KATHMANDU, SEPTEMBER 11
Rice traders and stakeholders have expressed concerns about food price inflation after the Indian government banned the export of broken rice and imposed a 20 per cent duty on export of several types of rice in a bid to secure its domestic supply as below-average monsoon curtailed planting.
While Nepal continues to struggle to be self-sufficient in agriculture, strict restrictions imposed by the southern neighbour and the ban on export of broken rice will not only lead rice mills on the brink of shutdown but also raise questions on the 'roti, beti' relationship, the two countries share, stakeholders say.
According to Subodh Kumar Gupta, president of Association of Nepalese Rice, Oil, and Pulses Industry, the increase in duty and ban imposed by India will surely affect the Nepali market.
"The 20 per cent duty will not only quicken food inflation and disrupt supplies, but also encourage illegal trade and push rice industries to the brink of closure. Meanwhile, the ban on export of broken rice will greatly disrupt the beverage, trade, and livestock industries as well," he said.
Gupta opined that Nepal should have been excluded from the recently imposed restrictions. "The export of rice from India to Nepal is nominal compared to its overall rice exports, but could hugely affect the market and food prices here. There is a crucial need to seek a solution through diplomatic channels," he added.
The invasion of Ukraine and climate change have widely affected food security around the world. "In such a situation, it is understandable for a nation to think about its citizens first.
However, with India continuing to ban export of various supplies, it is clear that Nepal has no other option but to be independent in agricultural products in the long run," he said.
He said the government should integrate modern technologies in the agriculture sector, as well as introduce a policy in coordination with the private sector to be self-sufficient in food production.
Sunil Kumar Gupta, proprietor of Pangeni Rice Mill, Birgunj, said the 20 per cent duty imposed by India on unmilled rice would severely affect rice mill owners as well as consumers.
"This duty will increase the price of paddy by five rupees per kilo and of rice by up to seven rupees per kilo. This will affect the quantity of paddy procured by rice mill owners and ultimately the supply in the market, leading to higher price of goods for consumers," he said.
"Self-sufficiency in agricultural production is a far cry when farmers are deprived of fertilisers for their fields. Due to the lack of fertilisers, farmers are having to procure 45 kg of fertilisers at a cost of Rs 2,000 to Rs 2,500 from India through various illegal means while it costs just Rs 800 for 50 kg of fertilisers in Nepal. This has severely affected farmers as well," Sunil added.
According to Homnath Bhattarai, director at the Department of Commerce, Supplies, and Consumer Protection, the cost of importing rice and paddy will surely increase for traders, leading to food inflation.
"The increase in prices in the domestic market as per the rate of imposed duty is acceptable, but we will definitely take action against traders charging unacceptable rates," he said.
A version of this article appears in the print on September 12, 2022 of The Himalayan Times.
