February 11: Paddy production this year has increased by 4.33 percent compared to the previous fiscal year, according to government data. This year, a total of 57,24,234 metric tons of paddy has been produced across the country. Paddy production this year is the highest in Nepal’s history. With the increase in production of paddy, the price of rice should have decreased. However, it has been found that the price of rice in the market has increased sharply despite the increase in paddy production.

Traders say that the price of rice has increased due to the restriction on rice exports by India. According to the general secretary of the Retail Trade Association, Amulkaji Tuladhar, the price of rice has increased by Rs 250 per bag (25 kg) in a period of two months. He said that the price of rice has increased due to the inability to import rice from India.

“The government has not shown any interest in importing rice. If the government does not think seriously about facilitating the import of rice, the price may increase further," he said, adding, "It seems that the country that used to export rice to foreign countries has reached a point where it cannot even import the rice it needs."

Last July, the government had started the process of importing 1 million metric tons of paddy and 100,000 metric tons of rice from India in order to discourage the price hike. Later, India also agreed to supply 95,000 metric tons of rice. The government tried to bring rice but failed to do so. As a result, the supply of rice in the market decreased and the price started to rise.

Importers say that even though the government has asked domestic traders to import rice, India has created a situation where Nepali traders cannot import rice. The rice that India will provide must be purchased from a private company in India. The company should be paid 100 percent in advance. Businessmen say that they could not proceed because they had to pay 20 percent customs duty while importing rice which would increase the cost.

At present, if Nepali traders want to import rice from India, they have to pay up to 20 percent customs duty in India. As a result, the cost of rice per quintal will increases by Rs 1,000. This will affect the price of rice, argues Bibhor Agarwal, a member of the Nepal Rice Oil and Lentil Industry Association. According to him, last year, India had given a quota of 600,000 metric tons of paddy to Nepal. At that time, Nepali importers were able to import paddy without paying customs duty.

India has not announced a new quota for Nepal after that quota expired. Agarwal complained that even though the businessmen drew the government's attention to this issue several times, the government only gave them assurances.