A study report has said that the import surge of agricultural products in Nepal has been adversely affecting agricultural sector of the country.

A study research entitled, “Import Surge in Nepal, a case study of Rice” has said that increased cost of production and lack of competitiveness of the domestic agriculture sector and Indian decisions with respect to their domestic agriculture are the main factors for the surge in agricultural products in Nepal.

“Given the increasing cost of production per hectare, the relative competitiveness of the Nepalese agriculture sector is very weak. This is an important issue since Nepalese agriculture has to compete against Indian agriculture, which receives subsidy in most agricultural inputs, including that of electricity in some states,” the report adds.

“Cheap Indian agricultural products easily find market in Nepal both thorough formal and informal channels, thus posing a serious challenge to the Nepalese agricultural sector,” the report said.

The report further said there is high presence of imported rice in the urban markets of Nepal. “In case of Bhairahawa particularly, 60-80 percent of the total rice sales was of the Indian variety. Similarly, 20-40 percent of the rice sold in Nepalgunj came from India,” the report adds.

The main reasons for import surge are low productivity, open border with India and no qualitative restrictions.

According to statistics, adequate food is available in only 10 districts of the country while 21 districts have food surplus and the rest of the districts have food shortage.

Stating that Nepal neither has the capacity nor the expertise to prove injury resulting from imports, the report said, “Countries like Nepal have to be provided with practical policy option to deal with such negative impact.”

Speaking at the report launching ceremony, vice-chairman of National Planning Commission Dr Shankar Sharma said that though import surge is a serious problem for the domestic agriculture market, there has been no report of injury to the domestic market from the import surge of rice.

The import surge will affect those who has surplus food, so it will not have a large impact in Nepal, he said. He however stressed on the need of further study in the area of injury caused to national industries.

Under secretary at the Ministry of Agriculture and Cooperatives, Dr Krishna Prasad Pant, said, “If the problem is creating serious impact in the local agriculture industry, we will be able to adopt safeguard measures as per the provision of World Trade Organization (WTO).” He however said that there were not such impacts in Nepal till date.

Dr Shibish Chandra Regmi, country director of Action Aid Nepal said that the import surge will have adverse effect in food security and price of goods.

“Though in the short run, the import surge reduces the prices of goods, in the long run, it makes countries dependent on their (exporting country) products ultimately resulting in the price hike of goods,” he added. nepalnews.com pb Apr 03 06