Facilitating Private Sector and Government Collaboration in Nepal to Reduce Rice Imports

USAID’s KISAN II Activity partners closely with the private sector to address constraints such as low productivity, susceptibility to climate shocks, and a mismatch between market demand and production. Nepal, once a net exporter of rice, now depends on rice imports - particularly of fine rice - as rice imports increased threefold in the past eight years. Although the Government of Nepal (GON) prioritized reducing fine rice imports in 2019, rice growers and millers have largely failed to capture this market opportunity. To address this, KISAN II introduced the Rice Mill Model (RMM), where millers provide growers with technical support to cultivate fine rice varieties, and growers provide millers with the quality and quantity of rice needed to meet processing demand. Farmers and millers were initially skeptical but soon realized the economic benefits (e.g., revenue, income) of collaborating.

Sharing technical evidence from the pilot led the GON, USAID, and KISAN II to adopt the RMM and initiate the Joint Rice Intervention Program (JRIP), an initiative to increase domestic fine rice production, with 8,000 farmers and eight mills. In 2021, 10,735 farmers cultivated fine rice on 5,102 hectares. Despite COVID-19 restrictions, both farmers and millers benefited from increased fine rice production. This evidence of success in two provinces and 18 municipalities has encouraged two additional provinces and 59 municipalities to pilot this model. Through increased collaboration and learning, this government-supported model can be expanded and adapted elsewhere to help Nepal reduce its dependency on rice imports.