Reliable Strategy Needed to Boost Agribusiness

KATHMANDU: Nepal should adopt a two-pronged strategy to boost trade in agriculture products, according to experts.

The country should work for the removal of the remaining market barriers through trade negotiations, and overcome supply-side constraints through improved governance, increased attention to economic issues, resource mobilisation, public sector like budgetary allocation and fiscal incentives, donor community with the help of Aid for Trade and private sector through Public Private Partnership modality, said chief executive director of South Asia Watch on Trade, Economics and Environment (SAWTEE) Dr Ratnakar Adhikari presenting his paper on ‘Nepal’s agricultural trade: Opportunities and challenges’ at the International Workshop on Agribusiness Promotion here in the valley today.

More than two-thirds of Nepalis depend on agriculture for their livelihood and agriculture also continues to represent a significant portion in Nepal’s trade basket, he said, adding that the National Trade Integration Strategy 2010 has listed seven agricultural and forest-based products — out of 12 products identified — as having export potential.
There should be structural transformation to promote trade in manufacturing agriculture products as transport infrastructure is critical for the trade of perishable goods like agricultural products, added Adhikari. “Nepal’s transport infrastructure is the worst in the region adding to supply side constraints.”

There is no significant barrier to agriculture import in the country and it also has export potential due to very low tariff barriers for Nepali exports because of the country’s membership of World Trade Organisation, South Asian Free Trade Area, and Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation free trade agreement and bilateral trade agreement with India that has ensured zero tariff access virtually for agriculture exports from Nepal.

“However, the country has failed to take advantages due to para-tariff barriers and non-tariff barriers that are still prevalent in neighbouring countries including India and China,” he added. High tariff barriers on certain agricultural products in the markets of developed countries coupled with India and Bangladesh imposing several ‘other duties and charges’ on Nepali agriculture products have limited export potential, he said, adding that India’s application of quarantine in a non-transparent and discriminatory manner, its requirement regarding ‘wooden packaging’, Norway’s refusal to import honey from Nepal due to absence of pesticide control programme, difficult customs procedures in India, subsidies on agricultural products provided by OECD nations and India have made Nepali agriculture products less competitive.

Organised by Project for Agriculture Commercialisation and Trade under the Ministry of Agriculture and Cooperatives, FNCCI, and World Bank Group, the three-day international seminar that saw participation from seven countries brainstormed on key issues; removing trade barriers to facilitate regional and international trade, identifying critical elements in accelerating Public Private Partnership in agribusiness, and creating markets for Nepal’s niche green products.

(Published in:The Himalayan Times, 10 April 2012)