Understanding Fertilizer Shortage in Nepal

Each planting season in Nepal brings not hope—but anxiety. Farmers fear not just the weather or pests. They fear the chronic shortage of chemical fertilizers. Over two-thirds of Nepal’s population depends on agriculture. The sector contributes nearly a quarter of the country’s GDP. This recurring crisis is more than a supply issue—it is a stark symptom of institutional failure, poor planning and a broken supply chain stretching from global procurement to rural fields.

This is not a seasonal mishap. It is a systemic failure of policy, logistics and governance that disrupts every stage of the fertilizer supply chain. From delayed international tenders to poor distribution, from political indecision in Kathmandu to thriving black markets in the Tarai, the entire system is inefficient and unresponsive. The result: farmers are left stranded, food production declines, and the country spends billions importing food that it could grow—if only the fertilizers arrived on time.

One visible symptom is the surge of low-quality, smuggled fertilizers from India. In districts like Bara, Rautahat and Sarlahi, black-market fertilizers flood in during peak season. This parallel market does not emerge from healthy competition; it grows out of desperation.

With no reliable alternatives, farmers are forced to buy untested products. These fertilizers often mimic legitimacy with Nepali-language packaging, but they lack proper NPK ratios, labels or quality checks. The impact of using these inputs is severe: soil degradation, reduced yields and worsening food security.

At the center of this crisis lies a broken official supply chain which is flawed in both design and execution. Two state-owned entities, Agriculture Inputs Company Limited (AICL) and Salt Trading Corporation (STC), are responsible for importing around 600,000 tons of chemical fertilizers annually. These include urea, DAP and MOP. The fertilizers are distributed to farmers through cooperatives at subsidized rates.

However, the system rarely functions as intended. Tenders are issued too late every year, sometimes just weeks before the planting season. The entire process — bidding, contracts, letters of credit, port clearance—is slow and riddled with bureaucracy. By the time fertilizers arrive in Nepal, typically through the Kolkata port, the planting season is already midway or even over. This delay forces farmers to either wait, scale back cultivation or resort to the black market.

The international side of the problem adds another risk. Nepal is heavily dependent on imports from India and, to a lesser extent, China. While India is the primary source due to cost and proximity, its export policies are unpredictable. In 2022, when India restricted fertilizer exports to protect its domestic supply, Nepal was left with alternatives. Unlike countries that have diversified trading partners and maintain buffer stocks, Nepal has no backup plan. Since it lacks strategic reserves, even a minor disruption in supply can trigger nationwide shortages.

Transport and logistics further compound the problem. As a landlocked country, Nepal faces high freight costs and long transit times. Shipments from Indian ports to Nepal are frequently delayed by procedural bottlenecks, truck shortages or political strikes. Inside Nepal, the distribution network hits another set of challenges: poor road infrastructure and limited storage capacity, particularly in remote and hilly districts. As a result, even when fertilizers are available in hubs like Kathmandu or Birgunj, they often fail to reach places like Rolpa or Bajhang in time.

This failure has massive consequences. According to recent trade data, Nepal now imports over Rs 360 billion worth of agricultural goods annually. That includes rice, vegetables, lentils and wheat. These are the crops that farmers could grow domestically if they had timely access to essential inputs. This means we are importing food because we failed to manage the supply chain for the materials needed to produce it. It is not just ironic; it is a costly mistake.

But this crisis is eroding trust far beyond the economic sphere. Farmers—already living on the edge—now feel abandoned by a state that overpromises and under delivers. A state that is more focused on spinning lies to rerun an election than solving real problems. As hope withers and promises go unmet, so do the delivery of critical inputs. The disillusionment runs deeper than farming; it fuels a broader loss of faith in governance, politics and the future of agriculture itself. The long-term result is a mass exodus of young people from farming, either into migration or unemployment.

Stopgap measures alone cannot fix this problem. It requires fundamental, long-term policy changes. Centralized fertilizer procurement should be streamlined, and an efficient, predictable distribution network must be established. Tenders need to be issued well in advance—ideally six to eight months before the planting season—with clear timelines and accountability measures. Policy frameworks should include emergency provisions that allow the government to make quick purchases if regular procurement windows are missed. Equally important, Nepal must reduce its dependence on a single supplier by building relationships with fertilizer producers in the Middle East and Southeast Asia.

Infrastructure investment is also critical. Provinces and districts must improve their storage capacity. Both supply and demand could be tracked in real time through the introduction of digital inventory systems. Equally important is improving road access to rural markets—not just for fertilizers, but for broader economic development. The last mile of delivery is managed through cooperative networks, which should be trained and supported with technical assistance and initial incentives to build their capacity.

This is not just isolated fertilizer smuggling; it appears to be an organized trade causing losses of tens of millions of rupees, operating with complete impunity. What the government must do immediately is wake up and strengthen border monitoring, ramp up on-ground inspections of retailers, and launch a public awareness campaign warning farmers about the dangers of using uncertified fertilizers. Penalties for smuggling and selling substandard fertilizers should be increased and strictly enforced.

In the long term, Nepal must shift toward more sustainable, locally sourced alternatives. Organic fertilizers, composting systems, and bio-fertilizer technologies are still underdeveloped but show great promise. Investing in research and farmer education can gradually reduce our dependence on imports and build a more resilient agricultural model. This approach also aligns with global trends toward regenerative agriculture and climate-resilient farming.

Nepal’s fertilizer crisis is not just about a missing product—it reflects misplaced priorities. Year after year, despite media reports, farmer protests and parliamentary debates, there is no improvement in supply. Until we address this issue with the urgency and seriousness it demands, the same story will repeat every season: fertilizers will arrive too late, farmers will turn to black markets, yields will fall, imports will rise and the nation will pay the price—not just in money, but in lost opportunity.

If Nepal aspires to feed itself and grow through agriculture, it must treat this crisis as a central governance challenge. It is a test of our governance, planning and capacity to deliver—and one we can no longer afford to fail.

This opinion article was originally published in September 2025 issue of New Business Age Magazine