KATHMANDU, March 27: The government has decided to reinstate subsidy in chemical fertilizers and administer the prices in a bid to improve the supply situation and bring relief to farmers. The decision in this connection was taken by the cabinet recently. [break]
"To start with, subsidy will be provided for 32,500 tons of fertilizer," said Dr Hari Dahal, spokesperson at the Ministry of Agriculture and Cooperatives (MoAC). He told myrepublica.com that the government will extend the facility for an additional 100,000 tons in the next planting season this fiscal year.
According to the ministry, annual demand for chemical fertilizer stands at 300,000 tons. However, official import figures remain much lower than that, creating severe shortages in different part of the country in different seasons.
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The cabinet has also formed a high-level Fertilizer Supplies and Distribution Management Committee under the coordination of the secretary at MoAC, says a ministry press release. The committee has been entrusted with arranging regular supply and monitoring the market.
The decision of the government is a major policy rollback. The government had decided in 1997 to remove subsidy in agricultural inputs, opening the prices to market forces.
Prior to that it was providing subsidy in chemical fertilizer, seeds and deep and shallow tube wells. While the subsidy in deep tube wells still exists, albeit to a limited extent, the government has been phasing it out, bowing to a condition laid down by donors while signing the second agricultural loan program.
The donors had mainly argued that the subsidy was greatly misused. Farmers and civil society representatives had strongly flayed the decision.
The policy reversal was decided after MoAC forwarded a proposal to the cabinet to reintroduce the subsidy, citing increased food insecurity and the problems faced by farmers in getting hold of adequate fertilizer during different planting seasons.
