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The trouble with Nepal’s agriculture

A group of women working the fields in Banke District in Nepal's Mid-Western Region. About 80 percent of the population is dependent on agriculture as their source of livelihood (June 2012) Phuong Tran/IRIN
Women working the fields in Banke District, mid-western Nepal (June 2012)

Agriculture in Nepal suffers from years of under-investment, limited research, and scant inputs, technology and services for farmers. Unless things change, Nepal may fall into deeper food insecurity and poverty, say analysts.

“Declining resource allocation to agriculture research and development will have direct implications on attaining the objective of poverty reduction, despite investment made on infrastructure,” noted a December 2012 paper by the US-headquartered International Food Policy Research Institute (IFPRI).

While most development plans give high priority to agriculture - which contributes 35 percent to GDP - government investment in the Ministry of Agricultural Development (MOAD) - has declined from 3.7 percent of all government spending 10 years ago to 2.6 percent this year. Meanwhile, overall government spending has doubled since 2006.

While MOAD saw a slight increase in government and donor funding following the 2008 global and national food crisis, its budget dropped this year by 27 percent to US$105 million compared to last year due to political squabbling that delayed agreement on an overall government budget. A partial no-growth budget to continue only ongoing programmes was agreed last November, four months late.

All this has meant a steeper slide into poverty for 66 percent of people nationwide who survive through agriculture.

The average farm size shrunk 36 percent from 1.1 hectares in 1995 to 0.7 hectares in 2010, often too small to generate income above the poverty line. “Despite overall reduction in poverty levels in the country, poverty for those self-employed in agriculture increased by 10 percentage points,” reported IFPRI.

“When investment is low, we cannot have new technology and programmes to generate employment and grow effectively,” explained Devendra Gauchan, agriculture economist and chief of the Socioeconomics and Agri-research Policy Division at the governmental Nepal Agricultural Research Council (NARC).

Extension services

Extension services are strained due to lack of staffing and funding. MOAD’s Department of Agriculture has 378 extension offices nationwide. Every agriculture outreach station serves more than 11,000 farmers; one technician is responsible for an average 1,500 farmers. In developed countries, the average is one per 400.

“We have not been able to provide farmers with the services they need,” said Yagya Raj Joshi, senior agriculture development officer at the Doti District Agriculture Development Office in the country’s Far West Region, known for its rough, mountainous terrain.

He heads a team of 30 staff, responsible for a population of 200,000 - 80 percent of whom are farmers, and 60 percent of whom still depend on increasingly erratic weather for their water.

“Our work is only small-scale,” he told IRIN, that there was no technology to transfer even if there were enough qualified experts to do it.

Most of MOAD’s budget goes on salaries and administrative costs; there is limited money for programming, said Prabhakar Pathak, joint-secretary and spokesperson at MOAD’s Gender Equity and Environment Division.

Compounding farmers’ woes, the current extension service model requires they go to district centres and sub-centres for assistance, leaving growers in remote areas most in need of support going without it, says IFPRI. “On average, rural households require more than two hours to reach their nearest markets or government service centres because of difficult terrain and a lack of transport infrastructure.”


Minimal investment in research has hampered efforts to meet the challenges of increasingly volatile weather, said Gauchan, especially given Nepal’s agro-ecological diversity.

Less than 0.4 percent of the agriculture sector’s GDP is spent on research, far short of the internationally recommended 1 percent. NARC received US$11 million this year, 22 percent less than last year. Only 32 percent of the $11 million was for research. In tight times, money for equipment and maintenance of research labs and farms goes first, which has long-term repercussions, said Hari Krishna Shrestha, an agricultural economist at NARC.

Funding cuts disrupt the breeding, production and distribution of new, improved seeds to farmers, and prevents timely response to emerging pests.

Meanwhile, NARC’s staff numbers are declining. More than 40 percent of the scientists are nearing retirement age, while 32 percent of posts are vacant due to recruitment problems. It is especially difficult to find masters-level entomology, pathology, soil and other hard-science graduates, said NARC’s Gauchan.

Agriculture and animal sciences are niche studies, drawing in only 0.3 percent of higher education enrolment in 2009-10. “Young graduates are not attracted to public sector scientific organizations,” he added.

Loans hard to come by

Inputs needed to increase the land’s productivity - from seed, to fertilizer, machinery, irrigation, and finance - are scarce nationwide.

Farmers hardly get compensation when their crops fail,” said Radha Nepal, a farmer and chairwoman of a maize seed production cooperative in Kashyauli village of south-central Palpa District. “And it is difficult for us to get loans, especially since most of our land is not held in the name of women, and our men have gone abroad.”

The government’s 2012 Agriculture Development Strategy Assessment Report estimated 200,000 youth, especially from rural areas, migrated abroad for employment in 2010, leaving mostly women, children and the elderly behind. Female-headed agricultural households have increased from 12 percent in 1995 to 26 percent in 2010. Yet only 18 percent of women in rural households own houses or land, according to the 2011 census.

In the last decade, the largely government-owned Agriculture Development Bank Limited has moved away from being a primary lender in agriculture, towards housing, vehicles, and commercial development.

In a 2010 analysis, Gauchan found the share of credit provided to agriculture was only 11 percent of the bank’s total lending portfolio due to the perceived high risk of investing in subsistence agriculture.

Some 54 percent of cultivated land in Nepal is irrigated, only 7 percent of households own a pump (not taking into account whether or not that pump actually works), and a mere 1 percent own tractors, power tillers, or threshers. The state-owned Agriculture Inputs Company Limited estimates fertilizer demand to be 500,000 tons, of which only 150,000 was supplied last year.

“On land where we could cultivate three harvests’ worth, we have to settle with only one,” said farmer Radha Nepal. “In the past, we had neither the technology nor the knowledge, now we have them, but we don’t have access to them.”

Bleak future?

MOAD spokesperson Pathak projected a bleak future unless things change: “The agricultural growth rate will decline. The contribution of agriculture to the GDP will decrease. There won’t be food and nutrition security. Agriculture job employment will decline. Youths will be less involved in agriculture, and the speed of income going abroad will increase.”

Some of those changes have already taken root. “Nobody wants to stay in agriculture,” said Sabnam Shivakoti Aryal, a senior agriculture officer at MOAD who is helping prepare a new long-term Agriculture Development Strategy (ADS), which will outline a 20-year vision and 10-year plan for Nepal.

“People are leaving land fallow where crops worth gold and silver can grow, to work as labourers making 10,000 to 12,000 rupees [$115-$139] a month,” said Joshi, the agriculture development officer in the Far West Region.

“If agriculture investment continues to be low, our poverty reduction efforts, and Millennium Development Goal (MDG) targets may not be possible,” added Gauchan. Nepal’s latest MDG progress report found that rural poverty - 28.5 percent - was four times higher than urban poverty - 7.6 percent. The overall MDG 2015 target for poverty is 21 percent.

Many in the government have set their hopes on the forthcoming ADS, with its promise of “sustainable growth in value in an agriculture sector that is more resilient to climate change”. A draft version is expected by March 2013.

Surya Prasad Paudel, a senior livestock development officer at MOAD who is also working on the ADS, listed a few of its preliminary proposals: increasing the share of the national budget that goes to agriculture; increasing the number of extension offices to nearly 900; and gradually committing up to 2 percent of agriculture-generated GDP to research. “If we invest in agriculture today, we will see the impact in 5-10 years’ time,” said Paudel.

The government approved in January 2013 four donor-funded agriculture projects worth $134 million (to which the state is contributing $32.5 million).

But Joshi is not optimistic. “I don’t trust them. So many strategies like the ADS have been developed,” he said, citing the last Agriculture Perspective Plan (APP) (1995-2015), which has seen many of its targets unmet. “I have been hearing that agriculture is the government’s priority since I was a child.”


This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions

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