Policies and programmes for fiscal 2020-21 focus on boosting the agriculture sectorFarming to be made an attractive occupation by increasing agricultural investment.
President Bidya Devi Bhandari presented the government's policies and programmes for fiscal 2020-21 to Parliament on Friday which gave particular focus to the agriculture sector with food being classified as 'most essential' during the Covid-19 lockdown.
“We are spending big in the agriculture sector as the government plans to make farm activities a major employment generating sector,” said Bhandari addressing a joint session of the federal Parliament.
The policies and programmes have focused on implementing contract farming to boost production and productivity by engaging the private sector in the farm sector.
“The government has accorded priority to farm mechanisation and modernisation,” said Bhandari.
The upcoming budget scheduled to be presented on May 28 will be based on the policies and programmes presented on Friday.
President Bhandari said that the policies and programmes had set a target to increase employment in agriculture and agricultural processing and make the farm sector an attractive and respectful occupation by increasing agricultural investment in irrigation, boosting productivity and expanding export markets.
The share of the farm sector in the gross domestic product has declined from 33 percent to 27 percent in the last fiscal year, but it still employs 66 percent of the population. Now that the global economy is in the throes of a recession due to the Covid-19 pandemic, hundreds of thousands of Nepalis abroad are likely to lose their jobs and return home.
Despite agriculture being a mainstay of the country, a majority of farmers are engaged in subsistence agriculture; and successive governments, despite promising to encourage commercial agriculture, have failed to do anything tangible.
“Nepal has a large supply of unskilled, often unemployed, workers well suited to farm work. It does, however, face skilled labour shortages,” said former finance minister Ram Sharan Mahat.
“The government needs to impart skill training and employ them in the farm sector,” he said. “Providing training also means generating jobs.”
“As people are moving to rural from urban areas, the government needs to encourage them to engage in agriculture activities and produce high-value crops that have demand in both domestic and international markets,” he said.
He said that many migrant workers were returning home, and the budget should focus on employing them—not only in the agriculture sector— but also manufacturing and industrial areas because they have the requisite skills.
The programmes and policies have focused on producing organic products which have big demand in the international market.
Nepal’s agricultural goods import bill ballooned to an all-time high of Rs220 billion in the last fiscal year, setting off alarm bells that the country was progressively becoming a net importer of farm products.
“This import data shows there is an opportunity in the farm sector. Covid-19 has created more opportunities. The future also looks encouraging,” said Pawan Kumar Golyan, chairman of the Golyan Group, one of the leading private sector enterprises which has diversified into the agriculture sector.
He said that demand for organic vegetables and food was very high in the international markets and was growing. The Golyan Group has started exporting vegetables and foods to the United Arab Emirates and Qatar. “From China to Europe, there is huge demand for organic food,” he said.
“The government should not scatter the budget in the name of subsidy. Instead, it should focus on increasing productivity, setting up storage houses and agro processing centres or zones,” said Golyan, which has acquired over 200 bighas of land in four different places in Jhapa to start commercial farming.
Large gaps in storage, cold chains and limited connectivity with markets have added to the woes of farmers. The participation of youths in the farm sector has dropped sharply mainly because it has become highly unattractive due to its high production costs and labour-intensive nature.
“Giving a tiller to a farmer at a subsidised rate will not make a big difference in the farm sector. Instead, the government should focus on reducing the input cost. For this, custom hiring centres need to be encouraged,” he said. “Farmers will rent out farm machinery to farmers who cannot afford to purchase high-end agricultural machines and equipment.”
Farming is a backbreaking activity in Nepal. The method of tilling, planting, weeding, harvesting and bundling hasn’t changed for centuries. Despite the hard work, farmers earn very little.
“With many labour migrants returning to the country due to the downturn in the global economy, there is an opportunity for Nepal,” former finance secretary Rameshore Khanal told the Post in a recent interview. “The government should introduce targeted schemes for them to turn the coronavirus crisis into an opportunity to make the country self-sufficient in food production."
This year, despite a bumper harvest, many farmers have gotten deeper into debt, as they are unable to sell their produce and many farmers’ products rotted due to the lockdown. While Nepali farmers' products were piling up, Nepal imported vegetables worth more than Rs4 billion from India.
“If we had a processing and storage centre, food would never have gone to waste because we can make dry foods and ketchup out of the unsold vegetables,” said Golyan.
The policies and programmes have focused on establishing processing zones to enable the export of Nepali products. “The government will make the agriculture sector an employment generating sector,” said President Bhandari, adding that Agriculture and Livestock Excellence Centres would be set up at all local units.
“Farm technicians will go to the doorsteps of farmers to help them while the government will announce the minimum support prices of key crops before they are planted,” said Bhandari.
The minimum support price is a form of market intervention by the government to ensure that farmers get reasonable value for their produce in the event of any sharp fall in farm prices. It is normally announced during the planting season or a month before the harvest on the basis of the recommendations of the Ministry of Agricultural Development.
The scheme gives farmers a guarantee that they will get a certain amount of money for their produce even if market prices were to fall due to bumper harvests.
The policies and programmes have announced establishing factories to promote the dairy sector and providing fertiliser and seeds to farmers in a timely manner.