India & ADB ink USD 130 mn loan agreement to promote horticulture in Himachal Pradesh

New Delhi: In a statement on Monday, the Ministry of Finance stated that the central government and the Asian Development Bank (ADB) have joined forces in a significant endeavour to enhance agricultural productivity, improve irrigation accessibility, and promote horticulture agribusinesses in the state of Himachal Pradesh. A loan agreement of USD 130 million was signed between the two entities on June 8.

'Supporting horticulture value chains will also contribute to the nation's food security goals'

Rajat Kumar Mishra, Additional Secretary of the Department of Economic Affairs, Ministry of Finance, and Takeo Konishi, Country Director of ADB's India Resident Mission signed the agreement. Mishra expressed his optimism about the project, stating that the development of subtropical horticulture in southern areas of Himachal Pradesh presents opportunities for crop diversification, climate adaptation, and more balanced economic and social growth throughout rural regions of the state. Supporting horticulture value chains will also contribute to the nation's development and food security goals.

The project builds upon a successful pilot programme funded by ADB's project readiness facility, which showcased subtropical horticulture production on 200 hectares of land. The pilot also laid the foundation for the draft Water User Association (WUA) Act and the draft State Horticulture Development Strategy," explained Konishi.

The project aims to enhance the income and resilience to climate change effects for approximately 15,000 farming households across seven districts of Himachal Pradesh, namely Bilaspur, Hamirpur, Kangra, Mandi, Sirmour, Solan, and Una. Many of these households have either ceased farming or reduced their agricultural activities due to a lack of irrigation facilities and crop damage caused by wild and stray animals.

Key interventions

Key interventions of the project include improving on-farm irrigation and water management in approximately 6,000 hectares of farmland through the rehabilitation or construction of new irrigation schemes. The capacity of Water User Associations (WUAs) will also be strengthened to effectively manage micro-irrigation systems. The Department of Horticulture and the Water Resources Department, also known as Jal Shakti Vibhag, will collaborate to implement these measures.

Project will establish ecosystem to enhance farmers' access to subtropical horticulture mkt

Furthermore, the project will establish an ecosystem to enhance farmers' access to subtropical horticulture markets. Farmers will be organised into cluster-wide community horticulture production and marketing associations (CHPMAs) and district-wide CHPMA cooperative societies. A farmer-producer company (FPC) will serve as the apex institution, driving agribusiness development on a statewide level. The FPC will be responsible for business plan development, agribusiness promotion, and the design of value-addition facilities such as sorting and packaging centers, storage facilities, and collection centres. It will also provide assistance to CHPMAs in managing these facilities.

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