Kathmandu, November 28

The unfavourable monsoon and shortage of chemical fertilisers caused by the protest in the Tarai have hit the production of paddy this year.

The Ministry of Agricultural Development (MoAD), in its preliminary report, has said paddy output will plummet by 10 per cent this year as compared to the previous fiscal. The significant decline in paddy production — which has a large contribution to the country’s economy — is another setback for the Nepali economy, which has been suffering due to the disruptions in supply at Nepal-India border.

The government recently revised down its projection of economic growth to two per cent from six per cent earlier. However, a significant drop in the major crop has heightened the threat that the country may not be able to achieve even the revised growth target this fiscal.

Late monsoon and shortage of chemical fertilisers have hit the production of paddy this fiscal, according to Hem Raj Regmi, under secretary (statistician) at Agri Business Promotion and Statistics Division of MoAD. “Production area of paddy has also declined by four per cent and production is expected to drop by 10 per cent.”

A significant decline in paddy production will hit the overall economic growth of the country in this fiscal because paddy and maize contribute about 95 per cent in the total production of summer crops. Summer crops contribute 75 per cent in the total agriculture production. Agriculture sector, meanwhile, contributes 35 per cent to the country’s economy. Therefore, agricultural production easily impacts the economic growth.

Rest of the sectors, namely, service sector that contributes 50 per cent to the economy, manufacturing (six per cent) and others (nine per cent) have also been badly affected as economic activities have remained at a standstill due to disruptions in supply from India to Nepal.

Production of paddy has been affected not only due to nature induced late monsoon but also because of human induced activities. Apart from late monsoon, which was nature induced, paddy production has also been affected because of shortage of chemical fertilisers at the time of paddy weeding due to Tarai protest.

As per MoAD’s preliminary projection, paddy production hovers at around 4.31 million tonnes as compared to 4.79 million tonnes of previous fiscal 2014-15. Paddy production in last fiscal had dropped by 5.1 per cent when compared with the production of fiscal 2013-14 of 5.05 million tonnes.

Paddy was cultivated on 1.37 million hectares this fiscal as compared to 1.43 million hectares the previous fiscal. The MoAD has said it will soon unveil its forecast on production of summer crops.

The market value of the harvest (paddy) is projected to stand at Rs 92.95 billion in this fiscal as the government has fixed minimum support price of Rs 2,157 per quintal of paddy. The market value of paddy last fiscal was estimated at Rs 96.40 billion.