January 26, 2013

IRIN, the news and analysis service of the UN Office for the
Coordination of Humanitarian Affairs, just released this assessment of the
decline of agriculture investments in Nepal and its profound future impact on
all Nepalis.
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Agriculture in Nepal suffers from years of under-investment,
limited research, and scant inputs, technology and services for farmers. Unless
things change, Nepal may fall into deeper food insecurity and poverty, say analysts.
“Declining resource allocation to agriculture research and
development will have direct implications on attaining the objective of poverty
reduction, despite investment made on infrastructure,” noted a December 2012
paper by the US-headquartered International Food Policy Research Institute
(IFPRI).
While most development plans give high priority to
agriculture - which contributes 35 percent to GDP - government investment in
the Ministry of Agricultural Development (MOAD) - has declined from 3.7 percent
of all government spending 10 years ago to 2.6 percent this year. Meanwhile,
overall government spending has doubled since 2006.
While MOAD saw a slight increase in government and donor
funding following the 2008 global and national food crisis, its budget dropped
this year by 27 percent to US$105 million compared to last year due to
political squabbling that delayed agreement on an overall government budget. A
partial no-growth budget to continue only ongoing programmes was agreed last
November, four months late.
All this has meant a steeper slide into poverty for 66
percent of people nationwide who survive through agriculture.
The average farm size shrunk 36 percent from 1.1 hectares in
1995 to 0.7 hectares in 2010, often too small to generate income above the
poverty line. “Despite overall reduction in poverty levels in the country,
poverty for those self-employed in agriculture increased by 10 percentage
points,” reported IFPRI.
“When investment is low, we cannot have new technology and
programmes to generate employment and grow effectively,” explained Devendra
Gauchan, agriculture economist and chief of the Socioeconomics and
Agri-research Policy Division at the governmental Nepal Agricultural Research
Council (NARC).

Extension services
Extension services are strained due to lack of staffing and
funding. MOAD’s Department of Agriculture has 378 extension offices nationwide.
Every agriculture outreach station serves more than 11,000 farmers; one
technician is responsible for an average 1,500 farmers. In developed countries,
the average is one per 400.
“We have not been able to provide farmers with the services
they need,” said Yagya Raj Joshi, senior agriculture development officer at the
Doti District Agriculture Development Office in the country’s Far West Region,
known for its rough, mountainous terrain.
He heads a team of 30 staff, responsible for a population of
200,000 - 80 percent of whom are farmers, and 60 percent of whom still depend
on increasingly erratic weather for their water.
“Our work is only small-scale,” he told IRIN, that there was
no technology to transfer even if there were enough qualified experts to do it.
Most of MOAD’s budget goes on salaries and administrative
costs; there is limited money for programming, said Prabhakar Pathak,
joint-secretary and spokesperson at MOAD’s Gender Equity and Environment
Division.
Compounding farmers’ woes, the current extension service
model requires they go to district centres and sub-centres for assistance,
leaving growers in remote areas most in need of support going without it, says
IFPRI. “On average, rural households require more than two hours to reach their
nearest markets or government service centres because of difficult terrain and
a lack of transport infrastructure.”

Research
Minimal investment in research has hampered efforts to meet
the challenges of increasingly volatile weather, said Gauchan, especially given
Nepal’s agro-ecological diversity.
Less than 0.4 percent of the agriculture sector’s GDP is
spent on research, far short of the internationally recommended 1 percent. NARC
received US$11 million this year, 22 percent less than last year. Only 32
percent of the $11 million was for research. In tight times, money for
equipment and maintenance of research labs and farms goes first, which has
long-term repercussions, said Hari Krishna Shrestha, an agricultural economist
at NARC.
Funding cuts disrupt the breeding, production and
distribution of new, improved seeds to farmers, and prevents timely response to
emerging pests.
Meanwhile, NARC’s staff numbers are declining. More than 40
percent of the scientists are nearing retirement age, while 32 percent of posts
are vacant due to recruitment problems. It is especially difficult to find
masters-level entomology, pathology, soil and other hard-science graduates,
said NARC’s Gauchan.
Agriculture and animal sciences are niche studies, drawing
in only 0.3 percent of higher education enrolment in 2009-10. “Young graduates
are not attracted to public sector scientific organizations,” he added.

Loans hard to come by
Inputs needed to increase the land’s productivity - from
seed, to fertilizer, machinery, irrigation, and finance - are scarce
nationwide.
“Farmers hardly get compensation when their crops fail,” said
Radha Nepal, a farmer and chairwoman of a maize seed production cooperative in
Kashyauli village of south-central Palpa District. “And it is difficult for us
to get loans, especially since most of our land is not held in the name of
women, and our men have gone abroad.”
The government’s 2012 Agriculture Development Strategy
Assessment Report estimated 200,000 youth, especially from rural areas,
migrated abroad for employment in 2010, leaving mostly women, children and the
elderly behind. Female-headed agricultural households have increased from 12
percent in 1995 to 26 percent in 2010. Yet only 18 percent of women in rural
households own houses or land, according to the 2011 census.

In the last decade, the largely government-owned Agriculture
Development Bank Limited has moved away from being a primary lender in
agriculture, towards housing, vehicles, and commercial development.
In a 2010 analysis, Gauchan found the share of credit
provided to agriculture was only 11 percent of the bank’s total lending
portfolio due to the perceived high risk of investing in subsistence
agriculture.
Some 54 percent of cultivated land in Nepal is irrigated,
only 7 percent of households own a pump (not taking into account whether or not
that pump actually works), and a mere 1 percent own tractors, power tillers, or
threshers. The state-owned Agriculture Inputs Company Limited estimates
fertilizer demand to be 500,000 tons, of which only 150,000 was supplied last
year.
“On land where we could cultivate three harvests’ worth, we
have to settle with only one,” said farmer Radha Nepal. “In the past, we had
neither the technology nor the knowledge, now we have them, but we don’t have
access to them.”
Bleak future?
MOAD spokesperson Pathak projected a bleak future unless
things change: “The agricultural growth rate will decline. The contribution of
agriculture to the GDP will decrease. There won’t be food and nutrition
security. Agriculture job employment will decline. Youths will be less involved
in agriculture, and the speed of income going abroad will increase.”
Some of those changes have already taken root. “Nobody wants
to stay in agriculture,” said Sabnam Shivakoti Aryal, a senior agriculture
officer at MOAD who is helping prepare a new long-term Agriculture Development
Strategy (ADS), which will outline a 20-year vision and 10-year plan for Nepal.
“People are leaving land fallow where crops worth gold and
silver can grow, to work as labourers making 10,000 to 12,000 rupees
[$115-$139] a month,” said Joshi, the agriculture development officer in the
Far West Region.
“If agriculture investment continues to be low, our poverty
reduction efforts, and Millennium Development Goal (MDG) targets may not be
possible,” added Gauchan. Nepal’s latest MDG progress report found that rural
poverty - 28.5 percent - was four times higher than urban poverty - 7.6
percent. The overall MDG 2015 target for poverty is 21 percent.
Many in the government have set their hopes on the
forthcoming ADS, with its promise of “sustainable growth in value in an
agriculture sector that is more resilient to climate change”. A draft version
is expected by March 2013.
Surya Prasad Paudel, a senior livestock development officer
at MOAD who is also working on the ADS, listed a few of its preliminary
proposals: increasing the share of the national budget that goes to
agriculture; increasing the number of extension offices to nearly 900; and
gradually committing up to 2 percent of agriculture-generated GDP to research.
“If we invest in agriculture today, we will see the impact in 5-10 years’
time,” said Paudel.
The government approved in January 2013 four donor-funded
agriculture projects worth $134 million (to which the state is contributing
$32.5 million).
But Joshi is not optimistic. “I don’t trust them. So many
strategies like the ADS have been developed,” he said, citing the last
Agriculture Perspective Plan (APP) (1995-2015), which has seen many of its
targets unmet. “I have been hearing that agriculture is the government’s
priority since I was a child.”

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