SNV Vegetable supply to institutions study

Terms of Reference

 Socio-economic dynamics of contractual vegetable supply to institutions and hydropower projects

 To be undertaken by national consultant

 SNV Bhutan, in collaboration with RAMCO/DAMC, DoA (Horticulture Division, RDC-Wengkhar and RDC-Bajo) (Joint group)

 Under MAGIP 

1. 1.           Introduction

 This study on contractual supply to institution and hydropower projects is taking place as part of the support of SNV Netherlands Development Organisation (SNV) to the Market Access and Growth Intensification Project (MAGIP). The collaborating partners in this study are Department of Agricultural Marketing and Cooperatives/Regional Marketing and Cooperatives Office and two Renewable Natural Resource- Research and Development Centers (RNR-RDC).
 With Bhutan’s new target under the Vegetable Production and Marketing Plan (VPMP) aiming at self-sufficiency in vegetable production within 2 years, the attention towards vegetable purchase and consumption by institutions like schools, army, police, hospitals and monasteries and by large hydropower projects employing thousands of employees, have received increased attention.  These large consumers have traditionally largely relied on cheap Indian vegetables, which now under the VPMP should increasingly be bought from local producers.
 Most institutions already consume some local vegetables during the summer months (May-September), when Indian supply reduces. And since the MoU signed between MoAF and MoE, which allows schools to opt for supply from local farmer groups regardless of the bidding requirements, two schools have signed such supply contracts with groups as pilot cases[1], which be included in this study.
 An inventory by the Off-Season Vegetable Programme implemented by RAMCO and SNV under MAGIP, shows that 63 schools in the 6 Eastern Dzongkhags require 109 MT of vegetables per week for 10 months per year (academic season), for schools lunches and boarders.  Income opportunities for farmers are substantial. For example in the case of Gyalposhing High School, Drepung geog, Mongar Dzongkhag, the school requires 200kg of vegetables a day, equalling a value of Nu 1,000,000 over 10 months. That same inventory learned that schools have a clear interest to engage with local farmers’ groups.
 Supplying to schools under a contractual agreement has a few characteristics which are likely to be complicated for farmer groups: 1) schools require a large variety, 2) require a constant supply, 3) prices are constant throughout the year, and often lower than market prices. This requires relatively a high level of organisation, commitment and management within farmer groups, including production planning, purchase from third parties if the group supplies are not sufficient, etc. Markets might provide higher prices, but often volumes will be less compared to schools, making the supply to school a high volume, low price business case.
 The case of vegetable supply by local farmer groups to hydropower projects is similar. Between 5,000 to 10,000 people (mainly Indians) are working at each of the hydropower sites under construction. 14 hydropower plants are already under construction or are planned to be built in the next 10 years. As construction companies and their messes (kitchens) are Indian companies with good connections with suppliers in India, and the Indian workers prefer vegetables some of which are hardly produced in Bhutan, the situation is even more challenging.  Since the start of August 2012, the PHEP (Punatsangchhu) with 10 messes is buying from 23 local farmer groups in 3 Dzongkhags, with support from DAMC and DoA (Dzongkhag, Horticulture Division, RNR-RDC Bajo. For Kholongchu Hydro Power Project, 7 villages are producing required vegetables to the project workers under the guidance of RNR-RDC Wengkhar and Trashiyangtse Dzongkhag, although no formal supply contracts have been signed. Supply to Phunatsangchhu and Kholongchu hydropower projects will also be covered by this study.

1. 2.           Objectives

 This assignment has the following objectives:
 To understand the social and economic dynamics on the supply side of contractual vegetable supply to institutions and projects, creating opportunities for intermediary organisations to improve their support to farmers, to achieve increased effective and sustainable supply and income.

1. 3.           Deliverables

 The consultant will deliver a report in English and MS Word, presenting the social and economic analyses of the supply side of contractual vegetable supply to the above mentioned 2 schools and 2 hydropower projects leading to practical recommendation of to increase effective and sustainable supply by farmer groups.

1. 4.           Work to be undertaken

 The following work needs to be undertaken by the consultant:
a)        Prepare a check-list of social topics to be covered in each case study (for b), and an economic analysis tool (for c). Prepare a work plan covering site visits, interviews with farmers and stakeholders. This has to be approved by the joint group.
b)        For each case, analyse the social dynamics within the farmer groups, related to production planning, social control, common understanding (or lack of), decision-making processes and conflict resolution capacities, perceived challenges/disadvantages and advantages of contractual supply by interviewing group leaders and regular members. Also analyse already existing documents (like MoUs, meeting minutes) and interview key informants and stakeholders.
c)        For each case, prepare the economic analysis of supply to the markets compared to supply to institutions (volumes and prices), risks & losses, for a period of a year. Calculate the difference in income from vegetables for an average household in the pre- and post-contracting situation, based on data to be collected from at least 15 randomly selected households per case. All collected data will be provided in the annex to allow for checking.
d)       Farmers’ general feedback and perception on the supply to institutions needs to be collected.  Whether it has made any difference in them finding a sustained market and any difference made in their income level.
e)        For each case, undertake a comparative analysis with the traditional supply of vegetables – largely from India. What are the cost implications for the buyers on an annual basis?
f)         Present conclusions from the 4 cases and provide recommendation on how to increase effective and sustainability of contractual supply per case and in general.
g)       Present the draft report to the joint group and finalise the report by incorporating feedback.

1. 5.           Timing

 The assignment will start early October and should be finalised not later than the end of November.

1. 6.           Work days required

 It is expected that about 30 days are required by a national consultant for field visits including 2 schools and2 hydropower projects, preparation, analyses, report writing and presentation.

1. 7.           Qualification and requirements of consultant

 The following qualification and requirements are expected from the consultant:
-                      Minimum of BSc in Agriculture
-                      Experience with social research
-                      Experience in cost-benefit analysis
-                      Good relational/social skills with farmers
-                      Fluent in English report writing
-                      Good presentation skills
-                      Secure and precise work, with attention for details
-                      Successfully finalised various relevant consultancy assignments
8.      Invitation for proposals
Prospective consultants are invited to submit proposals, with the following documents:

• Technical proposal ( max 6 pages)
• Curriculum Vitae  CV ( max 2 pages per team member)
• Evidence of qualifications, skills, proficiencies and track record.
• Financial proposal

 Application deadline is 3 October 2012.  These required documents should be submitted in hard copies in a closed envelop clearly marked with ‘Supply to Institutions’, at:
 SNV Bhutan
Langjophaka, Thimphu,
Tel: 02-322900

[1]2 schools: Jakar HSS and Gyalposhing HSS and 2 Hydro Power Projects (Punatsangchu Hydro Project and Kholongchu Hydro Power Project)

Closing date: 

Wednesday, October 3, 2012

Type of contract: 

Consultancy

Local