Growing Fertilizer Market in Nepal

Landlocked Nepal faces the challenge of low crop productivity due to climate change, depletion of soil fertility, and low fertilizer use. Over the years, there has been a significant shift in the use of inorganic fertilizer in the Terai agro-ecological belt, while use has stagnated in the hill and mountain regions. The low fertilizer use may be partly due to insufficient demand, the shortage of fertilizer-responsive varieties that suit Nepali production environments, limited access to irrigation facilities, or limited market access aggravated by rugged terrain in many parts of the country.

The government is concerned about high prices and the dubious quality of fertilizers sold in the country. It is unclear why the demand for and sale of chemical fertilizer supplied through private, informal channels remain high despite the poor quality of chemical fertilizers.

Divya Pandey/IFPRI

To support the government of Nepal, USAID Nepal, through IFPRI, carried out a study to identify what determines the quantity of chemical fertilizer farmers’ use. The project also studied how variation in chemical fertilizer prices across regions between 2003 and 2010 contributed to variation in chemical fertilizer use and other economic outcomes of farm households during the same period.

Key Findings and Policy Recommendations

Analysis of past policies and panel data from the Nepal Living Standard Survey for 2003 and 2010 show that in Nepal's Terai region, lowering the price of chemical fertilizer is more advantageous for larger farms than smallholder farms. The growth in fertilizer demand has been met by private markets, despite the knowledge that chemical fertilizer from private markets is often inferior and impure compared with the chemical fertilizer supplied by the government, nongovernmental organizations, and cooperatives.

The study outlines the following policy options:

  • increasing the use of chemical fertilizer in Nepal, particularly in the hill and mountain regions, which may require the government to focus on raising returns from the use of chemical fertilizer rather than on reducing the price of chemical fertilizer through subsidies
  • conducting further research on the variation in use of chemical fertilizer between medium- to large-size farms in Terai and those in the hill region, as well as on the interactions between chemical and organic fertilizer and the long-term environmental sustainability of increased chemical fertilizer use
  • enhancing investment in agricultural research and development on production technologies

Read more: Determinants of Chemical Fertilizer Use in Nepal

Farm Size and Effects of Chemical Fertilizer Price on Farm Households

Consultation on India Food Security Portal

Food Security Portal Partnership and Policy Dialogue in India
IFPRI organized a one day consultation on Food Security Portal Partnership and Policy Dialogue in India on April 30,2013 in New Delhi. The aim of the consultation was to create a food security portal that would strengthen policy research, develop strong analysis capacity and increase active policy network with interactive policy dialogue. Giving an overview of the existing Global Food Security Portal,   Maximo Torero, Division Director MTID said, the India portal will articulate with global food security portal, which would combine both global and national initiatives to work towards food security.

To understand the disparities in food security situation, initially the portal will cover three states Andhra Pradesh, Bihar and Gujarat and would later expand to rest of India. P K Joshi, Director South Asia, IFPRI said, we would closely monitor food security indicators in real time for creating database for medium to long term projections and prioritize the existing gaps. Devesh Roy, Research Fellow, IFPRI, added, we would be partnering with  institutions, private sector and NGO’s to take this effort ahead in three states in India.

Speaking on the incremental financial and distributional implications of the revised National Food Security Bill that was distributed in the Parliament in March 2013, Prachi Mishra, Senior Economists at Ministry of Finance said, estimating the cost of NFSB can be more involved than simply estimating the cost of additional food grains. She said it is necessary to incorporate –     Expenditures for running the program,    Grandfathering the existing beneficiaries and Including the misclassified

The consultation was participated by the team members from Swiss Agency for Development and Cooperation (SDC) and by government representatives, researchers, private sector and NGO’s. The group discussed the key food security research areas and priorities for India and as per the region.

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