Monsoon rainfall is good for economy but watch out for natural disasters, experts sayNepal is likely to receive 'above normal rainfall' for the first time in many years this monsoon which is expected to boost the economy strangled by Covid-19.
Nepal is likely to receive 'above normal rainfall' for the first time in many years this monsoon which, experts say, is good news for an economy strangled by Covid-19. But according to weathermen, heavy rains during the season from June-September could wreak havoc because of the country's climate vulnerability.
Normal to above normal rainfall is most likely during the 2021 southwest monsoon season over most parts of South Asia, according to a consensus statement released by the Nineteenth Session of South Asian Climate Outlook Forum (SASCOF-19) and the Climate Services Users Forum recently.
The outlook shows that geographically, above normal rainfall is most likely to occur in some areas of the northwest, along the foothills of the Himalaya and north-eastern parts of the region, and many areas of the central part of the South Asian region.
Nepal’s economic wellbeing is intimately linked with the monsoon. Water from the skies is the lifeblood of Nepal's Rs4.26 trillion economy which is farm-dependent, as nearly two-thirds of the farmlands are rain-fed.
A large part of the country gets nearly 80 percent of its annual rainfall during the four months—June to September.
The production of food grain, mainly rice, depends on the amount and distribution of monsoon rainfall over the country. The monsoon rains also replenish ground water and reservoirs critical for drinking and power generation.
“Monsoon rain is key for Nepal’s economy,” said Hem Raj Regmi, deputy director general at the Central Bureau of Statistics. “The summer crops, mainly paddy, alone contribute over 11 percent to the national gross domestic product and are the major income sources for more than half of the population,” said Regmi who holds a doctoral degree in food security.
Paddy, which is transplanted in June and harvested in October, contributes around 7 percent to the gross domestic product.
During this fiscal year 2020-21 ending mid-July, the country’s paddy production reached a record high for the fourth straight year due to 'normal monsoon' rains and an abundant supply of farmhands, even though a severe shortage of chemical fertiliser during transplantation and top dressing had caused distress among farmers.
Following the revival of economic activities, Nepal is expected to post a growth of 4.01 percent this fiscal year from a contraction of 2.1 percent in the last fiscal year, according to the National Account Estimate released by the Central Bureau of Statistics on Friday.
The agriculture sector recorded a growth rate of 2.64 percent due to an increase in paddy production.
“The economic growth forecast is based on the assumption that most activities will return to normal after the two weeks of restriction imposed by the government to prevent the spread of Covid-19,” said Regmi. “It’s uncertain. We cannot determine how the Covid-19 related restrictions will impact economic growth. But we are certain the growth rate will not go into negative territory this fiscal year.”
According to Regmi, the monsoon report, obviously, is a good sign for the economy for the next fiscal year 2021-22.
“The monsoon obviously benefits the country’s economy, mostly the production of crops. But there should be good preparation to reap the benefit,” said Indira Kadel, senior divisional meteorologist and chief of the climate analysis section at the Department of Hydrology and Meteorology.
“Farmers should be informed based on the forecast. If there is going to be a drought, the government should plan accordingly,” said Kadel. “This year, the monsoon is likely to be above normal, which means a good rainfall; and along with that, farmers should be provided with enough fertiliser and seeds so that the country can benefit from the above normal monsoon.”
Apart from the agriculture perspective, an above normal monsoon could prove to be a disaster if the response is not timely, said Kadel. “It’s sensitive. You need proper planning so that risks are minimised.”
This fiscal year, there was a fiasco in the distribution of state-subsidised chemical fertiliser. The heavens had opened up during the last monsoon, and Nepal received 31 percent more rain than usual. But farmers missed the chance to profit because the government bungled fertiliser distribution.
Paddy output grew marginally, but it was still a record harvest of 5.62 million tonnes due to bountiful supply of both rainfall and farm workers.
Last year, farmers encountered fertiliser shortages right from the beginning of the planting season in June. First, there was a short supply of DAP, as the Covid-19 pandemic disrupted the global production and supply chain.
Then a shortage of urea appeared during the first and second top dressing. In response, the then minister for agriculture Ghanashyam Bhusal promised to bring urea from Bangladesh and requested a shipment of 50,000 tonnes.
In many districts last year, farmers were forced to buy urea smuggled in from India by paying a black market price of Rs50 per kg following a nationwide shortage, according to ministry officials. The fertiliser costs Rs14 per kg at the government subsidised rate.
“The problem will not repeat this year,” said Shree Ram Ghimire, spokesperson for the Ministry of Agriculture and Livestock Development. “We have enough chemical fertiliser in stock to prevent a crisis this year even if global prices have increased sharply.”
The government has allocated Rs11 billion in fertiliser subsidies for this fiscal year. The value of total imports hovers around Rs19 billion annually.
However, with the global price of chemical fertiliser soaring to a seven-year high, Nepali farmers could be in line for a repeat of the 2020 mess-up when they suffered a severe shortage of the vital plant nutrients at the height of the paddy growing season.
Ghimire admitted that the price of chemical fertiliser has been increasing. “We have to slash the subsidies given to farmers in order to increase the quantity if prices keep increasing,” he said, adding that the government had allocated Rs11 billion to finance the supply of chemical fertiliser in the next fiscal year.
According to reports, DAP which cost $409 per tonne on average in April 2020, has increased to $618 per tonne this April. Similarly, the price of urea which was $382 per tonne in April last year has jumped to $504 per tonne.