It is quite ironic that Nepal being an agricultural country imports majority of vegetables, fruits, and other crops from its neighboring countries. Lack of infrastructure, legal hassles and shortage of manpower are some of the many factors contributing to this unfortunate state of agricultural sector in Nepal. To address this problem, Paicho Pasal was established with a mission to best utilize the products from farmers and make Nepal a self-sustainable country. They’ve also been awarded the “Rastriya Yuba Prativa Samman” for their contribution in the agriculture sector. Learn more about the company that is working against all odds and modernizing the barter system through this interview conducted with Rajan Paudel, Director (Research and Development) of Paicho Pasal.
How did you come up with the idea for Paicho Pasal?
Our Managing Director Dhurba Neupane was the one who came up with the idea for Paicho Pasal. He always wanted to work in agriculture sector so; he did his research and registered the company in April 2014 as a shop as well as a company. We came up with the name Paicho Pasal because barter system is very much in practice in Nepal and we wanted to signify the modernization of that system through our work. We started with our first shop in Gulmi and we’ve been growing ever since.
How did you initially fund your start up?
We invested our own money. A bunch of us got together and invested 1 crore initially. Fortunately, in these 4 years, we reached break even and even established goodwill for the company. This, I believe, is our biggest return.
Can you help us understand how Paicho Pasal works? Is it an organization or a shop?
Paicho Pasal isn’t just a shop. This is a platform for farmers to connect with consumers. We have 60+ collection centers for farmers to drop their produce. For their convenience we set up the centre not more than 15-20-minute walk from their homes. Each transaction is then recorded with them and they can choose to either to collect their money or buy some goods for their household. That is why we call it “Paicho” which means “Barter”.
We transport these collected goods to the Butwal centre within 18 hours and so that the consumers get fresh vegetables. Our focus areas are Ghulmi and Butwal nevertheless we have 13 shops in the hilly areas out of which 3 run as complete departmental store. The department stores sell only our products but the stores in rural parts have all kinds of goods including grocery, home appliance and other fancy products that are not easily available in those parts of the country at given level of price and quality. We also try to partner with local shopkeepers and name them Paicho Pasal. Besides that, we also have a factory in Gulmi which produces dozens of varieties of food products such as jam, juice, ketchup, tomato puree, pickle, maize grits , millet flour, nettle powder sweet corn, etc.
What is the social change you wish to bring with your company?
Nepal is called an agricultural country yet, most of our vegetables and fruits get imported from China and India. We want to increase the scope of the agricultural sector through irrigation and easy access to farmers. We are already associated with 16,000 farmers and 70,000 families. We’ve also employed 251 people and pay wages and salary according to government prescribed standards. Recently one of our farmers provided us with 12lakhs worth of products and that already shows the direct social impact of the work we are doing. We have also noticed that some of the farmers are motivating their children to get in to the same line of work
What kind of challenges have you faced along the way?
Initially it was very difficult to convince farmers to sell us their product because the common practice is to consume the product that they grow and distribute the remaining. Lack of irrigation is another challenge that affects quantity of yield. Also, competition from the Indian and Chinese market is intense since the cost is highly subsidized in agricultural product. This affects our market share and demotivates the farmers as well. Being said that our major problem however is investment from banks. None of the banks are willing to invest stating that the collateral is not sufficient since the value of land is very low in the rural area. This makes managing working capital difficult for us.
How did you overcome these challenges?
We had to convince the farmers to give us their product by agreeing to deliver the money at their doorstep. We have started providing tunnel irrigation along with trainings on utilization of resources for increasing the yield. We buy as much as possible from the farmers so that do not get discouraged. We have established “Paicho Bikas Kosh” which has a deposit of 50 lakhs wherein we give out loans to the farmers.
How many districts do you operate in?
Our main shops are at Palpa, Gulmi and Butwal. We distribute our product from Bardibas to Kathmandu and the western part of the country. In terms of collecting raw materials, we collect from Mustang, Myagdi, Jumla, Kalikot, Dailekh, Rolpa, Rukum, Pyuthan and Salyan.
What are your future plans for the organization?
We want to sustain our agriculture and trading unit. We aim to distribute the Paicho Product all over Nepal and later export internationally. We want be known as the ultimate brand for households.
Do you consider yourself a business man or a social entrepreneur?
I don’t think I can choose between the two. We are business people whose work has a social impact. So, I think we need to analyze if we can really consider ourselves as social entrepreneurs.
Have you measured the impact of your work?
Yes, definitely. We have our internal research team working on impact as well as a tie up with a Swiss Contact to analyze our data. The village we worked in 2071/72 in comparison to 2074/75 has seen drastic change in case of employment, economy, living standard etc. We commercialized “peepal seeds” which were in abundance but held no significance in a village and money started flowing in. This is just one of many ways we’ve been trying to have an impact in the villages we work with.