Becoming a self-sufficient economy is an enticing idea, but what are its costs?

As supply chains, local and international, are disrupted by the Covid-19, we have seen the rise in calls to build a self-sufficient economy. For a country like Nepal whose imports far outweigh the exports, the idea of self-sufficiency is always attractive. One of the ways in which this desire to create a self-sufficient economy manifests is in ‘buying local’.

Buying local is always a good idea. Why buy from producers outside of the country when you can support producers within your country? This proposition appeals to us even more in the situation of crisis, like the present one caused by the Covid-19. We would not have to face a shortage of goods if they were made within the country. But before we draw this conclusion, let’s see what buying local can mean for individuals.

First and foremost, the decisions related to what and who we buy from are always related to personal preferences. Is the product of the quality we are looking for? Is it a good value for our money? Besides these two logical considerations, several factors dictate our decisions around what we buy. One among such factors, one is emotional. Does it make you feel good when you buy a product from a local producer? If it does and supporting local producers is in your interest, go ahead and buy them.

However, the issue becomes problematic when ‘buying local’ gives rise to the idea that a country must be self-sufficient in all goods – okay, not every good. One evident reason for this is it is impossible. Another, not so evident reason is, it is possible. It is possible to become self-sufficient in many goods we consume. Vegetables, rice, pulse, biscuit, chips, clothes, and multiple other products can be produced at home. But, at what cost? Let’s take an example of one product, many of us love to eat and we are self-sufficient in; chicken.

One of the products that Nepal is self-sufficient in is poultry products. Because the country was said to be self-sufficient in poultry, the government has banned the import of poultry, both meat and eggs. This policy protects local poultry farmers and they do not have to compete with imported poultry from India. While farmers and hatcheries reap the benefit of such a protectionist policy, consumers pay the price for it. Only in December last year, hatcheries in Nepal destroyed thousands do chicks to create a supply gap and increase the price of poultry meat. These types of foul play by the poultry producers have made poultry made it expensive for some consumers and unaffordable for many.

The case of poultry should caution us against the government’s anti-competitive policies. When self-sufficiency is idealized, it results in policies like these. Thus, whether to buy from local producers or from others should be left to individual consumers to decide. Buying should be a matter of personal choice, not dictated by the government’s policies.

Bidhyalaxmi Maharjan

Bidhyalaxmi Maharjan

Bidhyalaxmi is working as Research & Communications Assistant at Samriddhi Foundation. She is a Master of Arts student at Madan Bhandari Memorial College.