Monday, June 25, 2012

Scope of Agricultural Businesses in Nepal

Nepal is called an agricultural country as agriculture consists of a large portion of our Gross Domestic Product and it provides job to the largest portion of our population.

However, the scenario is changing as the young generation is being attracted towards the service related job at offices, restaurants, banks and so on. The new generation is gradually departing from the traditional occupation of farming. This changing scenario has a lot of implications and from the business perspective this has increased the scope of agriculture related business even more.

Although, agriculture seems to be unprofitable business as of now, it really isn’t. The unprofitability issue arises based upon how we approach agriculture.

Agricultural production is closely associated with our basic needs. The food we eat and the clothes we wear are our two most rudimentary needs which can be fulfilled only from agriculture. However, since the people associated with agricultural production are decreasing steadily, it has created opportunities for the entrepreneurs to invest in business and make good profit.

On one hand the population of the country is rising and on the other hand, the manpower is leaving the traditional occupation of farming to get better jobs in the service sector. Hence, as of now, for any businesses which can produce agro-products successfully will have no problem at selling its product.

As for the price of the agricultural products, the prices are rising steadily, thus making the business more and more attractive to the prospecting entrepreneurs. Due to the increasing demand for the consumption, the prices of agricultural products like cereals, vegetables, meat, eggs, and milk are consistently and persistently increasing. This rise in price is making the production of such goods profitable.

Similarly, one problem of agricultural businesses is that in many cases, the traders get more remuneration rather than the producers. Fruits and vegetables can be the examples of this case because the price at which these products are sold to the ultimate consumer is many times higher than the price paid to the producers by the wholesaler. This problem, however, is due to the lack of good marketing practices and due to production of goods in a small scale. Producing the goods in a significantly larger scale can make the producers capable to retail their products themselves, thus they can significantly benefit by selling their own products.

Here is my SWOT Analysis of the Agricultural Businesses in the present context of Nepal.

Strengths:

  • Nepal is an agricultural country and therefore, it is easy to get labors for work
  • Similarly, land is available in abundance
  • The skyrocketing load shedding might have little effect on agriculture
  • Also, the political strikes have considerably low impact upon the production sector. However, marketing might be heavily affected especially for easily degradable products such as vegetables. If such products cannot be sold in time, they might go wasted. However, since food is essential for people to survive, there are chances that it could be sold even during the strikes. Even those parties who call for strikes would need food to keep on calling for more strikes!
  • Nepal’s climate and land topography is suitable for the production of various types of agricultural products. Terai is good for cereals; the hilly region is good for livestock farming (goats, buffaloes, cows), horticulture, apiculture, and cultivating flowers; and mountain region is good for livestock farming (yaks, sheep, chyangras and so on), horticulture (apples) and so on.

Weaknesses:

  • Lack of good agricultural technology
  • Lack of the availability of the seeds of genetically modified crops (hybrid plants)
  • Lack of information and awareness about the latest technology in agriculture
  • Lack of genetic engineering technology
  • Lack of adequate resource centers providing consultation related to agriculture
  • Lack of government support and subsidy
  • Lack of manpower for scientific research and innovation related to agriculture
  • Lack of Irrigation facility in many places
  • Lack of skilled manpower (labors, engineers, researchers, scientists, entrepreneurs, and so on)
  • Lack of modern approach towards conducting business activities

Opportunities:

  • Increasing population, thus higher number of consumers
  • Decreasing manpower in agriculture, thus rise in potential number of buyers
  • No problem of market to sell a significant portion of agricultural production as we have to import a lot of agricultural products from India currently

Threats:

  • The goods produced within the country will have tough time competing with the products imported from India, because of the subsidy provided in agriculture by the Indian government
  • The lack of technology to control the diseases in agricultural crops, fowls and animals could pose serious threats to the respective businesses (e.g. Bird flu in chickens, etc)
  • The volatile political environment of the country can pose serious threats. Rise in vandalism, lack of sincerity and commitment among workers, rise in the impunity and the crime rates, lack of government control over such aspects, etc can pose serious threats. Crimes such as theft, robbery and fraud can seriously affect the businesses.
  • Lack of visionary manpower, lack of ability to make rational decision, ineffectiveness of the education system, etc can also pose threats to the commercialization of agriculture.

Despite the weaknesses and threats many entrepreneurs are successfully running their businesses and making some profit. Therefore, we don’t want the manpower which seeks to be spoon fed by the helpless government of Nepal. We need the manpower who can accept the challenges and threats and work on to improve their weaknesses to turn Opportunities into profits.

The USA is the world’s richest country. However, it too hasn’t been able to provide employment to all its population. It remained unable to reduce its unemployment rate even in three to four years period. In the light of this incident, how can we expect that the government of Nepal will ever be able to provide employment to its entire people?

Therefore, we shouldn’t frown upon our government only. We should try to do something ourselves and stop putting all the blames upon the government, even though the government has its own weaknesses which it could avoid.

4 comments:

  1. great bro....i need some ideas on it. i totally agree with your views... great lines which inspires....

    ReplyDelete
  2. Namaste!

    My son is a Bsc. AG student studying in third semester. Can he devote his one month long vacation time into your org. as a volunteer? May be in field or research or relief program to earthquake victims etc.? He is based in Chabahil, KTM?

    Ang

    ReplyDelete
    Replies
    1. Namaste! I'm glad to hear from you and I really liked your idea.

      It is always good to start early. Therefore, I strongly suggest you to engage your son in some kind of volunteering program like you have said, (either research, agriculture, or relief program) because that will provide him exposure to outside world.

      Regards,
      Prem

      Delete
  3. Namaste,

    It is my first time.well i want know more information about agriculture in a hill side.

    ReplyDelete