» Agriculture Cooperative in Kapilbastu - A Case of Institutional Development

Aug 08, 2017
Agriculture Cooperative in Kapilbastu - A Case of Institutional Development
The case study on how PAF is supporting communities for Institutional Development.

PAF began its program in Kapilbastu district in 2004.  One of the poorest Village Development Committees (VDCs) bordering with India, Bijuwa, was selected as program VDC a year later.  After a due process of social mobilization, PAF formed 21 community organizations in the VDC and has been helping the poor in carrying out different income generation and community infrastructure related sub projects for the last seven years.  A total of NPRs 22,735,095 (US$ 267,000) has been invested in the VDC, out of which PAF contributed 77 percent and the rest was contributed by the communities in cash and kind.  The total amount of fund invested in income generation is currently revolving within the community in the form of revolving fund.


In 2006, these COs formed a VDC-level network comprising of a representative from each CO.  The network was formed as an umbrella organization of all COs in the VDC to establish coordination and linkages with local bodies and NGOs, facilitate monitoring, provide feedback to CO members, and resolve any disputes.  Additionally, the COs also teamed-up to form three CO federations to carry out activities like animal insurance, irrigation and construction of access road.


In January 2009, the CO Network, in consultation with all COs, established a cooperative named “Pragatisil Agricultural Cooperatives Ltd.” and registered it with the Division Cooperatives Office, Taulihawa.  Currently, a total of 250 members from 21 COs have a general share in the cooperative.  The share members make a monthly saving of NPRs 50 (US$ 0.6) and a combined a monthly saving of NPRs 25,000 (US$ 295).  Each member receives 6 percent interest from their savings in the cooperative while the cooperative provides a maximum loan of NPRs 30, 000 (US$ 350) for income generation activities and other works.


Through the cooperative, the CO members have been able to diversify the choice of their activities and are engaged in activities such as remittance handling, fishery, and commercial vegetable farming in leased land, among others.  The cooperative has invested NPRs 845, 000 (US$ 10,000) on loans and is also running a provisional store in Bijuwa.  By providing remittance handling service to the locales and non-CO members, people no longer have to spend time and energy to go to the district headquarters.  The cooperative was also able to fetch a net profit of NPRs 150,000 (US$ 1,760) and NPRs 300,000 (US$ 3,530) from wheat/paddy farming and vegetable farming respectively.  In addition, the cooperative is selling fertilizers to the local farmers in reasonable rates.  This has been particularly helpful in addressing fertilizer scarcity during peak seasons of fertilizer demand.  The weekly Haat Bazzar organized by the cooperative provides locals an opportunity to sell their products.


In response to the local demand, the cooperative, along with the District Land Protection Office, has constructed a small dam to control flooding during the rainy season.  The cooperative has also established an English-medium boarding school in Bijuwa to provide quality education to the children.  In partnership with PACT, another World Bank-funded project, the cooperative has started onion production as module commercial farming, benefitting 250 poor households directly.  The cooperative was awarded this PACT project, amounting to Rs 5.2 million (US$ 62,000) through national competition.


Against all these success, the cooperative is also facing challenges of meeting the growing aspiration and need of community members to carry out different businesses and trade with limited available funding.  Capacity building of the management team is also another area that needs to be strengthened as the cooperative is planning to expand its coverage.


In a span of few years, the cooperative has established itself as one of the the best community based cooperatives in the district, and is often visited by community-based groups, and local organizations.