Despite setting a minimum support price for paddy and allocating funds for procurement, the government has once again fallen short of its purchasing target, continuing a long-standing pattern of ineffective intervention in the agricultural market.
The state-owned Food Management and Trading Company Limited (FMTC) had earmarked Rs 2.65 billion to buy 73,620 tonnes of paddy this fiscal year. However, by the end of the harvest season, it had procured only 11,636 tonnes—just 16% of its target.
Read: Nepali Farmers Expected to Harvest Record 5.95 Million Tonnes of Paddy This FY
Criticizing the government’s failure, Uddhav Adhikari, coordinator of the Agriculture Campaign for Food, called it an “old ailment” of the system. “Despite policies, procedures, and budgets being in place, implementation has always remained weak,” he said. He further argued that the government’s real intent appears to be setting a minimum support price rather than actually purchasing paddy, which, he warned, could threaten food security and disrupt market stability.
However, FMTC’s Information Officer Sarmila Neupane Subedi countered, arguing that farmers were reluctant to sell their produce to the government since local traders offered better prices.
For the current fiscal year, the government has fixed the minimum support price at Rs 3,410.51 per quintal for coarse paddy and Rs 3,580.62 per quintal for medium-quality paddy.
“We set an ambitious procurement target this year in collaboration with local governments,” Subedi said. “However, delays in procurement and higher prices offered by traders disrupted our plan. Though we cannot compete with private traders, the good news is that farmers are receiving better prices.”
This shortfall in procurement is not new. In the last fiscal year, FMTC had aimed to buy 50,200 tonnes of paddy but managed to procure only 9,300 tonnes.
The failure to meet procurement targets has led to a recurring pattern: unused funds meant for paddy purchases are often redirected toward importing rice. Of the Rs 2.65 billion allocated this year, only Rs 402.8 million has been spent on procurement so far. Neupane confirmed that the remaining funds will likely be used for rice imports.
Meanwhile, Subedi acknowledged that procurement contracts are often awarded to domestic industrialists under the assumption that they will supply locally produced rice. “But we do not know where they actually source it from,” she added.
