Agriculture ministry to establish basket fund

Kathmandu, August 9

The Ministry of Agricultural Development (MoAD) is preparing to establish a trust fund in order to channelise the assistance provided by development partners to the priority areas in agriculture sector. The trust fund is a basket fund, where the development partners contribute their assistance and the government also provides counterpart fund.

The MoAD will mobilise the trust fund in priority areas where the government has to intervene for the robust growth of the agricultural sector. This will prevent the haphazard mobilisation of the donors’ assistance because the government mutually with the development partners will design the projects and select the project areas, which is expected to avoid duplication of programmes.

The MoAD has said that all the capital expenses of the ministry will be mobilised through the trust fund. The Agriculture Development Strategy (ADS) — a 20-year vision document with 10-year action plan — has envisioned developing a trust fund to mobilise the resources in a focused way to achieve the government’s target in agriculture sector.

A couple of examples where the government has implemented basket fund is in School Sector Reform Programme and Nepal Health Sector Programme so far.

The MoAD has started framing the operation modality of the trust fund. All the programmes under the MoAD will be operated through the trust fund from the near future, according to Shankar Sapkota, joint spokesperson of MoAD.

“The trust fund is expected to be instrumental in mobilising resources in an organised manner.”

Due to lack of proper coordination, various projects run on foreign assistance under the ministry have been concentrated in particular areas and there is duplication of programmes and beneficiaries.

The MoAD started implementing ADS from this fiscal and all the programmes run under the MoAD are designed as per the theme of ADS. The ADS has laid focus on four major areas to bring transformative changes in the agriculture sector. ADS has envisaged food and nutrition safety, proper use of agriculture technology and awareness among producers (farmers), value chain development and innovative agro enterprise development.

ADS aims to mobilise Rs 50 billion every year — Rs 44.5 billion from the government and development partners and the remaining from the private sector and cooperatives. It has discouraged foreign investment in the production sector to safeguard smallholder farmers. However, foreign investment has been encouraged in agro processing, market development and branding, and marketing of agro products.

Meanwhile, the MoAD is preparing to curb the operation cost of the projects. The projects run under the ministry have to maintain operation cost not exceeding 30 per cent of their total project cost. It is also preparing to regulate this through a ministerial-level decision, as per Sapkota.