KATHMANDU, May 25: Although the government has been increasing grants to boost production as the country has become increasingly dependent on imported food, food grain production has suffered decline. Over a period of five years, the government has increased grants to the agriculture sector by about Rs 12.5 billion. However, food grain production has only increased marginally.
According to the 62nd annual report of the Office of the Auditor General (OAG)-Fiscal Year (FY) 2024/25, the government provided Rs 16.83 billion in grants to agriculture, resulting in the production of 1,369,000 metric tons of food grains including rice, wheat, maize, and others in the FY 2019/20. Over the five-year period, agricultural grants increased by about Rs 12.5 billion.
In the FY 2023/24, agricultural subsidies increased to Rs 29.34 billion, yet food grain production reached only 1,096,500 metric tons. Over the past five years, food grain production has seen only a marginal improvement. This raises questions about the return on investment in food grain production growth.
From FY 2019/20 to 2023/24, food grain production increased by approximately 600,000 metric tons, which is quite low compared to the rise in subsidy investments. The government had set a target to achieve a 5.8 percent growth rate in the agricultural sector by FY 2023/24, but only 3.05 percent progress was made. Similarly, the target for paddy yield per hectare was 4.5 metric tons, but actual production reached only 3.98 metric tons per hectare.
Five times more applications received for model farmer’s grants
Similarly, for maize production, the target was 4 metric tons per hectare, but only 3.17 metric tons were produced. For wheat, the target was 3.50 metric tons per hectare, but only 3.01 metric tons were produced. For vegetables, the target was 20 metric tons per hectare, but only 14.48 metric tons were produced. For potatoes, the target was 22 metric tons per hectare, but only 17.11 metric tons were produced. Likewise, for fish production, the target was 6 metric tons, but only 5.57 metric tons were produced.
The Ministry of Agriculture and Livestock Development (MoALD) provided subsidies in FY 2023/24 as follows: Rs 24.34 billion was spent on purchasing chemical fertilizers, Rs 1.582 million was paid as crop and livestock insurance premiums, and Rs 1.328 million was given as subsidies to sugarcane farmers.
Similarly, subsidies amounting to Rs 1.32 billion were given directly to farmers, and Rs 2.575 billion was distributed as subsidies for other seeds, seedlings, machinery, agricultural tools, and so on. Among the subsidies, the largest share—83.05 percent—was spent on chemical fertilizers.
Prakash Kumar Sanjel, director general of the Department of Agriculture, stated that a major portion of the subsidy is spent on chemical fertilizers. “The increase in the price of chemical fertilizers has caused the subsidy amount to rise,” he said, “but the actual subsidy amount reaching the farmers has not increased.”
He also mentioned that while in the past about Rs 15 billion was given as subsidies on chemical fertilizers, it has now increased to around Rs 24.5 billion.
Matina Joshi Vaidhya, spokesperson for the MoALD, stated that the increase in fallow cultivable land has undermined growth in production. “Due to migration, land in rural areas remains fallow,” Vaidya said, “Since there has been no expansion of cultivated areas, production has not increased.”
Although food grain production did not increase as expected, Vaidya said that vegetable and fruit production has risen. The OAG has pointed out problems such as duplication in subsidy distribution, limited access for marginalized farmers to subsidies, and a lack of uniformity in the subsidy system. It has also noted that agricultural production and productivity have not grown as expected and has recommended organizing subsidy distribution to avoid duplication.
In the 15th Five-Year Plan, the target was to achieve a 5.8 percent growth rate in the agricultural sector, but only 3.05 percent was achieved. The goal was also to reduce agriculture's contribution to the Gross Domestic Product (GDP) to 22.3 percent, but it remained at 24.04 percent.
According to the OAG report, although milk production met its target, annual progress was not achieved as expected for paddy, maize, wheat, vegetables, potatoes, fruits, and fish. Likewise, the target for achieving a 25 percent seed replacement rate in major crops was also not met, as only 23.14 percent progress achieved.
