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Market and Price Impact Assessment Nepal United Nations World Food Programme (WFP) and Nepal Development Research Institute (NDRI)
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Nepal is high on the list of countries where rising food and commodity prices could have a huge impact on population. This is because Nepal relies heavily on
food and oil imports and has a high level of chronic food insecurity (41% is undernourished) and poverty (31%). Moreover, on average, its population spends almost 60% of its income on food. The country is only just emerging from a ten-year conflict. Its political future is uncertain and its government structures are weak. Nepal’s citizens have high expectations for the newly elected government. Improvements in living standards are urgently needed to avoid civil unrest that may threaten the new government. Since the 1990s, Nepal has been a food deficit country and has had to rely on food imports from India and other neighboring countries to feed its population. Annual food grain imports are estimated at up to 600,000 Mt. However, due to a large informal trade along the porous border with India, the exact amount that is annually imported is difficult to quantify. Since only a third of the country’s agricultural land is
irrigated, the annual national grain production depends upon favourable weather conditions such as timely and sufficient rainfall during the monsoon period. The growth in agricultural output has declined over the years. The 2.8% growth experienced from 2000/01 to 2005/06 is only slightly above the population growth rate of 2.25%. The bulk of food grains are produced in the Terai
(productive plains along the border with India). In contrast, the Hills and Mountains of Nepal are mostly food deficient. Food must be transported from the Terai to markets in the Hills and Mountains by truck where roads are available, by plane to places with landing strips or by porters or mule pack animals. Rice is the principle staple food. Other important cereals include maize, wheat, barley and millet. Nepal shares a porous border with India. The bulk of
Nepal’s international trade in agricultural commodities is with India. Domestic food and commodity prices are therefore directly influenced by supply and prices in India. In October 2007, India introduced a ban on the export of non-basmati rice, wheat and lentils. In addition, payment and supply issues between the Indian and Nepal Oil Corporations have seriously limited the supply of fuel to Nepal, resulting in severe and routine fuel shortages. Just after the completion of this survey, the government announced a fuel price hike of more than 25 percent. This resulted in a period of extended riots and demonstrations from civil society and transporters with opposite demands for lower and
higher transportation tariffs respectively. Food prices in Nepal have increased by 20 to 30% and are still rising. It is expected that the increase in fuel prices and the ongoing Indian export ban will further aggravate food supply and/or prices. To cope with the impact, it is necessary to understand
the nature, extent and causes of price fluctuations, the supply situation and the effect these may have on household food security conditions. The overall goal of this market and price impact assessment is to gain better insight into the current phenomenon of food price hikes and the effect this has on household food security in order to guide government and humanitarian relief efforts for
appropriate and timely actions.
Publisher:
NDRI/WFP ,   (2008 )
Type / Script:
Progress Report in English
Keywords:
FOOD GRAIN IMPORT, CHRONIC LACK OF FOOD, RURAL POPULATION, POLICY ACTIONS, WAGE EMPLOYMENT, RIOTS, LAND TOPOGRAPHY, CULTIVABLE LAND, GLOBAL FOOD CRISIS, CIVIL SOCIETY, CONFLICT AFFECTED POPULATION, DEPARTMENT OF AGRICULTURE, DROUGHT AFFECTED AREA, FUEL SHORTAGES, MOTHER AND CHILD HEALTH CARE, MALNUTRITION, SEED VARIETY, DATA MANAGEMENT, MARKET FACILITIES, FERTILIZERS, FOOD PRICE, COMMODITY PRICE INCREASES, PRICE HIKES, IMPROVED FOOD PRODUCTION
Thematic Group:
 WFP : Food and Emergency humanitarian logistict support
Thesaurus:
10.01.00  -  Food And Nutrition
Reference Link:
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