Nepalese Poultry Policies Affecting International Trade and Competitiveness

Devendra Chapagain It is clear that the poultry industry is not receiving any direct support except for the limited access to public veterinary services that cover the entire livestock sector. These services are generally confined to a few farms that are close to the district headquarters and are available only if the concerned entrepreneur manages to access the services of the veterinary technician.

Nepal has multiple tariff regimes in operation currently. While most tariffs are on an ad valorem basis, some are in specific form also. More importantly, there are a number of “concessions” to published basic customs duties depending on the source of the import.125 For example, imports from India face no tariffs (i.e. 100% concession), while a 10% discount on the standard rate is applied to imports from the Tibetan Autonomous Region of China, and 5% discount for imports from coun- tries with bilateral trade agreement (provided the products are subject to ad valorem tariff).

Agricultural reform duty is levied at a flat rate of 10% ad valorem on those agricultural products that face no customs duty. Thus, even those imports eligible for duty free import from India and Tibet are subject to a levy. The purpose of this duty seems to provide some protection to domestic products while remaining within the broad framework of the Nepal-India bilateral treaty, which provides for trade in primary products free from customs duty and quantitative restriction. A local devel- opment duty is also levied on importable items at the rate of 1.5% ad valorem.

In most products, the applied rate is 10%. In the case of India, while imports are free of customs duty, imports face “agricultural re- form duty”, with the same effect as tariff. Duty on parent stocks imported on the recommendations of the Nepal Hatchery Industry Association and on such ingredi- ents as shells of molluscs, feed supplements and limestone is only 1%. Similarly, duty on some of the equipment used in raising poultry and crates used in egg pack- ing are also levied a duty of 1%.

It is evident from the tariff structure that poultry products have some protec- tion as compared to feed. In case of feed, it is somewhat complex to determine the level of tariff protection. There are duties at the rate of 10% for important ingredi- ents such as maize and soybean, and these amount to 56% of the total cost of in- gredients. Nearly half of maize used by the feed industry is imported. Considering this situation and the fact that tariffs applied to animal feed, which includes poultry feed, is half the rate for these ingredients, the possibility of the feed industry being negatively protected cannot be ruled out.

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