Income diversification adk A presentation by Mr.Allah Dad Khan

2. Special Program for Food Security & Productivity Enhancement
INCOME DIVERSIFICATION
INTERVENTIONS
(IDIs)
STANDARD OPERATING PROCEDURE (SOP)
Presented By
Mr Allah Dad Khan
Provincial Project Director
SPFS(CMPII)Khyber pakhtunkhwa
Peshawar Dated 14th Oct 2010

3. TOPICS TO BE COVERED IN
PRESENTATION
A. Concept & Objectives OF IDI,s
B. Small Enterprises Suggested For IDI,s
C. Schedule of IDI,s
D. Financial Management for IDI,s
E. Eligibility Assessment to IDI,s

4. A.Concepts/Objectives of IDI,s
• Creating ample opportunities in rural areas by
providing gainful self-employment and
additional source of income to the small
farmers for their livelihood on sustainable
basis.
• Help educate farmers for a variety of
entrepreneurial and commercial technology
packages and skills.
• Providing expertise about commercial
activities, arts and crafts by establishing skill
development workshops and training programs.
• Ensure food security and reduce poverty by
creating employment and income generation
activities.

5. • Animal breeding
• Vegetable aqua culture
• Bee keeping
• Calf fattening
• Dairy farming
• Farm implement pools
• Small scale feed mills
• Feed sale centers
• Floriculture
• Fish farming
B.SMALL ENTERPRISES SUGGESTED
F0r IDI,s

6. • Fruit & forest plant nurseries
• Goat and sheep farming
• Mushroom farming
• Milk collection centers
• Off season vegetable production
• Commercial & backyard poultry farming
• Silk worm rearing
• Vegetable curing and drying
• Vegetable, fruits & nursery production
• Quality seed production input sale centers

7. • On an average, 10 IDIs for each village earmarked
• 10120 IDIs in 1012 project villages
• At village level:
– 1st year none
– 2nd year 03
– 3rd year 04
– 4th year 03
• It does not mean that a small and a large village will get
equal number of activities
• Distribution of IDIs will depend upon no. of member
farmers in each VO.
• A large village having 80 member farmers > 10 IDIs
• A small village having 30 member farmers < 10 IDIs
C. SCHEDULE OF IDIs

8. • It is anticipated that majority of farmers may show
strong inclination towards:
– Dairy farming
– Sheep & goat farming
– Feedlot fattening
– Poultry farming
• Duty of the project workforce is to educate the farmers
and create awareness
– About other more remunerative and profitable IDI
opportunities
– Off-season vegetable production
– Floriculture
– Fruit, forest plants and vegetable nurseries

9. • Cost sharing jointly by project & farmers:
– Project 80%
• Farmers 20%
• IDI loans in kind covering purchase of required
implements, material, machinery, necessary equipment
etc.
• Recovery:
– In 24 equal installments with a grace period of 6 months after
initiation of IDI
– 10% per annum on principal amount of loan as service /
handling charges which will remain with them as part of VO
Revolving Fund
D.FINANCIAL MANAGEMENT
FOR IDI,s

10. • IDI activities involve considerably large amount of project
funds
• Responsibility of project staff to carefully and vigilantly
assess needs and eligibility of beneficiary farmers before
recommending them for award of loan
• Rightful assessment will help best utilize loan by
beneficiary farmers for enhancing their productivity and
profitability
• Success of this component of project will entirely depend
on:
– Appropriate and judicious selection on merit of the most
suitable member farmer for each IDI activity
E.ELIGIBILITY ASSESSMENT FOR
IDI,s

11. 1. The first step towards IDIs introduction
2. Procedure for submission of application
3. Affidavit on plan paper
4. Scrutiny of applications
5. Parameter for Technical Committee to evaluate
business attitude and skill specific to IDI,s.
TOPICS TO BE COVERED

12. • To VOs and member farmers
• By telling in detail objectives, benefits, requirements and
procedures
• Publicity campaign to be run for 7 days for each intervention
• Frequent announcements through mosques at least for 3
days in two prayers a day
• Invitation notices on mosque main gates & outside office of
field assistants & on main village passages and roads
• Corner and special farmers meetings for the purpose
• Distribute literature having details of ITIs
• Formally invite applications from farmers clearly indicating
last date for submission of applications through notices
mentioned above
1.FIRST STEP TOWARDS IDIs
INTRODUCTION

13. • Interested member farmers will apply to concerned
president of VO for the IDI activity of their choice, on
plain paper
• Application must reach to secretary of VO on or before
last date with:
• A copy of the computerized national identity card
• Attested copies of documents pertaining to educational
certificates, qualifications, experience and or skills
related to each intervention
2.PROCEDURE FOR SUBMISSION
OF APPLICATION

14. • Size of landholding of applicant in village
• He will pay upfront 20% of estimated cost of IDI as his
share
• He will return the loan amount along with 10% per
annum service and handling charges
• According to the rules of the project and as per terms
and conditions of the agreement
• He is in search of new avenues of income generation
and possesses the required skills and aptitude.
3.AFFIDAVIT ON A PLAIN PAPER
DECLARING THAT

15. • Secretary of VO will sign each application
clearly putting;
• Date of submission of application
• He will get all applications countersigned by ;
– President & Vice President of concerned VO
• Hand over to Agriculture Officer in the evening of
the closing date
4.SCRUTINY OF APPLICATIONS &
FINAL SELECTION

16. • Qualifications, technical expertise and or skills of the
applicant farmers specific to the interventions such as
fish farming, poultry farming, bee keeping, etc.
• Economic position of farmer to be considered regarding
payment of 20% of cost as his share
• General reputation and credit worthiness of the farmer
• The same committee will also visit indicated premises or
site of each IDI activity for assessing its suitability for
specific enterprise
5.PARAMETERS FOR TECHNICALCOMMITTEE
TO EVALUATE BUSINESS APTITUDE AND
SKILLS SPECIFIC TO IDI

17. Based on assessment made, Technical Committee will:
• Prepare a technical report for each IDI
– Short list top 3 most suitable applicants on merit for each
IDI activity
– Submit technical report and its recommendations of
selected cases to executive committee for final approval
• Total time for interviews, visiting premises or
intervention sites and finalization of short listing
candidates should not take > than one week

18. • Consequent to the receipt of applications from Agriculture
Officer, Technical Committee constituted hereunder will
convene a meeting under the chairmanship of DPM:
• DPM Chairman
• President (VO) Vice Chairman
• Vice President (VO) Member
• DO (Agri-Ext.) Member
• DO (Livestock) or (Fisheries) Member
• IDO Member/Secretary
• Committee will critically examine applications
• Prepare comparative statement based on their
(applicants/candidates) understanding of genuineness,
capability, skills and neediness
PARAMETERS FOR TECHNICALCOMMITTEE
TO EVALUATE BUSINESS APTITUDE AND
SKILLS SPECIFIC TO IDI

19. • Land holding of the beneficiary farmer must not
exceed the maximum limit specific to each IDI
• Neediness, desirability and mental readiness for
earning profits for income generation from the new
intervention rather greediness of having soft loan
• Suitability of location/site for intervention such as:
• Availability of electricity if required for the intervention
• Availability of drinking water, animal sheds
• Safeness of the location including non-marshy, non-low
lying area, no water logging and non-saline land

20. EDO (Agri) & DO (Agriculture) will :
• Interview the top three short listed farmers and rank
them as:
– 1st, 2nd & 3rd for a particular IDI activity
• Decision of the executive committee will be considered
final
• Applicant declared as the first will become eligible for
award of intervention
EXECUTIVE COMMITTEE

21. • Consequent to final approval by executive committee,
beneficiary farmer will deposit his share of 20% upfront
in designated bank account of VO within two weeks
from the date of approval
• Failing in depositing prescribed share of cost within
given period next farmer/applicant in rank will be given
offer for participation
• Share of 80 % cost will be matched in shape of loan to
beneficiary farmers by project after receiving 20%
share from beneficiary farmer
• An agreement will be signed on a legal stamp paper of
Rs 50 between beneficiary farmer, DO (Agriculture),
DPM and the President of VO

22. • Process of selection of right person for IDI assistance
must be;
– Quite transparent
– Fair &
• Without any;
– Prejudice
– Discrimination
– Injustice
• Otherwise;
– Success of IDI provisions in the villages will be an exercise
in futility
CAUTION

23. Will be :
• Trained for respective skills required to run
entrepreneurial unit on profitable lines
• Also be helped for marketing their produce
Project staff will ensure :
• Training and marketing are arranged & covered properly
TRAINING OF BENEFICIARY FARMERS

24. • FPC will make all purchases:
– Most appropriate articles/ materials
– On competitive prices for IDIs
– With full involvement & consent of beneficiary farmer
• Purchase documents will be verified by FPC &
countersigned by concerned Agri. Officer & Income
Diversification Officer
• Beneficiary farmer & Project staff will maintain complete
record and documents of all relevant purchases for
reference and audit purposes in later stages
• A legal agreement will be duly signed by both parties for
affecting all such IDI loans
FARMERS PURCHASE COMMITTEE

25. • Earning of Rs. 945 per person per month
• Figure based on economic survey changes every year
If a family has :
• 7 members in household
• Earning less than Rs.6615 per month
• In such case family is living under poverty line
POVERTY LINE

26. • For very poor households
• 10 households falling below poverty line in each project village.
• Such household must be headed by some poor lady or a widow
• In case of non-availability of 10 households headed by a poor
woman other households from below poverty line headed by
unemployed men may be selected
• Households so selected shall be requested to construct/arrange
poultry pens according to recommended design so that poultry
units are handed over to them
• Short listed 10 most deserving cases shall be given a set of
poultry unit each comprising:
• 4 hens + one rooster
• Return half of the cost to project within a period of one year so
that other deserving people are provided with the same facility
BACKYARD POULTRY FARMING

27. FINANCIAL ANALYSIS
OF A FEW IDIs

28. ELIGIBILITY CRITERIA
• Financing eligibility: Up to two cows or buffaloes
• Land holding limit: Zero to not more than 5 acres
• Animals presently owned (cow/buffalo): Zero to not more than 2 animals
• Qualifications, experience: Sufficient experience of keeping milk animals
• Total cost estimate: Rs 110,000
• Project provision 80% cost: Rs 88,000
• Beneficiary share 20% cost Rs 22,000 (or more to complete the project)
• Handling charges 10% per annum
• Grace period 6 months
• Recoverable cost (from beneficiary) Rs 88,000 (plus 10.0% per annual charges)
• Total monthly installments 24
• Amount of each installment/month Rs 4,061 (10% handling charges inclusive)
• Farmers’ contribution to RF Rs 9,458
DAIRY FARMING
(FINANCING UP TO TWO COWS OR BUFFALOES)

29. ELIGIBILITY CRITERIA
• Financing eligibility up to 2,000 one day old chicks, 3000 sq ft shed and related accessories
• Land holding limit One to 5 acres
• Qualifications, experience Literate with some experience of poultry arming
• Total cost estimate Rs 150,000
• Project provision 80% cost Rs 120,000
• Beneficiary share 20% cost Rs 30,000
• Handling charges 10% per annum
• Grace period 6 months
• Recoverable cost (from beneficiary) Rs 120,000 (plus 10.0% per annual charges)
• Total monthly installments 24
• Amount of each installment/month Rs 5,538 (10% handling charges inclusive)
• Farmers’ contribution to RF Rs 12,898
POULTRY FARMING
(FINANCING UP TO 2000 CHICKS, SHED AND CCESSORIES)

30. ELIGIBILITY CRITERIA
• Financing eligibility up to 10 goats and or sheep
• Land holding limit zero to not more than 2 acres
• Animals presently owned (sheep/goat) zero to project provision not more than 2 animals
• Qualifications, experience: sufficient experience of sheep/goat keeping
• Total cost estimate Rs 40,000
• 80% cost Rs 32,000
• Beneficiary share 20% cost Rs 8,000 (or more to complete the project)
• Handling charges 10% per annum
• Grace period 6 months
• Recoverable cost (from beneficiary) Rs 32,000 (plus 10.0% per annual charges)
• Total monthly installments 24
• Amount of each installment/month Rs 1,477 (10% handling charges inclusive)
• Farmers’ contribution to RF Rs 3,440
SHEEP AND GOAT FARMING
(FINANCING UP TO 10 GOATS & SHEEP)

31. ELIGIBILITY CRITERIA
• Financing eligibility: up to 30x100 sq ft greenhouse/tunnel, vegetable
seed & other related accessories
• Land holding limit: one to 10 acres
• Qualifications, experience: sufficient experience of farming
• Total cost estimate: Rs 150,000
• Project provision 80% cost: Rs 120,000
• Beneficiary share 20% cost: Rs 30,000 (or more to complete the project)
• Handling charges: 10% per annum
• Grace period: 6 months
• Recoverable cost (from beneficiary): Rs 88,000 (plus 10.0% per annual charges)
• Total monthly installments: 24
• Amount of each installment/month Rs 5,538 (10% handling charges inclusive)
• Farmers’ contribution to RF: Rs 12,898
OFF-SEASON VEGETABLE
(FARMING UP TO ONE GREENHOUSE OF 30X100 SQ FT SIZE)

32. ELIGIBILITY CRITERIA
• Financing eligibility
• Beneficiary’s condition
• A household headed by a poor landless lady or widow or destitute woman
• one poultry unit (5 pullets/hens and one cock) per household
• Recoverable costhalf amount within one year
• Handling charges: NIL
BACKYARD POULTRY UNITS
10 POULTRY UNITS CHICKS/ VILLAGE

33. • It is anticipated that majority of
farmers may show strong
inclination towards:
– Dairy farming
– Sheep & goat farming
– Feedlot fattening
– Poultry farming

36. Off season vegetable Production
Tunnel Farming
Or
Tunnel Technology

37. Types of Tunnels
Three types;
1. High Tunnels - 11 feet or above high
2. Walk-In Tunnels - 6 feet high
3. Low tunnels - 3 feet high

38. High Tunnels
Kinds of structure
1. T.R / Angle Iron structure
− 11 to 14 feet height from center
− 7 to 8 feet height from sides
− 30 feet width & 100 – 200 feet length.
− Made by T. Iron & Angle Iron
− Average life 20-25 years.
− Safe for heavy productive vegetables. But;
− Most expensive structure (Rs.14-
15 lac/acre)
− Not good for heavy wind area.
− Unpopular due to high cost.

39. Kinds of structure
2. Pipe Structure
− Made by iron pipe of 1.5” dia & 14 -16 gauge.
– 11 to 14 feet height from center
– 7 feet height from sides
– 30 feet width & 100 – 200 feet length.
– Average life 15-20 years.
– Safe for heavy productive vegetables.
– Relatively less expensive ss than T. R structure
(Rs. 9-10 Lac/acre)
– Good for heavy wind area.
– Relatively more popular than T.R tunnels.
– Good for all vine type vegetables

40. Kinds of structure
3. Bamboo or Mix Structure
− Made by bamboo or bamboo + iron pipe 1.5” dia.
– 10-11’ height from center
– 7’ height from sides
– 30’ width & 100–200’ length.
– Average life 1 to 2 years.
– Very risky for heavy productive vegetables.
– Very cheap structure (Rs. 1 to1.3 Lac/acre).
– Very risky in heavy wind area.
– Farmers use it to initiate the tunnel farming.
– Some times structure collapsed due to heavy load.
– Not reliable.

42. Walk-IN Tunnels
• Merits:
– Best for bushy vegetables i.e sweet/hot peppers, squashes,
Freshbean etc.
– Vine vegetables i.e tomato, cucumber, bitter gourds, spong gourds
etc. can also be grown.
– Relatively less expensive & high profitable.
– Very popular in farmers being less expensive.
– Installation is easy, quick and needs no technical expertise
• Demerits:
− Production of vine vegetables remain less than high tunnels due to
restricted growth.
− Income is also relatively less than high tunnels.
– Management operations i.e spraying, hoeing, plants training are
difficult than high tunnel.

43. Low Tunnels
Kinds of structure
ii. Bamboo/Mulberry sticks Structure
− 3’ height from center
− 4-5’ width & 100-200’ length.
− Bamboo or Mulberry of
0.5 to 0.7” dia &10’ long are
bent into half moon shape &
fixed in soil.
− Average life 1 season.
− Very Cheap structure
(Rs. 25-30 thousand/acre)
− Good for heavy wind area.
− Very easy to construct & install.

44. LOW TUNNEL
(5 x 2.5 ft)
Best Material
Steel rods of 6mm dia and 10 feet long
bent in the shape of half moon.
Sticks of different plants can also be
used but often create problems.
Plastic need to be removed at
flowering for pollination.
Make the crop about 1.5 month early.
Problem of weeds if not controlled.
Courtesy: Shadi Farm

45. TYPE OF TUNNEL
Depends upon:-
1. Crop to be sown.
2. Stature of the crop.
3. Investment capacity.
4. Nature of the crop.
5. Variety to be sown.
6. Management level.

46. Type of tunnel
Crop Tunnel Type Tunnel Height
Cucumber
Tomato
Bottle gourd
High tunnel 10 to 12 feet
Sweet Pepper
Hot pepper
Walk in tunnel 5 to 6 feet
Red gourd
Sponge gourd
Water melon
Musk melon
Bitter gourd
Bottle gourd
Low tunnel 2.5 to 3 feet