By Krishna P Paudel
-Agriculture Policy Analyst
Rice, no doubt, is the main staple food of Nepal. It holds immense importance in terms of acreage, production, food habits and economic impact.
Rice, which accounts for 21 percent of the farming sector’s contribution of around 33 percent to the GDP, provides some 50 percent of the calorie requirement supplied by cereals. It is grown on about 1.15 million hectares, or 55 percent of the total cultivable land in the country. This particular crop is grown in all three distinct agro-ecological zones of Nepal. Of the total rice production area in the country, The Terai region consist of 69.7%, mid-hill 25.8%, and the mountain region 4.4%.
Nepal’s economy largely hinges on rice; the economy grows when there is an increase in rice production, and vice versa. In fact, this particular crop has been accorded the topmost priority in every periodic plan, national agricultural policies and programs. From the formulation of the fifth Five-Year Plan (1975-80) to the Agriculture Development Strategy (ADS 2016-35), rice has been prioritized as a potential value chain commodity to ensure food and nutrition security in the country.
The scenario of overall paddy production in Nepal is strictly bleak. That the country continues to remains a net-importer of rice, bringing in about 60,000 metric tonnes of rice per year attests to this fact.
According to the Ministry of Agricultural Development (MoAD), the average growth in rice area over the last 65 years is only 0.35% per year, with only about 1% production growth per annum. The country’s population has been growing at about 2% per year since the last decade. Nevertheless, the growth in rice production has strictly failed to meet the average population growth rate. There are a host of problems stifling rice production, thus preventing the country from becoming self-reliant in it.
Some major constraints to increased rice production and productivity in Nepal include limited irrigation availability, limited technological choices, and depletion of soil fertility, low and inadequate supply of seeds, labour shortages, very limited marketing infrastructure and price volatility, high costs of production and institutional ineffectiveness.
If we consider Nepal’s rice production from 2005 to 2017, there is a fluctuating trend. This volatility in production suggests multiple underlying environmental, economic, social and political factors. The trend not only suggests Nepali farmers’ vulnerability to climate stressors (temperature changes and droughts) as well as shocks (intermittent rainfall and floods) but also it indicates a lack of coping mechanisms including, reliable irrigation systems, storage facilities, insurance instruments, and disaster preparedness. Similarly, considering rice yield from 2005 to 2017, there is an increasing but unstable trend of rice production in Nepal.
It behooves the government to take some significant steps to move up the rice value chain, enhance self-reliance on rice and improve livelihoods of smallholder farmers, who dominate the entire agriculture sector in terms of number.
Firstly, there must be investment in the field of research and development (R&D) in every step of Nepal’s rice value chain. The research works shall be aligned with the actual needs and aspirations of smallholder farmers. At the same time, field trails, demonstrations and promotion programs need to be more effective to reach and benefit such farmers.
Secondly, a reduction in the cost of production is mandatory as it could well increase profits that the smallholders receive in each season. Organic rice production will substantially reduce the costs of production and increase the quantity as well as quality of the rice.
Thirdly, increasing productivity is one of the most pressing issues in rice value chain. Smallholder farmers have been unable to maximize their yield due to several factors including traditional farming techniques. So, the System of Rice Intensification (SRI) methods needs to be promoted to tackle this issue.
Fourthly, there must be proper interventions in the market chain. Smallholder farmers, especially in rural areas, are forced to sell their produce to local dealers, brokers, and barter traders. This inefficiency in the value chain can be potentially addressed by strengthening the capacity of farmer’s cooperatives. In addition, such farmers have to sell as soon as they produce, which does not leave them room to bargain the price. If storage capacity is to be strengthened through cooperatives, it would facilitate them to improve their negotiation power.
Fifthly, the promulgation of effective trade and pricing policy regarding rice seems highly desirable. Although the government has employed pricing mechanisms in favour of smallholder farmers, the policy has been strictly ineffectual. The ineffectiveness of pricing policy is, in fact, prompted middlemen only to distort prices the smallholder farmers receive. From a macroeconomic policy perspective, imports from Indian markets should be further discouraged through strict tariffs and effective enforcement of the existing laws.
Sixth, the promotion of parboiling rice can well be a vital step particularly in mitigating Nepal’s chronic reliance on India. Since we bring a large quantity of fine-grained steamed and aromatic rice from the southern neighbour, there exists an opportunity to intervene in this market. Currently, there are only two steam mills in Nepal. Encouraging investments in large scale steamed mills can help reduce the pressures of import from India.
If the above mentioned measures are taken, it can go a long way in enhancing rice value chain, self-reliance on rice and improving livelihoods of smallholders.