Narrow Results

The private sector in Nepal participates in the regulated import and distribution of three types of subsidized fertilizer. However, almost 55% of the agrovets (family-owned microenterprises) that retail agricultural inputs do not comply. Many farmers rely on the fertilizer purchased through these agrovets, including subsidized ones. There is no private sector importer of the three types of fertilizer covered by the subsidy program, which indicates that the agrovets either acquire these through leakage in the government distribution system or through illegal cross-border trade from India, both of which are considered legal noncompliance. We discern the determinants for this noncompliant behavior of agrovets using logistic regression. The results from logistic regression suggest that the agrovets that are more likely to comply are registered, have membership in business associations, and have a higher number of competitors. Those with diversified business portfolios and covering a greater number of districts are less likely to comply. Key informants, consisting of both public and private sector stakeholders, were solicited for their views on solving this noncompliant behavior. The private sector unanimously asserts the need for deregulation of fertilizer imports and the participation of agrovets in the distribution of the subsidized fertilizer. In contrast, the public sector is skeptical of the ability and trustworthiness of the private sector in the import and distribution of quality fertilizer. We propose a middle ground to mitigate private sector noncompliance and suggest a policy revisit to increase the fertilizer supply and distribution efficiency.

Despite the long-standing friendship between Nepal and China, their relationship has developed rather slowly since the reestablishment of democracy in Nepal in 1990, mainly due to the constant pressure from Western forces faced by Nepali political elite, as well as the ignorance of most democratic governments about balancing Nepal’s foreign relations, especially between its two giant neighbors, India and China. In recent years, however, the Nepali government has been trying to promote pragmatic cooperation with China in order to garner support for its own development. With the signing of the memorandum of understanding (MoU) on cooperation in building the “Belt and Road Initiative (BRI),” the China-Nepal relationship is likely to enter a new era. Based on a historical review of the development of China-Nepal relations, this article offers some suggestions on how to enhance their cooperative partnership in the future.