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NFC price-fixing relives farmers in west
NEPALGUNJ, JAN 19 - To the farmers who have been failing to compete with heavily subsidised Indian paddy, even the mere fixing of supportive price by Nepal Food Corporation (NFC) has relieved greatly. This is what the latest experience of Mid- and Far-Western markets reveal.
When the state-owned entity of Nepal Food Corporation fixed procurement prices for paddy after a gap of over six years in three western regions this time, its sole aim was to procure paddy directly from farmers for storage.
However, the step turned as a sweet tune to farmers as it triggered up the paddy prices in the market.
Till mid-November, citing prices of cheaper Indian paddy, the private players had constricted the prices of local coarse paddy as low as Rs 590 per quintal. But when the NFC fixed its prices at Rs 735 per quintal, the private players responded with increment in free market.
"The private buyers started raising prices as soon as we announced the government rates," Harihar Prakash Shrestha, acting chief of Nepalgunj branch of NFC told The Kathmandu Post. On Friday, the private buyers were procuring it at Rs 750 per quintal.
The situation was same in even in Mahendranagar where the private buyers had monopolised the prices at Rs 650 per quintal. But when NFC intervened in late November with Rs 680 per quintal, it soared to Rs 750 in free market. Now, as the NFC’s price is Rs 730 per quintal, the price in the free market is Rs 775 per quintal.
"The private buyers have been adjusting their prices as per our rates," said Ganesh Bahadur Chand, chief of Mahendranagar branch of NFC, in a telephonic conversation with this scribe.
The government had scrapped the system of fixing minimum prices of agriculture production in 1997 leaving it to the market to determine. From the same year, it had started phasing out subsidy provided on agriculture inputs.
However, owing to heavy competition coming from the heavily subsidised Indian productions, farmers have been failing to secure even the cost of productions since then.
Thanks to the NFC’s intervention, the situation reversed this year, said farmers here. "This has prevented further downturn in the prices of paddy and ensured us return over investment," they said. The cost of production of coarse paddy this year stands at Rs 700 per quintal, according to official estimate.
Despite the positive impact, NFC’s intervention, however, is not enough to relieve the small farmers as the price fixing became late. In the absence of alternative sources of income, most of the farmers sold out their products as soon as the harvest to makeup their livelihood. The NFC had fixed prices only in late November.
"Owing to delay in fixing the prices, the small farmers could not take advantage of the situation," conceded Chand, adding, "By the time our price came into effect, small farmers had already sold their productions."
"If the government is to protect the small farmers, it must fix the prices by mid-October," stated concerned market experts and officials here.
The delay in announcing the prices has also affected the NFC from meeting its target of procuring 40,000 tons of paddy through the NFC, Salt Trading Corporation and National Trading Limited.
However, it has bought only 1,153 tons of paddy through NFC, while Salt Trading and National Trading have still not procured paddy due to budgetary problems.
The procurement programme was affected mostly due to the inability of the NFC to reach farmers at villages because of poor security situations. "Also there was no publicity of the programme for the farmers to know about NFC’s new initiatives," said Shrestha.
Irrespective of failure of the procurement programme, agro-experts here stated that the latest government intervention on pricing impacted the producers here positively.
"This has created positive environment among producers," said Tulasi Gautam of Agriculture Market Development Directorate.
He viewed that the government should also promote development of institutional buyers to prevent pricing monopoly of middlemen.
Deputy Director of Pricing Division, Nepal Rastra Bank, Jhalak Sharma Acharya also viewed that the government should review the agriculture policy in line to protect the farmers, especially as they have fallen prey to difference in economic scale of Nepal and India.Posted on: 2004-01-20 03:40
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