International Trade And Logistics: Analytical Essay on Agribusiness in Nepal

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International Trade And Logistics: Analytical Essay on Agribusiness in Nepal

Executive summary

Agribusiness is an industry in which the farmers are engaged in producing foods, storing them, manufacturing and distributing the product. International trade has brought lots of opportunities in agricultural business however this national business also faces certain challenges and problems in international trade. International trade affects on the culture of Nepalese agriculture and it also affects the productivity of soil so for this agribusiness should make some policies.

Introduction

Agribusiness is an industry in which the farmers are engaged in producing foods, storing them, manufacturing and distributing the product. Agribusiness in Nepal has for some time been founded on subsistence cultivating, especially in the hilly areas where laborers get their living from divided land for cultivation. Agriculture in Nepal is fundamental to the economy of this nation. Almost 80 percent of the populace depends on agribusiness here and there, yet there isn’t sufficient creation to help the populace. There is an interminable issue of kid ailing health and an expected 50 percent of Nepal’s kids are influenced by hindering. This rate is significantly higher in the precipitous areas. Agriculture plays an important role in Nepal’s GDP as most of people of Nepal are engaged in agricultural business.

International trade involves importing and exporting of goods from one country to another.

International trade is considered as a fundamental factor for quickening the way of monetary improvement and most nations are included into outside exchange to make work, raise affinity to spare, increment remote trade acquiring, and raise the efficiency of venture moving from less gainful use to high profitable use (Sharma, December 2005). This report talk about the agribusiness of Nepal as a national business and the goal of owner is international trade considering the opportunities, and strategies. This report will include the opportunities for Nepalese agriculture international trade as well as strategies along with the solutions to overcome the risk in international business. This report concludes with the outcomes and recommendations.

Findings

AgriBusiness in Nepal

According to Gauchan “Agribusiness is key to the vocation of Nepalese individuals, adding to around 36 % of the nation’s GDP and utilizing 66 % of its work power (MoAC, 2007). The significance of farming as the absolute most significant supplier of occupation for two-third of Nepal’s populace infers that the improvement in this division will decisively affect guaranteeing nourishment security and destitution decrease. It is likewise the primary wellspring of fare profit and salary of the least fortunate families (90% of the base utilization quintile). Farming along these lines is the primary source of national economy and the significant motor of professional poor development” (Gauchan, 2008). Nepal got the participation of the World Trade Organization through the arrangement procedure in 2004 and the target of Nepal in accomplishing the enrollment was to broaden its trade and to change the exchange system (GC, 2018). The agricultural products exported from Nepal are floricultural products, tea and coffee, medicinal herbs and oils, and vegetable products and these products are mainly exported in India and China as Nepal’s three sides are surrounded by India and other by china.

Agribusiness Opportunities in International Trade

Nepalese people grow lots of agricultural products so they have lots of opportunities in international trade. Lentils has a high demand on South East Asia so Nepal has an opportunity of exporting high number of lentils that are grown in Terai region of Nepal same as the spices like cinnamon, turmeric, cardamom are grown in Nepal which has high market internally. In beverage Nepal is rich in tea farming which is in Darjeeling and which is considered as one of the best and fresh tea in world. This is exported more in Europe and also has an opportunity to grow its business in other sectors as well. Now a day coffee farming is gaing popularity and the demand for coffee is also high which shows the way for coffee farmer to expand their business nationally and internationally. From the historical period, Nepal is known for its medicinal herbs and in this modern world its difficult to find the fresh and good medicinal herbs so as being rich in such agriculture people have chance to grow their market and enhance their business.

Recently it is also showed that Nepalese have the opportunity of ginger farming. The nation creates the fourth most on the planet, to be precise, and this is following its a whole lot bigger neighbors India and China, just as Indonesia. The new space in Jhapa in eastern Nepal is arranged at the country’s ginger generation focus, and is accessible to neighborhood ranchers who beforehand didn’t approach the measures of water and innovation required to wash their yields or data about better agrarian practices, Presently, they can clean reap of earth and grime, along these lines preparing the valuable roots for trade and, significantly, higher deals costs (Deanna Ramsay, 2019). Many countries are being interested and some has invested also for this business.

The other more opportunities for Nepal by doing international trades are:

Chance to do business and be business partner with outside companies
Development of institutes like financial and others
Development in working pattern from traditional to modern
Development of agricultural equipments
Export pattern change from crude material to prepared mechanical products
Higher focused of specialty items
Development living standards of people

Strategies of Agribusiness to enter in International trade

While moving national business to international trade it definitely need to do preparation research about the markets, their culture and other information. Thus the strategies will help national business to cope in international trade and expand their business internationally. Some of the strategies are below:

· Developing AIC(Agribusiness Innovation Centers)

AIC is an instrument to expand the aggressiveness and development of spearheading inventive development situated little or medium agro-handling ventures that can possibly turn into an industry pioneer, These small and medium enterprises would translate item, procedure and plan of action advancement into improved items and bigger piece of the pie in existing markets or section into new markets and improvement of new items for existing or new markets (Shashi Bhattarai, 2013). This will help national business to know more about international trade and helps to overcome the problem.

Another strategy is to partner with international company which help them to know better as working with members having knowledge of the international business makes national business easy to understand
Tightening the security as focused more on the quality of products and taking feedbacks of local people as well as international customers about the products.
Private areas inclusion for the export of value merchandise and market organize, Concentrated on Market situated and aggressive agriculture, focus on extraordinary financial zones for agro-industry improvement Commercial, Organic and Export Areas and High priority on expansion, modernization, commercialization and advancement of farming area these are some other strategies.

Threats of Agribusiness

While expanding business to international market the companies or the business may face some problem and also they may occur risk while trading. Despite of various advantages it also has threats which are pointed out below:

Fast changes in the inclination, quality and principles of shoppers likewise represent a danger to Nepalese horticulture. Little and asset poor exports can’t keep pace with the difference in inclination, quality and gauges requested by the buyers of international.
Nepalese agriculture is exceptionally reliant on climate conditions, a circumstance which is upheld by the variety in the rural development rate, atmosphere change is the extraordinary exogenous factor compromising the horticultural segment. while moving to international trade this climatic reason can be the threat for agriculture
An absence of ‘funnel system’ (concentrated subsidizing component) in agrarian improvement may represent a risk to the achievement of exporting products in time.
The horticultural approaches of the neighboring nations additionally undermine Nepal. Substantial appropriations to the ranchers of neighboring nations, straightforwardly hamper the aggressiveness of Nepalese farming.

The above mention is some of the threats Nepal can face while doing international trade. Risk for agriculture in international trade can be unhealthy distribution of the products. For international market more agricultural products should be produced as a result the distribution of products in domestic market can be slow. The quality of soil of farms decreased as lots of product is produced and pesticides are used. While entering the international market it may lose its agribusiness culture and its importance. Nepalese agricultural products may not fulfill the requirements of an international market on time .international trade includes lots of tariffs and exchange rate also keeps on changing which may affect the business.

Problems of agriculture in Nepal

There is a gigantic lack of dispersion, augmentation channel, information, creation and rivalry. Furthermore, there is likewise an absence of appropriate farming foundations like storerooms, advertise focus, streets, media transmission and water system systems. The administration strategies put lacking imperatives on horticulture rehearses which just go to show poor administration. The condition of creation of horticulture is influenced by rare or little preparations, old innovation, absence of homestead administrative abilities, divided and little measured land, strategy level limitations, and above all absence of data administrations.

Possible outcomes of International Agriculture Business

The importing and exporting of the agricultural products like tea, coffee, fruits, ginger, flowers etc in other countries makes the good relationship between two countries. The Nepalese products also get chance to explore more not only nationally but internally. International trade increases the life stlye of Nepalese people and also gave them chance to develop and show their talent. Though there are disadvantages of international trade it can be overcome by making different policies in country and applying different principles. There has also more opportunities for agriculture in this modern era as the new innovative technologies like drones and other machines provide more opportunities for people to do different and something good and new. The capacity of this industry to adjust, improve and structure effective joint efforts will keep on supporting a solid and prosperous country with practical nourishment security.

Recommendation

Based on the challenges and risk faced by the agricultural business some sort of recommendations is:

1)reinforce exchange arrangements, particularly reciprocal; 2) Strengthen the specialized limit of local non-duty boundary (NTB) and different business condition steady foundations; 3) Strengthen the fare limit of ‘Comprehensive’ send out potential merchandise and enterprises; 4) Strengthen the GoN’s ability to organize and oversee Trade-Related Technical Assistance (TRTA) and Aid for Trade (AfT) (Trade and development strategy, 2014). By strengthening these boundaries and fare limits it can overcome its challenges. As the climatic changes is one of the problem for agriculture Nepalese agriculture should adopt the international system as well like growing fruits in managing temperature like greenhouse and others so that it can deliver the products on time. The private sectors or institution should be more concern on export quality and making good relationship with other markets. The marketing networks are also need to increase in order to be good in international trade. The food security of Nepal is less than that of international business so they should improve the food security and government should make policies regarding agriculture. Still the agriculture business in Nepal is traditional so the advanced equipment should be used to increase the productivity of the product and deliver the goods in time.

Conclusion

In conclusion with the above disused point, agribusiness in Nepal has effect more on its economic factor. International trade in agribusiness has changed a lot in Nepal and it also has lots of opportunities due to international trade. To overcome the problems and risk in international trade private sectors should be more focused on quality as well as advanced equipment should be used. Agribusiness has still more opportunities in this modern world.

References

Deanna Ramsay, M.,. (2019). IN NEPAL, TRADE-IN GINGER IS SPICING UP LIVES. Kathmandu: Trade for Development News.
Gauchan, D. (2008). Agricultural Development in Nepal: Contribution to Economic. Socio-Economic Development Panorama, 49-64, vol 1.
Federation of Nepalese Chambers of Commerce and Industry(FNCCI). (2019). Agriculture Opportunities. Retrieved from http://www.fncci.org/agriculture-148.html
GC, A. (2018). Nepali International Trade Before and After the World Trade Organization. vol1.DOI: 10.31015/jaefs.18020
Hibbett, K. (2018). Introduction of agriculture in Nepal. Retrieved from https://borgenproject.org/importance-agriculture-in-nepal/
Piya, S. (2012). Challenges and Opportunities. Retrieved from https://www.researchgate.net/publication/280010462_Agribusiness_in_Nepal_Challenges_and_Opportunities
Startups Nepal. (2018). Agribusiness and Problem facing Agriculture in Nepal. Retrieved from http://startupsnepal.com/stories/entry/agribusiness-and-the-problems-facing-agriculture-in-nepal
Sharma, O. (December 2005). Foreign Trade and Its Effects on Nepalese Economic Development. the journal of Nepalese business studies, vol ii no.1.
Shashi Bhattarai, N. N. (2013). Promoting Agribusiness Innovation In Nepal. Washington, DC: infoDev, Finance and Private Sector Development Department.

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