Agriculture growth may push GDP up

Kathmandu, June 10:

The real agriculture GDP, one of the key sector for Nepali economy, is expected to record a growth of six per cent for 2007-08.

The growth in real agricultural GDP was 0.7 per cent in 2006-07, according to the current macroeconomic situation based on the first nine months’ — the third quarter (Q3) — data of this fiscal year.

The agriculture growth could push the gross domestic product (GDP) to four per cent.

Based on the performance of agriculture, industrial, tourism and other services sector, the overall real GDP is expected to hover above four per cent in 2007-08. The real GDP growth was 2.5 percent in 2006-07.

The figure also reveals that Nepal’s food security is not ‘under threat’ because the production is expected to grow despite government’s apathy.

“The production must be increased to meet the increasing population,” says Dr Mishri Lal Shah, chief at the Parwanipur Agriculture Reserach Station.

The agriculture growth is on the basis of agriculture output. As per the agriculture related statistics recently released by the Ministry of Agriculture and Co-operatives, the production of paddy showed a substantial growth of 16.8 per cent in the current year.

However, the production of paddy had declined for the last three consecutive years. The production of wheat, maize and millet is likely to increase by 3.8 per cent, 3.2 per cent and 2.2 per cent respectively in the current year, according to the report.

While the vegetable production is also expected to grow by 9.6 per cent in the current year in comparison to a growth of 6.7 per cent last year, the fruits and spice production is reported to grow by 8.4 per cent in the current year in comparison to a 5.4 per cent growth last year.

As a result of significant increase in the production of paddy, which contributes 21 per cent to total agricultural production and a satisfactory growth in the production of vegetable — that has a share of around 10 per cent in total agriculture production — and fruits and spice — that has a share of 7.04 per cent.

It is definately not an economic revival but a positve sign towards the ruarl economic growth, says an agro-economist.

“But in recent days, it seems that government is ‘unconciously’ taking a policy shift and giving less priority to the agriculture sector,” he blamed, adding that the absence of JTAs

in the villages, inavailability of fertilizers, insecticides and pesticides, on time and not enough irrigation facility are stalling the possible-growth.

Nepal has a comparative advantage in the agriculture produces and agro-based industries but the government has not been serious to support them.

“As a result the production cost of Nepali farmers per kg rice is Rs 1.50 costilier than Indian farmers because of the subsidy they get,” says Shah.