During the period, chemical fertilizers became costlier by up to 47 percent while the price increase for farm produce hovered at a maximum of 38 percent over the period, a trend that indicates the weakening competitive edge of farmers.[break]
Data released by the Ministry of Agriculture Development (MoAD) shows that the price of paddy increased hardly 13 percent to Rs 2,083 per quintal while maize become dearer by 38 percent to Rs 2,255 over the review period that started from fiscal year 2008/09.
However, the price of urea and diammonium phosphate (DAP) rose by 44 percent and 46 percent to Rs 1,800 and Rs 4,000 per quintal respectively. Similarly, potash became dearer by 47 percent to Rs 2,000 per quintal over the period.
A study conducted by MoAD in Dhangadhi, Nepalgunj, Bhairahawa, Narayanghat, Biratnagar, Janakpur, Birgunj and Kathmandu shows that paddy and maize prices in Kathmandu are the highest among the towns surveyed. Paddy and maize were Rs 4,000 and Rs 2,800 per quintal in the capital at the time of the study.
During the four years, the government raised the price of urea twice, that of DAP thrice and potash once, leading to prices higher than those fixed before the introduction of subsidy in chemical fertilizers.
The government distributed a total of 146,584 tons of subsidized chemical fertilizer during fiscal year 2011/12, up from 109,958 tons recorded the previous year.
MoAD said the use of chemical fertilizers by farmers increased by 47 percent during fiscal year 2011/12, compared to the earlier year. However, the supply of chemical fertilizers in the country is far less than required by farmers. Officials said the annual average supply of chemical fertilizers in the local market stands at around 150,000 tons to 200,000 tons while the demand is estimated at 700,000 tons.
The Agriculture Sector Performance Review-- the government-commissioned report on the farm sector released in 2003/04, had shown that more than two-thirds of the total fertilizer required for agriculture in Nepal comes through informal channels, given the porous border with India.
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