High growth in commercial agriculture production with low production costs is prerequisite for the promotion of agribusiness in Pokhara Metropolitan City (PMC). PMC introduced the model “Agribusiness Promotion Act, 2017” on May 22, 2018 according to Article 226 of the Constitution of Nepal and section 102 of Local Government Operation Act 2017.
This act highlights promotion and professionalization of the agriculture sector with farmers and agribusiness personnel involvement in commercial contract farming aiming in poverty alleviation.
The act talks about the establishment of agricultural market by PMC where agriculture cooperatives, ward agriculture networks, agriculture entrepreneur in the guise of public-private partnership (PPP) or any agriculture organizations after the permission of concerned PMC are allowed to set up market in any of the areas falling under their domain. Similarly, the act has categorized agricultural market: wholesale market, retail market, haat bazar (temporary weekly market) collection center and e-bazar. The assembly of PMC decides the fee to be charged for operating such markets. Likewise, the provision of agricultural market operation and management committee formation is also discussed in act. Furthermore, the committee seeks to provide a sound environment for normal functioning of demand and supply sources and prevent market malpractices. Though agricultural market management guidelines and the agricultural market operating procedures have been prepared, since five years, PMC has yet been unable to operate market under the authority of this Act.
The act also provisioned eleven-member Metropolitan Agribusiness Promotion Committee led by the mayor of Metropolitan, including chief administrative officer, executive member looking after agriculture sector, coordinator of municipal food security committee, sectoral expert, chamber of commerce and industry representative, financial institution representative, agriculture NGO head, commercial farmers, Head of Agriculture Division and Livestock Division head. The committee aims to formulate necessary policies and plans for the promotion of agribusiness, maintain coordination and collaboration with the federal and provincial agencies, provide agriculture information and relevant trainings in this regard. As per the act, local level may grant exemptions to agribusiness in local tax clearance fee whereas provide subsidy for the use and expansion of technologies (like transportation and machinery) related to agribusiness promotion. However, since many years metropolitan food security committee is unformed yet. Food security committee is an important sector to end hunger and malnutrition which focus on doubling the agriculture productivity and income, ensuring sustainable food production system.
Any bank or financial institution also extend loans to farmers or agribusiness persons by accepting professional agricultural contract as collateral. One of the most important functions of Metropolitan Agribusiness Promotion Committee is to establish and operate a separate Agribusiness Promotion Fund. As stated by Agribusiness Promotion Act of PMC, the fund shall have the amount to be received from the federal and provincial government, municipality, Government of Nepal, foreign governments, donors and from any other sources. The amount received by the fund shall be deposited in a bank account. Likewise, the act also addresses internal and final audit of the fund, ensuring compliance with laws and regulations as well as maintaining accuracy of financial reporting and data collection. Despite nearly five years since the act issued, Agribusiness Promotion Fund in PMC has yet to be established and implemented to safeguard agriculture, further adds regulatory procedures.
According to the act, PMC may provide land and other physical properties to a person or firm or cooperative to run an agribusiness by a contract between two parties i.e contract farming.
Any person or firm or cooperative willing to run an agribusiness have to get registered in concerned local level. The act has also provisioned that arable land which has been left fallow for two consecutive years may be used for agricultural purposes as specified by the local government by preparing fallow land management procedures. However, streamlined procedural documents regarding fallow land management is still unavailable within PMC. The time and manner of completion of the contract farming is relatively vague resulting in overlapping between them.
Provisions related to disputes over the enforcement of agricultural contract is also addressed by the act. Firstly, the parties may resolve disputes regarding the implementation of the agricultural contract through mutual negotiations. After that, applications have to be submitted to local judicial committee, district court and likewise committee with conciliator for the resolvement of dispute between the parties. The act has also made a provision of insuring the agricultural products of the concerned farmer or firm or cooperative. An insurance company may deduct from its net taxable income, the portion of losses incurred in insuring commercial agricultural contracts. So far, due to cumbersome regulatory procedures, time consuming process and inconvenience in insurance company, farmers of PMC are still struggling for insuring their products.
Provisions addressed as per the act are complex and interwoven, a number of key conclusions can be drawn from the act: Is Agribusiness Promotion Act introduced to prioritize agriculture only on paper? If not, what, whether and how the programs and provision mentioned have been implemented since many years of its issue date? Further what steps can PMC take to meet the current needs of stakeholders involved in the developing process of agriculture production as well as agribusiness? When will PMC address its concern on agriculture sustainability, food security committee, Agribusiness Promotion Fund, fallow land management procedures formation?
Smooth coordination, effective implementation, regular monitoring and evaluation is indispensable for the effective and efficient results of agro-industry sector. However, in PMC, despite numerous agriculture techniques utilized at various time interval for development in these areas, a lot of things have been left behind for necessary actions. The extent to which these opportunities can be realized will depend on progress toward resolution of the issues that have resulted in the long period of social and political unrest.
