Cultivating Change: Addressing Inefficiencies in Nepal’s Agriculture Markets

Cultivating Change: Addressing Inefficiencies in Nepal’s Agriculture Markets

The stories serve as a testament to the plight of farmers and agriculture producers in Nepal who bear the brunt of the underdeveloped market system. On the other hand, consumers are also forced to pay exorbitant prices for agricultural products due to existing market inefficiencies. But, until my selection as Daayitwa Public Policy Fellow-2024 placed at the Ministry of Agriculture and Livestock Development (MoALD) for research on strengthening interregional coordination of Agriculture markets, I had never deeply contemplated the flaws and inefficiencies of Nepal’s agriculture marketing system and ways of optimizing it to benefit producers, traders, and consumers. It was surprising, given my upbringing in a farming community in Chitwan, where my family and other farming families around me faced challenges regarding marketing their agricultural products and getting fair prices. 

Even though I had grievances and anger against the inefficient agriculture market structure, my principal focus during my undergraduate years remained on studying agriculture production and extension systems, and I only had a passing interest in a broader systemic view of agriculture markets. Thus, as a result, I never seriously contemplated the optimization of the agriculture market system. Perhaps I had normalized and silently accepted the status quo like many farmers around the country who have accepted the sub-optimal market structures as the norm as they find themselves powerless to change it. 

My interest in agriculture markets was piqued when I was in New Delhi to pursue my master's in International Relations as it coincided with the large-scale farmer’s protest against three controversial farm laws in India. While I closely witnessed the protests, ongoing debates on market reform also provided me with intellectual stimulus to engage further with agriculture markets. Thus, the incredible opportunity to study agriculture markets in Nepal through the Daayitwa fellowship attracted me as the idea of enhancing the markets' efficiency and helping farmers achieve better outcomes resonated with me. 

In Nepal, agriculture is not just a profession; it is a way of life that is deeply interconnected with our culture, community, and ecology. Thus, sustainable development can’t be ensured without creating a sustainable agriculture system with robust and efficient markets. Markets are often plagued by inefficiencies, unpredictable price fluctuations, unreliable transportation, and sparse communication between different regions within and outside the country. There are large seasonal and spatial fluctuations in fruit and vegetable markets in Nepal. A study by the Asian Development Bank indicates that from 2000 to 2017, the average annual wholesale price of potatoes was NRs. 22/kg with a standard deviation of 11, while the average wholesale price of onion was NRs. 36 with a standard deviation of 17. Similarly, there is high post-harvest loss owing to mishandling of perishable fruits and vegetables, poor transportation, and lack of adequate storage infrastructure, including cold storage at production sites and wholesale markets. It is estimated that a reduction of post-harvest loss by 75% would lead to savings of approximately $ 675 million. Similarly, reducing the marketing cost of fruit and vegetables by $0.025 per kilogram can save up to $1.25 million in Kalmiati fruits and vegetable markets alone.

The current situation demands greater integration of agriculture markets and interregional coordination and collaboration, improving the flow of information, goods, and services, thus helping to stabilize prices, reducing inefficiencies, and ultimately supporting the farmers and other stakeholders. Thus, my current research revolves around establishing a robust mechanism for sharing market information and equipping farmers and other actors with knowledge of price trends and existing demand-supply dynamics. It is necessary to leverage modern technology to empower them to make informed decisions. Similarly, improving transportation and other logistical infrastructure, including handling and storage, can help ensure the timely delivery of agricultural products and reduce waste. Optimized transport and logistic networks are crucial to linking different regions and creating more efficient market systems. Moreover, the country is transitioning into the federal system with three tiers of government, each having authority on agriculture development. Thus, collaboration and coordination between these layers of government for crafting harmonized and effective policies is imperative. Most importantly, understanding the unique challenges farmers, collectors, middlemen, traders, and consumers face is vital if we want to propose policies grounded in reality that can bring intended change. 

As I have started the journey of change and self-development with Daayitwa, I am blessed with an incredible cohort of fellows whose passion for their work continuously inspires me to work harder. Similarly, there is also the support of the Daayitwa fellowship team, mentors, and supervisors, who have been a guiding light in helping me navigate the complex terrain of policy research.  There is no doubt that there will be numerous challenges, but these challenges make the journey interesting and meaningful. I am hopeful and determined to emerge stronger and better through the fellowship journey, more skilled and confident to inspire change.