Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010Labour Cost and Overall Production Cost: Transporting honey from the farm to the processing unit orwholesaler is the major marketing cost for each item, constituting as much as 50 per cent of the total marketingcost. The high transport cost is related to the small size of consignments. According to GTZ (2008), overallproduction costs of honey are high compared to China and India.Level of Processing Technology: Processing technology used in the country is still rather primitive, butchanges are taking place. There is almost no processing of honey in the A. cerana belt. Honey is squeezedout of the cut comb by pressing and then strained with a cloth. In the A. mellifera belt, the beekeepers usehoney extractors and honey straining devices. In Chitwan, Nepal Beekeepers’ Association (NBA) has installed amedium-sized honey processing plant. In Kathmandu, Gandaki Bee Concern has imported a honey processingplant of European standard. Other smaller enterprises have also developed simple processing units andtreating smaller lots to meet their sales.Cost and Quality of Infrastructure: Though some infrastructures like roads and electricity are developed inthe beekeeping areas, they are not adequate. The sector is hindered by insufficient road infrastructures in theinterior hill areas to transfer beehives for ‘grazing’ to the hill forest. This has limited exporters’ capability toexport even if honey remains a viable product. Additionally, quality monitoring, checking, and controlling ofhoney production and export by the government authority is lacking in Nepal.Efficiency of Domestic Supporting Industries: Upstream enterprises supplying inputs like beehives arescattered and large in number and small in size, particularly the localized beehive manufacturer or suppliers.Their efficiency is high, but improvements in beehives are needed. The main downstream industry buyinghoney as input is the manufacturers of Ayurvedic medicines. There is one large buyer, viz. Dabur Nepal, whileother traditional buyers are very small and scattered in urban centres throughout Nepal.Domestic Demand: The major use of honey in Nepal is its consumption as a food item. It is used in traditionalways in medicine as well as for religious purposes. It makes an important ingredient and an additive inAyurvedic and Homeopathic medicines and treatments. The total annual demand for honey in the domesticmarket is estimated to be above 300 MT, and is increasing over the years.Government Initiatives and Donor Involvement: As more and more farmers are attracted towards beekeepingand its development, a number of organizations in both private and public sectors, including NGOs and INGOs,are involved in providing training as well as extension services. The major organizations are: BeekeepingDevelopment Section, Godavari (Under MoAC/DoA), DADOs, Nepal Agricultural Research Council (NARC),District Forest Offices, MEDEP (UNDP/HMG, Nepal), Winrock International, AEC/FNCCI, GTZ, ICIMOD, Api-Net, Nepal, Nepal Beekeepers’ Associations/Cooperatives, Local NGOs, SNV, CARE/Nepal, SCF/US. Besides,organizations like DANIDA, Heifer International, CECI, and JICA are also supporting beekeeping programmesby organizing different activities. Most of these organizations provide hives with colony and equipment atsubsidized rate and provide training to farmers. The government’s role in the sector has been in the form ofsubsidizing hives and tools, developing a national standard and coordinating donor activities. The governmenthas been providing a 25 per cent cost subsidy on beehives and 50 per cent on other tools, equipment andservices. The Agriculture Perspective Plan adopted by the government has given high priority to honey as ahigh value crop to be promoted in Nepal. However, donors admit that honey production costs are high andvolumes currently too low to compete successfully in the world market (GTZ 2008). Donor-funded programmesare currently not targeted at directly promoting exports, but mainly in helping small farmers to produce andsell for the local market, which seems to make sense, given the probably high costs to establish or reviveexports to third countries and the small value of overall production.Prospect for Domestic Supply Conditions: The Federation of Nepal Beekeepers Association estimates thepotential production of 20,000 MT of honey per year, and a study by GTZ estimates the potential at 10,000MT, but we are not able to verify whether these numbers make sense from a commercial point of view.NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT37