Kathmandu, July 23: Financial institutions are seen to be tightfisted when it comes to the agricultural production sector. This is stated in the Monetary Policy for the Fiscal Year 2022/23 Nepal Rastra Bank unveiled on Friday.
According to the NRB, the financial institutions were
required to invest 15 percent of their investable amount in the agriculture
sector but they are found to have invested only 12.8 percent of this
amount.
"On the one hand the import in agriculture has
peaked and the financial institutions are seen to be parsimonious in investing
in this sector on the other hand. This means dependence on foreign import in
agriculture is not going to lessen any time soon," economist Bhawani
Khanal told RSS.
The financial institutions had invested Rs 490
billion 150 million in the agriculture sector by the end of the last fiscal
year, 2021/22. Investment of this amount means nearly three percent less of the
15 percent amount that they are required to invest.
The number of farmers taking concessional agricultural
loans during that period as of June 14 is 60 thousand 618. They took
concessional loans amounting to Rs 139 billion 684 million.
The budget for the fiscal year 2022/23 states that a
balanced agricultural trade would be maintained in the next five years by means
of agriculture transformation. Although it is mentioned in point no 18 of the
budget document that the import of rice, maize, wheat, vegetables, and fruits
should be decreased by 30 per cent, the financial institutions are not
enthusiastic in investing in agriculture to reduce imports.
"There is a large population of small farmers in
Nepal," said Uddhav Adhikari, the coordinator of the Agriculture Campaign
for Food. He said the Monetary Policy and the budget for fiscal year 2022/23 is
not in favor of the actual small farmers.
The Monetary Policy has made provisions by which the
real agriculture entrepreneurs can take project loans of up to Rs 2 million for
running an agricultural business. However, the small farmers are not likely to
benefit from this provision.
It is estimated that there are around eight million
small farmers in the country. Most of the small-scale farmers, who earlier run
projects keeping collateral, have no projects.
Middle-class farmers, who have run projects keeping
collateral in the bank, would be benefitted from this arrangement. Small-scale
farmers have fragmented arable land but the land is left uncultivated in a lack of
timely fertilizer, seeds, and irrigation facilities. Though the government had
brought a plan to manage the fragmented land, it has not been effective.
The budget of the current fiscal year has laid
emphasis on production through modernization, commercialization, and
mechanization of agriculture. But there are no symptoms of reduction of dependence
on agriculture immediately as arable land is gradually becoming barren, the population involved in farming becomes centralized in the cities and selling
arable land as housing plots.
The monetary policy has mentioned making the
agriculture loan, mentioned in the budget, effective through the establishment of a microfinance fund.
Small-scale farmers are found elated after the policy
mentioned that the amount deposited in the fund would be taken to the doorsteps of
the farmers. (RSS)