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Fundamental and Applied Agriculture
Vol. 6(3), pp. 323–335: 2021
doi: 10.5455/faa.89753
AGRICULTURE |REVIEW ART ICLE
Overview of agriculture in Nepal: Issues and future strategies
Pramod Gyawali 1, Saugat Khanal 2*
1College of Natural Resource Management, Agriculture and Forestry University, Tikapur, Kailali, Nepal
2Agriculture and Forestry University, Rampur, Chitwan, Nepal
ARTI CLE INFORM ATI ON
Article History
Submitted: 22 Jun 2021
Accepted: 13 Aug 2021
First online: 29 Sep 2021
Academic Editor
Sharif Ahmed
s.ahmed@irri.org
*Corresponding Author
Saugat Khanal
ksaugat506@gmail.com
ABSTRACT
The Northern upland of Himalayan, southern plain lowland, with the hill in
the arid, make Nepal a potential area for farming different crops. Agriculture
in Nepal is largely based on subsistence farming for the majority of the pop-
ulation and can never be underestimated. Agricultural growth in Nepal has
been low and highly vulnerable in recent decades. The farming system has
changed, management practices have updated, modern technologies have
been adopted, the budget allocation has changed, effective programs and
strategies are launched, and many agricultural reformations are made. Yet,
the pace of agricultural development has not caught the speed as expected.
The production has increased, but not at an anticipated rate. Despite having
outstanding production potential, farmers in the country are continually fac-
ing tremendous challenges. Technological constraints, resource constraints,
and capital constraints are still major problems. Poverty, land degradation,
low agricultural productivity, improper use of budget and subsidies, lack
of agricultural inputs, poor governmental support, etc. have impeded agri-
cultural development. The simultaneous increase in population on one side
and reduction in cultivable land on the opposite side has been a challenge to
cope up with for maintaining food security. In the long run, agriculture is a
very important question for planners and everyone. The government and
other organizations are trying to address the key challenges of agriculture in
Nepal so that agricultural production in Nepal can sustain in the future.
Keywords: Agriculture, constraints, Nepal, production, trade
Cite this article:
Gyawali P, Khanal S. 2021. Overview of agriculture in Nepal: Issues and future
strategies. Fundamental and Applied Agriculture 6(3): 323–335. doi: 10.5455/faa.89753
1 Introduction
Climatic diversity, even in a small area of territory, is
a unique geographical feature of Nepal ranging from
subtropical to arctic in high mountains (Acharya and
Kafle,2009). Farming patterns and production poten-
tial differ with ecological zoning i.e., Terai, Hill, and
Mountain (Chalise et al.,2019). Though agriculture
in Nepal has been practiced since time immemorial,
the productivity of crops seems to be unsatisfactory.
The sluggish development of agriculture has failed
to keep pace with the increasing population of Nepal
which is estimated to be 1.85% in the year 2020 (De-
shar,2013). Since the majority of the country’s pop-
ulation (66%) and 64% of the total household (DVN
2018/19) relies on farming directly or indirectly for
their livelihood, it is important to understand the fac-
tors that impede the production of agricultural crops
in Nepal. The main objective of the study is to iden-
tify and highlight the major factors that are limiting
the production of agricultural crops in Nepal as well
strategies to promote better production of crops. Al-
though a large percentages of people are engaged in
farming, the contribution of agriculture to national
GDP is in decreasing trend in few past years. In the
year 2016, agriculture contributed 29.15% of the total
national GDP. Further, in the year 2017, only 27.08%
of the National GDP was contributed. The trend is
still declining and it is 24.26% in the year 2019 (MOF,
2020).
Increasing population, increasing average income,
and globalization effects in Nepal have increased de-
Gyawali and Khanal Fundam Appl Agric 6(3): 323–335, 2021 324
mand for quantity, quality, and nutritious food, and
variety of food. Rapid unmanaged urbanization, plot-
ting of cultivable land for residential and industrial
use have further limited the area of cultivated land.
Therefore, pressure on decreasing available cultivable
land to produce more quantity, variety, and quality
of food has increased. Farmers mainly small hold-
ers have poor access to modern technology, required
input and credit (Thapa et al.,2019). The poverty
reduction plan and economic growth of Nepal are
driven largely by the growth of its agriculture sector,
which contributes substantially to GDP. The sector is
important to increase income, mitigate poverty, and
improve the living standard of people where about
80 percent of the people are rural (FAO,2020).
2 Agriculture aiding economy
and health
Agriculture is the cornerstone of the Nepalese econ-
omy and employ two-third of the country labor force
which is approximately 8 million peoples (MRSMP,
2017). The role of agriculture in the economic up-
lifting of Nepal is very high. It contributes approxi-
mately 24.26 percent of the national GDP Fig. 1. There-
fore, it fairly deserves the topmost concern because
the economy is still caught up in the initial stage of its
development where the income generated through
the industrial and service sector depends upon the
development of the agriculture sector. In 2019, ap-
proximately 50 percent of Nepal’s GDP was from its
service sector. Agriculture contributed the second-
largest amount, while just 13% came from the indus-
try sector. Elimination of poverty and malnutrition
is one of the promising factor of agriculture. Lack of
hybrid seeds, fertilizers, use of old and traditional
farming technique have caused hindrances for the
ample production of crops. This has created food
insecurity in the nation leading to malnutrition and
poverty. Fig. 2 shows the percentage of malnourish-
ment in Nepal due to food deficiency.
3 Agriculture in the past
Traditional agriculture was dominantly subsistence
type. The concept of growing crops for commercial
purposes was not developed. The government of
Nepal has prioritized the importance of agriculture
for the last few years. Different plans and policies
have been introduced which are aimed at increas-
ing the productivity of crops by proving subsidies,
improving irrigation systems, introducing improved
and hybrid seeds and introducing modern farming
techniques in Nepalese farms. Analyzing the pro-
grams and policies, the first periodic plan was in-
troduced in the year 1956 with a budget allocation
of 12 million rupees in agriculture (Adhikari,2015).
Further, the five-year plan (1975-1980), nine-year plan
(1997-2002), and thirteen-year plan (2013/14-2015/16)
are also contributed to improving the agricultural
sector of Nepal (Adhikari,2015). The government
focused on irrigation, the introduction of denotified
and hybrid varieties, use of fertilizers and pesticides.
Further, research activities in agriculture flourished
after the establishment of the National Agriculture
Research Council in the year 1991 as an autonomous
organization under the "Nepal agriculture Research
Council Act – 1991" with an aim to uplift the economic
level of people. Land under irrigation increased from
6,200 hectares in 1956 to 583,000 hectares in 1990 and
reached to 1,433,287 hectares till present (MOEWRI,
2019). The use of chemical fertilizer introduced in the
1950s, climbed to about 47,000 metric tons by 1998
and to 344,004 metric tons by 2020 (MOALD,2020).
Prime Minister Agriculture Modernization Project
(PMAMP) was initiated in the year 2016/17 to in-
crease agricultural production and productivity with
a budget of Rs 5.78 billion rupees (MOF,2016). This
project was supposed to make Nepal self-reliant in
fruits and vegetables in the next year 2017/18, in rice
and potato within 2 years, in maize and fish within
3 years, in banana, papaya, and litchi within 4 years,
in kiwi, apple, orange, junar, and mango within 10
years (MOF,2016). Budget allocation for agriculture
also increased prioritizing the importance of agricul-
ture in building the national economy. In the year
2002/3, 2.52% of the total national budget was al-
located for agriculture which increased to 2.75% in
the year 2009/10 and 3.77% in 2014/15 (MOF,2015).
In the year 2020/21, the budget for the agricultural
sector was increased by 6.6 billion rupees than the
past year 2019/20 and was made 41.40 billion rupees
(MOFE,2019) which is 2.18% of the total national bud-
get. If we analyze the budget allocation in the agri-
culture sector, the budget allocation does not seem to
be satisfactory. In the year 2015/16, 26 billion rupees
were allocated for the agriculture sector (MOF,2015).
With a slight increase in budget, 35.86 billion rupees
were allocated in the year 2016/17 (MOF,2016). Fur-
ther 34.80 billion and 41.40 billion rupees was sepa-
rated for the agriculture sector in the year 2019/20
and 2020/21 respectivelyFig. 3 (MOF,2020).
4 Agriculture in the present
Out of the total 147,181 square kilometer land area
of Nepal, agricultural land is 29% of total land use
that is 4,123,120 hectares (out of which 21% is un-
der cultivated and 7% is uncultivated), forestry 29%,
shrub land 10.6%, grassland, and pasture 12% and
water 2.60% (MOALD,2020). Nepal gained much
speed in agriculture development in past few years.
But, poverty, insecurity towards newly released hy-
Gyawali and Khanal Fundam Appl Agric 6(3): 323–335, 2021 326
Figure 3.
Budget Distribution in the agriculture sector in different years in the percentage. Source: MOF (2020)
1%
13%
15%
25% 46%
Permanent crops
Permanent meadows
Arable land
Forest land
Others
→1%
Figure 4. Distribution of total area of Nepal. Source: FAO (2020)
Gyawali and Khanal Fundam Appl Agric 6(3): 323–335, 2021 327
brid varieties, lack of extension activities and risk
factors (price and market risk, financial risk, risk of
sudden pest and disease outbreak) diverted farmers
to subsistence farming. Only 25.1% of farmers are
doing commercial farming and the remaining 75.9%
are doing subsistence farming (Simkhada,2019). The
production of cereals, cash crops, and pulses has sig-
nificantly increased in the few past years (Table 1)
but is still not sufficient for the increasing population.
More than one-fourth (26%) of the agricultural land-
holders in Nepal are women, while the majority of the
farm (53%) are small-scale farms with landholding
of not more than 0.5 hectares and the remaining 20%
are large-scale farms with landholding of more than
1 hectares (FAO,2020). Permanent crops contribute
only 1% of the total land under cultivation, 13% per-
manent meadows, and 15% arable land as shown in
Fig. 4 (FAO,2020).
New policies have been made to increase agricul-
tural production in recent years. Ministry of Finance
has allocated 41.40 billion rupees in the fiscal year
2020/21 for improving agriculture production status
which is almost 6.6 billion more than the past year
2019/20. New concepts of food banks have been in-
troduced to maintain stock of foods and to establish
200 food storage centers to ensure the prices of agro
products. For these 1 billion rupees has been allo-
cated (MOF,2020). Further, a new concept of “land
bank" has been proposed which is supposed to be es-
tablished in coordination with federal state, and local
government in the upcoming year 2021/22. Irriga-
tion has been prioritized with a budget of 27.96 billion
rupees and 3.22 billion for the Prime Minister Agri-
culture Modernization project to become self-reliant
in agriculture products in the coming years (MOF,
2020). The Prime Minister Agriculture Modernization
Project has so far developed infrastructures like 583
customs hiring centers, 369 post-harvest centers, 205
high-tech, and semi-high-tech nurseries, and green-
houses. Total 18 industries, cold storage, agricultural
produce storage, and laboratories are established. The
project has so far mobilized 664 student interns study-
ing graduate level in agriculture (ES,2019).
5 Trade scenario of agricultural
commodity
The government of Nepal has introduced many plans,
policies, and other initiatives to reduce the trade
deficit (Table 2). In this context, geographical sce-
nario, resource tools, available technology, local agri-
cultural workers necessity, sustainable development
goals, National agricultural policy, comparative ben-
efit, and Nepal’s international treaties are the com-
mitments of the nation and have the main goal of
replacing and filling the gap of trade deficit (Magar,
2019). Policy and legal framework have been made to
fill the gap existing in the trade of Nepal with other
countries (Fig. 5). Nepal ranks 3rd in cardamon ex-
port in the world with an export value of 20,437 USD
in 2010 and 46,146 USD in the year 2015 (MRSMP,
2017). Further, 235,000 MT of ginger was produced
in the year 2013, out of which 65% was exported.
In addition, Nepal exports high-quality cardamoms,
lentils, crude material, tea, fruit juice, ginger, and
other agricultural commodities worth 190,144 thou-
sand USD (Fig. 6). At the same time, Nepal imports
high-quality soyabean oil, rice, palm oil, maize, rape-
seed, jute, and other agricultural commodities worth
950,397 thousand USD (Fig. 7). Until mid-March of
the fiscal year 2018/19, the food and livestock exports
have declined by 9.9% to Rs.12.67 billion compared
to the export during the fiscal year 2017/18. During
this period, exports of tobacco and beverages have
increased by 7.7% to Rs.1.7 billion. Export of oil and
fat based on vegetable and animal products has in-
creased to Rs.5.8 billion. During this period, the im-
ports of food items and animals have increased by
13.8%, tobacco, and beverage by 17.1%, and vegetable
oil and animal fat by 15.3% with a total amount of
agricultural imports worth Rs.138.06 billion. During
this period, the export of agricultural goods equiva-
lent to 31.1% of the total commodity export has been
exported and import of agricultural goods equivalent
to 14.6% of the total imports have been imported (ES,
2019). At the same time trade deficit of 760,250 thou-
sand USD was reported in the year 2013 (MRSMP,
2017). This trend increased by a trade deficit of 1133
million USD in 2014/15 (MRSMP,2017), 1321.43 bil-
lion Nepalese rupees in 2018/19, and 1100 billion
Nepalese rupees in 2019/20 (MOF,2020). The trade
deficit is increasing every year with a high import,
export ratio 15.3:1 (MOF,2020) which shows the de-
pendence of Nepal on other countries. Due to the
shrinkage of agricultural production in present years
and decreasing interest of new generation towards
farming, food import has increased significantly. This
is an alarm that the Nepal government should not
underestimate the current situation. This can lead
Nepal to a high vulnerability of food insecurity, mal-
nutrition, and future hunger hazards.
6 Constraints and challenges
Nepal’s long-term agricultural development is at risk
due to climate change events, outmigration of the
labor force, loss and degradation of lands, environ-
mental pollution, lack of adequate holistic policy, in-
vestment framework and land fragmentation for agri-
cultural development (Deshar,2013). Further, land
degradation (Gupta,2019), high transaction fee, low
capacity to bear risk, and low input access (Thapa
et al.,2019) has challenged food security in Nepal.
Agricultural productivity and profitability from farm-
Gyawali and Khanal Fundam Appl Agric 6(3): 323–335, 2021 328
Table 1. Production status of major cereals, cash crops, pulse crops and other crops in Nepal
Crops 2016–2017 2017–18 2018–19
Area Production Area Production Area Production
Cereal crops
Paddy 15,52,469 52,30,327 14,69,545 51,51,925 14,91,744 56,10,011
Maize 9,00,288 23,00,121 9,54,158 25,55,847 9,56,447 27,13,635
Wheat 7,35,850 18,79,191 7,06,843 19,49,001 7,03,992 20,05,665
Millet 2,63,596 3,06,704 2,63,497 3,13,987 2,63,261 3,14,225
Buckwheat 11,090 12,039 10,296 11,472 10,311 11,464
Barley 27,370 30,510 24,648 30,510 24,409 30,550
Total 34,90,663 97,58,892 34,28,986 1,00,12,742 34,50,163 1,06,85,550
Cash crops
Oilseeds 2,07,978 2,14,451 2,24,595 2,45,867 2,60,307 2,80,530
Potato 1,85,879 25,91,686 1,95,173 28,81,829 1,93,997 31,12,947
Sugarcane 70,807 32,19,560 78,609 3679508 71,625 35,57,934
Jute 7477 11018 7507 11,159 7,285 10,585
Cotton 143 127 120 125 97 99
Rubber 700 805 555 296 476 249
Pulse crops
Lentil 2,06,969 2,54,308 1,98,605 2,49,491 2,08,766 2,51,185
Chickpea 9,933 10,969 9,882 11,271 9,653 10,675
Pigeon pea 17,091 16,497 16,428 16,211 16,753 16,538
Black gram 23,429 19,499 24,305 20,839 23,492 19,928
Grass gram 8,075 9,354 7,757 9,187 7,952 9,329
Horse gram 6,351 5,690 6,205 5,664 6,119 5,754
Soybean 23,563 29,061 21,897 27,681 25,179 31,567
Other crops
Fruits†1,10,501 10,18,308 1,11,744 10,86,931 1,20,023 11,77,640
Vegetables 2,77,393 37,49,802 2,86,864 39,58,230 2,97,195 42,71,270
Tea 28,522 24,653 28,595 28,804 28,732 25,206
Coffee 2,646 466 2,650 513 2,761 530
Chili 10,077 49,718 10,500 52,500 10,692 67,167
Large cardamom 17,002 6,521 17,004 6,849 18,273 7,954
Ginger 22,649 2,79,504 23,000 2,84,000 22,132 2,97,512
Garlic 8,116 56,668 8,500 59,500 10,107 71,902
Turmeric 6,777 65,999 7,300 71,500 10,107 71,902
†= productive area
Gyawali and Khanal Fundam Appl Agric 6(3): 323–335, 2021 329
Figure 5. The trend of the trade deficit in Nepal. Source: TEPC (2020)
ing are low due to the low use of modern technolo-
gies, limited commercialization, and diversification
of agriculture.
6.1 Hijacked subsidy
Being an agrarian country, the government has devel-
oped policies to enhance production, food security,
cope with hunger and poverty by providing subsidies
in the production process of the agricultural commod-
ity. Agricultural subsidies are aimed to make inputs
easily available to the farmers at a reasonable cost
to enhance farm productivity and profitability (Tim-
ilsina,2019). Currently, the government has allocated
18 billion rupees to provide subsidies every year and
has planned to provide 10,000 youths Rs 14.39 bil-
lion as a concessional loan (Timilsina,2019). But,
the subsidy provided by the government is hijacked
between the government officials and the farmers.
If the subsidy is on the right hand then, why still
marginal farmers are starving because of their finan-
cial scarcity? Corruption being one major reason for
such activity. Transparency indicator ranks Nepal as
117th most corrupted country out of 180 countries
with 33 scores out of 100. There raises a question on
who has access to subsidies poor or non-poor, farm-
ers or not. There is a need for research, knowledge
dissemination, capacity building, and an effective
framework for achieving the aims and goals of sub-
sidy.
6.2 Land degradation
Land degradation is an agricultural issue that has
limited the production of an agricultural commodity
in Nepal. Land degradation means declination of
land quality or potential productivity of land due to
physical, chemical, and biological processes. Which
are induced by human activities (Acharya and Kafle,
2009). These activities include soil erosion, acidifi-
cation, leaching, salinization, a decrease in cation
retention capacity, a decline in biodiversity, and de-
pletion of nutrients (Acharya and Kafle,2009). Most
of the land of hills is fragile and vulnerable to land-
slides whereas, terai is threatened by regular flooding
and deposition of sediments. During the past 6-7
decades, over 35% of the total arable land has been
degraded due to human, induced activities (Gupta,
2019). Different studies have shown that about 64
t/ha of soil is eroded annually in the Siwalik hill,
22t/ha per year in the barren lands of the Koshi basin
of Nepal (Chalise et al.,2019), and a mean soil loss
rate of 11.17 t/ha/year in Aringale Khola watershed
of Nepal. Soil is being lost from agricultural areas
10-40 times faster than the rate of soil formation (Pi-
mentel and Burgess,2013) which has challenged hu-
man food security (Table 3). Further, it is estimated
that 3.16 million hectares have been affected by the
degradation process which included 38% of forest
land, 37% of pasture land, and 10% of agricultural
land (TARLD,2008). Researches have shown that
eroded soil has 1.3-5 times more soil organic matter
than the soil left behind (Pimentel and Burgess,2013)
leading to low production. About 16.6 t/ha of the
soil loss was estimated in the maize growing hills of
Nepal which resulted in the annual loss of 188kg or-
ganic carbon, 18.8 kg nitrogen, and 3.8 kg potassium
per hector (Chalise et al.,2019).
6.3 Insect and diseases
Insect and disease management is an important issue
in Nepal. Among the total pesticide consumption,
14-12% is used in pulses, 40-50% in rice, 10-20% in
vegetables and fruits, 13-15% in fiber crops (Manand-
har and Palikhe,1999) which indicates the severity of
Gyawali and Khanal Fundam Appl Agric 6(3): 323–335, 2021 330
010 20 30 40 50 60
Tea
Other textile†
Jute fabric
Juice
Cardamom
Woolen carpets
Refined soybean oil
Refined palm oil
Others
2.85
2.94
3.23
3.51
4.11
6.3
12.99
18.75
45.32
Percentage %
Figure 6. Agriculture export shares in Nepal. †= except cotton and woolen products. Source: MOF (2020)
0 5 10 15 20 25
Rice
Crude soybean oil
Butter
Milk and cream
Onion
Garlic
Potato
Vegetables
Dried lentil
Maize
16
13
1
5
23
2
25
2
12
2
Percentage %
Figure 7. Agriculture imports shares in Nepal. Source: MOF (2020); MOALD (2020)
Gyawali and Khanal Fundam Appl Agric 6(3): 323–335, 2021 331
insect and disease in Nepalese crops. Among, com-
mercial crops grown in Nepal, cotton receives the
large portion of pesticides (2,560 g/ha) (Ghimire and
Khadka,2005). The increase in the incidence and
severity of viral disease and pests have created signif-
icant yield loss in Nepal. Viral disease of rice (Rice
tungro virus and rice dwarf virus), Potato (PUX and
PUV), tomato (Yellow leaf curl virus), Maize virus
(Maize leaf fleck virus and maize mosaic virus) are
identified as minor diseases in Nepal (Poudel and
Khanal,2018). Further, soybean mosaic virus, tobacco
ring spot virus, scab, canker and bacterial wilt are
common and frequently occurring diseases in Nepal
(Poudel and Khanal,2018)). For every degree Celsius
rise in temperature of earth’s surface, insect losses
in 3 major grains crops; maize, rice and wheat can
increase up to 10-25% (Deutsch et al.,2018). In Nepal,
insect and pest infestation can cause loss of about
60% in potato (Giri et al.,2013), 10-100% in maize de-
pending upon maize storage structure and physical
environment (Paneru et al.,2018). In Nepal 20-25%
of the agricultural production is lost due to pests like
insects, rodents, mites, and others (Bhandari et al.,
2012).
6.4 Weed
Weeds are the problematic unwanted plants in the
fields that causes, 33.16% yield loss in food crops,
41.26% in cereals, 31.88% in pulses, 40.82% in oilseeds,
34.23% in fiber crops, and 40.28% in rice crops (Karim,
1998). Further weed competes for water, nutrients,
and space with crops. The competitive ability of weed
depends on the density of crop and weed, environ-
mental conditions including weather, soil condition,
management practices, and minerals and nutrients
present in soil (Karim,1998). Weed causes 16-86% of
yield loss in rice field in Nepal depending upon the
density, cropping pattern and planting space (Paudel
et al.,2017). Further, yield loss of 117% and 108%
were reported in Maize crop due to weeds Ageratum
conyzoides and Polygonum chinensis in Baglung and
Parbat districts of Nepal respectively (Karki et al.,
2014). Higher grain yield (7.7 t/ha) was found on
weeded field on rice than on unweeded field (1.8
t/ha) in Lamjung district of Nepal (Paudel et al.,2017)
which shows the limitation of crop yield due to weed
infestation.
6.5 Climate change
Climate change has been a serious issue regarding
the pattern of growth and development of plants.
In a report by MOFE (2019), the mean temperature
has been estimated to increase by 0.9-11
°
C in the
medium-term period [2016-2045] and 1.3-1.8
°
C in the
long-term period (36-65
°
C). It has been shown that
since the years 1975 to 2005, Nepal has been warmed
by about 0.6
°
C per decade (MOFE,2019). The rapid
growth of carbon dioxide and other greenhouse gases
has affected agriculture, forestry, biodiversity, ecosys-
tem (Malla,2009). The frequency of drought, severe
floods, landslides, and mixed types of effects on crops
have increased rapidly in the nation (Malla,2009). In
research carried by the NARC, to study the effects of
carbon dioxide, temperature, and rain on the yield of
rice and wheat, showed a positive effect in all regions,
but negative effects on maize yield in the terai region.
The yield of rice and wheat increased by 26.6% and
18.4% while doubling the quantity of carbon dioxide
and 17.1% and 8.6% due to increased temperature re-
spectively (Malla,2009). Further, vegetables are more
sensitive to environmental extremes such as increased
temperature, carbon dioxide, soil moisture stress, and
greenhouse gases which influence the growth and
development of the plant (Naik et al.,2017).
6.6 Plotting land for residential use
If we analyze the data of the total agricultural land
(1% of land area) in Nepal, in 1961, only 24.846% of
the total land area was under cultivation (WB,2018).
The percentage of land under agriculture increased
till 2001, with 29.71% of the total land area. But,
with the increased population and residential plot-
ting of agricultural land, the agricultural land shrank
to 28.748% by the year 2018. A total of 0.962% of the
agricultural land is lost which is equals to 1419.1 km
2
of land (WB,2018).
6.7 Fragmentation of land
Agricultural land has been continuously fragmented
for residential purposes and development work
mainly in the terai region of Nepal (Shrestha,2011).
Fragmentation of land has created many negative
impacts such as reduce the slope of mechanization, ir-
rigation, soil conservation and thereby decreasing the
quality and quantity of the food product (Timilsina
et al.,2019). Further, the number of land parcels has
significantly increased from 10975 thousand to 12096
thousand from 2001 to 2011 respectively (CBS,2013)
which supports the fact of increasing land fragmenta-
tion in Nepal.
6.8 Huge price gap
There is a huge gap between the price farmers re-
ceive for their agricultural commodity and the price
consumers have to pay due to the Presence of bro-
kers. These brokers buy the commodity at low prices
with the framers and sell them at high prices to the
final consumers. This results from the low net return
to the farmers which discourages them from further
production of agricultural commodities. There are
also a few cold storages running across the country.
Gyawali and Khanal Fundam Appl Agric 6(3): 323–335, 2021 332
Table 2. Different trade policies and Legal framework of Nepal
Policies and legal
frameworks
Trade Policies Agricultural policies Common policies
International
conventions, treaties
Indo-Nepal trade treaty,
China-Nepal trade treaty,
SAFTA, BIMISTEC,
WTO, OBOR
ITPGRFA, CBD AOA, TRIPs, SPS
National policies,
strategies, framework
Supply policy, Trade pol-
icy, NTIS, Industrial
policy
14th plan Agriculture
policy, Seed policy,
Seed Vision, Livestock
Husbandry policy
ADS, Agri-business
promotion policy,
National Coffee policy,
Dairy policy, National
Tea policy, Floriculture
promotion policy
National legal
framework
Competition Promotion
and Market Protection
Act, SEZ Act, Export and
Import Act, 2013
Plant protection act
and rules, The pesti-
cide act 1991 and Reg-
ulation 1993
Industrial Trade Act,
Custom Act 2007
Source: MRSMP (2017)
Table 3. Land area under degradation in Nepal
# Land use category
Degraded
area (M ha)
Total land
area (M ha)
% of degraded
land
1 Forest (poorly managed 2.10 5.828 36.02
2 Agriculture (poorly managed slopping terraces) 0.29 2.969 10
3 Pasture/rangeland (degraded) 0.647 1.75 37
4 Areas damaged by floods and landslides (1984-2003) 0.106 11.551 0.92
5 Forest encroachment 0.119 5.828 2.04
Nepal 3.262 11.551 28.24
M ha = million hectare
Only 35 cold storage with an average size of 3,000
metric tons and average annual storage of 1,560 met-
ric tons capacity are underuse (FNCCI,2005). The
annual fresh vegetable production in Nepal is 4,271,
270 metric tons (MOALD,2020). If we calculate only
54,600 metric tons of agricultural commodities can
be stored on average per year. Lack of availability of
cold storage further increases the price rate of agricul-
tural commodities in the off-season than at the season
period.
6.9 Delay in fertilizer import
Nepal fully depends upon its neighboring countries
like India and Bangladesh for a fertilizer that is used
for the production of agricultural commodities. The
agriculture ministry records show that the annual de-
mand for chemical fertilizer is around 800000 tons
while only 386000 tons of chemical fertilizer is im-
ported (MOAD,2016). Further, subsidized fertilizers
cover one-fourth of the country’s total need, while the
other portion of demand is met by informal imports
or shipments. The majority of farmers in hills still
use FYM as a major source of fertilizers. The FYM
used is also prepared by the traditional method which
contains only some traces of minerals and essential
nutrients. In this regard, the application of chemical
fertilizer is most for satisfactory production. But, due
to delays in fertilizer import, farmers don’t get them
on time resulting in a yield decline.
6.10 Lack of extension services and poor
teaching system
There exists a gap between research workers, their
findings, and the farmers. Still, many farmers deny
planting hybrid, high-yielding varieties. Major issues
found publicly extension systems are lack of motiva-
tion among the agricultural youths, farmers; natural
resources degradation and global climate change and
sustainability issues; the inadequate number of the
extension workers and their qualification and skills;
Gyawali and Khanal Fundam Appl Agric 6(3): 323–335, 2021 333
inadequate infrastructure and capacity to be used
of ICTs among the bottom level extension workers;
lack of monitoring and assessment of the impact of
extension activities in rural farmers; low level of need-
based extension coverage particularly for tiny farm-
ers; ineffective and weak linkages between stakehold-
ers at different levels; low level of education of farm-
ers; insufficient budget and investment for extension
activities; domination of supply-driven approaches
instead of demand-driven; inadequate extension ser-
vices in parts of import addition and market exposure
(Dhital,2017). The extension works are concentrated
on some of the lower land areas of Terai region. Hills
and Himalaya regions are mostly neglected. There ex-
ists a gap between theoretical knowledge and practi-
cal knowledge as our universities are poorly managed
and cannot provide good practical knowledge to the
students demanding to study agriculture. Our uni-
versities rely on the old and outdated course syllabus.
Universities focus on a theoretically based knowledge
system and keep practical knowledge aside. Innova-
tion of new technology is never been heard rather
the equipment and technologies within the universi-
ties are old, useless, and outdated. Only theoretically
based graduates will never understand the problems
of farmers.
7 Conclusion & Recommendation
Nepal has a lot to improve in its agricultural sector.
The condition of agriculture in Nepal is dim and
needs some strong and concrete strategies to cope
with these limitations. In a long run with the same
performance, no agricultural development can be ex-
pected and this can lead nation to severe food short-
age in near future. So, the country should emphasize
the extension activity and should flow the informa-
tion to our farmers. Developing a landlocked coun-
tries like Nepal, agriculture needs to be focused on
most. Farming must adapt to new realism and amal-
gamate between tradition and innovation. For exam-
ple, organic farming could open up as a profitable
source for internal consumption as well as export,
as has already started to happen. Major constraints
in agriculture development in Nepal are improper
use of subsidies, land degradation, insect and dis-
ease outbreak, weed infestation, climatic constraints,
the huge gap between farm-gate prices to consumer
prices, losses of agricultural lands for construction
work, and residential use. There are tremendous op-
portunities for the successful establishment of agricul-
ture in Nepal. But for this, the constraints are needed
to be addressed.
The following recommendations have been made
to cope with the constraints:
1.
Government must, as a matter of necessity,
should adopt plan, policies and strategies to en-
gage youths in agriculture by generating neces-
sary subsidies, and loans through micro-finance
banks, commercial banks, and development
banks with minimum interest.
2. The Government through its agencies needs to
identify the hijacked subsidies and fund losses.
For this, a separate commission has to be estab-
lished or the present commission needs to be
more alert and active.
3.
There must be the provision of the government-
to-government process to import necessary
fertilizers, tools, and equipment to eliminate
the corruption that has been flourishing for
decades.
4.
Plans and policies need to be developed that
can deploy modern agricultural practices in
Nepalese farm.
5.
The Government through its agencies should
seek to increase the extension programs to fill
the gap that exists between research workers
and the farmers. Dissemination of research find-
ing from researchers to the farmers is necessary
for the adoption of new technology and vari-
eties.
6.
Policies and programs are often made but not
implemented. Funds through budget allocation
are lost due to corruption and for other unnec-
essary administrative works which need to be
strictly checked and controlled.
Conflict of Interest
The authors declare that there is no conflict of inter-
ests regarding the publication of this paper.
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