Drop in output forces Nepal to import rice worth Rs 11b
KATHMANDU, JUN 26 -
Nepal imported Rs 11.60 billion worth of rice from the global market in the first 10 months of the fiscal year largely due to a fall in paddy output. According to the Trade and Export Promotion Centre, the country imported 420,490 tonnes of rice during the review period, up from 286,995 tonnes in the same period last year.
Nepal’s rice imports have been far higher than the projection of the Food and Agriculture Organization of the United Nations (FAO). The rice market monitor report of the FAO had estimated Nepal’s imports to reach about 300,000 tonnes in 2013.
The stats show that Nepal’s total cereal imports in the first 10 months jumped 72.09 percent to Rs 16.16 billion. Out of the total imports, rice imports amounted to Rs 11.60 billion, up 85.30 percent. The country imported cereals worth Rs 9.39 billion in the same period last year.
The massive imports follow a projected food deficit this year. The Ministry of Agriculture Development has estimated that Nepal will face a shortage of 900,000 tonnes of rice this year despite a likely surplus in the total food grain reserves. The country’s paddy production fell 11.3 percent to 5.07 million tonnes. Rice is a major staple food for Nepalis, and is also known as the economic backbone of almost 66 percent of the country’s population.
Senior economist Bishwamber Pyakurel said food insecurity was common in many rural parts, but the alarming import of food grains in particular will affect the country’s rapidly growing urban population. Experts said that urban areas rely on food produced in rural areas, and based on supply and demand, if rural areas produce more, urban areas experience decreased food prices.
“As Nepal is witnessing a huge farm labour shortage, particularly due to migration of youths, the agriculture sector is gradually becoming isolated,” said Pyakurel. The result, according to him, can be seen in the annual growth rate of agriculture which has slumped to 1 percent from 5 percent. “In such a scenario, besides making policy interventions, there should be special arrangements for the farm sector in the next budget.”
A number of experts said that the country’s surplus cash reserves should be spent on mechanization and commercialization of the farm sector. Pyakurel said that Nepal had been importing food grain for the last five years; and considering the growth rate, it does not look like the market will be corrected soon even if there were to be bumper harvests for the next two to three years. “But production of high-value crops could play a major role in reducing the trade deficit to some extent.”
Source: The Kathmandu Post
