Sources Sought Notice USAID Agriculture Transformation Activity.pdf

SOURCES SOUGHT NOTICE

This is a Sources Sought Notice issued by the U.S. Agency for International Development (USAID/Nepal). The purpose of this notice is to gauge interest from qualified organizations to implement the “USAID Agriculture Transformation” activity. The goal of this activity is to catalyze transformation of Nepal’s agricultural sector required for inclusive economic growth.

Further details about the activity can be found in the Concept Note in Annex A.

This notice is not a Request for Proposal and in no way commits USAID for an award. USAID does not intend to award a contract based solely on submissions in response to this Sources Sought Notice, nor does it intend to pay for any costs incurred in response to this Notice.

USAID/Nepal seeks to determine the capabilities and interest of qualified organizations. While USAID/Nepal has not determined the most appropriate contract vehicle, use of General Services Administration (GSA) One Acquisition Solution for Integrated Services (OASIS)is under consideration. As such, USAID/Nepal would also like to understand the qualifications and interest from GSA OASIS Unrestricted and Small Business Pool 1 holders.

CAPABILITY STATEMENT REQUIREMENTS

Organizations interested in being considered should submit information supporting their experience, expertise, and capabilities in undertaking similar work as follows:

1. Organization Information: Name, email address, address, GSA OASIS Pool holder details (if applicable), small business status (if applicable).

2. Maximum three-page capability statement describing your organization’s ability to execute the “Requested Services” detailed in the above section.

3. One-page table (see sample format in Annex B) that contains a list of up to five past or current projects/activities that details your organization’s experience of performing efforts of similar size, scope, and complexity as the requirements detailed in the above “Request Services” section.

Responses must be received no later than COB Wednesday, March 30, 2022. These submissions must be submitted by email ONLY to kathmanduoaaexchange@usaid.gov and Robyn Bertholon, Contracting Officer, at rbertholon@usaid.gov. In the subject line of the email write: Agriculture Transformation - Sources Sought Notice. Fax and hand carried submissions will not be accepted. Phone inquiries will not be entertained.

In accordance with FAR 15.201(e), responses to this Sources Sought Notice are not offers and cannot be accepted by the Government to form a binding contract. The result of this market research will contribute to determining the method of procurement. No feedback or evaluations will be provided to companies regarding their submissions. Interested parties who consider themselves qualified to implement the above-listed activity are invited to submit a response.

Annex A: Concept paper

Concept paper

USAID Agriculture Transformation

Country context Investment in Nepal’s agricultural productivity is crucial for both overall economic growth and poverty reduction. The agriculture sector is the country’s largest employer, providing livelihoods for nearly 74 percent of all Nepali workers1. In spite of this, agriculture’s contribution to GDP remains low, at around 28.6 percent in 2019, and the majority of agricultural laborers–around 70 percent–are subsistence producers23. Many factors contribute to the poor performance of agriculture, including inadequate delivery of technologies and support services to farmers, armed conflict, labor shortages in rural areas, political instability, limited investment in agriculture from both public and private sector–and most recently, the coronavirus pandemic. As a result of these challenges, Nepal’s agriculture sector has become less competitive in domestic and export markets.

Following nearly two decades of low and erratic growth, Nepal’s economy grew by an average of 7.75 percent from 2017-2019. However, COVID-19 has reversed this trend, with a negative GDP growth rate of -2% recorded in 20204. The nationwide lockdown from March to July 2020 and multiple lockdowns in different geographical locations that followed limited movement and suspended most economic activities. The resultant economic shock sent ripples through the agriculture sector and allied economic segments. Limitations on the normal operation of agricultural value chains crippled the distribution of vegetables, dairy, and other agriculture products, including cereals and livestock. Lack of adequate supply of fertilizers, pesticides, and seeds due to limited movement and decrease in economic activities affected the supply side of the agriculture value chain.

To address these problems, USAID seeks to accelerate an agricultural transformation in Nepal.

This transformation, characterized by the transition from subsistence farming to diversified, commercial farming, will be achieved through targeted efforts to rapidly enhance farm productivity and increase market competitiveness. Constraints to the realization of the agriculture transformation agenda can be grouped into two broad categories: a) those related to investment and growth, such as, low level of labor productivity, technological innovations, inadequate infrastructure, low competitiveness; and b) those related to the inclusiveness of growth, including unequal distribution of opportunities to improve agricultural productivity.

1 Nepal Labor Force Survey II 2008, CBS 2 World Bank, World Development Indicators 3 FAO. 2019. Country gender assessment of agriculture and the rural sector in Nepal. Kathmandu.76 pp 4 World Bank Development Indicators: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=NP

Purpose and Activity Objectives

USAID Agriculture Transformation seeks to catalyze a transformation in Nepal’s agricultural sector that will lay the foundation for broad based and inclusive economic growth.

Alignment with the Government of Nepal (GON)’s strategy

The activity will contribute to the GON’s long-term vision for agricultural development as expressed in the GON’s “Agriculture Development Strategy - 2015-2035” by advancing Governance, Productivity, Competitiveness, and Profitable Commercialization. The activity will build the strategic partnership with the government at all three tiers to build capacity to replicate business models and best practices that promote agricultural transformation, which is a central goal of GON’s agricultural development agenda.

Alignment with USAID’s strategic goals

In line with Nepal’s vision of becoming a middle-income country by 2030, USAID’s Country Development Cooperation Strategy (CDCS) aims to help Nepal become a self-reliant, prosperous, and inclusive nation. USAID Agriculture Transformation will contribute to the achievement of USAID/Nepal’s CDCS Development Objective 2: Broad-based and inclusive economic growth fostered, and specifically to Intermediate Result (IR) 2.1: Inclusive, private sector driven growth in agriculture promoted; IR 2.3: Economic Governance & Business Enabling Environment Improved; and IR 2.4: Marginalized & Vulnerable Communities Integrated into Market Systems. To achieve these higher-level goals, the CDCS includes federalism, inclusion, and resilience in its overarching strategic approach.

Objective 1: Agricultural productivity, competitiveness, and diversification increased. This objective will be achieved by advancing the commercial interests of firms through improved business operations and trade that pulls smallholder farmers into sustainable supplier relationships. When type, volume and quality of production do not meet market demand, lead firms are prompted to import agricultural products. Technological innovations and best practices are imperative to achieve overall agricultural productivity and leading to enhancing competitiveness. Therefore, the activity will focus on transfer of technologies appropriate to marginal lands in the Terai and hills of the Feed the Future (FTF) Zone of Influence (ZOI) including but not limited to farm mechanizations, weather forecasting systems, and crop insurance schemes.

Expected outputs under Objective 1:

● Output 1.1 Commercial linkages between farm production and agro-based industries enhanced

● Output 1.2 Agro-enterprise opportunities expanded

● Output 1.3 Access to markets and trade strengthened

● Output 1.4 Trade in domestic and regional markets expanded

Objective 2: Enabling environment for private sector investment in agriculture and equitable access to market systems improved. A policy environment for inclusive agribusiness promotion must engage the three tiers of government, private sector, civil societies, academic institutions, and other actors such as farmer groups/cooperatives and women, youth and marginalized groups.

The activity will assess the barriers in governance and implementation of existing policies on agribusiness development; should plan to gather evidence for improving the enabling environment for value chain efficiency and inclusivity that contributes to crowding-in private investments in agro-enterprises. The activity will build consensus on policy development and policy implementation, by coordinating with well-informed and well-engaged stakeholders including development partners who are seeking policy change in similar identified policy areas.

Expected outputs under Objective 2:

● Output 2.1: Evidence-based policy strengthening and regulatory framework developed

● Output 2.2: Sector institutions’ responsiveness to stakeholder needs developed

● Output 2.3: Policies governing commercialization in the agriculture sector optimized for modernization and growth

Objective 3: Climate and economic resilience of women, youth, and marginalized communities enhanced: This objective will focus on building resilience to climatic and economic shocks and stresses among women, youth and members of marginalized communities. A focus on women is particularly important to agricultural transformation because the economic contributions of female farmers in Nepal is so significant. The activity will integrate marginalized communities through literacy, life skills, and entrepreneurial training that enables women, youth, disadvantaged castes, and ethnic minorities to access agricultural and nutrition interventions. It will build economic empowerment by removing barriers to livelihood diversification, and enhance climate adaptation and mitigation through the promotion of climate smart agriculture, and by supporting planning processes to protect selected value chains.

Expected outputs under Objective 3:

● Output 3.1 Enhanced literacy and business skills

● Output 3.2 Economic empowerment for women and socially marginalized groups

● Output 3.3 Promote Climate Smart Agricultural Practices

● Output 3.4: Promote resilience to shocks and stresses

Objective 4: Capacity of national agricultural research institutions and extension systems strengthened: The activity will build the capacity of the national research system to inform and advance Nepal’s agricultural market. The activity will also link research institutions to extension systems to apply this research at farms and firms. Most Nepali companies do not significantly invest in their own private agricultural research, so public research activities that are aligned with market demand are critical to transform the sector. Evidence from USAID’s past FTF activities confirms that extension services provided by the private sector leads to increased sales, expanded clientele, and repeat business– as well as higher incomes for farmers. Therefore, the activity will increase private sector engagement in agriculture value chain development, including extension services to the farmers.

Expected outputs under Objective 4:

● Output 4.1 Capacity of national research system on targeted value chains enhanced

● Output 4.2 Linkage between research and extension strengthened with increased role of private sector

Commodity Selection and Geographic Focus

Commodity selection: The activity will focus on fine rice, industrial maize, lentils, high-value vegetables, and goat value chains.

Geographic focus: The activity will focus implementation in the ZOI, or in the 25 districts of following four provinces:

● Bagmati Province: Kavrepalanchowk, Sindhupalchowk, Nuwakot and Makawanpur

● Lumbini Province: Kapilvastu, Palpa, Arghakhhanchi, Gulmi, Banke, Bardiya,

● Karnali Province: Surkhet, Dailekh, Jajarkot, Dang, Salyan, Rukum, Rolpa, Pyuthan.

● Sudurpaschim Province: Baitadi, Kailali, Kanchanpur, Doti, Accham, Dadeldhura, Annex B: Past Performance Table

SN Name of Activity Country Years (From - To)

Brief Activity Description