Rice is such an important food item that most Nepalis cannot do without it, but neither, it seems, can the country’s economy.
Encouraging rice harvest figures have prompted the government to raise estimates for Nepal’s economic growth rate this year. Paddy production was nearly 9% up from the previous year, reaching 5.6 million tons. Buoyed by these figures, Finance Minister Yuba Raj Khatiwada is optimistic that the country’s annual economic growth rate will touch 7% this year.
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The International Monetary Fund had predicted a 5% growth, but increased it to 6.5% mainly because of a healthy monsoon. However, the Asian Development Bank’s estimate is that Nepal’s annual growth rate will be 5.5% this year.
“Rice harvests account for up to 1% of Nepal’s annual economic growth rate,” said Ram Krishna Regmi, who heads the statistics division of the Ministry of Agriculture and Livestock. Agriculture and forestry contribute more than a quarter of Nepal’s GDP, of which rice makes up 21%. Two-thirds of Nepal’s population depend directly on agriculture for livelihood, and of them, one in five live below the poverty line.
Although the estimates look somewhat encouraging, they have exposed yet again just how much Nepal’s economy is dependent on the vagaries of the southwest monsoon. And with the summer rainfall becoming increasingly erratic because of climate change, Nepal’s economy will continue to be fragile.
Yubak Dhoj GC of the Agriculture and Livestock Development Ministry said that besides the monsoon, the reason for the increase in paddy production is due to an increase in the area under rice cultivation, the use of high-yield seeds, timely distribution of fertiliser, and the spread of mechanisation.
“There was a healthy monsoon, and timely paddy transplantation, and there were also fewer landslides and not as much river erosion,” GC explained. Last year, paddy seedlings were transplanted in 97% of fields, up from only 86% the year before. All this also affected productivity, which increased to 3.67 tons per hectare, a 0.25 tons increase in yield per hectare from the previous year.
Even so, the total production could not meet Nepal’s demand for 6.1 million tons of rice, and the shortfall was met with imports from India. In the first four months of this fiscal year alone, Nepal has already imported Rs9.35 billion worth of rice from India.