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NEPAL: Poor Planning Behind Rising Food Prices

Mallika Aryal

KATHMANDU, May 8 2008 (IPS) - As the sole breadwinner in a family of five, Maya Tamang watches her food budget carefully. And she can vouch best for the way many items are steadily disappearing from the table as food prices spiral steadily.

“Cooking oil is expensive. We can hardly afford rice (the staple) and meat has skyrocketed beyond reach,” Tamang told IPS. “It doesn’t look like the prices are going to come down any time soon, how do poor people like us survive in this situation?”

In Nepal the price of many food items have doubled in the past year. Preoccupied with the Apr. 10 constituent assembly elections and the vote counting and parliament formation that followed, the government has not been unable to relieve the hardships suffered by millions of Nepalis.

The dramatic rise in oil prices, a trend towards diverting agricultural lands to producing bio-fuels, increased demand for food and meat and growing affluence in India and China (both neighbours of Nepal) are some of the reasons cited for worldwide shortages.

For Nepal, the shortages became acute when neighbouring India and Bangladesh decided to cut down on food exports to deal with a looming food crisis in their own countries. But at least part of the problem is home-grown.

According to the United Nations World Food Programme (WFP), in the last few decades, Nepal has become a food deficit country. Yields per hectare have not been able to keep up with the rapid growth in population and the country has had to export from neighbouring India to fill the gap.

Since the 1990s Nepal has been growing steadily dependent on food imports. “Food, fertilizers, pesticides and even seeds – we are so dependent on India and the other countries that any price fluctuation in the international market is going to have a huge impact on prices here in Nepal,” says Jagannath Adhikari, a food security expert.

Nepal imports over NRS 2 billion (30.7 million US dollars) worth of rice and Rs 50 million (769,000 dollars) worth of wheat every year to help feed a population of 29 million people.

Many say Nepal’s traders have raised prices because they want to recoup money they gave to various political parties during the recent constituent assembly elections. Others say that the traders are also hoarding food stocks to create artificial shortages.

With these rise in prices it is families like that of Maya, who survive on daily wages and spend a large portion of their daily income on food, that are hit the hardest. “If the prices are going to keep increasing my family will either have to cut down on one of the meals, or I will have to pull one of my kids out of school and send him to work,” says Maya.

“We are most worried about the effect that rising prices are having on Nepal’s eight million poor – those who typically spend more than 80 percent of their income on food. For these families any increase, much less a 40 percent increase, in food prices spells disaster,” says Richard Ragan, country representative of the World Food Programme (WFP) in Nepal.

WFP has been working in Nepal for 41 years and last year it fed nearly two million Nepalis. Its recent report says that in 2006 drought and other natural disasters resulted in a national 13 percent cereal production deficit, in summer of 2007 paddy harvest bounced back with estimated 17 percent increase as compared to the year before.

But, despite these good crop yields, food prices have increased significantly leaving millions extremely vulnerable. WFP estimates that the number of Nepalis struggling with food security has doubled from four million to nearly eight million people.

Nepal exports wheat flour and rice to Tibet, China and Bangladesh. Almost 1,000 tonnes of wheat leave Nepal for Bangladesh everyday from the customs office in Mechi, east Nepal. On Apr. 30 the Nepali government imposed a ban on the export of paddy, rice and wheat. Officers at the Ministry of Supplies said that this decision was taken as a response to rising food prices and to prevent a food crisis in Nepal.

Experts say that the government needs to do more than just ban export on certain items. They recommend that the government immediately evaluate how much food it has in stock, whether it will be sufficient for the next six months, and start importing to fill in the gap. However, they also warn that that the government should actually be thinking long-term if it is serious about dealing with the food crisis.

Jyoti Baniya of the Consumers’ Protection Forum says, “This problem will plague us for a long time and unless we act on it fast and plan long-term, thousands of Nepalis will begin to die of hunger.” Baniya suggests that the Nepali government, like in Pakistan, introduce ration cards so the consumers can buy food at subsidised prices.

Baniya suggests that the government immediately fix maximum retail price for food grains so that there’s healthy competition among retailers.

Ragan of the WFP says that the government can take a number of steps to protect those living on the razor-thin line of poverty. “Nepal needs to quickly adapt initiatives that build households food security like developing small scale irrigation projects, providing improved feed stacks and other agricultural inputs to farmers.” He adds that the WFP is already working with drought affected communities to develop these assets but it is imperative that the operations are expanded to the growing number of people that cannot meet their food needs because of rising prices.

Adhikari says that in the future the government has to start thinking about subsidising food, and working out ways in which farmers increase their yield and eventually become self-sufficient. He adds, “Feeding its people should be the topmost priority of any government. Food shortages can only be solved if the government has long-term vision. It hasn’t happened in Nepal yet, but if the government doesn’t respond quickly Nepalis may resort to food riots.”