| Abstract | The hill region of Nepal has the highest percentage of people under poverty line among her physiographic regions. The discussion in this study revolved around two important research questions regarding poverty reduction in the region, i) how can adaptive capacity of farm households against vulnerability to drought be built-up and ii) what are the ways to improve the access of marginal farmers to agricultural marketing ? Climate change related drought in recent years has emerged as a source of household level vulnerability in rainfed hill agriculture of the country. Hill farmers are not uniform in possession of adaptive capacity against the vulnerability, and the government also has limited resources to build-up the capacity of all these farmers. This calls for prioritising both the adaptation indicators and beneficiary farmers on the basis of their vulnerability. Similarly, country's social structure demands a pro-poor marketing policy in order to attain economic growth with equity where most of the producer farmers are small and marginal, which underscores the need of identifying issues for proper and socially inclusive marketing.
In order to address above research questions, the objectives of the study were i) to identify and prioritise key indicators of farm household level vulnerability to drought, ii) to assign hill farm households into different vulnerability categories and discuss important adaptation interventions for each category, iii) to determine the effects of gender, ethnicity and livelihood status of farmers on access to production of high-value low-volume agricultural commodities, and finally iv) to determine the effects of livelihood status of farmers on access to marketing of high-value low-volume agricultural commodities in the hills of Nepal. Information was generated from focus group meeting, trader's record, tracking of marketing channels, Participatory Rural Appraisal and household survey of 158 farm households during August 2008-January 2009 conducted in three hill villages. The Principal Component Analysis was used to identify and prioritise the vulnerability indicators, whereas, Cluster Analysis was used to classify farmers into different vulnerability groups. Marketing analysis was based on descriptive statistics, and content analysis. The uncorrelated indicators identified and arranged from highest to lowest priority were access to land, access to irrigation, employment diversification, access to market, crop-livestock integration, access to social networks and access to agricultural training. Three clusters were derived from cluster analysis with the use of these seven indicators as inputs. Based on the value of these indicators, clusters were named as highly vulnerable, moderately vulnerable and low vulnerable consisting of 63%, 18% and 19% of total households respectively. Results showed that low access to land, low employment diversification, and low access to markets, social networks and agricultural training were the constraints of highly vulnerable farms. Similarly, low access to irrigation, market, low crop-livestock integration, and low access to social networks were the constraints of moderately vulnerable farms. Low crop-livestock integration appeared as a single constraint for low vulnerable farms. On the basis of underlying characteristics, increasing cropping intensities with high-value-low-volume crops, promotion of agro-based processing industries and vegetable seed production which can improve rural employment and income were recommended for highly vulnerable farm households. Similarly, integration of agro-forestry, promotion of livestock animals, and land stabilization and use of less sensitive crops to moisture like ginger, turmeric, peanuts, and pulses were suggested for moderately vulnerable farms. Finally, to develop the adaptive capacity of low vulnerable farms, promotion of dairy animals was proposed.
iv
Marketing analysis revealed that major marketed high value crops were mandarin, and different summer and winter vegetables in the study site. Adoption of these crops was found to vary according to gender of farm manager and livelihood status of the household. Main adopters of these crops were male farmers and high livelihood status farmers. Also, male farmers and higher livelihood status farmers had higher gross income from the sale. This all showed that the production and income earned there from was mainly owned by better-off and male farmers. Roadside collectors, orchard buyers, farmers' cooperative, village based retailers and direct consumers were buyers of mandarin from farmers. Roadside collectors were those buyers who keep collection centres at the road nearby the production areas and the purchase the fruit from farmers, whereas, orchard buyers buy pre-ripe fruits of the whole orchard and harvest later. It was interesting to observe that marketing networks followed varied with livelihood status of farmers. Main buyers of mandarin produced by low livelihood status farmers were roadside collectors, village based retailers and local consumers which provided immediate cash, but the price was low. Whereas high livelihood status farmers sold their mandarin to orchard buyers and farmers' cooperative who retained the fruit in tree itself until higher price prevailed in the market. Low livelihood status farmers had weak bargaining power, had small size of scattered orchard and were subjected to forced sale at lower prices due to the immediate cash need of the family. Price spread analysis of mandarin marketing revealed that farmers' receipt, marketing cost and marketing margin shared respectively 45, 34.5 and 20.5 per cent of price paid by consumer in case of high livelihood status farmers. In case of low livelihood status farmers, it was 40, 29.5 and 30.5 per cent respectively. However, there was no any organised marketing of vegetables produced in periurban Kathmandu where small scale vegetable marketing followed either farmer-retailer-consumer or farmer-consumer model. This study has made two contributions to the existing knowledge base. First, since the current literature on vulnerability has got inadequate attention with uncertainty in its measurement at household level, this research proposes a methodological framework using multivariate independence techniques for its objective measurement. Second, the study validated that neoliberal economic theory does not guarantee equity in production and marketing of agricultural crops in a society of individuals with diversity in gender and livelihood status. This study showed that demand of produces, and availability of infrastructure, technology and facilities were only the necessary conditions for poverty reduction in Nepalese hill context. The sufficient condition is the appropriate institutions that can ensure inclusion of rural woman and marginal farmers in production and marketing process.
The findings of this research have the following implications for poverty reduction in the hills of Nepal: i) prioritising agricultural research and development based on the vulnerability assessment framework ensures efficiency in poverty reduction, and ii) developing inclusive cooperative model of marketing with the establishment of revolving fund system for advance payment to marginal farmers in order to enable them to retain fruit until price will be higher in the market. It also helps organise marketing for scattered production in small and scattered patches of marginal and small farmers across village where the present businessmen are less interested in. Application of these two strategies can be expected to reduce hill poverty substantially. |