October 31, 2017 02:00 AM NPT
Food prices in Nepal
On paper, we are an agricultural country, with 68 percent of the population dependent on it. In reality, the country has to import large quantities of cereals, vegetables and fruits it consumes. Why this mismatch? The main reason is the drastic reduction in the output of our farms thanks to the massive outmigration of young people, who would otherwise be tilling their fields, to work abroad. The situation is so dire that entire villages are now bereft of able-bodied men, so much so that sometimes there are not even enough folks to carry a dead body to the nearest riverbank. With no food grains, and even fewer vegetables and fruits grown locally, the unhealthy instant noodles are all rage in our villages. Widespread flooding this August in Tarai-Madhes, the country’s traditional ‘bread basket’, decimated what little was growing in the fields. This has not only pushed hundreds of thousands of farming families into penury. It has also led to a worrying spurt in import of foodstuffs. Since these foods have to travel long distances to arrive at Nepali markets, the prices of daily consumables like fruits and vegetables are also increasing alarmingly.
Take the price hike in just a month’s time. At the start of October, a kilo of small tomatoes was going for Rs 55 a kg in the Kalimati fruit and vegetable market. The price at the end of October is Rs 95 a kg, which comes to around 72 price increase. Likewise, black-eyed peas that were being sold at Rs 85 a kg is now fetching Rs 125 a kg (47 percent increase). The per-kg-price of onions, an indispensable part of the diet for most valley residents, has been jacked up from Rs 55 to Rs 75 (36 percent increase). Some might contend that in a market economy the price of all commodities is determined by the market. The only problem with this theory is that the prices of daily commodities seem to be going only one way: up. Perhaps the only thing that has gotten cheaper over time is petro products, but which again is meaningless for most Nepalis as the reduced fuel cost is not reflected in cheaper public transport fares, or in cheaper vegetable price resulting from reduced transport cost. This suggests that the prices of daily commodities is artificial and does not reflect the subtle demand-and-supply dynamic.
According to a recent survey of World Food Programme, the prices of daily edibles in Nepal, assuming comparable incomes, are among the highest in the world. Food items in Nepal are nearly twice as pricey compared to Pakistan and three times as pricey compared to India. Nepali economists attribute such inflated food prices to easy money from remittance and increase in wage rates thanks to an acute labor shortage. The risk is that soon a big segment of the population—26.1 percent of the youth aged 15-29, for instance, is unemployed—could be priced out of the Nepali food market. The country is still far way off from having a famine. But, with the current level of food inflation, cases of under-nutrition and malnutrition could steadily increase, significantly impacting the health and wellbeing of millions of Nepalis.