Are Nepalis really eating more rice?

Nepal’s population has not increased by that much more in the past year, and a favourable monsoon increased paddy harvests. Yet, Nepal’s import of rice went up in the last fiscal year.

This has left statisticians at the Ministry of Agriculture scratching their heads. So far, they have no clues, only theories. 

Nepal imported Rs39 billion worth of rice mainly from India between August 2020 and April 2021. This was 64% up from the same period the previous year, when only Rs23 billion was brought in.

This would mean that Nepal spent nearly half the Rs7.8 billion it earned this fiscal year from all its export items put together just to import rice and paddy, representing a significant portion of Nepal’s trade imbalance. 

Furthermore, the increase in imports coincide with an increase in Nepal’s rice harvests by 1.3% to over 5.62 million tonnes of paddy in the past year. How come imports increased when domestic production also rose?

“We are flabbergasted,” admits Yogendra Karki, Secretary at the Ministry of Agriculture and Livestock Development. “We need to get to the bottom of this, and find out why imports are going up so steeply.”

It could be that Nepalis are eating more rice because of the spread of the road network, and the country’s falling poverty rate. But there is no proof of that. 

The Central Bureau of Statistics Household Survey of 2016-17 showed that every Nepali was consuming 112kg of rice per year. The previous year’s survey had put per capita annual consumption of rice at 131kg. If anything, going by these figures, individual rice consumption appears to be declining.

Senior Statistician Ram Krishna Regmi at the Ministry of Agriculture does a back-of-the-envelope calculation to show that at 130kg per capita per year of rice consumption, Nepal’s 30 million people would need 3.9 million tonnes of rice. 

Regmi says that even if only 60% of the rice remains after dehusking and milling, Nepal would need 6.5 million tonnes of rice. But domestic production and imports this fiscal year totalled more than 7.5 million tonnes.

According to figures from the Department of Customs, Nepal imported 546,000 tonnes of paddy from August 2020 - April 2021, whereas in the same period in the previous fiscal year it was only 247,000 tonnes. Most of the rice was imported from India, although some rice also came from China, Thailand, Japan and the United States.

Even though some of the imported rice is used for seed, this does not explain the huge increase in imports. Some agronomists say that with the ease of transport, many Nepalis in the high mountains are giving up traditional rice varieties, millet, buckwheat and other crops for rice. Remittances allow many families to eat more rice, and the upper middle class is moving to imported long-grained aromatic rice varieties.

Karki says that even putting all this together does not explain the sharp increase in imports. He suspects the rice imports are mostly going not to feed Nepalis, but Nepal’s burgeoning beer industries.

With new breweries opening up and a range of new Nepali and international brands being made here, the demand for rice adjunct has shot up. Beer production requires barley, but more and more plants are using rice, broken rice and rice hulls to start the brewing process.

“It could be a combination of demand from the alcohol industry and from livestock breeding,” admits Subodh Gupta of the Rice, Pulses, Dal Producers Association of Nepal. “The rice produced in Nepal is not of good enough quality.” 

Indeed, Customs Department figures show that there has been a 350% increase in the import of broken rice in the past final year: from 17,711 tonnes in 2019-2020 to 82,187 tonnes so far this fiscal year.

Other reasons given for the increase of rice imports are: Indian rice is cheaper than rice grown here, more imports coming in through official channels during the lockdown and pandemic, as well as mis-labelling other imports as rice at the border to facilitate money laundering by some importers.

The bright spot in all this as far as government revenue is concerned is that Nepal’s exchequer earned Rs3.05 billions just from import tax on rice in the first nine months of this fiscal year.

Productivity of other crops has also not gone up by much. This is because nearly 70% of Nepal’s agriculture is still rain-fed. The disappearance of traditional rice varieties suited to Nepal’s micro-climates has also impacted production.

While harvest numbers may be promising, Nepal needs government priority in agriculture, improved yield though better seeds, irrigation, techniques and mechanisation. In the past 30 years, productivity has not increased that much: paddy yield only went up from 2.4 tonnes per hectare in 1990 to only 3.8 tonnes today.

Statistician Regmi at the Ministry of Agriculture says there may also be a need to revisit Nepal’s paddy harvest figures, flaws in the data collection could be making total production figures inaccurate. 

He says, “This unnatural increase in imports leads us to think that maybe our domestic production figures are an over-estimation.”