The government has approved the guidelines for cash distribution for farmers across the country whose paddy crops were inundated during the unseasonal October heavy rain and floods, after a hiatus of one and a half months.

The country suffered floods following unseasonal torrential rains starting on October 17 that killed more than 100 people, damaged standing and harvested paddy crops on thousands of hectares and left settlements in several districts underwater for days.

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

Prakash Kumar Sanjel, spokesperson for the Ministry of Agriculture and Livestock Development, said that the local levels will collect data of the affected farmers or crops within two weeks once the notice is published in Nepal Gazette.

“The local levels will make public the affected farmers' names and three additional days will be given for farmers that were not incorporated in the initial list to make claims,” he said. After the claims are settled, the names will be forwarded to the district’s disaster relief committee for further approval.”

According to Sanjel, it will take one more month to complete the process. “All affected farmers will get the compensation in their bank account.”

The maximum compensation amount would be Rs55,000 as per the guidelines.

The Cabinet meeting on November 18 had announced a record Rs5.52 billion payout for farmers who lost their paddy crops to extreme weather last month. 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 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 decision, the cash compensation will be distributed in four categories.

The government will compensate 65 percent of the production cost of small farmers who hold up to 10 katthas.

Similarly, the government will cover 30 percent of the production cost of medium farmers whose holdings range from 11 to 60 katthas.

For big farmers whose farms are larger than 61 katthas, the government will compensate 20 percent of their production cost.

For partially affected farmers, the government has decided to compensate a flat 20 percent of the production costs for all small, medium and big farmers.

The farmers who have insured their crops, however, will not be eligible for the compensation.

As per the guidelines, the compensation amount has been based on the production cost of Rs2,304 per quintal [100 kg] and the crop productivity rate of the district.

Nepal’s economic well-being 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 this year, October’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.

According to the ministry, 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 that have lost their entire crops or the flood swept away their ready-to-harvest paddy fall under the first category.

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 loss of stalks, which have a good monetary value, are also huge.

The ministry has estimated that the paddy production may drop below 10 percent this year.

The damage will be reflected on rice prices this year, insiders said.

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 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 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.