By Laxman Kafle,Kathmandu, Feb. 12: Nepal is much touted as an agrarian country. Still over 60 per cent people in Nepal are engaged in agriculture. But the big irony is that the country spends billions of rupees to import agricultural products to feed its people.
Until 35 years ago, Nepal used to export rice; however, now the country imports rice and paddy worth nearly Rs. 50 billion every year alongside other goods like vegetables, fruits pulses and mustard oil. The contribution of agriculture to gross domestic product has now decreased to 23.9 per cent while it was as high as 37.4 per cent two
At the same time, farmers often have to waste their produce, especially perishable vegetables and fruits in lack of markets. Recently, farmers threw vegetables on the road for failing to sell them at a reasonable price.
This contradiction serves as a testimony that there is something wrong in our farming policy and system and market management for local products.
When there is no guarantee of market and other facilities from the government and other agencies, farmers have to undergo constant ordeals, such as management of seeds, fertilisers, labourers and irrigation, right from the time they prepare to plant a crop till the harvest. However, despite all the hard work, farmers find it difficult to sell the crops at the end of it all.
Many news reports suggest that farmers in Nepal could not sell vegetables and fruits in lack of markets and government policy to protect and promote local products.
Recently, vegetable farmers in Chitwan took to the streets throwing their vegetables on the road demanding reasonable prices and control of vegetable import from India.
Likewise, sugarcane farmers from Terai frequently stage demonstrations in Kathmandu stating that the sugar mills do not pay their dues of sugarcane for years.
Protests from farmers have started to be a new normal amid lack of support from the concerned authorities.
Chairman of the National Farmers' Commission Prem Prasad Dangal admitted that farmers face innumerable problems right from the
planting season to selling their products in markets.
"We are unable to provide required incentives to farmers in agricultural inputs, ensure access to finance, technologies and create an environment in which they get reasonable price for their products," he said.
He further added, "Now, it is vegetable growing season in India, but it is also the season of vegetables in Nepal. Vegetables produced by Indian farmers arrive in Nepal, but our local products go to waste. This is a recurring problem. A long-term solution to this is a must, but, sadly, the government has not paid attention to this issue.”
Farmers in loss, consumers ditched
Another irony is that farmers are forced to sell their products at a very low price in lack of market, but consumers in urban areas are paying high prices for the same vegetables.
“Due to the vegetables being imported from India, domestic products have failed to find the market,” said Ram Sharan Dahal, a farmer from Ward No. 3 of Panchkhal Municipality in Kavrepalanchowk district.
He complained that the local traders are reluctant to buy vegetables from the Nepali farmers citing that a large quantity of vegetables enters Nepal at a cheaper rate from India.
According to Dahal, Panchkhal’s farmers are selling tomatoes at Rs. 10 per kg, cauliflowers at Rs. 10-12 per kg, and potatoes at Rs. 22-25 per kg.
“While we struggle to find a market, local traders accept to buy the vegetables only at a cheaper rate. These rates fall short of the production cost,”
"Farmers like us are hit hard because of the free entry of Indian vegetables, and we have lost our market and investment," Dahal exclaimed.
Sachita Simkhada of Gatthaghar, Bhaktapur, said that consumers are always cheated by traders when buying vegetables and fruits in lack of effective market regulation.
"We get to hear and read the news that farmers are not getting reasonable price for vegetables and are selling their products at a cheap rate. But we, consumers, mostly have to pay high prices for the same," she said.
According to her, the price of vegetables is five to seven times higher in the retail market than the real price received by the farmers.
At present, the price of tomatoes is Rs. 60 per kg, cabbage and cauliflower cost Rs. 40 per kg, and potatoes are Rs. 45-50 per kg in the retail market.
Indian vegetables deluge market
“Normally, around 40-45 per cent of total vegetables that arrive in Kalimati-based vegetable market are from India,” said Binaya Shrestha, information officer of Kalimati Fruits and Vegetables Market Development Board.
Kalimati market supplies 60 per cent of the vegetables in Kathmandu Valley.
Among the vegetables imported from India mostly are potatoes, onions, and lemons.
He added that green vegetables, including beans, carrots and pumpkins, were also arriving from India lately, but the quantity is nominal.
“Traders are encouraged to import vegetables from India because their prices are lower than the local products,” Shrestha said.
"Naturally, the traders want to make more profit, so they bring cheap vegetables from India. Also, there is no regular supply of vegetables round the year in Nepal," he added.
According to trade statistics of the Department of Customs, agricultural products worth Rs. 150.47 billion have been imported during the first six months of the current fiscal year 2022/23.
Of them, fruits worth Rs. 5.99 billion and cereals worth Rs. 27.91 billion have been imported. Similarly, vegetables worth Rs. 10.04 billion have been imported during the same period.
According to the National Centre for Potato, Vegetable, and Spice Crops Development, about 4 million tonnes of vegetables have been produced in the country in the last few years. Vegetables are being planted in around 284,000 hectares of land across the country.
The production of agricultural goods, especially vegetables, has increased over the years as many youths are engaged in commercial production.
Tiers of intermediaries
Multiple layers of middlemen are the biggest challenge for effective marketing of agricultural goods. The consumers have been compelled to pay higher prices for vegetables due to profit margins based on tiers of middlemen.
Madhav Timalsina, President of Consumer Rights Investigation Forum, said that seven to nine layers of middlemen are involved when the agricultural produce, including vegetables, reach consumers from farmers, resulting in unnaturally high prices.
Thus, the price is determined arbitrarily when there are several levels. There is also no uniformity in the shutter fares of the businessmen, due to which they charge exorbitant prices to the consumers.
The government's desire is to reduce the influence of middlemen on the price paid by consumers to as many producers as possible, said Basu Dev Kafle, Chief of National Centre for Potato, Vegetable and Spice Crops Development.
According to Kafle, the government has emphasised on the establishment of collection centres and their operation through cooperatives, arrangement of cold storages, operation of weekly (haat) bazaars, and arrangement of farmers’ markets in different places
The Consumers' Protection Act, 2018, has proposed that the layers of middlemen should only be up to four and profit up to 20 per cent.
“If the government implemented the Consumer Protection Act, 2018, effectively, the problems of both the farmers and consumers would be solved significantly,” said Timalsina.
Weak monitoring, market infrastructure
Monitoring and regulating the market in terms of price is the responsibility of local bodies and municipalities. Many studies have been done to determine the level of intermediaries and solve the problem.
Consumer rights activist Timalsina said that government officials have prepared more than half a dozen reports in a bid to solve the existing problems, but they are confined only to the papers.
"The government has not implemented the rules made by itself," he said. "The government looks uninterested in solving the problems of farmers."
Sometimes, ministers of the concerned ministries inspect the wholesale market after reading the news reports that the price of vegetables increased unnaturally. However, nothing is done later.
Due to the lack of arrangements for issuing bills when buying and selling vegetables even with farmers, market monitoring has not been effective and traders are taking abnormal profits.
Chairman of NFC Dangal said that poor agricultural infrastructures, such as cold storages, collection centres, and poor access to roads in local levels, are also creating problems for farmers to sell their produce at a reasonable rate.
Government officials admitted that there is a weakness in the marketing of vegetables from the farmers as well as the government.
"If we construct cold storages at the local levels and provide subsidies to farmers while storing goods produced in the season, they can sell in off-season and get a good price," said Dangal.
According to him, if the farmers’ access can be ensured from collection centres to the wholesale market, they will be able to get a reasonable price for the produce.
Chief of National Centre for Potato, Vegetable and Spice Crops Development Kafle said, “The production of some products is more concentrated, as the government's investment is also focused in this. Both the farmers and the government have to be smart in the marketing and diversification of the products."
He further said that due to its membership of the World Trade Organization (WTO), Nepal cannot stop the import of vegetables from India. However, according to the provisions of the WTO, anti-dumping duty can be imposed on vegetable imports from other countries if there is a situation that will have a negative impact on the Nepali market.
"Local level governments should also encourage traders to purchase local goods instead of imported ones by providing subsidies in transportation and other things," said Kafle.
NFC Chairman Dangal also stressed the need for enhancing the capacity of the offices, under the Department of Food Technology and Quality Control, at the border for pesticide testing can also help control the import.