Success Story: Increasing Fine Rice Production and Incomes in Nepal

The initiative began in 2020 with the partnership between Nain Rice Mill and USAID's KISAN II project. Nain Rice Mill, located in Kailali district, identified a market opportunity for processed fine rice but struggled to meet demand due to local farmers producing mostly coarse rice. The Rice Mill Model (RMM) implemented by KISAN II established linkages with 2,100 farmers, providing them with technical services and a buy-back guarantee to encourage them to grow fine rice varieties. The mill upgraded its milling capacity by 50 percent and built strong connections with the government to further scale fine rice production. In 2020, the mill helped 800 more farmers grow fine rice on 300 hectares through the Joint Rice Intervention Program (JRIP), a collaboration between KISAN II partners, the federal government, and provincial government. Implementation details included the establishment of fine rice demonstration plots and provision of agri-machinery subsidies benefiting 202 farmers, 89 of whom were female. A 20 percent subsidy support from USAID's Nepal Seed and Fertilizer project enabled the mill to purchase a tractor and trailer, facilitating the collection of 625 metric tons of rice directly from farmers' fields. The mill also procured about 350 metric tons of fine rice from farmers in 2021. The Government of Nepal (GON) began rolling out programs to replicate the RMM, with Sudurpaschim Province initiating an incentive program to promote fine rice and partnering with Nain Rice Mill to pay associated farmers NRs. 5 (USD 0.04) extra per kilogram of fine rice. The province also supported the mill to build a 2,200 metric ton capacity warehouse. In 2021, the mill collaborated with Ghodaghodi Municipality to implement a GON-supported fine rice program that linked farmers with agri-inputs suppliers, helped 180 farmers install irrigation schemes, and paid a premium for fine rice. Farmers like Kavita Badayak increased fine rice production by working closely with Nain Rice Mill, boosting her annual sales by 144 percent and her income by 177 percent from 2020 to 2021. Kavita attributed her success to technical support from Nain Rice Mill, irrigation support from KISAN II, and machinery support from the Agriculture Knowledge Center (AKC). She increased her cultivation area from 0.17 hectares in 2019 to 2.03 hectares in 2022, resulting in a 145 percent increase in fine rice production and sales, and a 173 percent increase in income. By working closely with local farmers and government, Nain Rice Mill now sources locally produced fine rice to meet growing demand, thus increasing the mill's income. Owner Natthu Ram shared that after implementing JRIP and GON-initiated programs, his overall rice procurement doubled from 625 metric tons in 2020 to 1,300 metric tons in 2021. With more farmers producing and supplying fine rice after partnering with KISAN II, his overall sales increased by 83 percent. In 2022, Natthu will further increase his rice purchases and continue motivating and supporting farmers to cultivate fine rice to cater to the growing domestic market demand. The KISAN II project has helped increase farmers' rice yields and sales by providing targeted support to over 25,757 rice producers, 16,046 of whom were female, through 15 rice mill partners like Nain Rice Mill. From 2018 through 2022, participating farmers increased yields by 39 percent and annual sales by 216 percent.