Nov 03, 2006

Fight Against Poverty

Nepalese farmers have shown that transformation of agriculture from subsistence-based to market-oriented can reduce their miseries of poverty. Given access to market, they can produce high value agriculture products maximizing their income. After the implementation of Agriculture Perspective Plan (APP) 1995-2015, which aims to reduce the poverty incidence to 14 percent by 2015 by increasing agriculture production, market forces are gradually coming to play their role. Although the agriculture sector has yet to be fully exploited, transformation has immensely contributed to improve the lives of tens of thousands of poor rural farmers. Between 1995-96 and 2003-04 the performance of agriculture sectors was reasonably good as the number of rural poor declined by over 2 million with poverty rate falling from 42 to 31 percent. Shifting to commercialization, agriculture sector is proving as an important component in the fight against rural poverty

By KESHAB POUDEL

The livelihood of Maila Bomjon, 45, a resident of Palung Village Development Committee of Makwanpur District, 60 kilometer south-west of capital Kathmandu , has drastically changed as his family has now turned from sole importer of food grains to surplus producer of vegetables. Shifting traditional pattern of subsistence-based farming to market-oriented, growing vegetable crops made the change possible in his family.

Vegetable marketplace : Applying agro-economy to defat poverty

In the past decades, government agencies, international non-governmental organizations and non-governmental organizations brought many programs targeting to uplift livelihood of people like Maila but all programs resulted in a failure. However, the completion of 15 kilometers-long agriculture road linking a point near, Tribhuwan Rajpath , Nepal 's oldest high way brought the change in his family life.

Instead of cultivating  traditional products like corn, millet and barley, which was hardly sufficient to feed family for six months, Bomjon now grows  off-season vegetables like cauliflower, cabbage, radish which brought about  Rs.200,000 (US$ 3000). This flow of money supported him to send his two daughters and a son in local school and buy other cereal food stuffs to feed his six-member family.

As the monsoon rain was inadequate in two consecutive years, the production of traditional crops like maize, paddy and millet declined throughout the country but the overall production of cash crops including vegetable has gone up.

"Unlike traditional crops, the water flow from nearby mountains is enough to irrigate our vegetable crops. Unfortunately, the excessive rain of August destroyed some vegetables," said Bomjon. "As there was less rain, other farmers of nearby village too switched off to off-season vegetables."

Although Tribhhuan Rajpath, which was built under Indian cooperation, is more than 55 years old, it is just recently that the construction of other agriculture roads have begun to link this highway. Like Bomjon's village, the government is constructing many other agriculture roads to link villages with national road network opening up the market.

A lady farmer : Livestock for livelihood

"In the past, we did not know that our patches of terrace land irrigated by small water stream could produce off-season vegetables and there was also the lack of road. It used to take three to four hours of walk from our village to reach nearest point of highway," said Maila. "Now it is less than an hour’s drive by mini-truck. We don't have to go to city centers as the vendors collect vegetables from our doors."

Published by the Ministry of Finance, Economic Survey 2006/07 reveals that the food crops contribute 65.5 in total food production and 34.5 by cash crops in the fiscal year 2004/05. The pattern changed in the fiscal year 2006/07 with food crop and cash crop sharing 62.5 and 37.5 percent respectively. Out of total 3.36 million food covered areas; food crops covered 89 and cash crops 11 percent in both the years. In current fiscal year, 2006/07 the production of vegetable crops is expected to increase from 2.081 million metric tons to 2.182 metric tons with an increment of 4.86 percent. The area covered by vegetables crops is expected to remain at 189,000 hectare.

"It is found to have frequently increased both the area covered by vegetables and cash crops and its production owing to increasing inclination of the farmers towards doing vegetable farming as a means of principle cash crop to replace other crops," writes the Economic Survey.

For years, Purna Sunar, 45, a Dalit of Bethan village of Ramechhap district, production of juicy Japanese orange had no commercial use other than to feed to the cattle but the situation has changed for last two years. The opening of motorable road to his village has brought both fruit vendors and money.

Sunar, who used to feed  Juicy Orange (Junar) to his cattle that was planted a decade ago under the support of Japanese government, made  Rs.100,000 (US$1500) selling the fruits of ten trees this year. "If everything goes normal, I will get more money next year,” he said.

Growing pumpkins at rooftop : Cash for crops

Frustrated by lack of access to market, Sunar had chopped almost five other trees four years ago to grow the traditional crop corn and millet. The completion of 25 kilometers road linking his village to Dolalghat, a small market  place at  Nepal-Tibet highway, opened a gateway to go to market through out Nepal .

"I just laughed when some Japanese volunteers gave the plants saying that it would produce money later. But now their remarks have come true. Small farmers like me have to go for cash crops like vegetables and fruits than to plant the traditional crops - which did not produce enough food to feed families round the year."

Maila and Purna are not alone, tens of thousands of Nepalese marginal and poor farmers who live along the high way corridors and those whose village are linked by rural road are getting same kind of economic benefits growing off season vegetables, fruits and other new agriculture products.

Past Experience

For centuries, Nepalese farmers had to be satisfied with what did they had as high mountain terrains remained hindrance to transform the subsistence based agriculture to commercialization.

"At least 2 million Nepalese farmers (out of a total population of 8.4 million) make a trip of 1-2 months duration annually, just to bring their agriculture products to the market to the Indian or Tibetan borders, and to get mainly salt in exchange for it. The average net cash income of Nepalese farmers is between thirty and seventy Nepalese rupees.  The extremely low income is caused by the poor quality of products and the small quantities involved," wrote Toni Hegan, a Swiss geologist, who conducted the first geological survey of Nepal in 1950-1958 under a project of United Nations Development Program.

In his report Observation on Certain Aspect of Economic and Social Development Problems in Nepal presented to United Nations Development Program in 1959, Hegan observed that Nepal needs to transform its subsistence-based agriculture system to commercialization to bring prosperity in poor households of rural Nepal .

Even Americans in 1952 began their aid cooperation in Nepal  to transform the subsistence-based agriculture and to increase the agriculture production. They, too, saw the constraints of access to market to Nepalese agriculture products.

Investment in Rural Road

As the government is investing more money to build the agriculture road, many other rural poor also see transformation of their life as the road gives access to the market which can transform subsistence-based agriculture to market oriented.

A highway link : Access to market

Nepal has invested a lot of resources in the past to build the infrastructures but they are hardly used to bring the substantial change in the rural life. The studies have shown that subsistence-based agriculture is main hurdle to move towards high economic growth.

By aiming to transform Nepal 's subsistence-based agriculture into market-oriented by exploiting infrastructures built in the past and construction of agriculture roads, APP has given a new way to raise living standard of all through the dynamic growth in agriculture.

The World Bank's Country Assistance Strategy 2004-2007 also argues that the higher growth will be achieved through greater productivity in agriculture. Nepal 's Poverty Reduction Strategy was also framed toeing the line of APP.

Funded by the Asian Development Bank, APP- aims to modernize, diversify and commercialize crop and livestock production by expanding the use of technology and increasing the access of farmers to modern agricultural inputs credit and access to road.

Experts argue that poor accessibility not only restricts the movement of people and goods but also ideas and technologies. This is recognized at the policy level and there is now emphasis on the construction of agriculture roads. The APP estimated that about 6,200 kms of rural roads need to be constructed within 2015. Department of Local Infrastructure Development and Agriculture Roads have already constructed some 1000 kilometers road according to Millennium Development Goals Needs Assessment, a report
published by United Nations Development Program on International Poverty Day.

" Nepal has to pursue agriculture-led growth to address poverty successfully, 90 percent of the poor are concentrated in the agriculture sector. Although the Tenth Plan 2002-2007 and Poverty Reduction Strategy (PRSP) stress the primary role of agriculture as a key to broad-based and pro-poor growth, neither can be realized without full implementation of APP," writes Nepal Human Development Report 2004.

Although Nepal 's agriculture sector is moving towards market oriented, it is still predominantly marked by subsistence production. "The government is giving high priority to transform the agriculture sector encouraging farmers to grow the cash crops," said vice-chairman of National Planning Commission, Jagdish Chandra Pokharel.

Being predominantly subsistence based agriculture society, Nepal 's economic progress lies on what ratio country’s agriculture sector commercializes. After liberalization of agriculture policy along with APP, private sector is also a part of the fight against rural poverty.

According to the Asian Development Bank Country Strategy and Program Nepal 2005-2009, agriculture is the largest sector of the Nepalese economy and it contributes 39 percent of GDP (in 2004) and involves more than 60 percent of the population. Majority of farmers are small with 70 percent holding less than 1 hectare of land and 44 percent holding less than 0.5 hectare.

As long as the programs are directed to marginal farmers like Bomjon and Sunar who possess the land less than 0.5 hectare, poverty reduction strategy cannot work.

For the farmers with small land holdings, there require diversification of crops as well as maximum use of fertilizers and high value seeds of market driven products. As Nepal lies in the high-hill with diverse climatic zone, Nepalese farmers have advantage to grow off-season vegetables, fruits to the population Indian plain.

In recent years, Nepal 's share of agriculture exports has increased dramatically and there is considerable scope for further expanding exports of horticultural and livestock products.

In the past decades, the livelihood of tens of thousands of farmers, who gave up the subsistence farming, has drastically changed. Prepared by Central Bureau of Statistic and the World Bank, Nepal Living Standard Survey II (NLSS II) reveals that agriculture in Nepal is still largely subsistence or semi-commercial but the extent of commercialization of agriculture has increased steadily. In 1995/96, sales of agricultural commodities by rural households on average were equal to modes 16 percent of gross crop output.

By 2003/04, the value sales as a percentage of gross crop output increased to 25 percent. The share of households selling crops increased to 54 percent. Market surplus of most crops like paddy, wheat, summer maize and lentils are still very low. However for a number of crops such as winter vegetables, these surpluses increased quite noticeably since 1995/96.

"Despite many constraints, there is ample evidence that Nepal 's farmer do, in fact, respond to market signals. Past experience shows that agriculture production is responsive to market success and that Nepal 's farmers are quick to capitalize on new income-generating opportunities. Being effectively connected to markets, therefore, is crucial to progress in rural Nepal ".

Agriculture is progressively shifting from subsistence to a commercial orientation. Over the last 15 years, the government has liberalized the agricultural input and output markets to foster private sector initiative. In response, crop diversification from cereals to off season vegetables, citrus fruits and vegetables seeds is taking place.

Market-based agricultural development has proceeded in a faster pace in all parts of Nepal particularly in eastern region. Accelerating the shift from subsistence to a commercial orientation is a key strategy for boosting rural productivity and incomes.

Many factors still hold back poor farmers in the process of commercialization including
technology for production and post production, limited access to market, credit information and poor infrastructures.

After decades of efforts, agriculture is shifting from subsistence to market orientation paving the way to reduce the level of poverty in rural areas.