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Innovation in Nepal: Lessons on economic freedom from a farmer-entrepreneur

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Agriculture is a way of life for the people of Sugauli Birta, a small village in Nepal. But while farmers invest much of their time and energy in their crops, they often spend long hours traveling across the region to have their grain and rice ground by regional mills. Such journeys are a drain on productivity and opportunity, diverting attention and resources away from their land, families, and community.

Fortunately, a local entrepreneur, Lorik Prasad Yadav, had an innovative idea that would solve this problem—saving time, cutting costs, and creating more value in the “intangibles” of daily life. Lorik invested in a tractor and three threshers, constructing a “mobile mill” that would allow for streamlined, transportable service to individual farms. His business has thus far been a success.

Food is a necessity, and Lorik has made it easier, cheaper, and quicker for thousands of people in and around Sugauli Birta to process their crops,” writes AJ Skiera. “He keeps his prices low, charging only 15 NPR per 10 kilograms of grain—and he even leaves the chaff behind so that local farmers can recycle it as organic fertilizer or feed for their livestock. His customers save their chaff, save money, and save themselves the exhausting, multi-hour trip to town.”

The bad news: Nepal’s enterprise laws won’t allow for it, requiring a permanent address for a business to operate. Soon enough, Lorik’s larger competitors (the regional mills) used these laws to threaten and pressure his business out of existence.

In a short film from the Atlas Network, we learn more about Lorik’s story, as well as how local organizations and activists are working to change these laws and provide more economic freedom to the people of Nepal.

Lorik is still unable to operate legally, but with the support of his customers, he was at least able compromise with the regional mills, allowing him to still support local farmers as long as he doesn’t encroach on his competitors’ terrain.

It’s an arrangement that works better than the previous status quo, offering a solution to those distant farmers. But the fact that a negotiated deal was even necessary shows how much creativity is being constrained and squandered by a dysfunctional government. What could Lorik’s business do for other communities in the region if he were allowed to continue innovating and expanding his mobile model to new areas and economies?

I would certainly benefit from being able to run my business legally, without being held back,” Lorik explains in the film. “It would help me raise my kids and provide for them. I bring all my earnings from the thresher operation to my family. We eat together. We share what we have.”

As Skiera explains, these barriers stem mostly from overall political instability, a reality that is driving many of Nepal’s aspiring workers and entrepreneurs to seek opportunities elsewhere:

Nepal has had 27 governments in the last 28 years, and the tentative reforms of one administration are often rolled back by the next. That lack of political stability prevents the modernization of laws that might otherwise encourage more people such as Lorik to create new ways to add value to their communities.

That instability has put in place many barriers to prosperity and opportunity, and the lack of opportunity at home is driving a massive outmigration of Nepal’s youth. Today, about 1,500 of Sugauli Birta’s young men and women are living and working in the Gulf countries. In Lorik’s case, his business doesn’t have a stationery address, which it must have in order to be registered. Because he can’t register, he doesn’t exist—which means he has no access to credit or other tools that might help his business grow. Enterprising young people such as Lorik have become handcuffed by policies that destroy the value they’ve worked hard to create. And so they leave.

So what might we learn from such a situation?

Much of Lorik’s story reminds us of the creativity and resiliency of the human person. Despite harsh economic circumstances and a range of government barriers, Lorik continues to persevere and overcome those obstacles to better his community. Regardless of the restrictive actions of his government and arm-squeezing by various competitors, he understands that his contribution can continue. It flows from someplace else.

But such a revelation also brings a political lesson, one that ought to inform how we unleash human creativity and meet human needs in any cultural or economic environment—whether amid the seeming simplicity of Nepal’s agrarian life or the technological complexity of Silicon Valley or Wall Street.

Lorik was not allowed to legally operate his business because the policymakers (at the time) never imagined that such a solution was even possible—a problem of the foreseen and unforeseen. That’s a policy challenge, but it’s one that stems from a stilted economic imagination.

What are we expecting from the people in our communities? What are they capable of right now, regardless of their circumstances? What is their creative capacity, and how can we best allow them to apply that creativity to meet human needs and connect their communities?

Only when we answer that question correctly—expecting the Loriks of the world to innovate and create and serve and grow, no matter the natural obstacles or competitive threats—will we be able to channel that purpose and tailor our systems accordingly.

Image Credit: Bernat Parera/Atlas Network

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Joseph Sunde is an associate editor and writer for the Acton Institute. His work has appeared in venues such as The Federalist, First Things, The Christian Post, The Stream, Intellectual Takeout, Foundation for Economic Education, Patheos, LifeSiteNews, The City, Charisma News, The Green Room, Juicy Ecumenism, Ethika Politika, Made to Flourish, and the Center for Faith and Work. Joseph resides in Minneapolis, Minnesota with his wife and four children.

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