SANGAM PRASAIN
DEC 18 - First, the good news. This year, the production of our major food crops—rice and maize—grew by a whopping 11 percent, overcoming the food shortfall we had faced due to below-average monsoons. This growth comes on the back of a 4.33 percent fall in agricultural output last year, and economists agree that the rise in output means the Nepali economy will certainly grow this year.
Now, the bad news. This increase in output, and the subsequent food self-sufficiency, is not thanks to any government support. Instead, an above-average monsoon resulted in the growth. Government support to agriculture—in the form of subsidies and irrigational projects—may have risen, but only marginally. And farmers continue to move out of the sector because of low returns, high debts, and low productivity.
Because agriculture contributes nearly 32 percent to our Gross Domestic Product (GDP), the current rise in output of food crops will definitely have an impact on Nepal’s growth, giving rise to hopes that the country can achieve the 4.5 percent GDP growth rate projected for this year. However, the state’s focus has slowly been shifting away from agriculture, and this is highlighted by the meager increase in budgetary support to the sector: From 2.4 percent of the total budget in 2008-09, it increased to 3.1 percent in 2010-11. “The agricultural sector is seriously disadvantaged due to a lack of government attention,” says Hari Dahal, spokesperson at the Ministry of Agriculture and Cooperatives.
How did Nepal go from being one of the highest producers of rice in the region in the early 60s to becoming a net importer of food grains today? The answer, most experts agree, lies in the neglect the state showed the sector after donors stopped funding agriculture in the mid 90s. “Agriculture has been neglected for the last 10 years after donor agencies pulled out. The government, instead of increasing its support, withdrew its fertiliser subsidies in 1996-97,” says Devendra Chapagain, former member of the National Planning Commission.
The withdrawal of subsidies came as the state started adopting more neo-liberal policies. It opened the doors to private players for importing fertilisers. “Consumption of fertilisers grew heavily when the private sectors started import. However, these imports lasted only for a short time as the Indian government started a heavy subsidy programme for its farmers,” says Dahal, adding that the price of imported fertilisers rose heavily forcing private players to stop their imports. At the same time, government subsidy to shallow tubewells also stopped.
The government’s withdrawal of state support meant that agriculture today is wholly dependent on the state of the monsoons. “Agricultural growth depends according to nature. If it rains, we have a good harvest. If it doesn’t, we have a bad year,” says Chapagain.
The rise in production of paddy and maize this year—courtesy good rains—means the country will produce an additional 436,000 and 200,000 tonnes of the two grains respectively. This increase comes on the back of a shortfall of 316,465 tonnes of grains last year, because of which at least 1.6 million people had to face a severe food shortage. As major food grain production also has a direct impact on the country’s GDP, planners and analysts say that the targeted 4.5 percent economic growth could be realised this year because of the increased production, despite the other economic indicators not doing too well. “Increased food grain production will raise the country’s GDP by 0.5 percent at least,” says economist Bishwamber Pyakurel.
However, this rise in production is a sweetener only for the short term. For, more and more farmers are leaving the sector for good as they suffer a vicious cycle of low returns on production, and rising debts and following bankruptcy. “Rice farmers in Nepal have never been adequately compensated. Low returns from the sector have forced the younger generation to abandon the profession altogether,” says Dahal.
Though the government initiated the distribution of fertilisers at subsidised rates from last year, the 81,598 tonnes of fertilisers distributed only fulfill the requirement of 5 percent of total demand. The state also distributed 826 tonnes of improved seeds, and allocated Rs. 3 billion to agricultural subsidies in the form of lower fertiliser prices and small irrigation
projects. Conversion to hybrid, higher-yielding, variety of seeds is also very slow, and like last year’s protests by Tarai maize farmers showed, not all hybrid seeds are achieving the results promised.
The state has also not delivered irrigation projects as required by the sector. Of the total cultivated area in Nepal, only 15 percent of the land can be irrigated all year round. But irrigation projects are themselves underutilised. Only about 1.1 million hectares of the total of about 3 million hectares of arable land have irrigation facilities. For example, the Koshi Pump Irrigation Project has a capacity to irrigate 4,100 hectares of land, but its coverage is limited to only 40 percent of that capacity.
A simple analysis of the numbers of paddy, which is our major crop, puts this into perspective. While production and yield has risen, the area under cultivation has remained nearly the same. For example, in 1999-2000, the area under paddy cultivation was 1.55 million hectares, which actually declined to 1.43 million hectares in 2006-07 before rising to 1.55 million hectares again in 2008-09. Analysts point towards the massive decline in the expenditure on the agricultural sector since the 1980s as being a major reason why agriculture today is suffering this state of dichotomy. From as much as a third of the expenditure being spent on agriculture in the 1980s, the share fell to as little as 5 percent in the 1990s. This trend is continuing even now, revealing a drastic shift in economic policy.
Agriculture still employs 66 percent of the total workforce in Nepal, which means that the livelihood of two-thirds of Nepalis depends on the sector. A shift in the economic outlook of the state towards manufacturing and services in the early 90s meant that the sector continued to witness neglect, and inevitably, decline. Though the increase in food production this year comes as a glimmer of hope, most analysts agree that not enough is being done to sustain the sector, which continues to depend on one single source of irrigation—the monsoons—till now. As witnessed last year, a drop in rainfall led to a severe food shortage, and although that has been corrected, what will Nepal do if a season of drought comes up?
Saturday, December 18, 2010
Improve air safety: ICAO to govt
SANGAM PRASAIN
KATHMANDU, DEC 18 -
In view of increasing accidents in air transport in Nepal, the International Civil Aviation Organization (ICAO) has urged the Government of Nepal to adopt a deliberate approach for air safety improvement.
ICAO’s Asia Pacific Region Regional Director Ahmad Mukhtar Awan on Friday met Prime Minister Madhav Nepal and urged him to take appropriate measures to ensure aviation safety, said Rajan Bhattarai, the PM’s foreign affairs advisor.
In the meeting, Awan said Nepal needs to focus on expanding infrastructure at the Tribhuvan International Airport (TIA) in view of the increasing air traffic. “We are ready to support the Government of Nepal in this regard,” Bhattarai quoted Awan as saying. The Global Aviation Safety Plan (GASP) articulates ICAO’s strategy to guide prioritization and implementation of its global safety initiatives. Between 2000 and 2009, the total number of fatal accidents on commercial scheduled flights dropped by 50 percent and the corresponding number of fatalities by 31 percent.
According to ICAO, the overall level of safety in international civil aviation is remarkable, with a global accident rate of approximately four accidents per million departures.
The ICAO says that with the anticipated increase in traffic volume throughout this decade , a steady accident rate will translate into a greater number of accidents. Currently, two out of seven ICAO regions have an accident rate that is twice the world average. In the context of Nepal, within four month the country’s aviation sector has witnessed three major fatalities and a number of minor mishaps. Three major air accidents in four months have claimed 38 lives.
“We talked about the immediate need to ensure well-coordinated relations between the industry and its regulator,” Awan told the media.
The ICAO forecast reveals worldwide air traffic to grow at the rate of 6.4 percent this year, 4.7 percent in 2011 and 4.9 percent in 2012. Traffic for Asia Pacific airlines should grow considerably faster than the global aviation pace at rates 10.8, 7.8 and 7.75 percent for the same period. In the context of Nepal, international passenger movement recorded an 11 percent and domestic passenger movement a 33 percent increase in 2009 as compared to 2008.
KATHMANDU, DEC 18 -
In view of increasing accidents in air transport in Nepal, the International Civil Aviation Organization (ICAO) has urged the Government of Nepal to adopt a deliberate approach for air safety improvement.
ICAO’s Asia Pacific Region Regional Director Ahmad Mukhtar Awan on Friday met Prime Minister Madhav Nepal and urged him to take appropriate measures to ensure aviation safety, said Rajan Bhattarai, the PM’s foreign affairs advisor.
In the meeting, Awan said Nepal needs to focus on expanding infrastructure at the Tribhuvan International Airport (TIA) in view of the increasing air traffic. “We are ready to support the Government of Nepal in this regard,” Bhattarai quoted Awan as saying. The Global Aviation Safety Plan (GASP) articulates ICAO’s strategy to guide prioritization and implementation of its global safety initiatives. Between 2000 and 2009, the total number of fatal accidents on commercial scheduled flights dropped by 50 percent and the corresponding number of fatalities by 31 percent.
According to ICAO, the overall level of safety in international civil aviation is remarkable, with a global accident rate of approximately four accidents per million departures.
The ICAO says that with the anticipated increase in traffic volume throughout this decade , a steady accident rate will translate into a greater number of accidents. Currently, two out of seven ICAO regions have an accident rate that is twice the world average. In the context of Nepal, within four month the country’s aviation sector has witnessed three major fatalities and a number of minor mishaps. Three major air accidents in four months have claimed 38 lives.
“We talked about the immediate need to ensure well-coordinated relations between the industry and its regulator,” Awan told the media.
The ICAO forecast reveals worldwide air traffic to grow at the rate of 6.4 percent this year, 4.7 percent in 2011 and 4.9 percent in 2012. Traffic for Asia Pacific airlines should grow considerably faster than the global aviation pace at rates 10.8, 7.8 and 7.75 percent for the same period. In the context of Nepal, international passenger movement recorded an 11 percent and domestic passenger movement a 33 percent increase in 2009 as compared to 2008.
Lawmakers demand transparency in NOC
SANGAM PRASAIN
KATHMANDU, DEC 17 -
Lawmakers on Thursday said the government’s subsidy policy on LP gas was not in favour of consumers and is only benefiting industries.
The government refunds the Value Added Tax (VAT) levied on LP gas purchased for industrial purpose only. Lawmakers said that the consumers, who use a maximum of two-three cylinders per month, should not be compelled to
bear the burden for the facility given to industries.
The government collects Rs 207 per cylinder as tax, of which Rs 149 is collected as VAT. The government had included LP gas in the list of daily essential items.
“VAT levied on LP gas purchased for industrial purpose is refundable, but the government’s opposite tax policy is burdening poor consumers,” said CPN-UML lawmaker Rabindra Adhikari, while discussing the price hike on petroleum products at the Parliament’s Public Account Committee (PAC).
The PAC had summoned Minister for Commerce and Supplies Rajendra and officials from Nepal Oil Corporation (NOC) to justify the recent gasoline price hike.
Minister Mahato also admitted that the government subsidy policy was opposite. “The government should introduce subsidy on LP gas for the consumers as in India,” said Mahato.
He added that the ministry is holding discussions with the finance ministry on the issue. The waiver in VAT will drop the gas price by at least Rs 40 per cylinder, he said. Of the total imported gas, 30 percent is consumed by industries. The country consumes one million gas cylinders every month.
Amid pressure from the
political parties, student
unions and consumer rights activists to revise the petroleum
products price hike, Mahato said the price revision is possible only if the government excuses the tax levied under the head of road maintenance and upgrading or scrap the VAT.
Petroleum products are the government’s largest revenue generating commodities. Last fiscal year, NOC paid Rs 12.41 billion revenue. The country consumes gasoline worth Rs 60 billion every year.
During the meeting, lawmakers said corruption, commissions and irregularities were the reasons behind NOC’s ballooning losses every year. “Rampant irregularities in NOC have compelled consumers to suffer from price hike,” said Adhikari.
Dhan Raj Gurung, lawmaker of Nepali Congress, stressed on the need for forming a separate independent board that would make the fuel prices more transparent and discuss all the alternative measures for price revision and adjustment. “Although, the state-owned oil monopoly is being cash-strapped every passing years, its officials are found to be well-off,” said Keshav Nepal, the UCPN-Maoist lawmaker.
Nepal added that an immediate measure should be introduced to make the corporation more transparent and punish the officials involved in corruption and commissions.
Purushottam Ojha, secretary at the ministry of supplies and the chairman of the NOC, said the government should end the monopoly of NOC in fuel distribution and involve the private sector in this business.
Ojha added that NOC is in the process of developing oil pipeline that will end the rampant fuel adulteration and high transportation cost. Although the oil pipeline project was initiated long time ago, change in its modality has frequently delayed the construction.
“NOC delegations to finalise the oil pipeline modality are departing to India in January,” Ojha said.
KATHMANDU, DEC 17 -
Lawmakers on Thursday said the government’s subsidy policy on LP gas was not in favour of consumers and is only benefiting industries.
The government refunds the Value Added Tax (VAT) levied on LP gas purchased for industrial purpose only. Lawmakers said that the consumers, who use a maximum of two-three cylinders per month, should not be compelled to
bear the burden for the facility given to industries.
The government collects Rs 207 per cylinder as tax, of which Rs 149 is collected as VAT. The government had included LP gas in the list of daily essential items.
“VAT levied on LP gas purchased for industrial purpose is refundable, but the government’s opposite tax policy is burdening poor consumers,” said CPN-UML lawmaker Rabindra Adhikari, while discussing the price hike on petroleum products at the Parliament’s Public Account Committee (PAC).
The PAC had summoned Minister for Commerce and Supplies Rajendra and officials from Nepal Oil Corporation (NOC) to justify the recent gasoline price hike.
Minister Mahato also admitted that the government subsidy policy was opposite. “The government should introduce subsidy on LP gas for the consumers as in India,” said Mahato.
He added that the ministry is holding discussions with the finance ministry on the issue. The waiver in VAT will drop the gas price by at least Rs 40 per cylinder, he said. Of the total imported gas, 30 percent is consumed by industries. The country consumes one million gas cylinders every month.
Amid pressure from the
political parties, student
unions and consumer rights activists to revise the petroleum
products price hike, Mahato said the price revision is possible only if the government excuses the tax levied under the head of road maintenance and upgrading or scrap the VAT.
Petroleum products are the government’s largest revenue generating commodities. Last fiscal year, NOC paid Rs 12.41 billion revenue. The country consumes gasoline worth Rs 60 billion every year.
During the meeting, lawmakers said corruption, commissions and irregularities were the reasons behind NOC’s ballooning losses every year. “Rampant irregularities in NOC have compelled consumers to suffer from price hike,” said Adhikari.
Dhan Raj Gurung, lawmaker of Nepali Congress, stressed on the need for forming a separate independent board that would make the fuel prices more transparent and discuss all the alternative measures for price revision and adjustment. “Although, the state-owned oil monopoly is being cash-strapped every passing years, its officials are found to be well-off,” said Keshav Nepal, the UCPN-Maoist lawmaker.
Nepal added that an immediate measure should be introduced to make the corporation more transparent and punish the officials involved in corruption and commissions.
Purushottam Ojha, secretary at the ministry of supplies and the chairman of the NOC, said the government should end the monopoly of NOC in fuel distribution and involve the private sector in this business.
Ojha added that NOC is in the process of developing oil pipeline that will end the rampant fuel adulteration and high transportation cost. Although the oil pipeline project was initiated long time ago, change in its modality has frequently delayed the construction.
“NOC delegations to finalise the oil pipeline modality are departing to India in January,” Ojha said.
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