Rice import bill increases 47pc to reach Rs 13.67b

KATHMANDU, SEP 06 -

Nepal’s rice import bill jumped to an alarming Rs 13.67 billion in the 2012-13 fiscal year, as the country’s output failed to meet the growing rice demand.

According to the Trade and Export Promotion Centre (TEPC), the rice import bill soared by 47 percent. The TEPC statistics show that the country imported 493,291 tonnes of rice last fiscal year, up from 398,482 tonnes in the previous year.

Of the total import, semi and wholly milled rice amounted to Rs 8.66 billion while import of rice in the husk stood at Rs 4.66 billion.

Massive imports follow a projected rice 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. Per capita, rice consumption in Nepal is 122 kg per year.

“Although the country has an overall surplus in cereal crops, due to rice eating habits there was an import pressure as the output did not meet demands,” said Prabhakar Pathak, spokesperson of the agriculture ministry. “We have estimated that the massive import has been driven by Nepal’s high cost of production.” In past decades, Nepal was a rice exporting country. “Now, we are gradually becoming dependent on rice imports,” said Economist Madan Dahal. Dahal believes rice import has been hurting the country’s foreign exchange reserve. “As we don’t have sufficient Indian currency, we have to sell the US dollar.”

With the growing population, production and productivity has remained constant; and if the same situation continues, Nepal will soon become the largest importer of agricultural products, experts claim.  

The agriculture sector is currently growing at a rate of 3 percent per annum. Dahal said that the sector is likely to suffer more in the future due to the fragmentation of land holdings.

“Increasing land fragmentation will not let the country succeed in commercial production or agro mechanisation,” Dahal said. “As production strains, it will be difficult to limit imports.”

The agriculture ministry said that with an increased coverage of plantation, improved seeds and an increase in chemical fertilizer, future paddy crops should flourish.

“The import pressure will ease this coming year, as rice output is set to rise due to sufficient monsoon rains,” Pathak added. With the exception of five Tarai districts that have witnessed a late drought this season, he said the overall performance of paddy cultivation has been encouraging so far.

Source: The Kathmandu Post