Food Investment Good Investment

Nepal is an agronomic country. The dominance of agriculture persists in the country owing to what has been written several times in various articles published by different publications; more than two-third of the population engaged in the agriculture to contribute merely around one-third of the GDP. And with the alarming situation of more than 1700 people leaving the country every day for various purposes, the contribution  seems to go further down – one, there will be few people working as human capital for agriculture and two, the agriculture pattern has not upgraded itself from traditional approaches.

It is not true that no work has been done for the remedial purpose but the effectiveness is what has remained questionable. The world now believes that it is out of the crisis phase but the Food Price Index of Food and Agriculture Organization (FAO) has stringently remained either above or around the upper bound which reached during the food crisis in 2008. In case of Nepal, according to the World Food Programme, more than 3.5 million people are directly under the risk of food insecurity. A document produced in 2011 suggested that 38 districts in Nepal ponder with the deficit food production and it might be unbelievable when I say that the condition has worsened up further. The economic survey released by the Ministry of Finance shows that the average food price inflation in the last seven years is 12.1 percent, ranging from around 8 % to 17 %.

Nepal is really having a tough time trying to come up with programs which would escalate the agricultural production and strengthen the agricultural value chain. Banks and Insurance companies are the most respected service sectors in the country but it is no different than a movie sequence that they are not much interested working for the food investment or the agricultural enhancement as the returns come late as compared to other prevalent sectors.

It is high time that the country has a policy for the food investment, by which I mean investment for the agricultural production to that for the market enhancement. The objective to invest for agricultural production should be directed to narrowing the production deficit. Private sectors can be encouraged for the same with tax regimes. Few steps have been taken in this budget but the execution has been questionable. Nepal Food Corporation should be restructured making it focused to maintain its warehouses to establish a food bank and keep the socially auditable records of the food stock with it collected from all over the country. Regular auctions should be carried out which will also facilitate bulk traders. Finally, a commodity exchange has to be thought of with government investment along with private sectors, which will increase efficiency for market channelization, price determination & control and attain international food standards.


Note: This article was published in the Perspectives of The Himalayan Times on 19th October, 2014