Economy

National Economy	Price and Supply Situation	Industry and Tourism
Transport and Communication	Energy, Forestry and Environment	Agriculture

Agriculture
Production Position:

Crops

In FY 2000/01 productions of major food crops had increased by 2.6 percent as compared to that of the previous year. Preliminary estimate of production of these crops during the current year suggests an increase of 1.1% only to a total of 7547,000 metric tons. The total area under these crops is estimated to have declined by 0.5 percent to 3.3 million hectares in the current fiscal year compared to that of the increase in last year. Production despite the decline in cropping area in the current year as attributed to favorable monsoon, disease control, and easy access to agricultural inputs and improvement in productivity:

Production of major cash crops, which increased by 7.3 percent last year, is expected to continue its upward trend by 2.8 percent to reach a total of 3.78 million metric tons in the current year. The area under these crops cultivation is estimated to increase only by 0.3 percent to reach 393,000 hectares.

Production of lentils, fruits, vegetable and other crops combined is estimated to increase only by 3.2 percent to reach 2.46 metric tons in the current fiscal year compared to the increase of 9.6 percent last year.

Shares of food crops and cash crops in the total production of major crops are estimated to be 65.6% and 34.4% respectively compared to 66.1% and 33.9% last year. Areas under cultivation of these two crops are estimated to be 89.4% and 10.6% respectively as they were in last year.

The cropping intensity is expected to be 168 percent in the current year.

The demand for food grain was 43,83,443 metric tons against the supply of 44,51,939 metric tons in FY 1999/00. In FY 2000/01, demand for food grain is estimated at 44,30,128 metric tons against the supply by 45,13,179 metric tons. Per capita vegetable consumption is estimated to have increased to 59 kg in FY 2000/01 against 55 kg in FY 1999/00.

Major Food Crops

Paddy: Paddy production increased by 4.6 percent during FY 2000/01 compared to the previous fiscal year. It is preliminary estimated to decline by 1.2 percent resulting in the total production of 41,65,000 metric tons in the current year. The productivity of paddy with an increase of 1.5 % is estimated to be at 2.74 metric tons per hectare in the current year as compared to that of the previous year. Areas under this crop in the current year as per preliminary estimate will to decline by 2.7% as compared to that of the last year. As a result, both total production and productivity are estimated to shrink due to insufficient rainfall during peak season of paddy plantation from mid-June to mid-July of 2002 in sizeable areas of the Eastern Region.

• Maize: Production of maize in FY2000/01 had increased by 2.7 percent as compared to the preceding year. In the current year, production is expected to increase by 1.8% to the total of 15,11,000 metric tons. Productivity is expected to rise by 1.7 percent yielding 1.83 metric tons per hectare against that of the last year. Area under this crop is expected to increase only by 0.2% against that of the last year.

• Wheat: Total wheat production in the FY 2000/01 declined by 2.2% as compared to that of the preceding year. In the current year, it is expected to increase by 8.6% to the level of 12,58,000 metric tons in relation to that of the last year. Its productivity is expected to increase by 4.4 percent yielding 1.88 metric tons per hectare compared to the previous year. Cropping area under this crop is estimated to rise by 4.1 percent with substantial increase under wheat 'crop due to favorable winter rain to the total of 0.667 million hectares.

• Barley: Barley production had dropped off by 3.2 percent in FY 2000/01 against that of the past year. It is estimated to increase by 3.3 percent to the level of 31,000 metric tons in this year. The area covered by barley is expected to remain unchanged and its productivity is expected to gradually improve. Farmers of Terai area are motivated to cultivate different cash crops replacing barley.

• Millet: Millet production had registered 4.0 percent decline FY 2000/01 in relation to the preceding year. In the same way it is estimated to further drop by 0.3 percent to reach the total 2,82,000 metric tons in the current year. The Area covered is also expected to decrease by 0.8 percent as against of that of the last year apparently due to sharply declining cultivation in the Terai region.

Production Position of Cash Crops
Cash Crops

• Sugarcane: Sugarcane production had fallen by 5.2% in FY 2000/01 as compared to that of past year. In the current year 22,48,000 metric tons will expected to be produced with an increase of 1.6% as per the preliminary estimate in the current FY. The area covered by sugarcane is expected to remain unchanged. Productivity is expected to improve however, by 1.6% yielding 38.1 metric tons per hectare.

• Oilseed: Oilseed production which increased by 7.3 percent in FY 2000/01 as compared to that of the previous year estimated to rise by 2.3 percent to total of 1,35,000 metric tons this year. Its productivity is expected to rise by 2.8% yielding 0.72 metric tons per hectare despite the area expected to remain unchanged.

• Tobacco: Tobacco production had increased by 5.3 percent in FY 2000/01 in comparison with the last fiscal year, and its production is estimated to fall by 2.5 percent to the level of only 3,900 metric tons in the current FY. Similarly, the area covered by tobacco is expected to drop by 2.5 percent whereas productivity seems to be remaining unchanged in the running fiscal year.

• Potato: Potato production which recorded growth of 11.0 percent last year is expected to increase by 5.0 percent to a total of 13,80,000 metric tons this year. Area under this crop is estimated to rise by 1.5%. Productivity is also expected to rise by 3.4% yielding 10.53 metric tons per hectare this year.

• Jute: Jute production had recorded the 5.0 percent growth registered in FY 2000/01 as compared the last year. Growth rate is estimated to remain unchanged with total production of 16,100 metric tons for the current year. Both area covered and productivity are also expected remain the same as last year.

• Tea: Tea cultivation is growing as a commercial farming in Eastern Development Region. Its production increased by 30 percent to the total of 6,628 metric tons in FY 2000/01 against the total 5,085 metric tons a year before. It is expected to increase only by 5.6 % with production reaching 7,000 metric tons this year. Area under tea farming is estimated to grow by 4.2 % to the total of 12,500 hectares as compared to 12,000 hectares last year. The number of tea farmers is estimated to reach 5,500.

• Coffee: Coffee cultivation is also developing as commercial venture in the Western Region. Its production increased to 88.7 metric tons in FY 2000/01 as compared to 72.4 metric tons in the previous year. This year, production is estimated to rise by 1.5 percent to total of 90 metric tons area under new cultivation to expand by 6.1 percent to reach a total of 450 hectares, and the number of farmers associated in this farming is estimated to be 3,000.

Productivity of Agriculture (MT per hectare)

Crops	FY 2000/01	FY 2001/02
Food crops	122.70	124.82
Maize	2.70	2.74
Wheat	1.80	1.88
Cash Crops	318.36	325.78
Sugarcane	37.49	38.10
Oilseeds	0.70	0.72
Tobacco	1.00	1.00
Potato	10.18	10.53
Jute	1.45	1.45

Other Crops

• Lentil: Lentil production is estimated to be 250,000 metric tons increasing by 2.9% in this year as compared to 2.5% increase in last year.

• Fruits: Fruits production in the current year is estimated to drop by 3.0% to the level of 473,000 metric tons as against the rise of 8.9% in last year due to this year being a lean period in the production cycle of mango that occupies a significant share in total fruit production.

• Vegetable: The production of vegetable had gone up by 11.0 percent in FY 2000/01 compared to that of previous year, but this, year, production is expected to increase only by 5.0 percent to a total of 4,736,000 metric tons.

Livestock

• Meat: Meat production increased by 2.7 percent in FY 2000/01 as compare to the last year. A total production of this year is expected to rise by 2.3 percent to a total 199,000 metric tons.

• Milk and dairy products: Milk and dairy products increased by 2.5 percent in FY 2000/01 over that of last year. This year's production level expected to rise by 3.1 percent to a total of 11,59,000 metric tons.

• Eggs: Total egg production is estimated to go up by 6.1% compared to 5.5% increase last year and the total units to be 538.42 million units of egg in this fiscal year.

• Fish: Fish production which increased by 4.9 percent in FY 2006/01 is expected to rise further by 5.2 percent to a total of 35,000 metric tons in the current year of this total fish production, share of fish pond is estimated at 17,000 MT and 18,000 MT of other sources.

Chemical Fertilizer, Improved Seeds and Insecticides

• Chemical Fertilizer: Use of chemical fertilizer on an average, has improved due to improved supply from the private sector participation. However, the supply of chemical fertilizer by the Agriculture Inputs Corporation (AIC) has declined by 36.6 percent in FY 2000/01. Supply is from AIC is expected to total 23,600 metric tons in the current year. Total supply during: the review period of this year amounted to 11,500 metric tons as against 12,300 metric tons last year. National Fertilizer Policy (Box 8.1) has been made public this year. Prices of Urea, D.A.P. and Potash have slightly declined while that of sulphate did not change.

  National Fertilizer Policy, 2058

  • Enhancement of fertilizer application through Policy reform and infrastructure management.
  • Promotion of integrated crop nutrition management for efficient and balanced use of fertilizer.
  • Establishment of a reliable, competitive and transparent fertilizer import and distribution system.
  • Mechanism to determine the fertilizer price.
  • About 20 percent of potential consumption of chemical fertilizer to be stored as reserve. Maintenance of chemical fertilizer reserve of 20 percent of potential consumption.
  • Motivation for establishment of network of fertilizer sellers and distributors in districts.
  • Promotion for establishment of chemical fertilizer industry within the country.
  • Encouragement to private and co-operative sectors for investment in fertilizer factory of neighboring countries.
  • Establishment and strengthening of laboratories to make the quality control system effective.

• Improved Seeds and Insecticides: The use of improved seeds is expected to have increased because of growing participation of private sectors as well as plenty of seed distributed through relief measures. The AIC had distributed 231 MT of paddy seeds, 7 MT of maize seeds and 1,656 MT of wheat seeds in FY 2000/01. During the review period of current year, 2,650 metric tons of improved wheat seeds have been distributed by the AIC compared to 1 metric ton of paddy, 3 metric tons of maize and 1,311 metric tons of improved wheat seeds distributed during same period of the last fiscal year. The AIC has stopped the transaction of insecticide.

• Irrigation: HMG and the ADB/N are the main parties currently engaged in irrigation development. In FY2000/ 01, irrigation facilities were expanded to additional area of 29,661 hectares, of which 27,282 hectares were under projects launched by the government and 2,379 hectares under ADB/N. During the review period the current year, additional 3,017 hectares of land has been irrigated by the projects launched by ADB/N, while there has been no addition under government program. In comparison, during the review period of last year additional 1,732 hectares (government projects 1,530 hectares and ADB/N 202 hectares) of land had been irrigated. By the end of current year, additional irrigation facilities to a total 44,022 hectares of land has targeted comprised 39,539 hectares and 4,483 hectares under the Government projects and the ADB/N respectively.

Export and Import situation of agricultural products:

According to S.I.T.C. group, during the review period of this year, the total export value was equivalent to Rs. 3961.2 million by exporting of food grains, live animals, tobacco and beverages as compare to Rs. 3307.4 million by exporting the same goods in the corresponding period of the last year. Likewise, commodities equivalent to Rs. 5172.4 million was imported during the review period of current year as against of about Rs. 4736.2 million in the same period of preceding fiscal year.

In the perspective of the current Ninth Plan, it is expected that the production of food crops in terms of 2096/97 as base year is estimated to have increase by 13.3 percent to a total of 7.247 million metric tons, major cash crops to increase by 35.2 percent to a total of 3.783 million metric tons in the current year. Production of pulses, fruits and vegetables to increase by 22.9 percent amounting to total production of 2.459 million metric tons.

Annual economic growth rate of agriculture sector is estimated to be 2.9% only as against the target 4.0%. The main reasons behind the low economic growth in agriculture sector are less than expected investment production decline due to unfavorable monsoon in the first and the fourth year of the plan, and subsidy abolition in shallow tubewell in third year of the plan affecting the irrigation expansion adversely.