KATHMANDU, JULY 7
The favourable monsoon this year is making Raj Man Salaju, a farmer from Thimi, Bhaktapur, all the more miserable thinking of the lost opportunity for a bumper harvest.
Compelled to transplant paddy saplings without any chemical fertilisers, Salaju, who has been engaged in farming since two decades told THT, that his paddy production will likely be low this year.
"Despite an acute shortage of urea, I somehow managed to acquire a small amount of DAP (diammonium phosphate). However, it is insufficient for farming," he lamented.
Although agriculture is one of the main sectors of the country and provides employment to around 65 per cent of the total population and contributes about 27 per cent to the GDP, fertiliser shortage is a perennial problem in Nepal.
"Fertilisers are readily available in the black market, but the price is so high that I simply can't afford it," Salaju added.
A high-ranking officer at the Ministry of Agriculture and Livestock Development, seeking anonymity, concurred that trading of fertilisers via illegal channels has gone up after the government failed to cater to the demand. "Due to the porous border with India, especially farmers living in the border areas have been buying fertilisers informally. But if we crackdown on the practice, it will impact the farmers' production."
As per the Agriculture Ministry, Nepal needs around 600,000 tonnes of fertilisers annually, for which the government had allocated Rs 15 billion for subsidies in the current fiscal year. The demand for fertilisers during the monsoon season stands at around 200,000 metric tonnes, but the government has only managed to secure 13,000 metric tonnes of urea and around 20,000 tonnes of DAP so far.
Another 400 tonnes of fertilisers has entered the country through Tatopani Customs.
The Russia-Ukraine conflict has caused the fertiliser prices to surge dramatically. Subsequently, the quantity of fertilisers being imported has decreased, with only around 100,000 metric tonnes expected to be imported for this monsoon.
"The contractors who were supposed to import 222,000 metric tonnes of fertilisers for this monsoon season cancelled the contract after its price became dearer, which led to the shortage," the ministry officer informed.
"The price of urea which was available at Rs 68 per kg a year ago, now costs around Rs 138 a kilo whereas the price of DAP has reached Rs 168 per kilo from Rs 88 per kg over the year," the officer added.
On February 28, the government had signed a government-to-government (G2G) agreement with India for the supply of fertilisers over the next five years so as to bypass the lengthy tender process.
Under this agreement, Nepal can get 565,000 tonnes of urea and 370,000 tonnes of DAP fertilisers over a five-year period. This fiscal, which ends in mid-July, Nepal will be importing 100,000 metric tonnes of urea and 50,000 metric tonnes of DAP fertiliser from India. But the problem is that the fertiliser has yet to reach Nepal's warehouses.
The World Bank report released in April stated that the fertiliser prices are expected to climb by almost 70 per cent in 2022 before easing in 2023. "Risks to the outlook include supply disruptions in Russia and Belarus, higher input costs, and a prolonging of Chinese export restrictions," the report added.
According to Shiva Sundar Shrestha, president of Nepal Agricultural Federation (NAF), the major reason for the fertilisers shortage is due to management lapses. "This is not the first time that the Nepali farmers have faced a shortage of fertilisers. It is a perennial problem that has prevailed for many years," he pointed out.
The two state entities, the Agriculture Inputs Company Ltd (AICL) and the Salt Trading Corporation, are in charge of supplying chemical fertilisers.
Shrestha urged the government to establish a fertiliser factory for a long-term solution to address the recurring problem. Moreover, he also opined that the government should have a proper plan for the storage of the fertilisers for next year.
As per National Fertiliser Policy, 2001, 20 per cent of the total demand should be in stock for the next fiscal year, which means the country should have 120,000 metric tonnes in storage. However, according to a report by the Office of the Auditor General in 2021, the average stock of fertiliser was just 58,497 metric tonnes over the last five fiscal years.
A version of this article appears in the print on July 8, 2022, of The Himalayan Times.
