J5_KISAN_2015_Annual_Report.pdf

KISAN PROJECT

ANNUAL REPORT

JULY 1, 2014 – SEPTEMBER 30, 2015

CONTRACT NUMBER AID-367-C-13-00004

Submitted October 30, 2015

This publication was produced for review by the United States Agency for International Development.

It was prepared by Winrock International.

DISCLAIMER

The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

ANNUAL REPORT

JULY 1, 2014 – SEPTEMBER 30, 2015

CONTRACT NUMBER AID-367-C-13-00004

TABLE OF CONTENTS

TABLE OF CONTENTS

LIST OF TABLES

ACRONYMS

I. ANNUAL HIGHLIGHTS

II. DATA ANALYSIS

A. COMPARISON OF RESULTS AND TARGETS

III. PROJECT MANAGEMENT

A. COORDINATION AND LEVERAGE

B. PROJECT IMPROVEMENTS

C. STATUS OF FINANCES

D. ENVIRONMENTAL COMPLIANCE

E. MANAGEMENT CHALLENGES AND RESPONSES

F. ANTICIPATED RISKS AND MITIGATION MEASURES

G. PROSPECTS FOR FY2016 (YEAR 4) PERFORMANCE

IV. ANNEXES

ANNEX 1: SUCCESS STORIES

ANNEX 2: FINANCE AND EXPENDITURE

ANNEX 3: FTFMS DISAGGREGATED DATA TABLES

ANNEX 4: FY2015 SURVEY DESIGN AND DATA QUALITY MEASURES

ANNEX 5: KISAN INDICATORS

LIST OF TABLES

Table 1. 4.5.2(13) Number of rural households benefiting Table 2. 4.5.2(14) Number of vulnerable households benefiting Table 3. 4.5.2(7) Number of individuals trained Table 4. 4.5.2(11) No. of food security enterprises, organizations, and associations assisted Table 5. 4.5.2(27) No. of members of producer organizations and CBOs assisted Table 6. 4.5.2(37) Number of MSMEs/farmers receiving BDS Table 7. FY2014 to FY2015 consolidation of categories related to improved technologies and management practices Table 8. 4.5.2(5) Number of farmers who applied improved technologies or management practices* Table 9. 4.5.2(2) Number of hectares under improved technologies or management practices* Table 10. Nepal Custom: Yield/Ha (metric tons) Table 11. 4.5.2(23) Incremental sales* Table 12. 4.5.2(16) Gross margin/Ha* Table 13. Quantity of Nutrient-Rich Vegetables Set Aside for Home Consumption (MT) Table 14. Nepal 2.2-1: Number of MSMSs established and/or expanded Table 15. 4.5.2(38) Value of Private Sector Investment (USD)* Table 16. 4.5.2(42) Number of Enterprises, Producers Organizations, and CBOs that applied Improved Technologies or Management Practices*

Table 17. (Nepal 1.3.2-1) Percent of leadership positions filled by a woman or member of a vulnerable group Table 18. 4.5.2(29) Value of Agriculture and Rural Loans (formal) Table 19. 4.5.2(30) No. of MSMEs/farmers assisted to access loans (formal and informal) Table 20. Management Challenges, Implementation Impacts, and Responses Table 21. Anticipated Challenges, Potential Impacts, and Mitigation Measures Table 22. Finance and Expenditures Table 23. KISAN Indicators FY2015-2017

COVER PHOTO: KISAN beneficiaries attend a training conducted by grantee Dev Bhar Milling Company to improve fine rice production.

ACRONYMS

BDS Business Development Services

CEAPRED Center for Environmental and Agricultural Policy Research, Extension and Development

DADO District Agriculture Development Offices

DAG Disadvantaged Group

DO Development Objective

FTF Feed the Future

FTFMS Feed the Future Monitoring System

FTE Full Time Equivalent

GESI Gender Equality and Social Inclusion

GON Government of Nepal

ICT Information and Communication Technology

KPI Key Performance Indicator

LSP Local Service Provider

MIT Micro-Irrigation Technology

MFI Micro Finance Institution

MPC Marketing and Planning Committee

MSME Micro, Small, and Medium Enterprise

PIRS Performance Indicator Reference Sheet

SACCO Savings and Credit Cooperative

VDC Village Development Committee

WIKISAN Winrock International’s KISAN project database

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INTRODUCTION

The United States Agency for International Development in Nepal (USAID/Nepal) awarded Winrock International a contract on February 14, 2013 for the Knowledge-based Integrated Sustainable Agriculture and Nutrition (KISAN) Project. KISAN is funded with a budget of $20.4 million over five years (2013-2017) by President Obama’s Feed the Future (FTF) Initiative. Its goals are to sustainably reduce poverty and hunger in Nepal. KISAN’s budget expended to date on improving smallholder agriculture is equivalent to $113 per farmer.

KISAN contributes to all three USAID/Nepal Development Objectives (DOs):

DO1 More Inclusive and Effective Government: KISAN forms community based organizations and strengthens members’ skills and knowledge.

DO2 Inclusive and Sustainable Economic Growth to Reduce Extreme Poverty: KISAN helps raise incomes for smallholder farmers by supporting high-value vegetable production, strengthening market linkages, and building private sector capacities.

DO3 Increased Human Capital: KISAN improves household food consumption and nutritional status, especially of women and children, by helping farmers achieve higher yields and grow nutrient-rich vegetables.

KISAN works in twenty districts – ten districts in the Bheri and Rapti Zones of the Mid-Western Development Region; six districts in the Mahakali and Seti Zones in the Far-Western Development Region; and four districts in the Lumbini Zone in the Western Development Region. KISAN helps subsistence farmers graduate to commercial agriculture by improving on-farm production and facilitating market development. KISAN focuses on target commodities that are important for food security (rice, maize, and lentils), are high-value (off-season vegetables), and are nutrient-rich. Market opportunities vary across KISAN’s target area. In areas with access to markets, such as the Terai and low-lying hills, KISAN focuses on building the capacities of private sector and community-based service providers to improve the supply of quality inputs, credit, and other services such as land preparation and equipment rental. In parallel, the project facilitates market linkages to improve farmers’ access to service providers and buyers. Opportunities to attract buyers and to engage private sector service providers are fewer in more remote regions. Here, KISAN project staff work directly with farmers to achieve higher yields, promoted market development, and increase household consumption of vegetables. Coordination and collaboration with the Government of Nepal (GON) ensures unified messages on recommended agricultural inputs and techniques, and helps coordinate investments in irrigation and collection center infrastructure. KISAN works through change agents including commercial agribusinesses, market planning committees, GON extension staff, local service providers, lead farmers, and staff to deliver trainings, capacity building, and guidance.

Winrock implements the project in collaboration with two Nepali organizations: the Center for Environmental and Agricultural Policy, Research, Extension and Development (CEAPRED) and the Development Project Service Center (DEPROSC).

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As per the contract (Section C.4.8.8 and F.4), Winrock must submit an annual progress report up to 30 days following each project year. The annual report describes the accomplishments compared to performance targets. While the Year Three (Y3) Annual Report covers the period from July 1, 2014 to September 30, 2015, annual results data aligns with the standard USAID fiscal year and that presented in the KISAN Project PMP: October 1, 2014 to September 30, 2015.1

I. ANNUAL HIGHLIGHTS

In FY2015, KISAN’s Year 3, the project accomplished the following results (refer to Figure 1):

• 83,286 farmers trained and implementing improved agricultural practices and technologies.

• Increased yields for rice, maize, lentil and vegetables from 29 to 91 percent.

• 60,713 ha under improved management practices and technologies.2

• $71.8 million in farm-level incremental sales for target commodities.

• Improved gross margins for cereals by 38 to 139 percent. Greatest improvements in vegetable gross margins are for tomato, cucumber, and cabbage (122 to 161 percent).

KISAN also made technical and management improvements in a number of areas:

• Aligned M&E Plan with USAID/Nepal and Feed the Future (FTF) results frameworks and reporting schedules, and designed and implemented surveys to collect results data. FY2015 data presented in this Annual Report provides the first clear picture of project results, evidence for KISAN’s theory of change, and scale of potential life-of-project (LOP) results.

• Streamlined staff structure to improve communications, reporting, and overall management.

• Identified and started to implement a robust learning agenda.

• Revised overall technical approach to focus on building private sector capacity to provide trainings, demonstrations, and technical information directly to farmers.

• Significantly increased grant awards, awarding $254,740 in KISAN funds and negotiating final details for an additional $550,000 in awards.

On April 26, 2015 Nepal suffered a 7.8 earthquake followed by weeks of strong aftershocks.

KISAN’s project areas were not significantly affected by the earthquake. Project activities went on largely unhindered; though some staff lost homes in earthquake-affected areas and took leave.

1 Results for the quarter starting July 1 FY2014 and ending September 30 2014 were included in KISAN’s FY2014 data in FTFMS.

2 The number reported in FTFMS is higher (76,629 Ha) because FTF methodology allows the same hectare to be counted multiple times, based on the number of crop cycles a particular parcel of land is farmed. KISAN farmers report a total of 60,713 ha of cultivable land, which represents the upper limit of the actual number of hectares under improved management.

KISAN PROJECT Y3 ANNUAL REPORT PAGE 4

Figure 1: Selected KISAN FY2015 Results

II. DATA ANALYSIS

A. COMPARISON OF RESULTS AND TARGETS

OVERVIEW

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1. Additional information

Additional information is available in the following annexes:

Annex 5: table of indicator titles and corresponding FTF and USAID indicator numbers

Annex 3: complete data tables for all indicators and disaggregates

Annexes B and E in KISAN’s M&E Plan:

detailed guidance on who and what counts for each indicator

The following narrative focuses on aggregate results for KISAN’s 18 indicators and selected disaggregates.

Indicators are grouped under the following themes:

• Project reach: number and type of beneficiaries;

• Farm-level outcomes;

• Private sector and organizational capacity building outcomes; and

• Access to finance outcomes.

This structure is more conducive to telling the story of KISAN’s beneficiaries and project achievements than following the five outcomes in KISAN’s contract, as the project design has evolved since the outcomes were identified.3 Gender and social inclusion (GESI) results are discussed throughout the narrative, including but not limited to those indicators that explicitly focus on women and disadvantaged groups.

KISAN’s seven Key Performance Indicators (KPIs) were drawn from the Feed the Future (FTF) results framework and are marked with an asterisk*. Of these, KISAN’s most impressive achievements occurred with farmers, far exceeding the project team’s expectations:

• Application of improved technologies and management practices exceed targets for both the number of farmers and number of hectares. Farmers applied an average of 9.7 technologies and management practices each.4

• Yields exceed baseline by more than 25 percent for five of KISAN’s eight most important commodities.

• Incremental sales of $71.8 million exceed targets by a factor of more than seven and average $862 per farmer.

• Over 96 percent of KISAN farmers sold at least one KISAN-promoted commodity.5

• Gross margins exceed targets by 35 percent or more for seven of KISAN’s eight most important commodities.

• KISAN’s budget expenditure to date (FY2013-FY2015) is $113 per farmer, compared to $862 per farmer in total incremental sales.

KISAN conducted extensive due diligence to ensure data quality. The key drivers of success are discussed in the Farm-Level Outcomes section.

3 References to USAID/Nepal Intermediate Results (IRs) and Sub-IRs are also omitted from the narrative to allow for a more readable document. Refer to the indicator table in Annex 5 for USAID/Nepal indicator numbers, which reflect the IRs and Sub-IRs.

4 Compared to 6.5 in FY2014 and 4 in baseline.

5 Compared to 77 percent in FY2014 and 66 percent in baseline.

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Figure 3. Women provide essential agricultural labor and leadership due to significant out-migration. KISAN works with women to improve their cultivation techniques and access to credit and labor-saving technologies.

PROJECT REACH: BENEFICIARIES

Who benefits? KISAN beneficiaries include smallholder households, producer organizations, trade associations, agribusinesses, financial institutions, and government. Noteworthy characteristics include:

• KISAN has formed over 4,000 farmers groups, trained over 83,000 farmers, and supported 465 additional private sector enterprises and organizations;

• The majority of KISAN farmers trained are women (73 percent);

• The vast majority of KISAN-supported farm microenterprises are managed by women (72 percent).

• 68 percent of beneficiary households are vulnerable to extreme poverty and social exclusion; and

• 24 percent of KISAN farmers are youth (15-30 years).

KISAN met its household beneficiary target. Household beneficiaries equal the number of farmers trained: 83,286 (refer to Table 1, next page). Of these, 59 percent (49,384) are new beneficiaries in FY2015 and 41 percent (33,902) are continuing from FY2014.

KISAN’s contract specifies a target of 30 percent for the number of beneficiaries from female-headed households. KISAN achieved 28.6 percent, just under the target.6

6 Although not explicitly stated, the rationale for KISAN’s female-headed household target is that many are headed by widows who are more vulnerable to extreme poverty. This is not always the case in rural Nepal, where many female-headed households have men working overseas and receive remittances. Since the female-headed target remains in KISAN’s contract but is not a vulnerability criterion, it is reported under rural households.

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Table 1. 4.5.2(13) Number of rural households benefiting

HH Gender Disaggregates

FY15

Target

FY15

Actual Percentage of Target

Female-Headed (female decision-maker)7 30% 28.6% 95% Male and Female Adults (M&F) 80,005 80,779 101% Adult Female No Male (FNM) 1,374 1,424 104% Male Adult No Female Adult (MNF) 621 625 101% Disaggregates Not Available 0 458 n/a Total 82,000 83,286 102%

KISAN met its vulnerable household target. In March 2015 USAID defined vulnerable households in its Mission Performance Management Plan (PMP) based on the criteria listed below, which omits female-headed households. Although it does not require disaggregates, they are presented to help characterize KISAN’s vulnerable beneficiary population. Disadvantaged groups (DAGs) include disadvantaged caste groups and ethnic and religious minorities (e.g. Dalits, Janjatis, and Muslims).

Some households meet multiple criteria. The total reflects the number of households that meet one or more of the criteria to avoid double-counting.

Table 2. 4.5.2(14) Number of vulnerable households benefiting

Vulnerability Criteria

FY15

Target

FY15

Actual Percentage of Target

Less than $1.25/day/person8 n/a 37,444 n/a Disadvantaged group n/a 55,104 n/a Victim of natural disaster n/a 4,040 n/a Number vulnerable households 55,597 56,634 102%

KISAN met all indicator-level (aggregate) targets related to the number of enterprises, organizations, and members assisted. The following tables present data for several overlapping beneficiary groups.9 These output indicators and their disaggregates are most relevant for characterizing KISAN’s beneficiaries than providing evidence of actual capacity development. For this reason, they are presented in the beneficiary section.10

7 The 28.6% is based on 23,860 of 83,286 KISAN farmers are from a female-headed household.

USAID/Nepal’s definition for “female-headed household” differs from the FTF “Adult Female No Adult Male” (FNM) disaggregate. “Female-headed” signifies that a woman has decision-making authority, which may or may not be related to the absence of her husband. The FNM disaggregate reflects the composition of the members currently residing in the household. It does not reflect who makes the decisions. For example, it is common for a rural household to have a male elder who is no longer involved in making decisions about the use of farmland. Such households may be classified M&F but still be female-headed. This information is collected on the Intake Form at the time each KISAN farmer starts training.

8 KISAN uses the individual income reported by each farmer on the project Intake Form as a proxy for income/day/person, as household income is difficult to measure.

9 For example, number of producers trained [4.5.2(7)] equals the number of “KISAN farmers”, the number of members of producer organizations assisted [4.5.2(27)], and the number of rural households benefitting [4.5.2(13)].

10 The number of MSMEs assisted to access loans [4.5.2(30)] is discussed under Access to Finance. Although FTF identifies it as an output indicator, this is an outcome indicator in the context of KISAN’s project design.

The MSME must actually receive a loan to be counted and KISAN does not disburse loans.

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Farmer training and subsequent needs based support: KISAN’s farmer mobilization and training activities were concentrated in the first year of fieldwork (FY2014) and helped create the foundation for the project’s ongoing market development work. KISAN’s Agricultural Technicians led each farmers group through a six-course training curriculum on market opportunities and improved on-farm practices. Upon group formation, course delivery was sequenced and timed to coincide with the local crop calendar and related fieldwork, so that farmers could immediately put what they learned to use in their fields. In parallel, KISAN facilitated linkages with agrovets to ensure that farmers had access to quality inputs when needed. As a result of this methodology, 100 percent of KISAN farmers adopted improved seeds in FY 2015 (to be described more fully later in this report).

Although KISAN emphasized vegetable production, technical staff also advised on cereal production at strategic points during the agricultural calendar. Now that all KISAN farmers groups have graduated from formal training, KISAN Agricultural Marketing Technicians provide ongoing needs-based assistance that reinforces training messages. In parallel, they continue to strengthen marketing linkages while building private sector capacities to provide support services to farmer.

Refer to Table 3 for the number of beneficiaries trained, Table 7 for a list of improved technologies and practices promoted in KISAN training, and the narrative for Table 4 for a description of KISAN training for private sector firms.

Table 3. 4.5.2(7) Number of individuals trained

Disaggregates

FY15

Target

FY15

Actual Percentage of Target

Type of individual Producers/Farmers 82,000 83,286 102% Government 40 26 65% Private Sector Firms 470 466 99% Gender Male 22,376 23,070 103% Female 60,134 60,708 101% Age (Farmers Only) % of Farmers 15-30 years (youth) n/a 20,088 24% 31-60 years n/a 57,281 69% 61+years n/a 5,917 7% Total 82,510 83,778 102%

KISAN Assistance to Micro, Small and Medium Enterprises (MSMEs) and Organizations:

Beyond training farmers on improved production practices, most other KISAN assistance comprised business development services (BDS) for targeted agribusinesses; for example, KISAN:

• Helped farmers access improved inputs by linking them to agrovets;

• Helped farmers increase sales by strengthening over 100 collection centers and linking farmers to buyers, including traders;

• Helped over 170 agrovets improve inventory planning and book-keeping;

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• Helped seed companies broker production contracts with over 1,300 KISAN farmers and cooperatives to improve supply chain management, increase the supply of quality seed on the market, and increase sales for farmers; and

• Worked with over 75 savings and credit cooperatives (SACCOs) and microfinance institutions (MFIs) to expand their membership/client base and loan products by linking them to KISAN’s farmers groups – most of which also function as savings groups (88 percent) as a result of KISAN support.

The following three tables capture overlapping data related to training, BDS, and other assistance.

Disaggregates vary across indicators. KISAN’s unique beneficiary groups are listed for each FTF-specified “type of organization or SMSE” disaggregate to clarify who contributes.

Table 4. 4.5.2(11) No. of food security enterprises, organizations, and associations assisted

Selected Disaggregates

FY15

Target

FY15

Actual Percentage of Target

Type of organization Private enterprises (for profit): banks and agrovets 341 192 56% Producers organizations: farmers groups 4,000 4,004 100% Trade and business associations: seed groups, traders, cooperatives, MPCs, SACCOs 110 272 247%

Disaggregates not available 0 1 n/a Water users associations, women’s groups, and CBOs 0 0 n/a

Total 4,451 4,469 100%

Table 5. 4.5.2(27) No. of members of producer organizations and CBOs assisted

Selected Disaggregates

FY15

Target

FY15

Actual Percentage of Target

Type of organization Producer organization 82,000 83,286 101.6% Non-producer CBO11 60 unknown unknown Total 82,060 83,286 101.5% Table 6. 4.5.2(37) Number of MSMEs/farmers receiving BDS

Selected Disaggregates

FY15

Target

FY15

Actual Percentage of Target

Size of MSME Micro (1-10 FTE workers) 82,607 83,752 101% Small (11-50 FTE) 4 0 0% Medium (51-100 FTE) 0 0 n/a

11 KISAN anticipated that some non-producer members of KISAN-supported MPCs would benefit. However, KISAN was unable to collect data on these beneficiaries.

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MSME Type Agricultural producer: farmer 82,000 83,286 102% Input supplier: agrovets, seed companies, agricultural business 120 180 150%

Trader: cooperatives, collection centers, MPCs 120 115 96%

Output processors: millers 13 3 23% Non-agriculture: financial institutions 88 76 86% Other 270 92 34% Total 82,611 83,752 101%

In addition to the indicators listed above, the FTF Annual Portfolio Review looks at the number of rice, maize, lentil, and vegetable farmers. This information is reported in Table 10 under Direct Beneficiaries.

Across all indicators, results reflect direct beneficiaries only. These include beneficiaries supported by KISAN staff (primary contacts), and those trained by private sector service providers supported by KISAN (secondary contacts) under an intentional cascade approach. Spontaneous spillover of improved practices to neighbors is not counted (these are indirect beneficiaries). Starting in FY2016, KISAN will count secondary contacts associated with KISAN’s private sector grantees. Although KISAN signed grant agreements in FY2015, grantees had not yet implemented sufficient activities by the end of FY2015 to measure results.

FARM-LEVEL OUTCOMES

This section looks at yields, sales, and gross margins and the technology adoption that drives yields. In addition, it looks at increased consumption of nutrient-rich vegetables as a complement to sales.

KISAN far exceeded its farm-level targets for FY2015, suggesting that targets were overly conservative. Extensive data quality assessment was conducted to rule out the possibility of data issues. The analysis shows that data across all contributing factors are within expected ranges. When KISAN set targets in August 2015, it anticipated modest increases across factors.12 In contrast, all contributing factors increased simultaneously, creating a synergistic and compounding affect.

Two factors outside of KISAN’s control explain part of the results:

Weather: Farmers benefitted from unusually favorable weather conditions in FY2015 that helped optimize yields; and

Market prices: Prices increased for most KISAN commodities, accounting for $15 million (21 percent) of the $71.8 million in incremental sales.

Three factors attributable to KISAN interventions are significant:

12 Refer to the Monitoring Systems and Performance Targets section for additional information on target-setting.

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2. Improved seeds, improved income

Access to quality certified seed in Nepal is constrained by limited production. Unique Seed Company Pvt. Ltd. plans to address this constraint with help from a KISAN grant. The company will contract farmers to grow certified seed and will hire three new technical staff to train 570 farmers on rice, maize, lentil, and vegetable seed production. The company will also offer credit to 500 farmers to buy inputs like high-quality foundation seed and tools. The company expects to increase its sales of certified seed by 10% within the first year.

Farmers will benefit from improved seed cultivation skills and yields and an assured buyer; a larger number of farmers will benefit from having access to quality seed in local markets that could improve their yields.

• Increased yields: Beyond favorable weather, yields were driven by increased adoption of improved technologies and practices, for example, 100 percent of KISAN farmers invested in improved seeds.

In addition, farmers had significantly more experience with improved practices, having completed KISAN’s full six-part training course and multiple crop cycles.

• Increased land area dedicated to vegetables: As farmers shifted to vegetable production, the average number of hectares planted in cereals per farmer decreased (maize and lentils) or increased modestly (rice 4 percent) compared to baseline. Conversely, the average number of hectares per farmer dedicated to vegetable production increased by 100%, doubling from 0.08 ha to 0.16 ha.

• More sellers selling larger volumes of vegetables: Beyond price effects, the balance of incremental sales is attributable to the increase in the number of sellers13 and sales volumes, and a shift to high-value vegetables. Low-value cereals account for $15.9 million (22 percent) of incremental sales, compared to $40.9 million (57 percent) for vegetables.

KISAN’s theory of change assumed that farmers would pilot test KISAN’s recommendations on a very small area of their plot, and then incrementally increase the number of hectares planted in vegetables using improved technologies and practices as they gained confidence. In parallel, money earned from sales would allow them to invest in better technologies. KISAN anticipated that cereal production would decrease as farmers allocate land previously planted in cereals to higher-value vegetables. FY2015 data supports our theory. The welcome surprise is that KISAN farmers progressed more rapidly than expected with respect to improved production and marketing practices. The potential pace and scale of change was not evident when KISAN set targets based on FY2014 results, because KISAN farmers had only 6.6 months on average to contribute to FY2014 – too short a timeframe to accurately predict the shape of the technology adoption/behavior change curve.

Tables 7-12 follow the production and marketing cycle outcomes, from application of improved on-farm technologies to yields, sales, and gross margins. Table 7 presents a list of improved technologies and management practices promoted by KISAN, grouped by FTF disaggregate. This identifies potential behavior changes attributable to KISAN farmer training. The two far-right columns list the number of potential technologies per FTF disaggregate in FY2014 and FY2015. KISAN condensed

13 In addition, a higher percentage of KISAN producers sold compared to FY2014. This is significant for the calculation methodology, because the sales baseline is adjusted for annual increases in the number of producers, not sellers.

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Figure 4. Through demonstrations of agro-technology, like the push row seeder pictured here, KISAN promotes adoption of labor-saving technologies that increase yields and incomes of smallholder farmers.

the list in FY2015 to collapse closely-related practices into a single practice (e.g., line sowing and raised bed cultivation, which would not occur separately).

Table 7. FY2014 to FY2015 consolidation of categories related to improved technologies and management practices

FTF Disaggregates No. in

FY2014

No. in

FY2015

Crop genetics: improved seed 2 1 Cultural practices: 1) improved nursery practice, 2) soil solarization, 3) direct seeding of cereals by machine, 4) staking 5) mulching, 6) raised bed farming, and 7) polypot/polybag and/or tray nursery

17 7

Pest management: 1) Integrated Pest Management (IPM) – lure and traps, judicial use of Class III and IV pesticides, jholmol (liquid manure); and 2) proper handling of sprayer.

5 2

Disease management: judicial use of fungicide 1 1 Soil conservation: 1) terrace improvement, and 2) use of nutrients and lime, use of bio-fertilizer. 7 2

Irrigation: 1) shallow tube well, 2) lift irrigation, 3) canal, 4) drip irrigation (micro-irrigation technology), 5) sprinklers 6 5

Water management: 1) plastic pond and 2) cement or stone masonry tank. 5 2

Climate mitigation: 1) drought or flood tolerant seed varieties and 2) plastic house or tunnel for vegetable production 2 2

Marketing: input costs recorded in logbook 3 1 Post-harvest handling: 1) super bags for grains, 2) metal seed bins, and 3) plastic crates for vegetable transportation. 8 3

Other: off-season cultivation of vegetables for sell to other eco-regions 1 1

Total Number of Potential Technologies 57 27

Application of improved technologies and management practices exceeds targets for both the number of farmers and hectares with at least one improvement by 11 to 25 percent. As noted for FY2014 results, given the large number of improved technologies and management practices in agriculture and the long history of donor interventions in the Zone of Influence, application of at least one improvement is a very low bar that obscures the actual level of behavior change among project beneficiaries.

The change in the average number of improvements provides a clearer picture.

KISAN-assisted farmers applied an average of 9.7 improved technologies or management practices in FY2015 – more than double the baseline of 4. These

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numbers underestimate adoption, as KISAN collapsed its baseline list of 58 improved technologies and practices into 28 for the FY2015 survey. A corresponding adjustment to the baseline number (reduction) will be required to fully capture project gains.

Over 76 percent of improved technologies and management practices were applied jointly by women and men. In addition, farmers applied improvements to both cereals and vegetables.

Table 8. 4.5.2(5) Number of farmers who applied improved technologies or management practices*

Selected Disaggregates Baseline FY15 Target

FY15

Actual

% of Target

Commodity Rice farmers 26,871 66,318 65,826 99% Lentil farmers 6,880 20,434 31,839 156% Maize farmers 19,273 43,232 52,553 122% Vegetable farmers 21,698 68,906 75,286 109% Gender Male farmers 18,733 33,411 9,420 n/a Female farmers 13,864 41,435 10,514 n/a Joint farmers 14 n/a n/a 63,352 n/a Technology Crop genetics 20,334 70,146 83,286 119% Cultural practices 29,629 74,483 76,539 103% Pest management 20,334 59,229 57,850 98% Disease management 5,206 34,895 52,723 151% Soil conservation 3,247 72,124 39,314 55% Irrigation 27,853 55,171 59,291 107% Water management 18,701 5,107 1,154 23% Climate mitigation 1,424 8,749 46,867 536% Marketing 1,432 34,168 29,253 86% Post-harvest handling 1,018 69,326 27,893 40% Other 0 0 9,748 n/a Total with 1 or more 32,597 74,84615 83,286 111.3%

KISAN farmers applied improved technologies and management practices to 76,629 hectares.

This number is based on FTF measurement methodology, which requires double-counting. It exceeds the number of cultivatable hectares reported by KISAN farmers in the FY2015 survey:

60,713 hectares. This latter figure is reported in Figure 1 as a better proxy for the number of hectares under improved management when communicating KISAN results to outside audiences.

14 FTFMS does not have a gender disaggregate for “joint” application. KISAN therefore divides the result for

“joint” equally between the “male” and “female” disaggregates in FTFMS. In this table, we present the three disaggregates, in accordance with the FTF Annual Portfolio Review Table (Annex K of KISAN’s M&E Plan).

15 FTFMS target is 75,006 which includes 160 other than farmers

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Table 9. 4.5.2(2) Number of hectares under improved technologies or management practices*

Disaggregates Baseline FY15 Target FY15 Actual % of Target

Commodity Rice 16,157 40,455 42,416 105% Lentil 1,994 7,278 8,138 112% Maize 4,233 9,317 10,376 111% Vegetables 1,189 4,224 11,669 276% Technology16 Crop genetics 10,585 45,616 74,223 163% Cultural practices 16,775 59,139 8,859 15% Pest management 2,201 26,171 7,212 28% Disease management 623 14,436 23,449 162% Soil conservation 16,528 57,342 8,701 15% Irrigation 10,336 31,956 47,212 148% Water management 199 1,932 203 10% Climate mitigation 410 5,177 7,818 151% Other 14,710 54,994 0 0% Total with 1 or more17

23,563 61,274 76,629 125%

16 For each technology disaggregate, hectares are counted more than once if multiple technologies are applied to the same hectare. The number of crop cycles is not considered.

17 For the “Total with 1 or more” figure, hectares are counted more than once for multiple crop cycles. The number of technologies applied is not considered.

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Yields exceed targets by more than 25 percent for five of KISAN’s eight most important commodities.

Table 10. Nepal Custom: Yield/Ha (metric tons)

KISAN Commodities Baseline FY15 Target

FY15

Actual

% of Target

No. of Direct Beneficiaries

Rice 3.49 3.56 4.51 113% 70,031 Maize 2.28 2.88 3.24 144% 58,137 Lentil (Pulses) 0.60 0.63 0.91 127% 37,983 Bitter Gourd 8.62 13.94 18.68 134% 31,198 Cabbage 15.65 21.09 26.44 125% 57,231 Cauliflower 13.07 16.93 18.49 109% 62,161 Cucumber 13.87 18.82 23.06 123% 30,854 Tomatoes 14.43 19.33 30.22 156% 44,185

Incremental sales of $71.8 million exceed targets by a factor of more than seven and average $862 per farmer.

Table 11. 4.5.2(23) Incremental sales*

Selected Disaggregates Baseline FY15 Target

FY15

Actual

% of Target

No. of Direct Beneficiaries

Total: All Commodities Total volume of sales (MT) n/a 129,052 339,081 263% n/a Total no. of direct beneficiaries18 86,176 208,942 242,600 116% 242,600

By Commodity Rice n/a $191,201 $14,175,512 7,414% 70,031 Lentil n/a $246,325 $2,240,263 909% 37,983 Maize n/a $1,055,141 $2,451,591 232% 58,137 Vegetables (16 total)19 n/a $7,860,115 $52,966,108 674% 76,449

Total $9,352,782 $71,833,475 768% 242,600

Gross margins exceed targets by 35 percent or more for seven of KISAN’s eight most important commodities. Much more important than gross margin increases for individual commodities -- KISAN has helped farmers significantly increase high-value vegetable production, which have gross margins that are 7-8 times greater than cereals. This is evident in the doubling of land dedicated to vegetables (per farmer average) and substantial increase in volume and value of vegetables sales. Tomato gross margins can be up to 14 times greater than cereals and account for 21 percent of vegetable production and 16 percent of incremental sales.

18 Beneficiaries in this table are counted for each commodity grown.

19 KISAN’s 16 target vegetables include: bitter gourd, cabbage, cauliflower, cucumber, tomatoes, eggplant, chili, long bean, bottle gourd, okra, spinach, pumpkin, carrot, onion, sponge gourd, and french bean.

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Table 12. 4.5.2(16) Gross margin/Ha*

Selected Disaggregates Baseline FY15 Target

FY15

Actual

% of Target

Rice $506 $660 $700 106% Maize $488 $579 $796 138% Lentil (pulses) $327 $391 $781 200% Bitter gourd $2,822 $4,366 $5,892 135% Cabbage $2,276 $3,014 $5,055 168% Cauliflower 3,682 $4,069 $5,883 145% Cucumber 3,961 $3,893 $5,534 142% Tomatoes 3,969 $4,636 $10,343 223%

Total consumption of nutrient-rich vegetables exceeds the target by almost double. Note, however, that KISAN’s target was set based on baseline results for only four vegetables, compared to seven vegetables in FY2015. Regardless, it is clear that production of nutrient-rich vegetables is increasing in the Zone of Influence (with the exception of carrots) and that these vegetables are either consumed by the producer, shared with neighbors, or sold in the market for consumption by other households.20

Table 13. Quantity of Nutrient-Rich Vegetables Set Aside for Home Consumption (MT)

Commodities Baseline FY15 Target

FY15

Actual

% of Target

Consumption Bitter gourd 504 1,410 1,713 121% Cabbage 1,233 2,143 5,236 244% Cauliflower 1,471 2,977 5,534 186% Okra 456 1,151 1,343 117% Carrots 23 -- 20 n/a Spinach 36 -- 37 n/a Pumpkin 229 -- 772 n/a Total 7,681 14,656 191% Beneficiaries % Increase Bitter gourd 11,212 -- 31,045 177% Cabbage 16,036 -- 57,231 257% Cauliflower 18,023 -- 62,008 244% Okra 10,212 -- 15,438 51% Carrots 1,207 -- 306 -75% Spinach 3,065 -- 653 -79% Pumpkin 8,893 -- 9,839 11%

PRIVATE SECTOR AND ORGANIZATIONAL CAPACITY BUILDING

20 Post-production losses may also occur, an issue that KISAN will assess in supplementary analysis of survey results as part of project learning.

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3. Meeting urban demands

Urban demand for poultry and livestock is increasing, creating unmet demand for quality feed. With a KISAN grant, Pyuthan Feeds Firm plans to double its operational capacity and increase locally sourced maize from 40 MT to 670 MT and increase soya capacity as well. To achieve these increases, Pyuthan will contract 450 farmers and establish an extension team of two agricultural technicians, five traders, and 20 lead farmers who will advise 600 farmers on maize and soya cultivation using DADO-approved, high-yield seed varieties.

KISAN’s capacity building outcome indicators measure enterprise expansion (increased revenues), value of private sector investment, application of improved technologies and management practices, and gender and social inclusion. These outcomes are driven by training and other assistance provided to farmers, firms, and organizations reported earlier in the Beneficiary section. This section focuses on evidence of actual increased capacities.

KISAN exceeded its target for the number of new or expanded MSMEs. This is a new indicator for KISAN in FY2015 from the USAID/Nepal PMP. New MSMEs established as a result of KISAN assistance include farmers and agrovets who sold products for the first time in FY2015. Expanded MSMEs include farmers and other MSMEs that increased the value of sales by 10 percent or more since FY2014. The low target (611 MSMEs) mistakenly omits farmers from the micro-enterprise disaggregate. For FY2015 reporting, KISAN assumes that the 75,020 farmers who sold high-value vegetables is a conservative estimate of the number of farmers who increased sales by at least 10 percent.21 This is 90 percent of KISAN farmers. An additional 464 microenterprises also increased sales by at least 10 percent.

Table 14. Nepal 2.2-1: Number of MSMSs established and/or expanded

Selected Disaggregates FY15 Target FY15 Actual % of Target

Size of MSME Micro (1-10 FTE workers) -- 75,484 -- Small (11-50 FTE) -- 0 -- Medium (51-100 FTE) -- 0 -- Gender of Owner Male -- 20,766 -- Female -- 54,718 -- Joint -- 0 -- Age of Owner 15-30 years (youth) -- 12,493 -- 31-60 years -- 53,234 -- 61+years -- 9,757 -- Disadvantaged Group Dalit -- 8,676 -- Janajati -- 32,714 --

21 The FY2015 survey did not collect information on FY2014 sales, as incremental sales are measured against the baseline for FTF, not against the prior reporting period. The data shows that average total sales per farmer increased 362 percent since FY2014 (from $248 to $1,143) and average vegetable sales per vegetable farmer increased 657 percent since FY2014 (from $91 to $693). Although it is likely that almost all 83,286 KISAN farmers achieved higher sales, KISAN focuses on vegetable sellers (75,020) to report a conservative, lower-limit estimate.

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4. Climate smart technology improves resiliency

Vegetable production can significantly increase smallholder incomes; however, it requires reliable access to water. Unpredictable weather and the high cost of irrigation often preclude smallholders from this technology.

Sital Thopa Sichai Prabidhi Udhyog plans to change that through a KISAN grant. As a micro-irrigation technology manufacturer and dealer, STU plans on adding 13 new dealers linked to Community Based Agents who will work on a commission basis. They will be trained on logistics, assembling, maintenance, and basic finance and in turn will train 10,000 farmers on MIT and vegetable cultivation. STU expects to sell an additional 10,000 MIT systems and will make credit available for at least 5,000 farmers to purchase MITs.

Table 14. Nepal 2.2-1: Number of MSMSs established and/or expanded

Selected Disaggregates FY15 Target FY15 Actual % of Target

Muslim/Madhesi -- 8,000 -- Other -- 2 -- Total 611 75,484 n/a

KISAN exceeded its target for the value of private sector investment by more than double, for a total of over $1.6 million in capital investment. This target is relatively low because most KISAN-supported MSMEs make working capital investments, such as agricultural inputs, rather than capital investments. The capital investments reported below reflect investment in land/building, Vehicle, Furniture, Machinery, Computers, Tools and Equipment.

Table 15. 4.5.2(38) Value of Private Sector Investment (USD)*

Selected Disaggregates Baseline FY15

Target

FY15

Actual % of

Target Total n/a $777,514 $1,616,024 208%

KISAN exceeded its target for the number of enterprises and organizations that applied an improved technology or management practice by 10 percent. This number is largely driven by farmers groups who have started to save as a group. Other examples for KISAN beneficiaries include:

• Cooperatives: prepared business plans, improved accounting practices, improved credit flow, and proper seed storage.

• Collection Centers and Marketing Planning Committees: held market-led production planning meetings, provided marketing extension services to members, wrote a business plan, posted a Market Information Board (wholesale and retail prices, planting times, etc.), and established links to three or more traders or wholesale markets.

• Agrovets: Practiced safe distribution, use, and disposal of pesticides and fungicides; installed a first aid box; took health and hygiene precautions (soap and water for hand-washing); stocked sand for pesticide spills; conducted demonstrations or training for farmers; and properly stored agro-chemicals.

• Financial Institutions: Expanded access to wholesale credit; increased share capital, deposit, and financial resources; improved audit system, and improved transparency.

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• Cross-cutting: improved information technology, improved record-keeping, improved budgeting and financial management, and new or improved business plan.

Table 16. 4.5.2(42) Number of Enterprises, Producers Organizations, and CBOs that applied Improved Technologies or Management Practices*

Selected Disaggregates Baseline FY15 Target

FY15

Actual

% of Target

Type of Organization Private enterprises n/a 273 172 63% Producers organizations n/a 3,200 3,527 110% Trade and business associations n/a 88 186 211% WUAs, womens groups, and CBOs n/a 0 0 0 Total 3,561 3,885 109%

Fifty-seven percent of leadership positions in KISAN-supported community groups are filled by women or members of disadvantaged groups. In August 2015, USAID/Nepal requested that KISAN adopt a new cross-cutting governance indicator related to gender and social inclusion (GESI) in leadership positions in “community management entities”. These are broadly defined to include community groups engaged in private sector activities. KISAN set targets starting in FY2016.

Although not required, FY2015 results are reported below, broken down by organization type. Of KISAN’s 4,004 farmers groups, 54 percent have a female chairperson.22

Table 17. (Nepal 1.3.2-1) Percent of leadership positions filled by a woman or member of a vulnerable group

Organization Type Total Leaders23

GESI

Leaders

GESI

Percentage

Number of Women that are Chair of Farmer Groups No. of Farmer Group chairperson 4,004

Women as the Chair of the FG 2,181 54% Number of Women and DAG members in Executive Committee or Board of Organizations No. of Executive Committee/Board Members 2,655

Women and/or DAG24 1,634 62%

Totals/Percentage 6,659 3,815 57%

22 No data is available on the percentage of chairpersons who are members of disadvantaged groups, since

KISAN collected data on group members at the time groups were formed, before this indicator was assigned, and no new groups are being formed at this point in the project cycle.

23 Although not requested in the USAID/Nepal Performance Indicator Reference Sheet (PIRS) for this indicator, KISAN has provided data for the total number of leadership positions and number leadership positions filled by women or members of disadvantaged groups to ensure that the Mission can roll-up project-level results across its program portfolio. Percentage figures alone cannot be aggregated.

24 This figure avoids double-counting individuals who are both female and a member of a DAG.

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ACCESS TO FINANCE

KISAN exceeded targets for both loan indicators by roughly 3 to 4 times. KISAN’s access to finance indicators focus on loans and exclude other financial services such as savings. The two indicators measure different types of loans:

“Value of loans” measures the value of cash loans from formal financial institutions to KISAN beneficiaries that are invested in agriculture25.

“Assisted to access loans” measures the number of cash and in-kind loans, to KISAN beneficiaries, from a formal or informal financial institution, for any purpose.

Table 18. 4.5.2(29) Value of Agriculture and Rural Loans (formal)

Disaggregates Baseline FY15 Target

FY15

Actual % of Target

Type of loan recipient

Producers $486,605 $1,710,123 $6,658,270 389% Local traders/assemblers:

cooperatives, agrovets, traders $91,379 $203,609 $593,376 291%

Wholesalers/processor: seed companies, cereal and feed mills $18,684 $60,000 $316,105 527%

Others $70,947 $1,973,732 0 0%

Gender of recipient

Male $230,802 $296,060 $4,831,066 1,632% Female $59,593 $394,747 $2,736,685 693% Joint $377,220 $1,282,925 $0 0%

Total $667,615 $1,973,732 $7,567,751 383%

Over half of KISAN farmers received a loan. KISAN’s efforts to increase access to informal credit has focused on helping farmers groups function as savings groups. This is a critical first step in helping farmers become credit-worthy so that they can eventually access formal sources of credit. In addition, KISAN has worked with agrovets to provide credit for agricultural inputs. KISAN’s efforts to increase access to formal sources of credit have focused on helping SACCOs and MFIs expand their membership/client base by linking them to KISAN’s farmers groups and wholesale credit.

KISAN’s FY2014 farmer survey asked participants an open-ended question about their top three constraints to increased yields and sales. Only 3 percent of respondents identified lack of access to credit. KISAN suspected that this response may reflect a cultural stigma related to borrowing. The data in this section suggests that farmers have access to credit, do in fact borrow, and that the number of KISAN farmers who have received loans has increased almost 10-fold since baseline (while the number of KISAN farmers has increased less than 3-fold).

25 Although the formal definition refers to loans attributable to KISAN for only KISAN commodities, it is not possible to disaggregate loans by just KISAN commodities as neither farming households nor organizations are able to isolate what commodities loan proceeds were used for. Attribution also is difficult to determine. As loan growth is directly related to sales growth and sales growth is attributable to KISAN, all agricultural loans were included.

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5. National Seed Summit

The Government of Nepal’s Ministry of Agricultural Development, in close coordination with development partners and other relevant stakeholders including KISAN, held the National Seed Summit in September 2015. The Summit brought together more than 150 public, private, and donor stakeholders to identify how policy makers, the regulatory environment, and private sector actors can come together to accelerate seed sector development in Nepal. For instance, one commitment is to establish a Seed Industry Innovation Lab for technical assistance to relevant public and private sector actors.

Table 19. 4.5.2(30) No. of MSMEs/farmers assisted to access loans (formal and informal)

Disaggregates Baseline FY15 Target FY15 Actual % of Target

Size of MSME

Micro 4,931 17,818 48,440 272%

Small 0 4 0 0%

Medium 0 0 0 n/a

Gender of owner

Male 1,705 2,673 15,441 578% Female 440 3,567 32,652 915% Joint 2,786 11,582 347 3% Total 4,931 17,822 48,440 272%

III. PROJECT MANAGEMENT

A. COORDINATION AND LEVERAGE

KISAN links beneficiaries to other funding opportunities to help communities leverage KISAN trainings by adopting improved techniques and technologies that enhance agriculture production.

This approach has established an environment for multi-stakeholder coordination, and minimized duplication of donor-funded activities in common working areas. Collaborative activities are carried out jointly, with KISAN providing technical assistance and partners contributing resources in kind or cash.