Nepal - Current economic position and prospects (Vol. 2 of 2) : Agricultural development

RESTRICTED Report No. SA-7a Inis report Was preparea bor use W In rne anK..0I.S.Tn ons. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CURRENT ECONOMIC POSITION ANDrT PROPCTS OF NEPAL (in two volumes) VOLUME 11 AGRICULTURAL DEVELOPMENT June 26, 1969 South Asia Department CURRENCY EOUIVALENTS 'I ,epalese rupee - . f. . 1 1 U. S. dollar = NRs 10. 125 1 Nepalese rupee = . 74 Indian rupee (IR) 1 IR = NRs 1. 35 This report is based on the findings of a mission that visited Nepal from March 15 to April 6, 1969. The mission consisted of the following members: King, Benjamin B. - Chief Brown, Dorris D. - Agricultural Economist (Consultant) Erkmen, Esref - Power Engineer (part time) Hardy, S. Clifford - Transport Engineer (part time) Kavalskv, Basil G. - General Economist Mark--ren. Olle J. - Education Specialist Wilftelm. Rolf E. - General Economist CONTENTS Page I. RESOURCES FOR AGRICULTURAL DEVELOPMENT 1 Agricultural. Regions 1 Soil Characteristics 2 Temperatures and Rainfall 2 The People and The Land 3 Fruits, Vegetables and Potato Production 6 Livestock Resources 7 Forestry Resources 10 Capital Used in Agriculture 12 II. AGRICULTURAL OUTPUT - CROPS AND LIVESTOCK 12 Changes in the Use of Inputs 17 Markets, Prices and Costs 19 III. THE AGRICULTURAL DEVELOPIMENT PROCESS 22 IV. DEYiAND FOR AGRICULTURAL OUTPUT, ITS POTENTIAL A T Af, TnOAD T T,D,TT'TrPl DDrA)DT Vi or. &LINJ IJ VLULL k/L Jj' V .w.LAj. 1IJ-"l1 L IL 1V.JJ.L10 C4 TT T1 T ,T ;, TrcQn flT n orTn T ' TTTrnTTt T nMrTT-7T nn -.1TmT Dnnn tn t, 7hi V. LULk 1D1%1j U MAN hUR ULJ U L) vrji.LUvLl1 I L"UUILi u ncreasing vutput from New Caital nevurces 2o APPENDIX A - INSTITUTIONS AND AGRICULTURAL DEVELOPMENT 32 APPENDIX B - ALTERNATIVE STRATEGIES FOR INCREASING AGRUCIULTURAL UUTPUT - 1970 TO 19O MAPS - Geotechnic - Forestry - Continued - CONTENTS (Continued) TABLES IN THE TEXT Page 1 Ponulation. Net Cropnd Land and Tenural Status by Regions and Districts 2 Land Utilization in Nepal 6 3 Bovine and Buffalo Resources; by Regions and Districts 8 4 Value of Crop and Livestock Output by Regions 13 5 Output and Earnings from Agriculture in Nepal and India 16 6 Inputs Distributed by the Agricultural Supply Corporation 18 MA DOT TC --hT hDD TrTV A .L.M_j_j0 J_jj ViJ£ JIN ±J±A L4i I Category and Number of Persons Trained, Department of Education and Research 7 2 Details of Agricultural Technicians Employed by the Ministry of Food and Agriculture - 1907/o Lo 3 Budgeted Expenditures, Ministry of Land Reform, Agriculture and Food - 1965/6 to 1967/8 69 4 Conversion Table - Weight Measurements Used in Nepal 52 5 Conversion of Volume Measures into Weights of Agricultural Products 53 6 Conversion Table - Land Measurements S4 CHAPTER I RESOUGES FUR AGlIULTURAL DEVELPUMENT Agricultural Regions 1. Nepal, measuring 800 kilometers from east to west and 180 kilo- Himalayas, between India and the Tibetan region of the Republic of China. Food anu fiber are produuceu wader wiuely varying natural cunuitions. Fr purposes of analyzing agricultural resources the nation may be fivided into Live major regions, each with two or more distinct subregouis.- The Eastern and Western Terai regions are a part of the Indo-Gangetic plain bordering on the states of West Bengal, Bihar and Uttar Pradesh. This alluvial plains area, with altitudes ranging from 250 to 1,000 feet above sea level, is generally blessed with a 12-month crop growing season. More than half of the 15,000 square kilometers is covered with forests and stream beds of the many rivulets and rivers that flow from the mountain rains and melting snow. Paddy occupies 60 percent of the net cropped land. Other principal crops include wheat, pulses, oilseeds and sugarcane; and in Eastern Terai, jute and tobacco. The two regions contain 32 percent of Nepal's population and 65 percent of the total cultivated land. 2. Surplus crop production is marketed in the adjoining deficit mountain regions and exported to India. Over 80 percent of Nepal's total exports of commodities are produced in the Terai regions. 3. Above and north of the Eastern and Western Terai regions are located the Eastern Mountain, Middle and Western Mountain regions. Each of these regions has valleys with altitudes varying from 1,000 to 4,000 feet. Most of the 8,000 square kilometers in these "lower valleys" are afflicted with malaria. Also, some of the soils tend to be sandy, rocky or gravelly and unproductive. Much of the area is in heavy jungle. However, in some parts of these subregions malaria has been brought under control, the jungles are being cleared and crop farming is practiced. 4. At elevations of h.000 to 12,000 feet, 60 percent of the farm families occupy only 30 percent of the cultivated land and concentrate on the production of oaddv. maize and millets. mostly for family consumption. Tea is an important crop in selected valleys of the Eastern Mountains and potato and fruit are produncd in most valle,v The average holding has less than .50 hectares of cultivated land and most of it is on a terraced hillside. ranging from 10 to LO percent slope. More than two thirds of the remaining land area is covered by rocky and gravelly mountains and is unnrodutive for ano n+ricutua purnoses. The small size of mo+ fields and Western Inner Terai and Far Western Terai as shown on Map No. 2 (Vol.1). Western Mountain region includes Western Hills and Far Western Hills. The Middle Region includes Kathmandu Valley and Central Inner Terai. The Eastern Mountain Region includes the Eastern Hills and Eastern inner Terai. The agricultural statistics are grouped by these regions. the steepness of land slope precludes the use of bullock power or mechanical equipment. Land preparation and other crop cultural practices are performed by human labor using hand tools. Except for Kathmandu and Pokhara valleys mechanical transport facilities are not available in the mountain regions. Food and other necessary materials must be imported from the Terai or India and transported up the mountain pathways by porter or animal pack teams. 5. At elevations of 10,000 to 15,000 feet, the high mountain valleys are utilized as pasture lands by nomadic tribes who raise sheep and yak. During the winter herdsmen move their animals southward and utilize pastures and fodder in the lower forest and hill areas. They exchange wool, sheep and milk for needed consumer goods. Along the northern border of each mountain region is a chain of high mountains, covered with glaciers and perpetual snow. Soil Characteristics 6. A detailed soils map has not been completed. However, a general map based on geotechnic origin has been developed14 (See Appendix Maps). The map shows the Eastern and Western Terai regions to be an alluvial plain, with a section of sandstone conglomerates along the foothills. Most of the soils used for cron production in the mountain regions oriinated from shales and carbonaceous rocks. Soils of carbonaceous materials in the higher elevations are used for nastures. Most of the hiqh mountain soils orieinated from crystalline or carbonaceous rock. 7. More than half of the cultivated cropland was reported as havi:ng n ph ofI +.han s 0, indicating an acid condition and nobnable favorable crop response to lime and phosphate treatments. Only a. very small area of summary of 170 soil tests from samples representing Terai and Inner Terai r ngi-nSSh.o,-11trenconte, n t t. wo. rtn.n+n -a- . nn -6 nn ee,frwom ver 1 o v , tvoom d,A ee Ara * .1 psp , 1ma content from very low to low; potash content from very low to moderately from h O0 to 700 F in ecember and January, and from 700 to 110 F in May nu oun. DJ-uQ vi u e r,y LrUUUy uy ursg LnL m uCvu eovLu, LIZ; ULW y and maize crops require 150 to 220 days for maturity. Summer temperatures rdlnge .Lrum ou- o yr r. *in une ann'..uueu mouuve o,uu~. ±set, the sm growth period and hours of effective sunlight are less and photo-sensitive crope sun as rice and, to a lesser extent, maize, are replaced with mriets. Two crops of 110-120 day paddy can be produced in the Terai regions although most farmers prefer and use paddy varieties hat take 10 to at days to mature. At altitudes of 2,000 to 6,000 feet the growth period starts from the end o February and lasts until dseptember or October, except for wheat, barley and potato. / From Soil Survey of Chitawan Division. 1968 - Forest Resources Survey, Department of Forests, H.M. G. Nepal - in cooperation with USAID. 9. Summer monsoon-type rains start in June and end in September. In most regions 75 percent or more of the rainfall is received during these months. In the elevations above 1,000 feet winter rains occur from November to January. The amount of rainfall varies from over 100 inches per year in parts of the Eastern Mountains and Upper Pokhara Valley (Western Mountains) to 40 inches in the western part of the Western Terai and Western Mountains. The data in Western Nepal appear to be less reliable. Kathmandu Valley in the Middle region receives 50 to 60 inches of rain each year. Annual variations from the ten-year average exceeded 15 percent, four years in ten. Also, the date when rains start and stop may vary by twenty or thirty days from the normal. Thus floods and droughts, sometimes during the same season, influence the agricultural economy of most regions. The People and The Land 10. Cultivable land in Nepal is owned under ad hoc freeholder rights currently in the process of identification and registration under the La:nd Reform Acts. Table 1shows the area, distribution of population and house- holds, size of holding and tenural arrangement as given by the 1961-62 Census of Agriculture. The proportion of all households engaged in agri-- cultural production (crops and livestock) varies from 67 percent in Kathmandu Valley and 73 percent in the Far Western Terai to 94 percent in Eastern '.ills and the Western Hills. The size of net cultivated land per aricultural household averages 1.23 hectares for all of Nepal but varies from below 0.50 hectares nPr household in eighteen and less than 1.00 hetare nPr household in twenty-seven of fifty-two districts, all located in the mountain regions. Then avernae s ofhldring exceedediari 7- rnl-r Pialht, istrirc qnri ranged from 2.0 to 3.0 hectares in nine districts, all located in the Terai o)r Tiner Ta-rai Size. ofP land; hllingy rna larestc ini thosnisrcsahr malaria control since 1954 enabled new settlers to clear and transfer land from forest, to -r- 10L- * ?uantk. 01.' % ± 1 uI j 313J"±J. 140~± v& I O v. vI v I~V jaV UJ, hectares and another nine districts have from 0.11 to 0.30 hectares of crop- -Lc . LJ'JIIK; UJ.L UIAJO : oL..VQQ czlt Uv± L.J.v .LAI ± O±J 'J L ' J - yl - - - and must purchase and transport these needs from the Terai districts where per croLU, ipland raVe %-1-U U7L4 le ~rs 13. The proportion of crupLanU reUeu froUm ers averageU 27.U percent for Nepal and varied from less than 10.0 percent in the Western Hills to over 40.0 percent in the Western Terai regimer]. me uliniun 1 --aiu Dzaut from others" does not separate the different types of tenant operations known to exist in Nepal. - 1-1 - labl 1 POPULATION, NET CROFPED LAND AND TENURAL STATUS BY REGIONS AND DISTRICTS Net Crepland Percentage Agricultural Ha. per Cropland Population Total Householdn Agric. Ha.per Rented from Region/District Area Present Density Hnuseholds Number / of Total Hectares Holding Person Others (sq~nTes) (thousands) (per sq.,) (0 TYT 7 ¯_000) ¯ Nepal 54,362 9,413 173 1,703 1,494 87.7 1,841 1.23 .20 27.8 Eastern Terai 5,115 2,213 433 451 359 79.6 784 2.18 .35 31.2 Jhapa 573 120 209 26 20 78.0 91 4.16 .76 51.3 3iratnagar 961 326 339 66 51 77.0 144 2.82 .44 46.0 Hanumannagar 1/ 602 300 498 ) 9B 75 76.2 172 2.29 .82 23.9 Siraha 1/ 310 211 679 Mahottari 819 488 596 101 83 81.8 141 1.70 .29 26.4 Sarlahi 480 163 340 35 27 77.6 64 2.34 .39 24.2 Rautahat 402 219 544 146 35 77.3 60 1.71 .27 13.6 Bara 511 250 489 51 40 78.8 77 1.93 .31 30.1 Parsa 457 138 301 27 27 99.8 35 1.29 .25 19.4 Eastern Mountains Fastern Inner Teral Hills 1,829 194 106 35 31 88.0 50 1.62 .26 21.3 lldayapur 927 89 97 17 14 83.3 38 2.71 .43 2)j.14 Sindhuli Gadhi 602 104 116 18 17 92.4 12 .70 .12 11.0 Eastern Hills 10,114 1,887 187 323 305 94.4 192 .63 .10 23.8 abhre Palanchok 574 216 399 38 35 90.6 21 .57 .10 9.7 Sindhu Palchok 9b8 186 197 30 29 96.1 14 .48 .08 10.0 Dolakha 600 132 220 24 24 99.3 4.9 .20 .04 18.0 Chisankhu (Ramechhap) 682 123 181 22 22 97.5 5 .23 .04 8.3 jhisankhu (OIkhaldrnga) 1,380 164 119 30 28 96.1 8 .28 .05 12.1 Majhkirat 657 128 195 25 23 90.6 11 .49 .09 15.8 Bhojpur 926 253 273 48 45 93.6 5.4 .12 .02 19.4 Chhathum 685 135 198 24 23 95.0 39 1.71 .29 27.5 Tehrathum 3,132 423 135 59 57 95.4 58 1.02 .4 28.8 Il1am 530 125 235 22 20 90.5 27 1.36 .22 37.0 Middle Region Middle Inner Terai 2,176 24L 112 40 34 86.2 56 :1.63 .23 15.5 F7isapani 1,012 159 157 27 24 90.6 18 .75 .11 16.6 Chitaun 882 68 77 11 9 77.1 33 3.73 .49 11.5 Nawalpur 282 18 63 2 1 78.8 5 :3.63 .28 37.4 Kathmandu Valley 218 460 2,110 86 57 67.0 29 .50 .06 34.7 Kathmandu 105 225 2,1h42 40 19 48.2 9 .47 .04 37.4 Lalitpur 71 145 2,047 29 24 61.2 12 .49 .08 25.6 3haktapur 42 90 2,139 18 15 84.6 8 .5L- .09 h411.7 1/ Apparently the same together as Saptari in the agricultural census. - Continued - Tablae 1- (ctiued)cI POPULATION, NET CROPPiD LAND AND TENURAL STATUS BY REGIONS AND DISTRICTS Net Cropland Percentage Agricultural Ha. per Cropland Fopulation Total Households Agric. Ha.per Rented from Region/District Arew Present Dens ity Households Nubr of Total Hectares Holding Person Others E-(sq.mI[es) (tFoUsands (per sq.m) ~ (000 T -ðT~ Western Teral 1,307 400 306 86 72 83.7 179 2.49 .45 41.7 Palhi 320 96 301 20 16 78.5 35 2.22 .36 82.0 PMajikhanda 387 ii2 366 3? 26 82.2 69 2.61 .h9 26.8 Khajahani 385 125 325 26 23 88.2 43 1.88 .34 36.5 Shivaraj 215 37 174 8 7 89.0 32 4.59 .86 36.1 Western Inner Terai 711 99 138 ih 13 95.4 61 444 .62 42.2 Dang 257 56 217 8 8 95.6 44 5.78 .79 36.8 Deukhuri h57 43 93 6 5 95.1 16 2.90 .37 56.6 Far Western Terai 2,813 272 96 h 32 72.8 180 5.64 .66 32.6 3anke 722 95 132 20 15 72.9 32 2.15 .34 44.3 Bardia 624 68 109 10 6 58.5 59 10.10 .87 48.9 Kailali 886 90 101 11. 1 84.3 73 7-54 .81 20.3 Kanchanpur 611 18 31 2 2 76.9 17 9.70 .94 6.8 estern Mountairs Western Hills 11,l4 1,947 175 351 329 93.8 202 .61 .10 9.4 NawaoT 1,1-15 163 146 31 29 94.6 9 .30 .06 12.6 Dhading 1,071 203 190 34 32 95.7 16 .49 .08 8.0 Gorkha 971 151 156 24 21 88.3 6 .26 .04 14.0 Tanahum 525 128 243 25 23 93.0 15 .66 .12 144. Lamjung 1,525 131 86 26 23 89.9 6 .26 .05 14.2 Kaski 583 128 219 28 25 88.2 13 .52 .10 13-h Synagja 734 340 463 59 57 95.3 17 .30 .05 13.8 Baglung 2,78h 229 82 38 37 96.9 31 •8h •14 5.0 Gulmi 962 302 314 55 53 96.1 22 .41 .07 2.6 Palps 87h 173 198 31 29 93.0 68 2.33 -39 9.7 Far Western Hills 18,902 1,698 90 273 261 95.3 109 .42 .06 13.1 Piuthan 975 212 218 39 39 98.3 29 .75 .14 4.1 Sallyan 3,2:31 416 129 73 69 94.2 2h .35 .06 7.4 Jumla 1/ 7,518 185 25 DailekE 1,774 209 118 36 35 96.6 15 .13 .07 15.2 Achhamn 2/ 585 153 261 85 50 93.9 29 .36 .09 22.5 Doti 2/Æ 1,414 159 112 BaitaNi 2,839 283 100 24 23 95.5 4 .15 .01 17.5 Dandeldhura 566 83 146 15 15 97.8 8 .52 .10 24.4 1/ Not included in agricultural census. 7/ Combined as Doti in agricultural census. - 6 - 14. Land utilization data for 1961 are given in Table 2. Since the terms used in this table are not well defined it can only be used to illus- trate orders of magnitude. Table 2 Land Utilization in Nepal Area in '000 ha. Percent of Total Land under Forest 4,570 31 Alpine Meadows 1,021 7 Waste Land and Reclaimable 3,060 21 River Beds, Villages and Towns 1.996 1L Under Perpetual Snow 2,250 15 Cultivated Land: Lowland 1,023 7 L@land 662 5 Total 14,582 100 Sourrpe Acritnita.n1 Rnnnmics Sntion Data. Minitrv of' Food and Agriculture, 1961. and gravelly soils or marshy conditions, not more than half of the reoorted r 1 a~ve. .,nr4, vA n., a nn.,n -A 4t %nt , ,,~4 A .1 , tA - A 4, mostly for pastures. A limited part of the forest land in the Terai can be l.~~~~ ~~ waiv re ur Ul UL _LtL Lt .LpcLJ U.~ ~j LlJ LJL~ LU* A UtL of 2.3 million hectares Was r epUrtd in all cultivate crops in 1961 on the 1.7 million hectares of net cropland. This provides for a crop intensity ratio of 1.3, slightly higher than India's figure cf 1.2. To achieve the 1.3 ratio, it was necessary for most of the area reported in pulses, -Ameat, oilseeds, potato and vegetables to have been planted on land in paddy, maize, or millets during the summer crop season. This is a plausible situation under Nepal conditions. Since i961, net cropped area has increased by less than 0.4 percent per year. The cropping pattern has remained essentially the same except for increases in area planted to maize, potato, wheat, sugarcane and tobacco and decreases in millets and oilseeds. Cropping intensity remained at approximately 130 percent. Fruits, Vegetables and Potato Production 17. Nepal's production of fruits and vegetables other than potato is not reported. A rough estimate is that the value of production for these -7- items approximates 10 percent of the value of foodgrain crop production.-' The production area for each fruit is limited by altitude, temperatures, rainfall and soil conditions. Vegetables are produced for home use in most family gardens and also for sale near the larger villages and towns. 18. Selected subregions have demonstrated a comparative advantage in the production of potato, which has expanded more rapidly than any other crop since 1961. Selected subre-ions have natural resources of soils and climate that would encourage the production of apple, peach, cherry and pear. However, most of thpn favornhl reAions art at elevations of 5.000 to 7,000 feet and lack road transportation for movement of the produce to nosih1 markets in panl and Tndia TAvP_q+.nr_k psn'g 19 Datam f rm them 1961/A2 Cerinc of- Agr-"ictu reo fovr I i irn_q+.nek qrf_ given in Table 3. The census does not give the age for any category. "It rep orted an, aum ag e f + *W c ~ h b ' a o a, _%rn" per M""i^cm1 + ur1 al holding. India had about 2.9 such animals per holding. Cattle population -ws Lecot A- en Se,L~ "Ii UL±e L~jIL, at hmaunudi 'TTtll y ruidU kllwoJ U U=L.LQV ".L LLJ._ V&"i , L4A'e.. Terai and Far Western Terai regions. In these regions, more than half the land area was reported as in forests andU LFOs PasLtes. .uffalo are concentrated in the Western and Far Western n.L.L. districts where the production and marketing of ghee is a major source of income. Gnee production from buffalo milk is also a major activity in the Eastern Hill districts of Sindhu Palchok, Dolakha, Ramechhap, Okhaldhunga and n,ajhkirat. Bovines predominate in all other districts where the pro- duction of bullocks is of higher priority than the production of milk and gnee. 21. Nepal farmers maintained an estimated 7.30 million cattle, 1.3 million sheep, 2.0 million goats, 200,000 yak, 150,000 swine and 14.0 million poultry in 1961/62. It is probable that poultry numbers have in- creased more rapidly than population. Sheep and goats are concentrated in the M1ountain regions. Yak are maintained at elevations above 10,000 feet. In addition to milk or ghee, the major products marketed include meat, eggs, wool and bristles. Oxen are used for land preparation where the fields are not too steep and where land holdings exceed 0.75 hectares in size. Oxen, yak, sheep, goats and horses are used as pack animals on some of the mountain trails. 1/ The list of fruits produced include banana, mango, papaya, orange, apple, almond, guava, pear, peach, cherry, apricot, plum, litchi, jack gruit, lime, grape and pineapple. The list of vegetables produced include onion, radish, beans, pea, carrot, turnip, spinach, okra, egg plant, tomato, peppers, cabbage and cauliflower. Spices of various types and English walnut are also produced. - 8 - Table 3 BVINE ANUALO RO-URtCE_S; DV D IVTSUC gry) TICnTTrT TS NUAL (1961-62 Livestock Census) Ccws and She Buffalo Per Oxen per Oxen per Agr. Total Cattle per Fegion/District Cows She-BuffaloY Oxen Agr.Hold. Hectare Total Hold. Cattle Agr.Hold. (0)77 Tö7) - - 7T iea] 2,850 1,617 36.2 2,818 1.87 1.5L 0067 2.99 7,285 h.88 rastern Terai 619 192 22.8 7 52 2o .6 811 2.3, 1, 5 tL0. Jhapa 58 10 6.8 73 3.65 .80 68 3.00 111 7.05 iratc:arar 138 37 21.1 171 3.35 1.19 175 3.3 306 6.78 nHACdiuoagar- 15 57 26.5 170 2.27 .99 215 ?.87 385 5.13 ý7iraha 1/ - Mahottari 12 34 21.5 100 1.69 .99 158 1.90 298 3.59 Sariahi 38 13 18.3 64 2.37 1.00 71 2.63 -35 5.00 .auiahat 39 15 27.8 45 1.29 .75 54 1.54 99 2.83 9ara 50 18 26.5 58 1.05 .75 68 1.70 126 3.15 sar,a 24 8 25.0 31 1.15 .89 32 1.19 63 2.33 astern Mountains Fastern Inner Terai Hills 69 33 32.4 84 2.71 1.68 102 3.29 186 6.00 Idayapur 26 13 33.3 50 3.57 1.32 39 2.79 89 6.36 .1ndhuli Oadhi h3 20 31.5 3L 2.00 2.83 63 3.71 97 5.71 nstern Hills 678 2Q 35.1 397 1.30 2.07 737 2.l2 1,c3. 3.72 Kabbhre Palanchok 50 35 2I.3 35 1.00 1.67 85 2.L3 1.20 3.3 ~indhu Palchok 3 28 45.2 27 .93 1.93 62 2.14 89 3.07 k a1 2.5 21- 1.00 .L l0 1.67 6 bhisankhu (Ramechhap) 25 19 43.2 25 1.1h 5.00 00 2.00 69 3.lh 7Y,sankhu (Ckhaldhunga) 46 29 38.7 33 1.18 L.13 75 2.68 108 3.86 Majurat 27 16 37.2 27 1.8 2.5 c3 1.87 70 3.00 ihojpur 74 33 30.8 66 1.47 12.22 107 2.34 173 3.84 hihathun 49 18 26.9 L6 2.00 1.18 67 2.91 113 4.91 -Ehrathum 99 08 32.7 81 1.42 1.40 147 2.58 228 4.00 TIja, 55 12 15.6 33 1.65 1.22 77 3.85 110 5.50 'idcle Pegion Middle irner Terai 101 47 31.8 99 2.91 1.77 118 0.35 217 7.26 hJsarsni 54 25 31.6 08 2.00 2.67 79 3.29 127 5.29 ihitaun 39 19 32.8 03 4.78 1.30 58 6.04 101 11.22 Hawalpur 8 3 27.3 8 8.00 1.0 11 11.00 10 19.00 Kathmandu Valley L5 20 32.5 15 .26 .52 65 1.1h 80 1.b0 1.7 831.3 5 .26 .56 25 1.32 30 1.58 Lalitpur 20 8 35.0 8 .33 .67 28 1.17 36 1.50 Shaktapur 8 4 30.0 2 .13 .25 12 .80 i .93 1/ Apparently the samne together as Saptari in the agricultural census. - Continued - 2/ !s a percentage of the sum of cows and she-buffalo. -.9- Table 3 (continued) BOVINE AND BUFFALO RESOURCES; BY REGIONS AND DI3TRICTS IN NEPAL (1961-62 Livestock Census) Cows and She Buffalo Per Oxen per Oxen per Agr. Total Cattle per Region/District Cows She-Buffalo Oxen Agr.Hold. Hectare Total Hold. Cattle Agr. Hold. 7M) Tw-f =) -- __ - - 7=1 Western Terai 168 55 24.7 225 3.13 1.26 223 3.10 480 6.22 aT=I 28 10 38.0 L8 2.75 1.26 38 2.38 82 5.13 .ajhkhanda 63 21 250 87 3T3 1.26 88 3.23 171 6.3t Khajahani 37 12 24.5 54 2.35 1.26 49 2.13 10; [.8 Shivaraj 40 12 23.1 40 5.71 1.25 52 7.13 92 13.1h Western Inner Terai 113 25 18.1 90 6.92 1.48 138 10.62 228 17.5h Dang 64 17 21.0 60 7.50 1.36 81 10.13 11 17.63 Deukhuri ho 8 7.1 30 6.UU 1.88 57 11.80 O8 17.40 Far Western Terai 194 42 17.8 128 3.88 .69 236 7.38 360 11.25 B e - 82 13 23.6 29 1.93 *91 55 3.67 OL 5.60 3ardia 63 14 18.2 29 h.83 .9 77 12.83 106 17.67 Kailali 70 11 13.6 55 5.50 .75 81 8.10 136 13.60 Kanchanpur 19 4 11.8 11 5.50 .65 23 11.50 3L 17.00 Hestern Mountains Western Hills 456 603 56.9 517 1.57 2.56 1,059 3.24 1,576 4.79 39a+ L8 LO 07.0 -h 1.52 L89 83 286 127 h38 Dhading 60 h2 50.6 49 .65 3.06 102 3.19 151 4.72 Oorlha 33 35 51.5 29 1.38 4.83 68 3.24 97 8.62 I.anahrum,., , .'8 92 no I.00 13- 5' .78 Laniing 30 33 52.8 28 1.08 4.00 63 2.74 87 3.78 Kaski 27 46 63.0 2b .96 1.85 73 2.92 91 3.88 Syangja 57 131 69.7 162 2.84 9.53 18 3.30 350 6.1 Baglung 42 56 57.1 34 .92 1.10 98 2.65 132 3.57 Gulmi 73 125 63.1 66 1.25 3.00 198 3.74 261 L.98 Palpa 45 h9 52.1 44 1.52 .65 94 3.24 138 4.76 Far Western Hills 577 381 37.1 515 1.97 8.72 918 3.52 1,833 5.49 Piuthan 92 85 32.8 90 2.31 3.10 137 3.51 227 5.82 Sallyan 173 102 37.1 172 2.89 7.17 275 3.99 hh1 6.48 Jumla 1/ Daileki 73 58 44.3 69 1.97 8.60 131 3.74 200 5.71 Achhen 2/ ) 1 80 35.7 112 1.80 3.86 224 2.80 336 8.20 Doti 2 laitadi 62 37 37.8 88 1.91 7.00 99 8.30 1U3 6.22 Dandeldhura 33 19 36.5 28 1.87 3.50 52 3.87 80 5.33 1/ Not included in agricultural census. 7/ Combined as Doti in agricultural census. Source: Census of Agriculture,Nepal, 1962. - 10 - Forestry Resources 22. Most of Nepal's 8.6 million hectares of forest and alpine pasture lands are under the control of the Forestry Ministry. Of this total, the forest proper consists of 1.3 million hectares in the Eastern and Western Terai on land that is or could be made accessible to bullock-cart transport; 0.8 million hectares in the Inner Terai which is more difficult to reach; 2.0 million hectares scattered through the Hills at elevations of 4,OC0 to b,000 feet and 0.5 million hectares at elevations above 8,000 feet, all considered non-accessible except for porter transport to supply local con- sumption,. 23. An estimated 47 percent of the 2.3 billion cubic feet of net com- mercial sawlog volume in all the Terai regions consists of trees in excess of 20 inches diameter. 1/ Of this amount, 54 percent is sal and 28 percent of other hardwood species including shisham, Khair and other local hardwoods. These species are used for railway sleepers, plywood furniture and construc- tion lumber. The bamboo is harvested for pole construction and pulpwood use. All specie:s are used for fuelwood. In the Hill regions, local oaks and other hardwood species predominate while conifers are found in the higher mountains. In the Hills and Mountains, forest trees provide the locally used fuelwood and construction lumber; many trees are lopped annually, with the leaves and twigs used as fodder for ruminants. 24. Reliable and consistent information regarding annual growth and harvest rates for forest products is not available, however research is in progress to measure these factors. Crude estimates indicate growth rates of 1.0 to 1.8 percent per year for the Terai forests and slightly higher rates in the Eastern Mountains. Harvest rates are estimated at approximately double the annual growth in the accessible part of the rerai region and in the Hill regions near village centers. Overgrazing the forest lands and lopping the trees have also retarded growth and refor- estation. In the less accessible regions mature and over-aged trees retard the growth of younger trees. Most sawlogs are moved out of the forest by bullock-cart, 25. The Forestry Department estimated a timber harvest of 37 million cubic feet in 1963/4; 11 million as sawlogs. 25 million as fuelwood and 1 million cubic feet of bamboo and other products. UNDP forestry experts estimated harvest in the Terai reeion (1967/8) as 6 million cubic feet for regulated commercial sawlog products; if an estimate for a particular area of harvest by theft and encroachment is tvDical of the whole Terai. there would be an additional 33 million cubic feet of commercial timber plus an unknown volume for fuelwood. The volume of harvested timber in the Hills and Mountain regions is completely unknown. Details of forest resources in the Tprqi qre availnble in Forest Stat- istics for the Terai and Adjoining Regions, Forest Resources Survey Publication No- I. Department of Forests- I-M4- N-nn - 1Q7 - 11 - 26- Reliable Drice data for the stumoage value of for.st ornChits harvested were not available, A very rough approximation using Indian 1960/1 orices and qdiuqtPi for letion and no in NPnal i.n.q followq! Million TRs Cu. ft. Use Location million 3 Sawn timber Terai 48 O'nurlnac To-rni innv.a1Q 8 Sawlogs Hills and Mountains 80 35 Tiwool d nal 70 The value of timber lost through theft and illegal clearing for transfer tn onland m-r el-o1 1 va- +h e-ieed1h4 amwrit+ Thk m--4- ^P J- +)'- r *~'.j -,1-a ~ ~ .1- , .11 -* -S UhOa ' 5 -54 --t ~ t± . estimates is extremely large; they are only intended as a first approxima- tinn +.n nn n"Anw f%P maqnn +niAp nan+ m +_ --es n un a e aA el rvm for substantial price increases since 1960/1, the value of all timber h-avested a+ nresent+ -Jces --igh+ we" meceedA TD- enn 44,4man+ possibly by a very large margin. This is in striking contrast to the 5"' L) '' .Ll. ± UVACULLU WI1.At.,Ll lcr LcL,t-tA L.LUWV i i. 1,1S L U. o Ai 6 L LL.L ion.UA since 1963/4 (cf. Table 6, Vol. I). 27. For administrative purposes the Forest Ministry has divided the VIkj Vi. vQ.'L " .'jv W.LuiL ca .1 uY Lauu O~ua.L-LJ ut JU t:- IJ U luu- U11t Forest Conservator for each circle. These officers manage the forests and identify trees to be harvested. frees are sold by public auctin or contract negotiation. The Ministry through its Timber Corporation of Nep jt oUeraes a sawuILL anU procesing factory aU aitaurae Urazing rights are issued. In 1969 over h0 sawmills were operating mostly in the Terai from HUtjar ou c.rgani to Dutwa, Mosu lug are processed into railway sleepers or planking for the furniture and construction market, Small volumes of plywouu and of paper are processed. It was reporLed that tnese mills were having difficulties procuring logs and competing with the alleged i"Legal operators in the Indian export market, 2U. Ve of the major UaLlenges u government is tuat of iureabin'g returns from forest resources. Export demand for forest products is considered to be strong, boTh in InUia and the wor.l marKet. Some 01 the problems to be solved include: (a) Effective control of harvesting and transport to prevent theft, unauthorized land clearing and smuggling, (b) Development of publc and forest roads, mainly in the Terai, but also in selected Mountain regions where trees are mature and ready for harvest. (c) Development of manpower and facilities for the more efficient processing and marketing of tree products. - 12 - (d) An improved program for management of the forest lands, including identification of lands to be deforested and converted to cropland, controlled sale of timber harvests at full market values, control of grazing and appropriate reforestation operations, Some of the needed roads are under construction. A training program for forestry manpower is supported by Indian and USAID missions. Processing equipment for demonstration Purposes has been provided. The major need is the improvement of forest management and marketina. including transporta- tion and border control. A proposed INDP program provides additional support. Capital Used in Agriculture 29. Capital for agricultural production in Nepal is held mostly in the form of land improvement and irrigation facilities used for crop pro- duction. The next major item of capital is held in the form of livestock and poultry. Each agriculturnl family has a rpltivPlv small volume of assets in the form of land preparation implements, crop harvesting equip- ment and orimitive tyRs of household grain or notato stora facilities. Only a small inventory of seeds and other replaceable assets are held. Detailed information showing the valin of thep mc; ts i-, not. vAilable. 10. Rurql inHPhtetnPaq wqq pimtE.t Amn- piRn 7cO million in 196 or an average of NRs 500 per agricultural household. Relatives, landlords anrl lor.nl mqrkPtEwr- hqri nrnvird mo<t of thiq hnrernr-i n-nnit.nl a-. int.P-Pst rates varying from 10 percent to 40 percent per year. Most of this type of nonil nI ngai t.o hir lhnr _nrl frNr fnmilr r-onimntAon nnrl ni-monies - The newly, estab lisqhedar- T)=l ±v vcl lnlnmanfh Pank nnrl i ii-.-qy~~ of local branches and cooperatives had extended NRs 4 million fresh ag:ricul- turnl produetion nrdit at. a 10 orcent interestrate in 10(R/O MnoA nor- rowers used the loan funds to pay for labor and fertilizers. In addition, +.hp rpr-onEly ntlshdT.nnA -Pefrm rnmn-nianr q-rvin" qflhmm ad Anv+ondAear NRs 90 million loans to agricultural families, mostly in kind, as rice or maiz. for ronsumntion These tan ageniae plu ommrial banking insti- tutions and private money lenders also extended credit to marketers for market noPrations an f'nr-ilitieq The -unlimie of +.hoq loans Tan not made available. A new law enacted in 1968 established 10 percent as the maximum rate of interest a money 1l.A-. n sharge for agricultural loans to farmers and provided means for intercepting loans at higher rates. It is +nn onrl +. rv%Ine+ ho c mnlk r%F +hJo of+. n +hniihT 1^n-nc in v,rnocc of NRs 2 million had been intercepted by March 1969. Proposals are under nf.i1-i frr" +in +ho Anvi +n nownlanment Rank ,nrd ^nnc!n1iA,n+.inCr the Compulsory Saving Scheme and the land tax schemes. II. AGRICULTURAL OUTPUT - CROPS AND LIVESTOCK 32. The amount and value of crop and livestock output for Nepal and for each maJor region ae gIven u i Tblo e Tiv4 pur1pos1 Id a for each commodity have been used for comparative purposes with India and - 13 - Table h VALUE OF CROP AND LIVESTOCK OUTPUT BY REGIONS IN NEPAL Average of 1965-66 to 1967-68 Agricultural Data Value = IRs (000) at 1960-61 Prices Output = f O0 Metric Tons Prices per Nepal Eastern Terai Eastern Mountains Middle Region Western Terai Western Mcuntains Metric Ton utpt v7alue output Valae Utet Vaa- lue O utput Value ou,tput Vue Foodgrains fRaice 562 1,286 722,732 711 399,582 121 68,002 96 53,952 225 126,450 133 74,746 Maize 327 849 277,623 82 26,814 262 85,674 98 32,046 100 32,700 307 100,389 Wheat 405 164 66,420 23 9,315 33 13,365 7 2,835 17 6,885 84 34,020 9arley 305 27 8,235 5 1,525 3 915 1 305 2 610 16 4,880 Millets 342 117 40,014 12 4,104 40 13,680 3 1,026 6 2,052 56 19,152 Pulses 400 38 15,200 21 8,hoo 3 1,200 3 1,200 7 2,800 4 1,600 Total Foodgrains 2,181 1,130,22 854 419,710 102 182,836 208 91,364 358 171,497 600 234,787 Gross Per Capita .236 107.64 .345 -199 .265 .415 .147 Petato 216 309 66,744 34 7,344 153 33,0148 31 6,696 27 5,832 64 13,824 Oilseeds 750 54 140,500 13 9,750 4 3,000 19 11,250 14 10,500 4 3,000 Sugarcane 41 168 6,388 71 2,911 8 328 1 41 68 2,788 20 820 Jute 663 39 25,857 34 22,542 - - 1 663 4 2,652 - - Tobacco 1,770 6.4 11,328 4.7 8,319 .3 531 0.6 1,062 0.5 885 0.3 531 Tea 260 1 260 1 260 Fruitsand Vegetables 1/ 113,022 I&L,974 18,283 9,136 17,150 23,479 By-Products 1/ 4,308 3,025 210 156 634 283 Gross Valie Crop 'utput 1,399,131 548,605 238,196 123,368 211,938 276,724 r.s per Agricultural Holding 936.50 1,528.15 709.81 1,355.69 1,an.4 L69.02 Animal and Poultry 1/ Buffalo Meat ~ 874 20 17,480 2,098 3,146 699 1,398 10,139 1utton 2,468 5 12,310 1,234 2,468 617 1,23 6,787 Other (Swine,jak) 1,852 3 5,556 556 1,111 278 556 3,055 Poultry Meat 1,5c0 10 15,000 1,500 3,000 3,750 1,500 5,250 'Wool and Mohair 3,500 2 7,000 700 1,400 350 700 3,850 ilk 5r0 OPC,.litres) 575 287,500 34,500 51,750 11,500 23, 000 166,750 Eggs 120 (X'0) 400 M -8,000 14,800 9,600 12,000 4,800 16,800 Other (Rides,hair,etc.) 50 5 10 3 5 27 Total Animal Products 392,926 45,393 72,485 29,197 33,193 2:12,658 Oross Agricultural Output 1,792,057 593,998 310,981 152,565 245,131 489,382 Rs Per Agricultural Holding 1,199.50 1.65L.59 925-54 i,676.5 2,095.14 829 .46 / u-ut data for these ites were estimted by ad hoc tecniques and shoul be cosidered only as rough guides Fuit d the value of foodgrain Production. •s -ources: Agricultural Production Data, Agriculvural Economics Section Report, HMG of Nepal, 1968-69. IC Price data from Brochure on ReviSCd Ser-es of National Product for 1960-61 to 1964-65, Table , pp iL-18. entral Statistical Organization, Departrment of Statistis, Cabinet Secretariat, Goverralent of India, August, 1967. L'4 because the Nepal price series are collected at the retail level and not at the wholusale or larmgaue levels /. Aspects of price s1m1arUiLes an u.n- ferences between the two countries and between Nepal regions w11 be discussed later in this report, The data snould De considered only as a rough approx- imation as there are many apparent weaknesses in the system of estimating crop area and output. The fruit and vegetable and livestock outputs are rough estimates and only indicate probable magnitudes for the nation and each region. The relative differences between regions and between Nepal and India are, however, considered plausible. 33. The data in Table 4 indicate that the value of agricultural output as an average of the 15b5/ to 1967/8 years was IRs 1,399 million (1960/1 prices) from crop production and IRs 393 million from livestock and poultry production. Rice provided 51 percent of the gross value of crop output and mil: and milk products provided 73 percent of the gross value of livestock and poultry production. The Eastern and Western Terai regions produced over 70 percent of the rice, while maize, wheat, barley and millets were the major foodgrain crops produced in the Mountain regions. All regions except the Western Mountains reported a per capita foodgrain production in excess of estimated local needs for human consumption. However, there were districts and subregions in the Middle and Mountain regions where local. foodgrain production was less than local demand. 34. A comparison of the crop data summarized in Table 4 with the limited data available for the three years 1961/2 to 1963/4 gives simple linear annual growth rates for output of the major crops, as shown below. The data in parentheses are growth rates calculated in a similar way for India. Estimated Growth Rates for Nepal and India, 1961 to 1968 (7.) Nepal India Nepal India Potato 18.2 Oilseeds -3.6 (-.0.9) Wheat 10.5 ( 1.1) Rice no change (-.1.8) Millets 4.2 ( 1.1) Maize no change Barley 3.2 Pulses no change (-.2.2) Tobacco 11.4 Sugarcane 2.8 ( 1.0) All foodgrains 0.9 (no change) Jute 0.,8 (-2.3) All crops 1.8 (no change) 35. The 1965/6 and 1966/7 drought affected India more than Nepal. It may be assumed that changes in output for the two countries have followed 1/ Prices used are in Indian rupees and as reported for 1960/1 in Brochure on Revised Series of National Produce for 1960/1 to 1964/5, pp. 11-13, Central Statistical Organization, Department of Statistics, Cabinet Secretariat, Government of India, August 1967. Crop area and output data were Provided by the Agricultural Economics section of the Nepal Ministry of Agriculture and Food. - 15 - about the same trend. but -ith Hifferent baseR and nombinntions of cropoing patterns, inputs and responses. 36. Most of Nepal's growth in potato and foodgrain crops occurred in thp P-.trn qnrl Wo--t.prn Momintin nri th- MrIH.l rpainnq c q r-milt of in- creased double cropping and new varieties of potato and wheat. Important i nni-t i Jn t vh riti 1e i-oain imwre +.Th -hrff+. rf f o n rnl +1 (,- orrnland in the Rapti Valley (part of the Inner Terai) and the additional use of nA +h- V, +hm-nAll IT,1l Mvnoof n-P +him ""n..1i in cash crop output occurred in the Eastern Terai region where a new cigarette fanntrr nnr q noT a n ciq i npyrrTm p p q+ 1 4 qhpr T" oaddi+ y +, to ch J +. in cropping pattern, there were small increases in the use of irrigation 17 To +he eX+-e + + 4 +4- 4-1,- ma m n an n n m an n+ 4n~r U11Vt K, U% U A C iIU -11 .v u hav Cuuvauli aa alec orrlu PAugr--;n outpuy Jn Nepal has grown at a slower rate than population since 1960. Total crop OUtT111 no a grown at C-buu vue same rate asnou]uaan -4-,- uaaMlo meager to analyze regional differences in growth and obtain the desired -I- l, n.-P LA LI -. LIL ': --'A..I- p -,L U - --. ' V~V 4..L A.'d- 4 A. assume that the increased output and marketing of potato, wheat and millets JAIC;J Jid LdJ..I. JVC. A)i1d± d.± U.k j V±iC±:11 .UC U,% .JW.L of rice, jute and ghee. 38. Nepal's cereal grain yields per hectare for 1965/6 to 1967/8 d.V4.d~eU .937C_J 6 L UI~ !L J a'UUJ ~ P.,J 60L~ 1£JAt/j .L37J-) rL6D LUI tL%-Zt,p 1,258 kgs for wheat, 1,038 kgs for barley and 1,200 kgs for millets. Yield yel uICteUcu C WC.Z ig.L81ut1 ul tuuil LUe:dL LIrVy .n one oiUUL1UdLnL anu hlrluu-Le regions than in the Terai regions. Yield rates for potato and the cash crops were highest in1 the%: Eaternl .teracL@ Average crop yields in Nepal were higher than those reported for the adjoining Indian State. 39. The Western Mountain region produced more than half of the nation's milk, meat and wool. The Eastern Mountain and Middle regions were also important. producers of these commodities. One subregion in the Eastern Mountains produces tea. 40. Ine average gross value per operated agricultural vuling of agricultural output by regions was as follows: Gross Value of Agricultural Output per Holding kris per agricultural holding) Crops Livestock Total NEPAL 937 263 1,u20 Eastern Terai 1,28 126 11655 Eastern Mountains 710 216 926 Middle Region 1,356 321 1,677 western Terai 1,811 Oou 2,uy> Western Mountains 469 360 829 - 16 - 41. The larger size of farms in the Ivestern and Eastern Terai regions and the higher productivity of high value per hectare crops of rice and potato in the Middle region helped achieve their higher values for crop output. As previously indicated, the production of animal products is a more important source of income for many farmers in the Mountain regiois. 42. Table 5 gives data for the average farmer in Nepal during the period 1965/6-1967/8 with output valued at 1960/1 Indian prices, together with certain comparative figures on India. Although detailed data are not available per holding in India for the same dates, information for earlier years suggests that the Indian farmer had a slightly higher gross income from crop plus livestock production than the Nepal farmer. The Indian farmer operates with about twice the area in crops, but with lower average yields per unit of land. Since there is a higher proportion of farmers in Nepal, the per ca:pita value of gross output from crops and livestock is fairly close in the two countries, i.e. IRs 154 in India and IRs 146 ix Nepal in 1960/1,and IRs 134 in India and IRs 143 in Nepal in 1965/6 to 1967/8. Table 5 Output and Earnings from Agriculture in Nepal and India (At 1960/1 Indian prices) Earnings per Agricultural Holding (1965/6-1967/8) Nepal Number of agricultural holdings 1.7 million Average net crop area per holding 1.23 hectares Gross earning per farm - crops 936.50 Gross earning Per farm - animals 263.00 Gross earning - crops and animals 1,199.50 Less: Cost of inputs 231.65 967.85 Plus: Inventory change 17.00 Gross agricultural product 983.85 Less: Depreciation 2.00 Net agricultural product IRs 959.85 Food Outputs per capita (1965/6-1967/8) India Neal Cereal grains (kg) 162 Pulses (kg) 33 38 Red meats (kg) 1.57 2.83 Poultry meats (kg) 0-78 1.00 Milk (litres) 48 57.5 Efgs (number) 60 LO Gross Output Der caDita (agriculture) 1960/1 IRs 154 IRs 146 196/6-1967/8 T 11h TP? 1L - 17 - Changes in the Use of Inputs 43. The major inputs used for agricultural production in Nepal iaclude labor, land and its cropping pattern, irrigation, fertilizers and organic manures, seed and other items. The amount of labor employed in agriculture is not known. However, a rough estimate based on rural population, size of family and labor requirement would indicate 4.58 million employed in agri- culture and forestry in 1968/9, up from 4 million so employed in 1960/1 or 43 percent of the population and 93 percent of the total labor force. There were 2.3 agricultural workers per hectare in cultivated crops. 44. Since 1961 an estimated 40jOCO hectares have been added to the net cultivated area. Most of this increase came from the clearing and transfer of forest land to cropland in the Inner Terai (Rapti Valley), part of the Middle region and in the Western Terai. Crop intensity estimated at 1.30 in 1961 appears not to have changed, except in those limited areas where winter irrigation became available. 45. In 1967/8 it was estimated that 224,000 of the approximate 2.4 million hectares of crops on the 1.8 million hectares of cultivated land were irrigated; 84,000 from the government constructed projects and the remainder from privately owned facilities. The 131,000 hectares of command area had doubled since 1960/1. The proportion of cultivated land irrigated varied widely by regions and districts. In the Eastern Terai, 12.2 percent of the land was irrigated and in Jhapa District 31 percent of the cropland was irrigated. Approximately 58 percent of the increase in irrigated area for the nation occurred in this region. 46. Approximately 9 percent cultivated land in the Western Terai was irrigated. The highest proportions of land irrigated reported in the Hill districts were: 25 Percent in Kathmandu Valley. 36 Percent in Doti, 18 per- cent in Baitadi, 15 percent in Kaski, 13 percent in Sallyan, and 12 percent in Dandeldhura districts Major additions to irrigation were reported.in the Kathmandu valley and the recently settled lands of the Western Terai. Other districts and regions have less than 10 percent irrigated cropland 1/, 47. Nepali farmers use cattle manures extensively for crop production, except in parts of the Eastern Terai where cooking fuel is not readily available from the forest. However. prior to 1965 less than 500 tons of in- organic fertilizers had been used, mostly on jute and sugarcane in the Eastern Terai. Fertilizer sales since 1965. and the sale of other inputs by the Agricultural Supply Corporation are given in Table 6. 1 More detailed data regarding irrigation resources are available ix, Poqsibilitip of SurfmP Wnftr Trriantion D)PvPoomPnt in NPD,11. Dharma N. Koirala - National Planning Commission Secretariate, - 18 - Metric Value Metric Value Metric Value W( 643.8 508 ( 1,183.8 410 Maize ( 30 ( 296 Fertilizers 2 kplano autrients) Nitrogen 1,297 ( 3,244.9 2,823 ( 7,654.8 4,0oo rhosphate hoo k 988 ( 1,Ou Potash 120 ( 360 ( 600 Total 1,903 4,171 6,200 Pesticides 2 32.8 86.6 100 Agricultural Implements / 145.5 250 . Source: Agricultural Supply Corporation Progress Report for Fiscal Year 197/O and oral estimates for 1966/9. An estimated additional 1,000 tons of fertilizer and NRs 100,000 pesticide chemicals were imported from India by private dealers and distributed to farmers in 1968/9. / 100 irrigation pump sets were included in the 1968/9 agricultural implements. 48. The use of plant nutrients has increased from 1 kg per hectare of cropped land in 1966/7 to over 3.3 kg per hectare in 1966/9. Over 80 percent of the fertilizers were used by farmers in the Eastern Terai and Middle regions on sugarcane, jute, potato, tobacco, wheat and paddy. In these two regions the average rate of application on these crops exceeded 6 kgs per hectare in 1968/9. 49. Adaptive research trials in Nepal have identified higher yielding exotic varieties of potato, wheat and open-pollinated (synthetic) maize that are also more responsive to increments of irrigation and fertilizer. Field trials with exotic paddy and other crops, so far, have not identified varieties superior to local seeds and acceptable to consumers. Distribution of seeds by the Agricultural Supply Corporation (ASC) is also reported in Table 6. However, most seeds were exchanged between farmers once a superior variety had been introduced and accepted. - 19 - 50. The values of pesticides and agricultural implements distributed by the ASC are also given in Table 6. The volume is extremely low, i.e. NRs 0.15 pesticide and NRs 0.25 agricultural implements per farmer in 1968/9, but the rate of increase over the past three years is significant. Most of the pesticides were used on potato and tobacco. Irrigation pump sets and hand tools were the major agricultural implements. An additional unknown quantity of these inputs was distributed by private dealers. Markets, Prices and Costs 51. The agricultural commodities with substantial quantities of out- put moving through commercial market channels include rice, wheat, maize, potato, tea, jute, sugarcane products, fruits and vegetables, milk as ghee or milk, wool, meats, eggs and forestry products. Marketing systems and resources used vary with each commodity and with most locations. Only a limited amount of descriptive studies and market cost data are available 1/. $2. As an approximation, 100,000 to 150,000 tons of rice, wheat and maise move each year from Terai primary assembly markets to consumer markets in the mountains. Perhaps 10 to 20 percent of this volume is exported to China. An estimated three fourths of this volume now move up the roadways to and through Kathmandu and Pokhara; the remainder is transported by porter and pack train to and through Surkhet and Dandeldhura in the Western Moun- tains and through Dhankuta and up the Sunkosi in the Eastern Mountains. The remaining Terai marketed surpluses of rice, maize and wheat,estimated at 250,000 to 300,000 tons, are exported to India. 53. Grain handlini, storage, and processing facilities at the farm level and primary and secondary assembly points are extremely primitive and result in excessive losses. In the Mountain and Middle regions the beginning of the summer rains coincides with wheat ripening, harvesting and storage. As a result. some of the wheat grains become insect infested before harvest. It is difficult to dry and maintain the wheat to a safe storage moisture level. Storage facilities are inadeauatelv orotected from rats and insects. Handling and storage losses of 25 to 4O percent were reported for wheat stored more than six months under these conditions. Sh. Field tests in Nepal show that hand-poundina or the huller-type rice mill, typical of village rice milling, recover 52 to 55 kilograms of rice from 100 kilograms of dry Daddy The sheller-tyme rice mill. tvical of commercial operations in the Terai, recovers 56 to 60 kilograms of rice 1/ See Jhapa Bhoj Bazaar (Jhapa Paddy Market in Nepali) and Nepalganj Ghee Marketing. both by Aricultural Enonomics SAntion. Danrtment of Agri - culture, H.M.G. of Nepal. Also, Nepal paddy market studies made by Dorris D, Brownin 196h and 1966 and nurrpnt foodgrnin market studies, -nnnrtd by ISAID, were used as points of reference in this section. - 20 - when raw rice is processed and 60 to 63 kilograms when parboiled rice is processed. Reasonable standards would be 65 to 67 percent recovery while the most modern techniques should yield 68 to 70 percent rice recovery rates. In addition, losses due to excess moisture, rodents and insects may exceed an estimated 15 percent in the Mountain. regions and 12 percent in the Terai for paddy stored more than six months. 55. Similar problems of storage and processing were observed for maize and millets under typical village conditions. Potato produced in the Terai regions must be marketed soon after harvest as cold storage facilities are not available. For the cash crops and animal products, market facilities for handling, storage, processing and transportation may also be character- ized as primitive. The Quality of jute is below recognized standards due to the quality of water and techniques used for retting. The quality of ghee, wool, supar products and meats is below desired market standards. For the exported commodities, i.e. rice, jute and ghee, the achievement of recognized standards of quality appears to be an essential requirement to compete in these markets in the future. The achievement of recognized standards of market efficiency for the domestically consumed commodities could save a substantial quantity of products now wasted. 56. H.M.G. of Nepal does not maintain a wholesale or farmgate price series for any apricultural commoditv Only informal glimoses of Drices at these levels were collected while on tour. The Central Bureau of Stat- istics arid the RAstrn Bpnk nollnt nnd nihlish a time spripR of Drices Daid by consumers for a number of items. 57. Assuming that farmgate prices are near a constant proportion of retnil nrinsq nvr timp +.Ihpn the nrine of h pt. (f1ir) relative to rie or potato favored. the increased allocation of resources to wheat production .qt,t.incr in 1 6)/ Al cnr~! n z n h~ti.i-~*' -ina_ y'~ n--1~s ninp q fnivc)-r1 an increase in potato production. Farmers in selective areas, also armed rit.h non mt. rnr o nn iv nnrl hi %hrinle4incr wlih nt ondl nn+n+.n ai .on did increase the area and the amount of fertilizer and irrigation used. to produce thin crr,n. ThA area in nise dcnlined. Tndications are that the average Nepal farmer operates his farm business with economic rationale. Wheat and notato nt.niit. wa increased a nh+situted, in part, h oranmPrm for rice. 58. It is generally believed that wholesale prices for agricultural comModiti3 n+.a Tc"ai markets+. ae a fiinction of' -n-4yr TnAin v.ab1 cn1a market prices, adjusted downward for transport, handling and other marketing c s ls; +hn+ nvv'ea j" +hk oi7,nne Mn,inn m vz+ ,onTwc for". onrmm ities "imported" from the Terai surplus production areas represent the Terai ,,Th l -n 'n n iic +Ii - no+ SdliveredV to Nepalan U Bairawa, J a Bia tnag .L/ .L .L7v-J) d.lIu J-7J4Lares price a~Uy.L~ -d.dL armer fo padkdvy delivered to Nepalganj$ Bhairawa3 Birganj, Biratnagar, aL± 3 Jik~ .11 e UJtUW~I _L"T~ )Vv WU LnZI) '~ UU1.9 - 21 - varying with quality and location. Prices at nearby Indian rural markets ranged between IRs 350 and IRs 425 for similar quality paddy. During these years a higher proportion of marketing moved to Nepal Mountain region markets than in 1967 to 1969 Y./. (ii) In March 1969 IRs 500 to 600 per ton was paid farmers for wheat, varying with quality, delivered at Nepalganj, coin- pared with IRs 850 to 950 per ton paid farmers at Uttar Pradesh markets (Gorakhpur, Lucknow, Kanpur, Hapur); IR;3 600 to 700 per ton paid farmers for paddy at Biratnagar and Nepalganj, compared with IRs 1,100 to 1,200 paid at Uttar Pradesh and Bihar markets. 60. Informed civil servants expressed the opinion that margins of these magnitudes were the usual expectations. With truck and rail transpor- tation costs estimated at IRs 1.5 to 2.0 per ton-mile, it is clear that the indicated margins between Nepal and India would move foodgrains long dis- tances to Indian markets. Prices competitive with the Indian wholesale market plus transportation and handlina were required to shift the direction of grain movement from India to deficit markets in the Hill and Mountain districts. In these regions, Pack train and Porter transportation costs were reported at NRs 4.37 to NRs 9.37 per ton-mile. 61. Factor costs of farming in Nepal appear to have similarities in some cases and vary widely in other cases from factor costs in Uttar Pradesh and Bihar, India. Labor costs per man and per unit of output in the Terai and in India are similar: while in the Mountain regions costs are lower per man, but are higher per unit of output where bullocks are not used for land prPnaation an harvesting nhore Pnd twip-P the human labor is needed per unit of land. Seed costs are a similar proportion of 62. The farmers costs for fertilizers in Npal and Tndia were anorox- imately as follows during 1968/9: (IRs per metric ton) Ammonium Murrate Market Sulchate Urpa Phosohate of Potash Location 20.5% N. 65% N. 16% P 205 50% K20 India 525 900 370 400 Teral 563 905 65 410 Kathmandu 650 1,060 545 505 India follows a policy of uniform prices for fertilizers at all sales points while Nepal charges the world tender price plus transport and handling costs to each sales point. I From Foodgrain Procurement and Distribution, a report to the Ministry of Economic Planning, Nepal; Dorris D. Brown, Ford Foundation, September 1 - 22 - U. sts 1Ur aLesel Iue anu Lur agracu-rUa iimjp±wemnu maue ±rum1 iron and steel are higher in Nepal. In summary, the Nepal fartier appears to receive a lower price per unit lor his produce and he encounters a higher factor cost market except for labor when compared with his Indian neighbor. The benefit-cost situation varies by commodity and region aid needs additional study. III. THE AGRICULTURAL DEVELDGMENT PROCESS 64. The Nepali farmer appears to exercise economic rationale within the limits of his "package" of resources and his knowledge of technical and economic opportunities. Credit, supply and marketing agencies appear to operate with the same economic rationale. The small growth in agricultural output observed since 1961 appears to have been a response to improved benefit-cost relationships supporting the addition of cropland, irrigation and fertilizers and the improved availability of fertilizers and more responsive potato and wheat seeds. Improvement in prices for foodgrains and potato were related to the rising level of prices for these commodities in nearby Indian markets and to demand in a number of Mountain and Middle region districts. 65. New government programs for irrigation, credit, input supplies, agricultural research and extension services, and mala.ia control that enabled new land to be settled helped facilitate development. Most of the land reform measures concerned with the tenants' share of the produce and interest rate charges were applied in the Eastern Terai. On the other hand, the farmer's family labor input cleared most of the forest and added most of the minor irrigation and produced the seeds. Private traders and money lenders provided most of the additional marketing and credit services and a substantial part of the purchased inputs other than fertil- izers and. labor. 66. Nepal is self sufficient in foodgrains, potato, ghee, jute and forest products. Surpluses are exported to India, except jute which moves to third countries. Agricultural commodities imported include vegetable oils, tobacco, sugarcane products, cotton textiles and seasonal fruits. Demand has been and no doubt will continue to be a function of growth in population in Nepal and India. If per capita incomes should increase ap- preciably and flow to low income families domestic demand and per capita consumption for rice, fruits, protein foods and cloth would be expected to increase. Improved roads that reduce transport costs could also influence demand upward. Demand for the export commodities has been strong and is expected to continue so. Even if India becomes self sufficient in foodgrains, an unlikely probability in the next 5 to 10 years, demand for these products in the northern Indian urban markets should remain suffi- ciently strong to take all of Nepal's surplus. 67. Observed major development problems include: (a) lack of adequate and accurate data for use in identifying the more feasible resource alloca- tions: (b) the time reauired and the lack of depth of talented manpower needed to manage and operate the new infrastructure built, mostly since - 23 - 1961; (c) ineffective agricultural technology adapted to the vastly heter- ogeneous environmental conditions; and (d) doubtful economic feasibility for the tenant to use yield increasing technology under prevailing landlord- tenant arrangements and for owner-operators where the levels of crop response are relatively low and input-output marketing costs are relatively high. 68. Important aspects of administering agricultural programs and projects are shared by the Ministries for Agriculture and Food, Irrigation and Power, Forestry, Land Reform and Education. Within these ministries the departments with major responsibilities for program and project opera- tions at the farmer's level include Agricultural Education and Research, Agricultural Extension, Irrigation, Forestry, Livestock and Poultry, Fruit and Vegetables and Fisheries. In addition, the Agricultural Development Bank, the Land Reform Compulsory Saving Corporation and the Agricultural Supply Corporation, each operating as an autonomous government corporation, provide production credit and input supply services through cooperatives and private agencies. The Agricultural Economics Section, Central Bureau of Statistics. and. Rastra Bank collect and provide statistical data and economic analysis. The Food Research Institute provides food processing research and regulatory market services. and the Food Management Corporation procures and distributes scarce consumer goods at controlled prices when needed. Land Reform and Panchavat agencies collect land revenues and com- pulsory savings and administer laws dealing with tenure rights and private money-lender interest rte_s 1/. 69. In 1968/9 over twenty foreian governments and institutions financed about half of the recurring budget and about three fourths of the develoPDment budet for agriculture- Tnhninl assistance was also provided. Major programs and projects receiving foreign assistance include road con-struction connpnting agrinultur.l market center. maior qnd medium irrigation projects, education and research, extension, forestry, fruit nnd vatable develoPnment and milk marketing- 70- An 1,rl hon prnamatic qnnrnvhnt ;onprs to best describe the procedures used so far to allocate government and foreign resources to the qsrimnltural sentor Planning Commission and other government technical experts have attempted to analyze benefit-costs of proposed projects and of alternative npronanhe forag ivon nrnient_ Howver, the anta needed for a more sophisticated analysis of alternatives have not been adequate or have not yiolded nlausible resnu+.s in nme ncases rPcommPnded alloations have been rejected for non-economic reasons. Then too, each foreign agency Q~+.Off 'hncl i+,z rmrm nho+-n on A i+, '~nv-%i T- nf~ n-rr)inPt n-rinit.ipq~ for its support, some of which appear to be inconsistent with maximizing economic ri-n,in. Nenal Peno?'ce hnc hnen msrl_ e 1QA1 - in imnvovina tlh quantity and quality of data and analytical procedures and in establishing 1 For a. more detailed description of the organization chart and functions - 24 - and staffing new agencies and institutions for the administration and oper- ation of programs and projects. The outlook is for further improvement. TV ThvANJT WO Af3(TATTTW T TFPIITP ITS POTENTIAL AND MAJOR DLVELOPMENT PROBLEMS 71. An agricultural output growth rate of 2 to 2,5 percent per year for the next five to ten years is needed to equate estimated domestic demand resulting from the expected growth in population and if there is to be no reduction in per capita consumption and volume of exports. An annual growth rate of 3 percent or more is needed if per capita incomes are to be improved. Indications are that potential domestic and export demand for aFricultural output will absorb a 3 to 3.5 percent growth rate, so long as India, the major buyer of extorted foodprains. ghep and forestry products. is not self- sufficient in these commodities. Even with national self-sufficiency for India the massive urban mrkets in West Bengal. BihAr. Uttar Pradesh and New Delhi should continue to offer a large market for Nepal's surplu agri- cultural commodities It i. also nrobable that China would Durchase food- grains, ghee and livestock products when the road system is more ful2y develonwd Probable increa in dlometin and foreian demand for fruits. jute, forestry products, tobacco and sugar further support growth rates of this m unitudp wit.hmn+. -_Prmoinu rJ+.aYhnhn0cf n i r'lyti nhins 7P_ Of' Pniil irmponce,mproemen in pe-r capitan Jnco.me_ musqt oriinnt.- largely from an increase in the rate of growth of agricultural output and OeCr h in iinIic+.iim ha .cA an env. nl+n l f,mmod,+ v ,on motorial * 1 o. 1n- t! until latent mineral and hydro-electric power resources are exploited. health, nutrition and family planning hinge largely on increasing agricul- tu-rml n+.nni+. Cania+ l Po-m+4nn mn,+ -Cinmat+- moo1w --n +hi- -l J +nrtl sector, supplemented by loans and grants from external sources. 73. Resources readily available to help achieve a 3 to 3.5 percent r If+. t-e ' _n C-tr f, Jnn ,, -,de 1.k,r. ,,n,- p. wA.nnn c a -rr4ic, l tQr a 1 llor untapped water for irrigation,and the possibility of transferring Terai land now+T M+riAllyuse for 4-- anl+4rrp+oductin to -It-brfte cron prod"rntin With irrigation and improved cultural practices available for more of the C i_ltivIo,+ -A i n -4 nn a ",++---- -__ k- -A4-,,+-A --A rdaA_ _1kno4w and per unit of labor or capital can be increased. However, relatively low to be restraining the average farmer, especially the share tenant farmer, -11. 41 _/.Lng addti 1Ll A1 gr wt ctiLil"ating ,put v.LIJU O 1. .L.L ut-,LAU J..CU,L .Le.JU_L.L_ izers, and new crop varieties and livestock improvement practices. 7. Soils in parts of the Terai and the adjacent river valleys are gravel during the monsoon (June to September), followed by lack of sufficient rinall fo a pruucU ve wmot r season. in tume areas the so"s are acide and give low responses to phosphate fertilizers. There is a shortage of effective crop and livestock yield Increasing technology adapted to the local variations in soil and climatic environment. In most regions the - 25 - lack of low cost transportation and efficient market operations retard the necessary "in" movement of production requisites and the "out" movement of marketable surplus. Approximately half of the Terai is in forest of which a substantial proportion is considered to be arable cropland. 75. In the Nibuntain and Middle regions there is very little, if any, uncultivated and arable land that could be transferred from forest or pasture land use as a technique of increasing agricultural output from cultivated crops. In fact. some of the land now used for crop production may well need to be transferred back to grass and tree culture if soil erosion and stream silting are to be minimized and pDrodution of fish increased- In these regions the major increases in agricultural output must flow from the use of those inouts that increae vield npr unit of land. i_e. irrigation. lime. fertilizers, improved seeds, shifts in crop pattern, etc., and per unit of livestock. J. fodder nnrl fonppntrate Hz. imnrovP-8 apntic Pfficiency. herd culling, and shifts to more productive kinds of livestock, etc. Even though crnn vields ner unit of Innrl and rPnnu P. n w pA s an fertil- izers are higher in the Mountains than in the Terai, there is need for more effective an d rffinipnt technolo in all regions. Pronosals for -YDansion of fruit production lack adequate research to give direction for investment. Motorablhe rnadr ar comnletely abntn exn+ in the Kathmannu and Pokhar subregions. In many districts farm family food requirements preclude a marketable in1 to naw for -sh innut n-t 7AThe robn"lenms of ide1nt.ifyringannd decid4ring oin p-rorit+ies c fo-r aloca- tion of domestic and foreign resources and the need for improving the admin- is+ration and operation of agricultural prorms nd rojects have been described. A further aspect of the problem is the time and opportunity cost from the project. Prolonged gestation periods rapidly increase project ''.t' Ut WIL. t.± Cc.c W DO.LL C Ld L±C. .1 UL,/ U . .U..LW.D. .L11U V1 -_ILCI.tt tC progress with respect to these situations; however, further improvement is II. L1uproveu aU M_U itI,.L-UV JU1 alu UdiJUa.L_ WlUlA UUtJULnv uU W_LU11 Ulnu applicable technology from research in progress or proposed, should, if C~.V C~.L ULt LC.u.L L. A..LjY O~U_LV% U p.iietJcts. , LfZ:II11VC IJ U I.-I 1111 L VO _L .J±U identified above and enable Nepal's agricultural output to expand to, say, a . ~9± LCLI c UIC".. . .UC JY _L7J.;Oj dLU. liciijo' CL _-iLL LUJ.Y IL±i-61c. .:Ll 0.C d 1980 or later. Potential improvement in market efficiency would also help stove euUlJU cLiQUl,U. llt n1U.111 Um LiUuUUUl1j ubua-L-Ly ±ulnUJ..LU to receive and apply development capital and technology in both the public anu priVELUIB SUCOu aru avalauIE. nowever. in m1ny UUZ5t,3 U.Lu6 ecll- nical assistance and capital are considered necessary to achieve the desired rate of grow611. - 26 - V. HALLM%RKS OF AN AGRICULTURAL DEVELOPMENT PROGRAM 78. The basic assumptions underlying this section are: that an annual growth rate of 3 to 4 percent is a plausible achievement for the 1970 to 1980 decade and is fully consistent with national objectives: and that the annual growth rate for agricultural output in Nepal is a function of the inouts serving the arinltural sector A third assumtion is needed regarding production coefficients for each input for each subregion and 79.An i ra-;. f h n-P,io sl4 be+e 1- ,4i -- ii .nii+. nd ti amount and efficiency of resources invested in agriculture is a difficult 'Mcdertak'ing under ideal conditos and 4-r so i---A---- -n,epl be- cs of thei lack of adequate data on regional potential and technical characteristics. lctut::.IJ UL a6 -.VL JLL±L- LLiU 0~tJI1A:L11.0 ao a. jJ1-UJJV1.LJ1 ofL gross C -L- -,+ u a. 3 value added which is needed to maintain a given rate of growth depends, in Part, on the voluie, kind and efficiency of capital goous suppled j. High output responses to low capital investment are more difficult to acIeve quickly in developing countries where soils are exhaucted, where technical responses are low, where there is a shortage of water for two or more crops each year, and where inadequate transport and marketing facil- ities restrain rapid development. Among these factors Nepal has productive soils, undeveloped water resources and underutilized technology, but the data needed to determine the most effective combination of resources to add are largely lacking. 80. Experience with alternative types of investment in irrigation resources and actual or estimated output responses aptly illustrate the relevance of allocating scarce resources to projects with high output responses per unit of capital. One minor irrigation surface water project had an investment cost of less than NRs 1,000 per hectare and increased the value of output by an estimated NRs 500 per hectare per year with a project 1/ For the 1960/1 to 1967/8 years a rough approximation is that 4O to 45 percent of the added gross value of output was derived from added irrig- ation, 20 to 25 percent from added fertilizer, 10 to 15 percent from added net cropland and the remainder from other inputs. These propor- tions are based on assumed "yardsticks" for value added at 1960/1 prices of NRs 500 per hectare for added net cropland, NRs 600 per hectare for added irrigation and NRs L,920 per ton for additional fertilizer plant nutrients with the remainder due to other factors such as new seed var- ities, shifts in crop pattern, added labor. etc.. since 1960/l. 2/ In small develooing nations where the nPricultural growth rate averaaed 3.8 percent, agricultural investment as a percentage of agricultural grosc v,qlue arded avernaed 609 prcntn in 1950o-60, ndr 7.5 percent in 1960-0q, The average agricultural capital-output ratio remained virtually unchangtd at 1 . to l during n+the enti 1n-year neind Tn Mnal a 10A/ +o 1979/80 perspective Plan study uses a 2.02 ratio. life span of thirty years. Preliminary results with tubewell irrigation projects show an investment cost of 1Rs 2,200 per nectare irrigaued to achieve Nls 600 increase in value of output per year for ten years. One major irrigation project proposal under review has an estimated capital cost exceeding NRs 8,000 per hectare and an estimated annual increase in value of output of NRs 1,000 per hectare per year for 100 years. The annual operating costs and capital-output ratios for these alternative allocations of capital vary widely. The increase in output that can be obtained varies with Nepal's capacity to implement and operate each type of project and with natural resources at each possible location. Output results also vary with the interactions obtained when other inputs such as fertilizers, more re- sponsive seeds, shifts in cropping pattern, etc., are combined with added irrigation. Overriding all of these factors are the elements of operating managerial capacity and the time costs of capital. Resource allocation strategy should first aim at increasing output per unit of added capital. With this improvement, then increases in the amount of capital invested in agriculture and its supporting infrastructure should achieve higher rates of growth. 81. The "package of crop inputs" most likely to have the highest in- fluence on arowth rates is believed to include land use transfers (from forest to cropland in the Terai), shifts in crop patterns, and added irriga- tion. fertilizers and croo cultural oractices including more responsive seeds The package for increasing livestock and poultry output includes increasing the size and Pffinipncv of commprnial nonilfir nnrAtions. imroved -osture. fodder and concentrate feeding, improved management and breeding. If capLnil-oni+.nni+. anmlvsis is +.o he used to evaluate the effect of altenMtive capital and input combinations, locate the more responsive areas for 1,,_ 'cts determi-n e~ , cpita - technic~r'~ a r,- e u- ment , ~- n--~ ~ r~e f sibilities, more information is needed regarding probable physical and tion of statistical data and in the development of agricultural research 3 to 4 percent growth rate in output it is suggested that much more could and sholdL be, LAV--1t: L1LVCLJ bJ, Jy relJlocingd curret~L resurces along broad guidelines: (a) Collect and analyze the economics of farming data collected Irom a small sample of farmers in each major type of far-ming area where substantial investments are proposed. Such in- formation, which should include a study of the returns to labor on tenant operated farms, could be used as guidelines for evaluating the economic effect of alternative capital allocations and price policies. (b) Initiate data collection procedures to obtain farmgate and wholesale agricultural commodity prices at representative markets using the metric system for weights, measures and land areas. - 28 - (c) Expand market efficiency studies for major factor and commod- ity markets, i.e. rice, ghee, maize, wheat, potato, jute,, etc., where croo losses and auality deterioration are above normal expectations. (d) Improve the accuracy and quantity of data collected regarding nrea vield and nutnut for anc mainr aricultural commodity, '~ P~v~ ~r- ~ I11l+11y'n ront1, L'-%rJ+.J,C! Frv +.hz mnin-& o'rnn.q fruits, vegetables, livestock and poultry so that they will puts of water, lime and fertilizers, more responsive seeds, eL U j'~ U L IJV.LVkl- LoV VI JI -Ck UJJ .LV. , CLLiLL1k:L_L.cL. lUA JU.L J. " Y.~ control and feeding practices. f) Expand the use of the types of information obtained unde! (a) to ke) above for the purposes of planued resource allocatisV and project operations. (g) Reorient and improve the quality of operations of the applic- able input and credit distribution agencies, i.e. Irrigation Department, Agricultural Development Bank, Cooperatives, Land Reform, Compulsory Savings Corporation, Agricultural Supply Corporation, Land Resettlement, etc. It is believed that most of the above can be performed by tha available tech- nical staff. In some cases foreign technical assistance is also available. Increasing Output from New Capital Resources 53. Sources of new capital investments for agriculture and its sup- porting infrastructure include savings of farmers and marketers, private and public money lenders, public revenues, export earnings and foreign agency loans and grants. It is important that these new funds flow into investment activities with high output responses relative to the cost of added inpits, although there may be additional criteria such as the choice of labor Laten- sive projects applicable to a number of local areas, projects with relativ- ely short gestations and total capital requirements, projects that stimulate subsidiary development activities, and projects that are manageable within the limits of existing and achievable manpower skills. 84. The followine list of Droiects or programs is suggested to Dromote sustained agricultural development in accordance with the above guidelines. The priorities listed here are tentative and warrant additional study and evaluation as a part of the allocative process for domestic and foreign PssistannA (ReA A-DnPndiY R " A1t.PrnqtivP Strat.vie for Tnarpnsinq Outout in Nepal".foran approach to priority classification.) - 29 - Group I - Highest Priority Projects 85. Since relatively little is now known about the technical aspects of agriculture in Nepal, it is necessary to improve the quality and qaantity of adaptive agricultural research particularly for the export earning or import substituting crops of foodRrains, jute, ghee, forest products, seed potato, oilseeds, fruits and vegetables, and tobacco. Research should be directed toward identifying disease resistant varieties that are more re- sponsive to other inputs and that have a relatively strong consumer demand. Water reauirements for crops to be irriated and the value of their physical and economic response to incremental rates of other inputs should be deter- mined only for those subrppions whprp intAnsivp develooment is under consid- eration and where transport facilities are or soon will be available. It is doubtful if economic loit wdni suppot the ibln-hmtnt iof qeventeen fruit research stations now operated. Concentration of this work in, say, three to -rv l~nnfinnQ and, inte +.Vn , ing i1+i, -ongny-t-Inr.V0 writh t.hp other disciplines of the Agricultural Education and Research Department Coq,ilrl nnl-i, tr m wy. ii,nfi - ii+ T, of- iir-vv+^1- - in v+.,ZnZJUP " research to develop more productive grasses and fodder crops is a necessary activities, future planning can begin to reflect changes in emphasis on the ."tVt UIk LILIA. CLI±U -LVW,;U U.UU1 LV.L UU V t: LUJ MU1 Lr U L V.L VLU 0~ _±L.L c:U_ki V1 U UL ULU LY U 11UU under U .L U%L; ULV11 U1--J Ujf; -IQ1UL1 La V stage of planning, where economic feasibility is reasonably well assured, shu"u be completed. Iese include Chatra, Gandaki and a number ol bube- wells, minor and medium surface water projects. The emphasis should be on minimizing the construction time factor before deilvery of water to farmer- fields. At this stage, minor and medium surface water projects appear to have a higher value of output per unit or capital required and a shorter gestation. The management of water on farmers' fields should be included. 87. The agricultural market structure can be strengthened by completing road projects now in various stages of construction and adding feeder roads that link the main road with nearby village markets, where a relatively high potential for agricultural and forestry development can be identified and where voluntary local labor can help build and maintain the structure. Development efforts must be concentrated on the more promising accessible areas at first, and these can be widened only to the extent that road con- struction proceeds. 88. Lime crushers can be installed with a distribution system to farm- ers' fields where the cropland soils are acidic and where limestone rock is available (90 percent or more CaCo preferred) in the agricultural areas identified for intensive developme t. Preliminary estimates indicate that a facility capable of producing 6,000 tons per year would cost NRs 120,000 and could operate and sell agricultural lime at NRs 55 per ton at the plant. Equipment for transporting and spreading on farmers' fields would also be needed. Crop responses to lime usually are higher for legumes, maize, wheat and potato than for paddy. - 30 - 89. The availability of agricultural inputs, and production credit where needed, consistent with desired rates of growth and benefit-cost incentives, e.g. pump sets, fertilizers, high yielding seed varieties, plant protection materials, could be strengthened and improved. The cost of fer- tilizer to Nepal's farmers might be reduced by arranging an agreement with India to deliver imported fertilizers to an Indian port at Nepal's foreign exchange expense and receiving the same kind of fertilizer ex-factory at Gorakhpur, Kanpur, etc. Arrangements for obtaining seeds from 2antnagar in India could also be explored. 90. In those areas where substantial volumes of crops and animal products move through commercial market channels, it would be worthwhile to investiaate the economic feasibility of installina drvers. protective storage, and processing facilities that reduce losses to insects, rodents and excess moisture. and increase recoveries in Drocessing and improve auality. Feasible economic response appears to be more probable for market improvement with rice. wheat. maizA. seed notato. commernin1 Dntato and gheA Also in the Terai and other accessible areas where forest trees are mature or where fojrest. landl is ton bep convrted.a ton n-ron,A a3 m-n of'fo+vp fn-r.qtrv mAnna- gement and marketing program should be developed. Roads and forest trails processing and marketing forest products. 91. Operational activities in land survey, land revenue collections for conversion to cropland use should be strengthened. There are indications the land area in each Ward and that compulsory savings and land revenue col- letiLuum a.re LIUu1 a eu uy a±. ar1Uiu Uura. ±auuwnerb anu 1-ecauv .n an equitable and progressive manner as intended. An alternative to land re- seitlement as now envisaged wouLd be to identfy the forest plots to be settled, map and locate the roads and market center service areas and offer each plot for sale under appropriate rules. Each purchaser would have f1", responsibility for the development of his own landholding. This approach should be tried on an experimental basis and proved feasiole before expanding it to a national program. 92. The critical manpower needed for current and long-term development in agriculture needs to be identified and trained. Group II Priorities 93. Some of these activities should be considered as Group I priority in areas selected for intensive development during 1970-74 and upgraded to Group I priority for 1975-79 and later: 94. The quality and technical competence of the Extension Service staff should be upgraded, where research results warrant it. It will also oe necessary to improve coordination with agricultural research and the various departments of the Ministries of Agriculture, Irrigation, Land Reform, etc., and to assure an effective two-way communication between farmers, research scientists and institutions. - 31 - 95. Feasibility studies of selected irrigation and road projects for expansion during the Fifth Plan (1975-79) should be completed. QA9 Additional qaricultural credit to farmers should be Drovided. consistent with their ability to repay and their needs for project implemen- +!+.i nn Tho rliffinl. rn-ripnom with Cnn rntivP (Crpriif, ani Land Reform Compulsory Saving Loans indicates the need for improvement in identifying npopnle and nrojec+.o th-+re-ol+1 J-n n-rnedsrcu+mlnrIin+t.nn ann loan repayment before more capital is made available for lending purposes. ia-LL -A I..- -o.L J. J . LUO y * ±I1 ±.U ~UUPj IUi± .L U ~ .L UJlt UUVt:--LJjJI~± U11 L~i~ ubseU.tors livestock; commercial horticulture; and fisheries. Technical and economic relationships necessary for rapid development of these resource ar no very effective or are not known, clearly identified and easily applied.. additional research is needed to clarify these relationships before aLuca- ting large amounts of development resources. In some cases roads and market facilities are needed to stimulate development. Once these data clearly indicate economic feasibility, project priorities could be raised. APPENDIX A Institutions and Aericultural Develorment 1. Recently the Ministry of Land Reform. Awriculture and Food was separated into two ministries with the following line and staff RrcuDings: Ministry of Agriculture and Food /Minister / Economic Central / Anal-vsis and / (Secretary 7 /Coordinntin /Planning Division/ Committee Joint / _/Under 7 /Secretarv/ /R-rst-ry / Dept of Agr. Dept. of Dept of Dept of Dept. of Dept of 'Research Horti onilturp LIvestock Fiqhprv Food V rAnh cr- Education & & Regulation Extension LI eeiary Acricultural Aprinultural oI Supply Development Management Resettlement Cornoration Pank CrporatIon Corpora+Ion .. 33 - Ministry of Land Reform /Minister/ /Secretary/ /Joint Secretar,/ Cadastral Register for Dept of Dept of CompuAsory Survey Cooperatives Land Reform Land Saving Administration Corporation also tied in with Agr. DeveloDment Bank Ministry of Agriculture and Food Economic Analysis and Planning Division 2. This division, created in March 1969 by renaming and upgrading the Agricultural Economics Section, provides a part of the data collection and economic evaluation services for the ministry. Nine of the division's current professional staff have received advanced training in agricultural economics and/or statistics. The staff collects and compiles an agricultural retail price series from fifty-five markets each month. The Central Bureau of Statistics since 1965/6 has collected crop area and output information, on the basis of stratified random sample crop cuttings, for paddy and wheat, and on the basis of local observation and opinion for other crops. These data are compiled into preliminary. final, revised and second revised estimates for each crop by districts by years and are used for program evaluation and re- source allocation Purposes. It is recognized that the system used does not give data with the highest precision of accuracy or that lends itself to appropriate weightings. Studies completed or in progress include: 1. Evaluation of the Compulsory Savings Program 2. Evaluation of horticulture projects. 3. Price analysis and market structure studies. 4. Evaluation of irrigation projects. 5. Program needs in the coordinated agricultural development districts. 3. This important service arm of the ministry can be further stranthened bs n Prinvirli-na thp np.prinriina mn-hinP.. nnulqtors and tve- writers and arranging for a computing service. h) triinnn1 +-rvinincr nrf +,th c+.nff' in nrninr-.+ finrmiItion ;nd evaluation techniques, c ~T~~~.oed oorinaionwith other d-artments of the Agicl- tural Ministry and with other ministries, for example, by set up so as to yield production function information, by e,t'UJ..L.i-ngL1 mlOre~ preciset definitJV1 JAL IUIVllU. V.Y " and market place where price and volume data are collected, and by collection of wholesale and Larmgate price data, d) Improved techniques to collect crop area and yield data. e) Application of the metric system for all data concerning area, volume, weights, etc. f) increase in the number and quality of studies concerning the identification of regions and projects for more efficient resource allocations. Central Coordination Committee 4. This committee was organized in 1965 to sponsor the coordinated Agricultural Development Program in selected districts. The committee, consisting of the secretary and administrators for Land Reform, Cooperatives, Food, Panchayats, Economic Planning and Agri-Economics, approves programs formulated by the different departments, organizes and assists District Coordinating Committees operate the approved program and obtains the assistance of Industry, Irrigation and other departments concerned with rural development., The objective was to make available to farmers all of the essential elements of agricultural development, simultaneously. Success- ful results achieved in the Middle districts have now made this approach the accepted strategy for other selected districts. 5. Since 1967, representatives of some of the major foreign aid donors were appointed to the committee and its functions were broadened. Currently the committee assists the ministry develop coordinated plans and implenent programs including budgetary control antivities- However. it does not en- compass actions of the Forestry or Irrigation ministries. The Department of Agricultural Education and Research 6. This department is responsible for research in all agricultural e C,rnOTh+ e-^-n + t,---r+ .--11 1 , -+ ne - A nn,,1+-, -Nvnev, C' h I - JLI 'flA Wk.t V JI. J1 U V U5 UO&J4.tOy .J. vr; tflJtIV ck VW 4 th A 'Y / 4-I J .9 .- - - 35 - and agricultural economics. Research in these subjects is performed by the respective departments or not at all. Responsibilities also include the pre-induction training of JTA's in technical agriculture, on-the-job train- inF: of the DADO's and the production and quality control of improved wheat, paddy and maize seeds. Publications are issued and field days are held to acciuaint farmers and others with research results. 7. Oreanized in 1960, the department has sections for aricultural botany, agricultural engineering, agronomy, entomology, plant pathology and soil snienn Thp cPntral research and 9ucational training station is located at Patan near Kathmandu. Eight regional research stations are OnerAtAH The q+,nff innIiiPq mover n nainitrn -inti.'t_ With advanced degrees and field experience in research work. Substantial technical and ennit..qI cmnpport+ h"h n- nvtrirl A oi%, 1 OAI 1-vr +h) Pnolrof.011PY. F nmition. FAO, USAID and India Cooperation Mission, for the introduction and testing nf'iOJ P3l ^-rl r% - _-; -+ c. .v-A -'I +--., I n-.-n+- -n through the techniques of plant breeding and the use of irrigation water, but. impressive results have been obtained with paddy, maize and other crops, However, responses to increasing increments of these inputs have fluctuated widely at each experiment station and between experiment stations each year. 1t isunt0 clear whener these variations in response coefficients are due to the methods of measurement used or to uncontrolled and unexplained variables of soils, environment and other factors. 9. Further research is needed to identify crop responses to new and added technical inputs more clearly and to relate results to local e.nviron- mental conditions. Some of the results also reflect dubious economic benefits at existing benefit-cost relationships. 10. Training activities performed by this department are summarized in Appendix A Table 1. Most of the training has been with the JTA's before their employment by the Agricultural Extension Department. In addition, the department helps identify persons and technical fields for training at agricultural colleges in other countries. Since 1957/8, 1,186 students were trained or are on training for advanced agricultural science degrees at foreign institutions. The details and training of agricultural technicians employed by the Ministry of Food and Agriculture in 1967/8 are given in Appendix A Table 2. 11. A proposal is under review that would transfer the JTA training center to the central research station in Patan and expand it to a 12-month course. A second proposal under study would establish a Colleae of Agri- culture at Patan with agricultural courses leading to a two-year diploma and a four-vear Bachelor of Science degree in agriculture- A UNDP proposal for the production and processing of cereal seeds and for soil fertility research is also hina nonirrI. HoWnver, there is nonhbtantive proposal to further expand adaptive research functions. 1-L -I1 d10 Wk 1 nnin'ln n n"r nay1 - h 1- 4nn Inir.r~c.r.r r +ihic r + An,'- r" the past five years, their major problem remains that of budget and policy staff and facilities that would provide a steady stream of yield increasing anc-BL e-corLonduc"Ly .1 eail L;.LLJup dI LveS LC teclnIOY * i±±±i 11tv responsibility for research work for the other important agricultural L'.LULet'-* ±L1±.'U ruUb.9 vegtaUkiU.t, J-LV UOU1'k. EiLU Udjlcolu L;U UULO department, and adding the disciplines of agricultural economics and certain aspects of forestry research would broaden the institution's ecope and could contribute to more rapid progress. It is highly probable that other agencies could perform the proposed quality seed production and distribution functions more effectively with this department responsible for providing genetically pure nuclear seeds. The proposed two-year agricultural diploma course of study would certainly be an improvement over the existing system for training JTA's and other supporting types of agricultural technicians. The proposed four-year College of Agri- culture Science degree course would not replace the system of training: for this degree now performed by sending students to foreign institutions. The Horticulture Department 13. Responsibility for the development of fruits and vegetables is vested with the Horticulture Department in the Ministry of Food and Agri- culture. This department operates 17 centers for research where it evaluates varieties and produces tree seedlings and vegetable seeds. / During 1967/8 over 225.000 seedlings and over 6.000 kilograms of veg- etable seed were produced and distributed. In 1968/9 over 300,000 tree seedlinrs were distributed. mostly orange. aDole. maneo and peach. National policy and practice is to produce and distribute fruit tree seedlings and vegetablp spi nt subsifi.P rates a a meanns of Oromoting production for family consumption. Except for Kathmandu Valley, only a very small commp.rninln mnrk±t. hn ivPlnnPH for thema itpms nt this time Most of the favored production areas lack motor transport to market centers. lb- Romacr'h un~vkl has h o-rirn an+n+cte . he ionnt.rol of' dinncAnP of orange, apple and peach trees and of potato. A major contribution give up to 12 tons higher yields per hectare than the local varieties and ~ ~ J are- accpte inte -e nd marke~'ts. .I.arJ W V4&*0 OVV".~ C24~u J.L% %,U1LQU.L CU X ~a..i V J± UJ V~L1L.d. j'.'J'LL of disease and insect control and on the strength of domestic and export 1/ Centers are located at Kirtipur, Dhankuta, Kakani, Dhunibesi, Kathmandu, Janakpur) Daman, Thak, Helambu, Trisuli, Baitadi, Godavari, Parwanipur, Bhairawa, Jiri, Ynjnapuri and Pokhara. - 37 - demand for fruit, vegetables and potato. Much of the needed research could be performed by an expanded agricultural research and education department with personnel and facilities for related disciplines. The Department of Animal Husbandry 16. This department is responsible for the development of the industry, including poultry. It operates six breeding farms where Murrah buffalo, Hariana cattle and sheep are produced. Males from these herds are distribu- ted through the panchayats for use in village herd improvement. Trials to test pasture grasses are in progress at Patan and Jiri. Two hatcheries are maintained, The department Droduces vaccines and provides veterinary serv- ices from 33 hospitals to farmers for the protection of animals and poultry from diseases and pests, 17 hnepalis livestock and poultry industry must expand if the growing population is to achieve adequate nutrition from animal protein sources. An estimated one third of the female bovines are considered as useless for reproductive or milk purposes. Closing of the China border has eliminated the.. use of' Tibean grazing land and~* reue theA flo ofJ me,~.U, La'VJAuat ands woo fo this area to Kathmandu. Most of the pasture lands and forests are over- lack adequate fodder for the October to April "dry" season. Cattle, sheep wd yak adredL heavi.ly infested wiindUerpest~V and li±ver: flJuke. ±1. Wspor taC tion difficulties impede the ready transfer of surplus production to the Kathmandu valley and village demand centers. Concentrate feeu prices are high relative to the value of output, except for poultry and eggs at selected centers. Genealogy and individual production records are not maintained. An effective breeding program must be based on these data maintained for a number of generations. The Department of Fisheries 18. This department provides fingerlings, technical information and services for the development of the industry from seven fishery stations. Distribution of fingerlings and marketing of fish from six hatcheries and fishing lakes maintained by the department were reported as follows: 196516 1966/7 18 Fingerlings distributed 209,000 303,000 636,000 * Fish sold (metric tons) 6.87 6.00 7.60 19. The department is concentrating on the development of commercial fish farms. Two demonstration farms totaling 60 hectares of fish-producing water and capable of producing 700 to 1,200 kilograms of grass and silver carp per hectare per year are now under development at Hitaura and in the Rapti valley. The Agricultural Development Bank has agreed to provide credit to worthy farmers and fish cooperatives for the construction and operation of fish ponds. Also in the Terai, production of 200 to 700 kilograms of fish per hectare has been obtained from fingerlings planted in rice paddies. It was observed that the yield of paddy produced with the fish was above that. of adjoining fields, - 38 - 20. At elevations between 1,000 and 7,000 feet the mahseer fish is found in many of the rivers. Heavy harvesting rates, sometimes by unlawful poisoning or dynamiting, and heavy silt loads in the streams have retarded outDut_ The department Droooses to establish trout hatcheries and to stock potential trout streams at elevations of 5,000 to 9,000 feet. If success- fil this reornce should attract additin1 turiqtq n in K,hmir. India. research, hatchery operations, stream protection, the establishment of fish TkD sa r 1 LL1D _LA. U LU IU.J. XU%~. /k %JV.. VW.L C% 1 A W.. 22.l.LO -~ cqtsIu Woraie as61LZ"UU a public secV.L inLJ1CULL 1L6A to serve as the nation's agency for the procurement of foodgrains in surplus producing ara3 uf the Teral to be distributed, i Ueicit areas, mosLy in Kathmandu Valley., The purpose was to maintain price stability to consumers and to assure minimum availability of the necessary foodgrain supplies The 1965/6 and 1966/7 "drought" years in northern India resulted in rapid price increases rlor foodgrains in the Nepalese Terai and a strong 1pull" for export sales. The Food Corporation protected consumers by procuring and distributing at subsidized prices over 50,000 tons of rice and wheat during 1965/6 to 1967/8. 23. In 1968 the Corporation was reorganized and food marketing, re- search and regulatory functions were allocated as functions of the Food Research Institute. Procurement and marketing functions of the Corporation were assigned to a new Food Management Corporation in the Land Reform Min- istry. The Food Research Institute staff is now operating a food testing laboratory to develop standards for the enactment and enforcement of a Pure Foods Act. It is conducting research -to determine minimum standards for agricultural commodities to be exported. It is also studying the develop- ment of protein food concentrates to help solve this nutritional deficiency. 24. A major study is in progress on ways of improving the efficiency of processing paddy to rice and wheat to flour. In the case of paddy only 52 to 58 percent rice conversion rates were observed with typical storage and processing facilities while more modern facilities would result in rates of 65 to 68 Percent. The rapid increase in wheat Production and a shift in demand to bread flour in the Kathmandu valley has created a demand for imDroved storage And processing, 25. Similar studies of marketinp nroblms with vegetable oilspeds. maize, potato, vegetables, fruits, and ghee are needed and will be initiatedI ered excessive for all these commodities, while quality losses were exces- sing and tasporfruits wand gmhee Better faciitieS for Storage, oes sing and transportation would improve market efficiency for most of these on,r,aratns, -39- The Agricultural Extension Service 26. This institution was organized in 1960 and has major responsibility for extension types of agricultural education and program promotion work in- cluding rural youth and home science activities with farm families. At this time the director in Kathmandu has a small administrative staff. including specialists in the development of "grow more food" promotion campaigns and publicity materials, it also provides publicity materials for farm news and farm broadcasting services. Agricultural technology and pre-employment and Research. 27. The extension field staff consists of one District Agricultural degree; from 10 to 30 Junior Technical Assistants (JTA) in each of these districts andu o.ne Wb attached to thdistL~rLit pancha-ya', in1 each of. 214 districts (without a D&DO). Forty-eight of the JTAs are assigned as specializeud± af t work. w±i rural yutwil 12.± are assigned~L to woJrk on home sciences. 28. Fbrmerly the operations performed by the DADO-JTA staff included cadastral land survey; initiation and use of the Compulsory Savings Scheme; allocation of scarce inputs through the Agricultural Supply Corporation; allocation of production credit needs for each farmer through the Agricul- tural Development Bank and local cooperative societies; intensification of development for minor irrigation and actions to safeguard tenancy rights. Since 1968 responsibilities for the cadastral survey, Compulsory Savings Scheme and tenancy rights functions were transferred to other agencies. 29. In 16 districts a coordinated Agricultural Development Program was organized in 1965/6. 1/ Nine additional districts are in a transitory stage of development toward adopting the fully coordinated approach in 1970. By 1975, it is planned to initiate this system in 13 more districts now in the preliminary stage of development. Also DADO's and additional JTA's are to be posted in the 24 mountainous districts. 30. The average age of the JTA is 16 years when he is hired for pre- job training. He has completed eight to ten years of primary and/or sec- ondary school education. He is given three months training in basic agri- culture, extension education methods and administrative procedures. Plans are in the discussion stage to extend the length of pre-job training to one year and to increase the number and amount of technical agricultural subjects taught. 1/ The districts were concentrated in the Birgani-Kathmandu-Rapti Valley sections of the Eastern Terai and Middle regions. This is the "supply" region for the "deficit" Kathmandu consumer market. - 4O - 31. Most of the JTA's on the job are between 16 and 20 years of age. They and most DADO's have no means of transportation other than walking. The Kathmandu office communicates with each DADO and each DADO with the JTA's under his supervision by mail and by an occasional group conference or tour. Other agencies provide seeds and fertilizers to be used for the three crop demonstrations each JTA is required to supervise on farmers fields. 1/ 32. A summary of problems of this institution is as follows: a) The immaturity of the staff and lack of adequate knowledge in tonhninn1 ariniultirp Thi.q is dup. in un.rt. to the very brief pre-job training of immature people and the lack of adequate aihlral technnv nht.ainn fronm rperch and experience on farmers fields. Under these conditions farmers ha'vel not dAeeveloped nrn44 L nnl ,,+he0f V) The use of raheUigdadiaeutUdiitaiepoe dures for the flow of the limited technical information, iu and capta frVom the Center, Wte UDADdw the" J to w farmers. c) Failure to provide adequate concentration on effective demon- strations of recommended technology on farmers fields. d) Serious problems of communication and transportation. The Agricultural Supply Corporation 33. This institution was established as a public sector corporation in February 1966. It functions as the importing, procurement and whole- saling agency for all imported agricultural inputs, i.e. fertilizers, plant protection chemicals, pump sets, seeds, etc. Prior to this date very low volumes of yield-increasing inputs were available to farmers. It has six branch offices and operates a number of wholesale warehouses under a policy of recovering all costs from the sale of inputs. In 1967/8 44 coop- eratives and 219 private dealers were licensed as retail distributers. Retail prices and margins are regulated. Most of the sales were made to farmers in the Kathmandu valley, Eastern Terai districts and Rapti valley. Additional sales points and an expanded program are planned. 34. The corporation has experienced the "growing pains" of becoming established and should now be able to expand sales without incurring large administrative costs. Prices charged farmers are necessarily high because of the high transportation cost from Indian ports and within the country and the low volume of sales at most retail outlets. 1TDuring the mission's tour an innuiry to ten JTA's and three DADO's for results of demonstration trials was answered by the statement that they had not rAnived the nAnAry materials and had not conducted demon- strations on farmers fields in 1967/8 or 1968/9. - 41 - The Agricultural Development Bank / 35. The ADB was established in January 1968 as a joint stock company, taking over the responsibilities of the Cooperative Central Bank and pro- viding loans to individuals, cooperative societies and corporations for agricultural development Purposes. Most of the loans made to provide fer- tilizers, agricultural implements, bullocks, insecticides and pump sets are distributed through district and primary cooperative societies, but some are extended directly to farmers. Loans are also extended to individuanl anr nrnnrtAnn- fn-r marketing and thp in.t11n.tion of qtornae and, processing facilities. Regular banking services are provided to the nublin in 'ale.t.d ral o be increased with the approval of H.M.G. Paid-up capital was NRs 7.5 mil- loan amount. Loans are secured by liens on the standing crop; property ings and land. Charges vary from 7 to 10 percent, with a 2 percent margin Cdc ' o cooprative soclet--5 37. The Cooperative Central Bank and ADB had by February 16o9 dastrib- uted NRs 15,8 million of loans of which NRs 1 million was to cooperatives for relending to farmers. Loans overdue exceeded NRs 1.7 million or 26.7 percent of the amount due in February 1969 or 23.9 percent of the loans outstanding. Of the NRs 653,000 loaned directly to individuals, approx- imately half was for the installation of minor irrigation facilities and the remainder was for the development of poultry. 38. Loan approval procedures appear to be cumbersome. For example, in the districts with the coordinated Extension system a farmer requests the JTA for technical crop production information. The JTA then develops a written crop plan that lists the recommended variety, fertilizer appli- cation, plant protection, materials, etc., the farmer should use. The crop plan is then approved (signed) by the local sub-inspectors and by an officer posted with the local panchayat. The farmer then takes the crop plan to the local office of the cooperative or if not available to the branch office of the ADB where a crop loan application is filed and later approved or disapproved. The farmer then returns to the ADB office and transfers the approved loan paper to the cooperative's retail supply depot or to the Agricultural Supply Corporation's branch depot and receives the specified quantities of seed, fertilizer and plant protection materials. All this in a culture where over 90 percent of the farmers are illiterate. 39. Experts from the Asian Development Bank are assistine Nepal's AD3 to improve its policies and procedures. It is proposed that additional capital resources be provided for uqp with sppctPH ngri.nilturnl dpveloDment projects. nT A mo-rep orti ofr t. Ai Dev elopmn rt-, Bank ThPqnn Asi tne M isi n in The Report of the Asian Development Bank Technical Assistance niLssion To. thea Agri. .LS -1r all& Dev lop en vB..L.srU,c , -- .L'nfl% T.. - a , -t1 I 0A 0~ - 42 - Food Management Corporation o. This autonomous government corporation resulted from the bifurca- tion of the Food Corporation into research and regulatory functions as ex- plained in a previous section of this report. At this time the corporation is mostly on a stand-by basis and could be activated to Drocure and distrib- ute any consumer item experiencing unduly high price and short supply condi tions- Man.al Rom+At int flvnrovti on sponsibility for resettling refugees from other countries and "surplus" It also has prime objectives regarding the protection of publicly-owned of drinking water in the villages and exploitation of groundwater rescurces. .L u L0 111d.I1dr U IJY C ~'L U"f ± . J.-eU L1Z % U±±0JL U.L116 LJ.L liJ %.i±11.L x L;L,1UVCLY. representative members from the inistries of Agriculture, Power and Water, AULL.LtAUEV. allU UVJ111t~U~ I U.L'1;:y2UU V1V U1. 4-. Resettlement projects nave been launched at Nawa.pur in the Rapti Valley Middle region and at Banke, near Nepalganj in the Western Terai. Approximately 2,000 families have been established with 2.6 hectares each of forested land which they have cleared and transferred to cropland use. Detailed plans are prepared for each settler regarding the location and construction of housing, crop patterns and production practices used, and off-farm services for inputs, marketing, roads, education, health, etc. Technical and financial assistance is provided each family by the corpora- tion with the help of the FAO World Food Program, Israel, USAID and the Dooley Foundation. Annual gross income per farmer averaged NRs 4,65 in 1967/5, about the same as the average of other farmers in these local areas. A target for resettlement assistance to 14,000 families by 1971 has been set up by the corporation. 43. Detailed information needed to evaluate this method of resettle- ment and development and to compare its approach with other methods was not available. Observation of the experience supports the hypothesis that the problem of resettling refugees is very different from that of trans- ferring surplus Mountain families to the Terai. Foreign grants and tech- nical assistance have helped solve some of the operational problems. However, for the big task ahead, an alternative approach could be evaluated, a system that would enable the "surplus" Mountain family to use more of his own managerial and capital resources to homestead Terai forest lands. Ministry of Land Reform 44. This ministry is responsible for determining the ownership of land and recording changes in owntrshin. collAting land revenu,. nadministerine the land ceiling act and the maximum interest rate act, and operating the (~omoi1_q'%T rin17'zZ (.)rne--v_n inn nnrl The Cadastral Survey 45. This department, started in 1962, measures the size of each land nlot nnd identifies the owner and tenant. issues leqI nertifiantps of ownership and prepares a Land Register. Detailed work has been completed in ni ne- distic.Jnork, is% in rognaress in thInirteeocn rert drI-iict. OveCr 1 million hectares of land in 2.7 million plots and with 1. million owners aDp- ,tet --P TarAio 'Wainsta"on *, LJ fr't. UU W~.L I .LJ.LL X%II_".LJ...LQ U.J. &. .L.J ±II l tc L L U L. U£JI £1 g±_ IU k UAV / j J U±d ~~ U UA W1I LJ..L.0V~.L_L%,t, Land Office where records of land transfers are maintained, tax rolls are prepared and lan revenues are collected. l the astLricts where the offi cl Land Register has not been completed an ad hoc system of identifying owner- ship, determining tax rates and collecting revenues is used. rour imajuv classifications for irrigated and non-irrigated land are used for revenue purposes, based on the productive quality of the land and actual land use. Revenue rates for each classification vary between the districts and between subdivisions within the district. Department of Land Reform 47. This agency is responsible for compliance with the Land Reorganiza- tion Act of 1962 which specifies the maximum area of net cropland any indiv- idual can own as indicated by the land title certificate. The maximum, varying by districts and quality of land, is usually 16 hectares in the Terai districts, 4.1 hectares in the Mountain districts and 2.8 hectares in Kath- mandu Valley. However, each member of a family may own up to this amount. Land owned in excess of the ceiling is exchanged for government bonds at fixed values. This agency then redistributes the surplus, usually to the operating tenants, if any 1/. This agency also administers the Tenancy Act and the Maximum Interest Rate Act. Under the Tenancy Act the maximum rent due the landowner is calculated at 50 percent of the normal yield for the major crop produced, usually Paddy. The maximum legal rate of interest that can be charged for all short-term agricultural production loans has been set at 10 percent. Many administrative and legal problems have been encountered in the implementation of these Acts. The Land Reform Saving Corporation 48. Under the Land Reform Act each farmer is required to deposit 86 kilogram: of fondgrain nor hntare of croniand enrated or its nni_v- alent value of NRs 58. Absentee landlords pay NRs 38 and the tenant pays uR,- 20 pezr ecae*Theo gai4n or c,nahmr eqi -tnlnn is- collecatedar by-i the Wn7-( Committees of the village panchayat and then deposited with the Land Reform 1 So far, 62,000 hectares of above-ceiling cropland has been acquired and 16,0 hnnn re has- been disribted motl toth tnts - th4 - five years as cash, in kind, or as government bonds or Agricultural Develop- ment Bank shares. Collections through 1967/8 in 34 districts were valued at 'NRs 95.4 million in kind and NRs 9,5 million in cash. An additional amount estimated at NRs 93 million had not been collected in 39 districts because of lack of adequate staff or storage space, inept management and, in some cases, malpractice. 49. The Ward Panchavat Committees extend loans to agricultural tenants and owners from the Land Reform Saving Corporation for use to buy seed, fertilizer. or bullock. to in.tql1 irrigation fnilities. Dersonal con- sumption and medical expense and to pay land revenue or watercess. Loans to villars carry a 10 nornent interaet chng and are to. hp. rp.id when the next crop is harvested. Loans of grain valued at NRs 80 million and Imqh -vnai-n- - - - I m-11in, nd been exte nd mos+1v or nnn mntin purposes in 34 districts. Only 76 percent of the loans advanced had been Compulsory Savings Program were suspended in April 1969, pending investiga- '- 'V ._ A. V i .jll ' U -LL±6L.ULVLo e. me negsurar Lur kvUPerau±ve5 aIu ius aai o the 13500 cooperatives organized to provide farmer members production requisites and credit. Nost of the cooperatives operate in ne te±al districts and in Kathmandu and Pokhara. Over 50 percent of the cooperative resources were subscribed by members in Kathmandu and 53 percent of the loans extended were to members in Kathmandu. Because of the growing delin- quency rate, the Central Cooperative Bank was converted into the agricul- tural Development Bank in 1968 with a new management system and broader functions for financing development. 51. National strategy is for the district cooperative union to borrow funds from the Agricultural Development Bank and relay the money to primary cooperatives for lending to farmers. Currently, approximately 200 of the 1,500 primary societies are active and viable institutions. The cooperativeo lack the support of farmers and dedicated business leadership among the officers and managers. The Ministry for Irrigation and Power 52. The development of irrigation resources costing NRs 300,000 or more is the responsibility of the Ministry for Irrigation and Power while minor irrigation development is the responsibility of the Ministry of Agri- culture and Food. Some of the existing and most of the proposed major irrigation project facilities can also provide hydroelectric power and contribute to flood control, tourism, fish production and other development activities. Coordination efforts with other ministries and aaencies are formally organized through the Chief Secretary, the Planning Commission and other agencies, -,)I - 53. Nepal has an abundance of water resources from perennial streams, rivers and underground aquifers relative to potential irrigable land. A bilateral. aid program with India provides funds and technical assistance for the development of irrigation resources in the Kosi and Gandaki watersheds. Similar programs with UNDP and F00 assistance are located on the Trisuli, Sun. Kosi. Kamla and Bagmati rivers. Groundwater and tubewell exploration and surface water utilization are under development with the above agencies and. also with USA.ID -uDort. ql ConRtruntion of the mpior anal qvqtAm for the Chatra (Kosi River) project is, perhaps, 50 percent completed. Detailed plans are nearing com- olption fr t.he hainning of nnnn .ho Knmln nnd (Inn(inki DroiPnts. Feasibility studies are in progress for the Sun Kosi, Trisuli and various thibeweall andl gfroiindae projects. These projects, if andl whn coemple+.td and fully utilized by farmers would add an estimated 330,000 hectares of net, 20 or 25 years will be required to complete all of these projects to the pint UtU farmerst:1'Z do, in fact;, hiUVU aulfqUated WfoUntsb and contL-L_ ofL iri-LG ation water for the October to June crop production season for the entire inucated command. area. A more rapid progress is hampered by the folluwiug factors: 1. Lack of adequate budget, administrative and technical support. 2. A preliminary indication of high costs for the construction and maintenance of water reservoirs, barrages, canals and drainage facilities and tubewells relative to the area served and added value of crop output. 3. Lack of adequate and reliable information regarding effective demand for irrigation water from farmers in the potential command areas. 4. Lack of research regarding potential surface water projects. The problems of administrative and technical support can be solved. Studies currently in progress and possible future studies may solve the problems of economic feasibility and capital requirements and enable Nepal to expand this resource as an important and major part of its agricultural development program. The Ministry of Forests 56. Forestry resources of Nepal are administered by the Ministry of Forests. For administrative purposes, the nation has been divided into for- estry circles with subdivisional officers and zone foresters, forest rangers and guards posted under the Chief Conservator for each circle. These offi- cers and staff manage the public sector forests. market forest products in- cluding grazing rights from these lands, survey and identify resources and Protect the forest wildlife- /t Jiri a multoi-DurDose rese.rch Droiect with Swiss aid is testing ways and means of improving forest pastures and tree production. 57. Most of the professional staff of the department have received trainin at th nearby Indian Forest Trainn instiuions.Techica and capital assistance have been provided by the Indian Cooperation Mission, TTC' t.Tn _ -, TTTT1Th TDAP u'WiID ana uNPur. 58. By design, the harvest of forestry products is exploitive in muc- of the Terai as a part of the process of transferring forest land to agri- cultural cropland. In this region it is probable that unlawful harvest and movement of forest products to India greatly exceed the volume of official contract sales from public forest lands. In the hills the demand and need for cooking fuel, the pressure of livestock needs for grazing of forest land and the pressure to transfer forest land to cropland has created serious soil erosion problems, quickened the run-off of rainwater and caused serious siltation of the local streams and the rivers crossing the Terai in Nepal and India. A continuation of the present or higher rates of harvest without rapid increases in the rate of forest growth will lead to a decrease in productive capacity. Agricultural Education 59. Formal schooling and training of agricultural manpower is the responsibility of the Ministry of Education. Since 1957, it has operated a training center at Kathmandu with a capacity of 200 per three-month session. Usually three groups of JTA's are trained each year and 2,000 have received this type of diploma since the school opened. 60. This institution aporoves all students for training at foreign institutions. The usual practice is to grant this type of fellowship under conditions that require five vers employment in a government post after returning to Nepal. Persons receiving foreign training for more than a three-month term are not eligible for additional foreign training for three years after their return; thus most grants are for up to three months. Over 500 students have received and over 400 studen+s are now in +.Vaining for advanced degrees in agriculture at foreign institutions, mostly in India) United States and western Europe. 61. it was reported that the Ministry of Education has placed strong emphasis on advanced training in subjects other than agriculture. There culture and Food and in the matching of areas of training and manpower needs during theU nex five~ toJ. te years. LJLiLJ Apendix A Table 1 CATEGORY AND NUMBER OF FERSONS TRAINED, DEPARTMENT OF EDUCATION AND RESEARCH 1959l- 'L ___ -2ý' 1965~6 16 lj57/8 1<,9_8 1959/0 960/i 1961/2 1962/3 1963/96 196h/5 96/ 6/7 1967/8 JTA 48 23 h0- 62 35 30 - 87 230 351 Up-grading 22 17 4 Home Science 11 11 12 30 Agricultural Engineering 12 19 Rural Youth Training 23 21 F"ield Men 10 23 Farmerts Training 25 12 69 1,379 491 Refresher Training 27 45 56 10 122 307 45 JTA (Practical Training) 1 2 1 2 5 5 6 3 3 4 2 Source: Progress Report, Land Reform Agriculture and Food Ministry, 1967/8, p. 11 (in Nepali). - 48 - Appendix A Table 2 DETAILS OF A.GRICULTURL TECHNICIANS ENPLOYED BY MINISTRY OF FOOD AND AGRICULTURE - 1967/8 Ic or BSc or, , Diplor3a Department PhD Equiv. Eguiveil JT / JTA Total Agricultural Education and Research AgronouV 1 8 6 15 28 58 Soils - 6 6 5 6 53 Entomology 1 4 1 3 5 1 Plant Patholoev - 6 3 9 1 19 Agriculture Botany - 3 4 - 17 2 4 Agriculturp Engineering - - 6 1h - 4O Agrriculture_RY-,Pnc!io)n 0 A__595i 82 Veterinary 3 32 45 TIves+ock Develc-nment Dairy Development - 1 6 5 12 Horticulture - 6 17 3 14 40 Fishery - 2 5 4 6 17 Agriculture Economics - 7 1 12 2 22 Total 2 76 131 166 694 1,069 1/ BSc or equivalent includes B.V.Sc and Gazetted officers. 2/ Non-Gazetted officers only though they are graduates or have diploua. / Posted as District Agricultural Development Officers at the panchayat headquarters in each district. Source: Progress Report, Land Reform Agriculture and Food IvIinistry, 1967/8, p. 62 (in Nepali). - 49 - Appendix A Table 3 o1 nf' BUDG.ETEDJ EXPaIDIT URESI MINISTRY OF LAND REIFM, AGRICULTURE AND FOOD 1965-66 to 1967-68 (NCRs 000) Department 1965-66 1966-67 1967-oo Item Planned Actual Planned Actual Flanned Actual Land Reform Ministry 11,045 10,848 11,048 9,948 9,225 9,191 Land Dept. 500 139 500 324 1,000 1,000 Food Research Lab. 155 138 81 72 111 116 Cooperative Dept. 2,102 1,986 4,735 4,080 14,076 3,440 Director office 767 709 2,184 1,936 1,673 79 Zonal offices 497 446 617 568 686 476 District offices 599 597 1,028 946 1,883 1,627 Coop. Training Centers 139 134 06 131 240 159 Coop. Bank (Agric. Bank) 100 100 500 500 1,100 1,100 Livestock Development and Veterinary Dept. 2,783 2,659 2,886 1,992 5,156 4,299 Administration (Dept.) - - - - 131 79 Livestock Development 518 779 743 973 720 715 Veterinary 1,500 1,142 1,000 388 1,772 1,544 Dairy Development 384 364 829 441 2314 230 Poultry 120 112 121 105 445 445 Cattle Feed Plant - - - - 459 376 North FYontier Livestock Center - - - - 651 353 Carcass Utilization 260 260 53 23 282 225 Artificial Insemination - - - - 220 144 Jiri Agricultural Station - - 140 70 240 195 Cadastral Survey Dept. 4,817 1,752 5,725 5,000 7,287 5,916 Survey Administration - - - - 3L6 346 Survey Team - - - - 6,111 5,570 TriRonometrical Survey - - - - 810 Horticultural Development 1.590 589 1.569 1.030 1.851 1,248 Administration (Dept.) - 237 L1 41 Horticultural Develo=ment 1.h95 h9L 1.500 727 - - Hort. Research Center - - - - 678 607 Potntops Imorovement c.Pnter. Kirtipur, Ilam & Daman - - - 690 159 Hort Nurery 95 95 69 67 W41 413 - Continued - - 50 - Appendix A Table 3 p.2 of 3 BUDGETED EXPENDITURES MINISTRYf OF- LAND REFdrM, AGRICULTUME AND FOOD 1965-66 to 1967-68 (NCRs 000) Department 1965-66 1966-67 1967-68 Item Planned Actual Planned Actual Planned Actual Dept. of Fishery 233 192 828 603 1,246 1,197 Dept. Administration - - - - 125 119 FiLshery Developmient - - - - 92 137 Commercial Fish Farm Haitanda - - - - 990 101 Agricultural Stations - - - - 39 39 Dept. of Agric. Education and Research 3,954 3,903 6,780 4,287 5,289 3,600 Dept. Administration - - 971 862 103 39 Entomology 225 220 600 477 34' 260 Plant Pathology 175 638 505 188 51.1 505 Agric. Botany 136 102 293 228 303 181 Agric. Engineer-ing h20 375 h67 3)1 L37 556 Soils Science 223 209 346 268 277 194 Agronorny 786 71, 797 562 833 758 Agricultural Station 1,681 1,h56 2,501 867 1,39) 1,106 Training in India - - - - 1,000 Training for Technicians - - - 10) Rapti Tractor Station 308 159 299 19h Dept. of Agric. Extension 6,932 6,238 9 ,39 6,39 8,39 7, Agric. Administration 2,020 1,800 954) 464 h4 Z.Dnal and District Agrj^ ) 2,-39 Extension 1,700 1,h03 2,553) 3,272 2,988 Agric. School 432 405 1,322 657 1,0'5 526 Agric Inomto 1545 15- 153rýý il:ni[ý« 1.,2 275 218-i jk6 LI, - J IIJria.I .I ~> Jj .... J.4L .>.' ~ -- Rehabilitation 361 361 400 400 657 657 Å ...-- -- ~ -i rCn(n -1 r'CCnn ~ ' nnf nnn n '. n~ .)n4 Akgri.c. Su-pply- Gorporatioun -,Lj 1 ,20 3,20V 2j.)V,32 ,2 Minor Irrigation 430 338 628 - Continued - - 51 - Appendix A Table 3 P.3 of 3 BUDGETED ELYENDllUNES MINISTRY OF LAND REFORM, AGRICULTURE AND FOOD 196o5-00 to 1967-6d (NCRs 000) Department 1965-66 1966-67 1967-68 item Vlanned Actual Planned Actual Planned Actual Land Reform, Agriculture and Food Finistry 96 89 82 56 34 50 Agric. Economics 134 114 232 159 240 175 L.C. T.C. Commodity 94 1,000 Agric. Supply Training 50 Training in India & Pakistan 6,000 1,272 T.C. L.C. Training 182 Source: Progress Report, Land Reform, Agriculture and Food Ministry, 1967-68. Actuals for 1967-68 were estimated in some cases. Appendix A Table 4 MNVURlgTON TAmRLP WEIGHT wsA3URisfiNTS ULD !hl NEPAL zeer (Hils) Dharni Seer (Tarai) Maund 9Int Llgra.L Quintaýlt T 1. Pau 1.00 0.25 0.08333 0.213762 0.00534405 0.439712 0.0001963 0.1994508 0.0019945 0.00019945 2. 6eer (Hjlls) 4.00 1.00 0.33333 0.855049 0.0213762 1.758848 0.0007852 0.7978032 0.007978 0.0007978 3. Dharni 12.00 3.00 1.00 2.265148 0.0641287 5.2765U4 0.0023556 2.3934096 0.023934 0.0023934 b. Seer ( Terai) 4.6785 1.169625 0.389875 1.00 0.025 2.057717 .000918375 0.9331 0.009331 0.0009331 5. M4und 187.14 46.785 15.595 40.oC 1.00 82.2868 0.036735 37.3242 0.373242 0.037322 6. Pound 2.3741992 0.5685498 0.1895166 0.46861 0.012153 1.00 0.oooUh643 0.4563 0.004536 0.0004536 7. Long Ton 5094.2062 1273.551552 42h.5171864 1088.88 27.222 2240.00 1.oo 10i6.05 10.1605 1.01605 8. Kilogram 5.013768 1.253442 0.417814 1.07169 0.026792 2.20463 0.000986421 1.00 0.OL 0.001 9. Quintal 501.3768 125.3.42 41.7814 107.169 2.6792 220.463 0.098421 100.00 1.001 0.1 10. Metric Ton 50.13.768 1253.442 417.814 1071.69 26.792 2204.63 0.98421 1000.00 100 1.00 Source: Annual Report, Land Reform, Agriculture and Food Ministry, 1967-68 (TrEnslated) ApýIU.pendix - TabLe 5 00Ni0ERSTON OF VOLUME IV_ASURFS INTO WETI4HTS OF AGRITUM.RAL PRODUCTS (NEPÅ T.) Commodities Muri lbs kg. Rice (Marshi)(2nd Grade) 1 160 72.58 Rice (Fine) 1 150 68.o Paddy (3rd grade) 1 110 49.90 Wheat l 150 68.o" Millet 1 15 65.77 Fapar (k.LIIU Uf LLeLt m2, u. 5.L.3 Barley 1 100 45.36 Pule (sma i .6J 5UU Gram l 140 63.50 Beans I2 58- :U .5.L Long Beans and Big Peas l 150 68.07 IMustad 25 56.00( Sesame (til oilseed) 1 115 52.16 Sar;u (kind of oilseed) i 122 55.3h Maize Flour 1 107 48.54 Wheat Flour 1 9 44.45 Source: Annual Report - Land Reform, Agriculture and Food Ministry, 1967-68, P. 110 (Translated) Ap ix A Table 6 CONVERSION TABLE - LAND MEASURE2ITS Khet Hectare A&12a Acre Matomuri RO-i MEri Mathi Hana Meter. ar ihet 1.000 1.3065 1 .9568 3.2192 10-1755 25.000 100.000 2000.00 16000.Co 13045.0 15581.2 Hectare 0.7665 1.000 1.50 2.4678 7.8003 19.1644 76.6577 1533.036 12269.938 10000.0 11914.2 Bigha 0.5110 0.6667 1.000 1.6465 5.2003 12.7769 51.1077 1022.075 8180.36 6666.7 7963.2 Acre 0.3106 0.4052 0.6078 1.000 3.1607 7.765h 31.9531 621.1865 4971.779 4052.0 480.0 Matomuri 0.0983 0.1282 0.1923 0.3164 1.000 2.6569 9.8275 196.689 1573.006 1282.0 1530.0 Ropani 0.0400 0.05218 0.07827 0.1288 0.4070 1.000 4.000 80.00 640.245 521.8 623.2 Mwi 0.0100 0.013045 0.01957 0.03219 0.1018 .2500 1.000 20.00 160.000 130.5 155.8 Fathi 0.0005 0.0006523 0.009785 0.001610 0.00509 .1250 C.050 1.000 8.000 6.52 7.79 Mana 0.0000624 0.0000815 0.0001223 0.0002011 0.000636 .00156 0.00625 0.125 1.000 0.82 0.97 Square Meter 13045.0 10000.0 6667.0 4052.0 1282.0 521.8 130.45 6.52 0.82 1.000 1.194 Square Yard 15581.2 11944.2 7963.2 4810.0 1530.0 623.2 155.8 7.79 0.97 0.837 1.000 1/ Values for Khet, Ropani, Muri, Pathi and mana are not standardized in all Nepal districts. The values given here are standard for about 75 percent of the district. Source: As given in Nepal's Third Plan, Page 172 and calc,lated for hectares and acres APPENDIX B ALTERNATIVE STRATEGIES FOR INOREASING AGRICULTURAL OUTPUT 1970 TO 1980 1. This note reviews alternative strategies that could be followed hvi 1M o1i n-f Nnal +. nfhiv-ir + avn1T.T t f I narn-. npr yrar for th. 1970/1 to 1974/5 Plan period and 3.5 percent for the next five years. on+an+ ;ri)e on mmA ,.,-+h no h n i ni olac lve n-inoq t uh n lild influence shifts in crop patterns. 2. Coefficients used to derive the growth rates for each added unit an bn ato of inputs wer nn0 per rr Ar' per hectare of net irrigated area, NRs 4,920 per ton of plant nutrients in or with new research results. Residual inputs are assumed to provide 25 pe-CeA- us Le vaue Of added outpuL. 1iese coe11eUeu" U V100t:u with the research and field experience of 1965 to 1968. Estimates of cap- ital cost in each case represent government development expenditures and are arbitrarily determined. The data used are too uncertain to support any strong claim for a precise and detailed set of inputs and investment costs that would achieve the targeted rates of agricultural growth at the least investment cost. The purpose of the exercise is to show the kinds of policy implications that need to be proved or disproved on the basis of more complete information and analysis. Alternative I - Constant Trend and Input Mix 3. For the past 3 or 4 years Nepal farmers used 6,000 hectares more new land, 17,500 hectares more irrigation and 4,000 tons more plant nutrients per year than previously to achieve an estimated 1.8 per year growth in output. If the targeted growth rates could be achieved by increasing the quantity of these inputs then it would likely require the transfer of 7,000 hectares of forest land to cropland per year by 1975 and over 8,000 hectares per year by 1980. Gross irrigated area added would need to increase to 20,000 hectares and 24,000 hectares per year while fertilizer use would increase to 4,600 tons in 1975 and 5,500 tons in 1980. It is assumed that the increased use of other inputs would continue to account for 25 percent of the growth in output. 4. The achievement of the targeted rates of growth with this alter- native depends very much on the comoletion of irrigation projects now in various stages of development, all in the i,astern Terai. The Chatra project may be excented to have thA maior annals comDlted by 1970 or 1971 and with extension of field canals and drainage to farmers' fields under a phased aoroach shoulH nrid hout. 70.000 he.tares of irrignh1 nrpn by 197 But most of the Chatra water will be available during the July to September mons+ when r-ninfll nnmnllir -vmnCA C ihe T+ moy nir+ nvovlr +.ho estimated NRs 60 per h vale o op ue sf n estimated NRs 600 per hectare to gross value of output unless sufficient - 56 - However, treating the cost of the canal as a sunk cost, this project appears to have a relatively low investment cost to Nepal. 5. Of the remaining 40,000 hectares of added irrigation required with this alternative, 30,000 hectares would probably accrue at an investment cost of NRs 2,000 per hectare for tubewell installations and NRs 8,00C per hectare for the Sun Kosi-Kamla-Bagmati major irrigation projects in the Eastern Terai. M,1inor irrigation surface water projects costing less than NRs 1,000 per hectare irrigated could add up to about 10,000 hectares in other regions. 6. Under an effective system of management the cost of transferring Public forest land to cropland should be recovered from the value of the standing timber and the land. The more important issue is whether the spenified qrpq will tarrn more oroducing trees or DroducinL crols- The Agricultural Supply Corporation and its licensed retailers are now in -om-ition ani -hond ho. nhlp to hnilp +hp inrcJ-tP volume of fertilizer sales without much additional investment. 7. For all developmental activities this alternative has an estimated total investmen+t of N1 260 million to MDe 300 m-lio nn +.- 1-7- and over NRs 500 million for the 1976 to 1980 Plan. The gross value of added T, Td n +3 n nnA I- --+ +- cn forest sfr'0 mll. in the Terai classified as potential cropland. The cost of transferring tIs resource to cropland use was not availaule, However, it is assumed that the value of the land and harvested timber would exceed the cost of transfer and that the contribution of crops to gross product would be greater than from forest products. Also there is a considerable quantity of underemployed labor in the iountain regions that could be settled on these lands. 9. Under this alternative it is assumed that the rate of forest land transfer to cropland is double that used with Alternative I and that the gains in output are used to reduce the necessary additions to irrigated area. Higher rates of transfer are not considered feasible because of the labor and marketing restraints. The quantity of fertilizer used each year is held constant under both alternatives. The exercise is essentially a trade-cff of new land for new irrigation. 10. To achieve the targeted 3 and 3.5 percent growth rate with this alternative, 8,000 instead of 7,000 hectares of new land must be added by 1975 and over 11,000 hectares instead of 8,000 hectares in 1980. Each hectare of forest land transferred would "save" five sixth hectares of new irrigated area or 11,500 hectares during the ten-year projection. 1/ If the 1 This is on the assumption that the "forest" land is scruband produces a neEliaible annual return. For better forest land. a smdll correction would be necessary. average cost of adding new irrigated area is, say, NRs 5,000 per hectare and the net cost of land transfer is zero then the new land approach would reduce the necessary investment costs by nearly NRs 60 million. Also the benefits of this approach would be distributed to more regions in Nepal. Alternative III - Lime and Fertilizers 11. Nepali farmers applied fertilizers at an average rate of 0.6 kilo- grams per gross cropped hectare in 1968 and not at all five years earlier. This rate is extremely low by any standard. Negative returns from the use of fertilizers are usually not observed until rates of application exceed 40 to 60 kilograms per hectare on traditional crop varieties and up to double this amount on some of the new seeds. Also a substantial part of the cropped area is acidic. Lime has not been used. The application of lime should increase the response of crops other than paddy to fertilizer applications, particularly for phosphates. 12. This alternative assumes the installation of lime pulverizing facilities and distribution equioment with a capital cost of NRs 5 million and an increase of 10 percent per year in the volume of fertilizers used. The value of Droduct on land limed and fertilized is increased to ten times rather than eight times the quantity of fertilizer applied. The added vlup of ontrot undpr thi- P_lt.rnnt.ivP ovp.r Al ternative T is used to r'duce the required irrigated area and new land area needed to achieve the targeted 35,000 tons of lime between 1970/1 to 1974/5 requires only 52,000 hectares 1975. New land area would be required at the same rate as used in Alter- £ .I.LV LJ dlU U4LIZ; 4 -U ±LUI' U11LO cIUUIU -LILAU -L; U.L.LIIJ U U Lt:. J - I71I I/V,J more of the forested area could continue in this type of land use. 1h. Alternative I required 22,000 tons of fertilizer and 96,000 Iectares of ad ded irrigation. ThUS, upWt 1975 b; Y add.Lig 5,0 tosoffrilL and 35,000 tons of lime the cost of 4h,000 hectares of added irrigated area is saved, At an investment cost 01 1Vrs 5,000 per hectare The saving would exceed NRs 200 million, but there would be as an offset the added cost of fertilizer annually and of lime periodically; the trade-off would nave to be calculated. It should be noted that it has been assumed in this exercise that lime application would only build up toward the end of the five years and the benefits up to 1975 come therefore mainly from fertilizer application only. The large gains from lime would occur in the years after 1975. Alternative IV - Adaptive Research 15. Adaptive research should be directed mainly at providing the Nepali farmer a wider choice of input combinations that increase output per unit of input under the heterogeneous conditions of soils, climates and crop patterns, An assured criterion for evaluating the benefit-cost of investment in agri- cultural research is not readily at hand. - 58- 16. An effective agricultural research program in Nepal should increase the need for additional investment in industries that process and distribute seeds and plant protection materials and enhance returns to capital invested in irrigation, fertilizers, lime and other inputs. If average annual research expenditures (now NRs 4 million) were doubled for the next decade, an :ncrease in yield per hectare of the order of 0.1 to 0.2 percent per year would be required 'to break even on the investment. The rate of return could well be many times greater than this amount. Policy Implications 17. The implications of this illustrative exercise are: 1. There are many feasible combinations of added land, irrigation, fertilizers, lime and other innits +hat will aChieve a tareted 3 and 3.5 percent growth rate for the agricultural sector. Studies b%aed on -realistic data nd n4zc2imnrmcrnn ilintHfV t.he more likely and least costly combinations. 2. Added irrigation appears to have a wide range in investment ~ , gestatUin Utie, aLU ltoal appi.J.JG U.L'L V ± J J116 " J.U&A VLA'. rainfall pattern at each location, source of water, structural Lac.L.t:t:, r4Le.U clU Wnt farmers water Udemanu fur ch feasible crop. Detailed studies are needed to evaluate each proposal. 3. The trade-off between transferring forest land to cropland and adding irrigation depends on the cost of adding irrigation and the value of continued use of the land for timber production. There is also the problem of location. iviost proposed irriga- tion projects are in the Eastern Terai. Most of the potential new cropland is in the Western and Inner Terai. h. Expanding the use of fertilizers as projected in Alternatives IRl and IV requires little, if any, added investment capital and., when combined with lime and the results assumed for adap- tive research, minimizes the investment needs for irrigation and new land. 5. Investment in adaptive research requires a relatively small amount of capital and enables farmers to increase the response from the use of fertilizers, new seeds, existing irrigation and other inputs. MAP OF N SHOWING FOREST CO (TARAI AND ADJACEN 1"= 30 MILES ARA -< IARY IOUNDARY iAA THAN 50% PREPA RED BY TO 50% FOREST RE.SOURCES SURVEY' HAN 25% DEPARTMENT OF F-E2S- - 2- .°. 9K % :22. 'I-~~,'~ "I~' + + + ++\%.',< - AW..+ N ++ ~ <Sif. Qy r+ - 1,7 VIKI2 +V ~ \13 IW.M isF- +- + + + VA l MMIL2I I I -- uA k 4 Ch a+ 14 V+ 10 F7 MEAP z5T 5 or %Js l YV ( V '4110\- - KIJTT - .J , d3 -4 * 1T \ * Cb 3 ~1 ~**XV~1UY -77-5" j i