AGRI BUSINESS

PROMOTION
POLICY
Presented by: Arpan Acharya
AGRICULTURE SECTOR AT A
GLANCE
 Agriculture: backbone of Nepal’s economy
 66% total population and 1/3rd of GDP contribution
 21% of the land is cultivable (47% rain-fed)
 Average land holding – 0.68 ha
 Major crops: Paddy , Maize, Wheat and Horticulture
 Livestock: Cattles, Buffaloes, Sheep/Goat, Pigs and Poultry
 Subsistence farming (low productivity and low production)
WHAT IS AGRIBUSINESS?
 Business of Agricultural production
 Includes all aspects of farming
 involves all the steps required to send an agricultural good to market, namely production,
processing, and distribution.
WHAT IS AGRI BUSINESS
PROMOTION POLICY 2063?
 Policy that highlights the diversification, commercialization and promotion of agriculture
sector with private sector involvement in commercial farming.
 This policy was prepared in the spirit of National Agriculture Policy 2061.
 Partnership between the private sector and Government has been emphasized for the export of
quality goods.
 The policy considers infrastructure development as a cornerstone for commercialization and
has envisaged promotion of partnership approach between Government and the private sector.
OBJECTIVES
 To promote competitive and market-oriented agricultural production through the
implementation of modern technologies and farming practices.
 To develop the agricultural industry, with a focus on promoting domestic agricultural goods
and increasing exports
 to commercialize agriculture as a means of alleviating poverty and promoting economic
growth.
MAJOR POLICIES
 Infrastructure development to promote agribusiness.
 Participation of government, co operatives, private sector in the collection, processing,
storage, transportation and pricing of agricultural products.
 Increasing credit access to farmers: agricultural firms can be used as collateral, deprived sector
lending etc.
 Insurance for crops, cattle etc.
 Tax exemption for importing machinery. Concession on interest rate in purchasing vehicles for
agribusiness, concession of electricity bills, financial and technical help from the government
while establishing collection centers and processing centers.
 Encouraging industries to use nationally produced raw materials
 Promoting FDI in agribusiness. Priority in export of goods.
LIMITATIONS
 Lack of clear and detailed plan for implementation.
 Lack of proper monitoring and evaluation mechanism.
 The micro level issues vary and may not be effectively addressed by one-size-
fits-all approach.
 No proper monitoring of subsidy and exemptions given by the government.
 Relying on market mechanism to determine prices of agricultural goods.
 Dependence on Foreign Investment.
 Financial knowledge on farmers and proper awareness
CURRENT
SITUATION
CREDIT FLOW IN
AGRICULTURE
 NRB has adopted a policy of
expanding credit to agricultural sector
that create direct employment and are
strategically important.
 Commercial banks are required to
disburse at least 11% of the total
credit investment to the agriculture
sector
 Increase of Government spending.
 Various services, such as Agri extension services has been made to support agribusinesses.
 Focus on attracting private sectors
 75% subsidy by government in crops and livestock insurance
Rs 886.274 total paid for insurance purpose.
 Hybrid seed programs has been conducted in the country.
 Irrigation facilities have improved.
PRIVATE SECTOR
PARTICIPATION
 Recent years have seen some business houses starting to invest in agriculture.
 Various large business house: Dugars, Golchhas, Khetans etc. have their investment in various
food processing, industrial and other ventures.
 Many of them have reduced their presence in agriculture or left agribusiness all together, but
some (Jyoti Group) have ventured into farming high value crops.
 Exports Himalayan Arabica Coffee beans to Japan.
 Started Farming from Nirmalpokhari, Kaski but now have expanded to Lamjung.
GOLYAN AGRO
 Golyan Group, under the brand “Mato” has started to supply organic farm products at
affordable rates in the market.
 Collection of farm products and market management
 Planning to open 20 stores in Kathmandu
 Already bought around 300 bighas land in Jhapa.
 Planted ‘kalanamak’ rice breed in 190 bighas in Jhapa and Bardiya collaborating with the local
farmers.
 Also preparing to produce plant seeds to end the dependency on imported seeds.
CEREAL PRODUCTION
(METRIC TONS)
POVERTY
Number of Tractor/Power Tiller Registered
MACHINERY
IMPORT

Source: Department of Transport Management

TREND OF FEW FAST GROWING EXPORT
OF AGRO-FOOD PRODUCTS FROM NEPAL
A HUGE TRADE DEFICIT IN AGRO
FOOD PRODUCTS
RECOMMENDATION
 Policies with clear and detailed implementation that provides specific steps, targets, and
indicators for success.
 Regular monitoring and evaluation to access the progress.
 Comprehensive plan for research, development and adoption of genetically modified crops in
Nepal.
 Encouraging FDI by providing incentives, tax breaks and subsidies to attract investment and
also providing a conducive business environment.
 Education and training programs for farmers.
 Encouraging and supporting cooperatives and other forms of collective action among farmers
to increase their bargaining power and access to markets.
 Establishing a network of independent, accredited laboratories for testing and certification of
agricultural products, specifically for checking compliance with sanitary and phytosanitary
(SPS) standards
THANK YOU