Flying and farming

For an airline executive, Birendra Basnet has his feet firmly planted in Nepal’s soil

Nepalis are giving up on the country and flying out of Tribhuvan International Airport by the thousands every day. One recent morning, Birendra Basnet was on seat 17A of an ATR-72 flight to Biratnagar. 

In these cynical times, Basnet is a shining example that individual persistence, ingenuity and vision can contribute to the nation’s economic growth. He employs 1,500. 

He was flying on Buddha Air, which he established 26 years ago, and has today grown to become Nepal’s biggest airline. The carrier is now cruising on autopilot, leaving Birendra Basnet time to focus on his other passion: agriculture. 

It is not a small backyard garden that Basnet is interested in, but large-scale mechanised agro-industry. His goal is to dramatically raise farm productivity and to serve as a model for the rest of Nepali agricultural enterprise. 

Basnet's Arju Rice Mill, in Morang, buys rice from local farms -- including his own -- to process and produce 80,000 tonnes of rice a year. 

Arzoo Rice Mill
Basnet's Arju Rice Mill in Morang.

“There are big obstacles to doing business in Nepal, but that is a given,” Basnet explains, gesturing animatedly. “Everyone faces the same challenges, the question is what are you doing to get past those hurdles?” 

Indeed, after his success in the airline business, Birendra Basnet feels he can transform agriculture to make Nepal self-sufficient in rice again. Every year, Nepalis consume 140kg of rice per capita. 

Basnet has so far ploughed Rs500 million of his money into his agriculture enterprise, and hopes Arju will go into profit starting next year.

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“I could have done anything with that money, why did I take the risk to invest in agriculture?” Basnet asks, rhetorically. “To show that it works. Our community enterprise model buys directly from farmers and not from middlemen. This has helped subsistence farmers of the eastern Tarai make a profit for the first time. Every rural municipality in Nepal could adopt this formula.”  

Eighty percent of Nepalis depend on farming, and if they could get fair prices for their produce it would help them out of poverty.

Basnet asserts that Nepal has to move away from its current crony-capitalism, with its winner-takes-all system. What is ideal is a culture where social entrepreneurs look not at a bigger slice of the pie for themselves, but to make the pie bigger. 

Basnet now wants to expand the community enterprise model to other agricultural products like oranges from Bhojpur, apples from Jumla, and ginger from Salyan. He also envisions developing a network of cold storage centres, solar powered, that preserve products so farmers are not forced to sell when prices are low.

While Basnet is frustrated with the bureaucratic hurdles that put off entrepreneurs wanting to take a chance in Nepal, he says there are many little-known success stories of those who have persevered and realised their dreams. 

“The reason I am optimistic about Nepal is that public outrage will find outlets in alternative politics and spawn leaders who are passionate about genuine change and action, instead of just talking,” he says. “For that, people like us have to be more involved.”

Meanwhile, back at Buddha Air, Basnet has decided to give up his plans to expand to remote areas through short takeoff and landing (STOL) fields. The carrier is also retiring two ATR-42s models from its fleet, replacing them with the newer ATR-72 600s. 

Last week, Buddha Air got top credit ratings from the credit agency ICRA Nepal for its strategy of ‘controlled business performance’ rather than risky expansion post-Covid. Buddha has 67% of the domestic market share, up from 56% last year, and has benefited from the poor state of inter-city highways in Nepal. 

The airline’s provisional revenue was Rs3.83 billion last year, flying 7.1 million passengers within Nepal,  on 150 daily flights. 

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