Investing in land recovery

Flying cross-country following the trajectory of East-West Highway from Mechi to Mahakali, one can have a breathtaking view of flat plains to the south and low hills and valleys to the north. One distinct landscape that can be seen from above is the hundreds of small and large waterways crisscrossing the country from north to south, the scenery dominated by white sandy areas, which follow the river pathways that vary in width from 100 meters to a couple of kilometers, excepting the big rivers like Koshi that spreads its wings many kilometers across.

When one takes a closer look at the riverbeds, in all likelihood, most of it would be dry—certainly during non-monsoon months but, most likely, also during monsoon except when there are torrential rains sustained over a period of time. There is perhaps some economic use of land on the edges of sandy riverbeds and streams such as for cattle grazing and short-season cultivation but much of it remains unutilized because of the sandy terrain, fear of flash floods during monsoon and unavailability of irrigation water during most of the year. In short, much of the sandy terrains following the trajectory of rivers and streams going south from the hills is considered a wasteland, serves no economic purpose and makes adjoining farmland vulnerable to desertification from frequent shift of riverbeds during heavy monsoon rains.

Total wasteland area created by major rivers and streams can be estimated at 10,000 sq km. On converting this span of land into farm area, we will get an equivalent of 1.4 million bighas.

There is no firm data available of the extent of wasteland created by the unregulated flow of rivers and streams but a rough calculation can be made. Assume that the distance from the base of the hills to the India border averages 40 kilometers, average width of rivers and streams is half a kilometer, including the area covered by sand deposits, and the number of main rivers and streams is about 500. (According to some estimates, there are 1,200 culverts and bridges along the East-West Highway, including those on small streams and rivulets).

Using these figures, total wasteland area created by major rivers and streams can be estimated at 10,000 square kilometers, which is roughly 7 percent of the country’s total land area. On converting this span of land into measurable farm area, we will get an equivalent of 1.4 million bighas, which is about one million hectares. Excluding the area that will be taken up by riverbeds and embankments when the water flow is tamed and harnessed for irrigation, there will be a net recovery of usable farmland area of about one million bighas (700 thousand hectares), equivalent to a fifth of arable land area available countrywide.

COST-BENEFIT ANALYSIS

Assuming that the government makes a decision of turning this vast expanse of wasteland into usable farmland, how wise will this decision be in terms of efficiency of resource use and indirect benefits that may accrue from positive externalities of such investment (flood prevention, control of desertification, irrigation and transport development, job creation)? We can use a simple cost-benefit analysis to assess the immediate returns from investing in land recovery along our waterways. Despite sandy terrains of much of the reclaimed land, it would fetch market value of normal farmland area due to the fact that reclaimed area will have access to improved irrigation and easier transport along the embankments. With the going price of farmland in the Tarai area around one million rupees per bigha, the market value of the recovered farmland will a phenomenal sum—roughly 1,000 billion rupees!

Compare this with the likely size of investment needed to finance this magnitude of land recovery. Using the above estimate—500 rivers and streams of an average 40 kilometers in length up to the India border—the total length of the project area comes to 20,000 kilometers, requiring 40,000 kilometer-length embankments (including both sides). The cost of embankment construction and riverbed-deepening can be anybody’s guess but we can reasonably assume Rs 10 million per kilometer which, for the entire forty thousand kilometer expanse of embankments, comes to roughly Rs 400 billion or less than half the value of recovered farmland sold at market prices. Value of annual production at just two tons of grain equivalent per bigha will bring about Rs 25 billion in annual sales, which will be a net addition to national production—about 3 percent of GDP. For the time being, we can leave out positive externalities of this venture, which will add at least as much to the improvements of living standards.

With a development budget of just about Rs 100 billion, it will be ludicrous to suggest that the government take up this level of investment immediately and on the full span of the target area, from east to west. A more reasonable and affordable approach will be to implement this project in phases and over several years, maybe decades—similar to the approach taken for the East-West Highway, which took some 30 years to complete and was completed in dozens of segments. More significantly, even if the plan is implemented phase-wise, the government is not required to put more than the seed money to start implementation.

Assuming an initial investment from the government of just Rs 20 billion covering one or two districts considered most suitable for such development (Tarai districts from Saptari through Rautahat comprise ideal sites as the test case for the project), this will help recover 50,000 bighas of prime land as per above estimate which, if sold at market value, will bring in at least Rs 50 billion in sales proceeds—more than twice the initial investment.

After paying off government’s investment of Rs 20 billion, the remaining amount of Rs 30 billion will become available for further development of the land recovery project, which would not require any government funding. We can reasonably foresee that if this amount of money gets wisely invested in a phase-wise manner to complete the remaining portions of the project, managers of this project would control hundreds of billions of rupees in surplus fund accumulated in the bank by the time the whole project gets completed. And accomplishing this feat will make the flatlands of Nepal rival the well-designed irrigation and flood-control infrastructure that has been developed, for example, in India’s Punjab region.

THIS IS A DREAM!

We can recount no more than half a dozen projects implemented during the past 50 years that have had a lasting effect on the lives of the people and also helped social and political transitions. Among these, we can include some major highway projects that connected the country’s mountainous region and Kathmandu Valley to the southern plains; the East-West Highway that helped the entire Tarai belt accessible for travel and commerce; and Kulekhani hydro project that ushered-in an era of affordable power generation with more to follow in later years. There are very few other ventures pioneered by the state that fit the category of dream projects except maybe the taming of the Koshi river in the early 1960s that brought relief from devastating floods affecting millions of people inside Nepal and a much larger number across the border in India.

Watershed development project sketched above will be another such dream project – many times more expensive than any of the past mega projects but with potential for changing the lives of half of the country’s population in significant ways over a short-period of time. Also, this venture would make significant contribution to the national economy in a more decisive manner than, for comparison, has been possible under the numerous five-year plans implemented since the mid-1950s.

In addition to the immense economic benefits flowing from this dream project, gains in terms of environmental protection will be no less significant; in fact, environment protection can be argued as the single-most important contribution of this type of project, which would help tame the spread of desertification in the plains and minimize the scale of soil erosion in the hills by promoting environment-friendly land use there. About the latter, an abundance of grain production in the plains – at a fraction of cost than in the hills – will discourage grain production in the region and encourage specialization in products more suitable for temperate climate and elevated terrains.

Products like fruits and vegetables, high-value commercial crops of tea and coffee and also dairy farming will find much scope for expansion in the hill economy if it can get access to cheaper and better quality grain from the farmland of the plains which, of course, would be the key objective of the expansion of farming areas in Tarai.

Besides the farming and environmental considerations, development of watershed areas in the plains will be worth the money simply for its aesthetic pleasures – the enhanced beauty of Tarai landscape that will encompass vast expanses of farmland, pastures, navigable canals and rivers. If the Tarai waterways are harnessed in the way envisaged, the region will also become a tourist haven, providing a healthy competition to the hitherto hill-focused tourism industry.