Agriculture Perspective Plan better known as APP is the plan formulated keeping in view the long-term 20-years in perspective. It is the first of its kind agriculture plan, which has encountered ten different governments in its eight years of implementation till now. Prepared with the support from the Asian Development Bank (ADB), APP is still regarded as a visionary document that can increase agricultural productivity and move farming from subsistence to commercialized level in this impoverished and predominantly agrarian country, if properly implemented. Although the APP remains the major guideline for agriculture planning, it still has to pass through many hurdles including the scarcity of budget and stable political backing. Despite hostile atmosphere what APP has achieved is remarkable

By KESHAB POUDEL

“Early USOM workers found critical shortage of trained personnel in agriculture, with only three or four India-trained agriculturists available to work in agricultural development when Paul Rose and his team arrived in 1951,” states the book ‘Half-a- Century of Development’ – the history of U.S assistance to Nepal 1951-2000.

“There are Agriculture Offices in all 75 districts with service centers and sub-centers and there are 11,000 plus employees. Among them 5,000 are junior and 2,500 are senior officers with graduate and higher degrees in agriculture sectors,” said Narayan Prasad Regmi, spokesperson of Ministry of Cooperatives and Agriculture.

These two statements show how Nepal’s agriculture sector has transformed in the last five decades from being virtually without manpower to a strong pool of qualified human resources.

Along with the manpower, the pattern of farming also has changed. “Grain cultivation mainly, paddy with some corn, barley, millet, and wheat, was the predominant cropping system, with improved varieties unavailable. The few trained Nepali agriculturists advocated improving wheat productivity to provide a winter crop: Double cropping was rare, due to lack of water and prevailing tenant systems which provided few incentives to increase production. The relatively large population of cattle, sheep, and goats and poultry were poorly fed, diseased, and unproductive,” sates the book.

“Compared to increase in the number of agriculture related institutions and organizations, their quality regarding institutional development, professional capacity, resource mobilization and transaction has been a matter of concern,” states Economic Survey Fiscal Year 2002/2003.

When a small team of the US government officials arrived in Nepal to support modernization of agriculture sector five decade ago, their main challenges were how to form a base in the sector. After fifty years, the country’s economic survey has encountered other nature of problems.

Journey Through
Political Instability

Nepal’s agriculture sector has passed through frequent rounds of political instability and upheaval but it has transformed from merely subsistence base to the semi-commercialization. The farmers have seen single crop to multi-crop system with new technologies but it is yet to successfully change the life of Nepalese farmers and population at large.

With 42 percent of the population below poverty line, agriculture remains a major sector to reduce the poverty from rural parts. Thus, APP has made efforts to link the agriculture development with poverty alleviation.

Several planning and programs, short term and long term, introduced in the past have had definite impacts in the agriculture sector but less than a decade old APP was the first of its kinds to have been formulated to radically change the sector. Despite political uncertainties, the APP is still surviving.

“APP is still our guideline plan and we are following the document. The APP’s vision is reflected in the 10th plan and we had adopted it in the ninth plan as well,” said Narayan Prasad Regmi, spokesperson of the Ministry of Agriculture and Cooperatives. “In a changed circumstances, we have made certain review on it.”

Agriculture Perspective Plan

With the experiences of more than four decades of modernization of agriculture sector, Nepal government had finally decided to implement a long-term program to enhance overall development in the agriculture. Thanks to the support given by Asian Development Bank, APP was prepared.

“The absence of a clearly defined strategy and well-focused action has hampered the past development efforts. I am convinced that Nepal how has the prerequisites for a take-off to transform its subsistence-based economy into a dynamic, fast-growing one. The APP provides the necessary recipe as to how this possibility could be tapped in the shortest possible time,” wrote then prime minister late Man Mohan Adhikari, releasing the document on July 3,1995.

“The APP is both a strategy and a plan to inform the formulation of agricultural development policy and plans in Nepal. As a strategy, it has a clear vision and appeal to the need of using technology and infrastructure to increase agriculture productivity and move farming from subsistence to commercialization,” points out Nepal Agriculture Sector Performance Review prepared for the Ministry of Agriculture and Cooperatives and Asian Development Bank.

Formulated with a view to push Nepalese agriculture sector into a sustainable high growth path, the APP was called as a blue print for the overall economic development of the country.

Like country’s all other development programs, the APP has also struggled to survive in the course of unstable government. Following the ouster of the first minority communist government in 1995, the country has seen 10 governments of nine prime ministers in the eight-year period including the two prime ministers nominated by King Gyanendra.

The World Bank’s Country Assistance Strategy Progress Report 2003, too, points out how political instability has hampered the development process including the agriculture sector. “Rather the instability and paralysis that plagued a series of coalitions ruling Nepal between 1994-1999 persisted and in the last nine months the political landscape in Nepal has been extraordinarily unstable,” states the report. “More specifically, growth has been concentrated in urban areas, leaving behind 86 percent of the population who live in rural areas, where per capita agricultural production has grown minimally and the overall level of economic activity has been sluggish.”

Role of Agriculture

Agriculture is still one of the largest sectors of Nepalese economy with potential to bring the change in the overall economy but it is yet to be fully exploited. Because of low budget allocations and stagnant programs, the sector could not fully cope with the situation.

Slight change in the overall agriculture production can effect significant change in the overall GDP growth. If rain is good and production increases, the overall GDP growth makes a steady rise. Thanks to the good rain and good harvest this year, Nepal’s GDP has gone up from 2 percent to reach 4 percent despite political instability and situation of insecurity.

Agriculture can bring miracles to change the economic performance of the country. Since it has such a vast area with profound ecological diversity, Nepal can produce all kinds of food grains and vegetables in all weather. Provided technology, investment and irrigation, Nepalese farmers can perform the miracle of sorts.

“The main reasons behind the low economic growth in agriculture sector are less than expected investment in agriculture sector, dependence on unfavorable monsoon,” writes economic survey. Because of low growth rate in the agriculture sector, the ninth plan could not meet the overall growth rate it had targeted. The growth of agriculture sector was estimated to be around 3.3 percent as against the target of 4.0 percent during the ninth plan.

“With a share of 40 percent and 80 percent in GDP and labor force respectively, agriculture plays a key role in the overall economy and society. The importance of agriculture is borne out by fact that almost 90 percent of the population lives in rural areas and depends on agriculture for its livelihood. Most agriculture in Nepal is characterized by low productivity and low commercialization. As agriculture is the main source of income in rural areas, the link between poverty and low productivity of agriculture is very close. Agriculture growth over the past two decades has barely kept pace with the population growth. Coupled with a low input agriculture and the low adoption of modern technology, agriculture in Nepal is one of the poorest in the world, with a value added per agricultural worker in 2001 estimated at US$ 137,” states Nepal Agriculture Sector Performance Review 2002.

Investment In Agriculture

Despite its importance in national development, the agriculture sector is still under invested. During the period of ninth plan, the agriculture sector did not receive adequate fund so it could not achieve the projected target.

According to the 10th Plan Document, published by National Planning Commission, the ninth plan had projected Rs. 21.52 billion investment in agriculture for five years period but only Rs. 9.47 billion were sanctioned. Interestingly, only Rs. 9.4 billion could be spent. This shows that the agriculture sector neither receives full amount nor is able to spend the amount sanctioned to it.

“Agriculture needs investment in three sectors like infrastructures – irrigation, road and electricity; technology generation; and extension. According to internationally agreed norms, there is a need to invest at least 3 percent of Agriculture GDP. In south Asian context, it is an average of 1 percent but we invest about 0.2 percent only,” said Dr. Hari Krishna Upadhyaya, a member of National Planning Commission and an agro-economist.

Whether in the irrigation sector or technology, the agriculture ministry is underfed. Since the private sector does not have huge resources to pump into the agriculture, the government is solely responsible to fund all the money. And as the government lacks the money, it has to knock the door of donor communities – which attaches many conditions.

The resources generated from donors that come with riders attached have often done more harm than good. Following the withdrawal of subsidy in many sectors, Nepalese farmers had to compete with the farmers of India where the state provides all kinds of support in terms of subsidy.

Though they are poor and underprivileged, Nepalese farmers do not get any subsidy in the areas of irrigation, fertilizers and other agriculture technology. The farmers have to rely on their own skill and technology rather than what government offers them.

Geographical and Topographical Advantages

Although many consider Nepal’s geography as a bane for the economic development, it can turn into a boon in case the existing advantages of topography and temperature are properly exploited to produce off-season vegetables and fruits. Nepal is one of the few rare countries in the world where temperature and topographical diversity exists in short distances. In the 50 kilometers of width, one can find temperature ranging from tropical to temperate. Even within a district, there are varieties of temperature available.

For instances, in Kavre district, Panchkhal has a tropical temperature and there are temperate climates in the same district elsewhere. Interestingly, there is one climate in the basin of mountain and completely different at the top of the hills.

“We need to exploit the ecological as well as temperature diversity to positively transform the agriculture sector. At a time when the country is in no position to give subsidy to the agriculture sector, Nepalese farmers have to take advantage given to them by mother nature,” said an analyst.

Because of initiatives taken by some non-governmental organization and government sector, some farmers have already started to grow off-season vegetables and fruits in different parts of the country looking at the market of India. According to an estimate, agriculture export to India represent 72 percent of total agriculture export of Nepal.

“If Nepalese produce more off-season vegetables and fruits, there will be more market for the Nepalese products,” said an economist. “In the areas of paddy and wheat, Nepalese cannot compete with Indian farmers. Nepalese farmers have advantages in the areas of off-season vegetables and fruits.”

Expansion of Pockets

With the initiative from small non-governmental organizations, there are many pockets of small farms that have evolved in the period of last five decades. From banana pockets of Nawalparasi and Seti to orange pockets of some district of mid-hills and some vegetables pockets in mid-western regions, eastern regions and central regions and cattle growing in the hills, Nepalese farmers have shown tremendous skills.

As envisaged in APP, the growth of off-season vegetables and fruits in the pocket areas have expanded in different parts of the country but it is yet to spread to the mass level. “The time has come to expand the success achieved in the pocket areas to the mass level so that rural population can make significant improvement in their lives,” said Dr. Upadhyaya.

From small fisheries to livestock and vegetables and horticulture, farmers have learnt different ways for survival. The expansion of road networks and small irrigation has made it possible for farmers to grow cash crop. Despite all these development, the situation has not changed to the degree desired and to the extent it could substantially reduce the poverty nationwide and, in particular, rural parts.

Because of lack of road network, many apple-growing farmers in Karnali zone and Dhaulagiri zone are compelled to sell their produces in throwaway prices. Oranges grown in the eastern hills are yet to benefit from the transport to the market.

Thank to the implementation of APP, all these changes are possible through the growth and extension of pocket areas.

Despite many weaknesses in the APP, the current changes have helped to transform the agriculture sector. One of the failures on the parts of implementation side is that the country is yet to witness meaningful public-private partnerships and the private investment, too, is still insignificant.

“Lack of rural road network and absence of export oriented agriculture pockets hampered the returns on investment made in agriculture sector. On the other hand, this sector could not also be developed as a market oriented competitive occupation,” states Economic Survey 2003.

One of the major challenges the implementation of APP is also facing is the lack of coordination between different organizations. There needs to be full coordination among the Ministry of Agriculture and Cooperatives, Department of Roads, Department of Irrigation and Department and Industry, Trade and Commerce.

“We have made efforts to evaluate weaknesses and strengths of Agriculture Sector through performance review. After certain changes in the plan, the APP will definitely work as a very good plan for the country’s agriculture development,” said spokesperson Regmi. “The ministry is committed to implement the APP.”

Challenges Ahead

Following the introduction of new trade regimes like World Trade Organization and South Asian Free Trade Area (SAFTA), the country’s agriculture sector, too, will have to compete with the outside world.

Joining these new regimes is a challenge as well as a new opportunity for Nepalese farmers since they have to find the market abroad and nearby. To compete in such international market what is required is the development of proper strategy and plan to explore the opportunities that will be thrown open.

Past experiments have shown that Nepalese geographical advantages could be a big boon for the Nepalese farmers. If the road networks are expanded and the success of pocket programs emulated at the mass level, it will bring the substantial changes in the lives of rural people supporting the poverty alleviation programs.

“We must not compete with the neighboring farmers in producing traditional cereals and crop but we have to explore comparatively more advantageous areas like vegetables and fruits,” said Regmi. “Nepalese farmers can get more benefits thereby.”

The country has seen many ups and downs in its five-decade long history of agro-modernization and the government, donors, too, have spent a lot of effort to transform the sector. Whether in the context of country’s all round economic development or poverty alleviation, agriculture sector still plays important role. With the implementation of Agriculture Perspective Plan (APP) eight years ago, the country’s agriculture sector has seen certain changes but they are inadequate and incomplete.

From USOM (United States Operations Mission) era to present context of fairly adequate infrastructures, the agriculture sector has gone through various phases. The time has now come to kick-start the growth by exploiting the already available facilities and by taking advantages of geographical and ecological diversity.