The Nepalese agricultural sector is dominated by the production of basic staple grains. About 82 percent of cultivated land is planted with cereal crops, but basic staple grains contribute only about 30 percent of agricultural Gross Domestic Product (DFP). Since the share of high-value crops in total cultivated area is still small, the desired process of agricultural diversification is struggling to be noticed at the aggregate level. The reliance on subsistence level agriculture hinders the growth and contributes less towards fighting poverty and food insecurity. Trade is subject to gluts and price crashes due to lack of information and services in the local market. Storage and transport facilities are poorly developed; and quality and value enhancement through grading and processing is not well conceptualized. In the absence of adequate marketing channels and opportunities, the incentive and financial capacity to invest in improved farm, value addition and processing techniques, water management or modern inputs is limited.
PACT aims to improve the competitiveness of smallholder farmers and agribusinesses within selected commodity value chains. The project supports the value chain actors by providing competitive matching grants based on eligible proposals from private entrepreneurs, farmer groups, cooperatives, traders and exporters, for technology support, agribusiness development, post-harvest facilities and market linkages. Matching grant contribution of 25-40 percent of the total agreed amount, depending upon the nature of application, has to come from grant recipient. Several steps of screening followed by detailed field verification take place before a grant is awarded. Results targets and milestones, which have to be achieved prior to the release of each installment, are set for each sub project selected. Overall, PACT’s support to the grant recipients is primarily cash contribution, with some technical support including for ensuring environmental and safeguards compliance, supervision and monitoring, as needed.
Furthermore, PACT has been supporting the rehabilitation of Kalimati fruits and vegetable market, and has also initiated the support for the construction of Fruit and Floriculture wholesale market in Kathmandu. Rehabilitation and reconstruction of several other fruits, vegetables, fisheries and livestock wholesale markets in Central, Eastern and Western development regions of Nepal has also been initiated. Through PACT's Agribusiness Innovation Center, the project connects emerging agro entrepreneurs and facilitates investments in agribusiness sector. This entails directly working with early stage enterprises and facilitation of their growth through a number of services like shared facilities and equipment, business development, technology, finance, mentoring and networking.
Additionally, the project aims to reduce existing obstacles to agriculture and food trade thereby increasing the ability of farmers and agribusiness to respond to sanitary and phytosanitary (SPS) and food-quality standards to meet domestic and international market requirements.