Dr. Dinesh Chandra Devkota

WITH the outbreak COVID-19 globally, the pandemic has hit hard the health, livelihoods and food supply chain. Agriculture supply is under big threat. In view of prolonged lockdown enforced to contain the virus, safety net policy and programme responses are urgently required for majority of Nepalis who depend on precarious agriculture for their livelihoods.
Nepal has taken an early action to limit the spread of COVID-19, ordering a nationwide lockdown for its population of 30 million. However, as the COVID-19 cases are rapidly increasing, there is a great concern of open border with India which could accelerate the disease’s potential spread and impact. So far, 31 virus cases have been identified in Nepal and the country has to be ready for a possible surge. Particularly, appropriate and effective testing mechanisms for the virus should be expanded significantly.
Economic shock
The complete shutdown of all economic activities, except essential services, will create an economic crisis and misery for the poor, with massive job losses and rising food insecurity. The economic shock is likely to be much more severe for Nepal for two reasons. Before the pre-COVID-19, the economy was already slow due to various existing problems like unemployment, low incomes and low capital investment of government projects.
The expenses of the current capital (salaries, petrol, vehicles, rent, etc.) will persist even after the lockdown. Second, Nepal’s migrant sector is particularly vulnerable in this situation. In addition to this, if around three million migrant workers lose jobs and are forced to return home, the situation will be far worse. We have to plan accordingly to cope with the challenges triggered by COVID-19. Here the focus is laid on the likely impacts of the pandemic outbreak on agriculture, supply chains, food and nutrition security, and livelihoods.
World Bank predicts that South Asian nations, including Nepal, will see a sharp economic slump owing to the cessation of economic activities, collapsing trade, and greater stress on the financial and banking sectors. The report mentions regional growth will fall between 1.8 and 2.8 per cent in 2020, from 6.3 per cent projected six months ago. This deteriorated forecast will linger in 2021 with growth projected to hover between 3.1 and 4.0 per cent, down from the previous 6.7 per cent estimate.
As per the report, Nepal’s economic growth is expected to fall between a range of 1.5 and 2.8 per cent in the fiscal year 2020, with declining remittances, trade and tourism, and broader disruptions caused by the COVID-19 outbreak. A prolonged outbreak of COVID-19 would impact growth significantly with a further deceleration or contraction in services and industrial production. Economic growth during the fiscal year 2021 is also likely to remain subdued due to the lingering effects of the pandemic with some recovery expected in 2022.
Nobel laureate economists Dr. Esther Duflo and Dr. Abhijit Banerji said that the government of India should have been much generous with their package of social transfer schemes where $22 billion in spending is only 0.85 per cent of the country’s GDP which is not enough. They further mentioned that this is much lower than the packages passed by the United States, European countries and some Asian nations. India should think bigger, and be spending at least 4 to 5 per cent of GDP. Nepal should also learn and make the same concept applicable. The government should urgently introduce the bigger scale of finance packages of funding modalities for production sectors; especially agriculture and food. Aggressive massive plan and guide for each of rural municipalities for the promotion of different models of farming system. Models such as the Public Private Partnership (PPP), cooperatives and users groups are urgently needed in field actions to promote the national economy linking the unemployment youths and jobless workers from this season.
COVID-19 is disrupting major activities in agriculture and supply chains. This is primarily due to the unavailability of labour which is consequential to all activities in dairy, crops (rice and maize), livestock and chicken, and pig farming. There are disruptions in supply chains. Transportation is in all types of farms, including poultry, offseason vegetables, fruits, livestock, and dairy. Media reports show that the closure of hotels, restaurants, sweet shops, and tea shops during the lockdown is already depressing the sale of vegetables and dairy products. In order to keep the agricultural sector and supply chains working smoothly, an array of measures need to be implemented. Some are as follows.
The government has issued lockdown guidelines that exempt farm operations and supply chains. But focus should be laid on ensuring the supply of products by addressing the problems arising from falling prices, the shortage of labour force and feed availability and transportation shutdown. Keeping supply chains functioning well is crucial for food security. It should be noted that the food supply may come to a halt during this time and coming months and year in many remote places, including that of Karnali and Sudurpaschim States. Farmers should be encouraged to continue farming but they must follow essential measures such as testing facilities and practising social distancing.
Rural municipalities should encourage farming at individual, household and group levels. In this time, they can promote the PPP, group farming and cooperatives models by introducing the heavy subsidies to encourage the investment of individual capital to establish the agriculture farms. The current circumstances can be a perfect opportunity for the nation to design the new economy models.
Relief packages
COVID-19 is an unprecedented challenge for Nepal. The country’s large population and the economy’s dependence on migrant revenue, and subsistence agriculture have been greatly disrupted by the nationwide lockdown and social distancing measures. The government has already recognised the challenges and responded to them aggressively to provide relief packages for a week. But this response is just the beginning. It is urgent to scale up, easing the economic impacts through even greater public programme support mainly to agriculture and food security that keep markets functioning and protect the people from looming hunger.

(Dr. Devkota is former vice-chair of the National Planning Commission)