Dwaipayan Regmi

According to Nepal Rastra Bank data, inflation stood at 4.1 percent as of mid-August. In the review period, the food and beverages category inflation was 6.17 percent. Green vegetables experienced a 19.07 percent inflation, followed by pulses and legumes at 12.09 percent, cereals and their products at 9.15 percent, and dairy products and eggs at 3.66 percent. However, the reality paints a bleaker picture—most vegetables, except for items like chayote and radishes, are currently priced above Rs 100 per kilogram.

In the Kathmandu Valley, vegetable prices tend to rise during festivals, and this year is no exception. The prices of potatoes, onions, tomatoes, and coriander have surged. While there are established methods to measure inflation, they often fail to reflect real-time experiences due to outdated practices. As a result, Nepal Rastra Bank’s data and consumers’ experiences frequently diverge.

Nepal’s history with modern vegetable farming dates back to the 19th century when Prime Minister Jung Bahadur Rana introduced European vegetable varieties. Later, in 1937, Prime Minister Chandra Shumsher established seed shops and the Agricultural Research Council, initiating modern agriculture in areas like Kathmandu, Kakani, and Parwanipur. The celebration of Agricultural Year in 1975 further spurred the commercialization of vegetable farming. Despite progress in cultivation, seed distribution, and production, Nepal has fallen behind its neighbors, particularly India, which now dominates the Nepali vegetable market.

Currently, over 300 tons of vegetables enter Nepal daily through key trade points like Bhairahawa, Biratnagar, Birgunj, and Nepalgunj. Kathmandu alone demands around 120 tons of vegetables daily. In the first four months of the fiscal year 2081/82, Nepal imported vegetables worth over Rs 13 billion.

According to basic economic principles, prices rise when demand outstrips supply. In Kathmandu, the price hike is partly due to insufficient vegetable supply at the Kalimati market. India's export policies may have reduced imports to Nepal, possibly because India found more lucrative markets elsewhere.

Another possibility is the artificial manipulation of supply by middlemen to create shortages and drive up prices. Once prices increase, they rarely return to their original levels. For instance, restaurant menu prices in Kathmandu rose following the 2015 earthquake and the blockade, and they have yet to decline despite a return to normalcy.

The ongoing labor migration of youth abroad has also contributed to the problem. With farmlands lying barren, Nepal has failed to prioritize domestic production, even though the budget has earmarked funds for agricultural loans and subsidies. Consequently, the nation remains heavily dependent on imports. This dependency, coupled with an inability to boost local production, is a primary driver of rising vegetable prices.

Government policies further exacerbate the issue. Taxation on potato and onion imports, coupled with similar export taxes imposed by India, indirectly benefits middlemen while burdening consumers. A debate is needed on the fairness of taxing essential commodities that directly affect the poor.

Another pressing issue is the quality of imported vegetables. There is little to no oversight on pesticide usage in these products, and their safety remains unverified. The lack of accountability and evaluation by relevant authorities raises serious health concerns for consumers.

Currently, there is no increase in fuel prices, no production shortfall, and no declared or undeclared discriminatory policy from India against Nepal. This raises suspicions that the price surge may be orchestrated by middlemen. The steep rise in the cost of basic items like vegetables is particularly challenging for low-income groups, daily wage earners, and students in Kathmandu.

The government's inaction on regulating vegetable prices, quality, and supply reflects its inability to address these pressing issues.

The plight of Nepali consumers, especially those struggling to afford two meals a day, demands urgent attention. The rising cost of essential items has even forced some people to leave Kathmandu. The government, both local and federal, along with other concerned bodies, must collaborate to address the issues of price hike and quality.

Vegetable prices are more than just an economic issue—they directly impact public health and welfare. To alleviate this burden, proactive measures are needed to ensure affordability, quality, and transparency in vegetable supply chains.

(The author is a banker by profession.)