This is a story not of lofty revolutionary rhetoric about the coming utopia, but of plain old agriculture, and how we must, finally, unleash our full potential in a vocation that is our pride, strength and way of life. The current government has boldly declared that the next 10 years shall be a ‘decade of agricultural revolution’ that will transform the sector and make us food-sovereign. The share of agriculture in the economy is gradually decreasing, from about 37 percent a decade ago to 33 percent at present, but it still employs two-thirds of our economically active workforce.

Nepal’s agriculture is characterised by weather-dependent use of traditional crops and methods, and therefore remains unproductive. Because of the unpredictability of the monsoons, annual output varies widely. The conventional problems are now being compounded by the adverse effects of climate change and the exodus of our youth as migrant workers. According to the detailed 13th Development Plan (2013/14-2015/16), published by the National Planning Commission last week, of the estimated 2.6 million hectares of cultivable land in Nepal, about 1.8 million hectares are potentially irrigable. However, to date, there is nominal access to irrigation for 1.3 million hectares, only one-third of which are serviced year-round. In other words, for every unit of cultivable land that is irrigated in Nepal, there are still three that are not.      

Right direction

The Finance Minister made public several policy measures in the recently announced budget. Although the budget of one year (Rs 23.3 billion) appears insufficient, it has set the right direction for long-term results. The emphasis is on modernisation, commercialisation and diversification by building access roads to markets, subsidising fertilisers and seeds to lower costs and providing concessional loans to attract new entrepreneurs while encouraging traditional ones to experiment and grow.  

The budget reflects the government’s deep worry about the chronic problem of under-employment. Emigrating youth can be retained inside the country not by brute force but by making agriculture an attractive profession. This requires commercialisation, as the budget states, of high-value items like vegetables, milk and dairy, livestock and meat processing with farmers given loans at a subsidised interest of 6 percent. Farmers who pool 10 hectares in the hills and 20 hectares in the Tarai will receive 50 percent interest subsidy on their loans; cooperatives run by small and marginal farmers will receive much more. To expand the use of mechanical power, the government will largely exempt customs duties on the import of hand tractors, power tillers, feeders and milling machines. Likewise, milking machines and refrigerated vans used for transportation of meat and milk products can be imported free of duties. The tea industry will receive a tax concession (50 percent off VAT); insurance premia on livestock and agriculture will also be subsidised to reduce risk that farmers bear.

Much of the fertiliser that Nepal imports is used to increase the production of rice, wheat and vegetables. The government, therefore, plans to subsidise the sale of 255,000 metric tonnes of chemical fertilisers this year. Similarly, to alleviate food insecurity, 7,000 metric tonnes of seeds will be distributed at low cost to replace seeds of old varieties. There is an opportunity here for private sector investment in the development of foundation seeds (whose demand is expected to reach 3,000 metric tonnes by 2025). The private sector can also produce fertilisers, partner with the government in building infrastructure and take advantage of internationally accredited national labs in seeds and food to export high-value processed products. There is continued spending to strengthen agricultural research and extension services. Irrigation, too, has received a big boost in allocation, with, for example, expedited completion of flagship projects and interest subsidy to farmers who use renewable energy to water 50 hectares of land or more.   

Addressing imbalance

While we look forward to augmenting value at the farm gates, we cannot ignore some of the structural problems, such as the widening imbalance between the import and export of agricultural commodities. The huge volume of the import of rice, vegetable oils, oils seeds, fruits and vegetables is of grave concern. There are many districts of the Tarai, which used to be self-sufficient, but are now food-insecure. Going forward, we need to speed up the process of better marrying our potentials with core advantages. For example, in rain-fed areas, we need to focus on crop varieties that have a short lifecycle. In areas where fodder is abundant, we should go for livestock. In districts where irrigation facilities are available, we should use maximum inputs and high yielding cultivars. In areas near cities, we should promote vegetable farming. Low lying areas, especially inhabited by the indigenous Tharus, are suitable for fisheries. The government could also initiate the setting up of minimum support price as well as storage facilities to stabilise prices.  

In the 1970s, I had first-hand experience of marketing paddy in my district of Mahottari. We sold both in Matihani (in Nepal) and Madhwapur (across the border in India). I used to see hundreds of bullock carts loaded with Nepali grain before being wheeled away. Once during my school years, I personally went to sell our paddy in northern India on a bullock cart and was late returning home in the evening. As I was carrying cash (export earnings), I was afraid of being looted. It pains me now to see that the same border areas abundant with Nepali produce are swamped by imported rice and paddy in large Tata trucks.

This change is due to faulty planning and our diverging productivity. Tarai districts like Sunsari, Siraha, Mahottari and Rautahat, for example, used to export paddy just a few decades ago; now they record deficit. Indeed, in the 2014 Human Development Index, Rautahat and Mahottari rank in the bottom 10 among Nepal’s 75 districts, in the same category as Mugu and Humla in the Himalayas. We know that for poverty reduction, it is absolutely important to lift lagging areas, especially in rain-fed areas, where productivity remains low and nutritional insecurity persists.

The entire restructuring of the agricultural system is overdue. We cannot fail our farmers. The research and extension system has to be aligned closely with their needs, and be cognizant of new threats, such as climate change. The range of machineries and equipment that currently enjoy preferential tariff treatment needs to be expanded to include seed drills, planters, harvesters and sprayers. Finally, we should learn from our neighbouring countries on how they grounded their development with reforms in agriculture. While the green revolution of India is well-documented, China’s growth take-off, too, began with heterodox price reforms in agriculture. If we execute our new plans and strategies seriously, we can once again be a nation of food exporters as we once were in the 1970s. Without a strong agricultural foundation, our growth can be neither

sustained nor inclusive.

Mishra is a member of the National Planning Commission and former Executive Director of the Nepal Agricultural Research Council