Soaring agro import an incongruity of economy

By Laxman Kafle

coKathmandu, Aug. 25: Nepal, known as a country of agro-based economy, has been spending billions of rupees in the import of agro and livestock products every year. 

The report of Trade and Export Promotion Centre revealed that the county imported agriculture and livestock products worth Rs. 224 billion in the last fiscal year 2018/19. In the meantime, the country exported agricultural goods worth only around Rs. 36 billion.
Agriculture products contribute to almost 16 per cent to Nepal’s total import trade, which stands at Rs. 1,418 billion.
The country imported agricultural and livestock goods worth Rs. 153 billion in the fiscal year 2015/16, Rs. 175 billion in 2016/17 and Rs. 203 billion in 2017/18.
It is unfortunate for the agro-based nation like Nepal to import agro products including rice, wheat, meat and vegetables for consumption where about 65 per cent of the total population is involved in the agriculture.
The import statistics shows the growing dependency of Nepal on foreign countries to meet the daily demand of agricultural goods in the domestic market, said Krishna Raj Bajgain, senior officer, trade statistics and analysis section at Trade and Export Promotion Centre.
Despite having a high potentiality of growth in the agricultural sector, Nepal is experiencing a significant contribution in the country’s trade deficit from the import of agro and livestock products, he said.
In the 1980s, Nepal was known as rice exporter country. Now, the country has imported rice including paddy worth Rs. 32 billion in the last fiscal year, he said.
Decline in fertile land due to rapid urbanisation from hill to Terai areas is a major reason behind the increase of agricultural goods import which is being done to meet the national requirement, he said.
“The establishment of industrial corridor at the fertile land and lack of proper irrigation facilities also affecting in production,” he said.
According to the trade statistics of the TEPC, cereals worth Rs. 51.08 billion imported in the last fiscal year which was 16.2 per cent higher
compared to previous fiscal year. Share of cereals to the total export trade stood at 3.65 percent.
Import share of rice among the agro products is higher during the review period. The country imported rice worth Rs. 32.50 billion including husk rice worth Rs. 6.84 billion. The paddy production increased to 5.61 million tonnes last year, the highest so far.
Similarly, live animal worth Rs. 4.09 billion, different kinds of meat items worth Rs. 159 million and fish 1.89 billion imported during the review period.
Dairy products worth Rs. 1.60 billion and honey Rs. 130 million imported in the last fiscal year while sugar and sugar confectionery worth of Rs. 3.12 billion was imported.
Coffee worth Rs. 98 million, tea worth Rs. 117.7 million and piper worth Rs. 7.39 billion imported during the last fiscal year.
Likewise, the country imported crude soybean oil worth Rs. 13.43 billion and mustered oil seeds worth Rs. 1.15 billion. Sugar and sugar confectionery worth Rs. 3.12 billion has been imported. The Nepal is importing green vegetables, onion, garlic, mushroom and potatoes in a sizable amount from India, China and other countries.
Secretary at the Ministry of Agriculture and Livestock Development Dr. Yubak Dhoj G.C, the challenge of the agriculture sector was that it had failed to increase agro production in line with the demand resulting in the import of agriculture products.
“The productivity of all agro products increases but the tendency to leave the arable land uncultivated is affecting our agro production,” GC said. A large section of population has been compelled to involve in agriculture due to lack of opportunities available in other sector, he said.
“The reduction of the number of population involved in the agriculture and modernizing agriculture sector for increasing production is highly required at present. Having said this, the concerned bodies of the government including Ministry of Agriculture and Livestock Development should focus on increase irrigation facilities, agricultural road, electricity, supply of fertilsiers for increase the production,” he said.
The government is making an investment of around Rs. 25-30 billion in agriculture sector annually, which is not sufficient to reduce agro product import by increasing production, he said.
The contribution of agriculture sector to the national Gross Domestic Products stood at 27.5 per cent, he said.

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