Sunday, August 11, 2013

The composition of National Gross Domestic Product (GDP) and Gross National product (GNP) is changing year after year. Contribution of new sector like remittance (which now contributes around 20 percent of national Income) is increasing at increasing rate whereas the share of sector like agriculture is decreasing at  almost constant rate. About three decade's ago( In 1980 ) the contribution of Agriculture sector was about 62 percent of total national GDP. But this has come down to around 33 percent now. However, many people  have misunderstood it due to their wrong interpretation like they perceive,contribution from agriculture has decreased in quantitative term. Actually, the value of Agricultural GDP has increased by many folds compared to 1980s.
The agriculture GDP  is summation of many sub-sectors of agriculture, major being Cereals, Vegetables, Fruits and Animal products. The share of these every sub-sector is changing compared to earlier, which  signifies in one hand, changed food habit  and in another hand, driving effect of agricultural market economy.
The last two three decades were the most changing decade in Nepal's overall economic as well as agricultural development. New development prospective of open market economy, democratic government, intervention of technologies and most importantly improvement in people's know how are the major factors for overall change in agriculture sector. The effect of this change is also visible in share of different sectors in AGDP contribution.
The cereals are the most important food crop in Nepal. Crop like Paddy, Wheat and Maize almost contributes one third of Agricultural GDP. However, the share of cereals and other crops has decreased by 5.13 percent compared to year 2001/02. Among many reasons for this, two attributable factors would be decreased production of Paddy (-11.3%) and Maize (-3.6%) in year 2012/13 and increased production of other crops like vegetables and fruits during this time frame.The major decrease is found in case of paddy whose share was 20.75 percent at 2001/02 and has come down to 15.64 in year 2012/13. Other crops remain almost same but the  contribution of potato is example of increasing share where change is by 1.87 percent more.
The vegetable and fruits production has remained a example of excessive growth in this time frame.  The self-dependency of vegetables is said to be reached more than 90 percent in Nepal which was less than 50 percent two decade ago. The share of vegetables in AGDP has increased from 9.71 in 2001/02 to 13.54 in 2012/13. The same pattern is found in fruits production where the share has increased excessively by 6.45 percent reaching 13.49 in 2012/13.
Despite introduction of high yielding breeds of cattle and buffalo the Dairy sector along with goat's contribution is found to have decreased by 0.75 percent reaching 22.50 percent in year 2012/13. But in case of other animals, mostly poultry and pig , the share has increased from 2.43 in 2001/02 to 3.28 in 2012/13, the major driving factor being poultry meat production.
Thus, the share of different sub-sectors in agriculture is changing. This is contributed by many agriculture, national economy and consumer related factors. This has to be scrutinized seriously, so that agricultural development policies and plans would be effectively designed.
Share of Commodities to Agri GDP  (%)and percent change in quantity in Nepal

Weights
2001/02
2012/13
New weight
Cereals and other crop
49.41
100
127.95
44.28
Paddy
20.75
100
106.83
15.64
Maize
6.88
100
134.69
6.54
Wheat
7.14
100
140.31
7.07
Millet
1.37
100
111.33
1.08
Barley/naked barley
0.22
100
85.32
0.13
Potato
4.67
100
197.18
6.5
Sugarcane
1.24
100
131.12
1.15
Jute
0.17
100
88.00
0.11
Tobacco
0.06
100
36.17
0.02
Soyabeans
0.19
100
165.26
0.22
Pulses
4.42
100
132.16
4.12
Others
2.29
100
106.86
1.73
Total vegetables and Nursery
9.71
100
197.57
13.54
Vegetables
9.7
100
197.68
13.53
Others
0.01
100
191.29
0.01
Fruits and spices
7.04
100
249.53
13.49
Orange(citrus)
0.97
100
216.07
1.48
Mango
1.56
100
352.99
3.88
Banana
0.4
100
351.08
0.99
Apple
0.42
100
149.17
0.44
Spices
1.79
100
294.55
3.72
Tea
0.05
100
291.44
0.10
Coffee
0
100
488.76
0.00
Others
1.85
100
219.85
2.87
Domestic Animals and Dairy
23.25
100
130.85
22.50
Buffalo meat
4.42
100
139.89
4.36
Mutton
3.24
100
136.51
3.12
Milk
12.36
100
142.53
12.43
Others
3.23
100
113.83
2.59
Other Animal Farming
2.43
100
190.81
3.28
Pig meat
0.5
100
125.89
0.44
Poultry meat
0.67
100
298.89
1.41
Eggs
0.81
100
157.92
0.90
Hides and Skin
0.35
100
184.74
0.46
Others
0.11
100
86.06
0.07
Forestry
8.10
100
83.55
4.77
Overall Index
100
100
141.75
100.00



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Badri Khanal is An Agriculture Economist from Nepal
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