 |
||
|
||
COVER STORY |
|
||
|
||
COVER STORY |
AGRICULTURE
POLICIES Over the last 50 years, the
agriculture sector has seen various waves of creation and destruction of institutions.
Ignoring their contributions in the past and utility for the future, policy makers have
broken up many institutions that were in their prime. By dismantling public-sector
companies, research farms, demonstration gardens and scaling back departments and programs
set up after substantial investments, policy makers also exposed their own flawed
perception of development. In this unstable and uncertain policy environment, agriculture
has shown slow but steady growth By KESHAB POUDEL -Set up as a think tank to support farm
development activities in 1978, the Agriculture Project Services Center (APROCS) was
liquidated in 1998, for having become non-functional and non-productive.
-Built under assistance from the
former USSR to supply modern tools and equipment to Nepalese farmers, the Agriculture
Tools Factory was privatized and then liquidated. The factory abruptly stopped production
at a time when some of its tools and equipment were gaining popularity. Until the 1990s,
there were more than 15 public-sector enterprises and companies involved in agriculture
development. Most of them have been dismantled or liquidated. -The Small Farmers Development Program
(SFDP), which was considered a model project for agriculture development until a few years
ago, is nowhere in the picture today. The Agriculture Development Bank, which promoted the
SFDP, too, is in crisis. -The Department of Agriculture Marketing
and Management was reduced to a divisional unit as the Department of Horticulture under
the ministry. This is but one of countless cases of institutional demolition. According to the Auditor General's Annual
Report 2001, there are still a number of committees and corporations involved in
agriculture development. The Agriculture Lime Industry, Agriculture Input Corporation,
Dairy Development Corporation, Nepal Tea Development Corporation and Cotton Development
Committee continue working in their designated areas. The Kalimati Fruit and Vegetable
Wholesale Market Development Committee, Agriculture Information Section, Chandra Dangi
Seed and Dairy Development Committee and Livestock Development Farm Pokhara, too, underpin
a sector that remains the economic backbone of the country. The National Tea and Coffee
Development Board, National Dairy Development Board, National Cooperative Board and Nepal
Agriculture Research Council exist to provide institutional impetus to Nepalese
agriculture.
Under the Ministry of Agriculture and
Cooperatives, there are another dozen institutions like Department of Agriculture,
Department of Livestock, Horticulture Division, Fishery Division, Agriculture Research and
Publicity Division, the Horticulture Garden Development Program, Upper Sagarmatha
Agriculture Development Project, Nepal Irrigation Sector Project, Crop Protection
Projects, Crop Diversification Project, Market Development Program, and Silk Farming
Development Program. Among the many other programs and projects are 14 horticulture
gardens, Seed and Crop Promotion and Storage Project, Department of Cooperatives and
Central Food Research Laboratory. According to the Auditor General's report, more than 100
institutions have been created to monitor or to work on farming activities from the
village to the central level. Behind this impressive listing lies a grim
fact. The Department of Agriculture is the only institution that has continued function
for 50 years. Other departments, research centers, public enterprises, projects and
programs have come and gone. Many projects were deserted soon after the donors shifted
their targets. Established under the grant assistance of
friendly countries, some research and observation farms have now turned into playgrounds,
while important horticulture farms currently house hospitals. This frivolous
transformation can be explained by another somber reality: agricultural institutions have
been set up and dismantled in Nepal at personal whims. The government has never bothered
to justify why they were created or why they had to be dismantled.
Many of these institutions played an
important role in modernizing Nepalese agriculture. APROCS, which was dissolved for having
become a liability, produced many highly qualified researchers and experts. Many such
highly qualified professionals are working for international organizations. As the country
stresses the need to boost agriculture, it suffers from a shortage of qualified manpower
and strong institutions. The dissolution of the Agricultural Tools
Factory was another disaster for a country in constant need of small modernized tools and
equipment. Along with these two major institutions, mango, licchi and other demonstration
gardens, high-breed cattle farms and demonstrations centers were liquidated. Some
fisheries and hatcheries were closed down and dozens of support centers in rural areas
were destroyed during the seven-year Maoist insurgency. The remaining institutions, too, are in
crisis. Nepal Agriculture Research Center (NARC), for instance, to frail to take care of
itself. Turned into an autonomous institution to carry out efficient and effective
research in 1990, NARC is passing through a difficult phase. Massive recruitment of administrative staff
and political intervention in the day-to-day administration have turned NARC into another
white elephant. The center has seen more than eight executive directors in the last 12
years.
From supplying petrol to the
minister's personal assistant to appointing temporary non-technical staff it hardly needs,
NARC has been passing through a common disease afflicting Nepalese institutions. According
to accepted practice, there should be three general employees for every expert hired. At
NARC, there are six for every scientist. More money is spent on salaries and benefits than
on research. If the points raised by the Auditor General's annual reports are not
addressed, it will not be long before NARC, too, recedes into history. Since the establishment of the Department
of Agriculture with a demonstration farm at Singha Durbar in Kathmandu and a fruit nursery
at Godavari in 1924, successive governments have created and dismantled countless
institutions. While other South Asian countries were
leading a Green Revolution with high yielding varieties of wheat and rice, expansion of
irrigation, diversification of agriculture from cereals to cash crops like cotton and
oilseeds, horticulture and livestock, Nepalese planners were struggling to decide what
kind of institutions they wanted. Several efforts have been made to modernize
agriculture in the last five decade. But, as in other sectors, they have been too fast and
too complex. Productivity has increased, but not enough to keep pace with Nepal's growing
population. In the early 1950s, USOM teams had difficulty finding adequate manpower and
institutions in the agriculture sector. "Early USOM workers found a critical
shortage of trained personnel in agriculture, with only three or four India-trained
agriculturists available to work in agricultural development when Paul Rose and his team
arrived in 1951. There was no information on population, settlement patterns, or farmer
production systems, and no government planning unit interested in such data. Similarly,
there was no research system to bring in adapt new agriculture technologies; no extension
system to transfer them to farmers; and no input supply systems for irrigation,
fertilizer, agrochemicals, seeds, or agricultural credit," reveals
"Half-a-Century of Development, the History of U.S. Assistance to Nepal
1951-2001," published by USAID. The United States, Japan, India, United
Kingdom, Germany, South Korea, Switzerland, Denmark, the Netherlands and donor agencies
like the World Bank, Asian Development Bank and the UN Food and Agriculture Organization
have played an important role to modernize agriculture sectors. However, abrupt shifts in
policies and programs have stood in the way. The Japanese government has provided
important financial support for horticulture development in the mid-hills. India has built
many demonstration and research centers in the mid-hills and terai. Switzerland and
Denmark supported the commercialization of dairy products. United Kingdom has built two
important agriculture research centers in Pakhribas and Lumle. Unchanged Pattern Nepal has witnessed tremendous changes in
terms of manpower and research, production increases and use of technologies. Despite
bleak performance in the production and diversification of crops, there are some positive
sides. If the situation today is compared with what the USOM encountered in 1950,
considerable infrastructure has been created along with institutions. There are several
departments, research institutes, stations, farms, cooperatives, credit banks, private
companies to distribute fertilizers, NGOs and local level markets. Similarly, the pool of
trained manpower has increased substantially.
"The economic pattern of Nepal
is unique in so far as the 8.4 million people of the country live in the same way as they
did several years ago," said Tony Hagen, in his report titled "Observations on
Certain Aspects of Economic and Social Development Problems in Nepal" in 1959.
"Everything they need for living is produced more or less by them. As noted earlier,
Nepal is agriculturally a rich country and starvation is unknown. Some minor seasonal
shortages of food are caused only by the total lack of marketing and storage facilities,
but by crop shortages." The country's population has now reached
23.3 million, with a growth rate of 2.27 percent per annum over the period 1991-2001.
Although the literacy rate has gone up and roads connect hitherto remote parts of the
country, the mode of agriculture more or less resembles what Hagen had observed. "An average of 20-25 percent of the
population makes one 15-day trip to the Terai every year. Alternatively, 10-12 percent of
the population spends a total of 30 days traveling every season. The profit from selling
the products on the market averages 25 Indian rupees per load of 35-40 kg. It can be
concluded that 10-12 percent of the population has a yearly income of 50 Indian rupees per
year ($US4). A family may thus have a net cash income of about 40 Indian rupees per year
from the sale of agriculture products only. The agricultural products which are brought
from the midlands on human backs down to the bazaars of the terrain vary of course
according to the places of origin and seasons of the year. Fruit is generally unknown in
the rural areas. However, a few limited areas are famous for oranges," Hagen said. Before writing those sentences, he observed
the livelihood of Nepalese after travelling through different parts of the country for
more than eight years. Five decades later, the livelihood of large numbers of farmers has
been drastically transformed. Despite diversification and construction of roads,
agriculture is still largely subsistence based and transportation remains a major problem. The Agriculture Sector Performance Review
conducted under the support of the Asian Development Bank has noted many improvements. The
survey results confirm the impression that agriculture in Nepal is still largely
subsistence or semi-commercial. For some of the main crops (paddy, potato, lentil and
cauliflower), it was possible to compute the marketed surplus, that is average sales as
percentage of average production of household. Only 40 percent of the farmers producing
paddy actually sell paddy. Farmers have shown interest and investment in the agriculture
sectors increased by many folds. In 1997/98, average investment was about Rs.1, 305 per
household. That figure reached Rs.4,266 in 2001/2002. The stagnation in agriculture
production is caused by inadequate irrigation. Private sector consists of small farmers,
medium- and larger-scale farmers, and agro-enterprises engaged in provision of inputs and
marketing of outputs. International multilateral and bilateral organizations play an
important role in the agriculture sector, providing much-needed development financing and
making major contribution to agricultural policy debate, public sector reform and the
design and development projects and programs. Of the Rs.10,235 million ($136.5 million)
budgeted for the agriculture sector in fiscal year 2001/02. Farmers' Initiatives Amid unstable and unpredictable policies,
Nepalese farmers had to choose their own path to boost production. Whether in fisheries,
horticulture or vegetable production, farmers have developed their own marketing and
production systems. Laid off from companies, many experts and scientists are offering
various kinds of technical as well as other support in transforming agriculture. Although the Agriculture Development Bank
provided the know-how for the Small Farmers Development Program, the model is working in
different forms through the involvement of non-governmental organizations or the
participation of the community. Shree Krishna Upadhyaya, a former member of the
National Planning Commission and the executor of successful SFDP, and his team are now
running the program through SAPROS. In fisheries, expert Krishna Gopal
Rajbanshi, a former government official, has been visiting the countryside and encouraging
farmers. Gopal Rajbhandari, a former agriculture secretary, is running one of the
successful private dairies and popularizing milk products. Many farmers have been taking the
initiative on their own. If the government could create the proper atmosphere and offer
basic support, farmers would do the rest to boost production. Experience has shown that if water,
high-yield seeds and transportation are made available, the farmers can take care of the
markets and technology. "The government has little to take credit for the present
development. It is the initiative of the farmers that has brought such a drastic change in
agriculture," says Rajbanshi. The departments, projects and demonstration
and research farms under the Agriculture Ministry have their own problems. At the
ministry, secretaries have been removed and transferred so frequently at the whim of
politicians that there are always delays in decisions on policy implementation. "Notwithstanding the importance of
agriculture to the people and the economy of Nepal, the performance of this sector has
been disappointingly weak. During the past three decades, while many countries of Asia,
including South Asia, were experiencing rapid gains in agricultural productivity and food
production, Nepal was struggling to maintain its previous productivity levels.
Consequently, Nepal's crop yield levels, which were the highest in South Asia during the
early 60s, are now among the lowest in the region," said Dr. Hari Krishna Upadhyaya
executive chairman of CEAPRED. Contribution of Agriculture The World Bank's Economic Update 2002 shows
that agriculture in Nepal has long been lagging. It has shown some signs of dynamism in
the last few years. Agriculture's share in GDP is more than 35 percent, but its
contribution to growth has been below potential and has accounted for less than one-fourth
of growth during the 1990s. Although in the first half of the 1990s per capita
agricultural value added actually fell, this trend was reversed in the second half of the
decade. Despite the drought of 1999, per capita agriculture growth increased to nearly 1
percent during this period. Despite policy shifts, instability and
uncertainty over the last five decades, the agriculture sector has made some important
progress. In the 1990s, there was substantial progress despite some unwise decisions.
There was a 23-percent increase in the use of fertilizers in fiscal year 2000 and higher
food prices in 1999, better educated farmers, diversification of crop production as cash
crops and exports grew rapidly growth of agricultural credit and some improvements in
rural roads and irrigation and good rainfall. Despite this progress, agricultural and
rural economic growth remains constrained by inadequate infrastructure, weak irrigation
and other complementary inputs. With uninterrupted foreign assistance,
large technical manpower, institutional set-up, and technical know-how, Nepal's
agriculture sector has been transformed from a primitive to a modern system. Unstable and
uncertain policies remain the major hurdles to fully modernize the system and to increase
production. With a share of 40 percent of GDP and 80
percent of the labor force, agriculture plays a key role in the overall economy and
society of Nepal. The importance of the sector is borne out by the fact that almost
90 percent of the population lives in rural areas and depends on agriculture for its
livelihood. The World Bank's Nepal Public Expenditure Review reveals that agriculture is
the main source of employment for 83 of the labor force; 86 percent of households
cultivate some land; 80 percent have some livestock; and two thirds of incomes of all
households are derived from self-employment in agriculture or agriculture related wages. In terms of income differentials among the
various sectors of the economy, according to the Labor Survey of fiscal year 1999, value
added workers in agriculture was only $265 per annum, i.e. the equivalent of 53 percent of
the national average, and only 25 percent and 19 percent of average value added by those
working in industry and services sectors respectively. The report also shows that the rate of
growth in agriculture in real terms was only 2.6 percent per annum over the past two
decade. The production of food crops declined between fiscal years 1991 and 1995 and of
forestry products stagnated between fiscal years 1994 and 1997. The problems are not lack of donor
assistance - over US$500 million has been committed for agricultural development since
1990. According to Nepal Agriculture Sector Performance Review, agriculture is the main
source of income in rural areas, the link between poverty and low productivity of
agriculture is very close. Coupled with a low-input agriculture and the low adoption of
modern technology, agriculture in Nepal is one of the poorest in the world, with a value
added per agricultural worker in 2001 estimated at US$137. Since the share of high-value crops in
total cultivated area is still small, the desired process of agricultural diversification
is hardly noticeable at the aggregate level. Among the positive signs are the increased
yield performance of major cereals during the second half of the 1990s. "The
performance of the livestock sub-sector has been strong over the past decade with total
meat, milk and egg production growing more rapidly than population. The strong growth has
been the result of increasing demand and also increasing investment by farmers. Fishery,
in spite of still contributing a small share of total agriculture GDP, is a sector growing
rapidly. In terms of the technologies, process,
research and extension works, Nepal has implemented a lot in the area of agriculture.
There are many more options in front of farmers. The country has a record of making and
breaking the institutions for research, extensions and marketing. The challenges are immense and clearly
visible. "Nepal has seen little of the Green Revolution. Most landholdings are small
and fragmented, fertilizer use is low, agricultural road networks are inadequate and, in
spite of extensive river systems, irrigation does not reach most of the arable land,"
said Dr. Henning Karcher, UNDP Resident Representative in a statement delivered at the
launch of the South Asia Human Development Report. Implementation of the APP Nepal announced a 20-year Agriculture
Perspective Plan in 1996, recognizing it as the main guideline for implementation of
policies in the sector. But the government is yet to implement it as its objective. The
goal of turning a largely subsistence-based agriculture system into modern one is
admirable. Considering that the country has seen sudden shifts in policies, nobody knows
whether the APP will last the 13 years it still has to go. |
Send your feedback to the
editor: spotligh@mos.com.np |
