To be self-sufficient in onions, both the acreage and the productivity will have to increase
With the government imposing a 13 percent value added tax (VAT) on onions, its price has shot up sharply in the market, bringing tears in the eyes of the consumer. The government has imposed the VAT on certain vegetables and fruits, such as potatoes and onions, in good faith, hoping to encourage domestic production. However, the country relies on heavy imports from India for onions to meet its needs, with the domestic production standing at just 289,000 metric tons. Onion imports in the last 10 months of this fiscal were worth about Rs 5.6 billion.
In protest against the VAT, the traders have halted imports from India, causing a shortage of onions in Kathmandu, which has more than doubled wholesale onion prices from Rs 35 before the announcement of the budget to Rs 80-100 currently in a period of just a fortnight. VAT apart, certain imported fruits and vegetables also carry a nine percent agricultural service fee and a five percent advance income tax. With the government focused on increasing revenue through taxation and the traders intent on maximising profits for themselves, it's the ordinary consumer who suffers in the end.
Onions are a sensitive kitchen staple in south Asia, whose price has decided election outcomes in neighbouring India. Apart from being used in the preparation of curry, onions are eaten in the households together with green chilli and lemon to beat the summer heat. This, perhaps, explains why they are first served on a plate in the eateries in the hot plains of both India and Nepal even before the waiter takes orders for food.
With the disruption of the supply chain, following the traders' protests, there are chances of smuggling across the border, which will badly affect the government's revenue collection. Vegetable vendors are also likely to take advantage of the shortage, giving rise to a black market, further burdening the poor consumers.
It is apparent that the government introduced the VAT without doing much homework. It apparently did not foresee how this would negatively impact the market in such a short time. Onions apart, another major kitchen staple, the potato, is also imported in large quantities to meet domestic demand. Should its price go up, it will create another hue and cry among the consumers. Onions, according to the statistics of the Ministry of Agriculture and Livestock Development, are grown on about 20,250 hectares.
This means, if the country is to be self-sufficient in onions, both the acreage and the productivity per hectare will have to increase. The farmers should be provided the required inputs like fertiliser and irrigation facilities. Moreover, they should be aware about the government policy to encourage domestic production to feel enthused towards taking up onion and potato farming. However, with the youths preferring to go abroad for employment rather than work on the farm back home, increasing vegetable production is going to be a tall task. If we can emulate a strategy taken up recently by Japan, for example, to provide financial incentives to its youths to go to the countryside for a period of time, we could see a rejuvenation of the agro sector.
To be self-sufficient in onions, both the acreage and the productivity will have to increase
Know your onions
With the government imposing a 13 percent value added tax (VAT) on onions, its price has shot up sharply in the market, bringing tears in the eyes of the consumer. The government has imposed the VAT on certain vegetables and fruits, such as potatoes and onions, in good faith, hoping to encourage domestic production. However, the country relies on heavy imports from India for onions to meet its needs, with the domestic production standing at just 289,000 metric tons. Onion imports in the last 10 months of this fiscal were worth about Rs 5.6 billion.
In protest against the VAT, the traders have halted imports from India, causing a shortage of onions in Kathmandu, which has more than doubled wholesale onion prices from Rs 35 before the announcement of the budget to Rs 80-100 currently in a period of just a fortnight. VAT apart, certain imported fruits and vegetables also carry a nine percent agricultural service fee and a five percent advance income tax. With the government focused on increasing revenue through taxation and the traders intent on maximising profits for themselves, it's the ordinary consumer who suffers in the end.
Onions are a sensitive kitchen staple in south Asia, whose price has decided election outcomes in neighbouring India. Apart from being used in the preparation of curry, onions are eaten in the households together with green chilli and lemon to beat the summer heat. This, perhaps, explains why they are first served on a plate in the eateries in the hot plains of both India and Nepal even before the waiter takes orders for food.
With the disruption of the supply chain, following the traders' protests, there are chances of smuggling across the border, which will badly affect the government's revenue collection. Vegetable vendors are also likely to take advantage of the shortage, giving rise to a black market, further burdening the poor consumers.
It is apparent that the government introduced the VAT without doing much homework. It apparently did not foresee how this would negatively impact the market in such a short time. Onions apart, another major kitchen staple, the potato, is also imported in large quantities to meet domestic demand. Should its price go up, it will create another hue and cry among the consumers. Onions, according to the statistics of the Ministry of Agriculture and Livestock Development, are grown on about 20,250 hectares.
This means, if the country is to be self-sufficient in onions, both the acreage and the productivity per hectare will have to increase. The farmers should be provided the required inputs like fertiliser and irrigation facilities. Moreover, they should be aware about the government policy to encourage domestic production to feel enthused towards taking up onion and potato farming. However, with the youths preferring to go abroad for employment rather than work on the farm back home, increasing vegetable production is going to be a tall task. If we can emulate a strategy taken up recently by Japan, for example, to provide financial incentives to its youths to go to the countryside for a period of time, we could see a rejuvenation of the agro sector.
Lumpy disease
The outbreak of lumpy skin disease, which has spread across the country since February, has killed as many as 9,410 cattle including cows, oxen and buffaloes, causing huge financial losses to the farmers. The disease was first reported in Jhapa, and it has already spread all over the country. The Department of Animal Services has confirmed the disease has already infected a total of 355,698 cattle in 73 out of 77 districts. Lumpy skin is a disease caused by the capripox virus under the genus Poxviridae leading to infection in animals.
The disease has infected animals located close to the highways and those which graze in open fields. The highest number of the disease has been reported in Karnali region, where 4,775 animals have died from the disease. This is a serious issue the government must take up to bring it under control. At the same time, the government must also release insurance funds to the livestock farmers without any delay so that they can buy new cattle. Milk and meat production in the country will decline if the government does not take prompt action against the disease. All the veterinary doctors stationed in the concerned districts should be dispatched to the most affected areas along with medicines to bring it under control.
A version of this article appears in the print on June 16, 2023, of The Himalayan Times.
