In my previous posting, I mentioned about three sources of agricultural productivity- Input intensification, Technology change and Efficiency change.
Many of the studies in developing country show that technology is regressing over time. I tried to see the case in reference to Nepal. I estimated technology change index in 31 developing countries including Nepal for 20 years period. I am discussing here only the case of Nepal. Annual technology change index shows that technology is regressing over time. I divided 20 years period into two parts- before 1990- Panchayat era and after 1990 democratic era. the result shows that after the advent of democracy in Nepal, agricultural technology regression starts gradually.
This is the period when Government launched its ambitious 20 years long term agriculture perspective plan (APP) to increase annual agricultural growth from 2.1 to 5.1%. APP has put priority on input intensification. It has basically targeted fertilizer, irrigation, electricity and road. But due to misguided policy and poor implementation, target of input intensification could not be realized. Before APP, there was a huge subsidy for tubewell irrigation. Fertilizer price used to be fixed by the government with certain subsidy. But in the name of liberalization , Nepal government has withdrawn the subsidy program in irrigation and fertilizer. The result was very detrimental. The installation of tubewell almost ceased to progress in the terai (plain area). Fertilizer price hiked without any control. Above all, distribution of low quality fertilizer is a common problem these days. Government is totally misguided to understand the root problem. They thought the problem is basically related to timely unavailability of fertilizer rather than price of fertilizer. With privatization, they anticipated that fertilizer would be timely and easily available and consequently its use would be increased. But the private license holders are giving emphasis only to the accessible areas with higher profit motivation.
This is the period when Government launched its ambitious 20 years long term agriculture perspective plan (APP) to increase annual agricultural growth from 2.1 to 5.1%. APP has put priority on input intensification. It has basically targeted fertilizer, irrigation, electricity and road. But due to misguided policy and poor implementation, target of input intensification could not be realized. Before APP, there was a huge subsidy for tubewell irrigation. Fertilizer price used to be fixed by the government with certain subsidy. But in the name of liberalization , Nepal government has withdrawn the subsidy program in irrigation and fertilizer. The result was very detrimental. The installation of tubewell almost ceased to progress in the terai (plain area). Fertilizer price hiked without any control. Above all, distribution of low quality fertilizer is a common problem these days. Government is totally misguided to understand the root problem. They thought the problem is basically related to timely unavailability of fertilizer rather than price of fertilizer. With privatization, they anticipated that fertilizer would be timely and easily available and consequently its use would be increased. But the private license holders are giving emphasis only to the accessible areas with higher profit motivation.
How government meet its objective of poverty alleviation through agricultural commercialization? These all are buzz words for development worker in Nepal. In reality, agriculture is hard hit after the advent of democracy in Nepal.
Reason could be
- very open policy- rampant privatization and liberalization
- poor implementation framework
- irresponsible bureaucracy
- centralized planning
- focusing only very accessible area for agricultural development
- Donor driven program
Can we dream prosperous Nepal without agriculture growth??
In Nepal following are the most potential sector-
- hydro power
- tourism
- agriculture
- Remittance -export of cheap labor to developed country
After 1990, tourism sector is hard hit by never ending political disturbances in Nepal. there is no progress in hydro power; case of agriculture is also not encouraging. Only the encouraging sector is remittance. But, there is no example in the world where higher remittance coincides with higher economic growth. After all its countries productive capacity that's matter, how it put its potential productive resource on work, that's matter. But, in reality, country could not get momentum in these potential sectors. This portrays a dwindling future of our economy. Where are we going? The current situation gives a very bleak picture. What we have at present is the never ending political turmoil. I am not saying that Panchayat era was good. The darkest period in our history is the Rana period, when Nepal was just like a rotten meat in an air tight cane. Then came, Panchayat, its a stationary period- no progress at all. We had great hope after restoration of democracy. Unfortunately only the handful of people and crap politicians amassed wealth. The poor are left far behind with their misery.
Some ideas on agricultural development of Nepal...............
No doubt, the important sector in our economy is agriculture. Following could be the priority
- Export led agricultural growth through focusing on specific products like Tea, Coffee, Cardamom, Ginger, Non timber forest products, Lentil, Jute
- Inviting big investors as well as promoting a national level cooperative marketing system of small farmers
- Leasing land to the interested investors
- Loan
- Research on priority export crop.
Identifying potential production pockets for different crops. Due to poor infrastructure, these production pockets may not be economically viable. So, government should divert investment on infrastructure to transform these production pockets into economically viable unit. Present trend is just opposite. Investment on infrastructure is on ad hoc basis. We have very scarce resource, and we better know how to yield maximum benefit out of scanty resources. Second strategy is creation of growth center and cluster development- Growth center is the creation of big viable unit through linking more than one pockets. Growth center should be viable in terms of scale of operation. Clustering is a kind of strategy that provides opportunity to develop viable and integrated units of a business. It represents a picture of different value chain of a sub sector.
International market- we should focus on niche market and our production strategy should be focused on developing products for niche market. So production should be led by the quality and quantity of demand of niche market. Nepal is a small country with poor resource endowment, with inadequate technical and investment capacity. So we better not to focus on big common international market.
Fully decentralzed planning and implementation with coordination and cooperation at growth center level.
Strategy should be different for different purposes. If it is for domestic consumption, it should fit with our domestic demand structure. continue ...........
Sujan Piya
Sujan Piya
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