Bishwambher Pyakuryal

Food availability over time has increased in other countries in South Asia but decreased in Nepal and Bangladesh during the period 1991-2001. The average yield in Nepal has fallen compared to the South Asian average. In Nepal, about 60 per cent of the incomes are spent on rice, maize and wheat, therefore incidence of poverty is highly sensitive to the changes in economic availability of these crops. Crops constitute 62 per cent of the farm output, making people vulnerable to food security. Since this sector is losing competitiveness, agricultural policy should address the impact of agricultural sector liberalisation on food grain production and alternative policy measures that would guarantee the return on farmer’s investments. Alternative policy is important because investment in land is less than 3 per cent of household income in Nepal.

But globalisation has not helped in increasing real incomes and reducing poverty. The world has experienced that after globalisation, the global average per capita income has increased sharply throughout the 20th century, but the income gap between rich and poor countries has been widening. Data also shows that there is disappointingly slow average growth rate of real GDP per capita achieved by the LDCs during 1990s.

Fewer farmers have found a place in agriculture, and even privileged consumers have no food security in the sense of access to safe and nutritious food. Malnutrition in Nepal during 1990s remained one of the highest (26-28%) in the region. The priority is, therefore, to formulate appropriate policy to take care of the need for undernourished population. In countries that made progress, benefits accrued mainly in urban areas. Farmers could not get international market where products can be sold at higher prices and inputs and technology can be purchased at cheaper rates. Many farmers are deprived of the sufficient access to even local markets. The focus in the LDCs has been to increase yields of traditional food products. Growing staple food by the farmers is mainly for feeding their families but not for commercial cropping. The advantage was therefore, short-lived.

The food supply system has been severely disrupted in the conflict-prone districts of the Far East and Far Western development regions. It is reported that there are about 600,000 internally displaced involuntary migrants and more than 10,000 people have lost their source of food for sixty to ninety days because of the conflict. A political solution is needed to guarantee basic service delivery in food deficit regions.

Some estimates have been done that the household’s income per capita in Nepal increased by 1.98 per cent per year in the last four years of 1990s, which is close to the APP’s estimate of 2 per cent increase in household income per year. However, it is difficult to relate the increase in income and improvement in livelihoods with the liberalisation per se. The household income of the villagers and the job opportunities have improved not so much by improvement in agriculture but by labour migration especially to Gulf countries. Currently, the proportion of households that receive remittances is 32 per cent in Nepal, an increase from 23 per cent in 1995/96. According to Nepal Living Standard Survey II (2004) total amount of remittance is NRs. 46 billions.

The existing policy environment for investment in agriculture needs to be re-examined in the context of Nepal’s membership in regional economic blocks, global trading arrangement and new security concerns from the Maoist insurgency. WTO membership has opened up avenues for private sector to be competitive and capture the opportunities arising from non-discriminatory, transparent and predictable market access in the WTO member countries. Tariff rates as a measure to protect domestic market depends on the preferential trade agreement with India. Currently, agricultural products from India under the preferential trade agreement face zero or little tariff barriers in Nepal. In case Nepal experiences import surge from India, tariffs on agricultural products can be raised to the bound tariff levels to protect the interest of Nepali farmers.

To conclude, improving social capital and traditional ways of providing food security is important through community grain-stores, linking community forestry with poverty alleviation that could help in augmenting food security. By restricting food subsidy programme from the better-off people, food aid should be delivered through provision of income opportunities for local people in a way that they can become self-reliant over time. The food deficit areas have very high comparative advantages for development of natural resources like energy, water, biodiversity and tourism. Tapping these resources would lead to food security through economic prosperity. The bottom line is restoring confidence to the consumers and producers by resolving prolonged conflict.

Prof Pyakuryal is president, Nepal Economic Association