Farm sector’s growth rate to hit 9-year highNepal’s farm sector is expected to register a nine-year high growth rate of 5.32 percent this fiscal year, fuelled by good monsoon, after hitting rock bottom last fiscal year, the Economic Survey 2016-17 released on Sunday shows.
Nepal’s farm sector is expected to register a nine-year high growth rate of 5.32 percent this fiscal year, fuelled by good monsoon, after hitting rock bottom last fiscal year, the Economic Survey 2016-17 released on Sunday shows.
The survey, released a day before the country’s annual budget announcement, says bumper harvest of paddy and growth in production of other key foodgrains helped the sector to make a recovery.
Nepal’s farm sector saw a negative growth of 0.19 percent for the first time last fiscal year due to summer and winter droughts.
The average rainfall from June 10 to August 15 in the last fiscal year was 74.2 percent of the average rainfall of the past 30 years.
The situation was made worse by shortages of chemical fertilisers and crop failures in a number of Tarai districts.
The survey shows that Nepal’s farm sector has grown by an average of 3.15 percent annually for the last ten years.
The farm sector is expected to make a contribution of Rs691.2 billion to the country’s gross domestic product (GDP). This is 28.89 percent of the GDP, down from 31.1 percent recorded in the last fiscal.
The major contributor to the agricultural sector is paddy. Paddy production is projected to jump 21.66 percent to 5.23 million tonnes this fiscal year. This is the first time paddy harvests had gone up in the last two years.
The country is likely to produce an additional 931,248 tonnes of paddy this year. In the last fiscal year, a crippling drought hit paddy production severely, reducing paddy output by 10.22 percent to 4.29 million tonnes.
The survey shows output of cereals (paddy, maize, wheat, buckwheat, millet and barley) is likely to jump 13 percent to 9.74 million tonnes this fiscal year due to timely rains, and adequate supply of fertilisers and improved variety of seeds.
Similarly, output of cash crops like potato and vegetables is projected to grow by 8 percent to 2.75 million tonnes and 9 percent to 4.16 million tonnes, respectively.
The survey shows Nepal produces 13.73 tonnes of vegetables on every hectare. Fisheries sector has seen the strongest growth, with output surging 12 percent to 54,368 tonnes.
The growth rate of high-value crops and exportable items like ginger and large cardamom is expected to hover around 9.25 percent and 5.66 percent, respectively.
The country is expected to produce 289,952 tonnes of ginger and 12,847 tonnes of large cardamom.
“The figures are not so pleasing considering the base of last year when growth rate was negative,” said Hari Dahal, an agro expert. “This is because Nepal’s agricultural sector is largely dependent on monsoon rains,” he said, adding that if there is good rainfall, the farm sector grows.
The survey shows that only 40 percent of the country’s 2.64 million hectares of arable land has round-the-year irrigation facility. “Due to the slow progress in construction of multi-purpose irrigation projects, the coverage of round-the-year irrigation facility has been at only 40 percent,” the survey states.
However, experts argue that round-the-year irrigation facilities cater to around 20 percent of the arable land. “The government needs to expand ground water irrigation facilities to ensure farmers have access to proper irrigation facilities as weather patterns in Nepal have grown unpredictable.”
Likewise, fertiliser is another key component required for proper growth of the agricultural sector. “We are still applying very low amount of chemical fertilisers as compared to other South Asian countries,” said Dahal. “Fertiliser is the farm’s vital input as productivity depends on it.”
The survey shows that the supply of chemical fertiliser jumped to 298,677 tonnes in 2014-15 from 232,188 tonnes in 2013-14. In 2015-16, the supply dropped to 258,913 tonnes due to India-imposed trade blockade.
In the first eight months of the current fiscal year, imports of chemical fertiliser have reached 187,131 tonnes.
FISCAL YEAR GROWTH (in %)
(Source: Economy Survey)