Nepal Brief Series: Soybean Production

Bottom Line Up Front: Cereal crops are the staple food and contribute major share in area and production in Nepal; yet, growing cereal

crops year after year or intensive cereal production (short duration paddy, spring maize) systems have led to the degradation soil fertility, soil health, pest disease dynamics and soil erosion. Pulses (grain legumes) are important in terms of nutrition and subsistence farming. It plays role in enhancing the soil fertility by symbiotic nitrogen fixation. Pulses supply the major part of the dietary protein. Crop residues and by-products are valuable as fodder, feed and firewood. In 2009, pulses (excluding soybean) export and import were of US$ 75,459,000 and US$ 29,184,000, respectively.

The development of soybean cultivation in Nepal is directly related to that in India. The earliest efforts to popularize soybeans were made during the 1930s in India by Mahatma Gandhi and by the Britisher Kale, working with the Maharaja of Baroda.

Soya stands out as the best source of protein for inexpensive formulated foods It is unclear to what extent soya crops in Nepal are genetically modified.

History of Soybeans in the Indian Subcontinent ___________________________________________________________Soybeans (Glycine max (L.) Merr.) probably entered this region at a relatively recent date, after the year 1000 AD. The soybeans grown in the northern half of the subcontinent, most of which grow in the foothills and are black-seeded and procumbent, probably came from central China via either the Silk Route running across the top of the Tibetan Plateau then down into northern India from the northwest or, more directly, through the northeast tip of India (Assam) and Burma, then into Manipur and the Naga Hills just east of today's Bangladesh. The soybeans grown in central India were introduced from Japan, south China, and Southeast Asia, and have distinctly different germplasm from those grown in the north.

At least in north India and Nepal, soybeans have apparently been used as foods for centuries. The earliest efforts to popularize their use were made during the 1930s in India by Mahatma Gandhi and by the Britisher Kale, working with the Maharaja of Baroda. In late 1935 Gandhi wrote several articles about soybeans and soyfoods and published information provided by the Baroda State Food Survey Office in his popular magazine Harijan. The fact that Gandhi's community began growing their own soybeans, and that he praised the soybean's nutritional value and encouraged wider consumption, aroused a good deal of interest in soyfoods in India. One of India's early soyfoods pioneers was Sasanka S. De. He first became involved with soy in 1943 during the great Bengal famine (5,000,000 people starved to death), when he worked with Dr. B.C. Guha of Calcutta University in making soymilk for feeding hundreds of starving infants. Before that time soymilk had not been widely used in India. Noting the excellent results from this work, the Food Department of the federal government established a subcommittee for expanding the production of soybeans in India and popularizing soyfoods, especially soymilk, soy flour, and soy oil.

In 1947 India asked the US to help establish agricultural colleges similar to the US land-grant colleges founded in 1862. Six distinguished US land-grant universities agreed to help. Funding came initially from the US Agency for International Development (USAID) and later from the Ford and Rockefeller Foundations. In 1952 the first contract between USAID and a US university (Illinois) was signed and in 1955 the University of Illinois signed a USAID contract to work with Uttar Pradesh to build an agricultural university. Thus, commercial soybean production in this region began to grow starting in the late 1960s, with India leading the way, followed by Nepal. After 1972 India's soybean production began to skyrocket. Two factors set the stage for potential interest in soybeans in India in the 1960s: first, the new "Green Revolution" varieties of high-response Mexican dwarf wheat was introduced to India. Second, awareness of India's "protein gap" was increasing. Further, according to some sources, the key to the rising yields, seed size, and protein content during the 1960s lay in improved strains and techniques of Rhizobia inoculation and inoculum buildup in the field.

In 1970 the Rockefeller Foundation published a special report on A Partnership to Improve Food Production in India. The soybean and soyfoods were seen as having great promise. Researchers in India were said to see no reason why soybeans there could not repeat the "miracle crop" success story they made in the US. Further, in 1970 Dovring, Jindia, and Misra published Economic Production Possibilities of Soybeans in Northern India . They found that of all legume crops studied,

soybeans were the most profitable based on the criteria of per rupee investment, per rupee return over labor costs, and net profit. "The inclusion of soybeans in the cropping system would increase the income of farmers by 88% without an increase in resources, mainly due to conversion of fallow land. Were cash resources to be increased by 50%, the increase in net returns would be 135% over present conditions."1

Soybeans in Nepal___________________________________________________________________________________Soybean is traditionally grown in rice bunds and terraces of low fertility soils of Nepal. It is an important legume of the midhill, however, soybean is becoming popular as sole crop in terai and inner terai due to high yield potential and high demand of soyameal in poultry industry.2 Large seeded brown, medium seeded black and small seeded white are the major soybean cultivars grown as either mixed and/or relay crop with maize and millet. They are said to have long been grown only in the mid-hills at altitudes of from 915-1,525 meters (3,000-5,000 feet), but in the late 1970s they started to be grown in other parts of Nepal. Traditionally soybeans were intercropped with maize, millet, rice, or pigeon peas, as were other legumes.3 Although the area under soybean in Nepal has been increasing over years because of increasing trend of growing soybean at lower altitudes, production per unit area on national basis has not been increased. The imports of soybean oil and milk in Nepal has increased from NRs 2.39 million in 1978/79 to NRs 738.32 million in 1991/92 (see recent news section). Wide genetic diversity of Nepalese soybean germplasm has not been utilized in breeding soybean in Nepal;the exploitation of local germplasm, improvement in production practices for increased yields and establishment of processing industries are needed.4

Due to lack of marketing facilities, Nepalese farmers grow soybeans for their own food use, but leave a little to sell for food in local markets. Farmers also feed roasted soy flour to their cattle, especially cows and buffalo, during their lactating period in order to get more milk.5

Soybean in International Trade:: International Markets _____________________________________________________Soybean is the leading oilseed produced globally. Of the total global oilseed production, soybean production accounted for 58.9% in 2009/10; whereas of the total oilseed consumption soybean consumption accounted to 56.7%. The production of soybean has increased from 211.21 million metric tons (MMT) in 2008-09 to 257.46 MMT at a growth rate of 21.58%. On the other hand, consumption of soybean increased from 222.16 MMT in 2008-09 to 235.69 in 2009-10 MMT, registering a growth of 6.09%. Increasing price competitiveness, and aggressive cultivation and promotion from the major producing nations have given way to widespread soybean growth-both in terms of production as well as consumption. The United States is the major producer of soybean in the world, accounting for approximately 36% of world soybean production with an annual production of 91.4 million tons in 2009/10, followed by Brazil with 67.5 million tons of annual production. Argentina, China and India, with 54, 14.5 and 8.75 million tons of production, contribute to 21%, 6% and 3% of world production, respectively in 2009/10. China is the major importer of soybean in the world,

1 "Shurtleff, William and Akiko Aoyagi. "History of Soy in the Indian Subcontinent - Part 1." Soy Info Center. <http://www.soyinfocenter.com/HSS/indian_subcon1.php>.2 Shresta, R. "Status and Future Prospects of Pulses in Nepal." <http://www.doanepal.gov.np/downloadfile/Current%20Status%20SAARC_paper-Nepal_1320838291.pdf>. 3 "Shurtleff, William and Akiko Aoyagi. "History of Soy in the Indian Subcontinent - Part 1." Soy Info Center. <http://www.soyinfocenter.com/HSS/indian_subcon1.php>.

4 Sharma, K. P. "Soybean Production in Nepal: Past Achievements and Future Prospects." 1994. J. Inst. Agric. Anim. Sci. 15:19-26..

<http://www.iaas.edu.np/journal/vol-15/soybean-production.htm> 5

"Shurtleff, William and Akiko Aoyagi. "History of Soy in the Indian Subcontinent - Part 1." Soy Info Center. http://www.soyinfocenter.com/HSS/indian_subcon1.php

followed by the EU-27 nations, Japan and Mexico. United States is the major exporter of soybean in the world, followed by Brazil, Argentina and Paraguay.6 About 82-85% of the global soybean production is crushed for oil and meal, while the rest is consumed either in the form of 'bean' itself or for value-added soybean snack foods. The bulk of the crop is solvent extracted for vegetable oil and defatted Soy meal which is used for animal feed. The extracted Soy oil is one of the major sources of edible oil in the world. Soy oil remnant after oil extraction is rich source of protein for livestock. In 2009, soybeans represented 53% of world oilseed production.

GM Soy____________________________________________________________________________________________Genetically modified (GM) soy was first introduced in 1996, principally to make soy crops resistant to herbicides. Although resisted in some regions, notably Europe, GM soy is now grown in many parts of the world. Much of the soy in Latin America is genetically modified to tolerate glyphosate herbicide; This means soy can be sprayed several times with this herbicide during the growing season and all other plants but the soy will be killed. Recently more and more weeds have become resistant to this herbicide and as a consequence new GM soy variations have been developed with multiple herbicide resistance. By 2009, 77% of global soy production was GM an increase of 4.9 per cent on 2008. Countries such as Argentina and the United States are now almost entirely given over to GM soy.China aims to be the world’s largest producer of non GM soy for both internal use and export. India is also a GM free producer.7

Recent News_______________________________________________________________________________________ Edible oil import bill jumps 30 percent in 2011-12 , Kathmandu Post: Despite a 2.44 percent drop in import

quantity, the import bill of edible oil jumped 30.35 percent to reach Rs 17.22 billion in fiscal year 2011-12, thanks to the strong US dollar. Edible oil is the country’s eighth largest import. According to the Ministry of Agriculture Development, the surge in imports is due to a drop in domestic output with farmers turning away from oil seed crops due to high labour requirement and production cost. Atma Ram Murarka, director of Sri Ram Refined Oil Industries, said the import quantity has not increased much, but an appreciation of the US dollar pushed oil prices up in the international market, resulting in the increase in import value. According to Murarka, Nepal is totally dependent on imported soybean and palm oil, while domestic mustard production only meets 15 percent of the market demand.

Moreover, the trend of using vegetable ghee is declining in Nepali households due to its high fat level. Pavitra Bajracharya, president of the Nepal Retailers’ Association, said that households today do not use ghee, which was widely used in cooking in the past, due to its high level of saturated fats. “As a result, demand for vegetables oil has soared in the domestic market.” He added that imports had risen because domestic oil production has not been able to keep pace with demand.

Soybean oil tops the list of imported edible oils with shipments valued at Rs 10.13 billion, up 24.83 percent year on year. In 2010-11, Nepal imported crude soybean oil worth Rs 8.11 billion. Indonesia, Vietnam, India, Argentina, Brazil, Paraguay, Belize and Ukraine are the largest soybean oil exporters to Nepal. Argentina sold soybean oil worth Rs 6.26 billion to Nepal followed by Brazil with Rs 2.40 billion.

Further Reading_____________________________________________________________________________________ Status and Future Prospects of Pulses in Nepal Better Management Practices for Soy: World Wildlife Fund Why Monsanto? Nepali Times Soy Controversies

6 "Soybean." DCX Nepal. <http://www.dcxnepal.com/soyabean.html>. 7 World Wildlife Fund. "Genetically Modified Soy." < http://wwf.panda.org/what_we_do/footprint/agriculture/soy/soyreport/soy_controversies/genetically_modified_soy/>.