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| Kathmandu, Saturday March 08, 2003 Falgun 24, 2059. |
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Threat of food insecurity
looms large
By Sameer Ghimire
KATHMANDU, March 7 : Short supply of food grains
to the far-flung districts of the country may not have been an annual occurrence lately.
But if the present financial state of Nepal Food Corporation (NFC) is taken into account,
there is every likelihood that food scarcity would hit the districts again.
The state-owned monopoly supplier of food grains
to the food deficient districts is not in a position to procure grains as per demand due
to the weak financial condition perpetuated mainly by a slashing in transportation subsidy
by the government and reduction in the borrowing limit by Nepal Bank Ltd (NBL).
Officials at the NFC, talking to The Kathmandu
Post, said that the corporation has adequate funds for the purchase of only 40,000 tons of
food grains, against the average annual requirement of around 42,000 tons. However, the
food demand this year has been estimated at around 60,000 tons, due largely to a shortfall
in production.
"If the gap of 20,000 tons of food grains
is not bridge through some means, there are chances that some districts will face severe
food shortage," said an official. This year’s food grains production ran down
due to the adverse climate that hit the food producing belt of the Terai region.
NFC’s financial problems began with a
downsizing of the transportation subsidy bill. While the government last year had provided
the corporation with Rs 225 million in transportation subsidy, the NFC this year will be
having only Rs 185 million. "The reduced government support necessitate that
additional funds are sought," said the source.
The slashing of the subsidy by the government
unfortunately comes at a time when the country’s food production went down. Officials
argue that if Rs 225 million was needed for the purpose of food grains transportation
during a normal year, a reduced allocation of Rs 185 million would not be enough for a
year when food production has gone down.
Furthermore, NFC has also been hit hard by a
general rise in the transportation costs within the last one year. Officials said that the
cost of transportation in the last one year has shot up by around 20-30 percent.
"This has also constrained NFC’s ability to transport food grains up to a
proportionate level," said the source.
NFC’s financial position has also been
weakened due to the NBL’s decision to cut down on the borrowing limit from Rs 600
million to Rs 400 million in January. The bank had cited poor performance of the NFC as
the reason behind the slicing down the borrowing limit.
NFC’s inability to procure enough
foodstuffs has come at a time when paddy production this season suffered downfall
following a long drought in western parts of the country. Though the Ministry of
Agriculture has estimated that paddy production this year plummeted by 2 per cent, experts
are of view that the fall could be higher.
Only recently, Nepal Rastra Bank predicted that
wheat production, another major staple food, is likely to slip by around 10 to 15 per
cent. Wheat cultivation was hit due to a long spell of disastrous cold wave that hit the
Terai region for almost one and half months recently.
Experts are of view that if the NFC is not
provided with adequate funds to meet the possible increase in food demand this year, the
remote districts of the country, especially that of the western part, will face severe
food shortage. "Immediate action is needed to ensure that food insecurity situation
does not arise," an expert said preferring to remain unnamed.
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