Agriculture

Agriculture is the base of livelihood, employment, and economic and social transformation which has also been a major sector of Nepal's economy. The agricultural sector can be the foundation of a productive economy only through the modernization and commercialization of agriculture. Keeping this fact in mind, programs are being implemented to increase production and productivity, food security, and create employment through the modern and commercial farming system. A health strategy has come into force to strike a balance between public health, animal health, and environmental health. So far 48,781 individuals have got full employment and 443,467 individuals have got partial employment in various employment generation programs implemented under the Prime Minister Agriculture Modernization project. In the current fiscal year, the agriculture industry contributes23.9 percent to the economy. The Gross Value Added (GVA) has been expected to have a growth of 2.3 percent. According to the Nepal Labor Force Survey of 2008, 73.9 percent of the population was engaged in agriculture sector, but in 2018 the proportion has decreased to 60.4 percent.

Production Status of Agricultural Sector

Of the total production of the agriculture crops during the current fiscal year, the share of food crops is estimated to be 44.3 percent, vegetables 17.1 percent, cash crops 15.3 percent, industrial crops 13.2 percent, fruits 5.8 percent, and others 4.3 percent. During this period the production of spice crops, vegetables, cash crops, fruits, and honey has increased whereas the production of industrial crops, pulse crops, and food crops has decreased.
   

	2078/79			Percentage Change
Name of Crop	Area (in hectare)	Production (MT)	Productivity (MT per hectare)	Area (in hectare)	Production (MT)	Productivity (MT per hectare)
Food Crops	3486249	10772498	3.1	0.6	-3.1	-3.7
Cash Crops	457898	3731524	8.1	0	3.3	3.3
Industrial Crops	90817	3198766	35.2	-1.2	-0.6	0.5
Pulse Crops	334550	408371	1.2	-0.5	2.8	3.4
Spice Crops	76382	626722	8.2	4.5	7	2.4
Fruits	129532	1416750	10.9	0.1	4.1	4
Vegetables	281735	4153157	14.7	-0.8	4	4.9
Honey Hives	248995	5168	0	1.8	27.2	25

Source: Ministry of Agriculture and Livestock Development, 2078 *Till Mid-March
Note: Crops like paddy, wheat, maize, millet, barley, and buckwheat are included in food crops. Potato and oilseeds are included in cash crops. Sugar cane, jute, tea, coffee, and cotton are included in industrial crops. Under pulse variety lentils, gram, pigeon-pea, soya bean, grass pea, horse gram, and other pulses are included. Cardamom, ginger, onion, turmeric, chilly are included in spice crops.

1. Food Crops 

The total area of food crops has increased by 0.6 percent in the fiscal year 2078/79 as compared to that of the previous fiscal year. During the said period the production of honey, spice crops, vegetables, and cash crops have been increased by 27.2 percent, 7.0 percent, 4.1 percent, 4.0 percent and 3.3 percent respectively.
Production of Food Crops in Current Fiscal Year (MT in Hectares)
   

Food Corps	Productivity
Barley	1.2
Buck Wheat	1.27
Millet	1.39
Wheat	2.99
Maize	3.15
Paddy	3.47

Source: Ministry of Agriculture and Livestock Development, 2078

2. Pulse Crops 

In the fiscal year 2078/79, the area of production of pulse crops including lentils, gram, pigeon pea (arhar), horse gram (gahat), black gram, and soya bean is estimated to have decreased by 0.5 percent, and its productivity is expected to grow mildly. 
   

Pulse corps	Production (percent)
Horse gram	3
Pegion pea	4
Black lentils	6
Soyabean	9
Red lentils	62
Others : 16
Chick pea	3
Grasspea	3
Othes	10

Source: Ministry of Agriculture and Livestock Development, 2078

3. Cash Crops

During the current fiscal year, the production of cash crops (potato and oilseeds) is estimated to have increased by 3.9 percent to 3 lakh 58 thousand metric tons compared to that of the fiscal year 2077/78. During this period the productivity oilseed is expected to decrease by 2 lakh 77 thousand metric ton. Before this  fiscal year potato and oilseed had 17.6 metric tons and 1.1 metric tons per hectare, respectively.

4. Other crops

a)    Vegetable crops are estimated to have increased by 4 percent to 41 lakh 53 thousand metric tons in the fiscal year 2078/79.
b)    Fruit production is estimated to have increased by 4.1 percent to 14 lakh 16 thousand metric tons in the fiscal year 2078/79.
c)    Industrial crops except sugarcaneand jute are estimated to increase in the fiscal year 2078/79.Of the total industrial crops cotton is expected to grow by 17 percent,this year tea, cotton, coffee and jute are expected to increase by 12.1 percent, 7.2 percent 33.3 percent and 0.8 percent. 
 

Year	Production	Growth rate
2076/77	34	94.4
2077/78	31.8	-6.36
2078/79	31.6	-0.76

Source: Ministry of Agriculture and Livestock Development, 2078

d) Spice crop like cardamom, ginger, garlic, turmeric, chilly, etc. is estimated to increase by 8.2 percent. During this period the area used in the production of spice crops, production, and productivity is estimated to increase thereby increasing the total production to 6 lakh 26 thousand 7 hundred metric tons.

5. Production of Fish 

During the fiscal year 2078/79, the production of fish is estimated to remain at 1 lakh 17 thousand metric tons. The production of fish is increasing with the efforts of the private and public sectors.
 

Year	Production	Growth rate
2076/77	99.43	8.3
2077/78	104.62	5.2
2078/79	117	11.8

Source: Ministry of Agriculture and Livestock Development, 2078

6. Livestock and Poultry Production 

As of mid-March of the current fiscal year, the number of livestock including chickens, pigs, dairy cows, and buffaloes is increasing whereas the number of livestock including rabbits, he-buffalo, yaks (mountain cows)/ naks (female of yaks), ducks that lay eggs, has declined. In the current fiscal year, the country has become self-sufficient in chicken eggs, meat, and powder milk.
   

Fiscal year	Milk (000 MT)	Availability of milk per person KG​	Eggs (In crore)	Availability of egg per person
2076/77	2301	79	162	55
2077/78	2480	75	148.36	51
2078/79 (till falgun)	1739		108.32

Source: Calculated from statistics of Ministry of Agriculture and Livestock Development

In the fiscal year 2078/79 till falgun, the production of meat is 3 lakh 81 thousand metric ton. In 2076/77 it had increased by 54.6 percent to 552,000 metric tons due to the increased effectiveness of breed improvement, artificial insemination, and commercial livestock rearing programs.
   

Year	Production	Growth rate
2076/77	552.3	54.6
2077/78	520.7	-5.7
2078/79 (till falgun)	381

Source: Ministry of Agriculture and Livestock Development, 2078
Note: In net meat production, the meat of buffaloes, goat, sheep and lamb, pigs, chicken, and ducks are included.

Agriculture in monetary sector 

Interest grants was provided by the provincial government to farmers as a relief in order to minimize the impact of lockdown adopted as a measure to control the Covid- 19 pandemic. Financial support and relief materials have been provided by provinces to farmers who were victims of the lockdown by assessing the loss of their agriculture production and business.

Credit disbursement 

In the review period, out of the total outstanding credit of the BFIs, 66.8 percent is against the collateral of land and building and 12.3 percent against the collateral of current assets (such as agricultural and non-agricultural products). Such ratios were 65.7 percent and 13 percent respectively a year ago. Outstanding loan of BFIs to the agriculture sector increased 20.1 percent.

 

	Changes during eleven month
	2020/21		2021/22
	Amount	Percent	Amount	Percent
1. Agriculture*	90725.2	40.2	65213.7	20.1
1.1 Farming / Farming Service	31326.9	85.3	14202.6	20.5
1.2 Tea	351.6	9.4	738.9	17.2
1.3 Animals Farming / Service	25010.5	29.2	28627.9	24.6
1.4 Forest, Fish Farming and Slaughter	491.0	21.7	1627.8	62.8
1.5 Other Agriculture and Agricultural Services	33545.3	34.4	20016.5	15.2

Source: Nepal Rastra Bank

Concessional loan

As of mid-June 2022, the outstanding concessional loan remained at Rs.215.91 billion extended to 147,147 borrowers. Of which, Rs.139.84 billion has been extended to 60,618 borrowers for selected commercial agriculture and livestock businesses. Likewise, Rs.72.38 billion loan has been extended to 83,669 women entrepreneurs. Total of 2,860 borrowers have been availed Rs.3.69 billion concessional loan to other sectors.
 

	Number of Borrower			Outstanding Loan Amount
Types of Loan	2020 Mid-Jul	2021 Mid-Jul	2022 Mid-Jul	2020 Mid-Jul	2021 Mid-Jul	2022 Mid-Jul
Commercial Agriculture and Livestock Loan**	24763	46057	60618	54114.1	106978.4	139836.3

Source: Nepal Rastra Bank

Minimum support price

Minimum support price of paddy, wheat and sugarcane has the objective of increasing the attraction of common people towards agribusiness by making provision of getting fair price of their products based on the production cost. This provision is expected to ensure the sale price of agro-products of farmers and also help discourage the role of middlemen in the agricultural sector.
 

		Minimum Support Price
Agricultural goods	Per unit price	2077/78	2078/79
Sugarcane	Rs. Per Quintal	544.33	590
Coarse Paddy	Rs. Per Quintal	2735	2752
Medium Paddy	Rs. Per Quintal	2885	2902
Wheat	Rs. Per Quintal	3111	3165

Agricultural Insurance

As of 2077/78 fiscal year, as per the provision of 75.0 percent subsidy in the insurance fee amount of crop insurance Rs. 19.332 million has been provided as grant. Rs. 50 million has been paid against 75.0 percent subsidy in insurance premium of livestock and fisheries.

Sources: Economic Survey 2020/2021 (Ministry Of Finance),  Press Release GDP 2021 - CBS,  Statistical Information on Nepalese Agriculture, Ministry of Agriculture and Livestock Development 

Keywords: Nepalese agriculture, Food security, Livestock production,