Plate tectonics

October 24, 2017 02:00 AM Republica


Cost of food in Nepal 

The World Food Programme has devised a rather ingenious way to compare the cost of a ‘plate of food’ in different countries. This is based on the now established fact that, in the WFP’s own words, “in richer countries, most people spend a small part of their income on feeding themselves. In poorer nations, by contrast, buying the ingredients for a single meal can erase a significant portion of a person’s earnings”. According to the WFP’s new report, Counting the Beans: The True Cost of a Plate of Food Around the World, if someone living in the American state of New York has to spend US $1.2 to buy a plate of food, the comparable figure for a Nepali citizen living in Nepal would be $ 27.77, assuming that the two spend the same proportion of their daily income on food. This is shocking even by South Asian standards. In India, a plate of food costs $9.25; in Pakistan, $15.86. But why is food so expensive in Nepal, in fact three times more expensive than India from where the country imports most of its food?

One reason is wage growth, the wages of daily laborers in particular. There is now acute shortage of daily wage-earners in Nepal as a result of their massive exodus to Gulf countries and Malaysia. The few who remain naturally command high wages. This has also meant that they have more money to spend, which in turn stokes inflation. In fact, money from remittance and increased purchasing power of Nepali consumers—thanks to increased wages—have been responsible for near double-digit inflation year after year (even though it has of late cooled down a bit). This is also reflected in high food prices. Inflation in food products has often outpaced wage increase, perhaps because Nepal these days imports most of the food it consumes. Meanwhile, the country’s farms and fields are barren as there are no able-bodied men left to tend to them. Climate change has also played havoc with crops like rice and wheat. All these factors make Nepal more and more dependent on imported food. It is thus no wonder that Nepalis are spending anywhere between 13 percent (according to the WFP) to 20 percent (according to the Central Bureau of Statistics) of their daily income on a plate of food. The corresponding figures for India and Pakistan, as per the WFP, are 4.5 percent and 7.6 percent respectively.     

This again highlights the urgent need to revive our agriculture by modernizing our still labor-intensive farming techniques. The reason Indian rice and pulses are cheap compared to Nepali products is that Indian farmers have access to cheap credit, including to buy the latest (subsidized) farm equipments. The Indian state also offers generous subsidies in fertilizers. All these incentives not just improve the lives of Indian farmers; they are also reflected in lower food prices. Paradoxically, even though our youth have little incentive to take up agriculture, more than 60 percent of the population still depends on it for their livelihood. Unless a viable mechanism can be devised to boost our agricultural productivity and to pool together and sell crops, Nepali farmers will continue to languish near or below the poverty line. The price of daily edibles, meanwhile, will continue to worryingly inch upward. 


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