Fertilizer demand-supply gap and avenues for policy revisits in Nepal

Abstract

Nepal's farmers report fertilizer shortages yearly, especially for rice, wheat, and maize production. A reliable and established approach to estimating the actual demand for fertilizers for different crops and cropping seasons is lacking. Therefore, it is difficult to project the types and quantity of fertilizer to import and allocate across various regions in the country. With the direct involvement of the Government of Nepal (GoN) in fertilizer import, price (subsidy), and distribution, together with the high affinity of farmers for the subsidy, there is no incentive for the private sector to import and distribute fertilizers. Thus, farmers’ access to fertilizers in the country depends primarily on the subsidy budget, quantity and types of fertilizers imported, and their distribution management. In this study, the fertilizer demands, both at the national and sub-national levels, were estimated through a survey of cooperatives that distribute subsidized fertilizers in the country. Our estimate suggests that the fertilizer supplied in 2018/19 was only 60% of the total effective demand in the country. With this estimate of the demand-supply gap and the price variability across provinces, short, medium, and long-term policy recommendations are made to improve the supply of chemical fertilizer in the country SAARC J. Agric., 20(2): 223-234 (2022)

Integrated assessment of irrigation and agriculture management challenges in Nepal: An interdisciplinary perspective

“…A major challenge in the three systems, with the highest score of 4.41 among all 33 indicators, is the timely unavailability of an adequate quantity of fertilizers from the socio-economic and market category. In 2021, the technical demand for major fertilizers - Urea, Diammonium Phosphate (DAP) and Muriate of Potash (MOP) - was 1.29 million metric tonnes, with 40 % (0.6 milliom metric tonnes) of it considered as effective demand at the national level [ 30 , 64 ]. Generally, imports from the neighbouring countries met fertilizer demands in Nepal.…”

“…This is exactly the period before the survey was conducted. As indicated by Gautam et al [ 64 ], the existing fertilizer supply meets only 60 % of the effective demand with an even greater gap in western Nepal.…”

Does private sector involvement improve the distribution efficiency of subsidized fertilizer? A natural experiment from Nepal

“…Following FDD 2020, of the over 600 agrovet dealers registered across provinces as of April 2022, more than half (approximately 315) had already sold subsidized fertilizer to farmers in 2021 (Gautam, Gaihre et al., 2022). Whether or not the directive promoted equitable and efficient distribution by agrovets is assessed in the present study.…”

“…However, the national average fertilizer application is 87 kilograms (kg) per hectare, which is lower than the South Asian (SA) average of 135 kg per hectare (WDI, 2018). The current supply of subsidized fertilizer in Nepal is only about 60% of estimated annual demand of 840,000 metric tons (t) (Gautam, Gaihre et al, 2022). Kyle et al (2017) reported that only 25% of farmers could purchase all the fertilizer they sought.…”

“…Following FDD 2020, of the over 600 agrovet dealers registered across provinces as of April 2022, more than half (approximately 315) had already sold subsidized fertilizer to farmers in 2021 (Gautam, Gaihre et al, 2022)…”