A third of all remittances the country earned from foreign employment re-exited the country to foot the food import bill. Once a country with agricultural surplus, Nepal exported only Rs84 billion worth of food items.
Imports of even products like mangoes and guava which grow abundantly in Nepal have gone up. Nepal spent Rs1.2 billion importing just those two fruits in the past year. Nepal is a producer and exporter of tea and coffee, yet it imported Rs9.5 billion worth of the two products. The country’s dairy production has also increased, but Nepal still imported Rs2 billion worth of milk, cheese and other products.
India normally accounts for up to half these imports, with its post-lockdown share at 25%. Indian farmers receive support and subsidies in seeds, fertiliser, technology and irrigation, producing crops at competitive prices, which in turn flood the Nepali market. As a result, traditional Nepali variants are disappearing, replaced by cheaper, widely-available rice and other food items.
Nepal’s imports soyabean oil all the way from from Paraguay and Brazil, lentils from Australia, cooking oil from Russia, chillies from Indonesia and Vietnam, potatoes from Bangladesh, beans from Burma. Nepal may be self-sufficient in poultry products, but imports maize for chicken feed from Argentina.
“Cheaper and competitive imports, especially from India, are discouraging local farmers from commercial production,” says Devendra Gauchan of Nepal Agricultural Economics Society. Self-sufficiency in agriculture has been the motto of every government in the past decades, but Nepal’s dependence on the outside world for food is only growing.
The neglect of agriculture is evident in the fact that even though two-thirds of Nepalis depend on farming, the share of agriculture in the GDP has fallen to 25%.
A number of systemic issues plague the sector and waste Nepal’s agricultural potential, according to Gauchan. Workers are shifting away from agriculture to foreign employment and service-sector jobs, the latter now accounting for 61% of domestic production.
Only 56% of all arable land in Nepal is irrigated, with even less area getting year-round irrigation, meaning most farms still depend on the rains. Productivity is also falling because of the fragmentation of landholdings.
In addition, government investment, research and development and commercialisation towards agricultural technology, production and storage are sorely lacking. Only 6% of fiscal year 2021/22’s budget has been appropriated for agriculture. Meanwhile, farmers do not have access to markets, leaving produce to rot in the fields.
Despite plenty of potential, a lack of concrete supportive policies has left the country dependent on others for food it could produce itself. Policymakers do not know what products to promote and derive maximum benefit from, says agriculture expert Jeewan Rai.
“The mid-mountains have optimal conditions for fruits given enough research and investment, but the government has done nothing,” says Rai. Once exclusive to supermarket shelves, avocados are now available in every corner shop. Nepal imported 120,000 tonnes of avocado last year, some from as far away as Tanzania and Kenya.
To be sure, there are also positive trends. The rise in imports also indicates higher living standards and greater purchasing power of Nepalis. Once a country ravaged by malnutrition and hunger, the percentage of stunted children has dropped sharply from 57% in 1996 to 36% in 2016.
Much of the increased spending on food items is driven by a remittance boom, which brought in Rs9.61 trillion in the past year despite the pandemic – a near 10-fold growth in 15 years.
Transportation and globalisation have displaced local mainstays like buckwheat and millet with rice, which has become more affordable to the average Nepali. An emergent middle class is also driving up demand for more expensive long-grain and fragrant Basmati variants, most of which Nepali farmers can be nudged towards producing.
Demand for beer, for example, is also responsible for the dramatic rise in rice imports — beyond what Nepalis consume for food. Statistician Ram Krishna Regmi at the Ministry of Agriculture says domestic production figures for items like rice are over-estimations, swallowing up more and more imports to cover the data gaps.
But while a well-fed population is encouraging news, the priority must be to feed them with local produce and reduce the gaping trade deficit. The country must strive to produce and commercialise products tailored to its climate and soil, says Saurav Dhakal of Green Growth, which promotes local farming.
Dhakal adds, “If local varieties of fruits and vegetables can be researched and promoted, reliance on foreign imports can be cut.”