Assessing the potential for niche market development to contribute to farmers' livelihoods and agrobiodiversity conservation: Insights from the finger millet case study in Nepal

- Replacement of neglected and underutilized landraces by few modern crops threatens the on-farm agro-diversity conservation.
- Market failures prevent consumers from recognizing nutritional and health related traits of local landraces.
- A niche market development for landrace products can ensure a premium price to “conservationist” farmers.
- Consumers in Nepal have an high willingness to pay for unique traits associated to landrace products of finger millet.
- Competition among farmers and leakage effects reduce the economic and the ecological effectiveness of the niche market.

This paper explores the potential for niche market development of neglected and underutilized species as an intervention for improving both smallholder livelihoods and the agrobiodiversity conservation. We consider the case of finger millet, which plays an important role in the food security of Nepalese poor and marginalized farmers. Despite such importance, production and consumption are decreasing as a result of, inter alia, the expanding availability of more profitable crops, a lack of awareness regarding its nutritional qualities by urban consumers and limited R&D dedicated to this crop. Nevertheless, the potential to improve the ability of farmers to capture the values related to the positive environmental and nutritional externalities associated with the production and consumption of local landraces, suggests that the conservation through use of such genetic resources can support the achievement of development goals. We analyse both the demand and supply side of a potential niche market for local finger millets. Using a choice experiment we find that urban consumers have a willingness to pay a premium price sufficient to compensate producers' conservation opportunity costs. We also identify a range of challenges for such an intervention to be considered effective from both an economic and ecological perspective.