Nepal’s economy is largely dependent on agricultural, which accounts for 36% of GDP and

absorbs about two-thirds of the labour market. About 30% of Nepal’s total land is used for
agricultural purposes. The major cash crops are oilseed, potato, tobacco, sugarcane, jute,
cotton, and rubber; and the major cereal crops are paddy, maize, millet, wheat, barley, and
buckwheat. Cardamom, ginger, garlic, turmeric, silk cocoons, honey and mushroom are
also cultivated in copious amounts.
 
Nepal’s geography, water resources and ample supply of labour gives Nepal a comparative
advantage in agricultural production. The temperature and rainfall differ from place to place,
but the wet season is roughly the same in all areas of Nepal. The sector has seen NPR 3.37
billion (USD 338 million) in foreign investment in about 180 agriculture projects, which
employ over 7,500 people.
Even though Nepal is endowed with the resources needed for high land productivity, many
households, particularly in the mountainous regions of Nepal, experience food shortages for
4–9 months a year. More than 50% of the districts in Nepal are considered food-deficient by
FAO. This problem of low agricultural productivity arises due to fragmented subsistence
farming, poor technical knowledge, and lack of irrigation facilities. Erratic weather patterns,
pest epidemics, and lack of fertilizers and improved seeds exacerbate the problem.
Nepal also faces a negative trade balance in agriculture. The country’s agricultural imports
were NPR 40 billion (USD 400 million) in 2012/13. This figure is estimated to be at least
NPR 45 billion (USD 450 million) for 2013/14. However, agricultural imports from India have
been growing at an astounding rate of 40% annually for the past 7 years. On the other
hand, exports in 2012/13 stood only at NPR 13 billion (USD 130 million) and were expected
to reach NPR 18 billion (USD 180 million) for 2013/14. Agricultural equipment, chemical
fertilizers, rice, and vegetables account for more than two-thirds of the imports from India,
whereas food and live animals comprise over 90% of total agricultural exports to India.
As the agriculture sector is the biggest contributor to GDP, the Government of Nepal is
committed to uplifting this sector. The government is currently focusing on the
modernisation, diversification, commercialisation and marketing of the agriculture sector.
Towards this, the government plans to make available agricultural inputs, such as irrigation,
electricity, transportation, and agro-credit.

Opportunities
Food crops
 Rice is the main cereal consumed in Nepal, however, in 2012-13, rice worth NPR 9

billion was imported, signalling an opportunity for the expansion of rice cultivation. 

 Lentils, which are grown in the Terai region, are a good source of export earnings for

Nepal and are popular in South East Asian markets. 

 Cardamom, turmeric and cinnamon are the main spices exported from Nepal.
 
Beverages
 Nepali tea is considered some of the best tea in the world, with major export markets

in Europe and the US.

 Coffee farming has become popular in recent times and its market share has grown

domestically and overseas.

Fertilizer and agricultural equipment

 Nepal depends primarily on imported chemical fertilizers, creating a market for

chemical fertilizers to be manufactured in Nepal.

 Modern agricultural equipment could alleviate the problem of low land productivity in

Nepal. 

Problems of Nepalese Agriculture and their Solutions

 Traditional farming: Nepalese agriculture used traditional methods
of farming. ...
 Lack of proper irrigation system: ...
 Lack of transport and market: ...
 Unscientific and undemocratic distribution of land: ...
 Over pressure of manpower: ...
 Poor economic condition: ...
 Lack of research activities:
