Ganesh Subedi

KATHMANDU: In Nepal, news of the misuse of subsidies provided by various agencies and the government is widespread. However, the subsidized sub-projects under the Nepal Livestock Sector Innovation Project (NLSIP), run by the Ministry of Agriculture with World Bank-subsidized loan investment, stand out as different. This project, often criticized for granting loans from donors, has been seen as successful and exemplary compared to other grant projects.

Deen Bandhu Integrated Agricultural Farm, located in Kapilvastu Municipality-11 in Kapilvastu District, is one of the farms that received a subsidy from the project. Currently, the farm, run by local Hari Prasad Paudel, has 32 cattle, including 9 cows and 23 buffaloes. Paudel, who once sold 150 liters of milk daily, now sells 80 liters daily due to health issues but remains happy with the project.

He expressed satisfaction with the income from his milk business, noting that his connection with the project has improved animal health, reduced expenses, and provided professional knowledge, leading to a monthly income of Rs 200,000. Paudel received a subsidy of Rs 2.2 million from the project, which he used to build a well-organized shed and install machinery and equipment.

Paudel is one example among many. More than 200 farmers have joined this project. Despite the successes, farmers have raised concerns about bank loans, subsidy amounts, market access, and marketing challenges.

A nationwide shortage of agricultural laborers has compounded problems for livestock farmers, who struggle with the lack of workers despite no issues with milk consumption once a market is found. "Connecting with NLSIP has made the business satisfactory," said Paudel. "Half of the earnings make up for the expenses and the other half is the profit, but you have to be able to work."

He added, "The younger generation is leaving, there are no workers, and those remaining in the country are not interested in animal husbandry. If you get sick, you have to sell the animal. Perhaps we are the last generation to adopt the agricultural profession in Nepal."

Organizations and farms operating sub-projects have reported problems due to the mandatory provision of 30% loan requirement from financial institutions under the project's tripartite investment model. During media monitoring organized by the project last week, farmers indicated they had to take loans to receive subsidies but faced issues due to delay in release of the amount by the financer.

Project monitoring and evaluation officer Ishwari Prasad Khatiwada noted that some applicants who were not selected filed a court case, halting project payments. However, the release of payment resumed following the court's interim order not to stop ongoing project payments.

Khatiwada explained that involving financial institutions ensures regular monitoring and stability, making the loan mandatory. According to the sub-project manager, while cooperation with banks is easier for institutional and private farms, sub-project groups struggle to secure loans.

Most of the cooperatives and private farm owners running sub-projects with grants from the project complained about the requirement to take bank loans despite having 50% of the needed investment. Tika Neupane, president of Sanakisan Krishi Sahakari Ltd., stated, "We had enough capital for our share members, but the project required a loan from a financial institution. Since all members did not have collateral, we took a bank loan and provided it as surety."