Loan to food industries is not 'agricultural investment'

Kathmandu, Nov. 30

Association of Nepal Rice, Pulses and Oil Industries (ANROPI) has said that the banks and financial institutions (BFIs) have calculated the loans mobilized to the rice, oil and pulses enterprises at a rate of 15 per cent as agricultural investments.

"The BFIs should either consider these industries as 'agro base' enterprises and provide loan facility or they should remove credit given to them from the 'agricultural investment' category," a delegation led by ANROPI's president Dr. Subodh Kumar Gupta put forth the demand to Secretary of Finance Madhu Kumar Marasini at a meeting at the latter's office in Singha Durbar on Tuesday.

He urged the government to increase the duty on rice imports to 15 per cent from existing 8 per cent.

"The duty on rice imports should be raised to 15 per cent or customs duty on paddy imports should be decreased to 1 per cent from current 5 per cent," said ANROPI.

It also asked to open the export of high value Basmati rice from Nepal. "We will work together with the farmers if the government takes steps to discourage the import of rice," read a statement issued by the association.

The association has conveyed the same message to Director General of the Department of Industry, Jibalal Bhusal and Director General of Department of Commerce, Supply and Consumer Protection, Prem Kumar Shrestha, on the same day.

The delegation included former President of ANROPI, Kumud Kumar Dugar, Vice President, Naresh Rathi, General Secretary, Dipak Kumar Poudel, and Office Chief Ajaya Parajuli.

"The government should protect the rice, oil and pulses industries since they produce the food which are basic to the survival. The government should devise a strategy to save the country from dependency on foreign countries for food items and promote domestic industries," said Gupta.

According to the ANROPI, there should be two levels of customs duty of agricultural raw materials and final products.

Likewise, it suggested the government that the food products imported to Nepal must include information like the maximum retail price, name and address of the importers, its contact details, batch number, date of packaging and label.

It said that the domestic cooking oil industry by imposing 5 per cent Value Added Tax (VAT) and reducing import duty on mustard seed to 1 per cent from current 5 per cent.

As per the current practice, importers have to pay 5 per cent duty on mustard seed imports and 13 per cent VAT on refined cooking oil.

Similarly, the association suggested to apply different duty on refined pulses and raw materials like legumes. Currently importers are paying equal 10 per cent duty on the import of both items while the ANROPI has demanded to bring down the duty on legumes import to 5 per cent. 

Published in The Rising Nepal daily on 1 December 2021.