Nepal agro imports at all time high

A typical urban Nepali kitchen is globalised these days: there is rice grown in India, soybeans from the United States, the garlic is from Shandong in China, the chilies are Vietnamese. Vegetables are cooked in soybean oil from as far away as Paraguay, the small cardamom is from Guatemala and even the dal lentil is from Tanzania.

Other food essentials could be from Australia, Ukraine, Indonesia or Argentina. Even staples like rice and dal, vegetables and spices are not likely to be home grown. Despite this growing dependency on food imports, Nepal still officially describes itself as an agriculture-based economy.  

In fiscal year 2019/20, Nepal spent Rs243 billion importing food which was an increase of Rs19 billion compared to the previous fiscal year. Although two-thirds of Nepalis depend on agriculture, the country now fully dependent on food imports – despite every government in the past decades making agricultural productivity a priority.

There is hope that the return of hundreds of thousands of Nepali workers from abroad due to the COVID-19 lockdown will increase the number of farmhands, and help raise the production especially of paddy this year. A healthy monsoon has also lifted prospects of increased rice production this year.

However, a severe shortage of fertiliser and heavy flooding in the Tarai grain basket, and deadly landslides across the mountains may cancel out some of those gains.  

Rice production and productivity in Nepal from 2010 to 2019 (Source: MoALD, 2019).

The trend for the past few years is alarming: Nepal is now importing 80% of the grain it consumes, and spending on food imports has increased 62% in the last five years. Even crops like rice, dal and vegetables that are farmed extensively in Nepal, are imported. For instance, last year Nepal spent nearly Rs33 billion importing rice, Rs15 billion worth of maize and Rs15 billion for millet. The country bought Rs33billion worth of vegetables, mainly from India.

Imports of fruits, pulses and vegetables have also increased. This fiscal year, Nepal spent Rs 20.74 billion just importing fruits and cashew nuts. Fish and meat worth nearly Rs3 billion were also imported last year despite the abundance of livestock and aquaculture in the country. 

Nepal grows abundant tea and coffee and production is going up, but the country still imported Rs11 billion buying tea and coffee from abroad. From honey to milk, from sugar to spices, almost everything Nepalis consume is imported. 

Despite ambitious plans to raise agricultural production, and increase productivity of the land with irrigation, mechanisation and modern inputs, imports are going up faster than population increase. Since the policies have never been effectively implemented, output of grains, vegetables, fruits and other staples have not gone up, the shortfall can only be met by imports. 

Average quantity of plant nutrient (nitrogen, phosphorus and potassium) used in crop production in Nepal from 2008 to 2018 (Source: MoALD, 2019).

Other reasons for the need to import more food are: changing eating habits of Nepalis, increased household income from remittances, out-migration from rural farms, and prime farmlands being built over. 

The government and donors have invested heavily subsidising chemical fertilisers, improved seeds, irrigation, farming methods, and paddy productivity did increase from 2,400 kg per hectare to 3,800 kg per hectare in the past 30 years. Maize productivity has also increased, but the productivity of millet in the mountains has not gone up. However, the increase does keep pace with the rise in demand for the grains.

The government had announced that it will double the productivity in five years. But according to the Central Statistics Office, the average annual growth rate of the agricultural sector has been only about 3% over the past decade. Experts say the main reason is the lack of adequate fertiliser, slow pace of adoption of mechanisation, poor farm management, lack of irrigation and climate change. 

Only 56% of Nepal's total arable land is irrigated, and of that only one-third of farms have irrigation all year round. The rest have to depend on rain-fed agriculture.

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