Challenges
The livestock sector is an integral part of rural livelihoods and the economy in Nepal. Agriculture makes up 24 percent of Nepal¡¯s GDP, half of which comes from livestock. More than 52 percent of Nepal¡¯s population relies on agriculture and livestock for employment and income generation. A large proportion of the labor for the sector is provided by women but they have limited asset ownership and access to resources. Women are often excluded from decision-making and get fewer trainings and economic opportunities.
For long, the livestock sector grappled with absence of legal and policy frameworks exclusively defining the sectoral governance that led to weak institutional capacity to provide quality veterinary outreach services. Additionally, a shortage of trained human resources¡ªsuch as skilled ultrasound technicians, artificial insemination experts, and lab technicians at Livestock Service Centers and Veterinary Hospital and Livestock Service Expert Centers¡ªalong with insufficient diagnostic facilities, has impacted the capacity of these centers to provide adequate services to livestock farmers.
Despite the growing demand of livestock products such as milk and meat, productivity remains low due to several challenges, including issues around feeding, animal husbandry practices, and breeding. Farmers face significant losses from delays in detecting and treating animal diseases, along with inadequate cold chain infrastructure for vaccine storage, modern equipment and diagnosis techniques in the veterinary field. Apart from that, the inadequacy of public-private partnerships for enhanced delivery of extension services, absence of an international certification mechanism for livestock product exports, and insufficient trade facilitation are impeding the sector from reaching its full potential.
Approach
In the backdrop of these issues, the World Bank-financed supported the government of Nepal in formulating and implementing conducive policies to strengthen the livestock sector, promoting innovation, and improving the animal health and disease outbreak response. The project helped small farms and businesses improve livestock productivity, quality, and build resilience.
The project helped improve the country¡¯s veterinary services with modern equipment and diagnostic techniques trainings for service providers, and worked with 229 Farmers Field Schools (FFS) to educate farmers on herd health and climate-resilient practices focusing on goat farming and dairy.
The project strengthened extension services to modernize the feed-base development, such as promotion of adoption of silage-making technology and use of seed processing and mineral mixture plants for nutrient-rich feed. This contributed to building resilience of livestock production systems and lowering the GHG emission.
The project promoted gender equity by prioritizing grants for farmer groups led by women or with more female members. It also required women¡¯s participation in FFSs and business training to boost their role in decision-making throughout the project. As a result, 58.88% of FFS participants were women.
The project also supported development of the private sector actors such as farmers¡¯ cooperatives and organizations, as well as agri-enterprises. The project¡¯s unique matching grant modality on a business plan¡ª30% finance from third-party banks and financial institutions (BFIs), 20% from beneficiaries, and 50% from the project ¡ª promoted a sense of ownership among value chain actors. The involvement of BFIs helped ease the challenges farmers face in accessing credit and securing additional funding needed to commercialize the livestock sector, fostering trust in the process. This engagement also opened opportunities for future credit expansion, benefiting farmers in the agricultural and livestock sectors.
The project was strategically aligned with the four pillars - governance, productivity, commercialization, and competitiveness - of the government¡¯s Agricultural Development Strategy (ADS, 2015-2035), making its outcomes and lessons scalable and adaptable at the national level.
Results
Despite the significant impact of the COVID-19 pandemic on the project's activities in 2020 and 2021, it successfully achieved the following outcomes during its implementation period from January 2018 to June 2024.
? The project benefited more than 235,000 farmers, of which 42% were women. Milk productivity increased by 80% and sales value of milk and goat meat increased by 90% from 2018 to 2024.
? NLSIP supported the government of Nepal in formulating key policies including National Animal Health Policy, National Animal Breeding Policy, National Infectious Animal Disease Control Act, and National Animal Welfare Act. These policies are specifically dedicated to creating an enabling regulatory environment for modernizing the livestock sector.
? The project-supported national vaccination program significantly reduced animal deaths from Foot and Mouth Disease (FMD) and Peste des Petits Ruminants (PPR) by 63% and 88% during the project period through 16 million and 45.5 million vaccinations, respectively. It also supported the government in a rapid response to Lumpy Skin Disease with over one million vaccines, preventing major financial losses for farmers.
? The project built key infrastructure, including seven cold rooms across seven provinces with the combined capacity to store five million vaccine doses. During the COVID-19 pandemic, the project's cold chain facilities became crucial in providing vaccines, as public health institutes lacked the necessary storage capacity for large quantities of COVID vaccines.
? The project boosted genetic improvement by enhancing the capacity of the National Livestock Breeding Office, importing six bulls from the United States that produced 100,000 semen doses. It also improved local bull sourcing through a Pedigree Performance Recording Scheme (PPRS) and through establishment of breeding herds.
? Through the matching grant program, the project mobilized US$18.6 million private capital in total, both from the beneficiaries as well as third party financial institutions. This is one of largest private capital mobilizations through the World Bank¡¯s livestock sector portfolio.
? The project strengthened market linkages by establishing and operating 54 infrastructures, including livestock markets, Livestock Service Centers, and seed processing facilities. Nepal's first Pashmina Processing Center was established, helping farmers in Mustang and Dolpa to market their products internationally. In 2023, these products were exhibited and well-received at London Fashion Week.
? A high-tech biosafety level-2 lab for animal pathogens was built to certify goat meat as free from FMD, enabling international exports. Once accredited, it will boost Nepal¡¯s livestock production and trade potential.
Looking Ahead
The project has played a critical role in building the foundational works for modernizing the sector, which has significant opportunities for growth and contributing towards increased revenues, especially through exports of livestock products. To capitalize on the sector¡¯s potential, addressing the increased demand for livestock products, building access to new markets, and a robust national animal health system (AHS) are essential. An effective AHS is also vital for deploying a holistic approach to address key challenges including food safety, climate change adaptation and mitigation, exports, and pandemic prevention.
