The Agriculture Development Strategy (ADS) currently being developed by the government with the financial and technical support of 12 development partners aims to guide process of agricultural transformation over the next 20 years through increasing labor and land productivity while promoting exports. Initiated in April 2011, the ADS has so far completed many steps in four years, and remains pending in the cabinet for approval. On the basis of several consultations at various levels, it has developed a comprehensive implementation action plan for the first 10 years. Hence, all mid-term plans and annual programs to be implemented during this period are expected to reflect this strategy by following the implementation action plan.Improved productivity of land and labor is the cornerstone of ADS. The measures to raise agricultural productivity include those related to (i) effective agricultural research and extension; (ii) efficient use of agricultural inputs; (iii) efficient and sustainable practices and use of natural resources (land, water and forests); and (iv) increased resilience to climate change and disasters. In this context, the budget speech for the fiscal year 2015/016 has partially addressed first, second and third measure. But it has overlooked the fourth measure—the increased resilience to climate change and disasters.
In the case of efficient use of agricultural inputs, the budget speech has emphasized more on irrigation services, fertilizers and seeds. It has proposed overambitious target of providing irrigation facility to all agricultural lands within the upcoming five years. By completing ongoing ground and deep well irrigation projects and enhancing capacity and restoring the existing irrigation projects, irrigation facility will be made available for additional 28,300 hectares of agriculture land during this fiscal. Medium size irrigation facilities will be expanded in all districts.
Furthermore, 7,100 units of shallow tube-wells are proposed to be installed especially in vegetable pocket areas. The total budget allocated in the irrigation subsector is Rs 20.22 billion. Similarly, Rs 6.1 billion has been apportioned to provide grants for chemical fertilizer, organic fertilizer and improved seeds.
Regarding research and extension, the budget speech has focused on enhancement of agriculture productivity. A provision of Rs 2.08 billion has been made for agriculture research. Agriculture extension services are proposed to be implemented effectively in all 75 districts. For this, necessary budget has been allocated to make available one agriculture or livestock technician in each Village Development Committee. The budget has also encouraged mobile based technology for disseminating agriculture information and services.
Furthermore, network of agriculture and rural roads has also been proposed to be extended for movement of agriculture inputs to farms and agriculture products to the markets. For this, the budget speech has made the provision of Rs 15.25 billion for the construction of rural and agriculture roads and bridges. As electricity plays an important role in augmenting agriculture production, provision of Rs 2 billion has been made for extending rural electricity network to all VDCs within coming three years.
Provision has also been made to provide 50 percent subsidy on purchase price of fodder machine, which produce nutritious grass, to farmers rearing more than 50 cows and buffalos. In order to motivate agriculture mechanization, an arrangement has been made to waive customs and VAT in the import of machineries such as tractors, power tillers, and thresher machines. One hundred percent interest grant will be provided to private or cooperative sector in the first five years if they want to build and operate cold storage and food grain storage houses with loan from the banking sector. There is continuation of the provision of providing subsidy on excess of six percent interest rate to encourage investment in agribusinesses. Landing process is proposed to be further simplified.
Special program is to be initiated to standardize, branding, and registering in World Trade Organization to increase export of such products. The VDCs involved in organic farming will be provided 50 percent additional grant on top of regular grant. There are programs to promote collective and cooperative farming by integrating fragmented land for agriculture commercialization.
All these provisions in the current year's budget favor agriculture commercialization. But the existing implementation mechanism of the Ministry of Agriculture Development is weak and ineffective. Among the four strategic components of the ADS, the governance component has been overlooked in the budget speech, though it is said that the fiscal year 2015-16 will be the budget implementation year.
Governance in the ADS refers to the capacity of government to design, formulate and implement policies and discharge functions. Key elements of governance include accountability, participation, predictability, and transparency. The governance component is perhaps the most crucial one in order to implement programs effectively. Its effective implementation requires an improvement in management based performance and results.
Furthermore, milestones to be completed during the first year of ADS implementation are: amendment, formulation and enactment of necessary acts; establishment of the ADS Trust Fund (ATF) and coordination committees; formulation of guidelines for the ADS implementation; budget allocations to ATF by donors; and establishment of the Farmers' Commission. But the budget speech has said nothing about these milestones and there is delay in the approval of the ADS. Therefore whether the ADS will be implemented or not is in doubt.
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