Nepal’s Increased Sustainable Tea Exports Project (NISTEP) - a Tier 2 Project in Nepal supported by the Enhanced Integrated Framework (EIF) of the WTO – has been implemented by the National Implementation Unit of Nepal, Ministry of Industry, Commerce and Supplies (MoICS), Government of Nepal (GoN) as the Main Implementation Entity.
NISTEP aimed at two major outcomes and subsequent results. These include I) Improved Compliance to international standards of Nepal Tea through a) Technology based traceability and, b) Institutionalization of Organic certification practices, and II) Improved access to international markets through a) Strengthening, Promotion and establishment of Collective trademark “Nepal Tea” Quality from the Himalayas, b) Increased access and sales to new markets c) Formulation of tea sector investment strategies.
The first outcome was implemented by the National Tea and Coffee Development Board (NTCDB), Government of Nepal whereas the Ministry of Industry, Commerce and Supplies was responsible for the second outcome.
National Implementation Unit (NIU) led by the Joint Secretary of the Multilateral Trade and Trade Cooperation Division of the MoICS oversaw the overall project implementation and the NIU coordinated with the NTCDB to bring envisioned activities to fruition.
The project started on 13th November 2020 for three years’ period. The total project cost is US$1,895,000 with US$ 1,495,000 EIF grants and US$ 400,000 in-kind contributions by the GoN. The first 16 months of this period was severely affected by the Covid-19 pandemic. However, the project took momentum in the later period in 2022 and 2023. Most of the activities of the project have been completed while some activities are under implementation with a few being implemented in the second phase. Accordingly, the project had accomplished 96 percent of the progress by its end.
The project has developed a state-of-the-art traceability System for Nepal’s orthodox tea with wider consultation and validation of the tea producers, famers, and other stakeholders. The system was officially launched in the 4th International Tea Festival, 2023 by the Hon’ble Minister of Industry, Commerce and Supplies. Around 3,900 small farmers have been covered by the traceability system through 22 tea processors affiliated to the Project. Equipment and accessories have been provided to the users of the system, i.e. factories and cooperatives. Training of trainers (ToT) and users’ trainings have been provided in Ilam. Green tea leaves collection bags were provided to 3,400 farmers, and tea collection crates provided to the tea processing factories in Ilam.
The traceability system will add value to its acceptance in the target and premium markets and support Nepali tea’s improved compliance to international standards. This system will help track the value addition process, organic tea production, and tracing the farmers through processors who are registered in the traceability system. The 22 factories which are qualified to use the Collective Trademark of Tea: Nepal Tea Quality from the Himalayas are the current beneficiary of the system. Similarly, by increasing satisfaction of the international buyers and consumers, the system will help promotion of Nepali tea in international markets.
NISTEP has supported 11 tea factories and cooperatives in the organic certification cost/renewal in the first round. Similarly, through the second round of support, an additional 15 factories benefitted from the organic certification scheme.
NISTEP supported tea famers in organic manure production through cattle-shed improvement programs. A total of 1,094 (656+438) cattle-sheds have been improved under the cattle-shed improvement program in two rounds which has yielded improved farmyard manure to use in tea garden. The program in Ilam has been instrumental in the production of organic manure under organic certification scheme and thus, ensure sustainability of the project interventions by promoting organic production practices.
Efforts for institutionalization of organic certification practices have been ensured through trainings on organic tea cultivation and certification including ToTs, Internal Control System (ICS) including ToT, pruning and skiffing, plucking and tipping, and Good Manufacturing Practice (GMP). 2,923 small farmers trained on pruning and skiffing from 81 subgroups organized under farmers’ groups and cooperatives. The training on pruning and skiffing has contributed in increasing the volume of production of green leaves by 12-15 percent. 57 field-level inspectors trained on field-level inspection related to ICS. Overall, the project has provided different types of training to 6,416 farmers, processors and other beneficiaries of the project including 2,405 (37%) women.
6,500 farmer's diaries have been printed and distributed to farm families. 43 field-level inspectors mobilized to assist and build the capacities of the farmers to maintain their farm records and update farmers’ diaries. Two rounds of support in filling and updating farmers’ diaries in Ilam have been concluded.
Likewise, a report on organic certification scheme and support modality, TOT Manual on organic cultivation and certification and Manual on Internal Control System for Group Certification of organic orthodox tea have been developed to institutionalize the organic practices. Similarly, a report on identification of new premium markets and developing market penetration schemes of orthodox tea has been developed.
The Fourth International Tea Festival, 2023 was organized under the aegis of MoICS and NTCDB which sought to foster stronger bonds between buyers, sellers and government entities. The 3-day festival including tea tasting ceremony, B2B meets and a demo tea auction was a resounding success considering the diverse participation of buyers from four different countries, international media coverage and pre-seasonal sales. Consequently, tea exporters got orders from Japanese and Chinese buyers which is expected to increase export revenues.
Likewise, a delegation under the leadership of the NIU Chief of NISTEP consisting of four tea entrepreneurs participated in the World Tea Expo, USA in 2023. This participation bolstered marketing initiatives and provided the private sector representatives with international exposure to the global tea industry. As a result, one of the project’s beneficiary tea processing factory and exporter won best black tea award in the World Tea Expo, USA in 2024. This will definitely promote other Nepali teas and increase exports.
One of the overarching objectives of NISTEP was the formulation of Tea Sector Development Strategy to foster sustainable growth and competitiveness in the tea industry. This entails a concerted effort to enhancing the quality, production and productivity of tea cultivation and processing, increasing investment in tea sector, diversifying market channels, and promoting sustainability of the tea sector.
Nepal’s Increased Sustainable Tea Exports Project (NISTEP) with financial assistance from Enhanced Integrated Framework (EIF) has emboldened the tea ecosystem of Nepal by promoting backward and forward linkages. Furthermore, the interventions made by the project with regards to the organic certification, trainings, distribution of farmers diaries, strengthening of internal control system have tangible effect at the grassroots level i.e. farmers who have been at the bottom tier of the global value chain.
Hence, NIU's expertise and vision along with close consultation and cooperation of the EIF ES and UNOPS have been instrumental in guiding the project through various challenges, ensuring the highest standards of tea quality and effective marketing strategy. With NIU's continued leadership and effective monitoring mechanism, sustainability of the results of NISTEP and its objectives can be assured while leaving a lasting positive impact on the Nepali tea industry.
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