The government on Thursday announced a record high Rs5.52 billion payout for farmers who lost their paddy crops to extreme weather last fortnight.

The country suffered floods following unseasonal torrential rains starting on October 17 that killed more than 100 people and left settlements in several districts under water for days.

Heavy rainfall is unusual in Nepal in October, which is traditionally outside the monsoon season.

The rains started on October 17 in the western part of Nepal and then moved to the eastern part on October 19 claiming lives, damaging roads and bridges and other physical infrastructure in various districts.

The Ministry of Agriculture and Livestock Development said that a cabinet meeting on Thursday approved the Rs5.52 billion relief scheme. This is the highest ever aid package approved so far for farmers.

In its revised estimates of losses, the ministry said that the unusual rainfall had caused losses amounting to Rs11.87 billion. The ministry said that an estimated 424,113 tonnes of paddy on 111,609 hectares had been destroyed.

The latest statistics show that paddy crops on 90,996 hectares have been completely damaged. Similarly, paddy crops on 62,155 hectares have been partially damaged and 39,383 hectares have been slightly damaged.

As per the cabinet decision, the cash compensation will be distributed in three categories. The government will compensate 65 percent of the production cost of small farmers. Small farmers with holdings of up to 10 katthas whose paddy crops have been completely damaged will receive Rs1,921 per kattha as compensation.

Similarly, the government will cover 30 percent of the production cost of medium farmers whose holdings range from 11 to 40 katthas. They will get Rs887 per kattha.

With regard to big farmers whose farms are larger than 41 katthas, the government will compensate 20 percent of their production cost. They will get compensation of Rs591 per kattha.

For the partially affected farmers, the government has decided to compensate 20 percent of the production costs by paying a flat Rs591 per kattha.

“The assistance will be issued in the form of immediate cash grants,” said Prakash Kumar Sanjel, spokesperson for the Ministry of Agriculture and Livestock Development. “A guideline for the identification of farmers and relief distribution criteria will be formulated within five days as per the cabinet decision.”

Nepal’s economic wellbeing is intimately linked to the rainy season. 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. But last fortnight’s unseasonal rains spelt disaster.

Paddy is transplanted across most of Nepal in June and harvested in October.

The destruction of paddy is a major setback for Nepal’s economy. Paddy alone contributes around 7 percent to the national gross domestic product, and is the major income source for more than half of the population.

“The crop losses are huge,” said Ram Krishna Regmi, the chief statistician at the ministry, who has been on a field visit to Province 2 to assess the situation.

According to him, three categories of damage have been recorded. Farmers living on river basins or on the banks of rivers like the Karnali, Babai, Koshi and others have lost their entire crops or the flood swept away their ready-to-harvest paddy.

The second category of damage has been observed in the low lying southern plains where rainwater inundated the fields for more than two days and seedlings started to sprout from the harvested paddy left out in the fields to dry.

The third damage was due to the powerful winds which flattened standing paddy crops.

“Apart from the paddy losses, the losses of the stalks, which have a good monetary value, are also huge,” said Regmi. “We have estimated that the paddy production may drop below 10 percent this year.”

The damage caused to the food-producing districts will be reflected on rice prices this year, insiders said. “It will increase imports,” said Regmi.

In the last fiscal year ended mid-July, the import of cereals increased by Rs22.71 billion, crossing Rs79 billion. Out of the total cereal imports, imports of rice and paddy amounted to Rs27.62 billion and Rs20.54 billion respectively.

“The country will not suffer food shortages but food inflation may rise as Nepal has to fulfil the deficit through imports this year,” said Regmi.

The ministry said that Lumbini province suffered the highest losses. The heavy rains damaged more than 161,000 tonnes of paddy worth Rs4.51 billion. In the key affected areas—Bardia, Kapilvastu, Banke and Nawalparasi—floods swept away or submerged rice paddies on more than 42,000 hectares.

In Kailali and Kanchanpur districts of Sudurpashchim province, the rains damaged 138,528 tonnes of paddy on 36,455 hectares. The total losses in the province have been assessed at Rs3.87 billion.

More than 49,748 tonnes of paddy on 13,092 hectares has been destroyed in Province 1 which is worth Rs1.39 billion. The affected districts are Jhapa, Morang and Sunsari.

Similarly, Province 2 suffered paddy crop losses valued at around Rs1.61 billion. A total of 57,557 tonnes of paddy planted on 15,146 hectares has been destroyed in Saptari, Siraha and Sarlahi districts, the ministry said.

Karnali province suffered paddy damage worth Rs294 million. More than 10,515 tonnes of paddy on 2,767 hectares in Dolpa, Jumla, Salyan and Surkhet has been damaged.

Syangja, Kaski and Nawalparasi (East) districts of Gandaki province suffered combined paddy losses worth Rs126 million. More than 4,500 tonnes of paddy on 1,192 hectares has been destroyed, the ministry said.

In Bagmati province, 2,014 tonnes of paddy worth Rs56 million has been destroyed. The ministry said that in Chitwan and Nuwakot of Bagmati province, paddy crops on 530 hectares were destroyed.

The thousands of tonnes of ripe crops that were submerged will also get less value in the market as their quality has been ruined.

The sudden and extreme rainfall that occurred about a month after the monsoon usually ends in Nepal, has left experts wondering—and worried—how climate change is impacting the economy and livelihoods of the people.

Economists say the destruction of human lives, property and crops may dent economic growth which has already been strangled by the Covid-19 pandemic.