The continued political wrangling has had detrimental impact on some sensitive areas of the economy. The scarcity of essential commodities amidst phenomenal rise in the prices and deepening of food crisis are a couple of them. Even in normal circumstances, 55 districts are food deficient, including food-producing Tarai districts. We now import food worth billions of rupees, notwithstanding the fact that during 1960s and 1970s Nepal was among the major exporters of food items.

The share of agricultural contribution to national economy has been reduced to 31%-32% as opposed to more than 66% people dependent on agriculture, thereby resulting in the reduction of per capita agricultural income. Within the consumption basket, food items account for most of the income in low-income groups, which indicates that rise in prices would hit the poor and the vulnerable the hardest.

Highly skewed land distribution pattern, inaccessibility of transportation in remote areas, low wages in informal sector, subsistence farming, low purchasing power, etc, have increased food insecurity right across the country. The slow response or lack of effective food delivery system in food deficit areas has made the situation worse. This has created artificial shortage of food products in the market to the advantage of black marketeers. Although general market trend reports indicate price rise in essential food items by 50% to 120%, the Central Bank data for the last fiscal year indicate that prices of food items have increased by 13% on an average compared to 5.8% during the same period in the previous year.

Among food items, prices of oil, grain and pulses have increased by 29.3 per cent, 21.2 per cent and 11.1 per cent, respectively. Added to steep rise in prices of food, the food shortage in Karnali, Mid-Western and Far-Western regions spells an impending famine. Although lately food supply has been augmented by emergency local production incentive programmes in a few districts, these may not be adequate to resolve the deepening crisis.

The steep rise in price and deepening food crisis would have many ramifications which we can ill afford to overlook. First, it is clear that macroeconomic stability alone is not a sufficient condition to stabilise or contain rocketing prices.

In poor countries like Nepal, improving structural and institutional factors are

the key. Second, the experiences of many countries indicate that if steep rise in prices and acute food crisis persist, a social upheaval might ensue. Third, studies in developing countries indicate that in general, a 3 per cent increase in food prices raises poverty by almost 1.6 per cent.

One may expect a positive effect of food price rise on producers and adverse effect on consumers. But generally, as recent events indicate, price increase would lead to a rise in poverty and unequal income distribution among all sections of the society. At a time when we claim to register more than 5.5 per cent growth in agriculture, it is important to see why

this has had no significant price dampening effect. Above all, it should be recognised that starvation deprives the people of their basic right of survival.

In this context, there is a need to take immediate steps toward framing comprehensive policy and programmes to address the food crisis. The capacity of buffer stock food has to be enhanced substantially. Although some countries have introduced cash transfer programmes among the vulnerable groups, in Nepal’s context, free distribution of essential food items to

the most vulnerable groups will be appropriate. Although there are resource constraints and trade-off problems, there is sufficient scope for resource mobilisation.

Overhauling of sectoral prioritisation is necessary to keep agriculture at the centre stage of the economy.

This has to be followed by drastic intra-sectoral restructuring to introduce effective programmes by replacing redundant ones which are only a drain on the country’s

limited resources. Agrarian reforms need to be introduced wherein co-operative farming is encouraged. Moreover, as in Brazil, zero hunger programmes have to be launched within stipulated timeframes and food for work programme be broadened with focus on remote areas. This may be linked with employment and youth mobilisation in the long run.

The government has to improve the food procurement system at the local level. A small programme recently initiated in a few districts may need to be expanded with emphasis on productivity enhancement. A strong institutional mechanism to punish those who cheat consumers has to be developed in addition to reorienting fiscal, monetary and other policies. Finally, there is an urgent need to ensure food sovereign clauses in the constitution, which binds the state to undertake strong affirmative actions from food security perspectives.

Dr Khanal is an economist