Nepal's Fertilizer Crisis: A Symptom of a Broken Agricultural Supply Chain
Each planting season in Nepal brings not hope, but anxiety. It is not the weather, pests, or natural disasters that worry our farmers the most, but something entirely preventable: the shortage of chemical fertilizers. In a country where over two-thirds of the population relies on agriculture, and where farming contributes around 25% to the national GDP, this recurring crisis is not only unacceptable, it's a warning sign. An empty fertilizer bag is no longer just a supply issue; it is a glaring symbol of institutional failure, poor planning, and a deeply broken supply chain that begins with global procurement and ends in rural despair.
This is no seasonal blunder. It is a policy, logistics and governance failure that infects every link of the fertilizer chain. The end-to-end process is sluggish and unresponsive: from slow foreign procurement, to botched internal deliveries, from vacillating politics in Kathmandu to the black market networks of the Tarai. As a consequence, Nepali farmers are left helpless, food productions creed to the lowest and country has been spending billions on those grains which we could have grown by ourselves without outsourcing had we got the inputs at right time.
Low-quality smuggled fertilizers from India are the most glaring manifestation of that failure. These products rule the local markets during peak season in districts like Bara, Rautahat and Sarlahi. In addition to this is the parallel market which prospers due to the failure of the state. It is a market born from necessity, not competition. Farmers, having no other choice purchase fertilizers that have not been trial or approved, leading to soil depletion, low productivity and long term damage to their land. Most times these are branded in large nepali font on the package to induce you they are quality but with no guarantee of the proper NPK ratios nor labeling.
The official supply chain, at the heart of this crisis, dysfunctional both in design and implementation. We have two state-owned entities handling import of fertilizer into Nepal: (1) Agriculture Inputs Company Limited (AICL), and (2) Salt Trading Corporation(STC). Between them, they are a leading importer of some 600,000 metric tonnes of chemical fertilizers (mainly urea, DAP and MOP) each year. The government supplies fertilizers to farmers through cooperatives at subsidized rates.
However, the theoretical framework rarely plays out in practice. Every year, tenders are issued too late, sometimes just weeks before the planting season begins. The process of floating tenders, finalizing contracts, opening letters of credit, and securing port clearance is slow, bureaucratic, and riddled with delays. By the time the fertilizers arrive in Nepal typically via the Kolkata port the planting season is either halfway through or already over. This lag forces farmers to either wait, reduce their cultivation area, or turn to the black market.
The international dimension adds another layer of vulnerability. Nepal heavily depends on imports from India and, to a lesser extent, China. While India remains the primary source due to cost and proximity, its export policies are unpredictable. When India restricts fertilizer exports to protect its domestic needs as it did in 2022 Nepal is left with few immediate alternatives. Unlike countries with multiple trading partners and buffer stock systems, Nepal lacks both diversification and contingency plans. It does not maintain strategic fertilizer reserves, which means even a small disruption in supply becomes a national crisis.
Transport and logistics further complicate the situation. Nepal, being landlocked, faces high freight costs and long transit times. The journey from Indian ports to border customs is often delayed due to procedural bottlenecks, truck shortages, or political strikes. Once inside Nepal, the distribution chain faces another hurdle: weak road infrastructure and lack of storage capacity, especially in remote and hilly districts. Often, even when fertilizers are available in Kathmandu or Birgunj, they fail to reach places like Rolpa or Bajhang in time.
This systemic failure has real, measurable consequences. According to recent trade data, Nepal’s annual agricultural import bill has surpassed Rs 360 billion, a figure that includes rice, vegetables, lentils, and wheat, all of which could be grown domestically if farmers were supported with timely inputs. In effect, we are importing food because we failed to manage the supply chain for the materials needed to grow it. It is a cruel irony, and an expensive one.
But this crisis is hollowing out trust well beyond the realm of economics. The farmers, destitute at the best of times, feel deserted by this over-promising state which is now busy with lies to rerun an election. As hope grows old and promises are not fulfilled, the inputs are not given. The disillusionment goes far deeper than farming; it spawns a lack of faith in governance, politics, and the prospects for their children to make a living in agriculture. This leads to large-scale youth ejection from farming either to migration or unemployment in the long run.
Fixing this broken system demands a fundamental and long-term change in policy. Fertilizer centralized procurement should be strea:mlined and an efficient/ predictable fertilizer distribution network established. Tenders should be given a larger window of time, six to eight months prior to the planting season, along with an associated timeline and accountability. Policy Frameworks should contain those Windows as an emergency measure so that State/Deptt. can make quick purchase in case of missing out on the stock/time. And, just as importantly, Nepal must reduce its vulnerability stemming from a single source country by creating relationships with other suppliers in the Middle East and Southeast Asia.
Infrastructure investment is also critical. Provinces and districts will have to improve their storage capacity. Both supply and demand could be tracked in real-time using the introduction of digital inventory systems. It is also focused on the road access to rural markets that must be addressed for not only fertilizers, but for broad economic development. The last mile of the delivery spectrum is maintained through cooperative networks which should also be trained and invited to become capable technically to get tech developed and inaugural incentives.
One without the other simply won't cut it. It is not just a case of isolated smuggling of fertilizers; it appears to be an organized trade involving loss of hundreds of crores and operates without any fear. What the government can immediately do is to wake up and now indulge in strengthening border monitoring, step up on-ground inspection of retailers, began a public awareness drive or warning farmers of the dangers of using unverified fertilizers. Punishments pertaining to the smuggling and selling of substandard fertilizers should be enhanced, enforced.
In the long term, Nepal must begin shifting toward more sustainable and locally sourced alternatives. Organic fertilizers, composting systems, and bio-fertilizer technologies are underdeveloped but promising areas. Investment in research and farmer education can gradually reduce our overreliance on imports and create a more resilient agricultural model. This will also align with global trends toward regenerative agriculture and climate-resilient farming.
Nepal’s fertilizer crisis is not just about a missing product it is a reflection of missing priorities. Year after year, despite media reports, farmer protests, and parliamentary debates, little changes. Until we treat this issue with the urgency and seriousness it demands, the same story will repeat itself every season. Fertilizers will arrive too late. Farmers will turn to black markets. Yields will fall. Imports will rise. And the nation will pay the price not just in money, but in missed opportunity.
If Nepal aspires to feed itself and grow through agriculture, then the fertilizer crisis must be treated not as an exception, but as a central challenge. It is a test of our governance, planning, and ability to deliver. And it is one we can no longer afford to fail.
Article By: Ravindra Kumar Yadav & Amar Prashad Gupta
