Nepal’s fertiliser conundrum–governments ponder over it every paddy season and then forget after harvestAn agreement signed with India to directly procure 100,000 tonnes of fertiliser annually expired in 2017. Since then Nepali farmers have been deprived of timely supply of fertilisers, as authorities have failed to explore other options.
Farmers on Wednesday stood in serpentine lines in various districts, ignoring the coronavirus threat, to buy urea amid a severe crunch of the essential nutrient for their paddy.
With September already started, for farmers, it’s a race against time.
It’s the time for the second “top dressing” of paddy, and failure to collect urea will mean farmers will not get high yields by harvest time.
Fertiliser shortage is a perennial problem in Nepal.
Despite tall promises, the Oli administration has miserably failed in ensuring the timely supply of fertilisers.
The country has completed its paddy transplantation on 98 percent of the available 1.37 million hectares farmland, the highest transplantation recorded in the last five years, according to the Ministry of Agriculture and Livestock Development. The record transplantation is attributed to timely and sufficient rainfall and availability of farm hands who returned home from foreign countries due to the pandemic. It’s time to provide the paddy with the nutrients.
After mounting pressure and growing criticism for failing to import the fertilisers, the government has turned to Bangladesh, seeking 50,000 tonnes of urea.
Experts, however, were quick to call the government move akin to putting the cart before the horse.
“Paddy cultivation has its own routine. If chemical fertiliser—urea—is not applied within three weeks from now, a fall in productivity is imminent,” said Yam Kanta Gaihre, a soil scientist at the International Fertilizer Development Centre, who coordinates field research activities in Asian countries, including Nepal, Bangladesh, and Myanmar. “But it’s too early to say the level of the impact on production, as there still are chances of some recovery.”
Amid the Covid-19 pandemic, which has brought all economic sectors down, agriculture is one sector that the country is looking up to, but economists say the fertiliser shortages could hugely impact the output.
Paddy contributes approximately 7 percent to the gross domestic product and more than 60 percent of the working population is engaged in paddy farming which lasts for at least six months of the year.
Rice in Nepal provides nearly 50 percent of the calorie requirements supplied by cereals. Hence, drop in production has a cascading effect—it affects the country’s economic growth, increases food insecurity and affects the income of farmers.
But factors like limited input access, dependence on Indian seaports and Indian transit routes to access international markets, lack of buffer stocks and suppliers not fulfilling timely delivery commitments makes shortage reappear every year.
According to the Agriculture Ministry, the annual demand for chemical fertilizer currently stands at more than 700,000 tonnes while imports are just around 350,000 tonnes. The rest is met by informal imports or shipments smuggled through the open border. During the paddy season, urea requirement stands at 120,000 tonnes and 50,000 tonnes of Diammonium phosphate (DAP).
Though the government this year has blamed the Covid-19 pandemic for the fertiliser shortage, Gairhe says the problem is a lack of a system to ensure buffer stocks.
“There is enough financing to import fertilisers,” Gaihre told the Post. “That the country required buffer stocks has been an issue that has been in discussion for long.”
The budget has allocated Rs 11 billion for fertiliser subsidy for this fiscal year, up from Rs9 billion in the last fiscal year. Nepal imported fertiliser worth Rs 19 billion in the last fiscal year.
Application of urea during the first top dressing which normally begins three-four weeks of transplantation ensures rapid vegetative growth, promotes tillering, and helps strengthen the plants against disease attack. The second top dressing ensures complete grain filling, increasing the size and weight of the grains. It also improves the quality of the crop by increasing the protein content.
Hari Dahal, former secretary at the Agriculture Ministry, said that the shortage appears due to the inability of suppliers to deliver the product on time.
“It takes at least six months for a supplier to deliver the fertiliser. As fertiliser is an international commodity, prices keep fluctuating. If prices rise, the supplier won't bring them and they lose the security guarantee,” he said. “This happens worldwide. But many countries have a buffer stock to prevent the shortages.”
In a bid to address the shortages, Nepal in 2009 signed an agreement with India, which meant India would sell 100,000 tonnes of chemical fertiliser (60,000 tonnes of urea and 40,000 tonnes of DAP) to Nepal annually at import parity prices. The agreement allowed Nepal to directly purchase from India without going through the long tendering process which normally takes six months.
However, this got halted in 2015-16 due to the protests in Tarai and an Indian blockade. The agreement, however, expired by the end of 2017.
In 2018, Nepal had proposed renewal of the agreement to procure chemical fertilisers for at least five years at the import parity price. The proposal was made keeping in view the 10-year Prime Minister Agriculture Modernisation Project introduced in 2017 that aims to increase agriculture production.
The Agriculture Ministry had proposed importing 150,000 tonnes of fertiliser (urea 100,000 tonnes and potash 50,000 tonnes) in the first year–2018. In the second year, the ministry had proposed importing 170,000 tonnes of fertiliser under a government-to-government deal, 195,000 tonnes in the third year and 210,000 tonnes each in the fourth and fifth years.
According to Indian media reports, the government-to-government pact has been pending since December 4, 2018, when Nepal submitted the first draft of the proposed memorandum of understanding the same year.
“We had sent the proposal and several rounds of discussions were held on the agenda. But India refused to provide chemical fertilisers at the import parity price,” said one retired secretary of the ministry requesting anonymity. “India clearly told us that it won't sell the product at the import parity price and that it cannot give an equal treatment to Nepal as it has given to its farmers.”
There was no further development thereafter, according to him. “It would have been expensive for Nepal to buy fertilisers from India at the export parity price,” the official told the Post.
After farmers faced with the shortages, Nepal initiated the process with India in the hopes to get timely supply of the fertilisers.
According to Agriculture Minister Ghanshyam Bhusal, India, however, responded quite late, expressing its inability to provide fertilisers to Nepal immediately.
“So we decided to approach Bangladesh,” Bhusal told the Post. “It was not feasible to import from China due to transportation and logistic issues.”
Prime Minister KP Sharma Oli on Tuesday spoke with his Bangladeshi counterpart Sheikh Hasina on phone to request her government to provide 50,000 tonnes of fertilisers, according to Foreign Ministry officials.
Banshidhar Mishra, Nepal’s ambassador to Bangladesh, told the Post over the phone from Dhaka that as soon as the documentation process is over, the process to send the fertiliser will begin.
“The consignment will be dropped in Birgunj,” said Mishra. “It will take about a month. Our agreement is to return the same amount of fertiliser to Bangladesh in about six-nine months.”
Experts and former officials, however, for long have argued that Nepal needs to explore more options to ensure timely supply of the fertilisers.
Dahal, the former secretary, said one way could be initiating the process of importing fertilisers from India just like it buys petroleum products, by signing a commercial agreement.
“This will ensure timely availability of farm inputs,” said Dahal, “as Nepal’s demand is less than 1 percent of India’s total fertiliser consumption.”