Agriculture Ministry seeks Rs 90 billion

Ministry of Agriculture and Livestock Development has sought around Rs 90 billion for new programmes that is expected boost agricultural products and substitute agri produce imports.
The proposed projects – including Farmers Welfare Programme worth Rs 50 billion, One Municipality One Model Farm worth Rs 20 billion, Youth Employment Special Programme worth Rs 5 billion, Food Hygiene and Standards Programme worth Rs 5 billion, Agri Market Promotion Project worth Rs 5 billion, Paddy Production Programme worth Rs 4 billion and Agriculture Research and Extension programme worth Rs 1 billion – worth around Rs 90 billion.
Agriculture secretary Yubak Dhoj GC today presented at least seven medium and long-term projects to Prime Minister KP Sharma Oli. "The food production has been increasing in an arithmetic progression but demand is growing in a geometric progression," GC briefed the premier.
According to the Department of Customs (DoC), Nepal imported farm products worth Rs 215.50 billion in the last fiscal year, up by 10 per cent compared to a year ago. The share of agro products in the total import bill – of Rs 1,243 billion – has swelled to 17 per cent in the last fiscal year.
The food import bill in 2009-10 stood at Rs 44.43 billion, which almost doubled to Rs 76.05 billion in 2011-12 and to Rs 99.35 billion in 2012-13, and tripled to Rs 127.51 billion in five years in the fiscal year 2013-14, though Nepal is agriculture country. In the fiscal year 2014-15, Nepal imported agro products worth Rs 157.78 billion four times increment in 6 years.
Among the agriculture produces, cereal tops the list followed by edible oil, vegetables and food and animal fodder. According to the data, the cereal import bill amounted to Rs 44.52 billion in the last fiscal year, up from Rs 40.14 billion a year ago.
Likewise, edible oil imports touched Rs 29.72 billion in the last fiscal year, up from Rs 28.83 billion a year ago.
The vegetable import bill has also increased to Rs 22.67 billion in the last fiscal year from Rs 21.50 billion a fiscal year ago. The import of rice has also increased due to demand of aromatic and fine rice as the increasing middle-income population prefers to eat basmati rice, which is not grown in sufficient quantities in Nepal.
Though, Nepali agri produces including fresh vegetables, lentils, large cardamom and ginger are popular in Gulf countries, lack of standards, processing and packaging of these products made it difficult for the Nepali produces' export.
Likewise, Nepali tea, coffee, honey and herbs are popular in Europe, Japan, the US and Australia, but they also have branding, certification and quality issues.
Implemented in November 2016, the 10-year Prime Minister Agriculture Modernisation Project – launched to boost agriculture production and substitute imports – has failed to increase production and boost exports putting pressure on import bill.

Nepal claims to be self reliant in paddy in three years

The government has claimed that Nepal will be self-sufficient in paddy within three years.
Addressing an interaction in Kathmandu today, deputy spokesperson for the Agriculture Development Ministry Shankhar Sapkota, said that the government has brought various programmes to become self-sufficient in paddy within three years.
"The government has set a target of producing 5.4 million tonnes of paddy in 2017-18 against the total 5.23 million tonnes of paddy produced in the current fiscal year," he said, addressing the interaction organised by Nepal Agriculture Journalists Academy on the occasion of 14th National Paddy Day tomorrow.
According to the Agricultural Development Ministry, the government has projected a growth of 3.25 per cent in the production of paddy in the next fiscal year.
Sapkota also said that the government has implemented different programmes in key districts to increase production of paddy. "We had launched different programmes in 20 districts in the fiscal year 2014-15," he said, adding that the government had also introduced different programmes for 15 Tarai districts in the fiscal year 2015-16. "The government will hand over these programmes to the local units from the new fiscal year."
The government has also started Prime Minister Agricultural Modernisation Project from last fiscal year to increase the productivity of the agriculture. Under the Prime Minister Agricultural Modernisation Project, the government has put self-sufficiency in paddy production in high priority. "The 10-year project is estimated to cost Rs 130 billion."
Likewise, the government is also planning to increase off-season paddy production in 50 districts to 300,000 hectares from existing 118,000 hectares.
The plantation area of paddy in the country is increasing slowly and the market is receiving improved seeds. Despite record high production, the country imported 359,000 tonnes of rice worth Rs 20 billion from countries including India, Italy, China, Thailand, South Korea and Japan in the first 10 months of the current fiscal year, according to the Trade and Export Promotion Centre (TEPC). "In fiscal year 2015-16, Nepal had imported 539,000 metric tonnes of rice worth Rs 22.80 billion."
Paddy plantation was done in 1.5 million hectares land – 50 per cent of cultivable land in the country – in the current fiscal year. "Nearly 70 per cent of paddy is produced in Tarai districts, and remaining 30 per cent in hilly districts," according to the ministry.
Also speaking, on the occasion, chief of International Rice Research Institute (IRRI) Bhaba Tripathi said that the institute was developing different paddy varieties that can cope with extreme heat and submergence. "There already are different varieties of paddy that give high yields," he said, adding that the farmers are but yet to get hold of these varieties.
Agriculture sector contribute around one third to the gross domestic production (GDP).

Comparative data
Year Production (in metric tonnes)
2013-14 5.04 million
2014-15 4.8 million
2015-16 4.3 million
2016-17 5.23 million
2017-18 5.4 million (Projected)

Economic growth plunges to 13-year low at 0.77 per cent

The economic growth for the current fiscal year has squeezed to almost zero, according to the Central Bureau of Statistics (CBS).
Releasing the gross domestic product (GDP) estimate for the current fiscal year today, the CBS said that the economy will grow by a mere 0.77 per cent – which is a 13-year low – in the current fiscal year. In the fiscal year 2001-02, the country – under the King Gyanendra's rule – had recorded economic growth of 0.16 per cent. Likewise, the CBS has also revised last fiscal year's economic growth downward to 2.32 per cent from earlier estimation of 3.04 per cent.
The subpar monsoon that resulted in weak agricultural output, almost five months of economic blockade, and stalled reconstruction work in the aftermath of the last year's devastating earthquakes have pulled the economic growth down to a 13-year low, according to CBS director general Suman Raj Aryal.
The economy did not plunge into negative zone also due to better performance by the service sector including health and education sectors, he added.
The largest contributor to the economy, agriculture, is estimated to grow by only 1.14 percent, though its contribution to the economy is 31.19 per cent, whereas the lowest contributor – fisheries' sector – has just 0.5 per cent share in the economy.
The report also revealed that the total size of the economy is going to grow to Rs 2.25 trillion in the current fiscal year, from Rs 2.12 trillion in the last fiscal year.
Likewise, the largest contributors to the economy are agriculture (31.19 per cent); followed by wholesale and retail trade (14.23 per cent); real estate (9.16 per cent); transportation, communication and storage (8.42 per cent); construction (6.88 per cent); education (6.76 percent); and production (5.53 per cent) sectors, according to the CBS.
However, of the 15 sectors that are used to calculate the GDP growth, some six sectors are going to record negative growth in the current fiscal year.
Various national and international institutions have projected the Nepali economy to grow between -0.9 per cent and 2.2 per cent, whereas the government has in its white paper projected the growth at around 2 per cent, during the current fiscal year. The central bank had projected a negative growth for the economy whereas UNESCAP yesterday projected that the economy will grow by 2.2 per cent.
According to Aryal, various institutions are involved in making projetctions about GDP growth, but the CBS' projection is the authentic and most dependable one. "The CBS has projected the economic growth on the basis of nine months' data of the current fiscal year," he said, adding that the remaining 3 months could see some increment in economic activities, which could lead to improved economic growth.

Has gross national income increased?
Despite low economic growth, the CBS has projected an increment in per capita gross national income (GNI) to Rs 80,921 in the current fiscal year from last year's Rs 77,079. The increment of Rs 3,842 is 4.98 per cent compared to the last fiscal year, the CBS said. However, the increment in GNI per capita covers only half the inflation rate for the year, which is around 10 per cent, according to the central bank.

Savings lowest in last 22 years
Likewise, gross domestic savings as percentage of gross domestic product (GDP) is the lowest in the last 22 years, according to the CBS. The gross domestic savings as percentage of gross domestic product (GDP) is likely to stand at 5.26 per cent in the current fiscal year, as the country has failed to enhance its productive capacity. The figure is the lowest since fiscal year 1994-95.

Sectoral growth (compared to last fiscal year)
1. Agriculture and Forestry – 1.14 per cent
2. Fisheries – 11.76 per cent
3. Mining and quarrying – 6.54 per cent (negative growth)
4. Manufacturing – 9.86 per cent (negative growth)
5. Electricity, gas and water – 1.66 per cent (negative growth)
6. Construction – 3.98 per cent (negative growth)
7. Wholesale and retail trade – 1.13 per cent (negative growth)
8. Hotels and restaurants – 4.85 per cent (negative growth)
9. Transport, storage and communications – 2.55 per cent
10. Financial intermedeation – 3.30 per cent
11. Real estate, renting and business activities – 3.72 per cent
12. Public administration and defence – 5.78 per cent
13. Education – 6.69 per cent
14. Health and social work – 8.85 per cent
15. Other community, social and personal service activities – 5.60 per cent

Nepal, India to hold annual economic summit

Nepal and India are planning to to hold annual economic summits alternately in each of the countries.

The private sectors of both the South Asian neighbours – Confederation of Indian Industry (CII) and Federation of Nepalese Chambers of Commerce and Industry (FNCCI) – jointly informed the President Dr Ram Baran Yadav and Prime Minister Sushil Koirala during the meeting with the head of the state and executive head.

The CII delegation – led by president-designate Ajay S Shriram – that is currently in Kathmandu to attend the Nepal Economic Summit-2014 as
guest speaker and the FNCCI team – led by president Suraj Vaidya – informed the President of their decision of their planned intensely engagement to jointly promote bilateral economic activities, injecting investment in new sectors.

"In a joint initiative of CII and FNCCI, the two sides have agreed to convene Nepal-Indian economic summit on annual basis in an alternative country,” the FNCCI statement read, adding that the CII delegation is very encouraged from these two meetings and will convey the kind support provided by the president and the prime minister to potential Indian investors.

Meanwhile, the guests held separate talks with the President and Prime Minister and discussed bilateral economic, trade and investment expansion.

The delegation said that Indian investors were interested in employment generation, energy development, and commercialisation of agro-based industries, investment expansion and tourism in Nepal. They also urged the Nepal government to create favourable environment for them to come in the Himalayan nation in a big way.

Contract farming guideline on cards

Ministry of Agriculture Development is introducing — Contract Farming Guideline under the Agricultural Business Promotion Act and Farm Mechanisation Policy — soon to promote sustainable agriculture growth.

The draft policy paper is expected to commercialise agriculture that is at present under labour shortage and has low investment.

The draft will be sent to Cabinet to get its approval.

The draft of Agricultural Business Promotion Act that envisages contract farming will help ensure market access to farmers and to attract private sector in commercial farming, as it also ensures credit facilities.

Apart from making it easier to lease land for agriculture purpose, the guideline states that a buyer can buy the farm produces in advance.

After the implementation of the guideline, it will bind both buyers and producers legally and they can claim reparation, if any of the parities breach the contract.

The existing law fails to address leasehold farming practices as land owners are reluctant to allow others cultivate their land, fearing the leasers might claim permanent tenancy.

Likewise, the farm mechanisation policy aims at providing subsidies on the import of modern farming machinery, including discounts on VAT and other taxes.

The government has allocated Rs 100 million for subsidies to encourage farmers to use farm machines like power tillers, harvesters, planters and seed drills in hill and Tarai regions under the farm mechanisation. But the policy will help give the government more teeth to chew.

The proposed policy is also expected to encourage participation of youth in the farm sector that has seen drop in recent years mainly due to mass exodus for foreign employment as the sector needed high production cost but low return.

Though, according to the National Agriculture Census 2011-12 by the Central Bureau of Statistics, recorded some progress in terms of mechanisation, that was not planned progress. The census claimed, some 22.04 per cent farm households use tractor, while 20.96 per cent use threshers, due to lack of people. In 2001-02, less than 10 per cent used to use threshers and tractors.

Nepal fails to exploit agro potential

Though Nepal is an agricultural country, it has failed to fully exploit its potential due to the absence of standardisation, according to experts.

"Nepal has the possibility to take advantage through bio-energy standards to fully utilise its agriculture potential," said director general of Nepal Bureau of Standards and Metrology Dr Ram Adhar Sah, addressing a three-day standardisation workshop on 'Strengthening institutional capacity on sustainability criteria for bio-energy' that started here in the capital today.

Likewise, executive chairman of South Asia Watch on Trade, Economics and Environment (SAWTEE) Dr Posh Raj Pandey said that the initial euphoria among policy makers and private sector representatives about the role of bio-energy in mitigating climate change is being questioned now since the use of bio-energy is not necessarily carbon neutral, if looked at from a life-cycle perspective.

"Extensive promotion of bio-energy could also have environmental effects like destruction of biodiversity and soil erosion, and social impacts like exploitation of small farmers or their displacement to produce bio-energy impacts," he said.

Pandey added that there are also concerns that there will be competition on whether to use land to produce food or bio-energy, which, therefore, will have serious implications for food security. "Hence, it is important for developing and least-developed countries to actively engage in setting standards on sustainability criteria for bio-energy."

International trade of bio-energy has been taking place gradually, and developing countries are more competitive in the production and trade of bio-energy due to adequate natural resources and low cost of production, Pandey said. "If their concerns are not reflected in the standards that are being set, they might face trade barriers later."

Speaking as chief guest, secretary at the ministry of industry Krishna Gyawali informed that the government has prepared a climate change policy. "Bio-energy is a crucial aspect of climate change and it is extremely important for the country to engage in such a standard-setting process," he said, emphasising that by actively participating in the standard-setting process, Nepal will be able to optimise the use of its resources.

The workshop is part of a longer project 'Trade promotion through standardisation' being implemented jointly by SAWTEE and the Swedish Standards Institute (SIS), with support from the Swedish International Development Agency in eight countries of the South and Southeast Asia regions, namely, Bangladesh, Cambodia, Indonesia, Laos, Nepal, Pakistan, Sri Lanka and Vietnam.

The workshop is being organised against the backdrop of the setting of a new standard on the sustainability criteria for bioenergy by the International Organisation for Standardisation (ISO).

International project manager of SIS Carina Svensson introduced the workshop to the participants and explained what was expected of them.

Over the next three days, participants will work on the draft of ISO standard on sustainability criteria for bioenergy with support from experts working in this area, and send their comments to ISO.

Government to double agro budget: PM

Caretaker Prime Minister Dr Baburam Bhattarai has said that his government will double budget for agriculture in the fiscal policy.
The government will double the budget to ensure food safety and promote commercialisation of agriculture, he said addressing a programme organised to mark 32nd World Food Day today.
"Food security is related to human rights, so the government is serious to protect the rights of the people," he said, adding that the government is developing agriculture sector with short, middle and long term programmes.
According to him, the government is also strictly monitoring the market to improve supply side. School nutrition and identity card for poor is also associated to food safety, he added. "The government is planning to improve land reform system and empower cooperatives to improve supply chain."
We are trying to reduce middlemen in the market to protect the consumers," he added.
The government had allocated Rs 12.43 billion in agriculture out of the total budget outlay of Rs 384.90 billion in the fiscal year 2011-12. It is about 3.27 per cent of the total budget outlay.
Agriculture is a major contributor to the gross domestic product (GDP). Its share in the GDP has been about 35 per cent for years. Within it, cereal crops cover 42 per cent, horticulture 31 per cent, livestock 25 per cent and fisheries two per cent. The country had produced about 9.3 million metric tonnes of crops including 5.07 million metric tonnes of rice.