Despite High Potential, Province 2 yet to Tap in Benefits from Agriculture Sector

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Despite High Potential, Province 2 yet to Tap in Benefits from Agriculture Sector

October 20: The contribution of the agriculture sector to the Gross Domestic Product (GDP) of Province 2 is said to be 39 percent, according to the Economic Survey of 2078. The average contribution of agriculture to Nepal’s GDP is around 25 percent. The portion contributed by Province 2 is the highest among all provinces.

In fiscal year 2068/69, the contribution of agriculture towards the GDP was 32 percent. However, the percentage is continuously declining ever since.

Province 2 is considered as the center of food production and supply. Analyst Jagdish Prasad Agrawal says that despite Province 2 having high economic potential, it has not been able to commercialize yet. As a consequence, expected results are not achieved, says Agrawal.

“Agriculture is the strength of Province 2, but it has not been commercialized yet. Mechanization alone is not commercialization in the field of agriculture,” says Agrawal, who runs an agro-enterprise.

Agrawal believes that the potential cannot be utilized until and unless agricultural production can be linked with industrial production. A study report released previously by Nepal Rastra Bank also pointed out high potential of agro-based enterprises in Province 2.

The potential of agro-based industries in Province 2 seems strong. According to industrialist Suresh Rungta, most of the raw material supply is dependent on imports even though agro-based industries like rice, oil, pulses, grains, flour and flour are in operation.

Subodh Kumar Gupta, president of Birgunj Chamber of Commerce and Industry, says that the positive cyclical effect of domestic production can replace the import of raw materials.

Gupta said that most of the industries are dependent on imports due to the absence of the availability of raw materials within the country. “When raw materials are supplied from domestic market, it will not only create employment opportunities and improve income status, but also replace imports,” he told New Business Age.

Experts say that, as Province 2 is considered as the center of food production, flourishing agriculture in this province can significantly contribute to the overall economic growth of the country. Stakeholders believe that due to the trend of subsistence farming, the expected benefits could not be reaped despite having high potential.

While the concerned parties are saying that a policy should be adopted to associate agricultural production with industrial production, the data has shown that the production of overall industrial crop has declined. According to the Economic Survey, the area and production of all industrial crops except cotton have declined in the fiscal year 2077/78.

Hari Gautam, vice-president of Birgunj Chamber of Commerce and Industry, said that the problems faced by the farmers associated with the highest-selling cash crop, sugarcane, is the representative problem of all the farmers.

Farmers are forced to fight in the federal capital to get their hard earned money for selling sugarcane. He argues that it will not be possible to diagnose other agricultural malpractices as long as farmers are forced to fight for their rights.

Chief Minister of Province 2 Lal Babu Raut says that the provincial government has given priority to agricultural production. The provincial government has stated that it has put forward schemes including irrigation, fertilizer and concessional loans for effective agricultural practices.

Minister for Drinking Water and Energy of Province 2, Om Prakash Sharma, says that a plan will be formulated to provide concessions in solar energy to farmers for irrigation.

There is a need for encouragement to the agriculture sector in order to increase the contribution of agriculture in the economy. Farmers in neighboring country India say that the government has given huge contribution and support to agriculture, which has had a direct impact on Nepal's farmers due to the open border.


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