Promote sheep farming

Once, woolen carpets, readymade garments and pasmina products used to be the jewels of Nepal´s export sector. These three products used to command 78 percent of the total overseas export at their peak in the late nineties and provide jobs to nearly a million people, particularly to those from the marginalized communities with no other means to make their ends meet. Ten years down the line, sadly, these products have lost their glory. Trade statistics show that their combined export volume now is just one-third of what it used to be and the overall overseas export is down by almost 40 percent.



The answer to the obvious questions as to what went wrong and why our export base dwindled within a decade is that we lacked competitiveness on most of the goods that we used to export to the international market. Besides a host of non-economic reasons, Nepal’s hefty dependence on imported raw materials was one of the major reasons that led us to this state. When price of wool that Nepal used to import from New Zealand and China climbed due to deprecation of our currency and rise in the price of wool globally, both carpet and pasmina industries simply lost their cost advantage.



Now, after a decade, both the government and private sector seems to have acknowledged that their apathy toward establishing backward linkages was the prime cause for the devastation of major export industries. Hence, the recent attempt made by pasmina producers, the government and Asian Development Bank in promoting sheep farming in Nepal’s mountainous region is laudable. The underlining point is that sheep faming is one of the few agricultural activities in which Nepal has an absolute natural comparative advantage.



Since most of our northern mountainous region is neither suitable for agriculture nor inhabitable, mainly due to the difficult terrain, it can be used for sheep farming.  The Chinese success in expanding sheep farming just across the border in remote Tibetan villages is something easily replicable in Nepal. In addition, sheep farming has a strong multiplier effect. Besides helping to infuse new life into the collapsing carpet and pasimina industries by supplying comparatively cheaper wool thereby helping them to regain competitiveness that was lost a decade ago, it can boost incomes of local people of the region where poverty is acute,. Sheep farming will also, to some extent, help in curtailing huge import of goats and buffaloes for meat (now worth Rs 15 billion), which will in turn help in narrowing down our swelling trade deficit.

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