Nepal’s farm sector likely to see negative growth

- Post Report, Kathmandu
Paddy output has shrunk by more than 10 percent and now the winter crops, particularly wheat, are not looking good

Apr 6, 2016-Nepal’s farm sector is likely to see a negative growth rate as the winter crop output is expected to shrink by double digits due to deficient rains and fertilizer shortage following a poor summer harvest.  

It is too early to predict the growth rate, but the scenario doesn’t look good, the Ministry of Agricultural Development said. 

“It’s almost sure that the country’s food balance sheet will be negative. Paddy output shrank by more than 10 percent and now the winter crops—particularly wheat—are not looking good,” said Shankar Sapkota, a senior agro economist at the ministry. “The ministry is yet to compile the winter harvest report. But the growth scenario will be disappointing.”  

According to a report produced by Climate Change, Agriculture and Food Security (CCAFS), wheat output is forecast to plunge 20.5 percent to 1.57 million tonnes. 

The first advance estimate of the 2015-16 wheat production in Nepal, which has been produced using the CCAFS Regional Agricultural Forecasting Toolbox (CRAFT), said that there would be a significant drop in production due to an estimated 5 percent decrease in the wheat acreage nationwide. 

The agriculture sector grew 1.9 percent in 2014-15 following a delayed and poor monsoon. The agriculture growth rate averaged 2.9 percent during the last decade. The farm sector accounts for around 33 percent of the economy where half of croplands lack irrigation. Round-the-year irrigation coverage amounts to only 18 percent. Meanwhile, the Agricultural Development Ministry said that the National Planning Commission (NPC) had pledged to provide a higher budget allocation for the next fiscal year if its programmes are focused on poverty reduction, employment generation and increasing productivity to achieve self-sufficiency in food.

The ministry said that the NPC had fixed the budget ceiling at Rs17.94 billion for the next fiscal year, down from Rs26.68 billion this year. The ministry had asked for a budget of Rs29 billion. 

Yogendra Kumar Karki, spokesperson for the ministry, said that they had told the NPC that they would require a large amount of money as they have to implement the Agriculture Development Strategy (ADS) from the next fiscal year. In November last year, the government had formally launched the highly-anticipated ADS, which is envisaged to transform Nepal’s farm sector in the face of common challenges such as climate change, food price volatility, low productivity and water stress.

The much-touted farm blueprint with a 20-year vision and a 10-year planning horizon which will be implemented from the next fiscal year has recommended spending Rs502 billion over 10 years, or around Rs50 billion annually.

Of the total proposed investment, the government and donor communities will put up 89 percent and the private sector will chip in 11 percent. The ADS will supersede the existing Agriculture Perspective Plan (1995-2015).

Karki said that the ministry had devised a number of programmes to make the country self-reliant in food. “As the growth of the service and industrial sectors is ‘not possible’ for at least 15 years, we need to focus on the agriculture sector,” he said. According to the ministry, the country faces a 15 percent food grain deficiency and 15.4 percent vegetable deficiency. 

“Due to low productivity, we have not been able to produce enough food,” said Sapkota. According to him, Nepal’s paddy productivity of 3.3 tonnes per hectare is the lowest in South Asia. 

Annual agriculture sector growth rate

Year    Growth (in %)

2014-15    1.9

2013-14    2.9

2012-13    1.1

2011-12    4.6

2010-11    4.5

2009-10    2.0

2008-09    3.0

2007-08    5.8

2006-07    1.0

2005-06    1.8

(Source: Agricultural Development Ministry)

Published: 06-04-2016 08:21

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