A farmer applying urea to his paddy crop. Photo: RSS
KATHMANDU: The government is mulling over entrusting the responsibility of importing and distributing chemical fertilizers to the private sector as well.
The Ministry of Agriculture and Livestock Development is preparing to make amendments to the Fertilizer Distribution Management Directive, 2020 to implement this change. The ministry has formed a committee under Joint Secretary Ram Krishna Shrestha, who heads the Agriculture Development Division at the Agriculture Ministry, to recommend amendments to the directive.
Dr Hari Bahadur KC, spokesperson for the ministry, told Himal Press that the directive is being amended due to recurring problems in the importation and distribution of chemical fertilizers. “The directive will include a provision to allow the private sector to handle fertilizer procurement and distribution,” he added.
Two government-owned entities – Agriculture Inputs Company Limited and Krishi Samagri Company Ltd – have been managing fertilizer procurement and sales at present. KC said the new directive will allocate a quota for the private sector entities to import and distribute chemical fertilizers.
A high-ranking official at the ministry said there is significant pressure from the ruling parties to involve the private sector in the procurement and distribution of chemical fertilizers. “Given the special interest of ruling parties, preparations are underway to assign fertilizer procurement and sales responsibilities to private companies as well,” the official added.
Spokesperson Dr KC said that discussions were underway to address all the issues in the import and distribution of chemical fertilizers by amending the directive. “The revised directive will resolve problems from procurement to distribution of chemical fertilizers and facilitate smooth distribution,” he added.
There is a demand for more than 600,000 tons of chemical fertilizers annually in the country. The government has been providing subsidies for three types of chemical fertilizers: urea, DAP and potash. The finance ministry has allocated Rs 30 billion for fertilizer procurement in the upcoming fiscal year.
Ministry officials say problems have been seen in the import and distribution of chemical fertilizers due to the inefficiency of Salt Trading Corporation and Krishi Samagri Company Ltd. Agriculture ministers have questioned the working style of these two entities.
The new directive will assign the responsibility of importing chemical fertilizers to the federal government, and distribution to provincial and local governments.
Ministry officials have also been pushing for an amendment to the Public Procurement Act to address shortcomings in fertilizer procurement stating that the act is specifically prepared to facilitate infrastructure development.
Experts, meanwhile, have been advocating for an online system for sales and distribution of chemical fertilizers. Krishna Prasad Poudel, an agricultural expert, said that an online system would be appropriate for the effective distribution of subsidized fertilizers. He also the government needs to strengthen its information system to resolve fertilizer shortages and other issues.
