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Every year, the Karnali Province government distributes different subsidies to boost production and productivity in the agriculture and livestock sectors.

The provincial government has been implementing these subsidy programs through the Ministry of Land Management, Agriculture and Cooperatives, and its subordinate agencies, as well as through local units. However, the Office of the Auditor General (OAG) has pointed out in its annual reports that subsidies for agricultural technology promotion, agricultural infrastructure development, procurement of farm equipment, and the promotion of livestock businesses have failed to yield the desired results. Moreover, it said that the provincial and local governments have not conducted follow-ups to gauge the effectiveness of these programs.

The annual reports of the OAG from fiscal years 2017/18 to 2022/23 clearly state that no study or analysis has been conducted on the contribution of subsidy programs in increasing production and creating employment. This has raised questions about the effectiveness of the millions of rupees invested in farm subsidies.

According to the OAG’s annual report for the fiscal year 2022/23, the Ministry of Land Management, Agriculture, and Cooperatives distributed Rs 138.46m for the promotion of agricultural technology, agricultural infrastructure development, expansion of livestock health services, and procurement of agricultural equipment, among other purposes, in 2022/23. Additionally, it provided farmers with another Rs 46.94m as a subsidy for insurance premiums. Subsidies have also been provided by the federal government’s Prime Minister’s Agriculture Modernization Project.

In its report, the OAG has directed the provincial and local governments to study the effectiveness of such subsidy programs. “There is no system for inter-agency coordination in the distribution and use of subsidies,” the report said, adding, “Due to a lack of coordination with local units, the use of subsidies has not met expectations.”

No list of beneficiaries 

The ministry has developed procedures for the distribution of farm subsidies. However, the targeted farmers in Karnali have not been properly listed. Consequently, the subsidies provided by the government have not reached the intended recipients. According to the report, the provincial government provided Rs 39.67m in interest subsidies for Rs 712.15m worth of concessional loans taken by 1,227 agri-entrepreneurs in 10 districts of the province. However, there is no certainty that the loans were used to run industries as the provincial government has not submitted any supporting documents, the report states.

The report has urged public offices to regularly monitor the subsidies and measure the achievements to ensure that the loans provided are used for the specified purpose.

Similarly, the ministry has provided Rs 220m to 20 subordinate offices for the procurement of farm equipment, promotion of vegetables and fruit farming, distribution of cattle of improved breeds, and youth self-employment programs. These programs are also being implemented by the federal government and various agencies under the provincial government and local units. There is a lack of inter-agency coordination for the implementation of these programs, according to the OAG report.

During the same year, the Agriculture Development Office, Dolpa, distributed Rs 9.16m as subsidies to 47 profit-oriented farms and individuals. Likewise, the Agriculture Development Directorate, Surkhet, provided a subsidy of Rs 17.88m to 162 profit-oriented firms and individuals. The report states that the directorate has not maintained records of the subsidies distributed.

Irregularities in subsidy distribution

The Veterinary Hospital and Livestock Service Office, Dailekh, provided a subsidy of Rs 7m to the Rural Agriculture Multipurpose Organization to implement a program for distributing 100 cows of improved breeds to farmers. In its proposal, the organization stated it would distribute Holstein and Jersey cows and cover any budget shortfall through internal resources. However, the OAG report indicates that the organization distributed cows of local breeds to the farmers.

Furthermore, the organization collected Rs 15,000 from each beneficiary farmer and also received a Rs 500,000 subsidy from the concerned local unit.

Multiple subsidies for the same program

According to the OAG report, the ministry provided a subsidy of Rs 850,000 to a local cooperative to build a cold storage facility. However, the cooperative also received a Rs 5.85m subsidy from the Raising Incomes of Small and Medium Farmers Project. Additionally, the Agriculture Development Directorate provided another Rs 6.65m subsidy to the cooperative for the same purpose. The OAG report for the fiscal year 2019/20 stated that farmers have not received any benefits from these subsidies and called for a necessary investigation.

Subsidies to Private Firms and Companies

The ministry provided subsidies ranging from Rs 200,000 to Rs 500,000 to nine profit-oriented business firms and companies in the fiscal year 2017/18. The report noted that the ministry provided a total subsidy of Rs 2.2m to private firms and companies, violating the provision that subsidy amounts can only be provided to consumer committees and beneficiary communities.

The number of people dependent on agriculture in Karnali is significant. However, in terms of production, Karnali has not been able to become self-reliant. Government statistics show that only 30 percent of households in Karnali are self-reliant in their own production. According to the National Agricultural Census 2021, 70 percent of households engaged in farming do not produce enough to sustain themselves year-round.

Devendra Godara, a leading farmer from Dungeshwar Rural Municipality-6 in Dailekh, said that the agricultural subsidies provided by the government have not been utilized effectively. “The subsidies received by genuine commercial farmers seem to be well-utilized, but those who get subsidies based on political affiliation and access misuse the subsidy amounts,” Godara said.

He also called on the government to revisit its subsidy program. “Subsidies should be given based on the area of land cultivated or the number of livestock. Only then will the subsidy program be effective, production will increase, and the living standards of farmers will also improve,” he added.

Petroleum exploration work is progressing in full swing in the Panchakoshi region of Dailekh. Engineers are engaged in drilling operations in Jaljale of Bhairabi Rural Municipality-1, with financial and technical assistance from the China Geological Survey. Drilling commenced last week after completion of various stages of survey in the region.

The drilling is part of the China Aid on Oil and Gas Resources Project, which is being jointly implemented by the Department of Mines and Geology of Nepal, the China Geological Survey and Xibu Drilling Engineering Company. The drilling work began after the Chinese companies supplied and installed the necessary equipment for the final exploration and extraction of petroleum products.

Minister for Industry, Commerce and Supplies, Damodar Bhandari, officially inaugurated the drilling operations. On the occasion, he stated that if the Dailekh mine proves feasible for extraction, it would significantly contribute to the country’s economic prosperity. “If petroleum products are confirmed in Dailekh, it will provide a substantial economic boost to the country. After that, Nepal will be known not as an importer but as an exporter of petroleum products,” said Minister Bhandari. “The drilling work will be completed soon, after which the presence of petroleum products will be ascertained. Further exploration and extraction works will follow.”

According to Dinesh Kumar Napit, chief of the Petroleum Exploration and Promotion Project under the Department of Mines and Geology, a team including Chinese experts has been deployed at the exploration site. “We will drill up to 4,000 meters. After this drilling, we can confirm whether this mine is feasible,” he said. “The possibility of finding petroleum products increases at depths between 3,500 and 4,000 meters, and necessary work has begun in that direction.” Napit said whether the mine will be feasible for crude oil or natural gas can be confirmed only after the completion of drilling, which is estimated to take five months. “We have drilled 53 meters so far,” he added.

Gasses have been burning on the earth’s surface in Dailekh for hundreds of years, and petroleum products have been seeping out in the area from Paduka to Shristhan. According to Napit, this is strong evidence confirming the existence of petroleum products in the area. “However, studies and research need to be conducted to determine the depth, locations, and quantity, and whether extraction will be technically and economically viable,” he added. Previous surveys had indicated the presence of crude oil and gas in the area.

Chure hills and Tarai regions potential areas

Some parts of Nepal’s Chure hills and the Terai region are considered highly potential areas for petroleum products. Accordingly, the Department of Mines and Geology has been conducting studies and research. The Nepal Petroleum Act was enacted in 1983 to regulate petroleum-related provisions in Nepal. The Petroleum Rules were introduced a year later.

“After the Act and Rules came into effect, the Department of Mines and Geology started advancing various studies, surveys and research in potential areas for petroleum products by entering into agreements with international companies,” Napit said. He added that petroleum exploration has also taken place in Bahuni of Morang. “It appears that drilling was carried out up to around 3,500 meters there. However, no petroleum products were found during the drilling process,” he said. In addition to Morang, some areas of the Chure hills and Terai regions were explored for potential oil extraction and exploration.

Exploration in Panchakoshi

In Nov 2015, a Chinese team led by then-Prime Minister KP Sharma Oli and then Industry Minister Som Prasad Pandey arrived in Dailekh. Oli announced that the government would start petroleum exploration works in the area soon. In March of the following year, Nepal and China agreed to cooperate in petroleum product exploration and extraction.

During Oli’s China visit, a bilateral understanding (G2G) was reached between Nepal and China. In 2019, the government approved a program to conduct detailed petroleum product exploration in Dailekh with China’s assistance. The Department of Mines and Geology and the China Geological Survey signed an agreement to explore and extract petroleum products in Dailekh, with financial and technical assistance worth Rs 2.4bn, in the same year. Oli formally inaugurated exploration at the Navisthan site in 2019. The technical teams from the two countries have completed seismic surveys, geological surveys, magneto-telluric surveys, and geochemical sampling surveys so far.

A small settlement sits on an open land next to Katti stream in Bhagawatimai Municipality Rural Municipality, Dailekh. There are 40-odd crudely made shacks and unlikely inhabitants occupying them: the endangered Raute people. Historically, Rautes are known to live mostly in forest areas and never in the same place. They are always on the move, and they have their own way of life. The Raute settlement in Dailekh is an aberration in that it is a permanent dwelling. Also, most of its occupants do not practice their traditional trade of making wooden bowls and crafts. They live off the allowance provided by the state. One might say that the modern way of life is attracting these tribal folk, but that is half the truth. There is a lure of modern comforts but there is also a more serious reason: forest degradation. Surya Narayan Shahi, a Raute tribe leader, says his people can no longer follow their traditional lifestyle because timber logs, with which they made kitchenware for trade, and wild tubers, their main source of sustenance, are hard to find. “The forests in this region are not like what they used to be. It is hard to find wild tubers and herbs,” he says. “Perhaps, there are dense forests in the upper reaches of Humla and Jumla districts but not here in Dailekh.” Shahi fears the tradition and culture of his people will disappear.  His fears are valid, says Satyadevi Khadka, who leads an organization that works closely with the Raute tribes of Nepal. She says the government should do more than just provide monthly allowances to protect Rautes and their heritage.  “The governments of all three tiers have been building roads and other infrastructure by clearing forest areas, all in the name of development,” says Khadka. “They are essentially invading the homes of these tribespeople.”     Climate change is another factor that is driving Rautes away from their traditional way of life. Changing climate patterns and increased human activities are causing water sources to dry up. Natural disasters like floods and landslides have also become more frequent in recent years. “Rautes have been described as ‘kings of forests’ but this moniker does not fit them when they are no longer masters of their domain,” observes Hira Singh Thapa, of Social Service Center Nepal. “Their traditional profession and culture are in danger. And the saddest part is, many of them are not aware of this.” The latest census puts the population of Raute people at 144. They are scattered in Dailekh, Surkhet, Salyan, and Jajarkot districts. Khadka says it’s the government’s responsibility to protect these endangered people, their indigenous rights and culture.  A draft of policy for the protection of endangered Raute tribe has been gathering dust at the Karnali province’s Ministry of Social Development for over a year now.       “The government should act before it is too late,” says Khadka. 

The Karnali province government has formulated a policy to mainstream the endangered Raute community.

Under the policy formulated by the Ministry of Social Development, members of the community shall be provided a place to settle permanently and issued citizenship certificates. The government shall also take measures to preserve their culture by helping transcribe their language.

 The policy comes amid reports that the Rautes’ language, religion, culture, and traditional livelihood are disappearing. Rautes spend most of their time building and demolishing temporary settlements due to their nomadic lifestyle.

Reports also show that they live in unsanitary conditions and children are deprived of education as traditional beliefs forbid doing so. The community suffers from high birth and mortality rates, and malnutrition.

The main objectives of the policy are to build an egalitarian society for the community by protecting the identity and human rights of the community, which has a long history.

According to the latest census, 618 Rautes live in Nepal. As of now, 143 people, including 68 children, from 44 families live a nomadic life in different districts of Karnali. Hunting and making wooden goods and exchanging them for food is their main source of livelihood.

The policy, which identifies education, health, and livelihood as the basic needs of the community, underscores the need to end all forms of violence and discrimination, including gender discrimination and sexual harassment, perpetrated by non-Rautes on Rautes.

Similarly, a museum to portray Raute identity will be established. The ministry has presented the policy to the Social Development Committee and the Provincial Planning Commission.

According to Krishna Prasad Kapri, secretary at the ministry, the policy will ensure the right of Raute children to receive an education. The policy proposes the formation of a steering committee under the chairmanship of the Minister of Social Development to implement the programs laid out in the policy, provide guidance to officials for the mainstreaming of the Raute community, coordinate internal and external cooperation, manage budget, and monitor work related to the Raute community.

The committee shall have secretaries from the Office of the Chief Minister and Council of Ministers, Ministry of Economic Affairs and Planning, Ministry of Social Development, Ministry of Land Management, Agriculture and Cooperatives, and Ministry of Physical Infrastructure as members. The chief of the Social Development Division shall work as a member-secretary.