Agriculture Ministry seeks Rs100 billion in fresh investments

Feb 25, 2019-

Ministry of Agriculture and Livestock Development has proposed a slew of projects and programmes worth nearly Rs100 billion to boost Nepal’s agricultural sector as the agriculture imports bill has started ballooning out of control.

Agriculture Ministry Secretary Yubak Dhoj GC on Sunday presented his ministry’s future “game changer” projects to Prime Minister KP Sharma Oli to boost agricultural production and farmers’ income. GC floated at least seven medium and long-term projects.

The proposed projects are Farmers Welfare Programme worth Rs50 billion, One Municipality One Model Farm worth Rs20 billion, Youth Employment Special Programme worth Rs5 billion, Food Hygiene and Standards Programme worth Rs5 billion, Agri Market Promotion Project worth Rs5 billion, Paddy Production Programme worth Rs4 billion and Agriculture Research and Extension programme worth Rs1 billion.   

“The agriculture sector in Nepal is full of challenges. The population is growing and we have to increase production while using the same areas of land and less human resources,” he said.

“It’s a well-known fact that food production has been increasing in an arithmetic progression while demand is growing in a geometric progression. In this scenerio, for a country like Nepal, we should go for a value-added agriculture system which generates billions of rupees in economic impact for the country,” GC told the Post.

Nepal’s agricultural goods import bill crossed Rs200 billion for the first time in the last fiscal year, propelling an already bloated trade deficit to its highest level on record. According to the Department of Customs, Nepal imported farm products worth Rs215.50 billion in the last fiscal year, up 10 percent year-on-year. The share of agro products in the total import bill has swelled to 17 percent. The country’s total import bill amounted to Rs1,243 billion in the last fiscal year.

Nepal’s reliance on foreign markets for agricultural goods has increased nearly fivefold in the last nine years. The food import bill in 2009-10 amounted to Rs44.43 billion. The import bill jumped to Rs76.05 billion in 2011-12 and to Rs99.35 billion in 2012-13. It further ballooned to Rs127.51 billion in 2013-14.

In 2014-15, Nepal imported agro products worth Rs157.78 billion, pushing agro commodities to the top of the list of imports and knocking petroleum products from the number one spot.

Cereal tops the list of agro imports followed by edible oil, vegetables and food and animal fodder. As per the figures, the cereal import bill amounted to Rs44.52 billion in the last fiscal year, up from Rs40.14 billion in the previous year. Agro experts say that Nepal started importing cereals seven to eight years ago, and now imports have risen to alarming levels.

Edible oil imports amounted to Rs29.72 billion in the last fiscal year, up from Rs28.83 billion.

Similarly, the vegetable import bill increased to Rs22.67 billion in the last fiscal year from Rs21.50 billion in the previous fiscal year.

Secretary GC told the prime minister that imports of rice has increased mainly due to demand of aromatic and fine rice. The expanding population of middle-income Nepali prefers to eat basmati rice but Nepal doesn’t grow such fine rice in sufficient quantities. Besides, the prolification of animal husbandry and livestock has increased the demand for maize and oil cakes massively, he said. “In vegetables, we have a balanced trade,” he said, adding that imports of onion and potatoes, however, have been increasing at an alarming rate.

GC said that demand for Nepali agriculture goods, particularly fresh vegetables, lentils, large cardamom and ginger, in the Gulf countries has been growing strongly. “But we lack standards, processing and packaging of these products,” said GC.

“Similarly, in order to boost exports of tea, coffee, honey and herbs in Europe, Japan, the US and Australia, we need to focus on enhancing the products’ quality and their certification.”

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