Agro subsidies should be made productive, predictable, sustainable and transparent

Despite being an agricultural nation, Nepal imports food items worth billions of rupees every year. Farming practices in the country are still traditional and newer technologies are yet to be adopted. Moreover, people still follow subsistence type of farming rather than commercial farming. As a result, the production base of agriculture goods is still low in Nepal. Similarly, other issues, including lack of timely availability of fertilisers and seeds, are affecting the overall agriculture output every year. Against this backdrop, Sujan Dhungana of The Himalayan Times talked to Yubak Dhoj GC, secretary at the Ministry of Agriculture and Livestock Development, to know about different agricultural issues. Excerpts:

Photo: Naresh Shrestha/THT

In recent years, agriculture output has been hit due to delay in availability of quality fertilisers and seeds. How is the government dealing with this issue?

Agriculture production is directly related with a number of ministries and government agencies. The entire system of governance, allocated budget for the agriculture sector, technologies, supply mechanism of seeds and fertilisers, among others, are crucial factors that determine agricultural production. Though we often cite and promote Nepal as an agricultural country, the annual budget allocated for the sector is less than three per cent. It clearly shows the priority that the agriculture sector is receiving. Similarly, credit flow from banks and financial institutions (BFIs) in the agriculture sector has never exceeded 10 per cent of their total loan portfolio. Commercial banks willingly issue loans to purchase cars, but are reluctant to provide credit to purchase buffaloes. The government introduced the subsidised loan facility for farmers, which is a good initiative. Though the agriculture minister has been backing and promoting this initiative, we are not in a position to make the subsidised loan system mandatory in the agriculture sector as BFIs fall under the Ministry of Finance.

The government has adopted a few aggressive policies and programmes, like doubling the agriculture production and ensuring food security and food sovereignty, which are encouraging. However, we have failed to ensure necessary human resources and budget to capitalise on these policies and programmes. Likewise, effective coordination between ministries, government agencies and government employees in the new federal system of governance has been a major challenge. The chain of command and coordination between different layers of government and government agencies in the federal system is not effective at present, which directly affects plans, policies and programme implementation at the provincial and local levels. Despite these hurdles, the agriculture sector has made some progress in recent years. There was record-high production of paddy in the country last year and we have also started exporting vegetables to countries like Qatar, Dubai and Saudi Arabia. Now the need is to focus on promoting commercialisation in agriculture by assuring the availability of subsidised loans, raising resources (budget) for the agriculture sector, bringing in new technologies and initiating research in the agriculture industry.

How sustainable is the subsidy-driven agriculture industry?

Globally, agriculture has always been a subsidised sector. Even in developed countries like the United States, the agriculture industry is driven by subsidies from the government. These countries are self-sustained in agriculture and even supply to other countries, even though only a small fraction of the population is involved in the agriculture sector. In our case, even though a majority of Nepalis are into agriculture business, the country still has to rely on imports of agricultural goods. Thus, the problem is our failure to adopt technologies in the agriculture sector. It is not that involvement of more people in agriculture raises agriculture production. Agriculture production is raised through commercialisation using agro-technologies. The government started giving subsidy in the agriculture sector in a bid to encourage people towards agriculture production. However, we realised that we were wrong to provide 100 per cent subsidy for any agriculture project. The subsidy that we give has to be productive, predictable, sustainable and transparent. We have to make sure that there is investment from the farmer’s side first to make any subsidy programme fruitful. So, if someone has a business plan worth Rs 10 million, the person has to raise half of the required investment on their own through personal investment or loans from BFIs. Only then should the government provide the remaining investment as subsidy. Similarly, the government’s subsidy should be focused on production — production of seeds, construction of nurseries, adoption of technology and development of infrastructure. However, our subsidies are more based on the proposal of a project and site inspection. This practice needs to be changed and then only will production improve gradually.

The government is often criticised for ineffective implementation of some mega projects, including the Prime Minister Agriculture Modernisation Project. As MoALD is the executor of the project, what is your take on this?

PMAMP has a number of zones, superzones, pockets and blocks to promote farming and production of different crops. Some of the identified zones and superzones have been performing well, while it is also true that some of them are not performing as expected. The government will gradually remove pockets and zones that are not doing well. For example, there is a superzone of maize in Dang which is doing really well. The traditional way of tilling land using plough has been substituted completely in the zone. Farmers are using different technologies to plough and harvest crops. The problem with PMAMP is that the board has been accorded high authority, while other project executing staffers have been given less responsibility and decision-making power. Thus, I have urged some changes in the original document of the PMAMP and presented it to the agriculture minister. Meanwhile, we are also planning to increase the number of agriculture zones and superzones.

The government recently inked an agreement with China to export citrus fruits. How practical is this, as Nepal itself imports a significant volume of these fruits from China?

The fact that we inked an agreement with China to export citrus fruits to the northern neighbour does not mean that we will immediately start exporting the fruits. The pact intends to open the door for export of these fruits to China in the future. Once we are able to raise production of these fruits and address other sanitary and phytosanitary measures, we will certainly start exporting citrus fruits to China.

It has been speculated that paddy production will be low in some parts of the country due to Garima seeds, which in turn will affect the overall paddy production target of the government this year. What is your anticipation?

Even we feel that this factor will affect the entire paddy production target of almost six million metric tonnes this year. However, we cannot say for sure now whether the production target will be affected as we have been using some other good breeds of seeds in other areas which can result in high production. Currently, we are calculating the area where the Garima hybrid seeds were used. Once we complete our study, we will also make the producer and distributor of the seeds compensate the farmers for their losses.

One of the long-standing issues is the pending payments of sugarcane farmers by the sugar mills. Why are cane farmers often denied timely payments?

This is the result of anomalies by middlemen who purchase canes from farmers and sell the produce to sugar mills. Even if sugar mills release the payments, middlemen delay in making the payments to cane farmers. Thus, the solution I believe is to carry out cane farming in the cooperative modality, where farmers sell cane to cooperatives and receive payments from them.

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Stakeholders demand clean energy for all

Kathmandu, November 11

Stakeholders have demanded that the government provide clean and sustainable energy for all. While discussing on the topic ‘Energy that transforms — the Road to 2030’ here in the Capital today, the stakeholders have highlighted current status of country’s climate change policy and also the status of energy access.

Speaking at the discussion programme, Ram Prasad Dhital, member of Nepal Electricity Regulatory Commission, said that the government is committed to strengthening and supporting people to ensure clean energy for everybody.

He further said that the commission is committed to formulating necessary laws and pushing the government entities to enforce clean energy access. “We have just 10 years to achieve the Sustainable Development Goal of universal energy access. Despite some progress, some obstacles still remain.”

Achyut Luitel, country director of Practical Action Nepal, said that the government has been trying to provide affordable clean energy largely through grid extension programmes, but the quality of service has often not been good and the poor have not been able to access it in a desired manner.

He suggested the government to formulate an integrated plan and action for grid and off-grid electricity, by laying more emphasis on providing clean energy for cooking purposes too.

“We have suggested the government to address such issues through a holistic approach and address the demand side and not just the supply side of clean energy,” Luitel said. “We have also asked the government to support multi-stakeholder processes, embrace inclusivity and increase public funding for clean energy programmes.”

On May 25, Minister for Energy, Water Resources and Irrigation, Barsha Man Pun, had made a statement while addressing the United Nations’ Sustainable Energy for All (SE4ALL) programme that the government is achieving significant progress in areas of developing and mainstreaming hydropower as well as renewable energy projects to reduce dependency on imported fossil fuels by replacing them with clean sources of energy.

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Bhadrapur airport to be closed for 10 days

Kathmandu, November 11

Flight operations at Bhadrapur airport will be halted from Tuesday for airport maintenance works.

According to the regional Civil Aviation Office, flight operations from and to Bhadrapur airport will be halted for 10 days for runway blacktopping.

“Blacktopping of the runway of Bhadrapur airport will start from Tuesday. Moreover, other regular maintenance works will also be carried out during this time. So, the airport will resume operations from November 22 only,” said Airport Chief Purna Prasad Chudal.

Chudal further said that half of the work of blacktopping the 1,500-metre-long runway had already been completed before the festive season. As the construction had been carried out during the night time, no flights were affected at that time. But due to the change in the weather at the moment, construction activities have to be carried out during the day time, so the flights are going to be affected.

“The weather is not favourable at night for the construction during winter season, so we have to do the work during the day time,” he added.

He, however, said that helicopters can be operated in case of emergency during these 10 days. “Helicopters will be allowed for VIPs and other emergency cases,” Chudal added. Meanwhile, Airline Operators Association of Nepal has issued a notice that flights for Bhadrapur will be diverted to Biratnagar airport for the convenience of passengers.

“Due to airport maintenance work at Bhadrapur airport, flights will be diverted to Biratnagar. Airline operators will operate additional flights to Biratnagar for the next 10 days,” reads the notice.

Currently nine flights a day are being operated at Bhadrapur airport. Of the total number of flights, Buddha Air is operating three flights a day, while Yeti Airlines is operating two daily flights.

Likewise, Shree Airlines is operating two flights while one flight each of Saurya Airlines and Nepal Airlines Corporation are being operated daily at Bhadrapur airport.


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MoCTCA allots Rs 1 billion for 100 destinations

Kathmandu, November 11

The Ministry of Culture, Tourism and Civil Aviation (MoCTCA) has allocated Rs one billion for the development and promotion of the 100 new destinations identified by the government. A meeting held at the ministry today allocated the budget issuing a 13-point guideline to the concerned authorities.

Out of the total allocated budget for the current fiscal year, Rs 500 million has already been distributed to the concerned local units in the first phase. The remaining budget will be distributed only after evaluating the work progress of the destinations, as stated by Rudra Singh Tamang, spokesperson for MoCTCA.

“Most of the local units have not submitted their work progress of the last fiscal year. So, for this fiscal we have put a condition of providing the remaining amount only after evaluating the work progress of the first instalment of the budget,” he said.

To receive the remaining amount, concerned local units have to submit both physical and financial progress reports to the ministry. After that the ministry will evaluate the reports and if it is satisfied then only will the local units will receive the remaining amount for their destinations.

“With the allocation of the budget for this fiscal, we have also requested the local units to submit last fiscal’s work progress report,” Tamang added. However, there has been no deadline set for the submission of progress report of the last fiscal. Meanwhile, for this fiscal the ministry has said that respective local units have
to submit their financial reports to MoCTCA every month, while the physical reports have to be submitted every quarter of the fiscal year.

He further said that the ministry is compiling the overall report of the 100 destinations. After the report compilation, a team from the ministry will go for field observation to observe the progress of the tourist destinations. MoCTCA had distributed Rs 500 million to local units in the previous fiscal.

“This time, the ministry itself will conduct field observation to evaluate the work progress of tourist destinations,” Tamang said, adding, “Financial progress will also be inspected strictly.”

Moreover, the guideline issued by the ministry has stated that the local units have to prepare a masterplan for the development and promotion of their destinations. Likewise, the budget can only be utilised for the selected destinations and if the local units are unable to spend the entire allocated budget, they will have to return the remaining amount to the ministry.

Aiming to attract more tourists in the country, MoCTCA had unveiled the destinations last year from all 77 districts. The identification of new destinations within the country is also aimed at developing and promoting them as destinations so that tourists extend their stay in the country as well as to promote domestic tourism.


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Bangladesh proposes Nepal for collaboration in hydropower

KATHMANDU: Nepal and Bangladesh will be collaborating in the sector of energy and hydropower with long term goals.

Bangladesh has proposed Nepal for a joint venture at the government and private level with the goal of purchasing around 9,000 megawatts electricity from here by 2040.

It seems that Bangladesh wants to use electricity generated in Nepal even through a tripartite agreement among Nepal, India and Bangladesh.

It may be noted that Energy Minister Barshaman Pun in August-September had visited Bangladesh and his visit paved the way for collaboration in the energy sector.

Nepal and Bangladesh had inked MoU on energy cooperation on August 10 last year. Minister for Energy Pun and Bangladeshi State Minister for Power, Energy and Mineral Resources Nasrul Hamid had signed the MoU.

Independent Power Producers Association of Nepal (IPPAN) president Shailendra Guragain said the Bangladesh private sector is willing to invest for the construction of hydropower projects with a capacity to generate about 6,000 megawatts power.

He said the government needed to create the environment facilitating in electricity export for that purpose.

According to him, Bangladeshi investors have expressed their willingness to invest in some of the attractive projects based in State-1.

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Industrialist Jyoti remanded to police custody for five days

Kathmandu, November 10

The Kathmandu District Court has remanded industrialist Roop Jyoti to a further five-day police custody.

Earlier on Friday, court had allowed police to investigate Jyoti by keeping him in custody for three days which ended today. Metropolitan Police Range Kathmandu had detained Jyoti on Friday, shortly after he returned from Singapore on charge of his alleged involvement in a housing procurement scam.

During today’s hearing on whether or not to extend his remand, Jyoti had himself pleaded on his behalf. Following his arrest Jyoti has been denying his involvement in any wrongdoing.

Jyoti, who is also a former state minister for finance and vice chairman of Jyoti Group, is primarily charged of duping people in housing business.

In December last year, the police had issued an arrest warrant against Jyoti on complaints that he was involved in housing fraud worth millions of rupees. Jyoti had immediately filed a writ against the arrest warrant and obtained a stay order from the court. However, a double bench of Chief Justice Cholendra Sumsher Rana and Justice Prakash Dhungana had vacated the stay order on Jyoti’s case on Tuesday.

Meanwhile, private sector has condemned the arrest of Jyoti and said that arresting industrialists in such a manner is discouraging to the business community and negatively impacts the business environment of the country. Moreover, a business group had staged protest against Jyoti’s arrest in Maitighar today.

Moreover, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) — the biggest umbrella organisation representing the country’s private sector — has expressed deep concern over Jyoti’s arrest.

“Arresting an industrialist who has a reputed history of doing business in the country and helping the entire economy by giving employment opportunities to thousands of people without enough investigation will certainly discourage the private sector,” reads the press statement issued by FNCCI today.

Citing that such trend of arresting industrialists will discourage both domestic and foreign investment in the country, FNCCI has urged government and all government agencies to treat the country’s private sector with dignity and respect.


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Five virgin peaks successfully scaled this autumn season

Kathmandu, November 10

Expeditions to five virgin peaks of above 6,000 metres have been successfully completed this autumn season.

According to Mira Acharya, an official at the Mountaineering Division of the Department of Tourism (DoT), the peaks Panpoche I (6620m), Panpoche II (6504m), Hunku Chuli (6833m), Hongu (6764m) and Linku Chuli (6659m), which had not been climbed previously have been successfully scaled this autumn season.

As per the records compiled by DoT, eight climbers from two teams successfully scaled Panpoche I while three climbers scaled Panpoche II. Likewise, two climbers successfully climbed Hunku Chuli, one climber scaled Hongu also known as Sura Peak and five climbers completed their expedition to Linku Chuli this autumn season. “The successful summits of the five virgin peaks have spread a positive message to the world. This will play a significant role in the development of the country’s mountaineering sector,” Acharya said.

According to DoT, Rs 184,460 has been collected from Panpoche I, Rs 6,940 from Panpoche II, Rs 45,240 from Hunku Chuli, Rs 22,750 from Sura Peak and Rs 113,800 from Linku Chuli from the climbers. Along with the successful opening of the virgin peaks DoT has earned a total of Rs 640 million through expedition royalty.

As per the report compiled so far, a total of 1,191 climbers from 161 teams have received expedition permits for 52 peaks in the country.

This autumn season climbers from 62 countries have received expedition permits. Of the total expedition permits, DoT has issued expedition permits to 329 climbers for Mount Ama Dablam (6,814m) which is the highest number for this autumn season.

From Ama Dablam, the DoT has collected royalty worth Rs 146 million. Likewise, Mount Manaslu (8163m) stands at the second position for collecting highest royalty. DoT has issued expedition permits to a total of 264 climbers of 27 teams,
collecting Rs 270 million. Likewise, DoT issued permits to 95 climbers to Mt Himlung Himal (7,126m) collecting Rs three million while the department has earned Rs 424,081 by issuing permits to 84 climbers for Dhampus Peak (6,012m).

In the autumn season, DoT levies $900 per person for expedition permits for mountains of above 8,000 metres.

Likewise, it collects $300 for mountains between 7,501 metres and 7,999 metres, $250 for peaks between 7,000 metres and 7,500 metres, and $200 for peaks between 6,501 metres and 6,999 metres. Meanwhile, climbers have to pay $400
per person to climb Mount Ama Dablam.

Till date, the government has opened 414 peaks for mountaineers to climb, of which 92 peaks are yet to be climbed.


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Melamchi official claims water will be supplied to Valley by this fiscal

Kathmandu, November 10

After remaining halted for around a year, construction of the remaining works of the Melamchi Drinking Water Project has finally begun, which consequently has created a hype again and there are claims that the project will soon supply water to Kathmandu Valley.

As per the revised plan, the project will start distributing water to homes in the Valley by mid-July next year, which is well ahead of the stated deadline of October 28.

“Sinohydro, the Chinese construction firm that has been assigned the responsibility to complete the remaining works, has already resumed construction at the project site,” said Tiresh Prasad Khatri, executive director of Melamchi Water Supply Development Board. “Around 96 per cent of the construction works had already been completed by the previous contractor and now the works of diversion will be taken ahead,” he informed.

The government had awarded the contract to complete the remaining construction works of the Melamchi project to Sinohydro on September 29. The Chinese firm has been given a deadline of 12 months to complete the works. As per the agreement, the one-year deadline started from October 29 and the contractor company must finish all the remaining works of the Melamchi project by October 28 next year. However, Khatri has claimed that they will be able to distribute drinking water in the Valley before the deadline.

At present, Sinohydro is carrying out works related to headworks and tunnel finishing, diversion tunnel, lining of audit tunnel and finishing touches of the tunnel, among others.

The project has urged Sinohydro to construct the remaining works by utilising the existing machines and equipment. “We have assured the company to provide necessary security and other coordination to complete the project on time,” said Khatri.

The project had earlier been stalled since the Italian contractor Cooperativa Muratori e Cementisti (CMC) di Ravenna quit Melamchi without any valid reason in December last year. Later, the government had announced fresh bids for the completion of the project. The whole project has been divided into two packages and both the tenders were awarded to Sinohydro.

Last week, the Development and Technology Committee of the Federal Parliament had inspected the project site and directed the project officials and contractors to complete the project within the stipulated timeframe.

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Draft of Electricity Act gathering dust for over a month

Kathmandu, November 10

Though the government has prepared the draft of the new Electricity Act to address all the concerns raised by the government and private sector power developers and concerned stakeholders, the government seems to be in no mood to introduce the act anytime soon as the draft has remained stalled at the Ministry of Energy, Water Resources and Irrigation (MoEWRI) since the last one-and-a-half months.

Stakeholders have repeatedly complained that the government has done nothing concrete to finalise the draft and introduce the final copy of the act.

Shailendra Guragain, president of Independent Power Producers’ Association, Nepal (IPPAN), said there are many provisions included in the draft which are not in the country’s benefit. “We have strong reservations against certain points like the one which states that the government can award licence to construct hydropower projects to both government and foreign firms without them having to face any competition,” he stated. “It will give rise to numerous anomalies in the long run.”

“The other disheartening provision in the draft is that the government can cancel the licence being held
by any private sector developer, which also points to the fact that the government is probably focused on nationalising hydropower projects being built by the private sector,” lamented Guragain.

The MoEWRI had previously mentioned that government and foreign firms will not have to compete with others to get licence of any hydropower project they want to build. This provision has been included in the draft of the new Electricity Act, which was made public on September 22 by the ministry for further discussion. The ministry had sought feedback and suggestions within 15 days. However, it has been more than one-and-a-half months but the ministry has not mentioned anything about introducing the new Electricity Act.

“We have already provided written suggestions on the draft of the new Electricity Act to the ministry, but the concerned minister and the ministry have not got in touch with us to discuss on our feedback,” Guragain said.

He further said that the delay by the government in formulating the new Electricity Act will directly affect plans of electricity trading with India and Bangladesh. “The new act is necessary for further cooperation in energy trading with the neighbouring countries.”

Earlier, Minister for Energy, Water Resources and Irrigation, Barsha Man Pun, had announced that the draft was not the final bill and there would be further discussions before it is finalised. However, he has not yet held any consultations with either the concerned stakeholders or with MoEWRI officials.

Prabin Aryal, spokesperson for MoEWRI, said they had received suggestions and complaints from various stakeholders. “We are planning to compile necessary feedback and consult with the concerned stakeholders. However, when and where we will hold the talks with the stakeholders has not been decided upon yet.”

Aryal further said that before holding a meeting with the stakeholders the ministry will speak to its legal adviser for further documentation process.

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Govt raises customs duty on gold, silver

Kathmandu, November 10

The government has raised the customs duty on imported gold and silver citing it as necessary to prevent possible smuggling of the precious metals from Nepal to India and vice-versa.

With gold price rising in recent months, the government move is certain to make the yellow metal dearer in the domestic market.

A recent Cabinet meeting on the recommendation of the Ministry of Finance raised customs duty on import of raw gold to Rs 7,500 per 10 grams for up to 50 grams and to Rs 8,500 per 10 grams for imports of above 50 grams and up to 100 grams. As per the prevailing law, individuals could bring up to 100 grams of raw gold while returning from abroad.  Previously, the government was levying customs duty of Rs 6,200 per 10 grams for up to 50 grams and Rs 7,200 per 10 grams on additional 50 grams of the imported raw gold.

In case of gold jewellery, the government has raised customs duty to Rs 8,500 per 10 grams for up to 50 grams from Rs 7,200 and to Rs 10,000 per 10 grams for additional import of up to 100 grams from Rs 9,000.

Customs duty on silver has also been raised — to Rs 75 per 10 grams from Rs 56 per 10 grams.

The Department of Customs has stated that reviewing the customs duty of such precious metals in line with their price in the Indian market is necessary to control possible smuggling of these metals between the two nations.

“Customs duty on gold and silver has been raised to match the market price of these metals in both Nepal and India. Gap in prices of bullion in the two markets has been promoting smuggling as the two nations share an open border,” said Sishir Ghimire, information officer at DoC.

The decision to raise customs duty on gold is also backed by unusual rise in transaction of gold during Dashain and Tihar though the business of gold jewellery remained tepid during Teej this year.

India levies 13 per cent import duty on gold on the value of gold submitted at the customs while Nepal imposes customs duty based on volume. As of today, fine gold costs Rs 60,870 per tola in Nepal and INR 38,250 (Rs 61,200) per tola in the Indian market.

However, jewellers said rise in customs duty of the precious metals would not only further raise the price of gold and silver in the domestic market but also hit hard the jewellery business as the jewellery market had already been hit by a rise in global gold price.

“Instead of increasing customs duty, the government should have used other ways to control smuggling of the precious metals,” said Mani Ratna Shakya, former president of the Federation of
Nepal Gold and Silver Dealers’ Association.


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