Unseasonal October rains to shave up to 0.6 percentage points off GDPLosses could be in billions of rupees as heavy rains damage paddy crops across the country.
A freak torrential rain has filled farmer Ram Kamal Chaudhary with dismay. The paddy farmer from Marchbari Rural Municipality in Lumbini was upbeat about reaping his first bumper harvest in 10 years because the monsoon rains had been good, and chemical fertiliser was available during the planting season.
But on Tuesday, a heavy downpour and fierce winds suddenly swept in and flattened his standing paddy crop on two bighas of land. “I was expecting a bumper crop in another few weeks. But the rain has wiped out everything,” Chaudhary said.
Thousands of farmers across the country are staring at the prospect of ruin. Just as the paddy was ripening, the crop was destroyed by untimely rains in October. After heavy rain flattened the crops, farmers now face the daunting task of salvaging their harvest. The thousands of tonnes of ripened crop that has been submerged will get less value in the market as its quality has been ruined.
According to preliminary estimates of the Ministry of Agriculture and Livestock Development, total losses in the agriculture sector, including livestock destroyed, could reach Rs10 billion.
Details of the actual monetary losses in Provinces 1 and 2 are yet to come, but according to the ministry, paddy losses amounted to 200,000 tonnes worth Rs6 billion in Lumbini and Sudurpaschim provinces.
Economists say the destruction in human lives, property and crops caused by the rain that has set off floods and devastating landslides across the country may dent economic growth which has already been strangled by Covid-19.
Nepal’s economic wellbeing is intimately linked with 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.
A large part of the country gets nearly 80 percent of its annual rainfall during the four months from June to September. But the rare downpour in the middle of October has come as a curse to many.
“This is a disaster, the state must make efforts to rescue the farmers who are in distress,” Madhukar Upadhya, a climate change expert, wrote on Twitter on Tuesday, referring to the destruction of the paddy crop by the deluge.
Videos and photos posted on social media showed villagers in most of the Tarai districts wading through knee-deep water to salvage their paddy crops inundated by the floods. Heart-breaking images of farmers crying as they surveyed their water-logged fields have gone viral on social media.
For Chandra Bhuwan Nau of Gaidahawa Rural Municipality in Rupandehi district, the paddy which would be harvested in November would feed his 12 family members for an entire year.
“All gone,” said Nau, as he stared at his ruined crop on Wednesday. He had planted paddy on 10 katthas [3,380 square metres] of land at the cost of Rs30,000 this year. “It’s painful to be a farmer.”
Nepal had recorded the fastest ever transplantation in many decades for two consecutive monsoons. Paddy alone contributes around 7 percent to the national gross domestic product and is the major income source for more than a half of the Nepali population.
Agriculture Ministry officials had forecast that the paddy harvest was likely to reach a record-high level this year, totalling at least 6 million tonnes.
During the last fiscal year 2020-21 ended mid-July, the country’s paddy production amounted to 5.62 million tonnes, an all-time high for the fourth straight year due to "normal monsoon" rains and a plentiful supply of farmhands, even though a severe shortage of chemical fertiliser during transplantation and top dressing had spread worry among farmers.
Now, officials are clueless about the economic growth rate which is heavily influenced by the agriculture sector.
“It’s too early to predict the losses. But it’s a big loss and it may hit the country’s economic growth rate as well, which has already slowed to a crawl,” said Hem Raj Regmi, deputy director general at the Central Bureau of Statistics, the central agency for the collection and analysis of statistics in Nepal.
“The loss of human capital is an even bigger setback for the economy, which, however, is not counted in Nepal’s gross domestic product.”
According to Regmi, the damaged crops may not get their worth because of the quality, but they can be used as animal fodder. “The standing crops, which have not yet ripened, can be recovered if there is sunshine.”
The Asian Development Bank has cut its forecast for Nepal’s economic growth in the current fiscal year 2021-22 to 4.1 percent from 5.1 percent earlier, largely due to high Covid-19 infection and risks, though reduced now, and slowed growth in tourism and services.
“The country’s economic growth rate may get shaved by 0.5 to 0.6 percent this fiscal year based on the preliminary losses data,” said economist Keshav Acharya. “The losses of other physical assets like roads, bridges and infrastructure are huge. Moreover, the loss of human lives or human capital is big but it is not counted in the economy.”
Acharya estimates import of rice may further balloon.
In the last fiscal year 2020-21, Nepal added a 30 percent year-on-year jump to its agricultural goods import bill, taking it to a staggering Rs325 billion.
The import of cereals increased by Rs22.71 billion within a year, crossing Rs79 billion in the last fiscal year. Out of the total cereal imports, rice and paddy amounted to Rs27.62 billion and Rs20.54 billion respectively.
As many as 101 people have been killed in the floods and landslides in different parts of the country since Monday.
The coalition government led by the Nepali Congress has set an ambitious 7 percent economic growth target this fiscal year, even as experts have been warning of a possible third Covid-19 wave. The growth target is slightly higher, by 0.5 percentage points, compared with that set by the erstwhile KP Sharma Oli administration.
Nepal’s economy has been gradually and slowly reviving from the Covid-19 pandemic-induced contraction of 2.1 percent in 2019-20.
According to the Asian Development Bank, Nepal’s economy is estimated to have grown by 2.3 percent in the last fiscal year 2020-21, below the earlier estimated forecast of 3.1 percent.
“The growth rate this fiscal year may slow down further because of the destruction,” said Acharya.
"Reports of the actual agricultural losses are yet to come, but preliminary estimates show crops worth billions of rupees have been destroyed," said Prakash Kumar Sanjel, spokesperson for the Ministry of Agriculture and Livestock Development.
“We are working on a relief package that will be distributed either through a cash transfer or farmers will be provided subsidised seeds and fertiliser for future crops,” Sanjel added. “The federal government had been coordinating with the provincial governments to provide the relief.
Rajendra Upreti, spokesperson for the Agriculture Ministry of Province 1, said that paddy harvested on 50,000 hectares had been affected. Paddy was transplanted on 336,000 hectares in the 14 districts of Province 1.
“The impact has been less in Province 1 as only 5 percent of the crop had been harvested,” he said. According to him, 25 percent of the paddy crop has been submerged, but "the plants can recover”.
Farmers are worried that their debts will increase further this year as they will not be able to recover even their input cost.
“I was expecting that a bumper crop this year would help me repay the loan of Rs50,000 I had taken to buy inputs. But the rain has shattered all hopes,” said Ram Kamal Chaudhary, a farmer of Lumbini. “I will not be able to recover my input cost this year, and my debts will increase further.”
(With inputs from Sanju Poudel in Lumbini and Binod Bhandari in Biratnagar)