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SMEs underpin economies worldwide, and Nepal is no exception. Here, SME’s account for 22% of GDP and employ around 1.7 million people (Rastra Bank, 2020/21). Among these, agri-SMEs stand out, as Nepal is still mainly an agrarian country – some 62% of people work in agriculture. These agri-SMEs are key to creating jobs and income and providing food security. Via the Commercial Agriculture for Smallholders and Agribusiness (CASA) programme funded by the Foreign, Commonwealth & Development Office (FCDO), Swisscontact has enabled partners to boost their digital skills and employ more efficient supply chain management.
Gopal Giri, a farmer from Sisuwa in Pokhara, owns 22 cows and has been supplying milk to Sujal Dairy for over a year. After feeling a buzz in his pocket, he reads an SMS from Sujal Dairy. The message provides details on the 130 litres of milk he has sold, including a breakdown of its fat and solids-not-fat (SNF) content, with his total earnings calculated accordingly. Alongside Gopal, other local farmers here contribute to the daily delivery of some 16,000 litres to the processing company, which sources milk from over 20,000 smallholder dairy farmers nationwide.
Meanwhile, in Chatrakot, Gulmi, Meena Tondon finds herself at the vegetable collection centre for Paicho Pasal, an agribusiness that collects and sells agricultural products of Nepalese smallholders.
Meena is here to collect all sorts of vegetables. For her, manual records and handwritten tokens are a thing of the past. With her app, she enters the collected vegetables, with the rates automatically calculated. Farmers receive instant SMS notifications of their sales. At the end of the day, the app tallies the total collection. She prints a summary with a small printer, photographs the receipt and submits it via Facebook Messenger.
Both Sujal Dairy and Paicho Pasal have adopted specialised supply chain management software with support from the CASA programme, addressing their unique challenges. Their aim is to establish a data capture system that boosts efficiency and transparency across the entire supply chain, while maintaining a digital database for data-driven decision-making. The digitalisation path has, however, been fraught with challenges they continue to navigate.
“Despite talks with four companies, we couldn't find a system that aligned with our sector’s complexities. A lack of local developers with in-depth agritech expertise forced us to seek solutions from Indian providers”, adds Dhurba Neupane, Managing Director of Paicho Pasal.
CASA helped partners boost their digital skills with staff training, and now they are training others within their supply chain. Paicho's IT team trained about 80 local collectors, who then taught farmers to use the system. They have covered about 90% of the farmers in their network.
The digitalisation journey has been transformative for Sujal Dairy and Paicho Pasal despite its challenges. Both have boosted their efficiency and productivity by automating tasks and gaining greater supply chain visibility. This has also improved financial transparency, providing new investment opportunities, as shown by Paicho Pasal's partnership with True North Associates, a private equity and venture capital firm helping Paicho to go public and find alternative financing.
While Nepal’s agri-SME sector is just beginning to embrace digital technology, the potential is enormous. Continuous investment in digital infrastructure and capacity building will be key to fully exploiting it. The success stories of Sujal Dairy and Paicho Pasal show that digitalisation is not only beneficial for agribusinesses, but also an ongoing journey that needs constant adaptation.