January 4, 2011

 

Nepal to boost local livestock by slicing meat import

 

 

The Nepali government plans to start a campaign to substitute meat imports by increasing domestic production.

 

The country imports meat worth NPR16 billion (US$221.91 million) annually, according to finance ministry assessment.

 

Nepal is the second highest meat consuming country in South Asia after Pakistan, according to the Food and Agriculture Organization. A Nepali consumes 10 kg meat per year on an average.

 

With the aim of cutting imports and promoting exports of meat, the government has allocated NPR1 billion (US$13.9 million) for livestock development for the current fiscal year. The Finance Ministry has prepared a draft of the procedures for using the allocated budget.

 

The government has already announced through the budget that the money would be lent to farmers through Small Farmers Development Bank and Small Farmers Cooperatives. It aims to promote livestock like goat, buffalo, pig and sheep for meat production as a campaign.

 

According to an official of the Finance Ministry, the government will provide the allocated budget in the form of concessional loans to Small Farmers Development Bank at 5% interest which in turn will provide loans to Small Farmers Cooperatives at an interest rate of not more than 9%.

 

"The government will waive 4% interest if the bank repays the loan on time," said the ministry official.

 

Small Farmers Cooperatives had formed Small Farmers Development Bank after they were detached from the Agricultural Development Bank. The procedures do not say how much interest the cooperatives should charge individual farmers.

 

A senior official of the cooperative bank said that there had been a general understanding that the cooperatives could charge whatever interest they have been currently charging. If the rate was higher than 9%, the excess would be refunded if the farmers repaid their loans on time.

 

The ministry plans to provide loans in three instalments. As per the plan, NPR300 million (US$4.16 million) will be sanctioned by mid-January, the second instalment of NPR300 million (US$4.16 million) by mid-March and the remaining NPR400 million (US$5.55 million) by mid-May this year.

 

A Finance Ministry official said that farmers would have to start making repayments one and a half years after the loan is issued and finish making all the payments within eight years.

 

There are currently 234 Small Farmers Cooperatives in 40 districts serving 160,000 farmers, half of whom are involved in livestock rearing, said the bank official.

 

"We have plans to provide loans to 13,000 farmers this year from the allocated budget," he said. However, they are yet to fix the production target with the investment of NPR1 billion (US$13.87 million).

 

Small Farmers Cooperatives have organised meetings in Nepalgunj, Bhairahawa, Hetauda and Janakpur regarding the proposed plan of lending money to farmers from the government's budget.

 

"They have set a daring goal to absorb loans worth up to NPR2 billion (US$27.74 million)," said the bank official.

 

Nepal produced 248,000 tonnes of meat in FY 2009-10, according to the Ministry of Agriculture. "Its value has been estimated at NPR63.61 billion (US$882.25 million)," said Hari Dahal, spokesperson for the ministry.