Statistics show, Nepal recorded a sharp rise in imports of agro and livestock products, mainly essential commodities, a situation which is quite unlike the previous years. For instance, the import of food items and livestock jumped to well over Rs 15 billion in 2009/10. [break]
“Closely analyze the movement of agro-imports and you will find it difficult to believe Nepal is an agrarian economy,” said Dev Bhakta Shakya of Agro-Enterprise Center (AEC) under the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
For instance, Nepal imported some Rs 6 billion worth of mustard, soybean and other oil producing seeds in 2009/10. Imports of crude soybean oil alone jumped to Rs 3.5 billion. These figures make it difficult to believe that Nepal was self-sufficient on mustard and oil related products till about a decade ago.
Though records of Ministry of Agriculture and Co-operatives shows Nepal performing better in vegetables output, trade statistics show that import of vegetables too have consistently continued to grow over the years and touched Rs 1.30 billion. Similar is the situation with fruits.
“Nepal used to be self-sufficient on food items, meat products and edible oils until a few years ago. Unfortunately, things have fast turned unfavorable us in the sector which should have been our strength,” said Shakya. He attributed this reversal and deteriorating situation of Nepal´s agro-trade to faulty priority and myopic vision of the policy makers.
Nepal´s agriculture sector largely suffers from low productivity that can be attributed to small size of farms, lack of timely and adequate irrigation, absence of technology, weak agro-inputs and high pre-and post-harvest losses. Together, these factors raise cost of productions.
However, when the productions boom, prices tend to go through unnatural squeeze because highly-subsidized Indian productions flush the market, thereby acting as price determiner.
As this cross-border policy discrepancy victimizes Nepali farmers, many have been moved out of farms. “We must correct this situation if we want to safely walk through the current high balance of payment deficit situation,” Shakya said.
Experts like him argue that the government can bring about changes by providing even small support. For example, if the government just supported rearing of good breed of sheep, it can instantly curtail import of meat and also generate local supply of wool -- one crucial raw material for the hand-knotted woolen carpet industry.
“This would have saved transportation cost of raw wool, which we import from as far as New Zealand, and also freed us from the need to rely on expensive wool that we acquire by paying foreign currency,” said Kabindra Nath Thakur of Nepal Carpet Exporters´ Association.
Apart from supporting commercial sheep farming in rural hills, which will contribute to poverty reduction as well, the program has potential to revive the price competitiveness of the carpet industry.
Unfortunately, policymakers that talk at length on poverty reduction through trade fail to see the importance of such a program. Instead, they are pushing for superficial programs like labeling the carpet, which will not address the real problem of the industry.
Such short-sighted visions and apathy to address structural problems like labor problems, power outage and instability has already cost Nepal´s industry and exports competitiveness dearly.
Worse still, Nepal has either lost or is in the process of losing largest export industries like readymade garment and woolen carpet, and it has not managed to groom and foster new industries that can grow in a big way to convincingly assure that they will replace the past heavyweights.
“Faulty policy orientation has already broken the back of the manufacturing industry. If we did not take steps to straighten situation in the agriculture sector, the largest employer, we will head towards severe crisis,” said Shakya.
Related story
Kakarbhitta customs point sees Rs 16 billion in imports as expo...
_20191222200001.jpg)
