A Booming Rice Mill Boosts Profits and Benefits Farmers in Nepal

February 28, 2018
KISAN/Winrock InternationalArvind Kumar Shah (background, far left) is working with over 1000 small-scale farmers, offering them a buy-back guarantee on harvests.

Dev Bhar Rice Mill has been operating for more than 20 years in mid-western Nepal. But until recently, it was only able to meet about 30 percent of the local demand for rice.

“Due to a lack of technical knowledge and low-quality seed, we were mostly dependent upon importing about 70 percent of our raw rice from India to cover the local market needs,” said Arvind Kumar Shah, the owner of Dev Bhar Rice Mill in Nepal’s Banke district.

Feed the Future is helping Shah and his company change that. A Feed the Future project in the area  teaches agribusinesses like Dev Bhar Rice Mill how to provide farmers with extension services, including agricultural training and improved production techniques so they can increase their production capacity. The more rice farmers grow, the more the mill can process.

After working with the project, Shah provided training, regular site visits, and guidance on good agricultural practices to 1,000 farmers to improve farming practices in rice, lentil and mung bean production to  better manage their crops and increase yields.

The improvements didn’t stop there – with support from the project’s grants program, Dev Bhar Rice Mill upgraded its machinery, boosted its manufacturing capacity and ensured a role for producers in the local agriculture market. With modernized machinery, the mill expanded fine rice production and threshing capacity for paddy rice, increasing its processing capacity in two years from enough rice to feed 11,000 people to enough to feed nearly 21,000 people. The Banke district has reduced rice imports from India by 30 percent. Local demand continues to grow, providing farmers with an opportunity to produce and sell more rice, thereby improving their ability to make a living.

Dev Bhar Rice Mill’s upgraded machinery also brought better business opportunities to farmers, who are seeing increased profitability from growing more rice. For example, a local food company selected Dev Bhar Rice Mill for a six-month service contract to thresh 200 metric tons of paddy rice in early 2017.

Feed the Future also worked strategically to facilitate direct connections between farmers and traders to create win-win relationships: Farmers get fair prices, and millers maintain sufficient stock.

"Before I started working with [Feed the Future], I had no idea who my local suppliers were," Shah said. "But now, I engage with them directly; I visit their homes and share their meals. It's good for the community and good for my business.”

The Feed the Future Nepal Knowledge-based Integrated Sustainable Agriculture and Nutrition (KISAN) project, is funded by USAID and works with the Government of Nepal to sustainably improve food security and increase incomes through integrated agriculture activities. KISAN builds the capacity of private sector and community-based organizations to improve the availability of quality farm inputs; increase access to credit, extension and other services; and improve the competitiveness and efficiency of processors and other buyers.