Rice imports hurt domestic mills

BIRATNAGAR- Anjani Rice Mill’s sales of rice have plunged from 2,500 kg daily to barely 400 kg due to competition from Indian rice. According to Sandeep Agrawal, operator of Anjani Rice Mill, other rice mills in the region are having the same problem.

Anjani Rice Mill is located in Biratnagar, 3 km from the Indian border town of Jogbani. “We are now only doing bulk sales. Until last year, there was good demand in the retail market here. The situation has changed now,” said Agrawal.  

According to him, the customs office allows people to bring one to two sacks (100-200 kg) of rice from India for household consumption. Taking advantage of this rule, the local people have been importing hundreds of sacks of rice, hurting sales of domestic mills, he added.

Nepal Rastra Bank’s figures show that the country imported rice worth Rs 8.45 billion in the fiscal year 2012-13, up from Rs 4.26 billion in the previous year.

Likewise, the data of the Trade and Export Promotion Centre (TEPC) shows that Nepal imported paddy and rice worth Rs 18.7 billion in the first 11 months of 2012-13. Imports of all types of food products including rice, paddy, vegetables and other food stuff were worth close to Rs 100 billion as of the first 11 months of the last fiscal year, according to the TEPC.

Economist PK Jha said the situation of food imports in the country is disappointing as more than 80 percent of the population depends on agriculture for their livelihood. “A country dependent on farming importing food items worth Rs 100 billion is simply embarrassing,” said Jha

The government’s data show that Nepal, which imported 227,000 tonnes of food annually during the years 2005 to 2010, has been importing 300,000 tonnes of food from 2010.

Biratnagar, which is considered to be a fertile land for paddy production, itself imported 30,231 tonnes of paddy worth Rs 618.9 million and 48,927 tonnes of rice worth Rs 136.5 million in the last fiscal year. In fiscal 2011-12, imports amounted to Rs 69.9 million worth of paddy and Rs 425.1 million worth of rice

According to Raju Agrawal, who has been involved in the rice and paddy business for three decades, the food situation has become so alarming that there could be severe shortages if imports from India are stopped for even six months. “Two decades ago, we used to export paddy and rice to India. Now it is the other way around,” said Agrawal.

He added that if imports of rice and paddy from India were to be blocked, prices would skyrocket in the local market making them unaffordable to a majority of the people in the country. “To a larger extend, imports from India have helped us in controlling prices here,” he said.

Two years ago, India banned the export of rice to Nepal and Bangladesh to prevent possible shortages in the domestic market.

(Published @ TKP)