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SOCIETY, POLITICS

Public Procurement Act blamed for delayed fertilizer delivery

On February 13, PM KP Sharma Oli instructed the Ministry of Agriculture and Livestock Development (MoALD) to ensure no shortage of chemical fertilizers during the planting season and to control black marketing.
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By UPENDRA LAMICHHANE

KATHMANDU, Aug 15: The shortage of chemical fertilizers has left farmers suffering on one hand, while on the other, it appears government officials have failed to follow the Prime Minister’s directives.



On February 13, PM KP Sharma Oli instructed the Ministry of Agriculture and Livestock Development (MoALD) to ensure no shortage of chemical fertilizers during the planting season and to control black marketing. He had also involved Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel, MoALD Minister Ramnath Adhikari, Chief Secretary Eknarayan Aryal, and MoALD secretaries Dr. Govinda Sharma and Dr. Rajendra Prasad Mishra in issuing these instructions. However, six months later, the directives had still not been implemented, prompting the PM’s anger.


On Tuesday, PM Oli called a meeting of stakeholders, giving them a three-day ultimatum to present a clear plan for fertilizer supply and distribution. “As soon as I became Prime Minister, I gave clear instructions a year ago to ensure there would be no shortage of fertilizers,” he said at the meeting. “Why is the fertilizer not arriving?”


The MoALD, however, said the problem was not due to ignoring directives, but rather due to the complexities of the Public Procurement Act, 2063 BS. Ministry officials complained that despite repeatedly raising the issue, no solution had been provided. “We began the procurement process last February, but due to the complexities of the procurement act, the fertilizer has not yet arrived,” said MoALD information officer and senior agricultural economist Mahananda Joshi. “Under the current procurement process, it takes six to seven months from initiation for fertilizer to reach farmers’ fields.”


Joshi explained that from the 35-day notice to the 20-day technical evaluation and tender approval, it takes a total of 226 days for the fertilizer to be delivered. “Fertilizer is extremely essential for farmers, so it should be treated like special medical supplies to shorten the procurement process. This is a key aspect of solving the problem. But nobody has given due attention to it,” he said.


PM Oli had previously instructed that tenders for chemical fertilizers be requested on time, and that distribution in the Terai should not take more than 10 days, and in the hills, no more than 15 days.


The MoALD also briefed the PM that rising international urea prices, problems with agreed-upon imports and the legal requirement of up to 45 days for global tenders could create supply issues. The Procurement Act has long delayed the purchase and delivery of fertilizers, and the ministry holds the same view now.


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The dispute continues, with the PM blaming officials and officials blaming the law. Meanwhile, farmers are in distress, unable to apply fertilizer to the rice crop. Reports of farmers unable to purchase fertilizer bags at twice the normal price have further angered PM Oli.


During a discussion at Singha Durbar on Tuesday, the Prime Minister questioned officials responsible for fertilizer supply. “Your organization exists for this purpose, yet there is a shortage. What has your organization been doing?” he asked.


Farmers face fertilizer shortages every year during planting, and the repeated problem this year has frustrated PM Oli. He criticized the tendency of the government and political leadership to face public criticism while responsible bodies shirk accountability. “Look at the newspapers—your organization hasn’t been criticized, but the ministers and parties have received blame while the responsible body remains silent,” he said.


After the discussion, the PM issued three directives to address the fertilizer issue: to develop a concrete plan with a new framework for the efficient supply of chemical fertilizers, to launch a national campaign for compost and organic fertilizer production and use, and to propose a grant policy for the same.


Following the PM’s directive, stakeholders are now engaged in continuous meetings. When asked on Thursday morning about the PM’s instructions and the fertilizer shortage, MoALD spokesperson Januka Pandit said the ministry would be occupied with related meetings until 5 PM.


The ministry’s information officer, Joshi, stated that they are preparing a detailed action plan to streamline fertilizer supply and distribution. “We plan to present the plan to the Prime Minister on Friday,” he said, “and hope this will bring new solutions.”


Joshi added that the current demand for chemical fertilizers in the country exceeds 1 million metric tons, and preparations are underway to supply 600,000 metric tons for this Fiscal Year (FY). “The government has allocated Rs 28.82 billion for 600,000 metric tons,” he said, “and we have also prepared the tender, but the procurement act poses challenges.”


What the MoALD says


Responding to questions in the House of Representatives (HoR) on Thursday, MoALD Minister Ramnath Adhikari cited the complexity of the procurement process as the reason for the fertilizer shortage.


He said that the ministry projects an annual requirement of 1.3 million metric tons of chemical fertilizers and plans to supply 600,000 metric tons this FY. “The allocated budget is also affected by rising international market prices,” he said. “Excessive subsidies on fertilizers have also contributed to the problem.” According to him, the subsidy is 82% for urea, 64% for DAP, and 49% for potash.


“Of the fertilizers procured, 90% is distributed to provinces where demand is highest,” he explained. “Provincial governments then distribute quota-based fertilizers to local units.”


Currently, fertilizers are being distributed through over 11,000 dealers, cooperatives, and agro-vets from 64 depots nationwide. “DAP and potash have few issues, but there are problems with urea,” he added. “We have amended some laws to address this, and it has started to work.”


Recent heavy rains at the Kolkata port have also delayed ships, adding to the problem. “A shipment of 60,000 metric tons of urea destined for Nepal is stuck at the port,” he said. “We are trying to bring it quickly.”


The minister said the ministry has procured as much fertilizer as the budget allows. Increased use of chemical fertilizers for crops other than rice, wheat, and maize has also created additional demand. The Israel–Iran war has damaged eight large fertilizer plants and raised prices, further affecting supply.


He noted that last year, the price of urea per metric ton was $420, which has now risen above $600. Similarly, DAP increased from $600 to $1,000 per metric ton.


Problems with the Public Procurement Act, 2063 BS


Under the Public Procurement Act, 2063 BS, international tenders for fertilizer take a minimum of 45 days from notice to contract, and up to 90 days in practice. Sometimes it takes even longer. Fertilizers are seasonal (needed during rice planting/wheat sowing), so delays can ruin crops.


The act requires giving preference to the lowest bidder, which prioritizes price over quality or timely supply. Many low-bidding suppliers may delay delivery or compromise on quality. Complaints by unsuccessful bidders can further delay procurement, extending the wait for seasonal fertilizer.


Documentation, guarantees, and procedural requirements also discourage international companies from participating. Participating companies also take time for technical evaluation, contract signing, and bank guarantees.


“Although the law provides for emergency procurement, there are no clear standards for what constitutes an ‘emergency.’ The ministry or relevant agencies hesitate to use this provision for fear of misuse. As a result, even in the case of urgent fertilizer shortages, the standard tender process must still be followed, causing delays in timely supply. Therefore, the ministry wants to classify fertilizer as an essential commodity to bypass the lengthy procurement process.”

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