 |
||
|
||
COVER STORY |
|
||
|
||
COVER STORY |
AGRICULTURE With
the introduction of off-season vegetables, subsistence-based Nepalese agriculture is
preparing to jump towards commercialization. Nepalese farmers have shown that access to
market and infrastructures like road and technology can transform their centuries-old
practices. Despite the intensification of insurgency, the agriculture sector still
performs well. Vegetable and horticulture sectors register positive growth. From improved
seeds to opening of new markets, farmers have learnt the ways to maximize profits.
Frequent general strikes have created a certain level of uncertainty. At a time when other
sectors of the country are faring badly amid conflict, agriculture has turned out to be
the savoir of Nepalese economy. Challenge now is to sustain and multiply the progress made
in the sector By KESHAB
POUDEL “Many food
items were shipped from India or the US, as the locally available fare was limited to
eggs, chicken, goat meats and rice. And the only fresh produce such as potatoes and
turnips and occasionally a bunch of bananas were brought in from India. Later, as families
moved out of the USOM compound into their own quarters, they planted vegetable gardens,
which provided welcome additions to their diets,” recalls Hugh Wood, one of the first
members of USOM (United States Operations Mission) about the details of Kathmandu valley
in 1951. (See Half-a-Century of Development, The History of U.S. Assistance to Nepal
1951-2001). One can see a
dramatic transformation since the time when Hugh Wood described Nepal fifty-three years
ago. Despite frequent general strikes and intensification of the insurrection in the rural
hinterlands, farmers continue to maintain their supply and production capabilities. Today,
Nepalese farmers produce all kinds of vegetables and fruits to fulfill the demand of
population of Kathmandu valley including a large expatriate community. From strawberry to
honey to cheese, Nepalese farmers produce all kinds of products. With various
ups and downs in development, the agriculture sectors slowly and gradually grew modifying
old technologies and accommodating modern systems. Studies have shown that agriculture is
the only sector still free from the wraths of bloody insurrection. As country’s other
economic sectors struggle, the growth and diversification in agriculture sector is
sustaining Nepal’s economy at this crucial juncture. Marketing
Management Although the
market is yet to be integrated and modernized as in other developed worlds, Nepalese
wholesale markets help enhance farmer’s market orientations. Thanks to the effective
communication, the farmers can know about the demand and supply situation. The road
linkage to more than 60 districts has proved to be a boon creating markets and linking the
rest of the country with these points.
Had the
country been free from insurrection, at least 70 districts would have already been
integrated to the national road networks. Even the remote areas like Jumla would have
already have direct transport link from Nepalgunj by now. Just early this
week, the sale of vegetables and seasonal fruits like orange at Kalimati wholesale market
in Kathmandu had suddenly surged as there was a rush of farmers and retailers to buy the
vegetables and fruits for the next two days of Valley bandh (December 20-21). Because of
frequent bandhs, farmers, wholesalers and retailers of the valley have already developed
mechanisms to maintain the supply. Since June this year, the country has already seen 19
bandhs. According to the Federation of Nepalese Chamber of Commerce and Industry (FNCCI),
there were a total of 192 bandhs since the first bandh was called in March, 1990. “As soon
as some of our neighbors, who returned from the valley, informed us that there was going
to be two days of general strike, I went to the farm and cut cauliflower and collected
tomatoes, as did all my neighbors. In the evening, we rented a mini-truck of nearby
cooperative to bring the vegetable here in Kalimati,” said Ghanashyam Rijal, a
resident of Bhedunga village of Dhading district. “We have to bear huge loss on
tomatoes if we don’t collect and sell it on time.” The orange
growers of Sankhu village of Kavre District, 30 miles east of capital, too have plans to
recover the damage. “Unlike vegetables growers, we have some advantages as we can
retain orange at tree for quite a long time,” said Prem Bahadur Thapa, a
resident of Sankhu Village, who makes Rs.500,000 -700,000 annually – a handsome
income by any standards – by selling oranges. In his 85
ropanies of garden, Thapa has planted about 2000 orange trees. He is not the only person
making such cash selling oranges. Almost all farmers in the village have their own orange
orchard. “Whether there is bandh or not, what we want now is a cold-storage facility
in Kavre so that we can store our products for a longer period of time,” said Thapa. “Our
villagers are producing large quantities of orange making good annual income. Growing
oranges makes much more financial sense than the traditional crops,” said Thapa.
“If there is a cold storage, our profit margin can double,” said Thapa. From early
morning till afternoon, Kalimati market is filled with the fresh vegetables and fruits
that arrive from different parts of the country. Oranges are brought here from places like
Gorkha, Kavre, Lamjung, Dhading and Tanahu. From small street vendors to shopkeepers,
there was a big crowd in Kalimati on Sunday (December 19) with transaction totaling about
Rs.30 million.
Because
of commercialization of agriculture, people of capital can find any kind of off-season
vegetables/fruits at the market. Except on the days of long general strikes, Kalimati
wholesale vegetable market offers all kinds of locally produced vegetables. Although the
frequent general strikes called by the Maoists and other political parties hamper their
activities, the farmers and traders have learnt to adjust to reduce the damage. Like Kalimati,
Tukucha -a small wholesale vegetable market - is also a busy place as farmers from eastern
pats of capital bring vegetables there. These two wholesale markets fulfill the demands of
vegetables of over 1.5 million population of Kathmandu valley. Gone are the
days when green vegetables and cauliflowers were the only two items available at the
market. During the winter cauliflower and green vegetables dominated the valley market and
beans, pumpkin and tomatoes were available during summer. Following the introduction of
off-season vegetables, the farmers are now producing all kinds of vegetables as
cauliflower, cabbage, tomato and beans all the year round. The vegetable
farming has transformed lives of many farmers living in rural parts of the country,
particularly those whose districts are close to the capital and bordering India. Bhedunga
Village of Dhading District, 30 miles west of capital has benefited a lot from growing
population in the valley. Till a few year
ago when the night bus service were operational, even the vegetables and fruits from
Baitadi and Dadeldhura, 500 miles far west of capital, were imported to capital. As the
night bus service has become irregular due to conflict, farmers do not want to take risk. With the
support from many non-governmental organizations, small and marginal farmers are gradually
moving from subsistence based traditional farming to modern commercialization agriculture.
The continual investment of the government and donor communities has helped Nepal’s
agriculture sector shift from traditional and routine farming to advanced and diversified
cash crops. Geographical
Diversity Nepal has
advantages as well as disadvantages. The hills and mountains of Nepal, despite having
enormous potentials, are yet to be exploited for the benefits of the larger population.
According to a study, hill and mountains of Nepal comprises 77 percent of the geographical
area of Nepal but only 16 percent of the land there is cultivated, leading to a high
population density per hectare of cultivated land. The altitude
ranges from 300 m to 8,848 meters. As there is diversification of the heights, there are
varieties of weather pattern in short range. Since Nepal’s southern neighbor is in
low altitude, it cannot produce off-season vegetables and fruits in cost effective way
like farmers of Nepalese hills. As the east west highway and construction of south-north
highways have accelerated, they have paved the way to reach Indian market easily than
before. Under the
initial support of CEAPRED – an NGO involved in agriculture development - farmers in
Dhankuta district have proved that there is a huge market across the border for the
off-season high quality vegetables. Nepal’s vegetables grown in the hill areas can
establish their own brand taste. Dhankuta’s experiment is exemplary, which shows
Nepal’s geographical potentials. Support
Activities for Poor Producers of Nepal (SAPPROS) has also contributed a lot to encourage
farmers in Dailekh and Gorkha districts to grow off-season vegetables. People in Dailekh
have been following the model developed by SAPPROS, which is chaired by Sri Krishna
Upadhaya, a renowned development strategist. Market
Promotion As Nepalese
agriculture sector is on the way towards commercialize, challenges that lie ahead include
developing dependable market information system. Unlike a decade ago when most of the
programs were directed to introduce new technology to increase yield and diversify the
farming, today all organizations, whether it is a non-profit making organization, business
organization or the government bodies, are taking efforts to build the market
institutions. From small non-governmental organizations to the government agencies and
private sectors like FNCCI, all are working to disseminate the information. FNCCI’s
Agro Enterprise Center is now providing wholesale prices of different agriculture products
collected in 18 centers from east, central, western and mid-western region. The AEC
releases the information regarding the market prices of agriculture products every day. The CenterÅfs
MIS Network collects information from four markets of eastern region, three in central
region, six in western, five in mid-western and two in far-west. It also disseminates
information of Indian border market, Delhi and International market of various
agro-products. As information
determines demand, supply and pricing, other NGOs and farmers can take the decisions
analyzing market scenario before changing the crops. The farmers have already paid heavy
prices in the past due to unavailability of market information. Farmers in
Sindhuli district have a very pathetic story to tell since they are compelled to sell
their high breed orange at lower rate. According to District Agriculture Development
Office, high breed oranges have already been planted in 1270 hectors of land. “We
require a cold storage at district headquarter to store our products to sell during off
season,” demanded farmer Chitra Bahadur Lungeli. “Our income will triple in case
of construction of cold storage. We don’t have any access about the supply and demand
situation of oranges.” Hagen’s
Experiences Nepal’s
current pace of development in agriculture sector is slow as large numbers of farmers are
still following subsistence based routine type of agriculture practices. The modern
diversifications of agriculture that have taken place at different pockets of Nepal have
shown encouraging results. “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
India or Tibetan borders, and to get mainly salt in exchange for it. The average net cash
income of a Nepalese farmer is between thirty and seventy Nepalese rupees (5-12 US
dollar),”writes Tony Hagen, a Swiss development expert, in his report presented to
the United Nations Development Program in 1965. “The extremely low income is caused
by the poor quality of products and by the small quantities involved: farmers on a trip to
the market have no chance to buy and food en route, but must carry their own food. The bad
quality is, on one hand, caused by the original seeds – plants and vegetables of poor
quality. On the other hand, the products (for example, dairy product) spoil on the long
journey to the market. Thus, Nepalese ghee (a kind of butter), for example, fetches the
lowest price of all ghees in India. But it is not only the poor quality of Nepalese
products which keeps prices low, the fact that the Nepalese cannot sell their products in
a free competitive market also plays an important part, Most of the Nepalese farmers are
in the clutches of money lenders.” Initiation of
Small Farmers Development Program (SFDP) in 1975 was a major step to relieve rural
community from moneylenders. With an aim to improve the socio-economic status of the small
farmers developing delivery and receiving mechanism, system for accessibility of credit
and other support service to the small farmers, SFDP has created many institutions to
transform agriculture sector. SFDP provided cash in early phase to accelerate agriculture
sector. “The
number of Sub-project Offices (SPOs) of SFDP reached maximum of 459 in 1993 benefiting
about two hundred thousand small farmers households, which is more than 1.2 million
population below the poverty line, steered over 649 Village Development Committee of 75
districts,” said Arjun Bista, spokesman of Agriculture Development Bank of Nepal
(ADB/N). According to
ADB/N, there are now 90 SFDP covering 264 VDCs with 10024 groups and the group saving
amount is Rs.16 million. Following the Maoist insurrection, the first victims were the
SFDP’s offices. In the first few years, Maoists are reported to have destroyed more
than three dozens SFDP. With the support from German Technical Cooperation, Small Farmer
Cooperative Limited is providing services to the rural poor of 16 hill districts. After the
intensification of Maoist insurgency and removal of banks from villages, donor agencies
are also encouraging rural people to establish cooperatives. Although micro-credit
cooperatives are small, they are effectively supporting rural population. Whither
APP Agriculture
Perspective Plan (APP) helped guide Nepal’s agriculture sector to the right
direction. According to the APP, the engine of growth will be agriculture as it dominates
employment through its direct and indirect influence. Agriculture – which is the
largest component of Nepal’s gross national product – has great potential for
technology based increase in resource productivity, and has strong multiplier effects on
other sector of the economy. The APP aimed to accelerate Nepal’s agricultural growth
rate by 2 percentage points: from about 3 percent per annum to 5 percent per annum. With
this sharp acceleration, farm incomes will rise rapidly. Farmers will then have preaching
power to boost the demand for high-value agricultural commodities – particularly
milk, vegetables, and fruits - and for nonagricultural goods and services from the small
and medium-scale enterprises of villages and market towns. Eight years
after the implementation of APP, the government recently announced a new national
agriculture policy to make the policy more clear. “This national policy is based upon
the APP and it does not intend to replace and change the twenty years long master
plan,” said Homnath Dahal, Minister for Agriculture and Cooperatives. Diversification
of Agriculture Many agencies
are involved in helping the diversification of agriculture. The Center for Environmental
and Agricultural Policy Research, Extension and Development (CEAPRED) is one of them.
Thanks to the program supported by CEAPRED, the farmers in the remote districts of
far-western region to central and eastern region have got opportunities to increase their
income through applying the cash crops. “During
the last 14 years, the Center has implemented 50 different projects/programs in 33
districts. CEAPRED has been privileged to provide its services to approximately 65,000
households and has assisted in generating additional income to the tune of Rs. 2.1 billion
through the sale of off-season vegetables,” said Dr. Pius R. Mishra, executive
director of CEAPRED. “With due consideration to institution building, it has
facilitated the formation, formal registration and operation of several types of
cooperatives. To date, the center has facilitated the formation of 20 multipurpose
cooperatives, 51 marketing cooperatives and 18 savings and credit cooperatives.” Share
of Agriculture Although the
share of agriculture in the Gross Domestic Product (GDP) has fallen from 72 percent in
1975 to 40 percent in 1999, nearly 85 percent of Nepalese people live in rural areas and
draw their livelihood primarily from agriculture and related activities. Agriculture
employs 80 percent of the total labor force compared with 4 percent employed by the
manufacturing sector. According to
the Asian Development Bank (ADB)’s Nepal Quarterly Economic Update September, 2004,
agriculture plays a dominant role in Nepal’s economy, providing employment to about
80 percent of the total labor force and 40 percent of GDP. High priority is given to the
sector with about one quarter of the government’s development budget being allotted
to it during the last five years. “There has
been a shift from production of traditional food grains towards high-value cash crops and
horticultural crops in the last decade but the shift has been occurring at a modest pace.
A review of sub sector diversification using gross value addition by different sub-sectors
shows that the share of cash crops and horticulture have increased from about 20 percent
in 1985 to 27 percent in 2003,” states ADB report. “For instance, growth rates
are high for citrus, cut flowers and vegetables in horticulture and for sugarcane and
potato in cash crops owing to domestic and external demand. Production of these crops has
particularly benefited from removal of price distortions in agricultural markets and a
more favorable policy environment to facilitate production, transport and marketing
facilities.” The
implementation of Agriculture Perspective Plan (APP) in 1995 has changed the traditional
trend and enhanced agriculture production through policy and institutional reforms and
liberalizing the agriculture sector. With the objective to transform Nepal’s
subsistence-oriented agriculture into a commercialized one through diversification and
widespread of regional comparative advantages, the APP emphasized the need to shift to
high-value and market oriented agricultural products. Among the cash crop, the increase of
potato is much higher. The survey showed that the potato production increased by 7.3
percent. Vegetables, too, increased by 5.0 percent with total production of 188.900 MT. According to
the preliminary estimates of Economic Survey 2004-05, the production situation of major
cash crops in fiscal year 2003/04 was mixed. With the increase of 2.0 percent over and
above the production of FY 2002/03, total production is estimated to be 4.11 million
Metric Tons while the area covered increased by 0.4 percent to a total of 404,000
hectares. Productivity of these products is estimated to have increased by 1.6 percent
over that of 2002/03. Productions of
fruits, however, have dropped by 1.7 percent to an estimated total of 510,000 Metric Tons
only. Production of vegetable was up by 5.0 percent to an estimated total of 1.89 million
MT. Of the total agricultural production cash crops shared 34.6 percent in 2003/04. “The
agriculture sector is expected to expand by 3.7 percent in 2005. Since the agriculture
sector has been relatively less affected by the conflict, it will buffer the economy from
the severe adverse impacts of conflict,” said Dr. S. Hafeez Rahman, resident
representative of Asian Development Bank. At a time when
the population in the urban area is growing and purchasing power is increasing,
Nepal’s own market also can support Nepalese farmers who grow the off season
vegetables. Because of high production, Nepalese oranges are now overwhelmingly dominating
the domestic fruit market. “Nepal’s
Agro-Ecological Diversity Offer Comparative Advantages” — Hari
Krishna Upadhyaya A
member of National Planning Commission HARI KRISHNA UPADHYAYA is a renowned expert in
agriculture sector. Upadhayay, who is also associated with the CEAPRED, spoke to SPOTLIGHT
on various issues of agriculture marketing: Off-Season
Vegetables The concept of
off-season vegetable is very new as it was introduced only a decade ago in Nepal. The key
element of selling off-season vegetables is the market assessment. Production scheduling
is required and more than one commodity is promoted to ease the competitiveness. On
Market First of all we
need to tap market. If we want to compete in existing market with existing products, what
we require is extraordinary quality, and less production cost. For instance, when we talk
about mushroom, we must reduce the cost of production or need specialty of the products.
Likewise, off-season vegetables have big markets in India. Our products do not have to
compete with local products there since Nepalese off-season vegetables are grown in
natural conditions. If we tap natural capital like ecology, we can successfully produce
vegetables for domestic and international market. The vast agro-ecological diversity that
exists in Nepal offers the country unique comparative advantages to produce a wide range
of high-value agricultural commodities, such as medical herbs, spices, off-season
vegetables, vegetable seeds, all of which have direct impact on rural farm incomes. The
trends observed in recent years indicate that Nepal has high potential to export such
commodities to countries both within and outside the region. The farmers in Dhankuta alone
grow 50-60,000 tons of vegetables. On
Social Mobilization We need social
mobilization to show that there exist opportunities. We need to provide training. Local
institution development is very important. Along with social mobilization, you need
institutions. Social mobilization is the setting ground for change. Such initiatives will
motivate the youths. The present challenge is to keep unskilled youth in agriculture. This
is a major sector to provide them employment opportunities. On
Domestic Market We have to see
domestic market, regional market and international market. In the last 15-20 years period,
we could observe the expansion of domestic market partly because new products have come
and partly because there was change of taste in consumers. The concept of monetization has
increased in both consumers and buyers. Till twenty five years ago, rural people did not
sell milks but now there is huge entrepreneurial development in milk products. Road
network increased the market. All people seem to have realized that subsistence
agriculture cannot change their situation. Population is increasing and the land remaining
the same, it needs to generate new opportunities. There is a need to generate more
commercial opportunities. For instances, the road links in eastern sector increased the
flow of market information coupled by external support also. People are maximizing their
income switching to vegetable growing. For instance, a farmer can generate Rs.10, 000 per
ropani planting traditional crop like maize but he can earn Rs 60-70,000 by producing
vegetables in the same area of land. For instance, CEAPRED initiated off-season vegetable
program from 1500 households in 1992. The land was not irrigated and the farmers had less
than 5 ropanies of land. The farmers basically did not realize the naturally gifted
opportunities. Nobody believed that they could grow vegetables in their land.
Sustainability is linked with time-dimension. One of the most important dimensions of
sustainability is to cultivate the local advantages and opportunities. Dhankuta’s
Experiment When we started
working in Dhankuta, it was a challenging task but in the two years time the program went
successfully. In the first two years, our aim was to increase annual income of 10 to
15,000 without hampering the traditional cropping. At the end of two years period, on the
average, the annual income was Rs 18,000. Thanks to the growing income, the farmers bought
a truck and the land price increased. Because of the increasing productivity, the land
price has increased. There is a need to replicate such programs to sustain it. We
have started with 1500 households. Our program was replicated by different
non-governmental organizations. In a country where the production units are small,
the farmers need to be organized. If they don’t become organized, informal
organizations tend to break away because of external pressure. Here comes the importance
of cooperatives. When you diversify productivity, the consumption will increase. ”Cost
Of Production Is High” — Dr.
Bishwambher Pyakuryal Professor
Dr. Bishwambher Pyakuryal is a well-known economist. Dr. Pyakuryal spoke to SPOTLIGHT on
various issues regarding the marketing aspects. Excerpts: On
Market Nepalese food
grain producers are yet to get the return of their investment in agriculture sector.
Although farmers are not getting benefits, the consumers have benefited from competition
of internal and external producers in the market. Whether we talk about the regional or
global market, we need to improve competitiveness in our food products. When we look from
the context of food security and poverty alleviation, only three products provide two
third contribution to the total AGDP. The fluctuation in these three products may change
the overall contribution of agriculture. When we talk about marketing, we must see the
restrictions on the movements of goods and prices. Now the public and private sector
market is deteriorating. On
Policy The cost of
production is very high in Nepal as compared to neighboring countries. Nepalese farmers do
not get any subsidy in irrigation, fertilizers and marketing. They also lack
infrastructures. Basically, there are policy failures. And a new environment has emerged
following the insurrection. The government needs to formulate plans to increase the
production, which has competitive advantages. There is a need to diversify products with
competitive edge. We should also encourage high value food products as pattern of
consumption is changing. There is a disincentive to the farmers to invest in the
commercial agriculture. It discourages the farmers. Nepal is not a food deficit country
but we are not in a position to carry food to deficit areas. The government needs a
broader agriculture policy as per the suggestions given by the APP. |
|| Cover
Story || Nepal HDR 2004 || Bhutanese Refugess || Icons
2004 || Encounter || Security
Personnel || |
Send your feedback to the
editor: spot@mail.com.np |
