Chemical Fertilizer Supply Chain Management in Nepal

Abstract

Nepal’s chemical fertilizer supply chain is crucial for ensuring the timely availability of chemical fertilizer to improve agriculture productivity, but fail to meet the demand in term of timeliness and quantity. This study critically analyze the fertilizer demand and supply scenario, procurement systems, subsidies allocation, distribution mechanisms, and private sector participation mainly focusing on subsidized fertilizers over fiscal years 2013/14–2024/25. Mixed-method combining institutional secondary data from MoALD, KSCL, and STCL and semi-structured key informant interviews were used to collect the data and information. Findings show that over the study period fertilizer supply increased up to 441,315 MT but remains below estimated demand of 800,000 MT. Supply proportion of Urea is higher than the technical recommendation. Fertilizer supply are largely managed by public institutions, with limited private sector involvement. The procurement process is lengthy and bureaucratic, and average procurement lead times frequently exceed the 210-day legal standard, leading to delayed imports and frequent shortages. Fertilizer subsidies have improved affordability for farmers but have also generated increasing fiscal pressure due to rising international fertilizer prices. Supply is constrained by weak demand forecasting, insufficient subsidy budget, inadequate storage and external market uncertainties. Procurement reform, strengthening demand forecasting, enhancing storage and distribution, sales price adjustment and private sector participation can support to improve supply chain efficiency.