Project Outline

The overview of the components of Himachal Pradesh Crop Diversification Promotion Project (Phase II) is as given below.
Table: Summary of Project Components

Project Objective

The objective of the Project is to promote sustainable crop diversification to high value crops and enhance farmer’s bargaining power by development of production infrastructures such as irrigation facilities and access farm roads, farmers support and institutional development as well as marketing development, thereby contributing to improvement of farmer’s income in all districts of Himachal Pradesh.

Project Approach

(1) Crop Diversification for Raising the Income of Farmers
To achieve the Project Goal which is to raise the income of farmers by improving the profitability of agriculture, the Project promotes crop diversification. Crop diversification is a two-fold approach; from the macro perspective, being a hilly state food security is a crucial issue for Himachal Pradesh. Therefore the productivity of cereals is increased at first, and the farm land is diverted from cereals to profitable vegetables without decreasing the production of cereals. At micro level, farmers are empowered with marketing skills as well as cultivation skills, and encouraged to divert their cultivation for better profit realization by promotion of off season cultivation, introducing high value crop and/or changing way of post-harvest handling and marketing.

(1) Crop Diversification Scenario
The target number of farmers in the 306 subprojects is 25,500, and the target irrigation area is 7,933 ha. The farmland targeted by the project is about 35% of the farmland owned by the above farmers. The area is 0.35ha / farmer on average. The scenario of the crop diversification plan in the target area aimed at by the Project is as follows.

Table 1: Crop Diversification Scenario

2) Strategic Crop

The Project identifies nine strategic crops. Strategic crops are defined as crops which can be cultivated in the agro ecological conditions, and farmers can easily find their markets for selling. While the Project promotes these strategic crops, the Project also empowers farmers with market skills as well as cultivation skills so they will be able to decide which crop to grow based on their judgement for augmentation of their income. The list of strategic crops is as under.

Table 2-a: Evaluation of Existing Crop for Strategic Crop

Remarks:         Profitability:                ◎=very good、〇=good,   △=not bad
Market Need:            ◎=very good、〇=good、△=not bad
Cultivation skill: ◎= skill required、〇=popular
Source: JICA Survey Team

Based on the above evaluation of the existing crop, agro-ecological zone-wise strategic crops are summarized as follows.

Table 2-b: Agro-ecological Zone-wise Strategic Vegetables

(2) Empowerment of Farmers Organization for Marketing
As the new agricultural ordinances comes into force, Himachal Pradesh, which is dominated by smallholders as mentioned above, will have opportunities for trade development under liberalization of the agriculture marketing.
In addition to strengthening farmers’ production capacity through crop diversification, the Project will encourage farmers to organize Farmer Producer Organization (FPO) to obtain larger bargaining power for marketing. One FPO is supposed to comprise 300 to 500 motivated farmers. It is assumed that at most 10 FPOs will be formed under the Project.
The Project will support FPOs in terms of i) business management skills, ii) infrastructure development and iii) financial access. As an independent business entity, FPOs prepare their business plan, namely Supply Chain and Market Development Plan with business skills development support by the Project. Based on the plan collection centers are established. Collection centers will function as an interface between distribution and production and be utilized for post-harvest processing. The Project will also provide loans to FPOs for covering operational cost.

Overall Project Framework
The main activities included in each component are organized as shown in the figure below.