management practices
• There is also a wide
yield gap of about 5.5
t/ha between the
potential yield at
national level trials and
farmers’ level
(Source: MoALD, 2017)

6. Trends in maize sector
• Growth of winter (Oct.
planting) and spring
season (Feb. planting) in
Terai districts (75-550
masl)
• CIMMYT and national
studies estimate that about
11%-14% of the
households in hills sold
maize
• Reduced consumption of
maize for food
86% maize production in the hills
is used at household level for
feeding animals
80% of the production in Terai is sold to
poultry and animal feed mills

7. Maize Markets – Feed Industry
• Nepal requires 2750 t feed per day for
poultry industry (yellow maize).
• Consumes 0.5 M t of maize grain per
annum out of which 80% (value USD
10 mill is imported from India (NFA,
2018).
• 127 feed mills (2 to 400t/day capacity)
are registered and engaged in feed
industry
• A 13% and 8.5% per year increase in
demand of poultry and animal feed
respectively, over the last five years.
• Feed industries prefer purchasing
winter maize

8. Maize Seed Market
• Annual requirement of maize seed in Nepal is 19,552 MT.
• Prevalence of farmers saved seed and OPVs
• Contribution of the formal sector to this demand is 15 % (2932
t)
• Companies contribute10% and balance 90% are produced by
cooperatives, DADOs, NARC and CBSPs.
• Three varieties viz., Rampur Composite, Manakamana-3 and
Arun-2 (constitutes 81% of the total source seed production of
75 t)
• Growing trend of hybrid maize in Nepal – open border
• About 1500 t (both formal and informal) of maize seed
imported worth NRs 1 billion
• Hybrids developed by NARC are yet to be commercialized
and
• Low capacity of private sector and limited market
development activities.

9. Maize seed supply and adoption in Nepal
Hybrid maize is covers <10% of the total maize area
(Source: SEAN 2017; SQCC 2018)
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2014 2015 2016 2017 2018
MT
Year
OPV Hybrid Total

10. Formal Seed Systems
Sector Stakeholders Features Remarks
Government MOALD, NARC,
NSC
Government
funded
Lead in R & D,
Policy &
Implementation
Semi Private/civil
society
DISSPRO,CBSP,
Cooperatives
Initiated and
partly funded
by
Govt./Donors/
NGO’s
Active inn
hill/remote areas
Private Seed Companies,
Agrovets,
Importers
Modest
Infrastructure,
resources.
project grants
Produce
OPV’s.
Limited R & D;
all commercial
hybrids are
Imported

11. Inputs Farming Post harvest Selling
Import
Aggregation
Feed preparation
Feed Sales
Typically performed by farmers
Typically performed by Integrated feed processors
Typically performed by feed mills
Intermediaries
•Lack of R&D
•Old varieties
•Low SRR
•Poor capacity
of private
sector
•Subsidies in
seed and
fertilizers
•Poor quality
enforcement
•Lack of
competition
•Limited reach
of extension
•Low
productivity
•Poor
knowledge of
Integrated soil
fertility
management
•Lack of
awareness of
new varieties
•Lack of
climate
advisory
services
•Lack of proper
drying
facilities
•High moisture
content -
aflatoxin and
molds
•Unavailability
of custom
hiring facilities
•Lack of
common
facilities
•Low surplus
•Far away
markets
•Fluctuating
price
•No collective
marketing
systems
•Poor storage
facilities
•Inadequate
access to finance
•Low availability
of produce
•Lack of drying
facility
•Fluctuating
prices
Uncertainty of quality
Fluctuating prices
Political unrest
Competition among
feed mils
Increasing unorganized
sector
Poor storage and drying
facilities
Underutilized capacity
Little integration with
local suppliers
KeyChallenges Challenges in Maize Market Development

12. Policy and Institutional Arrangements
• Seed Vision 2013-2025, Government of
Nepal
• Agriculture Development Strategy (ADS) of
the GoN aims to move from subsistence to
commercial production
• Maize is a focus crop
• Restricted domains of registered hybrids
• Lack of exclusive licensing of varieties
leading to low investment from the private
sector

13. Approach to Market Development
Stage I: Establish
institutional mechanisms;
systems and processes
and mobilize resources
Stage II: Implementation
(produce outputs; seed and
fertilizer technologies)
Stage III (Market
Development/technology
use and scaling.
Stage I: Leadership (Situation
assessment and strategic
planning
Stage II: Facilitation
(technologies,
methodologies and
approaches)
Stage III : Scaling and
Exit (Evidence based
analytical reports, sector
reports; impact
assessment)
CIMMYT PARTNERS

14. ADOPTION
&IMPACT
ICT PLATFORMS HYBRID & OPV SEED SOIL FERTILITY MANAGEMENT
LOCALLY ADAPTED TECHNOLOGIES
POLICY RESEARCH
MARKET DEVELOPMENT
STRATEGY
PPPANDCAPACITY
DEVELOPMENT
TECHNOLOGY DEVELOPMENT AND TESTING

15. BREEDER SEED
PRODUCTION
(RELEASED VARIETIES)
CERTIFIED SEEDS,
IMPROVED SEEDS
FOUNDATION SEEDS &
SOURCE SEEDS PRODN
NARC & PRIVATE
SECTOR, SQCC
SEED COMPANIES, CBSPS,
COOPERATIVES, NARC,
DISSPRO, RSTL, NSC
SEED IMPORTERSIMPORT OF
REGISTERED VARIETIES
MARKET PROMOTION SEED COMPANIES,
REGIONAL, DISTRICT
AGRO-VETS
SALES TO FARMERS AGRO-VETS/NSC/
DADO/SEED COMPANIES
FARMERSPRODUCTION
MAINTENANCE
BREEDING &
ADAPTABILITY TRIALS
NARC & SEED
COMPANIES
DISTRIBUTION WHOLESALERS (AGRO-
VETS & NSC)
PROCESSING &
STORAGE
SEED COMPANIES
CERTIFICATION SQCC & RSTL
PRODUCTIONPROCESSINGMARKETINGSALESADOPTIONR&D
NSAF DIRECT INTERVENTIONS
• DEMOS IN FARMERS’ FIELD
• AGRO-VET MEETINGS
• PROMOTIONAL CAMPAIGNS
• PRIVATE-SECTOR BASED
SERVICE PROVISION
• SEED FAIRS, EXHIBITIONS,
CAMPAIGNS
• TECHNICAL ADVISORY
SERVICES
• VARIETAL INFORMATION
PRODUCTION ADVISORY
SERVICES
NSAF SEED SYSTEM SUPPORT
INTERVENTIONS
• INTRODUCE NEW IN-BRED/
PARENTAL LINES
• INTRODUCE BIO-FORTIFIED
VARIETIES/HYBRIDS OF MAIZE
• FAST TRACK VARIETAL
REGISTRATION
• DEVELOP RESEARCH CAPACITY
• FINE MAP SEED PRODUCTION
ZONES
• IDENTIFY MARKET SEGMENTS
FOR CROPS
• PROVIDE TECHNICAL SUPPORT
FOR CROP BREEDING & SEED
PRODUCTION
• PROVIDE TECHNICAL SUPPORT
FOR TRUTHFUL LABELLING
SYSTEM
• FACILITATE BREEDER SEED &
FOUNDATION SEED
PRODUCTION
• DEVELOP SEED PRODUCTION,
PROCESSING & QC PROTOCOLS
• ORIENTATION ON GOOD SEED
BUSINESS PRACTICES
• FACILITATE FOR LICENSING
CROP INSPECTORS, SEED
SAMPLERS AND ANALYSTS
• SEED SCHOOLS
• CROP CALENDAR
• BUSINESS PLAN DEVELOPMENT
• ACCESS TO FINANCE
• ANALYSIS OF COMPARATIVE AND
COMPETITIVE ANALYSIS
• MARKET RESEARCH AND SALES
ANALYSIS
• PREFERENCE STUDIES
• STRENGTHENING SEAN
• CAPACITY DEVELOPMENT OF SMS
SUBJECT MATTER SPECIALISTS
(SMS)
NSAF POLICY SUPPORT
INTERVENTIONS
• INNOVATIONS IN SUBSIDY
POLICY FOR SEEDS
• PILOT VOUCHER SYSTEM
• PILOT INSURANCE SYSTEM
• PROMOTE/FACILITATE
CUSTOM SEED
PRODUCTION IN /FOR
OTHER COUNTRIES
• SIMPLIFY REGISTRATION
PROCESS
• FACILITATE REGISTRATION
AND DOMAIN EXPANSION
OF EXISTING POPULAR
HYBRIDS/OPVS IN MAIZE,
VEGETABLES AND RICE
• ESTABLISH NATIONAL
FORUM FOR SEED SECTOR
DEVELOPMENT
• PROVIDE TECHNICAL
SUPPORT TO NATIONAL
PROGRAMMES – PMAMP,
KUBK, HVAP
LINK TO OUTPUT MARKETS
CONTRACTUAL ARRANGEMENTS
MARKET STUDIES
• MULTI-LOCATION TRIALS OF
NATIONAL AND CG LINES
/VARIETIES
• FARMER FIELD TRIALS
• FIELD DAYS
• RELEASE & REGISTRATION
NSAF SEED COMPONENT IMPLEMENTATION FRAMEWORK
FLOWOFPRODUCTS
FLOWOFCOMMUNICATION

16. KEY LEVERAGE POINTS IN THE AGRO-FOOD SYSTEM OF NEPAL
GOVERNMENT
POLICY
R&D
FARMERS
& FARMER
GROUPS
EXTENSION
AGRI-DEALERS
AGRI- INPUTS
1
2
3
4
5
6
7
8

17. Market Ready Products
• Zn enriched maize
hybrids – 10.9 t/ha
• Quality Protein
Maize (QPM)
hybrid – 12.5 t/ha
• Pro-Vitamin A
(PVA) Hybrids – 9
t/ha
• Normal Maize
hybrids – 13 t/ha
• Heat stress tolerant
- 10 t/ha
• SOPs and guidelines
• Multi-location trials
• Fast track process
• Exclusive licensing

18. Evidence based Interventions
• Mapping market segments
• Soil mapping and digital
soil maps
• Agronomic packages
• Training and extension
• Alternate investment
options

19. Creating a vision for market upgrading
Uniqueness Low cost
Narrow
Market
scope
Broad
Market
scope
Segmentation Strategy
(with a differentiation or cost focus)
Differentiation
Strategy
Cost leadership
Strategy
Strengths based on…

22. Access to Finance for seed business
Outputs
 Banks developed loan products suited for seed
growers and seed companies
 For the first time in Nepal seed grower lending
model has been piloted by linking by-back
purchase agreement, seed insurance and
improved technology at low interest rate
 Higher recovery rate of seeds
 Reduced cost of seed production
 Improved quality
 Increase access to financing for operations
What CIMMYT facilitates: Business plan, banks literacy on opportunity
for investment in seed sector, tripartriate agreements; branchless banking

23. Growth in Seed Business
CIMMYT contributed to development of commercial functions to boost growth in the
Nepalese seed sector together with various stakeholders

24. Research and
Development (competitive
hybrids and OPVs, stress
tolerance, soil fertility
management, improved
source seed production,
capacity development Market Development and
Extension (Increase farmers
awareness, expand areas;
mechanization, private
sector investments; quality
control and distribution
efficiency and productivity
gains)
Post Harvest
Technologies
(Equipment's, facilities,
services)
Information &
Innovation (knowledge
sharing; partnerships;
digital tools, capacity
development)
Policies and Institutions
(commercialization,
domain expansion,
business planning, smart
subsidies, risk
management & youths In
agribusiness)
Market Chain &
Coordination
(Integrated value chain
development &
contractualization)
Increased
Productivity and
Commercialization
Core Functions of Maize Market Development
25

25. Way Forward
• Increase production
through productivity gains
• Product packages
• Capacity development
• New partnerships
• Coordination with national
programmes Prime
Minister Aand griculture
Modernization Programme
(PMAMP)
• Private sector investments
• Efficient delivery and
monitoring

26. Thank you
for your
interest!