Govt first needs to identify the areas where country can take economic benefits from high-value, low-volume cash crops

In a bid to give a boost to the agriculture sector and provide job opportunity to a large number of people, the government’s policies and programmes, presented by President Bidhya Devi Bhandari to the joint session of Parliament on May 21, has plans to discourage import of agro-based finished products. Finance Minister Yuba Raj Khatiwada who will be presenting budget estimates for the fiscal year 2018-19 on May 29 is likely to come up with measures to curb imports of finished products like rice, flour, pulses and edible oil, among others. Instead of allowing their import, the government will encourage traders and industrialists to import paddy, wheat, maize, mustard and lentils in bulk and process them within the country, thereby creating job opportunities by adding values to them. Import of these food items has been increasing annually as production base in the country is very low. According to Nepal Rastra Bank’s Macro-economic Outlook of the first nine months of this fiscal, the country imported rice worth Rs 21.56 billion – 16 per cent more compared to Rs 18.52 billion worth of import in the same period of the previous fiscal.

Finance Minister Khatiwada’s take is that by importing agro-based raw materials and adding values to them within the country will help create job opportunities, provide opportunity to the ancillary industries to grow and, also promote domestic brands. There is a domination of foreign brands even in the agriculture products though Nepal is basically an agrarian country with more than 70 per cent people engaged in it which contributes around 27 per cent to the GDP. The government is set to increase customs duty on such finished products which are distorting the agriculture production base of the country. This policy will encourage the industrialists to make more investments in food processing industries. The government’s recent decision to raise customs duty on import of sugar from 15 to 30 per cent is a case in point. The government also aims to be self-reliant on sugar, footwear, cement and pharmaceuticals.

There, however, is a caveat. Raising customs duty on the finished agro-based products may add risk of price hikes in domestic markets and, also deplete customs revenue. Traders say import duties on raw materials should be at least five per cent lower than on intermediate goods such as sugar and salt. The government first needs to identify the competitive areas where Nepal can take maximum economic benefits from the high-value-low-volume cash crops. This should be the ultimate goal of the government. For this, the finance minister has asked the private sector to suggest areas where Nepal can have a competitive edge in international markets. If the government wants to give a boost to the agriculture sector with active involvement of the private sector, it must first conduct a nationwide climatic survey based on which suitability of specific farming or livestock can be determined and agro-based industries can be set up. At the same time, the upcoming budget should come up with sound policies to train youths in all provinces about innovative, collective, modern and large-scale farming to absorb their labour and skills within the country.

Saving biodiversity

Biodiversity Conservation Day was observed in Nepal, and across the world, on Tuesday marking a quarter century of the ratification of the Convention on Biological Diversity (CBD). The CBD is an agreement among 196 countries to conserve earth’s biological diversity while ensuring that it is used sustainably and that the benefits from using genetic resources are shared fairly. When it comes to biodiversity conservation, Nepal’s track record is fairly good, with around 24 per cent of total land area – the agreement calls for at least 17 per cent – allocated for protection of biodiversity. In conservation of endangered species such as elephant, tiger and one-horned rhino also Nepal has made tremendous progress in recent years.

There, however, are challenges ahead. According to a research carried out between 2001 and 2010, forest area in Nepal, especially in the Tarai region, is being cleared at an alarming rate of 4.4 per cent. Increasing human population and rapid urbanisation could result in decrease in wildlife habitats that could cause more man-animal conflict.