Food prices become dearer

Disruptions in supply and increased fuel prices once again fuelled the price rise of food items in June after going through a moderation in the past few months.

The series of strikes nationwide due to the conflict regarding the structure of a new federal Nepal brought about a large scale disruption in supply in April and May hitting food prices hard. Likewise, Nepal Oil Cooperation's move of increasing diesel price by Rs four to Rs 93 per litre will affect transportation cost which will in turn put more pressure on prices.

"Such a continuous increase in fuel prices is a major concern for food security due to its likely contribution to the rise in transportation costs, thereby raising food prices," according to a joint report published by UN World Food Programme (WFP), Ministry of Agriculture Development (MoAD), Federation of Nepalese Chambers of Commerce and Industries, and Consumer Interest Protection Forum.

Increasing food prices have also started pushing the overall inflation up since the last couple of months. The index of food and beverages group increased by 7.1 per cent during the first 10 months of the current fiscal year, according to the macroeconomic report published by Nepal Rastra Bank which a month back was a mere 4.6 per cent.

Moderated food inflation was attributed for the general price level staying close to the target level of seven per cent but with the increasing food prices, national inflation might also see an upward trend once again, pointed out vice president of Consumer Rights Protection Forum Ramesh Chandra Poudel.

Moreover, a delay in the monsoons combined with insufficient fertilisers has affected timely plantation of paddy across the country and the growing maize mainly in the hilly belt, indicating a negative outlook for the summer crop production as compared to last year.

The index of non-food and services group increased by 10.1 per cent during the review period that stood at 4.2 per cent last year. In the retail markets regularly monitored by MoAD and WFP, most prices showed a slightly upward trend over the past one month, says the report. The national average price of coarse rice went up by 1.9 per cent in a kilo.

Likewise, prices of soybean oil and red potato climbed up by 1.4 per cent and 1.7 per cent in the review period. In the review period, the price index of vegetables went up by 27.8 per cent due to supply problems while it had increased by 48.3 per cent during the same period last year.                        

Fertiliser shortage continues, farmers warn of protest

Farmers, united under the umbrella of All Nepal Farmers' Association, today warned that they will protest against scarcity of chemical fertiliser in the market.
"If the government does not ensure the fertiliser supply soon, the farmers will start protest in street," chairman of the association Bamdev Gautam said in the Reporters' Club today.
The association has also demanded to scrap the tender given to Indian Potas Ltd (IPL), a blacklisted company for supplying low weight fertiliser sacks in March. "Giving tender to the blacklisted company is like looting of state treasury and Dr Baburam Bhattarai-led government is promoting it," he blamed.
The association has put six-point demands including immediate supply of fertiliser and scraping the tender process. But the government has been maintaining silence that will cost the country heavily.
Investigation committee under the Ministry of Agriculture Development had found about 4.42 kg less weight in 50 kg sack supplied by the company in March. The government had started the process to buy 30,000 metric tones (MT) di-ammonium phosphate (DAP) from IPL in May 8.
However, Agriculture Input Company (AIC) has asked the Mineral and Mine Trading (MMTC) to supply 12.500 metric tones of DAP. "The company has supplied fertiliser but it is a drop in ocean," said managing director of the company Sashi Raj Tuladhar.
On one hand the erratic rainfall has hit the farmers and on the other the shortage of fertiliser has made it difficult for them to harvest paddy that contributes more in the agriculture gross domestic production.
Agriculture contributes 33 per cent in the total GDP and the lack of fertilizer in the paddy season, will hit the economic growth of the country for the next fiscal year.
According to estimates some 700,000 metric tones of fertiliser is needed in paddy season. "The farmers will not get sufficient fertiliser for paddy — a major crop of the country — season," he said, adding that shortage of fertiliser has been sparking protests across the country.

Some hilly districts face high food insecurity

Across the mid and far western hill and mountain districts, the population suffering from food insecurity is estimated to be around 0.49 million in the first quarter of the year 2012.
"The number has increased compared to the previous quarter though it is slightly less than the same time last year," according to the Nepal Food Security report published by Ministry of Agriculture Development-Food Security Monitoring Unit and World Food Programme (WFP).
In Darchula, five village development committees — Dhaulakot, Sitola, Guljar, Dhuligada and Ranisikhar — are classified as 'highly food insecure' and a total of 11,223 people in those VDCs are facing the high level of food insecurity also mainly due to a low summer crop production of maize and paddy.
"These households are coping with consuming less preferred food, heavy borrowing of food/cash and selling of small livestock," the report said, attributing the scarcity to a series of bandhs called by various political parties and ethnic organisations across the country during the period forcing the markets to close and businesses, industries shut down putting pressure on supply side.
A day’s Bandh is said to cost billions to the national economy affecting people’s livelihoods and food security and the poorest are often the worst hit, it added.
Closed markets limit availability of food at household level and industries and businesses shutdown will result in no wage of the day for wage labours coupled with higher food prices due to limited supply, hindering those households with low purchasing power from accessing food. Poor households spend more than seventy per cent of consumption on food and they mostly rely on daily wages as the income source.
The situation is expected to improve during the next cycle due to the upcoming winter crop harvest and the starting of the Yarchagumba collection in May-June.
Winter crops of wheat and barley are harvested across the country between April and June, according to the Ministry of Agriculture Development that projected wheat and barley production to be 1.85 million metric tonne (MT) and 0.035 million MT — an increase by 5.7 per cent and 14.9 per cent respectively compared to last year.
It is worth noting that the wheat production has broken the last year’s national record of 1.75 million MT. The fiscal year 2011-12 edible cereal balance has set a record high 886,000 MT surplus, equivalent to 17.2 per cent of the total requirement.
According to the report from the District Food Security Networks in the 17 mid and far west hills and mountain districts, out of the total of 786 VDCs and municipalities, some 30 per cent are classified as food insecure, five VDCs in Darchula are 'highly food insecure, some 233 VDCs (29.6 per cent) in Humla, Mugu, Jumla, Dolpa, Achham, Bajura, Doti, Baitadi, Bajhang, Darchula, Dailekh, Jajarkot and Rukum are 'moderately food insecure'.

Nepal seeks Indian help to boost sugar production

A team led by government officials extensively toured Maharashtra to study sugar production.
They visited government officials in Mumbai and Pune apart from the Vasantdada Sugar Institute in Pune. The Vasantdada Sugar Institute is dedicated to research in sugarcane.
"The visiting Nepali team asked for technical help for its sugar industry," said director general of Vasantdada Sugar Institute Shivajirao Deshmukh.
The delegation also visited institutes related to the co-operative sector — like Pune-based Vaikunthbhai Mehta co-operative training institute — as most of Maharashtra's sugar industry is in the co-operative sector.
Later, the team went to Kolhapur and Sangli districts to visit some of the co-operative sugar mills and avail information about their workings. They also visited the Warna complex, the dairy and sugar co-operative from Kolhapur.
Domestic sugar production is sufficient to meet about 35 per cent to 40 per cent of the market demand. For the rest of the country's sugar requirement, Nepal is dependent on India.
The per hectare yield of sugarcane is 47 tonnes, and sugar recovery is eight per cent in Nepal, whereas in Maharashtra, the average sugar recovery is 11 per cent.

Jhapa records highest rice production

Jhapa district topped the list of highest rice producing district whereas Syangja tooped the list of highest maize producing district.
"Though, we have good crops in all the regions this year, productivity is still low," spokesperson of the ministry Dr Hari Dahal said, adding that current productivity is around 3.3 MT per hector.
Bhaktapur has the highest productivity of 5.93 MT per hector followed by Lalitpur and Nuwakot districts with 5.79 MT per hector and 5.76 MT per hector, respectively, he added.
In high rice yield, Terai has contributed 73.24 per cent to 3.71 million MT followed by Hill 25.82 per cent to 1.20 million MT and Mountain 3.05 per cent to 154,459 MT.
Food security situation has significantly improved with record production of two major crops, rice and maize, thanks to good monsoon.
"The country has bumper crops this year," Dahal said, adding that rice production recorded 5.07 million metric tonnes (MT) and maize 2.17 MT this year improving the food security situation as the production is sufficient to feed 26.62 million populace.
"We can even export up to 200,000 MT rice to neighbouring or third countries in quantitative restriction," he said. "Bangladesh has been suffering a food shortage of about half a million MT this year."
Nepal has witnessed 13.7 per cent increment in rice and 5.4 per cent in maize production.
Earlier rice production has recorded 4.52 million MT in fiscal year 2008-09. Last two years had witnessed continuous fall posting only 4.02 million MT in 2009-10 and 4.46 million MT in 2010-11.
According to him, increase in rice production contributed by not only the good monsoon but also increased cultivation area. Rice cultivating area has increased by 2.3 per cent to 1.53 million hectors. However, maize production has increased to 2.17 million MT despite 3.8 per cent fall in production area.
According to the ministry, millet (Kodo) and buckwheat (Phapar) production also increased by 4.1 per cent and 13.3 per cent, respectively. About 315,067 MT millet and 10,021 MT buckwheat have produced in the country this year.
Global rice production has increased by three per cent in the current year. Rice production has decreased in only a half dozen countries including Japan, Indonesia and South Korea.


Top rice producing districts
Jhapa–321,840 MT
Rupandehi–301,000 MT
Morang–277,610 MT
Bara–241,340 MT
Kapilbastu–207,350 MT
(Source: Ministry of Agriculture and Cooperatives)

Top maize producing districts
Syanja–92,750 MT
Ilam–77,500 MT
Bhojpur–74,370 MT
Tanahu–63,970 MT
Baglung–59,044 MT
(Source: Ministry of Agriculture and Cooperatives)

Rice-Maize prodution on rise
Year — Rice — Maize
2009-10 –– 4.02 — 1.85
2011-12 –– 4.46 — 2.06
2010-11 — 5.07 — 2.17
(Figures in million metric tonne. Source: Ministry of Agriculture and Cooperatives)

Govt plans separate agency to monitor big cooperatives

The government is planning to form a separate agency to monitor big cooperatives after central bank refused to monitor them.
Department of Cooperatives is creating a new agency, said registrar of the department Sudarshan Prasad Dhakal.
"We have submitted a detail proposal to the Ministry of Agriculture and Cooperatives to form a separate agency inside the department," he said, adding that the ministry has forwarded the proposal to Finance Ministry and Ministry of General Administration for their consent in budgeting and staffing issues.
"It will come under the department but gets a separate jurisdiction to monitor cooperatives," he said, adding that it will start monitoring and inspection from cooperatives that have over Rs 50 million annual transactions.
There are around 15,000 saving and credit cooperatives in the country but some 200 cooperatives have such big transactions.
Most of the big cooperatives are in the Kathmandu Valley, Kathmandu, Lalitpur and Bhaktapur districts. Around 12 per cent cooperatives are in the major towns like Biratnagar, Pokhara, Birgunj, Butwal and Nepalgunj.
According to him, the department has proposed a joint-secretary level chief monitoring officer, five section officers and a dozen of supporting staff for the monitoring wing. "Nepal Rastra Bank (NRB) will provide technical support to the team," Dhakal said, adding that the central bank is also positive on the new agency.
The department data revealed that cooperative sector has around Rs 111 billion deposit and mobilised loans worth Rs 97 billion in the different sectors. Savings and credit cooperatives have a share of 87.38 per cent deposits and almost equal share in lending too.
Financial activities of saving and credit cooperative has come under public criticism in recent years as they are not abiding by the basic norms of cooperative – cooperation and collaboration among members but are more profit oriented and have lent heavily on lands.
The economists have been urging the government to strictly monitor the sector for the financial sector's stability. And, the government has promised to monitor big saving and credit cooperative through central bank in the budget for the fiscal year 2011-12.

Nepal betters on its fight against hunger

Nepal has improved in the global hunger index (GHI). But this still gives one lots of food for thought as there is still a long way to go.
It ranks 33rd among serious hunger affected country and 55th in the overall global hunger index (GHI) that has 81 countries reviewed in the current year.
Nepal's score improved and managed to climb one category but is still at the bottom of the serious hunger category from alarming situation. Nonetheless, the country is on a winning path in its fight against hunger.
Nepal's score improved to 19.9 this year from last year's 23, when it was under alarming category. In 1990, the country had a score of 27.1 and 1996 score dropped to 24.6 and in 2010 it further dropped due to improving situation.
The lower the score the better the condition of the hunger in the country, according to International Food Policy Research Institute (IFPRI) that calculates the GHI every year, countries with extremely alarming have the score over 30, whereas alarming situation has score between 20 and 29.9, serious falls under score between 10 and 19.9 hunger situation. Similarly, the countries with score under 10 are moderate and under five are ranked under low.
“From food deficit situation a fiscal year ago, the country recorded 4,43,000 metric tonnes (MT) of food grains surplus in the last fiscal years," spokesperson of the Ministry of Agriculture and Cooperatives Hari Dahal said, adding that the situation is improving lately.
The Index is based on three equally weighted indicators; the proportion of undernourished as percentage of the population, the prevalence of underweight in children under the age of five and the under five-mortality rate.
The 2011 GHI report also revealed how the hunger situation has developed since 1990 at global, regional, and national levels. Globally, the GHI fell over one fourth from 19.7 in 1990 to 14.6 in 2011. The global GHI 2010 had been 15.1 in an average. Regardless of the positive trend, the global fight against hunger is not reaching its goals fast enough, the report said, adding that some 29 countries still have an alarming (20-29.9) or extremely alarming (over 30 score) hunger situation.
The global averages hide dramatic differences among regions and countries. The 2010 GHI had fallen by 18 per cent in Sub-Saharan Africa compared with the 1990 GHI, by about 25 per cent in South Asia, and by 39 per cent in the Near East and North Africa.
Sub-Saharan Africa and South Asia share the highest regional GHI scores (22.9 and 21.7 respectively), but food insecurity in the two regions stems from different reasons.In South Asia, the major problem is a high prevalence of underweight children under five, which is a result of lower nutrition and educational status of women. In contrast, the high GHI in Sub-Saharan Africa is due to high child mortality rates and the high proportion of people who cannot meet their calorie requirements because of bad governance, conflicts, political instability and high HIV/Aids rates.
The highest regional GHI score can be found in South Asia. After a rapid decrease between 1990 and 1996, the scores have not changed much despote the economic growth over the same period.
"The progress is inhibited by social inequality and the low nutritional, educational and social status of women," the report said, adding that slightly better numbers in Sub-Saharan Africa stem from the end of a several conflicts in in the 1990s and 2000s, economic growth and successes in fighting Aids.
The Index that is a tool designed to comprehensively measure and track hunger globally and by country and region highlights successes and failures in hunger reduction and provides insights into the drivers of hunger. By raising awareness and understanding of regional and country differences in hunger, the GHI will, it is hoped, trigger actions to reduce hunger.But no one really knows how many people are malnourished. The statistic most frequently cited is that of the UN Food and Agriculture Organisation, which measures 'undernutrition'.
The most recent estimate, released last October by FAO, revealed that 925 million people are undernourished meaning number of hungry people has increased since 1995-97 due to neglect of agriculture relevant to very poor people by governments and international agencies, the current worldwide economic crisis and the significant increase of food prices in the last several years which has been devastating to those with only a few dollars a day to spend.
The 925 million people is 13.1 per cent of the estimated world population of seven billion in the world meaning almost one in seven people are hungry in the world.The FAO estimate is based on statistical aggregates. It first estimates the total food supply of a country and derives the average per capita daily food intake from that. The distribution of average food intake for people in the country is then estimated from surveys measuring food expenditure.
Using the information, and minimum food energy requirements, FAO estimated how many people are likely to receive such a low level of food intake that they are undernourished.
This year's report focused particularly on the issue of food price spikes and volatility, which have played a large role in the global food crises of 2007–08 and 2010–11. Many poor people already spend large shares of their incomes on food, and surges in food prices leave them unable to pay for the food, healthcare, housing, education, and other goods and services they need.An IFPRI researcher describes the factors that have contributed to the increasing and more volatile food prices of recent years and their effects on poor people in developing countries.
Taming food price spikes and volatility will require that is understood as the causes and address them appropriately.

Food security situation remains stable

The overall food security situation has remained stable across the country.
“It is mainly attributed to a good harvest of winter crops (April-June) and employment opportunities generated by development aid,” according to Nepal Food Security Bulletin jointly produced by Ministry of Agriculture and Cooperatives and World Food Programme (WFP).
The main winter crops of wheat and barley production increased by 12.2 per cent and 9.6 per cent respectively compared to last year. Wheat production set a national record of 1.75 million metric tonne.
The situation, however, remains a concern for some in some pocket areas where crops were affected by localised natural disasters like insufficient rainfall and hailstorm, the report added.In Saptari the District Food Security network (DFSN) has identified 28 Village Development Committees (VDCs) in the south-western belt of the district as highly food insecure.
The report has attributed it to a 60 per cent reduction of wheat and spring paddy production due to a dry spell, which was cumulative to the 2010 reduction of 40-60 per cent in the main paddy production. Parts of the Eastern Hill and Mountain districts are reported as moderately food insecure, it said, adding that it reflected a seasonal deterioration in those areas where winter crops like wheat and barley are cultivated in limited areas and hence do not play a significant role in food security.
Most of the Mid and the Far Western Hill and Mountain districts reported a food secure situation, according to the report. Overall wheat and barley production ranged from normal to a 30 per cent or higher increase compared to last year.
Development programmes supported by various organisations have created good employment opportunities, it said, adding that main summer crops of maize and paddy are growing well across the country and the overall production outlook is good.
Good production of winter crops, wage employment opportunities created by development programmes, remittances, and regular supply of food to the local markets contributed to a stable food security situation across the country, it concluded, adding that a seasonal deterioration is reported in part of the Eastern Hill and Mountain districts where the winter crops of wheat and barley are cultivated in limited areas and do not play a vital role in food security.
The situation in upper Dolpa and some Village Development Committees in the northern and the southernbelt of Baitadi are likely to deteriorate to the highly food insecure phase during the next cycle as there will be no incoming harvest and employment opportunities as well as market supply will be affected by monsoon.
The food security situation in the rest of the country will remain stable expected to improve due to the positive outlook of summer crops.According to the central bank, High food prices remain a concern. The year-on-year inflation, measured by the Consumer Price Index, increased by 8.8 per cent in mid-June 2011 whereas the indices of the cereal subgroup increased by 10.4 per cent.

Sajha Yatayat plans flag carrier to neighbouring countries

Sajha Yatayat -- once very popular means of transportation in the country is planning to operate land transport flag carrier service -- to neighbouring countries -- apart from operating urban transport service in Kathmandu Valley and inter-district transport service.
"We have three-point goal," said newly elected chairman of Sajha Yatayat Cooperatives after assuming his charge here today.
"We will work on the goals phase-wise," he said, adding that it will now seek a good management team first.
Sajha Yatayat -- a 50-year old organisation that started mass transport service in Nepal -- failed to retain its past glory post 1990 movement and the private sector started coming aggressively in mass transportation sector.
The extraordinary general meeting of Sajha Yatayat Transport cooperative unanimously elected its new board today. Journalist Kanak Mani Dixit has been elected as chairman in the newly elected board that has former registrars of the Cooperatives Department Shanker Raj Joshi and Binod Kumar Adhikary, banker Bandhana Thapa and environmentalist Bhushan Tuladhar.
The annual general meeting two months ago decided to take the organisation away from government control and revive it as a genuine cooperative by directly electing board members.
The other members of the board are DG of Department of Transport Krishna Prasad Dawadi and Registrar of the Cooperatives Department Sudarshan Raj Dhakal.
"The government has taken an extraordinary step in helping Sajha Yatayat evolve as a cooperative," said immediate past chairman and secretary at Labour and Transport Ministry Dinesh Hari Adhikary handing over the charge to the new board. He also hoped that the new board will work effectively to provide the public with efficient, secure and economical public transport service.
Ending almost fifty years of government control Sajha Yatayat has been transformed into a fully cooperative model with directly elected board directors from today.
It has been dysfunctional for the last four years due to political bickering by successive governments and mismanagement.
Registered under the Cooperative Act, Sajha Yatayat was controlled by the government majority, though it has a total of 233 members.
"It needs to procure at least 20 new buses in the first phase, and gradually expand its fleet to lessen the private sector monopoly in the public transport sector," according to Sajha Yatayat.
Earlier, it used to operate a total of 182 buses on different routes in the country but it has only eight buses at present.
Sajha Yatayat had twice tried to operate on Kathmandu-Lhasa route too but it could not continue its service for long.

Agriculture Ministry prepares draft to comply with WTO norms

Agriculture Ministry has prepared a draft of Plant Variety Protection Act.
"We are waiting for the government's approval of the draft Act to finalise it," said spokesperson of the ministry Dr Hari Dahal.
The Act is one of the key components under Agreement on Trade Related Aspects of Intellectual Property Rights of the global trade regime.
As Nepal has already become a member of the World Trade Organisation (WTO), it is now a challenge to formulate appropriate policies and enhance the institutional capabilities in order to comply with and take advantage from the WTO. “We is also preparing Food Safety and Quality Policy and amending some of the old Acts to comply with Nepal's commitments by 2013," he said, adding that the ministry is also finalising the draft of Food Safety and Quality Policy.
Nepal still has to get international Laboratory Accreditation and enhance capacity of employees to meet the WTO standard under agriculture sector, Dahal said, though, the country has already become member of International Plant Protection Convention, ratified International Treaty on Plant Genetic Resources for Food and Agriculture, and established National Codex under the requirements of WTO. “We are in the process of establishing Post Entry Quarantine facility at Harihar Bhawan in Lalitpur also."
Nepal became a member of the world trade regime on April 23, 2004 through negotiation. During the accession, Nepal has made commitments in the agriculture, goods and services sector, which are substantial compared to those made by original members at a comparable level of economic development.
Nepal had made commitments to comply with all WTO trade rules latest by the end of 2006 and fully implement the provisions of Agreement on Technical Barriers to Trade and Agreement on Sanitary and Phytosanitary Measures by January 1, 2007 but the country has extended the deadline to 2013. “We got the time extension also due to delayed accession," Dahal said.
Though, WTO members agreed to discipline the agriculture sector by reducing domestic and export subsidies at the time of the establishment of the WTO, they are negotiating on the new reduction commitments and time period.
Nepal will have to be cautious that the modalities for tariff reduction ensures enhanced market access in the developing countries and elimination of tariff peaks and tariff escalation in the developed countries -- incase these are not addressed by duty-free quota-free access.
Nepali exports of agriculture products are concentrated in few products and also in few countries like vegetable fats, wheat, lentils, cardamom, oil seeds are exported to India whereas the major market for sugar is Europe.
Thus, the focus of Nepal on market access could be on opening markets in developing countries rather than in the developed countries.

Maize import shoots up by five times

Import of maize has increased by almost five times in a year. “The import of maize in the fiscal year 2009-10 stood at 1,32,213 metric tonnes from 32,861 metric tonne a year ago,” said spokesperson of Ministry of Agriculture and Cooperatives Dr Hari Dahal.
Similarly, the maize seed import has also more than doubled in a year. “In the fiscal year 2008-09, only 458 metric tonnes seed of maize was imported but in the fiscal year 2009-10, the import went up to 9,778 metric tonne,” he said, adding that Nepal is still ranked at the 23rd position among the maize producing nations list.
Maize is not only the second staple food but also the second crop. It occupies 26 per cent in the total food grain consumed in the country.
“In the last one decade, maize production has increased by 28 per cent, and its productivity has increased by 20 per cent,” according to the ministry that has started the fourth phase of Hill Maize Research Project that will run for four years beginning this August.
“Of the total project cost of Rs 5.65 million, Rs 2 million will be supported by the USAID and the remaining by the Swiss Agency for Development and Cooperation,” Dahal informed.
Some 3,500 poor and marginalised families of the 20 high-hill districts will benefit from the project, he said, adding that apart from government agencies the private sector will also be included in the project.
After the first phase (1999-2002), second phase (2003-2007) and third phase (2008-2010), the project will help increase maize yield that is among the lowest in Nepal.
The maize yield in Nepal stands at 2,361 kg — according to the ministry data — that is lesser than 2,647 kg of India and 5,535 kg of China.
The low yield is attributed to low seed replacement rate — that is only six per cent — coupled with soil, irrigation and timely fertilisers.
Nepal has 17,500 metric tonne demand in Nepal but the production is 1,076 metric tonne only.
Though, Nepal is an agrarian economy, it could not become government’s priority after 1990. Till seventh five-year plan, agriculture was the first priority of the government and donors but after the eighth five-year plan, the priority has shifted.
The government has earmarked Rs 10.52 billion for the total agriculture sector in the budget for the current fiscal year that is only 2.5 per cent of the total national budget. Among all the ministries, Agriculture Ministry comes at the eighth position in the ranking of budget volume, Dahal informed.

Maize import shoots up by five times

Import of maize has increased by almost five times in a year, the data revealed.
"The import of maize in the fiscal year 2009-10 stood at 1,32,213 metric tonne from 32,861 metric tonne a year ago," said spokesperson of Agriculture and Cooperatives ministry Dr Hari Dahal.
Similarly, the maize seed import has more than doubled in a year. "In the fiscal year 2008-09, some 458 metric tonne seeds of maize was imported but in the fiscal year 2009-10, the import went up to 9,778 metric tonne," he said, adding that Nepal is still ranked at the 23rd position among the maize producing nations list.
Maize is not only the second staple food, but also the second crops among domestic production. It occupies 26 per cent in the total food grain consumed in the country. "In the last one decade, maize production has increased by 28 per cent, and its productivity has increased by 20 per cent," according to the ministry that has started the fourth phase of Hill Maize Research Project that will run for four year from this August.
"Of the total project cost of Rs 5.65 million, Rs 2 million will be supported by the USAID and remaing by the Swiss Agency for Deveopment and Cooperation," Dahal informed.
Some 3,500 poor and marginalised families of the 20 high hill districts will benefit from the project, he said, adding that apart from government agencies the private sector will also be included in the project.
After the first phase (1999-2002), second phase (2003-2007) and third phase (2008-2010), the project will help increase maize yield that is among the lowest in Nepal.
The maize yield in Nepal stands at 2,361 kg -- according to the ministry data -- that is lesser than 2,647 kg of India and 5,535 kg of China.
The low yield is attributed to low seed replacement rate -- that is only six per cent -- coupled with soil, irrigation and timely fertilisers.
Nepal has 17,500 metric tonne demand in Nepal but the production is 1,076 metric tonne only.
Though, Nepal is an agrerian economy, it could not become government's priority after 1990. Till seventh five-year plan, agriculture was the first priority of the government and donors but after eighth five-year plan, the priority has shifted.
The government has earmarked Rs 10.52 billion -- for the total agriculture sector in the budget for the current fiscal year -- that is only 2.5 per cent of the total national budget.
Among all the ministries, Agriculture Ministry comes at the eighth position in the ranking of budget volumn, Dahal informed.

Government fix sugarcane price at Rs 401 per quintal

The agitating sugarcane farmers called off their strike today after the government agreed to fix a minimum price.
A meeting in the Valley today afternoon in the office of care taker Prime Minister Madhav Kumar Nepal has fixed the price of sugarcane at Rs 401 per quintal.
According to Federation of Sugarcane Producers Farmers chairman Kapil Muni Mainali the strike was called off after the price was fixed.
The meeting has also agreed to set a Sugarcane Development Board.
The sugarcane farmers have been agitating after the industries declined to hike the price of sugarcane and forced them to sell sugarcane in low price. They were demanding Rs 421 per quintal, while the industries had agreed to pay not more than Rs 330 per quintal this year.
Last year‚ the government had fixed the rate of sugarcane price up to Rs 570 per quintal from a minimum of Rs 421.
Earlier, the administration had also clamped curfew in 13-km range of the East-West highway in Sarlahi after the farmers obstructed the highway to pressurise the government to fulfil their demands.
Sugarcane farming accounts for 70‚000 hectors of land in seventeen districts in the Terai region. Nepali market consumes 1.5 million tonne sugar per year but the domestic sugarcane is enough to produce only one million tonne, according to the farmers.
Every year, the country has been facing sugar shortage in the festival seasons pushing the price up. However, this year, the price has not seen whopping rise -- due to easy availability -- in price unlike last year.
According to the central bank, the price indices of sugar and sweets increased by 28.8 per cent in the first four months of the current fiscal year against an increase of 50.3 per cent in the same period last year.
The sugarcane farmers have been blaming the government for not being interested in addressing their problems, though the caretaker Prime Minister Nepal had directed the secretaries of Ministry of Finance‚ Agriculture and Cooperatives and Ministry of Industry to create an environment of consensus and fix price with agitating sugarcane farmers.

Cooperatives can bring sea-change

The cooperative movement has brought about a sea change in rural economy, said Horst Ammann, Programme Manager, Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH-Inclusive Development of the Economy (INCLUDE), one of the lead contributors to the second Microfinance Summit Nepal 2010.
"Cooperatives are doing good at the primary level," he said adding that at the secondary level it has to be reworked with access to finance. Without broad access to finance, inclusive economic growth cannot be achieved," he said.
"Without cooperatives nothing can move in rural areas," Ammann added. "Apart from access to finance, they should be capacitated, supervised and encouraged."
The German agency had also supported the first microfinance summit in 2008 that has proven a successful tool in uniting microfinance stakeholders in Nepal and abroad towards building a strong and inclusive microfinance sector.
His organisation has helped found many cooperatives, helped manage them and also trained small farmers' cooperative system that provides financial and non-financial services. It was GTZ that helped form Small Farmers Development Bank.
Though they are doing good, the movement needs a another look. "An independent federation of cooperatives would make sense," he said adding that the government can play the role of regulator. The government should give them space for their development and not interfere.
However, Ammann was upbeat about the summit. "We are also looking forward to share experiences from GTZ INCLUDE's programme approach in 14 programme districts of Nepal. We will present our lessons learned vis-à-vis a 'business model for value chain finance through cooperatives' as well as 'linking entrepreneurship development with microfinance clients'. We are also looking forward to the input of stakeholders," he added.
He also called for strong and united messages from stakeholders of the microfinance sector. "We are looking forward to answers to open issues like deprived sector lending, how microfinance can contribute to inclusive growth in Nepal, increasing access to financial services in remote areas and to disadvantaged groups, the missing middle, the commercialisation of microfinance institutions and what more roles cooperatives can play."
Philipp Kruschel, Senior Advisor to GTZ INCLUDE, said he was happy to support the summit. "The summit is a unique opportunity to bring together a broad range of microfinance practitioners with representatives of the public sector as well as development partners here and abroad and jointly develop a vision for the future," he said adding that it would be a great chance to discuss the opportunities for and challenges to the microfinance sector in the light of much-needed inclusive economic growth in Nepal.
For inclusive economic growth, education is a must. "The basic concept of cooperatives is to educate," Ammann said adding that people should understand the value of education. "To push for education, the government has to support and protect the movement."
The educated mass can be involved in economic activities and by delivering financial services to people in rural areas the lower income strata can be brought within the ambit of economic activity.
In a similar fashion, inclusive economic growth can only be achieved if the 'missing middle', which neither has access to micro credit nor to services of commercial banks, will not be left out of this process.

Second Microfinance Summit
The second edition of the Microfinance Summit is going to be held on February 14-16 in Kathmandu.
The summit -- with the theme 'Microfinance for Inclusive Economic Growth' -- is aimed at addressing some new issues in the sector that has been identified after the success of Microfinance Summit 2008 and the seventh National Steering Committee meeting held on September 11 2009.
This summit aims to discuss on how to increase funding for the microfinance sector to improve client retention for microfinance services while simultaneously improving the livelihood of existing clients with entrepreneurial skills; how to make microfinance more inclusive towards excluded groups, the formal financial sector, and the macroeconomic framework of Nepal; how to properly govern Microfinance institutions so that they can not only reach their intended target markets in rural areas, but also provide them with sustainable microfinance practices; how to eradicate the burdens of poverty such as a lack of access to healthcare and education through the incorporation of savings and insurance schemes with microfinance practices; and how to improve credit schemes and creating a model for value chain finance in microfinance in cooperation with commercial banks so as to improve the sustainability of the microfinance sector.
The goal of the Microfinance Summit Nepal 2010 is to unite microfinance stakeholders in Nepal and ensure microfinance for inclusive economic growth. It also aims to improve and increase outreach to all households in need of microfinance services with the development of a joint microfinance strategy and action plan.
The second summit also aims to facilitate a broad dialogue among all stakeholders involved in the field of microfinance: policymakers and regulators, public institutions concerned with the microfinance sector -- including government-owned banks, microfinance practitioners, commercial banks and interested financial sector institutions -- including insurance agencies, remittance service providers, technical support providers and training institutes, and international donors.
It aims at discussing the issues for further development of the sector and to develop strategies to overcome any shortcomings; share information on current microfinance practices in Nepal and provide participants with up-to-date information on experimental trends and innovations -- both technical and strategic -- in the national and international microfinance sector; encourage policymakers to adopt recommended policies in order to improve the effectiveness of the microfinance sector in the national development strategy; showcase the achievements of Nepal's microfinance sector and the commitment of its stakeholders through a presentation of the results of the summit at the Global Micro-credit forum.
Microfinance has been one of the effective tools for poverty reduction in the developing countries. Despite ongoing development efforts, poverty remains rampant in Nepal with approximately 31 per cent of the population living below the poverty line. The incidence of poverty is highest in remote and rural areas. Through the creation of sound microfinance institutions and systems, poor people can safely deposit money and accumulate funds for future investments or emergencies as well as access loans for productive purposes leading to higher incomes.
Microfinance also produces an impact in other areas including good governance, participation in the political processes, women empowerment, social inclusion, and conflict transformation.
Currently, more than 1.6 million individuals in the rural population have access to microfinance services. This figure represents approximately eight per cent of the population and approximately 26 per cent of the people living below the poverty line.
However, the outreach of sustainable and sound microfinance institutions to the rural and urban poor must be increased to obtain more effective statistics and further diminish poverty.
The Microfinance Summit Nepal 2010 will attempt to address the broader theme by focusing on Value Chain Finance, innovative products and services, clients and protection, sources of fund and competitiveness.
Thus, the summit is expected to bring a series of outcomes. The first outcome will be that stakeholders shall see themselves as an integral part of the microfinance movement in Nepal. Despite the fact that some of the institutions involved will attempt to operate with a competitive mindset, all stakeholders shall recognize the need to coordinate with each other for the greater good of developing the microfinance sector. The second outcome is that stakeholders can plan and implement their strategies and activities based on an improved knowledge of the status of microfinance in Nepal and worldwide. This means that institutional development plans of the individual stakeholders will be based on a sound understanding of their own strengths and weaknesses in addition to any opportunities and threats present in Nepal’s microfinance market.The third outcome is that policymakers and regulators will have a much better understanding of what the sector further needs to grow and provide information regarding the international practices in microfinance regulation. This enables them to make informed decisions and develop strategies and policies which are understood and supported by microfinance practitioners. In addition, the event creates mutual trust between the public and the private sector by openly showing each other’s capabilities and limitations.The fourth outcome is the product diversification of microfinance in Nepal such as clean and green finance, remittances, education, health insurance, value chain, and savings and credit schemes.The fifth outcome is an increased awareness in Nepal and elsewhere regarding the efforts all stakeholders are making to improve the living conditions of the poor in Nepal. A showcase of the product diversification of microfinance has the intention of not only raising awareness, but also of depicting the potentials that lie within microfinance. This should manifest itself in an increase in sources of funding available for microfinance development and support for inclusive economic growth.The final outcome that is expected from the Summit is the protection of microfinance clientele. The practice of client duplication not only provides inaccurate statistics regarding the range of the microfinance sector, but also increases the chances of loan defaults and the disruption of the client's way of life. Through efforts to increase the entrepreneurial skills of clients, it is hoped that they will be able to use their loans effectively and reduce the incentive to accept loans from other microfinance institutions.
The impact would result in the emergence of sounder microfinance institutions and networks, and a stronger microfinance support structures through updating national microfinance strategies to match international standards and procedures aimed at increasing the capacity for inclusive economic growth; broader support for microfinance saving schemes from the financial sector, private sector, and the international community; and creation of a framework structured at not only providing legal recognition towards community based projects, but also facilitating in the sustainability of microfinance projects. This, in turn, should help Nepal’s poor to gain access to affordable and sustainable micro-financial services.
At the end of the Summit, a joint declaration will be prepared which shall incorporate the suggestions of all participants on how to improve the microfinance sector in Nepal.
The Declaration will provide policymakers with feedback on how microfinance stakeholders envision the future of the sector and could be helpful to the government in preparing strategy papers and policies.