Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010Domestic Demand: Very small demand from domestic industries. There are a few ready-to-eat-food andsnacks industries, but their requirements are negligible. A very large and expanding domestic market for lentilsitself is resulting from occasional export bans. The domestic retail prices of lentils have sharply increased inrecent years, from 38.3 NRs/kg in 1998/99 to 64.4 NRs/kg in 2007/08. 16Business Environment: The overall business environment is considered as average. But the administrativeand judicial services are considered weak to very weak due to a high level of corruption, increasing businessinsecurity and crimes in the country, and high informal costs, especially for import/export procedures. Theoverall macro-economic environment is also considered bad, but there are no legal restrictions for investors,a good capital market and a lenient tax system are in place. The port facilities in Kolkata for exporting lentilare considered bad.Lentil is a food item and thus it carries the risk of being a restricted item for export, depending upon the foodsituation in the country. Accordingly, export was banned for more than six months during 2009. The GoNrestricted the export of lentil on the ground that its supply in the domestic market had decreased and theprice had increased, thus, adversely affecting the general food situation in the country.Government Initiatives and Donor Involvement: There is no specific strategy or policy for the sector. However,production expansion and export promotion activities are implemented under the general developmentprogrammes of the government. Some such government agencies/programmes are: the Trade and ExportPromotion Centre (TEPC), Agribusiness Promotion and Marketing Development Directorate (APMDD), NationalAgriculture Research Council (NARC), National Agriculture Development and Research Fund (NADRF), DistrictAgriculture Development Offices (DADO), Plant Quarantine Directorate, Department of Food Technology andQuality Control (DFTQC), National Bureau for Standards and Metrology and Crop Diversification Project withAsian Development Bank (ADB) loan.Prospect for Domestic Supply Conditions: Continuation of production increases can be expected in the futuredue to increasing domestic demand and price and export demand, government’s efforts to extend area andincrease yield (from 0.72 MT to 0.90 MT per ha), and farmers’ willingness to cultivate this crop. Also, theadoption of improved varieties of seed could help expand the production and enhance the quality of exportedlentils.Index 4: Socio-economic ImpactCurrent Employment and Job-Creation Prospect: The number of people currently employed and futureemployment prospects in this sector are very high. There are about 600,000 to 700,000 farms in the Teraiinvolved in lentil production and employing in average about 70 labour days per ha cultivated. This isapproximately equivalent to 30,200 full-time jobs in lentil farming alone. Even more labour days are involved inthe total value chain, which is characterized by the presence of a very large number of traders and middlemento assemble the scattered production and transferring it through different marketing channels to the mill andfor export. Similarly, approximately 50,000 truckloads--truckers and labour--are employed to transfer rawmaterials from the farm to the mill to the export points.With a rough estimate of 15 per cent of production being exported, the FTEE for exports is estimated at4,500.16Source: Agricultural Marketing Information Bulletin 2008.NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT43