Nepal's rice economy

Ever since a picture posted on Facebook of Prime Minister K P Oli and his party co-chair Pushpa Kamal Dahal dining on red rice in the company of one of the most notorious businessmen in Nepal went viral last year, the word ‘Marsi’ has entered the Nepali lexicon not just to describe a nutritious variety of rice from the uplands but the unholy nexus between politicians and tycoons.

But what it did do is draw the country’s attention to the importance of rice to our lives as well as the nation’s economy. Rice is more than a staple grain in Nepal, it is a way of life. ‘Bhat khanu bho?’ is much more than a literal question about whether interlocutors have eaten, but a greeting like ‘How do you do?’.

Read also: Price of rice, Ramesh Kumar

Nearly 70% of Nepal’s population depends directly on agriculture, and the sector contributes more than a quarter of the country’s GDP – with rice making up 21% of that. Till as late as 1985, Nepal used to be a net exporter of rice, and during the 1960s the country was exporting up to $45 million worth of rice to India every year. How the tables have turned, in 2015 Nepal has to import 531,000 tons of rice worth $210 million from India.

There are many reasons why Nepal’s production of rice has not kept up with demand. The foremost, of course, is that the country’s population has doubled in the intervening years. Agricultural land is shrinking because of urban sprawl, and much of the farms are fallow because of outmigration. The educated youth do not want to live off the land anymore, and look for salaried jobs in the cities or abroad. Productivity has not increased by as much as it should have, nearly 80% of farms still depend on rains since there has been very little progress in irrigation – this in turn has made farmers vulnerable to erratic weather caused by climate change.

But there is a silver lining. As our reportage in this edition (page 8-9) shows, a healthy monsoon allowed paddy harvests to increase by 9% up from the previous year, reaching 5.6 million tons. An ecstatic Finance Ministry immediately raised the economic growth rate estimate to 7% this year. Even the IMF revised its previous estimate of 5% growth, and now estimates that Nepal’s year on year economic growth will be 6.5%. 

The Ministry of Agriculture’s statistics division has calculated that paddy was planted on 97% of fields this Nepali year, up from only 86% in 2074 BS. Paddy yield is still not comparable to other countries in the region that have intensive rice cultivation, but it did increase by about 8% to 3.67 tons per hectare.

The long and short of it is that Nepal’s rice economy is rain dependant, the government cannot take credit for the increased paddy harvests. There is precious little successive governments in the past 50 years have done to invest on improving yield, and finding a stable price for produce. The federal government earmarked Rs80 billion last year for agriculture, forestry and livestock, but most of it was spent on salaries and overheads. Donors spent another Rs16 billion over the past seven years to increase agricultural productivity with mixed results.

Despite the fact that two-thirds of Nepalis depend on their farms, agriculture is neglected and is just not a priority for politicians and bureaucrats. Twenty percent of farmers are subsistence, and living in extreme poverty. A report by Oxfam last month showed that the skewed distribution of wealth in Nepal is most glaring in land ownership patterns. The richest 7% of households own 31% of the agricultural land. More than 80% of women are landless, and 44% of Dalits in the Tarai do not own any of their own land, and are mostly tenant farmers.

As rice economist Rajendra Uprety points out in his op-ed in this edition, paddy imports from India peak during the harvest season in Nepal: indicating that Nepali farmers are not growing what Nepali consumers want. The only reason this is so is because the government has not been able to turn farmers to focus on varieties of rice preferred by consumers, reduce cost of inputs to make rice farming profitable, promote mechanisation and intensive rice cultivation techniques, and unleash a movement for domestic production.

This is not rocket science. We know what the problems are, we know the solutions to increase rice production. We just have to help our farmers do it. There is no reason Nepal cannot once more be the granary of South Asia.

10 years ago this week

Nepali Times issue #440 of 27 February – 6 March 2009 was about growing unrest in Tarai, elected Maoist government returning to militant extortion, and demands for radical changes: in national flag, the name Nepal, etc. The Ass spoofed the national dress:

Had we not got so used to seeing it being worn by officials, our daura suruwal national dress would look pretty ridiculous. It is a cross between thermal underwear and skirt, and to cover up this embarrassing combination it has a silly western-style jacket and a topi. Our national dress is only slightly less bizarre than the national dress of the Kingdom of Tonga which consists of a reed skirt with a bow tie on a shirtless chest (for men) and a reed skirt with neck scarf on bare chest (for women). Just like a new national anthem, it’s about time we had a new national dress.

The Maoist prime minister has taken the lead in modeling a revolutionary national dress which consists of a dark suit, white shirt and red tie with a bhadgaunle topi. It does make him look like one of those rotational monarchs from Malaysia, but the dress is catching on so fast that there is now a severe shortage of topis.