National Livestock Policy of Nepal: Needs and Opportunities
2. Study Methodology
3. Review and Analysis of Livestock-Related National Policies
3.1. Agriculture Perspective Plan, 1995–2015
|Main Policies/Plans||Secondary Policies (Livestock-Related Policies in Other National Policies)|
3.1.1. Strengths and Opportunities
- The APP introduced the vision of commercialization of agricultural sector, including the LSS .
- The APP emphasized the promotion of private sector investment in livestock, as livestock output is assumed to be largely demand-driven and dependent on private sector activities.
- With regard to public sector investment in the livestock sector, APP accorded first-order priority to transportation followed by irrigation and research and extension. The APP estimated public sector investment in the livestock subsector over 7 years (1997–2004) at 5 billion Nepalese rupees (NPR), which was almost fully met by the government’s budget allocation.
- The APP planned to use the livestock sector to aid regional balance and gender mainstreaming.
- The APP recognized livestock as a high-value product and acknowledged the need for import substitution.
- To achieve growth in livestock business, the APP recommended several policy reforms, including the removal of subsidies in livestock processing and marketing, resolution on the privatization of the Dairy Development Corporation (DDCN), enforcement of standards, establishment of a market information system, introduction of seasonal pricing of milk, and removal of restrictions on the movement of livestock commodities .
- In the poultry business, an annual growth of 5.37 percent was achieved against the APP target of 5.1 percent .
- The APP exempted fresh milk and yoghurt from the Value Added Tax (VAT), making them cheaper to consumers and helping the dairy industry expand.
- The APP’s long-term vision recognizes the need of formulating policy in view of recent developments including the liberalized economic environment, increased role of private sector, Nepal’s Millennium Development Goal commitment, and Nepal’s commitment to the WTO and regional trading arrangements.
3.1.2. Weaknesses and Threats
- In most cases agriculture and livestock related policies have not been implemented effectively because of various factors, including limited human resources and implementation capacity, lack of supportive legislation and monitoring and evaluation, poor coordination and weak planning .
- The APP’s livestock sector strategy laid emphasis on milk and meat production, animal nutrition (specifically, nutritious fodder supply), and health and marketing, while it did not prioritize wool and pashmina, despite the large export manufacturing industries based on these two products. The threats of market domination from Tibetan wool producers that supply wool to the Nepali pashmina and carpet industry continue to exist, as the current amount of pashmina and sheep wool produced in the country is not sufficient or of acceptable quality for producing exportable carpet and pashmina to even meet the 8 percent minimum local wool requirement stipulated by the WTO’s rules of origin (RoO). Scattered herders in the mountains produce wool, but there is no aggregation into viable-scale lots, and there is little or no primary processing to connect the value chain. As a result, raw wool is sold into Tibet, where primary processors raise the value significantly through simple removal of coarse hair, washing and bulk-packing, and the Tibetan traders subsequently sell it back to Nepal at about 10 times the price. To address this problem, the new policy should promote processing pashmina and sheep wool within Nepal by collecting it from small, scattered herders.
- The APP’s actual achievement of targeted annual growth rates in the milk and meat areas fell short, as up to 2003/04 they amounted to 2.77 percent and 2.87 percent, respectively against the targets of 4.2 percent and 4.5 percent .
- The APP did not address the impact of the existing legislation on the APP implementation, nor did it propose specific legislative changes.
- APP did not take into consideration climate change and its effect on livestock activities.
- There is a lack of policy consistency and clarity. Not laying a substantial emphasis on the privatization of the DDCN implies that the APP recognized the importance of promoting a level playing field between the DDCN and the private sector. Hence, in view of the privatization of the Pokhara Milk Supply Scheme, a project under the DDCN, in June 2004 in order to comply with the conditions associated with the ADB Community Livestock Development Project loan, new livestock-related policy should make a clear policy decision on whether to privatize DDCN.
- The DDCN’s role as the price-setter and controller in the dairy business instead of market mechanisms goes against the APP spirit. Set prices do not reflect geographic location differences, cross-border prices, general business cycles, and the impact of rising costs, wages, utilities, and taxes. Donor agencies and analysts have concluded that the government fixing of producer and retail prices is a major detriment to dairy development in Nepal. This reiterates the need for policy reforms as part of the new national livestock policy.
- Although APP’s vision of commercializing the livestock sub-sector is consistent with the Ninth Plan, Tenth Plan and NAP-2004, little has been done, except for the implementation of the Pocket Package Strategy (PPS) approach. The concept of contract farming proposed in these five-year plans can be applicable to livestock subsector also, and can be proposed in the new livestock policy.
- The APP posted hardly any progress in implementing programs on slaughterhouse and meat inspection. The House and Meat Inspection Act, 1999 and Slaughter House and Meat Inspection Rule, 2001 are yet to be implemented at the national level.
- APP policy to exempt livestock and livestock products (including poultry products, feed and feed ingredients) from local taxes as well as to remove barriers to livestock commodity movements was not fully implemented. Local bodies levying taxes on livestock products have often inhibited such products’ free movement. Therefore, the new livestock policy should incorporate a categorical policy on implementing such tax exemption provisions.
- The APP did not exempt dairy products such as cheese, paneer and ice cream from the value-added tax. To promote the commercial potential of dairy products, the new livestock policy should consider VAT exemption on them.
3.2. National Agriculture Policy (NAP), 2004
- To increase agricultural production and productivity,
- To develop the basis of a commercial farming system and make it competitive in the regional and world markets, and
- To conserve, promote and properly utilize natural resources, as well as the environment and bio-diversity.
- to ensure the needs of farmers (I) with access to resources; and (II) with comparatively less access to resources,
- to provide special facilities by classifying farmers into (I) those having less than half a hectare of land and lacking irrigation facilities; and (II) those belonging to dalit (so-called untouchable) and utpidit (downtrodden, underprivileged) classes and other marginal farmers and agricultural workers.
|Strengths (Positive Provisions, Potentials)||Weaknesses (Gaps, Shortcomings): Areas of Improvement|
3.3. Agro-Business Promotion Policy (ABPP), 2006
|Strengths (Positive Provisions, Potentials)||Weaknesses (Gaps): Areas of Improvement|
3.4. Forestry Sector Policy, 2000 (Forest Policy, 2000)
3.4.1. Strengths and Opportunities (Positive Provisions, Potentials)
- The policy simplified the process of handover of institutional as well as group leasehold forestry to Community Forestry User Groups (CFUGs) and has stressed integration of the leasehold forestry program to local community development.
- The Policy recommended commercial management for forests in larger blocks in Terai and Inner Terai districts. It provided for the Operational Forest Management Plan (OFMP), a plan consistent with the priority objectives of the erstwhile APP.
- The Policy aims to base livestock quantities on the amount of fodder production and highland pasture so as to improve forest management and increase the production of fodder by community efforts. The Policy calls to immediately design an integrated national forage development program and an appropriate institutional arrangement for its implementation in order to complement the Master Plan for the Forestry Sector and the APP.
3.4.2. Weaknesses and Threats (Gaps, Shortcomings)
- Disputes on use of forest resources including the fodder and grazing land (range-lands) should be properly resolved through collaborative forest management mechanisms so that livestock farming can make use of appropriate grazing land.
- Integrating livestock rearing into community forestry is needed to share forest resources and address the shrinking size of grazing lands.
- In the livestock, agriculture and forestry sectors, efforts should be made to bridge the gap in national support for Clean Development Mechanism (CDM) projects developed to address climate change.
- Livestock management should be initiated in close coordination with the mechanism of handing over forests to community forest user groups (CFUGs) and using community forest resources.
- The proposed integrated national forage development program and institutional arrangement for its implementation should now be aligned not with the APP but with the forthcoming Agriculture Development Strategy, which has identified feed shortage as one of the main constraints for increasing livestock production.
- The livestock projects should be strengthened to create awareness of the farmers in cultivating forage and pasture.
3.5. National Micro-Finance Policy, 2005
- Provides for micro-finance facilities to agriculture sector and allows for group guarantees
- Sees agriculture as a priority sector for micro-finance
- It is highly essential to have separate policies governing micro-finance for the livestock subsector instead of a blanket agriculture-related one, as this subsector has its own salient features that vary substantially from other subsectors of agriculture
- There is the need for according specific priority to livestock subsector micro-finance by making it mandatory not only for micro-finance institutes but also for commercial banks to allocate/ earmark at least a specific fraction, such as one third (1/3), of the total agricultural loans/ investments in the livestock business.
3.6. Dairy Development Policy, 2007 (2064 BS)
- To ensure quality dairy production, the DDP has entrusted the Department of Livestock Service with the responsibility to provide technical services, manage cattle-feed and livestock health training, and minimize costs.
- The Policy is based on a long-term vision to encourage participation of public, private and cooperative sectors in dairy production.
- A DDP objective is to increase production and productivity of milk in rural areas which helps alleviate rural poverty.
- To assure micro finance lenders and banks of the security of collateral-free loans, there should be provisions for community-based group-guarantee and group-monitoring of dairy borrowers.
- Incentives to disadvantaged communities will not materialize until social laws and practices effectively erase the old social stigma against using milk and dairy items produced by so-called low-caste people. This effort should coordinate with other social laws and law-enforcing agencies including police and civil servants.
- A large-scale livestock insurance system is yet to be developed. Subsidies should be coordinated with the Livestock Insurance Policy, and there is a need for a setting and monitoring mechanism in this regard.
- Resource centers of improved livestock (dairy animal) breeds should be developed.
- A mechanism to ensure participation of smallholder farmers (backward linkage) at all stages of the value chain to retail products is essential.
- Access of rural farmers to livestock support services and loans should be increased through district livestock offices and bank and micro-finance institutes.
3.7. Agriculture Bio-Diversity Policy, 2007
- Regulation for research and experimentation on Nepalese bio-diversity and genetic resources of livestock is yet to be developed and implemented.
- A system for registration and allocation of agro- and livestock biodiversity should be developed.
3.8. Trade Policy, 2009
- Nepal’s international (export) trade of livestock products and animal-based goods makes it mandatory to develop specific programs and infrastructure/facilities on sanitary and phyto-sanitary measures in compliance with WTO’s Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and World Intellectual Property Organization (WIPO)’s Conventions, to which Nepal is a party [12,13,14,15].
- National policies and programs to develop an export led production zone or processing zone with market link are essential.
- National policies and programs on initiating effective international marketing and competitiveness-enhancement for Nepali livestock-related products should be specifically developed to address the export requirements specific to livestock, including proper packaging and advertising policies to address the sanitary and hygienic concerns of foreign consumers.
3.9. Climate Change Policy, 2011
3.10. Rangeland Policy, 2012
3.10.1. Strengths and Opportunities
3.10.2. Weaknesses and Threats
- There is a need for integrating livestock rearing into community forestry to share forest-resources and meet the threat of shrinking size of grazing lands.
- Institutional arrangements and collaboration of government with livestock farmers and community forest users at the local level are essential to ensure a continuous year-round supply of cattle feed.
- The rangeland charge—important as an income-generating source for the rangeland management—should be well streamlined and managed.
- The rangeland charge should serve as a sufficient control measure to discourage use of rangeland by unproductive cattle, as the owners of such cattle would not let them graze in the rangeland; it is impractical and often cumbersome for the rangeland officials to directly identify productive and unproductive cattle.
3.11. Livestock Insurance Policy and Agriculture and Livestock Insurance Regulation (2013)
|Policy to promote livestock and crop insurance for encouraging financial institutes to invest more on livestock and crop projects.|
3.12. National Land Use Policy, 2012
|For all these policies to be effectively implemented there is an imperative need of a separate Land Use Act that provides adequate legislative backing.|
3.13. Breeding Policy, 2011 (2068)
3.13.1. Strengths and Opportunities
- There is a need to exploit potentials for breed improvement and increasing livestock productivity.
- There should be a policy and implementation mechanism on development of livestock (and poultry) resource centers through public-private partnership.
- Programs should be urgently initiated to conserve indigenous breeds which are in danger of extinction.
- Policy and programs to promote breeding of productive livestock (genetic resources) are needed as a part of implementation of agreements from the New Earth Summit 1992 (on livestock genetic resource conservation and their improvement).
3.14. Animal Health Program Implementation Procedure, 2013 and Animal Health and Livestock Services Act, 1999
3.14.1. Strengths and Opportunities
3.15. Labor Policy, 1999, and Child Labor Act, 2000
3.15.1. Strengths and Opportunities
3.16. Birds Rearing Policy, 2011
3.16.1. Strengths and Opportunities
- The policy is compliant with key agricultural national documents including the supplementary to the National Agriculture Policy (NAP), 2004 and Agri-business Promotion Policy, 2006.
- It plans to make the poultry business more productive, competitive and sustainable by improved quality of chicks through well-managed hatchery and rearing as well as by systematizing distribution of poultry products.
- The policy envisages programs to base bird rearing and poultry businesses on comparative cost advantages and production potentials.
- The policy is consistent with the national policy thrusts of public-private partnership and environment protection as far as its implementation plans are concerned.
3.16.2. Weaknesses and Threats
3.17. Approach Paper to 13th Plan and Agriculture/Livestock Development Policies
- To increase the production and productivity of crops and livestock products,
- To make crops and livestock products competitive and commercial,
- To develop and disseminate environment-friendly agro-technologies to minimize the adverse impacts of climate change, and
- To conserve, promote and utilize agro-biodiversity
- Promoting commercialization and diversification of agriculture and livestock
- Developing crop and livestock industries and enhancing their product quality
- Encouraging youths to take up commercial farming as a prestigious profession
- Promoting agricultural and livestock marketing, and
- Promoting the results-oriented application of technologies in the sector; while many of the 46 operating policies set in line with the eight priorities or strategies are generally related to the overall agricultural sector, some others are specific to the livestock subsector:
- to expand promoting campaigns regarding artificial insemination and fodder and forage plantation,
- to develop rural infrastructures such as agro-roads, electricity, and communications,
- to develop agricultural marketing network including livestock wholesale markets and hat bazaars (open-air retail markets), and expand access of livestock information at local levels,
- to develop technical manpower for agricultural sector and provide entrepreneurship and skill development training required for agro-business,
- to encourage production of high quality seeds, high-yielding breeds and vaccination, and to develop bio-pesticides to treat animal for parasites,
- to make provisions for livestock insurance, concessional agricultural loans, subsidy on livestock related industrial equipment and tax rebate on trade to small and marginalized farmers, entrepreneurs and business people,
- to promote contract and cooperative farming with involvement of private entrepreneurs and cooperative sectors,
- to establish agriculture and livestock extension centers under the local bodies at each VDC,
- to strengthen livestock related laboratories, and
- to provide integrated agricultural and livestock services and make effective involvement of national and international non-governmental organizations, universities and local bodies in providing such services.
4. Critical Cross-Cutting Concerns Facing the Livestock Subsector
4.1. Sectoral Contribution to Regional Balance and National Trade Balance
4.2. Gender Mainstreaming and Child Labor
4.3. Gaps between Policy and Implementation
- Lack of supportive adequate legislation (acts), rules and regulations for credible enforcement,
- Inadequate resource allocation,
- Ineffective coordination,
- Irregular and weak policy and program monitoring and evaluation,
- Lack of climate change monitoring,
- Limited human resources and implementation capacity, and
- Lack of continuity in leadership (short tenures of ministers and secretaries).
4.4. Gaps in Planning Process
- Poor data base for agriculture sector, especially in the areas of productivity, inputs, trade, seeds, improved breeds and agribusiness.
- The periodic plans do not cover programs/projects to the implemented through private sector, community-based organizations (CBOs) and non-government organizations (NGOs); the plans very much concentrate on programs to the implemented by the government only.
- There is no system of output and impact monitoring and evaluation.
4.5. Pro-Poor Policy and Poverty Reduction
4.6. Political Restructuring
5. Livestock Policy and Vulnerability
5.1. Livelihood Vulnerability
5.2. Climate Change Vulnerability
6. Rationale and Categorical Premises for a New National Livestock Policy
7. Policy Recommendations
- Policies on livestock insurance and corresponding institutional arrangements are essential.
- Policies and programs should provide soft loans for livestock farmers and other livestock workers including livestock health services providers.
- National Livestock Policy should be in compliance with measures on climate change, as biodiversity loss results from intensification of climate change effects leading to degradation of pasture lands that has put livestock at great risk. There is need for capacity building on climate science and policy to inform livestock policymakers, implementers, and stakeholders.
- The new policy should incorporate priorities specific to geographic locations (like Terai, Hill, Mountain, Valley and Siwalik/Inner Terai) and take into account the differing density of livestock to result in regional balance within Nepal.
- There should be appropriate legislative backing to the national livestock policy to support and ensure its effective implementation and adjudication. Also in other countries where mixed crop-livestock production systems exist, policies have not successfully accommodated realities of a mountain environment where livestock are key to smallholder livelihood  .
- An integrated approach to research and development (R&D) should be developed for fostering new technologies and policies
- A comprehensive and forward-looking policy environment should provide for policies to be updated and improved regularly .
- Livestock policy studies should be extended to accommodate the emerging concerns of socio-economic and national resources management and climate change mitigation and adaptation.
- Political parties and mass organizations should be involved in livestock development programs.
- Participation of villagers, local government bodies (VDCs and DDCs), and NGOs as collaborators in livestock development activities must be encouraged.
- The central government should bear the costs of developing livestock technologies that are in the national interest.
- Each state (or province) in the new federal structure should identify livestock growth-axes and growth-centers for promoting commercial production.
- Public private partnerships (PPP) along with the appropriate involvement of cooperatives should be promoted in livestock development activities. As suggestions on policy content and planning:
- There should be adequate and well-placed investments in the livestock subsector from both public and private sectors to allow policy implementation. Nepal’s government budget allocation for the entire agriculture sector has been meager and dwindling; in FY 2009/10, it figured only 2.75 percent of the total national outlay against 6.2 and 6 percent in Bangladesh and India respectively, and more than 4 percent even in conflict-hit African nations .
- The new policy should identify livestock projects that can be developed as strategic business units (SBUs), particularly for foreign-assisted projects. To identify such projects, past success stories and experiences in the livestock business can be used as benchmarks. There should be institutional arrangements and mechanisms for developing human resources required for farmer education, business development, and effective policy implementation.
- The newly established Agriculture and Forestry University (AFU) should be strengthened with a focus on developing human resources for livestock-promotion. There should also be roles for other existing universities, including Nepal’s pioneer Tribhuvan University, and for private sector institutes working in the area.
- Organizational resources at the Centre for Technical Education and Vocational Training (CTEVT) should be effectively managed and mobilized to develop low-level extension workers and technicians for livestock activities.
- Commercialization and diversification need to be addressed in a broader context that incorporates the emerging challenges and opportunities offered by regional trade agreements like South Asian Free Trade Area (SAFTA) and Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMSTEC).
- There should be policy thrusts and programs for promoting livestock marketing activities to establish stronger forward-linkages that provide farmers better access to market, so that livestock farmers can gain adequate returns from their outputs. Promote a marketing network, including livestock wholesale markets and haat bazaars (open-air retail markets), and centers for livestock information at central, provincial and local levels.
- In the new policy, there should be a well-functioning mechanism to channelize the livestock-related benefits envisaged directly to marginalized, disadvantaged communities
- Socioeconomic issues related to gender, child-labor, markets, community and farmers groups all have direct implications on livestock activities and should be considered in developing the national livestock policy. There is a need to ensure women farmers’ participation at all stages of livestock development planning. Women’s role should not only be limited to livestock rearing and care, but extended to include marketing and finance. Policy on women’s empowerment and participation should comply with Nepal’s commitment to the Beyond Beijing Conference and other international conventions including the UN Declaration against Discrimination of Women and Men and Elimination of All Forms of Discrimination against Women. Livestock policy should address the problems arising from use of children in livestock farming.
- The new policy should promote projects to set up rainwater harvesting facilities that increase water and fodder for livestock.
- The livestock policy should be developed and reviewed from the perspectives of (a) Improved cattle breeds; (b) Improved forage crops and modern varieties; and (c) animal health, including shelter from extreme weather and control of pathogens.
- It is important to make provisions to delegate responsibilities to local and community levels in appropriate areas:
- At the community levels, policies should make adequate provisions for backward linkages to promote livestock activities; they include, if are not limited to, pasture land management, animal health services, scientific breeding, and feed and forage management.
- Poor data in the LSS, especially in the areas of productivity, inputs, trade, improved breeds and agri-business, has been a hurdle in livestock development at the local and community level. A new livestock policy should establish an improved database and provide for constant updating and upgrading.
- A comprehensive strategy that coordinates various stakeholders in livestock development should be developed. Promotion of the free-market mechanism in the dairy business is deemed necessary and therefore the DDCN’s current role as the price setter and controller need to be revisited and redefined. A market mechanism should ensure that dairy prices reflect geographic location differences, cross-border prices, general business cycles and the impact of rising costs, wages, utilities, and taxes.
- There can be provisions for subsidizing livestock-related technologies and also for exempting livestock products of small-holder farmers from central and state government taxes as well as local taxes. Nepalese who have returned from foreign employment should be encouraged to take up livestock raising, processing and marketing by providing entrepreneurial support and micro-credit facilities to promote local ecomomy.
- A monitoring and evaluation system should be established and include the impact of livestock programs on national priorities like poverty alleviation and climate change monitoring.
- There is a need to review and strengthen the organizational framework and increase the capability of human resources for implementing policies.
- Technical and logistical assistance is needed to grassroots and village organizations for implementing resilience-building measures that promote long-term livestock development at specific locations.
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Pradhanang, U.B.; Pradhanang, S.M.; Sthapit, A.; Krakauer, N.Y.; Jha, A.; Lakhankar, T. National Livestock Policy of Nepal: Needs and Opportunities. Agriculture 2015, 5, 103-131. https://doi.org/10.3390/agriculture5010103
Pradhanang UB, Pradhanang SM, Sthapit A, Krakauer NY, Jha A, Lakhankar T. National Livestock Policy of Nepal: Needs and Opportunities. Agriculture. 2015; 5(1):103-131. https://doi.org/10.3390/agriculture5010103Chicago/Turabian Style
Pradhanang, Upendra B., Soni M. Pradhanang, Arhan Sthapit, Nir Y. Krakauer, Ajay Jha, and Tarendra Lakhankar. 2015. "National Livestock Policy of Nepal: Needs and Opportunities" Agriculture 5, no. 1: 103-131. https://doi.org/10.3390/agriculture5010103