Nepali farmers line up to sell paddy while imports surge

As per Birgunj Customs, Rs5.25 billion worth of Indian paddy entered Nepal between November 21 and December 30.

A large portion of the imported paddy comes from Bihar, Uttar Pradesh and West Bengal states of India. Post Photo: Shankar Acharya

Farmer Hirai Yadav of Jighaul, Siraha has been waiting for hours to sell his paddy at the depot of Food Management and Trading Company, the state-owned company tasked with buying farmers' crops.

“Farmers like us suffer all the time,” said Yadav.

Nepali farmers endured a chemical fertiliser shortage during the paddy transplantation period in June. They began harvesting their crops in November, and now they are facing another hardship—selling them.

While farmers like Yadav are standing in long queues outside the Lahan depot of Food Management and Trading Company to sell their paddy, convoys of paddy-laden trucks from India are entering Nepal through the Birgunj border point.

“The price we get for our paddy hardly covers our investment. Moreover, the government doesn’t buy our crops on time,” said Yadav.

On November 3, the government raised the minimum support price (MSP) for paddy by 8 percent for this fiscal year. The floor price for common paddy is now Rs3,128 per quintal, and the floor price for mota dhan is Rs2,967 per quintal.

The MSP is the lowest legal price that can be paid for farmers’ harvests. The government does not fix the floor price for fine paddy.

Nearly a month after farmers had harvested their crops and the government had fixed the MSP, Food Management and Trading Company finally issued a paddy purchase notice in Siraha, Madhesh province.

Since then, paddy growers have been waiting in long queues with their paddy-laden tractors outside the depot. On Sunday, the line stretched for 3 km.

The company has set the purchase price for sona mansuli at Rs31.28 per kg. The price of katarni, a fine grain variety, has been fixed at Rs38 per kg.

Raban Kumar Yadav, chief of the company in Lahan, said they would buy 1,500 tonnes of paddy this year as per the quota determined by the head office in Kathmandu.

“The process of buying paddy was delayed this year because the headquarters did not issue the purchase notice on time,” said Yadav. “In the past, the paddy buying process would begin in November.”

Farmers from Siraha, Saptari and Udayapur districts sell their paddy at the Lahan branch.

Despite the long line of farmers waiting to sell their paddy, officials say they may not be able to buy from everybody because they have to stick to the quota. They fear the farmers will launch protests if they are unable to sell their crops.

Farmers complain that middlemen are taking advantage of the situation.

Nepali farmers are expected to harvest 5.48 million tonnes of paddy this fiscal year, which is 7 percent more than last year, despite a crippling shortage of chemical fertiliser during the key transplantation period in the monsoon.

The paddy harvest will produce around 3.52 million tonnes of rice after milling. Nepal requires 4 million tonnes of rice annually to feed its population, and there could be a deficit of 480,000 tonnes this fiscal year, the Agriculture Ministry said on Thursday. The shortfall is normally met by imports from India.

Farmers complained that the company’s policy to purchase only up to 5 tonnes of paddy in the harvest season was not justifiable.Farmers from Siraha, Saptari and Udayapur districts sell their paddy at the Lahan branch. Post Photo: Bharat Jargha Magar

Khushi Lal Shah, a farmer from Madhopur, Siraha, said he had become frustrated waiting in the long queue.

According to the company, it will take at least a week to finish buying paddy from the farmers.

The Birgunj Customs Office said 151,907 tonnes of imported paddy worth Rs5.25 billion entered Nepal between November 21 and December 30, up 28 percent from the previous year.

The government collected Rs264.2 million in taxes from the imports.

“The import of paddy has increased steeply since mid-December,” said Jitendra Rasaili, operation in-charge of the Nepal Intermodal Transport Development Board in Birgunj, which operates the integrated check post.

“Around 125 to 150 trucks loaded with paddy have been entering the country every day.”

The Indian government has approved Birgunj, Bhairahawa and Kakarbhitta border points for importing paddy. A large portion of the imported paddy comes from Bihar, Uttar Pradesh and West Bengal states of India.

“Paddy and rice shipments commenced right after the Indian government permitted their export,” said Dhan Bahadur Baruwal, chief customs officer in Birgunj. “Traders might have been importing more than the usual amount to stock up in case the Indian government halts exports once again.”

In September 2022, India, the world’s largest exporter of rice, banned shipments of broken rice and imposed a 20 percent export duty on various types of rice, except parboiled and basmati rice.

The southern neighbour initiated the move to boost supplies and calm prices after below-average monsoon rains curtailed planting.

The repercussions were immediately felt in Nepal. Local retailers say the price of imported long grain and fine rice saw the single largest jump of Rs10 per kg.

Market insiders say the rise in the price of rice would affect all, particularly the poor.

India relaxed the restrictions in November, permitting the export of 600,000 tonnes of unmilled rice to Nepal. The Indian government said in a notice that it would allow exports to Nepal as it has traditionally relied on India to fulfil its food grain requirement.

“The government levies only a 5 percent agriculture improvement tax on paddy imports,” Baruwal added.

Subodh Kumar Gupta, president of the Birgunj Chamber of Commerce and Industries, said that the Indian government has allowed the export of 600,000 tonnes of rice and paddy to Nepal this season.

“The quota in the preceding year was 550,000 tonnes,” said Gupta, who is also president of the Association of Nepalese Rice, Oil and Pulses Industry. “The price of the rice might not increase this year as traders have been able to import sufficient quantities of paddy on time,” he added. 

Date: 04-Jan-2023