Alarming agricultural trade indicators

Nepal’s agricultural trade indicators over the past four decades show a very alarming trend. Nepal had an agricultural trade balance of US $14.3 million in 1979-80 which turned into a negative agricultural trade balance of US $151.6 million in 2002 (ESSA, 2002),  and an import of agricultural goods worth over US $2 billion (exact value in Nepalese rupees of Rs 215.50 billion) in the 2017-2018 fiscal year (Prasain, 2018). There is a widespread concern among local communities, national media, farmers, agriculturists, intellectuals, policymakers, and other stakeholders in relation to increasing agricultural imports, food safety and security, agricultural unemployment, outmigration of farming communities, land abandonment, and the conversion of agricultural lands in the country.

Asta-Ja means eight Ja, referring to the Nepali letter Ja and the associated words (Jal (water), Jamin (land), Jungle (forest), Jadibuti (medicinal and aromatic plants), Janashakti (manpower), Janawar (animals), Jarajuri (crop plants), and Jalabau (climate)).

Major  factors responsible for the failure of agricultural initiatives in Nepal include: the lack of a theoretically grounded and comprehensive agricultural development framework for the nation; implementation failure of agricultural policies and programs; degradation of natural resources; poor infrastructure; lack of appropriate market interventions (Poudel, 2019), social unrest; political instability; and the lack of clear understanding of local conditions coupled with a poor global perspective on agricultural planning and development.

The Asta-Ja Framework

Following the publication of the four-diamond model for business strategy and industrial competitiveness of nations (Porter, 1998), I published a theoretically grounded Asta-Ja Framework in this journal about a decade ago and argued that Asta-Ja resources have the greatest competitive advantages for economic growth and socio-economic transformation of Nepal (Poudel, 2008). Asta-Ja means eight Ja, referring to the Nepali letter Ja and the associated words (Jal (water), Jamin (land), Jungle (forest), Jadibuti (medicinal and aromatic plants), Janashakti (manpower), Janawar (animals), Jarajuri (crop plants), and Jalabau (climate).

My subsequent  publications on the Asta-Ja Framework include the Asta-Ja environmental and natural resources policy framework (Poudel, 2009), strategic framework (Poudel, 2011), Asta-Ja management capacity-building framework (Poudel, 2012), management of Asta-Ja system (Poudel, 2016),  restructuring National Planning Commission focusing on Asta-Ja and Nepal Vision 2040 (Poudel, 2018), Asta-Ja for grassroots-based economic development of Nepal (Poudel, 2019a), Asta-Ja crusade for a fast-paced agro-jadibuti industrialization of Nepal (Poudel, 2019b), and agricultural and natural resources development and management strategy in Nepal (Poudel, 2019c). These publications have enormously enriched the Asta-Ja Framework by covering its theoretical, scientific, and operational dimensions and competitive advantage in Nepal.

Processing cooperatives help to minimize losses of perishable commodities such as fruits and vegetable, flowers, and other similar products by providing appropriate processing and storage facilities.

The sections below present the types of cooperatives, establishment, and development of cooperatives, challenges, and opportunities of cooperatives, and the vertical integration of cooperatives with corporate and private businesses, corporations, and business entities for agricultural development and socio-economic transformation in Nepal.

Types of Cooperatives

Cooperatives are locally organized self-help groups for undertaking different activities including production, marketing, supplies, finance, and providing services. Since cooperatives follow the bottom-up structure in its governance and function locally, they may potentially serve as effective organizations for agricultural production, natural resources conservation, and economic development. Cooperatives are present in various forms in almost every country worldwide. Primarily, coops exist as service, production, processing, or marketing-related entities, but there is a wide range of coops including environmental or tourism cooperatives.

The marketing, production, and processing  coops may include various commodity specific cooperatives such dairy, fruit and vegetables, sugarcane, cotton, poultry, and livestock, while the farm supply cooperatives include those involved in the supply of farm inputs such as seeds, fertilizers, farm equipment, animal feed, petroleum products,  veterinary supplies, and other necessary items for farming. Processing cooperatives help to minimize losses of perishable commodities such as fruits and vegetable, flowers, and other similar products by providing appropriate processing and storage facilities.

In a country where post-harvest losses of food products are as high as 30%, the establishment and development of processing cooperatives are critical for agricultural commercialization and economic growth. Service cooperatives may be engaged in providing various services such as crop and livestock insurance, telephone/electric services, credit services, irrigation services, trucking, grain banks, ginger drying, rice drying, soil testing, land leveling, crop scouting, and providing nurseries and seedlings to its members. Environmental cooperatives such as sustainable agriculture, rural development, and nature farming (Wiskerke et al., 2003), and tree growers’ cooperatives in India in recent years are attracting the interests of policymakers and governments worldwide. Tourism cooperatives such as agri-tourism or eco-tourism are increasing worldwide. According to Verma (2005), India is trying to utilize its existing farmer cooperative networks in tourism development.

Establishment and Development of Cooperatives

There is a general tendency towards cooperatives, especially in Nepal, being established without sufficient groundworks, needs assessments, feasibility studies, availability of necessary manpower, constraint analysis, and market competition. Each stage of cooperative establishment and development such as creation of the idea fora cooperative to group formation, developing bylaws and terms and conditions, membership distribution, securing capital, putting together necessary logistics and infrastructure, hiring personnel, running businesses/activities, record keeping, monitoring and evaluation, and the assessment of progress made are quite challenging.

Well-thought-out strategies and a high level of managerial skills are necessary to excel in each stage. Clear operational guidelines, rules and regulations, communication, and democratic procedures in the operation of cooperatives are of the utmost importance in the success of a cooperative. Building and maintaining trust among the members of the cooperatives is critical for the smooth operation and success of a cooperative.

The management body of a cooperative, depending on its focus, should always be capable of anticipating market opportunities, government support, weather conditions, and other factors that are important for the success of a cooperative. There should be a clear definition of the roles and responsibilities of the Board and the manager of a cooperative. Generally, the Board makes the policies and guidelines while the manager performs and supervises day-to-day works. It is important to have a clear organizational structure and governance for the success of a cooperative.

(To be continued…)