West Asia Tensions Ripple Through Nepal's Agriculture Sector, Exposing Deep-Rooted Vulnerabilities

Kathmandu. The geopolitical tensions escalating in West Asia are beginning to impact Nepal's agricultural sector. According to agricultural experts and economists, this conflict is starting to disrupt global supply chains.

Experts analyze that Nepal's agricultural sector, already burdened by internal problems, is now caught in the vortex of an international crisis. Multifaceted impacts, ranging from fertilizer shortages and soaring transportation costs to sluggish exports and rising prices of modern agricultural inputs, are challenging Nepal's food security.

This crisis has once again highlighted the dependency of the Nepali agricultural system. According to Ramkrishna Shrestha, Joint Secretary and Chief of the Agricultural Development Division at the Ministry of Agriculture and Livestock Development, while Nepal's fertilizer supply system appears smooth for the immediate term, ensuring its availability in the future will be as difficult as "chewing iron nuts" both diplomatically and economically.

War's Impact on Fertilizer Supply

War in West Asia directly obstructs the production and distribution of natural gas. Natural gas is the primary raw material for producing urea fertilizer. Unrest in countries like Saudi Arabia, Kuwait, or Jordan affects their gas plants, which directly impacts global fertilizer production.

As soon as production drops, international suppliers often resort to the legal provision of 'Force Majeure,' backing out of previously made agreements. This is a clause that allows suppliers to be excused from fulfilling contractual obligations in uncontrollable circumstances such as war or natural disasters.

Consequently, import-dependent nations like Nepal not only risk not receiving fertilizer on time but are also forced to pay excessively high prices if they do receive it.

According to ministry data, Nepal currently has a stock of about 180,000 metric tons of fertilizer, which can somewhat sustain the paddy season in Ashar. However, this is not a long-term solution.

Although agreements have been made for the supply of 92,000 metric tons of fertilizer, suppliers are hesitant to bring it due to perceived risks in transportation and rising costs. Despite repeated discussions by the ministry, they cite transportation freight and international market uncertainty as reasons for their inability.

On the other hand, the budget also appears insufficient to cover fertilizer imports. Supplying 600,000 tons of fertilizer requires 64 billion rupees at current prices, whereas the government has only allocated a ceiling of 45 billion rupees to the Ministry of Agriculture.

China has also imposed an undeclared restriction on fertilizer exports, considering its domestic demand and natural gas shortages. This situation means that when Nepal tries to import fertilizer from third countries, both transportation time and cost are doubling.

Soaring Plastic Prices

According to Sunita Nhempaphuki, Vice President of the Nepal Agricultural Machinery Entrepreneurs Federation, the price of plastic agricultural materials has increased significantly. UV plastic and mulching plastic used for tunnel farming are co-products of petroleum. The rise in fuel prices due to the West Asia conflict has caused the price of these materials to increase by nearly 100 percent.

"Farmers can now buy only half the amount of materials for the budget they previously could. This has drastically increased production costs, but the market price of the produce remains the same," she said.

She argues that this is dampening the enthusiasm for commercial agriculture. She noted that small and marginal farmers returning to traditional farming because they cannot afford the costs is a major setback for the modern agriculture campaign.

Slump in Exports

Nepal has been earning foreign currency by exporting commodities where it has a comparative advantage, such as cardamom, coffee, and ginger. However, according to agricultural entrepreneur Sharan Limbu, the tension in West Asia has created a recession in the Gulf markets. "Dubai is the main transit and market for Nepali cardamom and coffee, where demand has seen a huge decline recently. Demand for Nepali organic products has also decreased in European countries as people's purchasing power has fallen," he said.

The increased risk on sea routes, coupled with the rise in insurance and freight rates, has directly affected the income of cardamom farmers in remote hills. This is shrinking Nepal's export trade and making the trade deficit even more severe.

Agriculture's 'Interconnectedness' and Challenges

Agricultural market economist Avinash Silwal states that this crisis has exposed the 'interconnectedness' of Nepali agriculture. "Nepali agriculture is completely dependent on fuel and raw materials. Even a slight increase in fuel prices raises the cost of seeds, fertilizers, and transportation," he said.

When transportation costs rise, consumers pay more, but the benefit goes to middlemen and transport companies, not the farmers. According to Silwal, the increase in fertilizer and fuel prices in India has also made its produce more expensive, which directly affects the import of rice and lentils into Nepal.

He warned that if India tightens exports for its own food security, Nepal could face a situation of famine.

Need to Change Perspective

Joint Secretary Ramkrishna Shrestha sees a need for a fundamental change in the state's perspective towards agriculture. "In Nepal, agriculture has always been viewed merely as a common occupation, but powerful nations place it in the first line of national security," he said.

Citing the example of the United States, Shrestha said, "The Trump administration provided a $12 billion relief package to address the plight of their farmers when cheap Indian rice was imported. Although we do not have that economic capacity, we have abundant local potential."

He stated that the failure to prioritize indigenous technologies like organic manure, vermicomposting, and biochar as alternatives to chemical fertilizers has brought our farming to a standstill due to external crises.

Development of Indigenous Food Systems

Agricultural campaign activists suggest that this crisis should be viewed as an opportunity to develop one's own local food system. Badri Kandel, an indigenous agriculture activist, said, "The importance of food grown in one's own soil is realized only during global crises. We must promote indigenous crops like millet, buckwheat, and barley instead of imported wheat and rice."

He argues that establishing organic fertilizer production centers in every municipality is the most practical solution now.

Similarly, Uddhav Adhikari, coordinator of the Campaign for Food, finds it regrettable that Nepal remains dependent on chemical fertilizers. He believes organic farming reduces dependency and ensures food hygiene.

Economist Silwal concluded, "As long as we rely on others for seeds, fertilizers, and technology, the key to our kitchen will remain in foreign hands. If farmers cannot be assured of timely fertilizer and market access, talks of prosperity will be like water on sand."