by Yadav Sharma Bajagai
The Nepalese economy is fundamentally
agrarian and the agriculture contributes to approximately one third of Gross
Domestic Product (GDP) and the largest source of informal employment to the
people. Reducing poverty, improving food
security and achieving sustainable development cannot be imagined in the
agrarian economy like Nepal without inclusive development of agriculture sector.
Two major requirements for the development of agriculture sector in our context
are adequate investment and conducive policies.
One of the major constraints faced by
the agriculture sector in Nepal is the under-investment from both public and
private sectors. Ministry of Agriculture Development is receiving approximately
3% of national budget which is not sufficient to promote adequate agricultural
growth and ensure food security to ever-growing population. Out of this
inadequate allocation, significant amount of public expenditure is being
expended to give price subsidy in agricultural inputs mainly fertilizer. It has
been also criticized that larger farmers are mainly benefitted by input
subsidies rather than small and marginal ones. To get the best possible returns
from subsidy policies, they should be subjected to a genuine cost benefit
analysis and review. If allocated budget could have been invested in capacity
building, rural infrastructure development and research in agriculture sector
instead, it would have given far better results. It is experienced that
producers are more concerned to easy access of these inputs than price.
As subsidies have usually been
politically sensitive agenda, it might be difficult to completely do away with
them, but they should be subjected to improved modalities and management so
that small and marginal farmers also benefit.
The state is obviously not in the
position to sufficiently invest in the agriculture particularly in developing
countries which are in transition like Nepal. However, the government can draw
other public and private sector investment by creating favorable investment
climate. As agriculture is predominantly
small-scale, labor intensive and subsistence in our context; small farmers are
the largest investors of agriculture. Therefore, farmers should be at the
center to formulate any strategy related to agricultural development. Government
policies should promote those agribusiness models which are in favour of small
scale producers.
Significant proportion of small scale farmers do not own the land they cultivate. Investment of these farmers to technology and farm level infrastructure to enhance production and productivity cannot be at optimum level unless there is perceived tenure security among these farmers. Marginal farmers cannot afford the risk of investing in uncertain rights of land tenure. This is inter alia one fundamental issue need to be addressed in our policy to increase private sector investment in agriculture and thus increase production and productivity of agriculture sector.
Although private sector investment in
Agriculture is mostly from scattered and unorganized small farmers, large scale
corporate investment has been initiated in some sub-sectors mainly high value
commodities like poultry and dairy. Favorable investment climate can attract
corporate investors in other sub-sectors in future. Large scale private investment in agriculture
can create employment, transfer technologies and create forward and backward
linkages. Although corporate investment could be the driving force for
commercialization and modernization of agriculture if properly backed up by
appropriate policies, there is risk that these investments may bypass small
scale producers and pose additional risk to the livelihood of local
communities. This can be prevented by the policy which ensures transparency and
accountability of large investment. Governance of these large scale investments
should be cautiously addressed in agricultural policy.
Therefore, forthcoming agricultural development
strategy should attract large investors but in the mean time interest of small
farmers should be protected with due respect to the rights of small scale
marginal producers. The policy should promote transparency and accountability
of large investment and also ensure meaningful inclusion of local communities
preventing transfer of productive capitals mainly land. Connection and
relationship between large scale investors and small scale marginal producers
should be a win-win model. This connection can be strengthened by mechanisms to
ensure benefit sharing from large scale investment to the local communities. The
strategy should promote direct involvement of local farmers in agriculture
value chain. For example, contract farming regulated by appropriate and clear
policy could be an option to attract large scale investment without
transferring ownership of land and serving the interest of both.
Moreover, youths are not sufficiently
motivated to invest their time and money in the agriculture sector resulting
either the agricultural land left barren or feminization of agriculture due to
emigration of young males in search of employment. Policies to attract large
corporate investors in agriculture may not necessarily motivate those youths to
the agriculture sector as employment in agriculture sector is usually less
attractive than in other sectors. Therefore, Agriculture Development Strategy
should address this issue and create policies to attract youths in the
agriculture sector.
Thus, Increasing investment in agriculture is
a must for reducing poverty, achieving sustainable development, and enhancing
food security. Increased investment in agriculture will be beneficial to the
country in the real sense only if the investments can help alleviate poverty
and enhance food security of vulnerable communities. As government investment
is not sufficient, appropriate policy and legal and institutional framework
should be in place to create a favorable climate for investment. In our
context, agriculture development policy should be in favor of small scale
marginal producers and suitable to specific agro-climatic realities, but in the
meantime, they should not hinder large scale investments capable of bringing
equitable and balanced growth to the agriculture sector.
P.S. This article has been published in the Republica (http://www.myrepublica.com/portal/index.php?action=news_details&news_id=49847) of 13 February 2013.
I got to read this article and must congratulate you for bringing some important points to the table. For me they were:
ReplyDelete1. Ensuring strategies that do not sideline or further marginalize the poor, small scale farmers
2. Ensuring strategies that transform subsistence farming to a more profitable venture
3. Ensuring the participation of youth in agriculture
As important as the other points are, it is vital that agriculture is made attractive for young people. And I believe the media has a role
in promoting agriculture as something that is 'trendy and sexy' and not something that only has to do with old people lacking style. It
has to be portrayed as a profession, if seriously taken, can provide returns that can fulfil their dreams in life. And for this, we need more role-models - real life examples who have made it big through agriculture. AGRICULTURE NEEDS TO BE MADE TRENDY. That is the goal - there are numerous strategies towards that goal - and media is one of them.
Another point I'd like to make is the importance of cross-sector strategic linking. Like for the point 3 above, agricultural polices need to link with the national youth policy and so on. Likewise, I saw in the news of the PM's plan for engaging youth through a national youth development fund or something to that extent -
agriculture should be linked to that program as well. Likewise, I read of PKD's plan for capitalist economic revolution and if we can trust him for his plans, then agriculture needs to be integrated big time into the scheme of things there. I think this plan talks about
agriculture in some way as in pooling land into cooperatives to improving agricultural productivity.
A last point, which I am not sure if it is already in practice, and if yes to what extent - is the need to bring the FNCCI and NCC and other
federations of trade and business into the fold of the agricultural plan. At the least, they need to have a division or focal point for
agriculture within their organization.
Thanks again for the article. And keep up the good work that you are doing!
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This is a good article. In my opinion, the major challenges are limited road access, and weak marketing management and farming support systems. Therefore, given these challenges, the increase in budget will have definitive impact only when there is rationale use of available fund. I liked your article. Keep it up.
ReplyDeleteA well written article. I agreed that the ADS should also focus on establishing a connection between large- and small-scale farmers. I think it will boost up the farm productivity through a glut of capital investment and labour supply. Meantime, the government should also start privatizing the research and extension activities. A hump of agriculture budget has been invested in the extension activities but with minimal outputs. The government could invite the private sectors and CBOs with their expressions of interests for the extension services. Naturally, it would induce competitiveness on extending technologies. And also, it supports for bridging two pillars - research and extension. It is clearly observed that the governmental institutes are far behind in social mobilization activities as compared to the non-government bodies.
ReplyDeleteloved it...i think infrastructures should be our priority at the moment..if the facilities exists, farmers can make their own investments...sustainable national and international market development strategy is another most important factor for our case...
ReplyDeleteGood voice. We should look the sectoral policy as well to formulate ADS. If not synchronized it will again become failure like APP. Wider discussions are not taking place even in this. What are the voices and need of the small and marginal farmers is thought from the policy makers from the seats of the Ministries, NPC. I am reluctant that the politicians always sought for the bigger investment in Agriculture but it actually doesn't happen in the reality. Sectoral investments is the key for the development as well. We need roads, electricity, market, research, education, training for the overall development. So big investment should side be side go to these sectors.
ReplyDeleteNice article. You have covered a good deal of related aspects of agricultural development. Linking agricultural production to market and industry, sustaining agricultural land productivity, and inter-ministerial coordination are major challenges in this regard.
ReplyDeleteNice to read. Concerns of mainstreaming marginal farmers is well addressed. In my opinion, there should be one door investment policy and research and extension should be well harmonized. Furthermore ADS should accommodate and give high priority to the views of real farmers and entrepreneurs versus the tainted view of their so called leaders.Readers like us would have been benefited better if you have been dived deeper into developments of ADS till now and recommended methodology to incorporate your important recommendations. I hope concerned authorities will take it seriously and we will have chance to read more of articles by the author.
ReplyDeleteI think Nirmal jee has a good point; unless the youths are attracted to and commercially involved in agriculture, it is difficult to transform agriculture in Nepal. Similarly, land use and management policy has to be successfully implemented to transform subsistence agriculture to a modern vibrant agriculture. Thirdly, intersectoral linkages should be established among the relevant policies. Likewise, the educated and well-trained people have to be involved in agriculture.
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