Nepal's import of garlic, a daily component in Nepali kitchens, has witnessed a 24 percent average annual growth over the past 13 years reaching Rs. 1.58 billion in Fiscal Year 2020/21. Despite being an agricultural country with various measures in place to increase the production of garlic, domestic production appears to be insufficient to meet the growing demand of local consumers.
Though garlic has been identified as a most profitable cash crop and widely used both in culinary and medicinal purposes, Nepali farmers and investors seem to be reluctant to engage in the commercial production of garlic. The biggest reasons for this reluctance are due to lack of agricultural labourers, destruction of cultivable land, remittance-induced urbanization, rising land prices, the tendency to discourage big farmers by labelling them as feudal lords and cruel exploiters and the growing insecurity and chaos in rural areas.
Likewise, uninterrupted imports of heavily subsidized garlic from countries like China and India are also eroding the competiveness of Nepali garlic even in the Nepali market. In addition to these discouraging factors, middlemen in the garlic trade are creating a mechanism whereby producers are compelled to sell their products at prices that do not compensate the costs to the farmers.
Against this background, the government should formulate an appropriate policy to increase garlic production in Nepal in order to meet domestic demand and pursue an implementable promotional strategy to export Nepali garlic in international markets mainly Indonesia, the United States, Malaysia, Germany, Pakistan, Russia, France, United Kingdom, Italy, Bangladesh, the Netherlands, Saudi Arabia and the United Arab Emirates.
According to the ITC/Trade map, Indonesia ranks at the top in imports of garlic in the world whereas Brazil, the United States, Malaysia, Germany, Pakistan, Russia, France, the United Kingdom, Italy, Bangladesh, the Netherlands, Saudi Arabia and the United Arab Emirates also have significant shares in the worldwide import of garlic as per the 2020 data. It is noteworthy to mention here that Nepal has been experiencing a huge trade deficit with most of these countries. With proper promotional strategies and apt diplomatic initiatives, Nepali garlic can play an important role to narrow down Nepal's galloping trade deficit with these countries.
By providing subsidies and incentives in garlic production, storage and transportation facilities, creating a secure environment in rural areas for big investors, lowering over bloated land prices, introducing tax waivers, intervening in the highly manipulated garlic supply chain and conducting trade negotiations with the government and private sector of target markets, Nepal can easily achieve the goal of narrowing the galloping trade deficit in the garlic business.