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Paddy price-crash hits local farmers
BHAIRAHAWA, JAN 13 - The cheaper Indian paddy that largely enters through the Nepal-Indian border unofficially has brought the paddy price down by about 20 per cent here, badly hitting a major income of local farmers.
The price of coarse paddy in the local market of Rupandehi district currently stands in a range of Rs 650 to 675 per quintal, which is a sharp decline against Rs 800 per quintal recorded during the same period last year.
The steep price decline has poured cold water over the expectation of the local farmers that a healthy rise in production would improve their income. Farmers here said that they are facing a tough time even to secure cost of production, let along the profit. According to a government estimate, the cost of paddy production in the district stands at Rs 700 per quintal.
"Production last year was poor due to adverse weather condition, which greatly squeezed out economic condition. But, our expectation to revive our financial condition with this year’s bumper paddy production mots likely to remain a pipe dream," said Asthabhuja Chaudhary, a farmer from Makrahar VDC-3.
Devi Prasad Chaudhary of Haati Banagai, another farmer, shared the similar grief and added that the returns form the paddy farming for the season did not even promise him and his family adequate to make their livelihood.
As in the past, decline in paddy is due largely to the massive influx of cheap Indian production. The official import of the product during the last five months has increased by three-fold, according to Bhirahawa Customs, while illegal inflow through the largely unrestricted border is expected to be multi-fold than the official figure.
According to customs, the paddy import stood at 29.97 tons during the last five months, while it was 6.41 tons during the corresponding period last year. "The quantity of unofficial inflow is much higher," conceded the customs officials.
And, the most painful fact for the local farmers is that the price smuggled cheap paddy is treated as a benchmark for setting price in the market. The government in past used to fix the minimum price for paddy to insulate the local farmers from such heat, but it left such practice to tune the economy with free market policy.
"But, how can genuine market forces work in a market that is distorted by a huge flow of highly subsidised Indian paddy?" questioned Asthabhuja. Owing to mechanised and commercial scale of farming along with the subsidies in major agricultural outputs, the cost of production is far lower in India.
But, such farming incentives greatly lack in Nepal. "The price of urea in Rupandehi stands at Rs 13.40 per kg while it is Rs 7.88 in India," conceded Jhalak Sharma Acharya, Deputy Director of Nepal Rastra Bank. Similar, price different exists in other agriculture inputs as well, he added.
Also the annual stock clearance of the Indian government, which it does at the rate of 25 percent of the total stock every year, has also affected the paddy price, as the old paddy directly enters the country, said Tulasi Gautam, expert at Agriculture Market Directorate.
"Under circumstances, if the farmers store their production and sell in coming summer, they could be better off," he said. But, it is very difficult at farmers’ level, as most of the farmers are heavily burdened with heavy loans, and are always under pressure to sell out their production as soon as possible.
Officials at the NRB research division suggest the government to introduce measures to protect the domestic producers, particularly through the period till the Indian government completely scraps the subsidy.
"This is important as increased disenchantment among producers, which is prevalent throughout the country, can badly affect the national production and productivity," they said. Gautam, however, ask the government to procure the production directly from the farmers and pursue the co-operatives farming to relive the farmers and strengthen their market determining capacity.Posted on: 2004-01-14 04:05
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