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FEASIBILITY STUDY OF COFFEE PRODUCTION IN SURKHET DISTRIC

Technical Report · June 2011

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Report on

FEASIBILITY STUDY OF COFFEE PRODUCTION

IN SURKHET DISTRICT

Submitted to:
Project for Agriculture Commercialization and Trade
Ministry of Agriculture and Co-operatives
Maharajgunj, Kathmandu, Nepal

Prepared by:
Debendra Shrestha
Chiranjivi Adhikari
Coffee and Tea Development Section
Kirtipur

June, 2011

+
Introduction

Coffee is an important cash crop for millions of farmers in more than 50 countries. Coffee is the
second largest commodity in world trade after petroleum with an annual trading volume of US$
40 billion. Brazil is the largest producers of coffee and America is the largest consumer (Dhakal,
2005). Farmers grew coffee out of curiosity. From the mid-seventies, coffee was grown as a
commercial crop and nurseries were also established for commercial purposes. During mid-
eighties, the coffee production in some districts was quite high. However, during late eighties
marketing problems and poor returns from the crop forced many farmers to cut down their
mature trees (Shrestha, 2004).

The total area coverage of coffee was 1515.06 ha in 2010 and total productive area was 687.15
ha. Similarly the production of parchment was 558.26 mt, Number of groups involved was 739,
numbers of farmers involved was 21098, and number of cooperatives was 69 (CTDS,
2010).There are three species of coffee grown commercially in the world, arabica, robusta and
liberica. Only arabica species is cultivated on the hilly conditions of Nepal. The crop is grown
elsewhere at an altitude range of 1500 m asl where rainfall is moderate between 1500-2200 mm,
20 – 250C temperature, 70% to 80% relative humidity daily10-12 hours sunshine and no frosting.
Initially, it was concentrated mainly in the Western region of the country such as Gulmi,
Syangja, Palpa, however, in recent years, it has been spreading many parts of the country due to
its monetary attraction (Shrestha, 2005). In Nepal, coffee is one of the lucrative cash crops
grown sporadically in some parts of the country. Available statistics indicate coffee is cultivated
in more than 41 districts; however, in commercial scale it is limited only in 24 districts of Nepal
(CTDS, 2010). Coffee is one of the important cash generative crops in the mid hills of Nepal.
Coffee, being an important high value crops, is mostly grown in marginal areas with minimum
use of improved technologies. In Nepal majority of coffee is wet processed, which is considered
best method for good quality coffee. Around 65 percent of Nepalese coffee is exported and the
rest amount is processed and supplied in the domestic market. Majority of coffee is exported
through personal contact of traders rather than institutionalized marketing channel. Therefore,
there is gap between what policies have stated and what actually implemented in the real fields
for the promotion of coffee (Tiwari, 2010).

Agriculture Perspective Plan (APP, 1995) envisages to make farmers withdraw from
environmentally fragile land and concentrate on stable farm-land through commodity crops of
high market value. This would lead to a paradigm shift from subsistence oriented farming to
market oriented farming through a land use system based upon sound ecological principles and
conducive agricultural policies (Shrestha & Shrestha, 2004). Coffee farming in Nepal is proven
as promising due to the production potential and the quality, fragile nature of soil, and
appropriate climate in mid hills (AEC, 2004).It also holds a special place as a foreign exchange
earner for our country. Now, in the world market, the demand of organic coffee with reduced
amount of caffeine, growing in same climate from the high hill region of Nepal (Specialty
coffee) is more and more (Dhakal, 2005). The income and employment opportunities of the
farmers can be raised by commercialization and by optimally utilizing the available resources for
production, processing and marketing operation for sustainable development (Gurung, 1999).

The return from coffee cultivation takes 3-4 years so the farmers do not want to take risk
although the return from the coffee production is higher than the other crops especially in the
hills. Most of the coffee growing areas are mid hills where there is lack of transportation
facilities, and the coffee production is not commercialized yet so there is high transportation cost
because of the scattered and subsistence production. Many cooperatives are working on these
areas but they are not able to extend their market and they do only little in commercialization and
the proper marketing. The demand of coffee is higher and also have good price in the
international market but the Nepalese farmers are getting poor price due to the lack of processing
facilities and the proper marketing channel. By utilizing the comparative resource advantage,
Nepal would compete for quality coffee production. However, the volume of production and
associated production cost accompanied with the marketing management is the most important
prerequisite to be a competitive in the international market (Shrestha, 2004).

Rationale of the study

Coffee can be successfully integrated into existing cropping/farming systems of the smallholder
farmers to generate additional income without sacrificing existing crops even marginal lands
with additional benefit of soil conservation and positive environmental impact. Farmers can
benefit by producing coffee as it can generate on-farm employment and income opportunities.
Coffee is a high value crop, which can be stored by the producers for a longer time as dry
cherries with simple on-farm processing practices. In the present context of massive
unemployment and movement of the rural youth to the foreign countries from rural areas, the
coffee sector can provide the employment opportunities for the youth, men and women. The
coffee sector is in need of solid institutional, technical and organizational mechanisms for
sustainable development of the sector through increased productivity and quality of coffee with
expanded domestic market and exploration of international market. There is a need to search for
alternative crops and farming practices to make agriculture more rewarding and beneficial. In
this respect, coffee, though emerging at miniscule scale, is indicating to be highly rewarding and
lucrative. Nepal has suitable climatic and soil conditions to produce good quality coffee
especially above 800 meters above sea level. Coffee produced in the mountains and labeled as
highland coffee. Rightly process coffee has right characteristics for marketing as ‘specialty
coffee’ in the international markets. Therefore, the findings of this study will help to expand the
area for coffee production. The demand of coffee is increasing but the area of production and
productivity is growing very little so there is necessary to expand the area under coffee
production in Nepal.

 
Objectives
Broad objectives

• To provide the basis for increasing the production of coffee through the expansion of
area.
Specific objectives
• To identify the suitable area for coffee production in Surkhet district.
• To know the local socioeconomic condition and agro-climatic condition of Surkhet
district suitable for coffee production.
• To collect the farmers perceptions and expectation for coffee production in Surkhet
district.

Methodology

During the study, following methodology was adopted to collect necessary data, information,
facts and figures:

a. Lines agency meeting

b. Interview with the farmers
c. Questionnaire, observation, group discussion,
d. Field visit and
e. Website search, literature review

Itinerary and activities

Date Day Itinerary Task performed

10/02/2068 Tuesday KTM to Surkhet En-route to Surkhet from KTM

11/02/2068 Wednesday Surkhet Meeting with DADO,DDC,DCD,DAC,SCCI

12/02/2068 Thursday Awolching Enroute to Awolching

13/02/2068 Friday Awolching Meeting with the farmers, teachers and site
visit in Awolching and Matella

14/02/2068 Saturday Surkhet Enroute to Surkhet from Awolching

15/02/2068 Sunday Khphalbot Meeting with the local farmers of Kaphalbot

VDC and site visit

16/02/2068 Monday Surkhet to Ktm En-route to KTM from

Visiting persons:

Debendra Shrestha, Agriculture Extension Officer

Chiranjivi Adhikari, Technical Assistant

Coffee and Tea Development Section/ Department of Agriculture/ Ministry of Agriculture and
Cooperatives

Supported from PACT.

Activities

• Met with Acting Senior Agriculture Development Officer, DADO Surkhet, Mr. Ram
Prasad Gautam and discuss about the coffee production in Surkhet district and consulted
about the probable areas for coffee production and needs for coffee production.

• Met with Ex- Vice-Chairman of District Agriculture Cooperative of Surkhet and current
chairman of Bhadrajyoti Krishi Sahakari Sanstha, Uttarganga-8, Mr. Laxmi Prasad
Gautam and discuss about the agro-climatic and Socioeconomic condition of the Surkhet
district and the took the affection and queries about the coffee production in Surkhet
district.

• Met with the Planning officer of District Development Committee of Surkhet district, Mr.
Dhruba Acharya and discuss about the inclusion of coffee production in the future district
plan.

• Met with the Executive Officer of Surkhet Chamber of Commerce and Industries, Mr.
Mitra Raj Pyakurel and discuss about the involvement in the marketing and production of
coffee production and current situation of the commerce and road access in the rural areas
of Surkhet district.

• Met with the Chief of the Cooperative Division of Surkhet, Mr. Anand Saru and discuss
about the existing cooperative of the agriculture working on the district and extension of
these cooperative into coffee cooperative.

• Visited the Gadhi, Ratu, Garpan, Satakhani, Matela, Awolching, Kaphalkot VDC of
Surkhet district.

• Discussed with the farmers, local people of Awolching, Matella and Satakhani VDC and
collected the expectations, interests and the perceptions about the coffee production in the
Surkhet and also collected the information about the local socioeconomic condition,
cropping system, local practices, local forest trees for shade, irrigation condition, road
access and the availability of labor.
Description of Surkhet district

Surkhet is one of the district of Bheri zone in mid-western development region of Nepal. Its total
area is 249016 ha. It has 11 ilaka, 3 electoral regions, 50 VDC and 1 Municipality. It has diverse
agro-climatic and socioeconomic condition. Surkhet lies between 28º 20’ to 28º 58’north latitude
and 80º 59’ to 82º 2’east longitude. It starts from the lowest 198m to highest 2367m above sea
level. It is surrounded by Salyan district in the east, Jajarkot and Dailekh in the north, Doti and
Achham in the west, Bardiya and Kailali in the south. The total cultivated land in Surkhet district
is 37444 ha and forest covers 178361ha.

Suitable   VDCs for coffee production in surkhet district 
                                                           N

  GAM 
LA
W E
  
BETAN BIJ  A
  U  R  A CHHAPRE
GUTHU
S
R
BIDYAPUR U
A
H SALKOT
C
  TGAUN
GHA Y
A
BI
A

;s]t
B POKHARIKANDA
      TOPANI
TA
KUNATHARI

Dad o      GADHI   T  A  N  MA  TE  L  A

RATUDEVIS
TARANGA LEKGAUN
Rak  a  m a  s c  AW  A  L  CH  I N  G 
A   AN 
GARP
  N  I B  A  SGHORETA
  sc B.N.N.P. UT RA
Sah
 a   re  a    R
B
PA   MKA  KAPHALKOT AGRIGAUN
A
Ram  gha  t   as  c UTTARGANGAJ   NI  
SATAKHA
RA   JE   
N A 
Awolc  h   in
 g  a  s
 c
  HARIHARPUR NE  TA  A BAJEDICHAUR
H  S  
Kuna
  tha   r  i   a s
 c
   LATIKOILI KALYAN  A T
A
R   KHA NIKHOLA
E
R  H
     I AU  DANDAKHALI
R R RAKAM
A P A
Bab  i y
 a  c h a  ur as  c
   RAMGHAT  S K
H  H  GUM H
C  H   H
A
A  E 
LEKHPARAJUL D  L A
H  M K
A KAPRICHAUR
D  U
H
MAINT   A  RA NA   G
  H  U   
CHHINC U  DHARAPANI
K SAHARE
EL
H 
E 
M MALARANI
20 0 20 40 Kilomet er  s

Agro-climatic condition of Surkhet district

Topography and soil

Hilly areas cover 84% and valley cover16% of Surkhet district and it includes Siwalik,
Mahabharat range, Dun valley. Most of land have slope between 3 to 30 % slope. There is very
much diversity in soil type but in most of the hilly areas, clay and loamy are predominant. Ph of
soil differs from 5.9 to 8.
Temperature

The average maximum temperature of Surkhet district 28.4 ºC was and average minimum
temperature was 15.75 ºC in the year before. The temperature is increasing in the recent years.

Surkhet , Maximum Temperature

29.5
29.0
28.5
28.0
C
O

27.5
27.0
26.5
26.0
1973 1977 1981 1985 1989 1993 1997 2001 2005 2009
Year
 
 

Surkhet, Mimimum Temperature

16.5

16.0

15.5
OC

15.0

14.5

14.0
1977 1981 1985 1989 1993 1997 2001 2005 2009
Year
 
(Source: Karnali West Rapti Basin Office, Surkhet) 
Rainfall

Rainfall is the main source of water in the hilly areas of surkhet. The average rainfall of previous
year was 1625mm.

Annual Rainfall, Surkhet

2200

2000

1800
mm

1600

1400

1200

1000
1975 1979 1983 1987 1991 1995 1999 2003 2007
Ye ar
 
(Source: Karnali West Rapti Basin Office, Surkhet)

Suitable VDC of Surkhet for coffee production

Gadhi, Ratu, Garpan, Satakhani, Matela, Awolching, Pokharikada, Lekhgaun, Lekhparjul,

Chhapre, Malarani, Kaphalkot, Dharapani. The areas can be extended to the other VDC after the
study

Study at Awolching

Total Cultivated land Type of land

Type of soil
(Ropani) Irrigated  un‐irrigated 
360 55 305 Clay

Do you know about coffee land use (ropani )

Fruits
yes
cereal crops
No
Cash crops

                       
.Major cultivated crops in the study area

Maize, Finger Millet, Chilly, Zinger, Bean, Soybean,

Major agro-forestry trees in the study area

Laligurans, Rainch, Kaphal, Koiralo, Naspati, Khaniyo, Katahar, Katush, Burush, Tiyu, Bhimal

Human resource

Surkhet has a total population of 317859 and total number of farmers is 52553. Sources of income came
from off-farm and farming activities. Some off farm sources of income are: construction, employment,
remittance, some were engaged in farming of crops (zinger, vegetable, corn and rice) and raising animals.
Most of the youth are going for foreign employment and there are only the women, children and the aged
people and there is no availability of other income generating activities other than involving in
agriculture.

Issues

• Farmers are interested for coffee production but the introduction in to a totally new area;
no agencies want to take risk.

Recommendations/ Future outlooks

• This feasibility study just took the picture of the hilly areas of Surkhet district and
especially the area from 800 to 1500 masl. As we took the condition of climate, soil,
elevation and also the other socioeconomic condition, some areas of the recommended
VDC are suitable for coffee production. At the beginning, the trial should be done in
different elevation and locality of the recommended VDC. And at the current, the
provision of shade trees is impossible so, the planting should be done in the areas having
the existing shade trees.

• Coffee group will be formed at the local level and demand collection for coffee
production by the Agriculture Service Center.

• In the beginning years, small number of Sapling should be distributed through District
Agriculture Development office providing subsidy on transport of saplings to the
Ratanangla Bazzar of Surkhet district and funding for the 2000 sapling should be done by
District Development Committee. In the following year, subsidy on coffee seed should be
given to the interested farmers for coffee nursery establishment. For the first year,
Saplings will be available at District Coffee Cooperative, Gulmi and transportation of
saplings from Gulmi to Surkhet will be done by District Coffee Cooperative, Gulmi.

• The sapling should be plant under the supervision of DADO, Surkhet and under existing
shade tree. Frequent supervision will be done from Coffee and Tea Development Section.
 • The yield potential should be studied by the local group under the supervision of DADO
if the yield high then planting should be done in large scale and plantation of shade trees
should be done.

• After 3- 4 years of planting pulping machine will be provided by Coffee and Tea
Development Section, Kirtipur.

• Agriculture Research Center, Dailekh can be developed as the resource center for coffee
production.

• Training for the Horticulture Development Officer and the JTAs will be provided by the
Coffee and Tea Development Section.

• Support should be provided from PACT for the empowerment of the coffee growing
group and the local cooperative.

• Surkhet Chamber of Commerce and Industries should involve in the marketing of coffee
and establishment of the processing center.

• Surkhet district can be developed as the center of ring of coffee production as production
area can be extend to the district attached with Surkhet district: Jajarkot, Dailekh, Salyan,
Achham, Doti.

• This report just took the picture of suitable places for coffee production in a very short
time and it is necessary to take the scan of the whole district for further extension of
coffee production.

Points must be considered

• Do not plant without provision of shade trees.

• Do not cultivate below 800 masl.

• Do not use any chemical fertilizer and pesticides.

Some photos from the feasibility study of coffee in Surkhet district

Ratu VDC Gadhi VDC

Matella VDC Garpan VDC

Awolching VDC Satakhani VDC

Can be used as shade trees for coffee Questions for the farmers

How’s the local condition? Local farmer showing their field

Increasing village roads Wide view of Surkhet

 Appendix

List of respondents

S.N Farmer name Address

1 Ran Bahadur Rana Awolching VDC -3
2 Tika Ram Rana Awolching VDC -3 ward
3 Dambar Bad. Rana Awolching VDC -3 ward
4 Nar Bahadur Rana Awolching VDC -1 ward
5 Tulsi Singh Sayoud Awolching VDC -1 ward
6 Lal Bahadur rana Awolching VDC -1 ward
7 Dhan Bahadur Rana Awolching VDC -2 ward
8 Kabi Raj Rana Awolching VDC -4 ward
9 Durga Bahadur Rana Awolching VDC -4 ward
10 Nar Bahadur Rana Awolching VDC -4 ward
11 Kat Singh Rana Awolching VDC -4 ward
12 Nanda kali Rana Awolching VDC -4 ward
13 Dambar Nepali Awolching VDC -4 ward
14 Bal Bir Nepali Awolching VDC -4 ward
15 Karna Bahadur Damai Awolching VDC -4 ward
16 Sukdev Upadyay Awolching VDC -6 ward
17 Janak Sharma Awolching VDC -6 ward
18 Nanda Lal Sharma Awolching VDC -6 ward
19 Himalal Sharma Awolching VDC -6 ward
20 Bal Bahadur Saud Awolching VDC -5 ward
21 Gopi Lal Saud Awolching VDC -6 ward
22 Gagan Rana Awolching VDC -7 ward
23 Jar Bir Rana Awolching VDC -7 ward
24 Surya Bahadur Rana Awolching VDC -7 ward
25 Dev Bahadur Saud Awolching VDC -6 ward
26 Harka Bahadur Rana Awolching VDC -6 ward

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