BY HARI PRASAD SHRESTHA 3/4/2018
According to the World Bank, the cereal production in Nepal was 9,562,680 metric tons (MT) as of 2014. Over the past 53 years, this indicator reached a maximum value of 9,562,680 in 2014 and a minimum value of 3,126,325 in 1966. Production of major cereals in year 2015/16 was – Paddy 4,299,079 MT, Maize 2,231,517 MT, Millet 302,397 MT, Buckwheat 11,641 MT and Wheat1,736,849 MT.
About 33.1 % of its GDP and more than 50 % of its export depend on agriculture, and it supports food, income, and employment to 65.7% of the population in Nepal.
The earthquakes of 2015 damaged agriculture infrastructures, livestock, fisheries, croplands and food and seed stocks the total amount to about NPR 28.3 billion.
Until 1980, agriculture was most prioritized and prestigious sector for Nepali people especially in plain lands of Terai region. It was superior means of livelihood compared to doing trade and government jobs. By that time, possessing an adequate amount of land were high profile, rich, prestigious and landlords (Jamindars) in Terai. But after increasing population pressures, low productivity, difficult to survive only through agriculture, this scenario completely changed.
Self-sufficient in food-grains until the 1980s, Nepal now import billions of foods. During the 1960s, the cereal yield in Nepal was one of the highest among the South Asian nations; yield in Nepal was 198 percent higher than that in Bangladesh, 212 percent higher than in Sri Lanka. But now the situation has completely reversed. Now, average rice, wheat, and maize yields are comparatively lower than for most of its South Asian neighbors.
It is well known that the agriculture sector in Nepal is not well developed and Nepal requires a Herculean effort to develop this sector. Low investment, lack of transport, lack of agriculture inputs, seeds, loans to required farmers, remote areas, excessive cost, weak market mechanism, substantial risk, lack of publicity and research are the problems of the agriculture sector
Present scenario
Because of low growth rate in the agricultural sector, the living standards in rural areas are deteriorating, and poverty gaps are ever widening in rural Nepal. In western and far western mountainous region, food supply by the World Food Program of the United Nations and the government itself has been a yearly routinely job; the long queues for rice in the mountains have been a never-ending phenomenon.
Approximately 45 of the country’s 75 districts fail to produce enough food to meet the population’s basic needs. Productivity is dropping while the population – approximately 28 million — is rising. Moreover, cropland holdings are diminishing in a country where nearly 70 percent of the population depends on agriculture for their livelihood.
Despite government’s limited investment in the agricultural sector, most of the funds are spent on administration expenses and staff salaries; only lesser amounts are being spent to support extension and productivity enhancements. The deteriorating agriculture scenario compelled many youths from rural farmer families to migrate, first to urban areas and then for foreign employment. According to the ILO, it is estimated that more than 80 percent of the agricultural workforce in Nepal are women.
Our farmers use traditional tools. Less than 1 percent farmers had tractors in 2011. Irrigation facility is a government’s liability, and less than 40 percent of its croplands are irrigated. Only 22 percent farmers have taken any loan of which only 8 percent have taken it from financial institutions like banks and cooperatives and the rest from money lenders.
Land ownership in Nepal has traditionally been concentrated in the hands of a few. For most poor rural families, access to land is insufficient. Almost 70% of the households have holdings of less than 1 ha, and many of them depend on plots that are too small to meet their subsistence requirements. Productivity levels remain low because of limited access to new farming technologies, inputs and extension services. About four fifths of the working population in Nepal live in rural areas and depend on subsistence farming for their livelihoods. And, poverty in rural areas can also be measured by area of land possessions as an indicator.
In rural areas household food security and poor nutrition are still major concerns; farmers are illiterate there, have large families, and are landless or have very small landholdings. Small, fragmented subsistence farming is a characteristic of Nepalese agriculture, and the average landholding is only 0.8 hectares.
Rural poor people in Nepal include:
• destitute people, such as sick or disabled persons, abandoned children, and displaced persons
• impoverished people, including illiterate or landless persons or those with very few assets
• moderately poor people, such as those who have small farms but are often heavily indebted
• people who are ‘nearly poor,’ including small farmers who are at risk of slipping deeper into poverty because of factors such as conflict, debt, and land degradation.
The overall food security situation is stable but dependent on food imports. However, there are some concerns for the most vulnerable households that live in remote northern parts of Far-Western and Mid-Western regions. In fiscal year 2017/18, rice import was about 930 000 tonnes, while imports of wheat and maize were at the level of 150 000 and 200 000 tonnes, respectively.
Severe floods in August 2017 affected 38 out of the country’s 75 districts, in the southern Terai plains, which displaced about 460 000 people and caused damage to housing and infrastructure, including irrigation canals, roads, and bridges. Losses of food stocks and livestock were also stated. As of late September 2017, about 778 000 people were estimated to be food insecure, mostly in the districts of Bardiya, Dhanusa, Mahottari, Sarlahi, and Rautahat.
Global trends
Agriculture produces food for people to eat and it provides sources of livelihood for 36% of the world’s total workforce. If we observe the global food supply scenario, the present food production is enough to fulfill the overall requirements of the global population, the demand and supply situation in the global context should be properly managed.
Except in most of sub-Saharan Africa, developing countries are making progress towards halving the incidence of poverty. Growth in agriculture and non-farm rural activities, as well as improvements in nutrition, are a central arena of success.
Growth in agriculture and associated rural non-farm employment can have a broad impact in reducing poverty in rural areas, where seven out of 10 of the world’s poor live. Income growth is essential if under-nourishment is to be reduced.
The high rate of agriculture production depends on many variables. Interestingly during the colonial period in Japan and India, the high land revenue rate was a major cause to increase agriculture output. The studies conducted in different countries have shown that the soil of Japan, South Korea, and Taiwan was of low quality, but the productivity was very high. Many journals and documents of South Asia Region have indicated that only forced acquisition land and land redistribution does not necessarily lead to increase in agriculture productivity.
The objective behind providing subsidies in agriculture sector differs from country to country; some countries provide subsidies for not planting crops, some provide subsidies to increase production to provide food at low prices. Subsidies should be given to remote and undeveloped agriculture production areas. India, China, and Vietnam have developed their economy through better planning and implementation of the agriculture sector.
The small farmers can’t compete with multinationals that have captured the food markets worldwide. The food prices are increasing, and the multinationals have received 2% more on their income, but the farmers have lost 50% of their income. There are an estimated 1.5 billion food producers and 6 billion food consumers all over the world.
Road Ahead
Environmental degradation, landslide, heavy rain, less rain has caused problems in food production. Increasing urbanization and shifting of people from the villages to urban areas is also creating a problem there. These tendencies are rapidly affecting to Nepalese agriculture in a negative way.
The land of Terai is in the process of desertification due to inflow of river water and sands. Landslide and deforestation in the hills as well as in plains have also caused a same negative impact. The excess excavation of sand and boulders in the Chure range above the Teari and influx bond and roads made by Indian along the border is causing this problem.
The growing population especially in Terai, both from the hill and bordering India has put huge pressure on cultivable land. The southern region of Nepal is the major agricultural production region of Nepal.
While formulating and implementing agriculture plan and program, we should not ignore the India factor. Cost of production is comparatively cheaper in India than Nepal. Besides, India is introducing many high technologies for rapid improvement in the agriculture sector. And technology improvement in Nepal is very slow, and this sector is dependent on traditional methods of cultivation. As India is the major country to export Nepalese agricultural productions, which is constantly facing problems of tariff and non-tariff to export there.
As an example, after 2013, as ginger farming grew highly in northern India, it imposed several restrictions on Nepali products. The government never tried to solve the hurdle raised by India. Quarantine test labs were lacking at the borders. India accused Nepali farmers of chemical pesticide and fertilizer use that they deny.
Nepal should not be only dependent on India for export; it must diversify export to other countries. Dried slice of ginger is in high demand in Europe, Japan, and America. EU alone annually absorbs 800 thousand tons of dried ginger. So, the demand is very high. Most of our farmers are exporting raw ginger to India as it is much easier for our farmers to reach Indian markets. A ginger dryer plant is not cheap.
A speedy technological reform is required in the agriculture sector to fulfill the internal demand for food. The use of chemical fertilizers in the Nepalese agriculture sector is not satisfactory. There is no fertilizer producing industry in Nepal and the fertilizer imported by the government sector is not enough to fulfill the requirement of agriculture, and this is full of controversy. Substandard, illegally imported fertilizers extensively are being used in agriculture in Nepal. The quality of such smuggled fertilizers has not been properly tested in laboratories in Nepal. Use of such fertilizers in substantial quantities has contributed to lower agricultural productivity. Fertilizer import by an individual and by a private company in Nepal is very difficult, and it is almost impossible to fulfill all the procedures of the government.
Nepal must develop its cooperatives with high efficiency to support the agriculture sector. Cooperatives are powerful and sustainable tools for marketing and development of this sector both at the grass root and national level. The Indian dairy cooperatives system and export vegetable cooperatives of Guatemala are good examples, and we could follow many positive aspects of it.
Moreover, special commodity policy is needed to be formulated for import substitution and export promotion of this sector. Emphasis must be given to produce commercial and high-value items, such as vegetables, fruit, meat, milk, herbs, fish, livestock, egg, leather, silk, bees, organic farming and lesser use of insecticides. Some programs are also to be launched for better soil fertility management. Public-private partnership for seed production to enhance productivity and to support agriculture security has been the demand of time.
More importance must be given to developing cold storage, external market study, soil conservation, forestation, agri-roads and control on low-quality fertilizers. Besides, projects on deep tube wells, shallow tube wells, and small hydropower should be implemented. To solve the problem of milk, control on the import of milk and milk products, diversification of milk products, encouragement to the private sector, tax holidays for animal food industries and the establishment of powder milk industry of large-scale, etc. are some of the measures to be implemented more effectively and efficiently.
The central bank’s monetary policy has directed banks and financial institutions to invest a certain percentage of their investment in productive sectors including agriculture, but the outcomes are not very promising. In 2013, the government announced crop and livestock insurance. The government provides 50 percent subsidy on insurance premium for crops and livestock. However, the scheme has not yet become popular.
Food market in Nepal has been controlled by the private sector. The Nepal Food Corporation (NFC) has a food market share of just about 2%. More small companies, cooperatives related to food management are required to be established in collaboration with a public-private partnership in local level with the inclusion of small farmers.
Nepal’s per capita food intake of 2,100 calories is below the international standard. It indicates low food consumption and lower quality food production. The slow modernizing of agriculture sector is facing more problems in cash crops production. The government’s subsidy in agriculture sector is decreasing, and the expenditure in the agriculture sector is almost stagnant.
Conclusion
The agriculture sector has been proved the backbone for the economic development. Nepal could significantly reduce its food insecurity over the next decade if it revamped its agricultural sector and invested more in irrigation.
The increased agriculture surplus changes the life standard of the rural people, and the surplus agriculture production is the backbone of a developing economy. Besides, the life of the rural population can be blissful only through surplus agriculture production in LDCs. In other words, surplus agriculture production is the key factor for poverty alleviation in developing countries.
Moreover, the campaign of poverty alleviation through agriculture development has been a challenging task. The agriculture sector is the lifeline for the rural people, and this sector should not be assessed from a cost benefit point of view in the public sector.
Alleviating hunger and poverty has been and continues to be the dominant policy challenge to the global and national decision makers. There are four major trends that are shaping the future food economy and consequently the prospects for meeting the hunger and poverty goals. These trends are: (i) rapid urbanization in the developing world and its impact on food markets, (ii) increasing integration of global food markets through trade, (iii) deterioration of natural resources base and the degradation of the global and local commons, and (iv) rising transactions costs in the acquisition and use of science and technology for development.
The government should be on high alert for the overall development of the food sector. The government should have an efficient demand and supply information system of necessary food crops. Supply policy and the program should be scientific and based on reality. The quantity of food required for a year, internal production, import and export position, quantity to be controlled by the government, international production scenario, the international prices and the price policies are the major areas of concern where the government should have good statistics and program of implementation. The recent hike in international food prices severely affects the people of developing countries. Due to the backwardness of the Nepalese agriculture sector, price augmentation of agriculture production has badly hammered the poor people.
Price of the agricultural product should be stable. Frequent changes in food prices affect the producer, businessman, and consumers, which destabilize the market system. Some economists presume that the government should always have control over 25% of national food production. For this purpose, large storehouses are required so that the government can control the market by supplying its reserve stocks of food during food crisis and to the people in the time of urgency. Due to lack of proper storage facilities both in the government and private sector, agriculture production is exported to India during the harvest season and imported during the other production season in Nepal.
Development of agriculture means the development of village and development of village means the real development of the country. The Nepalese agriculture sector is dependent on monsoon rain. Despite many decades of planned efforts, the Nepalese agriculture sector is still subsistence oriented; primarily food based and relatively undiversified. In total, the agriculture sector in Nepal is not developed satisfactorily, so Nepal is poor. However, it contributes large share in GDP.