Changing agriculture

Changing agriculture
TKP, 2-Apr-2010
By Jagannath Adhikari

The use of hybrid seeds is growing in Nepal, especially in vegetables, paddy and maize. These seeds mainly come from India, and their use is more common in the Tarai. We do not know much about the prevalence of genetically modified organisms (GMOs)—both the seeds and the produce of such seeds—in Nepal. But it is likely that GMOs are also prevalent, especially among imported seeds and foods.

Hybrid seeds and GMOs have changed agriculture, especially in developing countries. They produce more output provided they are used with high amounts of inputs in the form of fertilizers, irrigation and other chemicals. As the production of these seeds is expensive, only rich private sector companies and Multinational Corporations (MNCs) can do so. The companies also make the inputs required for these seeds. As a result, the cost of production is extremely high.

Another feature of these modified seeds is that they either do not produce seeds at all because of a terminator gene (genes that cause second-generation seeds to be sterile), or that the productivity declines drastically in the next generation. Therefore, farmers cannot produce their own seeds if they use hybrid or GMO seeds, and they have to buy seeds every year from the companies. As a result, farmers become seed-insecure. This is especially so if a government does not secure the seeds’ supply and control their prices and quality. Because of this, farmers become dependent on companies that produce these seeds.

In the past, farmers used their own open-pollinated seeds, in which the best of the current produce were selected as seeds. This would produce better seeds for the next generation of crops. But improving productivity through this ‘selection’ process takes a longer time.

Though these new seeds are more productive when used with higher inputs, these seeds could ruin farmers in developing countries because of various factors: very high costs of production; seed insecurity; dependence on companies for seeds and inputs; and the possibility that companies take monopolistic advantage and artificially increase the price.

In a country like Nepal—where the government does not have any mechanism to control the quality of seeds and other inputs, or a mechanism that ensures producers and distributors are accountable for their actions—farmers will suffer when low quality and untested seeds are available in the market. This is exactly what happened in Sarlahi and Mahottari with the maize crop. This incident, which lost farmers about Rs. 2 billion, was because of total negligence from government agencies in checking the quality of seeds in the new context of agricultural technology. If farmers had used traditionally-produced open-pollinated seeds, there would not have been such a problem, and farmers would not have been ruined.

Even though hybrid seeds and GMOs could have been developed with an intention of increasing food production, a political-economic analysis of this technology reveals that it has not been beneficial for farmers of poorer nations where government agencies are not prepared to deal with the risks. The farmers’ own knowledge has become obsolete in the light of new technology generated by MNCs. As a result, their dependency on these MNCs for seeds and other inputs has been growing.

On the other hand, increasing costs and possible low selling prices, or a lower output, may ruin farmers. In India, a large number of farmers committed suicide a few years ago when the price of cotton, for which they had used GMO seeds, fell and farmers could not pay the loans taken to use this expensive technology. Moreover, this technology and the control of the whole food system by MNCs are changing the way of life for farmers. They will, in the long run, become a small cog in an assembly line of a food system that is managed by MNCs. If this happens, a country may lose its independence in food production.

In order to deal with such a potentially-risky situation, which has already been observed at a small scale recently, the government needs to develop these technologies locally with the participation of farmers. Similarly, the government must show responsibility in setting up a quality-control mechanism to deal with new inputs and new technologies that are used in farming.

Adhikari is a Martin Chautari researcher with specialisations in food, agriculture and migration

There is lack of R & D in agriculture

ekantipur, 14-Feb-09

Diwakar Golcha, 54, is vice chairman of Golcha Organization. He joined his family business in 1974 entering its agro-based industries. He has been involved in setting up sugar, rice, daal, flour mills as well as other factories like steel. At a time when the government is talking about increasing the role of agro-based industries he talked to The Kathmandu Post about his experiences and why the agro-based businesses have not taken off in the past. Excerpts:

Your family has been involved in the agro-business for a long time.

My great grandfather was displaced from present-day Bangladesh before the Indian partition. He used to distribute jute seeds to the farmers in Biratnagar area, buy their jute and sell it in Calcutta. Later a jute mill was established in Kathihar in Bihar. Then the Biratnagar Jute Mills was set up. All this was before the Rana rule ended. We used to deal in company currency. Nepal Bank Limited was opened later. When I got into the jute business in 1976 we used to export to 33 countries. Then we set up daal and rice mills as well as and sugar and flour in the 1970s and 80s.

There seems to be a lot of potential. Where is the state lagging?

There is very little priority given to research and development. There should be different institutes like a jute development board or a sugar institute. These could develop and introduce new varieties of different crops. The fertility of the soil is going down because of use of fertilizer which has created a layer between the topsoil and subsoil. There could be research on what can be done about it. There is also a lack of orientation to farmers. For example, a two-feet gap is needed between lines of sugarcane plants for optimum production. In between those lines there could be intercropping and sweet potatoes and pulses could be grown. But who will tell farmers that or for that matter which is the best variety.

Surely, the state must have done something.

It has opened up agricultural research centres and they have done some work but we are talking about massive extension programme. There needs to be more interaction between experts and the people. We have technical workers regularly visiting every village in Morang. New varieties of crops developed have to be gradually planted in large areas. The determination has to be there and also skilled manpower is required. The sugarcane research centre in Jitpur, for example, has not been able to take off. The people are eager to learn. In Rautahat district when we introduced sugar cane in the 1990s there were three tractors but now there are 1,200 - all purchased from the profits.

Why can't that be done?

Our education system is defective. Students are not taught objectively. People think that SLC is a very worthy degree but what use is it in the job market? Once someone passes SLC they do not want to be involved in agriculture. They want a job in a proper office but they have no skills. Institutes have to be set up where students are given qualifications to be able to go and work in the field. There is an agricultural institute but there needs to be more across the country and students encouraged to study there.

How has the lack of subsidy for fertiliser affected the agricultural sector?

Our land is addicted to fertiliser but the government has removed subsidies on it. The Agricultural Inputs Corporation and later the private sector imported fertiliser to sell to farmers but there was a big loss. In India fertilisers are heavily subdised and costs only 15 to 20 percent of the international market prices. As a result there is a lot of smuggling of fertilisers across the border and farmers do not want to buy non-subdised expensive fertiliser. But the government does not seem to be concerned. When the Prime Miniser had gone to India last year I had suggested that he only ask for fertiliser.

Why can't the labour disputes be resolved permanently?

A reported 200,000 enter the labour market every year but only some 10,000 persons are absorbed because of the state of our economy. No one wants to lose his or her job because of the excessive politicization in all aspects of society including labour, workers do not feel that they can get sacked if they do not perform well. There are as many as 15 unions in one factory. Industrialists have reached a stage when they will say enough is enough and shut down factories. That is what happened in the case of Jyoti Spinning Mill which had 2,500 workers.

How do think things will turn out?

For the past two and half years there has been a wave of labour militancy. At this rate this will get worse before they can get better. Unless there is a realization that the conflict does not benefit anyone and there is cooperation between the industrialists and the workers, things will not be better.

Global Prospective: Chicken Farmers in the US Hit by Economic Crisis

Farmers Face Empty-Nest Syndrome Amid Chicken Housing Crisis
Wall Street Journal, 12-Feb-09
By LAUREN ETTER

Poultry Growers Lose Contracts, Can't Pay Off Their Pricey Coops; $200,000 Per House

Like many Americans, Darris and Sarah Dixon are struggling with mortgage payments and trying to avoid bankruptcy.

But the home the Dixons live in isn't the problem. The problem is their three chicken houses, on which they owe nearly $500,000.

"There's no way we'll make the chicken house payments," Mr. Dixon says from his farm abutting the Ozark Mountains.



A chicken housing crisis has cropped up in the U.S., and it's producing some of the same bleak results as the human one -- foreclosures, lawsuits and devastated homeowners.

In the wake of last year's bankruptcy filing by poultry giant Pilgrim's Pride Corp., hundreds of farmers suddenly find themselves unable to make mortgage payments on their pricey chicken coops.

To cut costs, Pilgrim's, the nation's second-largest chicken company, has terminated contracts with at least 300 farms in Arkansas, Florida and North Carolina. Under these contracts, farmers receive a set price per pound for raising chicks supplied by Pilgrim's until they are ready for slaughter. The company turns the birds into nuggets, wings and other food.

Pilgrim's still has contracts with more than 5,000 growers nationwide, and executives say they are trying to cut as few as possible. They say the reason the 300 farms weren't needed was that Pilgrim's stopped or reduced production at processing plants in those areas. "It's a very sad situation," says Don Jackson, the company's president and chief executive. But "the company is in bad shape." Last year Pilgrim's had a loss of nearly $1 billion.

For the farmers who have been cut loose, no contract means no chicks, which means no revenue -- and no money to pay off the coop mortgages. Chicken houses without chickens or contracts have virtually no resale value. And with the poultry industry in retreat, rival producers aren't looking for new growers. Tyson Foods Inc., the largest chicken company, and Perdue Farms Inc., the third largest, both say they're not cutting contracts with their farmers because of the industry downturn.

Today's chicken houses are bigger and more sophisticated than the coops of yore. Made from corrugated metal and wooden beams, the cavernous shacks can be longer than a football field and cost more than $200,000. To maximize profits, many farmers own at least four, meaning high-six-figure mortgages are common.

Inside the biggest such coops, more than 20,000 chickens spend their lives pecking at feeders and water spigots on a dirt floor. Computers regulate temperature. Most houses are kept dark to minimize activity so birds pack on more pounds.

A chick typically arrives weighing about three ounces and leaves six to nine weeks later at a plump four to eight pounds. Pilgrim's growers say they earn about 5 cents per pound per bird, although that varies. A typical farmer with four large chicken houses can gross between $125,000 and $150,000 a year. Expenses often amount to more than 30% of their income.

The houses grew in number and size as world-wide chicken consumption spurred greater production. In 2008, a record 36.5 billion pounds of chicken were produced in the U.S., up 32% from a decade earlier, says the National Chicken Council. Pilgrim's expanded its contract base to more than 5,000 growers, up from 1,300 in 1998.

But chicken demand has slowed along with the global economy. For the first time since 1975, the U.S. is expected to produce less chicken than in a prior year. Poultry companies typically cut back by reducing the number of chicks given to each farmer, but Pilgrim's finances were so dire that it decided to terminate some contracts, says Mr. Jackson, the president and CEO. The Pilgrim's spokesman says it's "not unusual for contracts to be terminated on an ongoing basis -- albeit at a very low rate."

Brad and Robin Dunlap of Springfield, Ark., lost their contract with Pilgrim's in August. The couple, who have three small children, say they owe about $200,000 on four chicken houses.

To make ends meet, Mrs. Dunlap, 27 years old, took a job at a medical-device company and Mr. Dunlap, 31, went into dairy farming with his father. They worry about having to file for bankruptcy protection.

"It makes you sick," Mrs. Dunlap says over beef-stew in her dining room. "Right now we're still feeding our kids. But our credit will probably be ruined after all this is over with."

Plumerville, Ark., farmer Steve "Peewee" Dixon (no relation to Darris or Sarah Dixon), 50, had his Pilgrim's contract terminated while still owing more than $100,000 on two chicken houses. Last month, he filed for bankruptcy after his lender foreclosed. "That was my retirement," Mr. Dixon says.

In Arkansas, 74 chicken farms have banded together to sue Pilgrim's. In their lawsuit, filed in state court in Van Buren County., the farmers say company representatives induced them to build chicken houses by making promises like their "grandkids will have chickens," according to court documents.

A Pilgrim's spokesman declined to comment on pending litigation. The company says contract terminations were a legal, necessary step to reduce costs amid volatile commodity markets and depressed chicken prices.

Losing their contract was a blow to Darris Dixon, 30, and wife Sarah, 27. In April 2005, they'd been married just over a year when Mr. Dixon quit his job delivering ice and took out a $532,000 loan from Farm Credit Services of Western Arkansas to build three chicken houses.

Under the Dixons' contract, Pilgrim's provided chicks, feed and other services in exchange for shelter and waste disposal, among other things. Things went well for three years. "We had no trouble making our loan payments," says Mr. Dixon, a lanky man in blue jeans and a John Deere cap. "I had more money than I ever had." The family spent $140,000 remodeling their three-bedroom home and bought a new tractor for $25,000.

Last May, a tornado whipped through Center Ridge, population 1,332, demolishing two of the Dixons' chicken houses. Their $370,000 insurance payment wasn't enough to rebuild; they grappled with whether to quit.

Mr. Dixon says he received a visit from a Pilgrim's representative who said, "Build them back as quick as you can and get 'em rolling again."

The Pilgrim's spokesman says, "At the time of the May tornado, the company was in need of square footage for housing...But no one could have foreseen the dramatic changes that occurred in the U.S. chicken industry last summer."

The Dixons tapped their savings to rebuild. On Aug. 1, a fresh batch of Pilgrim's chicks took up residence. Ten days later, Pilgrim's called to say those chicks would be the last.

"It was just a shock at first," recalls the Mrs. Dixon, tears welling as her newborn son slept in a bassinet.

One recent day, Mr. Dixon swung open the door to one of his 500-foot-long chicken houses. Feathers blew around the cool, damp floor. Instead of clucking chickens, silence filled the air. "It's hard to just see [the houses] sitting there," Mr. Dixon said.

He fears the Dixons won't be able to afford the $60,000 payment they owe in May. They've cut back on dining out and left unfinished the walk to their home. As for bankruptcy, Mr. Dixon says, "If that's what it takes, we'll just have to do it."

Pro Bio-Tech to go public

Pro Bio-Tech to go public
ArthaExpress, 7-Jan-09

Pro Bio-Tech Industries is planning to go public within next two years. “It is planning to be the first public limited company in agriculture sector,” said Ananda Bagaria, director of Pro Bio-Tech Industries — under the Nimbus Group — that has recently received international quality management certification ISO 9001: 2000 for its commitment to quality control, productivity and service delivery process. It is also the only Nepal Standard Mark certified animal feed manufacturing industry in Nepal.

“The industry has a modern and state of the art testing facilities for feed and feed supplements to ensure the quality of the products. Our commitment to quality consists of a comprehensive set of initiatives that address issues surrounding animal nutrition, animal health, technical and non technical support services,” he added.

“Pro Bio-Tech with its annual turnover of approximately Rs 2 billion at present plans to be a Rs five-billion turnover company by 2013,” Bagaria said adding that it aims to bring agri-revolution through modernisation and commercialisation of agriculture sector — that generates 60 per cent to 70 per cent of employment — in the country.

Poultry Industry contributes four per cent to annual GDP and eight per cent to agricultural GDP. There are 101 feed-industries in Nepal and Pro Bio-Tech — the leading animal feed manufacturing company — has 15 to 16 per cent market share. “It also exports its Shakti brand of pellet feed — that is the first and only animal feed in Nepal to have NS Mark — to India,” he informed.

“Shakti brand of pellet feed is the first and only one poultry feed exported to India,” said the director of Birgunj-based company that has a daily production capacity of 200 Metric Tonne (MT) per day.

“We are soon expanding the capacity to 450 MT,” promised the young entrepreneur, who dreams of organising a national agri summit in near future.

Pro Bio-Tech Industries has more firsts to its credits. Its also first company in Nepal to have vertical feed storage facility Silo that has a storage capacity of 25,000 MT. “The industry has also the first soya solvent extraction plant,” Bagaria added.

MoAC unveils commercial agriculture policy

MoAC unveils commercial agriculture policy
eKantipur, 25-Jul-08

The Ministry of Agriculture and Co-operatives (MoAC) on Wednesday unveiled a policy focusing on commercialization of agriculture sector for the fiscal year 2007/08.
Under the policy, MoAC has planned for a long-term lease of government-owned barren land to landless people for the purpose of commercial and co-operative farming.

The MoAC is also launching parwar (pointed gourd) farming in eleven districts, potato farming in 20 districts along with the programs targeted to uplift under-privileged groups in the terai.

“We have put commercialization of agriculture in top priority while formulating current fiscal year's policy,” said Dr Hari Dahal, spokesperson at MoAC, talking to the Post on Wednesday. "We are also continuing One Village One Product (OVOP) program this year for the commercialization of fruits and fish varieties like trout. The ministry has allocated Rs 30 million this year for OVOP program.

The government is also encouraging commercial farming of herbs, cooperative animal husbandry in 22 districts inhabited by backward people including the emancipated Kamaiyas, along with off-season vegetable farming inside green house to generate income among underprivileged classes, states the policy paper of MoAC.

The policy also has incorporated programs of lending goats in additional 38 districts to provide opportunity to poor farmers in goat rearing, and operating fisheries through women's groups along the highway in Kailali and Kanchanpur districts.

The ministry has also framed a policy to expand tea cultivation in other districts of the eastern region under the program of intensifying high-valued crops and off-season agricultural produce while programs will be initiated to extend coffee cultivation in additional districts of western hilly region.

Under the policy, the ministry has allocated Rs 37.9 million to provide subsidy in chemical fertilizers and seeds in 26 districts whereas the limit of subsidized loan has been hiked to Rs 15,000 from existing Rs 10,000.

To promote export of organic agricultural produces, government has laid a provision to issue internationally recognized certified demand paper.

Much to the relief of sugarcane producing farmers, government is forming Sugarcane and Sugar Board with the representation of farmers and sugar mill representatives and to conduct research to increase productivity.

In a bid to replace mounting imports, the MoAC is initiating the policy of expanding onion farming in additional 2,400 hectares of land in Saptari, Siraha, Sarlahi, Bara, Dhanusha and Rupandehi districts.

Nepal Bans Food Grain Exports To Prevent Shortages

Nepal Bans Food Grain Exports To Prevent Shortages
DPA, 1-May-08

The Nepalese government Thursday banned the export of food grains, including rice, in the face of rising prices and fears of food shortages.

The Nepalese government said the decision was to maintain stocks of food and followed similar steps by its neighbour India.

``In view of demands of food grain in international market and to prevent deterioration of food security in the country, the government has stopped export of rice, wheat and paddy with immediate effect,'' the Ministry of Industry, Commerce and Supply said.

The move followed growing concern in Nepal over the rising cost of rice, the staple food for most Nepalese.

The Nepalese central bank said the price of rice had risen by almost 30 per cent in the past three months, mainly due to the rising cost of rice and paddy in international markets.

The government ban is seen as an attempt to curb exports of rice by farmers and businessmen to India for better prices despite Nepal being a major importer of rice.

The ban imposed by India in its export of rice and paddy had directly affected the price of those essential goods in the Nepali market.

Prices of food items have skyrocketed in the market over the last three months. If the trend continues foods and oil will become unaffordable for the general public, say market analysts.

``But the situation can fast turn worse,'' warns Puskar Bajracharya, an economist who has been involved in extensive research in urban poverty. ``With essential commodities becoming unaffordable, risks have increased for wage earners, unemployed and low income groups failing to meet their calorie requirement.''

According to the Food and Agriculture Organization, 4.3 million tons of rice was harvested in Nepal in 2007 but the country ended up exporting some of its production to India despite Nepal's annual rice deficit.

Nepal imported 26,448 tons of paddy and 3,276 tons of rice from India in the first quarter of the current fiscal year.

About 3.8 million people in Nepal would face food insecurity in the coming months due to a combination of sharp increases in food prices and political instability in the southern part of the country, according to the UN World Food Programme in Nepal.

Nepal Dairy’s river of milk
Nepal’s top private dairy is preparing a new generation of entrepreneurs
NepaliTimes, Issue #397 (2008-04-25 - 2008-05-01)
SHEERE NG

Each time Nepal Dairy makes a breakthrough, the effects cause a wide ripple in the Nepali dairy industry, ultimately benefiting not only consumers and producers, but also the company’s business competitors.

But HB Rajbhandary, the company’s director, is not worried about inadvertently helping his rivals, for him the company’s business and the national interest go hand in hand.

When Rajbhandary set up first private milk company in Nepal 25 years ago, it eased the shortage of processed milk, laid the foundations for subsequent dairy businesses and provided additional income for farmers.

The supply of milk is often volatile, and in periods when there is a surplus, some companies stop buying and call for a ‘milk holiday’, which harms many producers who depend on being able to sell their milk.

Yet, Nepal Dairy, which has been selected by Nepali Times as its May Company of the Month, continued to buy even more and ventured into product diversification as a solution. Today, in retail outlets across the country, he sells ice cream, cheese, pizzas and pastries. In the process, ND has created thousands of jobs and given dairy farmers a fair price for their milk.

Since its foundation, the company continues to enjoy an annual 10 to 12 percent growth in profits. This is remarkable given the political instability of the war years.
One difficulty Rajbhandary is currently facing, and this is surprising in a country which is burgeoning with youth, is a graying workforce. Nepal’s brain drain means many young and middle-aged executives have left and there are only seniors who run the company.

In an effort to bring in new blood into Nepal Dairy, Rajbhandary recently opened his doors to college students training them in the processes of the dairy industry. He is now preparing to channel a portion of Nepal Diary’s profits into setting up a Nepal Diary Institute of Technology and Management.

This is because during the 1970s when the country experienced a shortage of processed milk, Rajbhandary– then general manager of the Dairy Development Cooperation and a PhD in Dairy technology–didn’t have the technicality to solve the problem. “I only understood things theoretically,” he says. He had to seek help from countries like New Zealand and Denmark.

Hence, in an industry where many players prefer to keep their methodology hush-hush, Rajbhandary says that helping the younger generation to get hands-on experience is a responsibility that established players should shoulder.

Asked what happens if the students decide not to work for the company upon graduation, Rajbhandary shrugs: “They will probably work for other dairy companies. Nepal needs qualified, competent young people.”

It is this ability to look beyond his company’s welfare to the national interest that sets Rajbhandry apart from many of his peers. He hopes that if the training produces good managers, he can split the company into separate units such as fast food and bakery sections, and expand each one under separate management.

The institute will also train dairy farmers to diversify their products to encourage entrepreneurship in the countryside. Rajbhandry says ND will help with distribution.

At 75, Rajbhandary has the energy, drive and vision of a man half his age. But he is determined to pass the torch to the new generation. When Nepali Times commented that he will be missed, he laughed and said, “Maybe there are people who want to see younger faces.”

Be prepared for higher prices: rice traders

Be prepared for higher prices: rice traders
eKantipur, 28-Apr-08

Nepali consumers staggering under mounting food prices should brace themselves for another rise in the price of rice, said traders.

They said that as Indian security forces had been intensifying border patrols, informal rice imports had slowed to a trickle. Nepali merchants have been bringing in grain through informal channels in the porous border after India stopped its export.

The traders also chided the government for not lobbying the Indian government to resume rice shipments to Nepal. India slapped a ban on rice exports in a bid to arrest rising inflation.

The local price of rice has gone up 25 percent compared to a year earlier, said traders.

Ganesh Lath, president of the Birgunj Chamber of Commerce, predicted that prices would keep shooting up until mid-September.

He said consumers wouldn't have been put in such a difficulty if the government had tried to persuade the Indian government through diplomatic channels to resume rice exports to Nepal.

The Birgunj Office of Nepal Rastra Bank said that prices would stay on an upward trajectory until the embargo was revoked. According to its findings, local rice production fulfills only 65 percent of demand.

An official at Birgunj Customs said no rice has come in from India from last October. Before the ban, 26,448 tons of paddy and 3,276 tons of rice were imported in the first quarter of the current fiscal year.

Chicken soars to record high

Chicken soars to record high
eKantipur, 26-Apr08

The price of chicken has soared 20 percent to a record Rs 190 per kilogram within a week in the face of shrinking supplies and rising demand.

Poultry entrepreneurs said production of broiler chicken has gone down sharply due to a government ban on import of parent chicks from major source countries like India where bird-flu was traced a few months back.

Production of broilers and layers across the country has nosedived at least 30 percent, as the shortage of parent chicks in the market deepens, Dr. Til Chandra Bhattarai, a poultry expert told the Post.

Hatcheries breed new chicks from parent chicks to sell to poultry farms, where they are raised for nearly eight weeks before being put on the market. "Shrinking imports of parent chicks, for which Nepal is completely dependent on third countries, has caused an alarming depletion in the stock of chickens at poultry farms," said Dr Bhattrai who is also managing director of the Chitwan-based Pancharatna Poultry Group.

In addition to growing demand for chicken in hotels and restaurants following a revival of the tourism sector, the huge quantity of chicken consumed during the CA polls also helped to widen the already bad mismatch between demand and supply.

As a result of a ban on imports of parent chicks from India, hatchers have been compelled to import parent chicks from other countries, pushing up costs by at least 20 percent, said Tikaram Pokhrel of Nepal Poultry Entrepreneurs Forum.

Nepal imports around 350,000 broiler parent chicks annually for over four dozen hatcheries across the country, he added. Nepali hatcheries are currently importing the parent chicks from Belgium, the Netherlands, the UK and Australia.

The price of mutton also has gone up, from Rs 330 to Rs 380 per kilo, within a few weeks, as bird flu hit northern India.

NFMA lauds proposed export ban on wheat

NFMA lauds proposed export ban on wheat
eKantipur.com, 23-Apr-08

Nepal Flour Mills Association (NFMA) has praised the government's initiation to impose a ban on the export of wheat on the back of a looming food crisis.
Issuing a statement on Wendnesdy, NFMA said the government's fresh initiatives would end the shortage of wheat for flour millers and contain the increasing price of flour.

"Flour mills have been compelled to run only during the harvesting season. The proposed move will allow us to operate at other times too and make wheat easily available at cheaper prices," NFMA further said.

NFMA has also demanded that the government cut the Value Added Tax, district development tax and syndicate system on flour to increase competitiveness against smuggled Indian flour that are flooding the Nepali market at cheaper rate than Nepali flour.

Nepali flour mills, bakeries, and biscuit and noodle factories are expected to benefit from the government's response on containing the increasing food shortage in the country.

Nepali traders have been shipping local wheat for last few month lured by handsome prices offered by Bangladesh which is facing a food crisis due to heavy loss on agriculture produce following devastating cyclone few months back and an export ban on wheat by India.

Food stocks down to week’s supply

Food stocks down to week’s supply
eKantipur.com, 18-Feb-08

Foodstuffs are running low and the prices of fresh vegetables have shot up as deliveries were disrupted by the tarai banda which has entered its sixth day.
Traders warn that if the supply situation worsens, the resulting acute shortage of food and vegetables would lead to further price rises.

“Rice and oil stocks held by major wholesalers in the Kathmandu Valley are down to half of normal levels,” Satish Kumar Bohara, joint secretary of the Nepal Rice, Oil and Pulse Producers Association, told the Post.

According to Bohara, stockpiles of rice and oil have dwindled to 5,000 and 1,500 tons respectively in the marketplace.

“The existing supply can fulfill the needs of the valley's 2.5 million population for hardly seven to 10 days,” he said. “The prices of foodstuffs, which are sourced mainly from the eastern tarai, will skyrocket due to the severe scarcity.”

He attributed the disruption in supply to the tarai unrest, fuel shortage and load-shedding, which has brought production to a complete halt at rice mills.

The banda in the tarai has also impacted the transport of vegetables, and fewer shipments are arriving at the marketplace.

According to Binaya Shrestha, planning officer of the Kalimati Fruits and Vegetables Market Development Board (KFVMDB), the inflow of vegetables at the Kalimati wholesale market has plummeted to around 500 tons per day from over 750 tons a week ago.

Vegetables from India and the tarai account for 25 percent of the total supply during this season.

“The delivery of fish and lemons from India was almost nil during the past week,” Shrestha said.

However, traders said that the prices of popular vegetables, barring some items, had not gone up because of the bumper harvests in the districts around the Kathmandu Valley.

Tarai farmers are supplying vegetables at throwaway prices to the valley, which is the only major market for them.

“But this state of affairs will not last for long. If the transport situation does not improve immediately, a hike in vegetable prices is inevitable because of the exorbitant freight charged by carriers,” said Bhoj Raj Rimal, a wholesaler of fresh vegetables at Kalimati. According to him, truckers have jacked up their rates to Rs 27,000 from Rs 15,000 previously for carrying a load of vegetables to Kathmandu from Lahan, a major vegetable trading hub.

The collection, processing and delivery of dairy products have also been thrown into chaos by load-shedding and the acute fuel shortage which has resulted in fewer vehicles plying on the roads, said dairy producers.

“Despite the problems, we have managed to get by so far,” said Sumit Kedia, general secretary of the Dairy Producers Association. He added that milk collection, processing and delivery would come to a complete halt if the fuel supply did not improve soon. Private dairies collect around 350,000 liters of milk daily from more than half a dozen districts.

Bumper harvest brings vegetable prices down

Bumper harvest brings vegetable prices down
eKantipur.com, 12-Feb-08

The prices of major vegetables have plunged over the last two months following abundant harvests. Traders and officials attribute the cheaper rates to bumper production and increased deliveries of fresh produce.
According to Binaya Shrestha, planning officer at the Kalimati Fruits and Vegetables Market Development Board, incoming shipments of vegetables at the Kalimati marketplace has shot up to 700 tons per day from 150 tons during the normal season.

“This is the peak season for harvesting vegetables. Besides, farmers are growing more vegetables than before,” Shrestha told the Post. “Vegetable growing districts are exporting their fresh produce in large quantities, and it has caused the supply to go up,” he added.

The data prepared by the board shows that the prices of red and white potatoes have gone down to Rs 11 and Rs 10 per kg respectively from Rs 14 two months ago. Onions are selling for Rs 12 per kg, down from Rs 18.

Bharat Upreti, a wholesaler of potatoes and onions at Kalimati, said that increased production in the key vegetable growing districts like Kabhre was the reason behind the deluge of potatoes in the marketplace.

According to Upreti, the districts of Kabhre, Bara and Parsa are the dominant producers of potatoes, with Kabhre accounting for more than 70 percent of the supply in Kathmandu. However, all the onions sold in the local market are imported from India. “The continuing decline in the price of onions in India means that the vegetable has become cheaper here as India fulfills more than 98 percent of Nepal's requirement,” Upreti said.

Traders said that around 40 tons of onions and 200 tons of potatoes were arriving in the marketplace daily.

Carrots and cabbages have also become cheaper. They are selling for Rs 16 and Rs 7 per kg compared to Rs 27 and Rs 9 two months earlier. Likewise, the prices of local cauliflower and tarai cauliflower have come down to Rs 20 and Rs 13 per kg.

Traders say that potatoes, cauliflowers and cabbages will become cheaper yet as production will continue to go up for the next few months.

However, tomatoes are a little more expensive this season because of a poor harvest. According to the board's data, the prices of big and small tomatoes have increased to Rs 20 per kg from Rs 19 and Rs 14 two month ago.

Household food stocks down to half in 38 districts

Household food stocks down to half in 38 districts
eKantipur.com, 11-Feb-08
BY PRABHAKAR GHIMIRE

Nepalis are already reeling under the rising prices of essential commodities, chiefly foodstuff. Worse lies ahead: Food, mainly food grain, is becoming scarce even at higher prices.

This could be a serious problem for a food-deficit country. International agencies, local officials and business persons acknowledge the looming crisis.

The Food Security Monitoring and Analysis System of the World Food Program (WFP) has reported that average household food stocks have gone down by half in 38 districts in the last three months (November 2007 to January 2008) compared to the same period a year earlier.

Increasing food prices mean that household stocks will be further strained in the next few months when recent harvests will have been consumed.

"The situation is very critical, particularly for the extreme poor who make up about 15 percent of the total population," said the WFP report, which estimates that around 3.8 million people will suffer greatly.

The crisis is looming large, said Richard F Ragan, country director of WFP-Nepal, who attributed the problem to factors like India's export ban on non-basmati rice, meager rise in domestic rice production and an unprecedented increase in international food prices. Nepal relies heavily on imports from India, which meet about half its total rice requirements.

"March, April, May and June will be the toughest months, as household stocks with the poor will be exhausted by then," Ragan added.

This shortage will be compounded by disruption in transportation (due to strikes and the tarai unrest) and lack of access to markets will also prevent many from being able to buy.

"Indications are that the tarai, a major production hub of the country, will also witness food shortages, unlike in previous years when the scarcity was limited to hilly regions," said Ragan.

Ministry of Agriculture data shows that the production of summer paddy will be higher by 17 percent this year. Even then, the cutoff of food shipments from India has caused prices to go up by 15 percent over the past few months.

"It signals a trend of increasing prices until the next harvest," the WFP report says, adding that once the old stocks in the market are exhausted, prices are expected to rise substantially.

Ganga Bishan Rathi, central vice president of Nepal Rice, Oil and Pulse Producers' Association, said that with rice stocks already running low, Nepal is going to witness a further rise in prices by at least 20 percent in the months ahead.

Recent WFP and FAO reports show that rice prices in the mountains are already 177 percent higher than in the tarai.

Food expert Bhola Man Singh Basnet said that Nepal needed a "food security mission" to increase food production and productivity as a way of dealing with the situation.

Although ambitious plans like food security banks have been mooted at the South Asian level they seem to be just an academic exercise with implementation nowhere in sight.

Beni Bahadur Rawal, general manager of the state-owned Nepal Food Corporation (NFC) - which has 15,000 tons of rice in stock - said that the corporation planned to buy an additional 20,000 tons against the expected crisis.

However, with the shortage already affecting rice mills and other producers, officials are skeptical the corporation will be able to make the procurement.

WFP has also warned about the possible consequences of the food shortage: It will force a large number of poor Nepalis to leave their villages and head for India to work as laborers. "Daily wage earners and low-end workers will be the most affected groups," said Ragan.

In the face of the rising prices, Nepali is raising the issue at the 31st governing council meeting of the International Fund for Agriculture Development (IFAD) which is being held this week in Rome, Italy, said Hari Dahal, spokesperson of the Ministry of Agriculture.

Food shortage and consequent rise in prices are however a global problem today. The International Rice Research Institute, the Manila-based global body, reported that worldwide food stocks were down to 143 million tons in 2007, the lowest in 25 years due to the worldwide effects of floods, drought and global warming. The Food and Agriculture Organization (FAO) has also cautioned that lower food stocks and rising prices would mainly hit the least developed countries.

Commodity prices skyrocket

Commodity prices skyrocket
eKantipur.com, 3-Feb-08
BY PRABHAKAR GHIMIRE

Ganga Poudel, a house wife from Baneshwor does not know how to manage with her husband's modest salary as prices of consumable goods have skyrocketed in recent days. Her husband is a teacher at Snow Apex Academy in Putalisadak.

"We are helpless. With our income we can hardly afford basic food items, and sadly we do not know where to vent ire or lodge the complain," she complained.

Poudel is one among millions who are suffering from astounding price hike in the basic food items in the last three months. In the period the price of mustard oil has increased by 35 rupees per liter, soyabean oil has gone up by 40 rupees per liter and rice by over 5 rupees per kilogram (see the table).

Prices of food items have skyrocketed in the market over the last three months. If the trend continues foods and oil will become unaffordable for the general public, say market analysts.

Ban imposed by India in its export of rice and paddy and hike in the price of rapeseed, palm oil, soybean oil and sunflower in international market has directly affected the price of those commodities in the Nepali market. According to traders, Nepali paddy can fulfill hardly 50 percent of the local demand.

"The prices of rice, palm oil, sunflower oil, soybean oil have gone up by 20 to 30 percent over the past three months in the international market," points out Satish Bohara, joint-secretary of Nepali Rice, Oil and Ghee Producers Association.

Traders and grocery shopkeepers say the price of rice went up by 12 percent to 15 percent while price of edible oils and vegetable ghee shot up to 50 percent during the period.

Ram Hari Khadka, a grocer in Bijulibazar of Kathmandu, admits that the prices of food items have gone up by more than 30 percent over the period of three months.

"Sad part is that sharp hike has come on commodities like rice, edible oils and ghee, which are very essential items of all Nepali kitchens," says Khadka.

On the paddy front too, the news is gloomy. Prices of newly harvested paddy have touched a record high over the past one month. "Once the effect reaches the retail stores, prices of rice would go up dramatically," said Bohara.

Moreover, decline by 50 percent in production volume of rice mills due to longer load shedding hours and unavailability of diesel, which powers generators, have caused the supply to dwindle and price to go up.

The price rise has mainly hit the poor consumers, whose income level has not seen any improvement for last few years.

Retailers say that overall demands of those items have not dropped, indicating that people are so far managing to get hold of basic consumable items irrespective of the price rise.

"But the situation can fast turn worse," warns Puskar Bajracharya, an economist who has been doing extensive research in urban poverty. "With essential commodities becoming unaffordable, risks have increased for wage earners, unemployed and low income groups failing to meet their calorie requirement."

And this trend is very likely, according to a report of Food and Agriculture Organization. Its latest report shows that food prices in the international markets have gone up like never before. Worse is, the upward movement of the price is still going on.

Paddy prices jump on short supply

Paddy prices jump on short supply
eKantipur.com, 3-Jan-08

A ban slapped by India on the export of paddy to Nepal has cut down its supply in the local market and caused the prices of paddy and rice to shoot up.

Traders said the prices have already gone up by around 30 percent this season compared to a year earlier. India banned the export of food grains like rice and wheat to contain their prices. The price of Sona Mansuli rice, used mostly by people of the lower and medium classes, has reached Rs 1,450 per quintal, up from last year's Rs 1,100. Likewise, a quintal of basmati rice now costs Rs 2,400 where as it was available at Rs 1,800 a year ago.

The price rise came despite a robust 17 percent growth in paddy production in the country.

Fresh data from the Birgunj Customs shows that the country imported 26,448 metric tons of paddy and 3,276 metric tons of rice in the first quarter of the current fiscal year. No rice or paddy was recorded to have been imported since then.

“The prices will keep rising as stock keeps depleting,” Tara Prasad Gupta, a rice trader, told the Post. After carrying out a research on the possible impact of India's ban, Nepal Rastra Bank's Birgunj Regional Office has suggested that the government request India to roll back the ban. As internal production can only meet 65 percent of the total demand, Nepal has no option but to import paddy and rice to feed its people, the research said.

Powder Milk Factory Coming Up in Pokhara

Powder Milk Factory Coming Up in Pokhara
New Business Age, September 2007

Sujal Dairy Pvt. Ltd., a subsidiary of Sujal Foods Pvt. Ltd., is finalizing installation of a powder milk factory in Pokhara with an investment of Rs. 250 million.

Planned to be commissioned by mid-November, this factory is going to be the first in its kind from the country’s private sector. While one powder milk factory is in operation in Biratnagar under the state-owned Dairy Development Corporation, another one is being set up in Chitwan by the private sector construction company Chitwan Co-E.

According to Anjan Shrestha, the executive Director of Sujal Foods, 30 percent of construction work has already been completed in the Pokhara factory which will in the beginning produce 5000 kg of powder milk every day. The capacity is planned to increase gradually to 7000 kg per day.

It is estimated that 6000 MT of powder milk is consumed in the country per year.

Nepal's exotic, delicious honey could go places

A sweet future
Nepal's exotic, delicious honey could go places
Nepali Times,Issue #323 (2006-11-17 - 2006-11-23)
MALLIKA ARYAL

Honey isn’t just sweet. The thin, pale gold, mass-market brands are vitamin-rich, antibacterial, anti-fungal, and other good stuff. But there’s also a whole world of exquisite tastes, and some varieties of Nepali honey can be the stuff of connoisseurs.

The dark, musky, slightly bitter buckwheat-based honey and paler, more complexly perfumed mustard-based honey are excellent additions to any breakfast or baking. Varieties like these, as well as lychee, chiuri, and rapeseed are unique to this part of the world, and they’re seldom seen in European or North American stores.

Nepal’s honey production is four times the 250 metric tonnes annual domestic demand, says the Department of Food Technology and Quality Control.

Honey producers here know that they can potentially create lucrative niche markets overseas, such as organic honey, ‘Himalayan honey’ and ‘honey from the highlands’, says Mahalaxmi Shrestha, secretary of Apiculturist Network.

“Nepal is rich in biodiversity, our bees feed on the nectar of flowers and fruits that are not available in many parts of the world,” agrees Surendra Raj Joshi of GTZ’s Private Sector Promotion/Rural Finance Nepal. “The taste, quality, and standard of Nepali honey are among the best in the world.”

But producers are finding it remarkably difficult to meet international standards. The problem is documentation. Recently Nepali honey was banned from the European market because the Department of Food Technology and Quality Control failed to submit the Pesticide Residue Control Plan that EU regulations require.

Producers also slipped up, failing to have their honey tested by international standards laboratories before export.

Entrepreneurs and department officials say that amid the instability of recent years, honey export was laughed off the priority list. “But even if we couldn’t get together a Pesticide Residue Control Plan, we should still have provided some documentation proving our honey is safe. Our main market, Norway, was wiped out,” says Ganesh Dawadi of Department of Food Technology and Quality Control.

Until the mid-1990s, beekeepers in Nepal produced honey mostly for their own consumption. Apis cerana, native to Nepal, was bred in small hives in backyards across Nepal. But honey never really took off as a business because the yield from one hive of local bees was just about 10kg a year. This changed in 1995, when the Bee Development Section introduced the hardy European Apis melifera, one hive of which yields 40-50kg of honey a year.

The exponential increase in production combined with a low initial investment, meant that beekeeping has became a vibrant commercial activity in the hills and tarai. “A recent survey of 350 beekeepers across Nepal shows that a household can increase its net annual income by over Rs 11,000 through beekeeping and honey production,” says Bhimendra Katwal of Winrock Nepal’s Farmer-to-Farmer Program. Dabur Nepal alone collects and produces 108 metric tonnes of honey every year. The Bee Development Section in Godavari estimates that, in the last three years alone, honey production in Nepal has nearly doubled. About 50,000 households now contribute to the 1,000 tonnes of honey being produced in Nepal each year.

The health benefits of honey are getting wider play too, from the word-of-mouth marketing of small producers, to Dabur’s massive marketing campaign with Amitabh Bachchan chatting up a bottle of Dabur’s best. “We just distribute through supermarkets and we’re doing fine,” says Prem Singh of Stone Bee Concern, whose labels list benefits ranging from aiding bronchitis to burns.

The Beekeeping Shop in Lagankhel , which sells three to four tonnes of honey every year through their shop and trade fairs, also caters to apiary enthusiasts—you can buy bees, hives, protective gear, the works.

Beekeepers need to upgrade their skills, says Ed Levi, a Winrock volunteer, to raise healthy bees and breed quality queens. Production needs to be streamlined and systematised to bring down costs, and quality control must be a higher priority, entrepreneurs say.

Queen bee

When private beekeepers imported the European A. melifera to Nepal some 15 years ago, and the agriculture ministry followed suit a couple of years later, there was concern about the impact these tough exotics would have on native species such as ghar mauri (A. cerena) (pictured), bhir mauri (A. laboriosa), khago mauri (A. dorsata), kathyauri mauri (A. florae).

“We decided to promote the new bees in the tarai, since we weren’t sure they’d survive at higher altitudes,” said Jaya Kumar KC, chief of the Bee Development Section. Also, the exotics need to migrate, which is easier in the tarai, and require lots of forage space and large pasturelands to feed on. Although A. milefera is more productive, it is also vulnerable to diseases.

Cross-breeding is a concern, because each variety of bee thrives in different conditions, says Sanjaya Bista, a scientist at the Entomology Division of the National Agriculture Research Council. The native A. cerana needs help during chiuri flowering season, though, so the imports are transported up for the feeding season. “But farmers understand that the two breeds cannot be mixed together, therefore when the feeding is over, they take the melifera back,” adds KC.

Chicken price touches record high

Chicken price touches record high
eKantipur.com, 29-Sep-2007

Propelled by dwindling supply after a major decline in production volume, the price of chicken touched Rs 165 per kilogram here.

As the Nepali government has imposed a ban on imports of parent chicks from source countries rumored to have been infected with cases of the bird-flu disease for the last one year, production of chicken has nose dived significantly for over six months prompting prices to skyrocket.

Entrepreneurs also attributed the price hike to frequent highway bandas and strikes which have been disrupting smooth delivery of poultry products. According to them, the price of chicken meat has shot up to Rs 165 per kg, up from the Rs 150 of a couple of months ago. "The price of chicken has culminated to a record high now," said Kapil Babu Khanal, the immediate past president of Nepal Hatchery Association.

"We have adjusted the price in line with the soaring price of feeds and short production along with shrinking level of supply." A short supply of goats has also contributed to the customers opting for chicken. This and an increase in the number of tourists arriving in the country have pushed the demand of chicken upward, Khanal added.

Traders said the recent improvement in the tourism sector along with an increase in economic activities in the country had caused a gradual rise in demand of meat. Poultry entrepreneurs said the prices would go up further.

Tea farming starts in Lalitpur district

Tea farming starts in Lalitpur district
ArthaExpress, 27-Sep-2007

Tea farming has also begun in Lalitpur district now. Earlier, coffee was grown in Lalitpur. The Modern Organic Tea Development Pvt Ltd (MOTD) has been producing some 6,00,000 tea saplings in 20-ropani of land in Chandanpur for commercial tea development. Production of tea saplings has been started from August to November.

Some 40 persons have found direct employment from the Modern Organic Tea Development Pvt Ltd while producing saplings. Tea saplings have been distributed in the south-eastern hilly villages of Kaleswor, Chandanpur, Gotikhel, Manikhel, Bukhel, Devi Chaur and Ghusel. Not only in private land but the tea farming has also been picking up collectively. Industrialists, businessmen and teachers have also been attracted to tea farming commercially currently. Balaram Banjara of the company, who is also a businessman of Chandanpur, said they have started production of saplings for the commercial production of tea.

He said the farming has begun by bringing cut plants from Ilam. The company has planted some 3,000 plants in Kaleswor- 9 alone. Headmaster of Nawodaya Primary School Kaleswor, Nawaraj Dahal has also planted some 450 plants on his field.

“It will change the lifestyle of the people,” said Chandanpur ex-VDC chairman Rhishi Ram Ghimire. “There is a good potential of tea farming in Lalitpur because of fertile soil and geographical condition,” said tea expert Taramani Khatiwada.

Tea can be planted in Nepal upto the altitude of 6,600 feet. It can yield for two to three years after planting once. In Nepal, tea farming began in 1920 BS by Ganarajsingh Thapa, the son-in-law of the then prime minister Jung Bahadur Rana.

Soaring Vegetable Prices

Soaring Vegetable Prices
eKantipur.com, 27-Sep-2007
BY PRABHAKAR GHIMIRE

Skyrocketing price of potato, due to supply deficit in Nepal prompted potato from Bhutan to find its way to the Nepali market this week, traders said. Shortage of potato due to nominal domestic production and short supply has led to mounting price of the ubiquitous vegetable in Nepal.

According to traders, around 50 tons of potato have been arriving in Kalimati wholesale market daily, down from the normal supply of around 70 tons. They said that supply of other major vegetable items has also nosedived by around 25 to 30 percent in recent days.

"Availability of Nepali potato in the market is almost nil, thus leaving the entire market dependent on potato from Bhutan and India of late," said Bharat Khatiwada, president of Association of Vegetable Wholesalers at Kalimati.

Khatiwada said red potatoes from Bhutan have hit the Kalimati market constituting more than half the total supply of potatoes. The potatoes from Bhutan are preferred by Nepali consumers due to its similarity in taste to Nepali potatoes.

Mist and disease in potato farms in different parts of the country, coupled by prolonged unrest in tarai region has disrupted supply and caused shortfall of production and supply of vegetables.

"Due to unrest in Tarai, Indian truckers have almost doubled transport charges, prompting market prices to go up sharply," said Shriram Upadhya another trader.

According to Upadhya traders are paying up to Rs 35,000 in recent days as compared to around Rs 15,000 to Rs 20,000 for ferrying vegetables. Data at Kalimati Fruits and Vegetables Market Development Board (KFVMD) shows an alarming rise of vegetable prices over a six month period.

Average price of red-potato, white potato and dry onion reached Rs 25, Rs 23 and Rs 36 per Kg respectively this week, which is almost double the price compared to last April when those items were priced at Rs 12, Rs 9 and Rs 20 per Kg respectively.

Likewise, prices of tomato, cauliflower and cabbage have reached Rs 29, Rs 44 and Rs 19 per Kg from, Rs 14 Rs 8, Rs 4 in April.

Over the period, price of onion in particular saw steady increase due to total dependence on India to cater to the ever increasing domestic demand of the most used vegetable item in Nepal, said Binaya Shrestha Planning officer at KFVMD.

Shrestha said that more than 95 percent of onion demand is being supplemented by Indian onion.

"However, production of onion in India has also dwindled sharply this year due to bad weather resulting in price hike in India, the sole supplier of onion to Nepal," said Shrestha.

Flood and inundation in Tarai region also aggravated the production and supply of other vegetables like cabbage, cauliflower, and tomato.

According to Shrestha, supply of vegetables in Kalimati wholesale market, the biggest vegetable market, stands at around 500 tons daily, down from around 650 tons to 700 tons in normal season.