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Kathmandu Friday June 29, 2001 Ashadh 15, 2058.
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Low wheat price hits farmers
Post Report
KATHMANDU, June 28 - The record low plunge in the prices of
wheat this year, which hardly covered the costs of production, has thrown cold water on
the farmers’ expectations that they would be able compensate the loss they incurred
in paddy cultivation last year.
According to the nation-wide wheat price complied by Market
Development Division of Department of Agriculture, the average per quintal price of wheat
has plunged to Rs 837, which is 27 per cent lower than the price recorded last year. The
per quintal price of wheat last year had been Rs 1,154. At the same time, the cost of
producing a quintal of wheat has been estimated at Rs 700.
The current wheat prices is lower than that recorded five
years ago, while the costs of agriculture inputs have risen substantially. Increasing
costs of production and stagnating output prices has severely affected the farmers.
The impact is likely to be greater on over 20 per cent of the
peasants of the Terai, who heavily depend upon wheat as the main source of income. Though
such number is higher in the hilly area, the slump in the market price of wheat would have
negligible impact on them since a major chunk of their production is used in household
consumption.
This is not the first time that farmers are plagued by
stagnating or falling prices. Flooding import of cheap Indian rice last year had dragged
down paddy prices by almost 50 per cent, making it impossible for the local farmers to
recover their investment.
In addition, with the latest price slump in the case of
wheat, the second major crop, farmers are getting increasingly skeptical about the
viability of agriculture as a sustainable source of income.
As a whole, the prices of food grains in the current fiscal
year have dived in comparison to the prices of the last year. The food grain prices had
been rising for the past one decade. However, following a bumper production in food grains
last year anchored by favourable weather conditions, both in India and Nepal, market
prices slumped.
And despite lower production this year as compared to the
output last year, slumping prices point to the role played by Indian agro-products in
determining the Nepalese agro-product market prices. Food grains production this year
dipped by almost 2.5 per cent.
Local farmers, deprived of subsidies in agro-inputs, are not
able to compete with the cheap subsidized Indian paddy. The government phased out subsidy
in fertilizer and most irrigation facilities in 1999, which resulted in a rise in the
costs of production for farmers. India still continues to subsidize most agro-inputs,
including fertilizer, irrigation and electricity.
The subsidy removal policy of the government emanates from
the Asian Development Bank (ADB) which argued that inadequate subsidy was hampering the
supply of the basic agro-inputs. However, even since the revocation of the subsidies no
improvement has been seen in the agro-input supply.
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