Himachal: ADB Approves USD 130 Mn to Boost Horticulture Agribusinesses

On June 8, 2023, the Government of India and the Asian Development Bank (ADB) officially signed a loan agreement worth USD 130 million. The loan aims to enhance agricultural productivity, improve access to irrigation, and promote horticulture agribusinesses in the state of Himachal Pradesh. The Ministry of Finance, Government of India, announced the signing of the agreement.

Representatives from both parties, Rajat Kumar Mishra, Additional Secretary, Department of Economic Affairs, Ministry of Finance, for the Government of India, and Takeo Konishi, Country Director of ADB's India Resident Mission, for ADB, signed the Himachal Pradesh Subtropical Horticulture, Irrigation, and Value Addition Project agreement.

Mishra expressed his optimism about the project, stating that the initiative would create opportunities for crop diversification, climate adaptation, and promote economic and social development in the southern areas of Himachal Pradesh. These regions, previously reliant on temperate horticulture in the northern areas, will benefit from improved subtropical horticulture. Additionally, supporting horticulture value chains will contribute to the country's development and food security.

The project is an extension of a pilot program previously funded by ADB's project readiness facility. The pilot successfully demonstrated subtropical horticulture production over 200 hectares of land and developed the draft water user association (WUA) act and the draft state horticulture development strategy, according to Konishi.

The project interventions are expected to benefit at least 15,000 farm households across seven districts of Himachal Pradesh, namely Bilaspur, Hamirpur, Kangra, Mandi, Sirmour, Solan, and Una. These households have either ceased farming or reduced their farming areas due to inadequate irrigation facilities and crop damage caused by wild and stray animals.

To address these challenges, the project will focus on improving on-farm irrigation and water management in approximately 6,000 hectares of farmland. This will involve rehabilitating existing irrigation schemes and constructing new ones. The capacity of Water User Associations (WUAs) for micro-irrigation management will also be strengthened through collaborative efforts between the state's Jal Shakti Vibhag (Water Resources Department) and the Department of Horticulture (DOH).

Furthermore, the project aims to establish an ecosystem that enhances farmers' access to subtropical horticulture agribusiness markets. Farmers will be organized into cluster-wide community horticulture production and marketing associations (CHPMAs) and district-wide CHPMA cooperative societies. The state-wide agribusiness development will be led by a farmer producer company (FPC) as the apex institution. The FPC will oversee the development of business plans, agribusiness promotion, and the design of value-addition facilities such as sorting and packaging facilities, storage, and collection centers. It will also provide assistance to CHPMAs in managing these facilities.

Additionally, the project will modernize both public and private subtropical horticulture nursery facilities to improve plant health. It will also enhance beneficiary farmers' access to information and communication technologies and other digital agri-technology systems. These technological advancements will provide real-time farm advisories and aid in efficient CHPMA management.