MoCS pushes for tariff hike of beetle nut

Ministry of Commerce and Supply (MoCS) has pushed for a rise in tariff of beetle nut in order to curb its unauthorized re-export to India.

The MoCS, which blames huge difference between import duty in Nepal and India for the illicit trade, had decided to hike the tarrif in January and written to the Ministry of Finance (MoF) for further action.

According to the MoCS, Nepal presently imposes 25 percent duty on import of beetle nut, whereas India has set it at as high as 108 percent. This difference was creating strong incentives to the traders to re-direct the imported product to India in unauthorized manner.

“We had forwarded the ministerial level decision to the MoF, as the illicit trade is creating undue nuisance in bilateral trade,” said Secretary Purushottam Ojha, who was recently transferred to Prime Minister´s Office from MoCS.

However, Shanta Raj Subedi, joint secretary and chief of Revenue Division said he had not yet received the letter. "I also have no knowledge of any discussions on its (beetle nut´s) tariff rise," he said.

Along with tariff hike, MoCS had also taken five decisions to deal with complaints by Federation of Nepal Chamber of Commerce and Industries (FNCCI) against the illigal trade and pressure exerted to local chambers for issuing Certificate of Origin (CoO) by different political forces and government officials.

“Decisions focused on controlling illicit export of beetle nut to India,” said a source, elaborating that one major decision of the MoCS then was to seek actual data of domestic production and demand of beetle nut from Ministry of Agriculture and Cooperatives (MoAC). Other decision was to monitor the CoO issued by the chambers every month.

MoCS also pushed the local chambers to make submission of recommendation letter of District Agricultural Development Office (DADO) of the beetle nut producing district mandatory for issuing CoO.

As its push for tariff hike failed to draw MoF´s attention, officials at MoCS said they were coordinating with the MoF yet again for increasing its tariff.

Commerce Secretary Lal Mani Joshi said that MoCS would follow up on all the past decisions, as those were important decision to prevent illegal trade.

In a recent anomaly, Republica had disclosed Agriculture Minister Nandan Kumar Datta of exerting pressure on the Siddharthanagar Chamber of Commerce and Industry (SCCI) to issue CoO for 3000 tons of beetle nut and facilitating Excel Trading Concern based in Bhairwaha to export beetle nut which was not produced locally. The consignment held by the trading firm was estimated at Rs 900 million.

Minister Datta aids illegal betel nut export to India

• Minister for Agriculture and Cooperatives Nandan Kumar Datta has been found abetting a racket engaged in importing hefty amounts of betel nuts and exporting them to India through illegal channels, in contravention to a bilateral trade treaty signed between Nepal and India.
  
  The racket surfaced after Siddharthanagar Chamber of Commerce and Industry (SCCI), which received an order from the Ministry of Agriculture and Cooperatives (MoAC) to issue a certificate of origin (CoO), a mechanism that certifies that the goods in question are produced in Nepal, declined to comply.
  
  MoAC , allegedly under direct instructions from the minister, asked SCCI last month to issue a CoO for 3,000 tons of betel nut of unspecified origin and owned by the trading firm Excel Trading Concern (ETC). At the present market rate, the consignment’s value is estimated at Rs 900 million.
  
  “A trader approached us along with the letter from the ministry and sought a CoO, but we declined to comply as he failed to disclose the origin of the beetle nut,” Mahendra Kumar Shrestha, president of SCCI, told Republica over the phone.
  
  SCCI had sought clarity over the origin of the betel nut mainly in view of the fact that Rupandehi, where Siddarthanagar is located, is not a beetle nut producing district.
  
  Senior officials at MoAC, who are familiar with the development, acknowledged that the ministry had issued such a letter as per the instruction of Minister Datta.
  
  When Republica contacted him, Datta flatly denied having any links with the racket or assisting it in smuggling betel nut to India. But he did not deny that he had instructed officials to send a letter to SCCI urging it to issue a CoO to a private firm. “I sign more than 100 letters a day that come to me and I hardly get time to go through them,” he said.
  
  However, at the beginning of his conversation with this reporter, he declined to admit that he had issued any instructions in this regard to the officials concerned.
  
  “I believe officials at the ministry do things as per the established norms and laws,” he said when asked why he had bypassed the normal process for issuing the CoO.
  
  “After receiving the request from the private firm, I had just instructed the officials to take necessary action as per the established practice, which means that the officials were free to take a decision as per standard practice,” Datta said.
  
  Illicit outflow of imported betel nut from Nepal to India has been on the rise in recent years as India imposes customs duty of 108 percent on its import from Indonesia, the main exporting country, whereas the duty on betel nut imported from Nepal is just 25 percent.
  
  In Nepal betel nuts are produced only in the eastern districts, including Jhapa, Morang, Ilam and Sunsari. Statistics at MoAC show that total production of beetle nut in the country in 2010/11 was recorded at 7,247 tons, and in the same year Nepal had imported more than 108 thousand tons of beetle nut.
  
  Dr Hari Dahal, joint secretary at MoAC, said, “There is no data available showing the amount of domestic betel nut consumption.” He further added, “When we don’t know the amount of domestic consumption, we can’t say how much of the total import is consumed in the country.”
  
  India has constantly raised the issue of illicit export of beetle nut from Nepal at Inter-Governmental Committee (IGC) meetings. India had claimed at an IGC meeting held in 2010 that Nepal exported 165 thousand tons of beetle nut in 2008/009.
  
  Moreover, India had requested Nepal at an IGC meeting held in Delhi in March 2011 to increase the tariff rate on betel nut imports.
  Indonesia, Thailand, Malaysia and Turkey are the main countries from where Nepali traders import beetle nut.

Sugam gets govt nod to resume op

The Ministry of Industry (MoI) has allowed Sugam Gas -- a notorious gas company that circulated liquefied petroleum gas (LPG) in tampered cylinders -- to resume operations even as it is yet to be tried under Consumer´s Rights Protection Act on charges of exposing consumers´ lives to grave risk.

Officials of Department of Industry (DoI) that issued a letter to this connection to the LPG bottler on Monday said they decided to let the company resume LPG bottling and sales as it served the suspension period and paid fine slapped by the MoI.

MoI had slapped a fine of Rs 500,000 on Sugam Gas and suspended its operations for six months as punishment.

“The company has already paid the fine slapped by the ministry. The suspension period also ended last week,” said Dhurba Lal Rajbansi, director general of the DoI.
Shiva Prasad Ghimire, proprietor of Sugam Gas, also told Republica that he received a letter on resuming operations on Tuesday and that his company would resume LPG bottling immediately.

“I have already filed an application at the Nepal Oil Corporation (NOC), requesting it to supply gas to my company,” he stated.

However, both Ghimire and Rajbanshi refused to talk about the case filed against the company by the Office of Cottage and Small Industry (OoCSI) -- the local market inspector -- in Sunsari.

The office had filed the case after its inspection found the company of illegally amassing cylinders of other bottlers and refitting Sugam´s foot rings and neck rings on them.

As such tampering works erodes pressure bearing capacity of cylinders, making them vulnerable to leakages and explosion, OoCSI and consumers rights protection bodies had assessed that the company had put consumers´ lives at risk by circulating tampered cylinders in the market.

Meanwhile, consumers´ rights activists have flayed the decision. “This is a wrong decision; we urge the government to revoke it,” said Ram Chandra Simkhada, secretary of the Consumers Right Protection Forum (CRPF). He even accused the ministry officials of working hand in glove with the company.

No progress in Govt. plan to lessen food insecurity

Ministry of Agriculture and Cooperatives (MoAC) has not been able to work substantially towards implementing provisions of the Three Years Interim Plan 2007/08 - 2009/2010 on food security in the country. The Interim Plan envisioned a Food Security Division in the MoAC to effectively to monitor and identify problems of food security in the country.

“We don´t have any data that specifically shows how many people are under food insecurity,” said Dr Hari Dahal, joint secretary and spokesperson of the ministry. “Though we have food surplus this year, the situation is unlikely to improve because we don´t have mechanism in place to distribute food to the needy.”

According to the World Food Program (WFP), 3.5 million people were under food insecurity in the country. Explaining the necessity of Food Security Division, Dahal said, “It would have been easier if we had actual data, forecast and overall coordination required to improve food security situation."

Due to the timely monsoon, Nepal has around 400,000 tons of food surplus in the country this year. “I think, if there was existence of Food Security Division in the ministry, there would of course be discussions on how we could distribute the surplus food.”

Moreover, the Interim Plan had another provision to provide at least 100 days employment to the families that are food insecure. To get this done, ministry must have data that show which families were under food insecurity in the country.

The Interim Plan, a blueprint to upgrade the national mechanism and infrastructure with sound planning, admitted 35 per cent of the total population were facing food shortages. “Adequate attention is not paid to food insecurity at the national level,” Interim Plan acknowledges.

According to Dahal, many districts in mid and far western regions remain under food insecurity this year as well. “There are some efforts from different agencies, but nothing at the national level to address the problem of food security in those regions.”

The Interim Plan 2007/2008 - 2009/2010, which was replaced by Three Year Plan 2010/11 - 2012/13, also has a vision to establish an Information Centre in the Ministry of Local Development (MoLD).

However, Dipendra Bahadur Kshetry, vice-chairperson of the National Planning Commission (NPC), said some efforts had been made to establish Food Security Division in the MoAC. “I think, work is in progress to establish a division in the ministry with the help of Food and Agriculture Organization of the United Nation.”