Gopal Bahadur Dahal has always been running into problems while selling his paddy. For decades, the farmer from Belbari in Nepal’s eastern region has been using a middleman to market his crops who takes a big cut.

So last year, Dahal made a deal with a rice mill in Duhabi to sell his paddy for Rs600 per maund (about 40 kg). But nobody came to pick up the ripened paddy for a week, by which time it had spoiled a bit.

“The mill then said it wouldn't pay more than Rs400 per maund. There was nothing I could do,” he said.

But now a modern rice mill has opened near Dahal's home, and he is upbeat that it will make his life easier.

Arju Rice mill in Dangihat promises to pay farmers the minimum support price (MSP) of paddy before they begin the transplantation. It will also harvest and collect the crop from the farmers' fields.

The state-of-the-art rice mill is the creation of airline magnate Birendra Bahadur Basnet. The factory has spent around Rs450 million to set up rice processing equipment made by Swiss company Buhler Group.

Farmer Karna Bahadur Thapa of Rangeli said he took a big risk by transplanting Ram Dhan, a home-grown improved variety of paddy, to sell to the mill.

“After four months, the result was astonishing. I didn't believe that the aromatic long-grain paddy productivity would be so high,” he told the Post.

Thapa was able to produce 110 maund on a bigha (0.67 hectares). He was ecstatic at having grown a bumper crop even without applying a sufficient amount of chemical fertilisers.

Nepal suffered the worst chemical fertiliser shortage during the June-August paddy transplantation season.

Thapa said he piloted Ram Dhan on a bigha out of his 5-bigha farm for the first time at the mill's request. “Definitely, it was a risk. No one knew about the outcome.”

For Thapa, the biggest incentive was the price assurance given by Arju Rice.

“We were paid within 48 hours,” said Thapa, who grew 4.4 tonnes of Ram Dhan. But he didn’t sell his entire harvest. “It has a good taste, and I have kept 10 sacks for myself.”

According to Thapa, the yield was good but it was no record performance.

“We have produced up to 140 maund per bigha by planting Swarna Sub-1. The productivity of this paddy variety is amazing, but we don’t make much money growing it.”

Nepal’s paddy harvest in the last fiscal year ended mid-July is expected to reach 5.13 million tonnes.

Experts say that in many districts, farmers have to struggle to sell their paddy because of the low demand for local varieties. And this has resulted in ballooning imports of fine varieties of rice which Nepal produces only in small quantities.

Long-grain rice holds a unique charm in global markets including Nepal, and this has resulted in a growth in rice imports although the country produced surplus grain in previous years, agro experts said.

Nepal's ever-swelling agricultural imports hit the Rs400 billion mark in the last fiscal year, prompting experts to warn that a farming country becoming so dependent on imported food indicates a full-blown emergency.

The value of cereal imports in the last fiscal year came to Rs74.28 billion. Out of the total shipments, rice and paddy amounted to Rs29 billion and Rs16.99 billion, respectively.

In 2015-16, cereal imports were worth only Rs39.34 billion.

Experts say there seems to be a direct link between remittance and food habits in Nepal. Nepalis have been earning more over the last couple of years, and demand for long grain and aromatic basmati rice has grown accordingly.

Arju Rice says it has targeted the spring season for paddy production. The country possesses 1.42 million hectares of farmland suitable for growing paddy. However, spring paddy is planted on only 112,000 hectares.

“For the spring paddy harvest, we have announced a rate of Rs900 per maund, up from Rs750 last year. We basically want to encourage farmers to produce more,'' said Basnet, chairman of Arju Rice and owner of Buddha Air, Nepal’s leading private airline.

“That’s a good offer,” said Dibya Raj Khatiwada, another farmer of Kanepokhari-3. “Getting price assurance before the transplantation definitely encourages farmers.”

Khatiwada says he has decided to transplant Ram Dhan for the first time. “It’s a risk shifting to new varieties. But there are successful farmers also.” He transplanted Tej Gold on his 5-bigha farm last year.

Farmers are troubled by the high cost of production of paddy. "For this reason, young farmers aren't much attracted to growing paddy," said Khatiwada.

According to him, you would need Rs4,000 worth of fertiliser for a 1-bigha field if you can't get the subsidised product. The cost of preparing land with a tractor is Rs2,200 per hour, up from Rs1,500 previously after the price of diesel shot up.

Farm hands need to be hired to prepare the soil, and they charge Rs900 per day.

During paddy transplantation, workers need to be paid Rs600 extra. The total cost for a bigha exceeds Rs10,000 nowadays, but farmers are excited about Ram Dhan's performance.

The improved variety of Ram Dhan was released in 2006. Its productivity ranges from 4 tonnes to 7.2 tonnes, depending on the availability of fertilisers and irrigation facilities. The maturity period is 133 days, according to the Crop Development Directorate of the Agriculture Ministry.

Research has shown that Ram Dhan has a higher grain return of Rs89,100 per hectare. The high market price of this variety is associated with high cooking quality, including taste and aroma.

“Many farmers did not supply us the paddy as committed because they have kept it for their own consumption,” said Basnet. “We hope many farmers will switch to Ram Dhan now.”

Khatiwada is optimistic that high-yielding and high-value Ram Dhan will boost his earnings.

“We have seen and listened to the success story of Ram Dhan. But we need technical know-how to avoid crop failure,” he said.

Nepalis' food habits are gradually shifting towards fine and aromatic rice from coarse rice, according to the Agriculture Ministry’s research papers. As a result, rice market transactions are moving to fine rice.

Rice traders try to sell even cheap coarse rice by converting it into fine rice using a high degree of polishing for a higher price, the ministry’s document says.

“These days, rice traders are attracting consumers by branding any type of rice as Jiramasino (fine rice). Sales of fine and aromatic rice in Nepali supermarkets and department stores have been on the rise for the past few years.”

Arju Rice has brought happiness to farmers who have been struggling to sell their paddy in the market for decades. Nowadays, they get paid in 48 hours which is a drastic change.

“The mill announces the MSP early. That’s a very positive and farmer-friendly policy by the private sector,” said agro expert Rajendra Uprety. “The mill is really a boon to farmers.”

The MSP is the lowest legal price that can be paid for farmers’ harvests. The government does not fix the floor price of fine paddy.

“We declare the MSP to encourage farmers. This will enable them to make an early decision to transplant paddy as per our demand,” said Basnet. “Basically, our approach is a ‘harvest-to-market’ initiative. We buy paddy from farmers' fields. We process it, package it.”

Arju Rice is planning to introduce Nepal’s first packaged long-grain aromatic rice in the domestic market on January 15. “We don’t buy paddy from the Indian market. We encourage farmers to produce it,” said Basnet.

Arju brand fine rice may cost Rs140 per kg.

Ram Dhan, which is 6-7 mm in size, could substitute ever increasing rice imports from India if marketed well, experts say.

Arju Rice provides harvesters and transport facilities for a minimal fee. “Our goal is to substitute rice imports from India. If we succeed with the Dangihat project, we will replicate this model across the country,” Basnet said.

The company is also promoting spring paddy. “We need at least 8,000 tonnes of spring paddy.”

Arju Rice says it will require at least 22,000 tonnes of paddy per annum. The factory has two dryers, each with a capacity to dry 15 tonnes of paddy per hour, and can mill 4 tonnes of paddy per hour.

The company aims to supply 14,000 tonnes of rice to the market annually.

Agro expert Uprety said that due to a lack of modern mills and low quality seeds, Nepal has become dependent on imported paddy and rice from India.

“This mill has brought better business opportunities to farmers, who are seeing increased profitability from growing more rice. It also facilitates direct connections between farmers and traders to create win-win relationships,” he said. “Farmers get fair prices, and millers maintain sufficient stock.”

According to Upreti, Nepal’s policy is focused on trading, and it has been affecting the production sector.

“If you import paddy, mill it and package it under a Nepali brand, you can have a turnover of Rs1 billion. But if local mills buy local products, the business hardly exceeds Rs200 million,” he said. “That’s why trading is thriving, and that’s not good for the economy.