Agribusiness

Ashmita Sharma (21)

Archana Bhattarai(22)

Suraj Singh Karkee(23)

Jyotsna Nepal(24)

Mandeep Adhikari(25)

Rajendra Mishra(26)

Prativa Khanal(27)

Ambika Pokhrel(28)

Swarnima Kc(29)

Kishwor Kafle(30)

Title and Content Layout

• Agribusiness development

• International trade

• Loophole of government policies on agribusiness management

Agribusiness is a business of agricultural production.

agribusiness

• supply of farm inputs

farming

• farm production

agribusiness

•marketing and processing

Sum total of all operations involved in the manufacture and distribution of farm supplies; production activity on the farm; and the storage, processing and distribution of farm commodities and items made from them.

Why agribusiness development???

• Nepal having a agrarian economy.

• 65.5% population directly engaged on agriculture.

• Agriculture contributes 32% in GDP.

• Agriculture facilitated by diverse geographical niches with microclimate.

• Agriculture being one of the promising sector in economic development of country which is still operating in subsistence level.

Prospects of agribusiness..

Examples:

• Tea: value addition, Organic and green tea.

• Spices: High Demand in international market.

• Seeds: Appropriate agro climate.

• Citrus fruit: High demand in the international market.

2026 B.S. Economic analysis Division under ministry of agriculture.

In 2029B.s Department of Food and Agricultural Marketing Services was established to provide marketing services to the farmers in the country.

National Agriculture policy 2061

Agribusiness Promotion Policy 2063

23rd April 2004; Nepal became member of WTO

2061/62 Agricultural Commodity Export Promotion Program and Agribusiness Promotion Program under Agribusiness Promotion and Market Development Directorate

Agribusiness development in Nepal

Contd…….

Commercialization in agriculture is one of today’s need.

With the increase in the volume of marketable surplus, the need of assured market output is very necessary.

Agribusiness Promotion and Marketing Development Directorate(ABPMDD) is major government institution for carrying out various activities relating to agribusiness promotion.

Objectives of ABPMDD

• Develop assured markets and marketing services for agricultural products.

• Develop efficient marketing systems of agricultural commodities.

• Provide fair price for farm products.

• Promote agricultural business and trade.

Programs from ABPMDD...

• Marketing research and statistics Management program.

• Agribusiness Promotion Program.

• Agricultural commodity export promotion program.

International trade of agribusiness

• Trade= import+export of gooods and services

• Historically 90% of international trade of Nepal before 1950’s was with India and Tibet.

• Trading relation with india started with treaty of trade and transit in 1950.

Main exports from Nepal

• Primary agricultural produce

• Garments

• Carpets

• Hides and skin

• Herbs

• Textile fibres

• Jute

• Tobacco

• Tea and coffee

• Ginger

• Black Cardamom

Imports in Nepal

• Industrial inputs

• Fertilizers

• Petroleum

• Salt and sugar

• Medicines

• Chemicals

International Trade agreements of Nepal

• 147th member of WTO since 2004 April 23

• Member South Asian Free Trade Area (SAFTA)2 and

• Member of Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)

• trade agreement with its major trading partner, India as well as seventeen other countries.

• New trade policy was adopted in march 2009 revising the 18 years old trade policy.

World Trade Organization…..

• The world trade organization (WTO) is the only global organization dealing with the rules of trade between nations.

• Major goal is to help producers of good and services, exporters, and importers to conduct their business.

Objectives of WTO

• To make transparent International Trade related rules.

• To help producers and traders of goods and services.

• To strengthen world’s economic situation and increase investment, employment and income.

Trade principles of WTO

• Non discrimination.

• Free movement of foreign products, services or nationals.

• Transparency.

• Special and differential treatment.

Agreement related to agriculture sector in WTO..

• Agreement on agriculture(AOA)

• Sanitary and Phyto Sanitary (SPS)

• Agreement on Technical Barriers to trade

• Trade related Aspects of Intellectual Property Rights.

• General Agreement on Trade in services (GAT)

Inability to take advantage from WTO

• Lack of efforts in product market diversification.

• Lack of efforts in generating competitive/comparative advantage.

• Government policies too not conductive to respond too changing requirements.

• Domestic difficulties.

Issues and challenges of agribusiness development in Nepal

• Uncompetitive agricultural enterprises due to heavy subsidy for Indian farmer.

• Not market oriented production system

• Inadequate physical infrastructure for commercialization

• Cost of production is high

Loopholes of government policies

• The policies formed by government have no legal binding and also the policies are improper.

• E.g.. Fertilizer policy, fiscal policy, infrastructure policy.

• In Nepal, policy formulation only for periodic plan and failure of policy due to change in government structure.

• Implementation rate of policy is very low due to political instability.

• Policy follow top to bottom approach rather than bottom to top approach.

• Government policies are highly ambitious.

Contd……… • Agriculture has been accorded the top most priority in all the plan periods but the results have not justified the priority.

• dissemination of market information on price quality produced, quantity produced etc by government information sector.

• Open boarder system.eg sugarcane export, quarantine of farm inputs.

• Lack of proper credit facilities.