Cereal import bill hits new record high of Rs41 billion

- SANGAM PRASAIN, Kathmandu

Jul 9, 2018-

Nepal’s cereal import bill hit a new record high in the first 11 months of the fiscal year, largely due to soaring demand for fine rice and maize used as animal feed.

Rice, paddy, maize and wheat worth Rs41.32 billion entered the country during the review period, according to the statistics of the Department of Customs. The cereal import bill is higher than the farm budget of Rs40.14 billion allocated for the next fiscal year.

Imports have ballooned even though Nepal’s 2017-18 grain harvest has been projected to hit a new high. According to the statistics of the Agriculture Ministry, the country’s paddy, maize, wheat, millet, buckwheat and barley output has been projected to grow 2.43 percent to 10 million tonnes this fiscal year.

Imports are swelling each passing year which shows that the government’s strategy to boost output has failed, said analysts. In 2015, the government unveiled plans to bring down the country’s rice import bill from Rs14 billion in 2014-15 to Rs6 billion in 2015-16 and then Rs2 billion in 2016-17.

It created an ambitious plan to export paddy worth Rs3 billion by 2017-18. But in an absurd turn of events, the rice import bill jumped to Rs21.24 billion in the first 11 months of the current fiscal year. Likewise, paddy imports soared to Rs5.57 billion.

In 2014-15, Nepal imported maize worth Rs5 billion. The government had planned to reduce the maize import bill progressively to Rs2.5 billion in 2015-16 and to Rs2 billion and Rs1 billion by 2016-17 and 2017-18 respectively. Ironically, maize imports more than doubled to Rs10.44 billion in the first 11 months of the current fiscal year.  

“Imports of cereal crops are ballooning and will continue to rise,” said agro expert Bhola Man Singh Basnet. He cited three reasons for the jump in imports: One, consumers asserting their preference for aromatic basmati rice from India over the local product; two, a growing rice deficit as Nepalis have not changed their rice eating habit for decades; and three, an expanding poultry industry and animal husbandry driving up maize imports.   

“As we don’t produce fine rice like basmati in adequate quantities, demand is met by imports.” India is the sole exporter of basmati rice to Nepal. According to Basnet, the growth of remittance has allowed a large number of people to eat fine quality rice. “Nepalis with high incomes are eating basmati rice and demand has grown accordingly.”  

Basmati rice is expensive, and its value has increased the import bill. He said that Indian basmati rice was much cheaper compared to Nepal’s product due to the low cost of production and India’s heavily subsidized farm sector.  

Basnet said that as per the Agriculture Ministry, a Nepali consumes an average of 191 kg of food every year--90 kg of rice, 45 kg of maize, 45 kg of wheat and other foods like meat and dairy products. These figures are outdated. “Based on our estimates, a Nepali eats 138 kg of rice per year due to a rise in income. This translates into an annual requirement of 4 million tonnes of rice while supply is 3.1 million tonnes,” he said, adding that the deficit of 900,000 tonnes was met by imports.

Published: 09-07-2018 07:57

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