There is an interview in the New Business Age with a businessman whose company is a major dealer in food trade in Nepal. He argues that unless the government initiates some action in the agricultural sector, the private sector is hesitant to invest in it. For a poor country like Nepal where about 73% of the population directly depend on agriculture, the government has to back this sector in a structured way through an industrial policy, which should help increase productivity and encourage production of few varieties that would help tap niche market abroad. Meanwhile, the IP should also help free surplus labor from this sector to the industrial sector, the ultimate decider of long term economic growth in an economy in the long run.
...It is difficult for the private sector to hold even one square kilometres of land for farming in the country. Only the government can remove this hurdle. If the government comes with proper planning, private sector can do a lot. If the government initiates action towards this direction, the private sector can support the process.
...Cardamom and ginger have been the major export items of Nepal for years. But the government has not facilitated these exports properly. For instance, we are growing and exporting big cardamoms while there is a growing demand for small cardamom which is more expensive. We should, therefore, begin to grow small cardamom as well. But we are not able to do that. Likewise, farmers here are growing Sona Mansuli rice. With the proper management and guidance from the government they can easily grow Basmati rice which can fetch more than double the price of Sona Mansuli. But the government has not thought about this for various reasons including the political instability. However, we are hopeful that the political impasse would be over soon and the government would take proper action to uplift this sector.
...Take an example of Yarsha Gumba. If its harvesting is properly managed by the government then the farmers can highly benefit from it and the government also would collect higher revenue. Proper management from the government is needed also to save the lives of the Yarsha Gumba collectors. Every year many people die while collecting Yarsha Gumba. If the fruit farming is managed properly then it would be of permanent nature. It would not be a temporary farming like that of rice or wheat.
...In India, the government pays special attention to the farmers’ problems. It provides appropriate financial support to the farmers and sends technologists to the fields to demonstrate the use of modern technology for improvement in the quality as well as quantity. We don’t have that system. In Nepal, there are lots of opportunities. We can produce world class apple juice and other fruit products, but sadly we are failing to do that.
...In Nepal, some 200 thousand tons of mustard oil is produced annually. We can increase it up to one million tons if the government provides the required support.
The role of the government is far from being realized and the private sector is simply not able to take risks. First the government has to do growth diagnostic to identify the most binding constraints for progress in the agricultural sector. Then, the government need to do intervention diagnostic to identify the best course of intervention that would be consistent with the available resources and would not temper individual and market incentives.
