Despite having a lot of arable lands with favourable climatic conditions and irrigation facilities, Nepal has been forced to import a huge quantity of cereal and other food items from abroad every year. One of the major reasons for such a shameful situation is that the country always reels from an acute shortage of chemical fertilisers during the times of paddy and wheat plantation. Needless to say, the fertilisers are an important agricultural input. If the chemical fertilisers are made available to the farmers easily during such crucial times, Nepal could restore her past glory as a food-exporting nation. More than 65 per cent of the country's total population still depends for their livelihoods and incomes on the agriculture sector. Its contribution to the Gross Domestic Product (GDP) stands at about 29 per cent. This also supports a myriad of industries and creates the largest number of jobs within the nation.

An estimated 1.35 million tonnes of chemical fertilisers is needed for Nepal each year. However, as per a news report carried by this daily on Sunday, the incessant crisis has reduced the demand for fertilisers to about 800,000 tonnes. Interestingly, only about 450,000 tonnes is imported annually. And hundreds of thousands of tonnes of fertilisers are believed to be smuggled to the country through India during the paddy plantation. Farmers across the nation use about 600,000 tonnes of compost manure a year. The country spends billions of rupees for grants in imported fertilisers. During the last fiscal year, the government set aside Rs. 10 billion for the fertiliser grants while the amount has risen to Rs. 11 billion during the current fiscal year.

Considering this situation, the federal government has recently decided to establish a chemical fertiliser factory in the country within the next five years. The issue of opening such a factory had been raised time and again for many years. But no significant progress was made to this end. A meeting of Minister for Finance Bishnu Prasad Paudel, Minister for Industry, Commerce and Supplies Lekh Raj Bhatta and Minister for Agriculture and Livestock Padma Kumari Aryal, and secretaries announced that the process regarding this had been initiated. As mandated by a cabinet meeting held in the second week of November last year, a committee headed by Finance Minister Paudel conducted a preliminary study about the proposed plant. A team of senior bureaucrats is now refining a concept paper. The panel is going to submit the document to the government within two weeks.

It is necessary for the government to consider the modality as well as the cost factor for the fertiliser plant. The government now has three options to set up the plant that can be based on natural gas, coal and electricity. As suggested by the Investment Board of Nepal (IBN), the gas-based plant is the most viable financially. This plant could be established at a projected cost of Rs. 22 billion while the electricity-based one may require as much as Rs. 157 billion. The government is considering the Public-Private Partnership (PPP) model to materialise the much-needed plant. Dhalkebar of Dhanusha district and Bardghat of Nawalparasi district are the proposed locations for setting up the plant. The government now must focus on materialising this project at the earliest.