Embassy of Japan in Nepal


March 5, 2007

Japan Extends Grant Aid to Nepal for the Increase of Food Production (KR2)

The Government of Japan has agreed to extend a grant assistance of three hundred million Yen(300,000,000), approximately one hundred and eighty million Nepalese Rupees (NRs.180,000,000), or approximately two million, five hundred and forty-nine thousand US dollars ($2,549,000), to the Government of Nepal for the Increase of Food Production (KR2), with special emphasis on underprivileged farmers, in Japan's Fiscal Year 2006.

His Excellency Mr. Tsutomu HIRAOKA, Ambassador of Japan to Nepal, and Mr. Rameshore Prasad Khanal, Officiating Secretary of the Ministry of Finance, signed and exchanged the Notes today on behalf of their respective Governments.

The grant has been extended for procuring necessary items to increase food production in Nepal with special emphasis on underprivileged farmers. Fertilizer is an important component for the growth of agricultural production. However, Nepal does not have domestic producers of chemical fertilizer and has to depend on imports. The grant will be used for the procurement of fertilizers needed to boost agricultural production, thus enabling the country to meet its growing food demand. The fertilizer procured under this grant will be utilized as a buffer-stock to counter acute shortages and price hikes and will be supplied to farmers in remote regions where private sector activities are limited. The Government of Nepal provides subsidies for the transportation of fertilizer.

The Government of Japan has been extending Grant Assistance for the Increase of Food Production (KR2) to Nepal since 1977; one of the oldest grant program from Japan to Nepal. Last such grant was extended in Japan's Fiscal Year 2004 amount of which was three hundred and one million Yen (301,000,000).

On the occasion, HE Mr. HIRAOKA stated that Japan, being a close friend and development partner of Nepal, has been extending assistance to Nepal in her endeavor for socio-economic development. He expressed his sincere hope that the grant extended today will contribute to increase agricultural productivity benefiting the people of Nepal and create an environment conducive for peace in remote areas of the country. He further expressed his belief that this support will also help strengthen the existing friendly and cooperative relationship between Japan and Nepal.



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