Agriculture remains an important economic activity in Nepal, employing over two thirds of the population and providing almost a third of Gross Domestic Product (GDP). About a quarter of the country is good for agriculture. Most of the swampy Terai flat lands near India and the valleys of the hilly region not in the Himalayan area.. Rice and wheat are the main food crops. Tea and cannabis are the main export crops. The annual monsoon rains and irrigation harnessing the snow melt of the Himalayas are vital to agriculture and the health of the economy.

Land use: A) arable land: 15.1 percent (2011 estimated) (compared to 1 percent in Saudi Arabia, 20 percent in the United States, and 32 percent in France): permanent crops: 1.2 percent (2011 estimated); permanent pasture: 12.5 percent (2011 estimated) B) forest: 25.4 percent (2011 estimated); Other (mostly mountains) : 45.8 percent (2011 estimated), Irrigated land: 13,320 square kilometers (2012). Agricultural land is divided into arable land (land cultivated for crops like wheat and rice that are replanted after each harvest) and permanent crops (land with for crops like citrus, coffee, and rubber that are not replanted after each harvest) and permanent pasture (land used for grazing animals such as cattle and sheep). [Source: CIA World Factbook, 2020]

GDP — composition, by sector of origin: : agriculture: 27 percent (2017 estimated); industry: 13.5 percent (2017 estimated); services: 59.5 percent (2017 estimated) In 2004, agriculture provided about 38 percent of gross domestic product. It used to account for more than half [Source: CIA World Factbook, 2020]

Labor force — by occupation: agriculture: 69 percent; industry: 12 percent; services: 19 percent (2015 estimated)

Since the 1960s agriculture sector has often provided nearly half of the GDP and employed most of the population. However, the sector’s contribution to the economy has declined. According to World Bank data, from 1965 to 2004 the agricultural sector declined from 65.5 percent of GDP to nearly 40.3 percent. Moreover, the percentage of the labor force employed in agriculture fell from 94.4 percent in 1971 to approximately 65.7 percent in 2001. Forestry and fishing often are categorized as agriculture in government statistics, and each accounts for less than 1 percent of GDP and the labor force. As a result of low agricultural growth rates and high population growth rates, Nepal has not been self-sufficient in food grain production since the 1980s. Low growth rates generally are seen as a result of limited use of agricultural technologies and declining landholding sizes. [Source: Library of Congress, November 2005]

Agricultural production accounted for about three-fourths of total exports in the late 1980s. Most exports consisted of primary agricultural produce which went to India. According to the “Worldmark Encyclopedia of National Economies”: In general the majority of Nepalese farmers are subsistence farmers and do not export surplus; this does not prevent a minority in the fertile southern Terai region from being able to do so. Most of the country is mountainous, and there are pockets of food-deficit areas. The difficulties of transportation make it far easier to export across the border to India than to transport surplus to remote mountain regions within Nepal. A considerable livestock population of cattle, goats, and poultry exists, but the quality is poor and produces insufficient food for local needs. [Source: “Worldmark Encyclopedia of National Economies”, The Gale Group Inc., 2002]

Crops in Nepal

Crops and agriculture and livestock products: pulses, rice, corn, wheat, sugarcane, jute, root crops, millet, potatoes, oilseed, milk, water buffalo meat. Major crops for domestic consumption: rice, wheat, corn and lentils. Major crops for export: tea, sugar cane, cannabis. [Source: CIA World Factbook, 2020, “Countries of the World and Their Leaders” Yearbook, Gale, 2009]

Rice is the most important food and cereal crop. It is grown on more than half the cultivated land, including large areas of the Terai in the south and the Kathmandu Valley during the monsoon season. In 1966 total rice production amounted to a little more than 1 million tons; by 1989 more than 3 million tons were produced. In 2004, rice production reached 4.3 million tons. Fluctuation in rice production was very common because of changes in rainfall; overall, however, rice production had increased following the introduction of new cultivation techniques as well as increases in cultivated land. By 1988 approximately 3.9 million hectares of land were under paddy cultivation. [Source: Andrea Matles Savada, Library of Congress, 1991*, Junior Worldmark Encyclopedia of the Nations, Thomson Gale, 2007]

Maize (corn) is often grown on the carefully terraced hillsides. About 25 percent of the land allocated for food grains is cultivated with maize. Production was 1.6 million tons in 2004. In 1966 approximately 500,000 tons of corn, the second major food crop, were produced. By 1989 corn production had increased to over 1 million tons. Other major crops produced in 2004 included 1.4 million tons of wheat, 283,000 tons of millet, and 30,000 tons of barley. Cash crops included 2.3 million tons of sugarcane, 1.6 million tons of potatoes, 6,100 tons of linseed, 6,900 tons of jute, and 3,300 tons of tobacco. Sugarcane, jute, and tobacco are mainly utilized as raw materials in Nepal. Potatoes are grown in Ilam. Fruit is produced mainly in Dharan, Dhankuta, and Pokhara. Tea is also grown in Ilam and elsewhere. In 2004, exports of agricultural products totaled $94.8 million, while agricultural imports amounted to $187 million.

The contribution of food crops such wheat, millet, and barley to the overall agricultural sector is relatively small. They are consumed mainly by the people that produce them. Increased production of cash crops — used as input to new industries — dominated in the early 1970s. Sugarcane and tobacco also showed considerable increases in production from the 1970s to the l980s. Potatoes and oilseed production had shown moderate growth since 1980. Medicinal herbs were grown in the north on the slopes of the Himalayas, but increases in production were limited by continued environmental degradation. According to government statistics, production of milk, meat, and fruit had improved but as of the late 1980s still had not reached a point where nutritionally balanced food was available to most people. Additionally, the increases in meat and milk production had not met the desired level of output as of 1989. *

Food grains contributed 76 percent of total crop production in 1988-89. In 1989-90 despite poor weather conditions and a lack of agricultural inputs — particularly fertilizer — there was a production increase of 5 percent. In fact, severe weather fluctuations often affected production levels. Some of the gains in production through the 1980s were due to increased productivity of the work force (about 7 percent over fifteen years); other gains were due to increased land use and favorable weather conditions. *

Farmers and Farming in Nepal

About one third of Nepal’s farmers are sharecroppers, working the land of, generally, for an upper caste landlord. Many others own plots of land that are too small to support their families. Many farmers work their fields with hoes. Tractors are rare. Even plow animals are not widely used because they are not suited for steeply-sloped terraced fields. Labor is often recruited through a system of reciprocal exchange.

According to the “Worldmark Encyclopedia of National Economies”: Agriculture in Nepal has long been based on subsistence farming, particularly in the hilly regions where peasants derive their living from fragmented plots of land cultivated in difficult conditions. The seasonal nature of farming leads to widespread underemployment, but programs to grow cash crops and encourage cottage industries have had some success over the years. [Source: “Worldmark Encyclopedia of National Economies”, The Gale Group Inc., 2002]

What people grow and the agricultural methods they use often depends on what elevation they live at. In the mountains people grow barley, wheat, buckwheat, maize, potatoes, squash, daikon radishes and what other vegetables they can and raise yaks and yak-cow crossbreeds. In the middle hill areas people grow wet rice and dry rice, maize, millet, wheat, cauliflower, squash, turnips and greens. In lower elevations some groups such as the Magar migrate with season practicing farming in the lowlands and moving to highlands when the weather is warm to graze their animals.

The fact that there are few roads makes the distribution of foodstuffs and getting crops to markets a problem. Often times the only way to move food is on the backs of porters. People often buy their food or sell their crops with government depots or large landowners that are several days walk away. It is no surprise that malnutrition is a problem in Nepal. When local crops fail people often go hungry because they have little food or mone. Much of the food at the government depot is either subsidized by the government or provided by foreign aid groups.


Livestock and Animal Husbandry in Nepal

Herding animals has traditionally been an important activity for people in the mountains and to a lesser extend the hilly region. People keep yaks, cows, yak-cow crossbreed for butter, cheese and meat and use these animals as well as ponies and sheep as pack animals. At lower elevations farmers keep water buffalo, cows or goats for milk and meat. Some people keep chickens. Pigs are rarely partly out of respect to Nepal’s small Muslim population. Beef is generally not eaten out of respect to Nepal’s large Hindu population. Buffalo and oxen are used as plow animals. Goats are popular because they are hardy and easy to take care off. Among some people they are a sign of wealth and some families have huge herds of them.

Cattle: 7.2 million; chickens: 25.8 million; goats: 8.8 million; pigs: 1.1 million; sheep: 801,371; . [Source: 2013 World Almanac]

According to the “Worldmark Encyclopedia of Nations”: “Livestock, adapted to many uses, forms an essential part of the economy. Livestock accounts for about 30 percent of gross agricultural output. In farm work, bullocks and asses are largely used. Herds of yaks, cows, and their hybrids, zobos, are grazed in the central valley and to some extent along the borders of the foothill jungles. A few hogs usually are kept on the larger farms. Sheep and goats are used for food and also as pack animals, particularly in the distribution of salt over the trade routes; the sheep also supply a valuable type of wool. [Source: “Worldmark Encyclopedia of Nations”, Thomson Gale, 2007]

“In 2005, Nepal had an estimated 6,994,000 head of cattle, 4,081,000 water buffalo, 817,000 sheep, 7,153,000 goats, and 948,000 hogs. Modern poultry farms are operated principally by the Newaris, who carry on most of the agriculture in the Kathmandu Valley. There were about 22.8 million chickens in 2005, when 15,700 tons of poultry meat were produced. Traditionally, butter and cheese are among the leading exports of Nepal. Livestock products in 2005 included an estimated 380,000 tons of cow's milk, 20,000 tons of butter and ghee, and 590 tons of wool (greasy basis).

Land Tenure, Brahmans and Bonded Servitude in Nepal

There are many kinds of land tenure systems: household ownership, individual ownership. lineage ownership. Land is sometimes given as a gift to religious institutions, Most land continues to pressed under the “raikar” system in which ownership is recognized by the government as long as taxes on it are paid. [Source: John T. Hitchcock, “Encyclopedia of World Cultures Volume 3: South Asia,” edited by Paul Hockings, 1992]

Traditionally there has been no banking system and Brahmans often served as moneylenders. Brahman shopkeepers offered small loans and Brahman landowners offered big loans and sometimes were able to seize control of the land or the labor of debtors who could not pay the loan. Farmers often helped each other out and made loans to each other to avoid such problems.

Brahmans still own much of land in the countryside and force peasant to work for them in feudal arrangements. In the Terai especially much of the land is owned by Zamidars, many of whom received the land from the king as grant for a service provided. Until the Land Reform Act of 1955 much of the land in Nepal was owned by 450 families. The legislation did not change much. Land reform in the 1960s did a little better.

Agricultural Technology, Methods and Irrigation in Nepal

The use of pesticides, fertilizers, high-yielding seeds, and irrigation has increased but mostly by owners of landholdings larger than two hectares.Cropping intensity has increased, with adverse environmental consequences, such as soil erosion. [Source: Library of Congress, November 2005]

According to the “Worldmark Encyclopedia of Nations”: “Agriculture has been hampered by the lack of irrigated land, by the small size of farms (an average of four hectares/10 acres), and by inefficient farming methods. Some of the arable land is still held free of taxation by a few large landowners and farmed by tenants, whose productivity is low. The government has officially abolished tax-free estates (birta ), eliminated the feudal form of land tenure (jagira ), set a limit on landholdings, and redistributed the extra land to farm tenants. Its economic plans also include the use of fertilizers, insecticides, improved seeds, and better implements; the extension of irrigation; and the construction of transportation and storage facilities. [Source: “Worldmark Encyclopedia of Nations”, Thomson Gale, 2007]

“Regional imbalances and lack of integration also hamper Nepal's agriculture. Although the country produces an overall exportable surplus of food grains, some areas of the country, particularly Kathmandu Valley and the hill areas, have a food deficit. Lack of transportation and storage facilities prevents the movement of food grains from the Terai to the hills, with the result that Nepal both exports and imports the same food items.

According to the “Worldmark Encyclopedia of National Economies”: “Government efforts to boost the agricultural economy have focused on easing dependence on weather conditions, increasing productivity, and diversifying the range of crops for local consumption, export, and industrial inputs. Solutions have included the deployment of irrigation, chemical fertilizers, and improved seed varieties, together with credit provision, technical advice, and limited mechanization. This has had some effect. Land under irrigation increased from 6,200 hectares in 1956 to 583,000 hectares in 1990. The use of chemical fertilizers, introduced in the 1950s, climbed to about 47,000 metric tons by 1998. Still, the weather continues to determine good and bad years for the average farmer. On a national scale, while production of both food and cash crops grew annually by 2.4 percent from 1974 to 1989, population increased at a rate of 2.6 percent over the same period. [Source: “Worldmark Encyclopedia of National Economies”, The Gale Group Inc., 2002]

Agriculture and the Environment in Nepal

Deforestation and land degradation appear to affect a far greater proportion of the population and have the worst consequences for economic growth and individuals’ livelihoods. Forest loss has contributed to floods, soil erosion, and stagnant agricultural output. Often cited causes of deforestation include population growth, high fuelwood consumption, infrastructure projects, and conversion of forests into grazing- and cropland. According to government estimates, 1.5 million tons of soil nutrients are lost annually, and by 2002 approximately 5 percent of agricultural holdings had been rendered uncultivable as a result of soil erosion and flooding. Land degradation is attributed to population growth, improper use of agro-chemicals, and overly intensive use of landholdings that are too small to provide most households with sufficient food. Since the late 1980s, government policies have attempted to address these numerous and related problems, but policies often are hampered by lack of funding, insufficient understanding of Nepal’s mountain ecosystems, bureaucratic inefficiency, and sometimes contentious relations between the central government and local communities. [Source: Library of Congress, November 2005 **]

According to the “Worldmark Encyclopedia of National Economies”: Government programs to introduce irrigation facilities and fertilizers have proved inadequate, their delivery hampered by the mountainous terrain. Population increases and environmental degradation have ensured that the minimal gains in agricultural production, owing more to the extension of arable land than to improvements in farming practices, have been cancelled out. Once an exporter of rice, Nepal now has a food deficit. [Source: “Worldmark Encyclopedia of National Economies”, The Gale Group Inc., 2002]

“Increased agricultural activity has placed tremendous stress on the fragile ecosystems of the mountains, with severe deforestation leading to erosion and flooding that threatens the livelihoods of farmers throughout the country. In the rush to open up arable land in the early years of development, Nepal lost half its forest cover in the space of 3 decades. Government plans to maintain cover at 37 percent depend on the success of community forestry programs, which merge traditional and modern agro-forestry and conservation practices. Responsibility is placed in the hands of Forest User Groups, which included almost 800,000 households in 1999.

Nepali Feudalism

Until a few decades Nepal was a feudal Hindu kingdom similar to the mini-states ruled by maharajahs in India. Through most of its history the kingdom consisted of impoverished subjects ruled by an absolute monarchy.

Under Nepalese feudalism, a small number of landlords held most of the agricultural land. The state extended its control over the land by the administrative device of making land grants and assignments and raising revenues. Most of the landlords who were granted state lands were not directly involved in farming but contracted with tenant farmers on a customary, and hereditary, basis. The basic purpose of land reform was to protect the tenant farmers, take away excess holdings from landlords, and distribute property to farmers with small landholdings (holding one to three hectares) and landless agrarian households. [Source: Andrea Matles Savada, Library of Congress, 1991]

Nepalese feudalism existed under the rules raikar land tenure: “a system of landlordism under which the rights of an individual to utilize and transfer land are recognized by the state as long as taxes are paid.” Under this system upper caste Brahmans seized land from other groups that was not actually lived on or cultivated because there was little documentation of who owned what. Soldiers were often given land instead of paid. This created conflicts between the Kathmandu-based Nepalis and other groups. [Source: John T. Hitchcock, “Encyclopedia of World Cultures Volume 3: South Asia,” edited by Paul Hockings, 1992]

Feudalism endured in Nepal until the 1950s. Feudal rulers used their power to secure labor and grain. Most of the population has traditionally been poor, malnourished and prone to diseases like tuberculosis. Peasant who tried to learn to read and write risked being imprisoned or even killed. Some migrated into India to escape the demands of the feudal lords.

Modern World Come to Nepal

The first automobile arrived in Nepal in 1951. At that time there were no roads in the entire country and the vehicle was carried into the country on a litter for the elite — and later carried back again for a trade in. The first road between Nepal and the outside world (India) was completed in 1952. In 1956 the first road linked Kathmandu to India. Road service to Pakhar was not competed until 1974. The East-West Highway across the Terai was finally complete in the 1990s.

The Hillary expedition on Mt. Everest in 1953 was the first time many people had heard of Nepal. Although there are many parts of Nepal that are still untouched by the modern world and the country as whole remains very poor and underdeveloped, Nepal modernized very quickly, going from a place with no roads, modern hospitals, doctors, airplanes, and television — where feudalism was still dominant — to a place with Western-educated doctors and engineers, airports and large infrastructure projects in a few decades. The process unfolded over centuries in other places. Tourism has been a major force behind Nepal’s changing.

In the 1960s, disease like goiter, small pox, malaria and leprosy were endemic. As they were brought under control people lived longer an the population began growing very quickly, in many cases outstripping available resources. The situation led to overuse of arable land and migrations of people to the middle hills and mountains. After the eradication of malaria in the Terai, many people also moved there. These migrations have caused friction between the ethnic groups that were the traditional residents of these areas, who in many cases were cheated out their land, and new settlers.

Land Reform in Nepal

Before 1950, a feudal system existed in most of Nepal. Land ownership was concentrated in the hands of landlords who contracted out to tenant farmers. Even though land reforms such as placing limits on the amount of land owned were made, feudal mechanism still exist. Land reform has been a predictable platform of most political parties in Nepal, particularly the communists. [Source: “Worldmark Encyclopedia of National Economies”, The Gale Group Inc., 2002]

The basic purpose of land reform enacted as been to protect the tenant farmers, take away excess holdings from landlords, and distribute property to farmers with small landholdings (holding one to three hectares) and landless agrarian households. [Source: Andrea Matles Savada, Library of Congress, 1991 *]

Efforts at land reform began with the enactment of the Land and Cultivation Record Compilation Act in 1956 and continued with the Lands Act in 1957 when the government began to compile tenants' records. Although these acts facilitated land reform, the lot of the small farmer did not improve, and further efforts were made. The Agricultural Reorganization Act, passed in 1963, and the Land Reform Act, passed in 1964, emphasized security for tenant farmers and put a ceiling on landholdings. There were several loopholes in the acts, however, which continued to allow large landholders to control most of the lands. There was some success in protecting the rights of tenant farmers, but not much was achieved in land redistribution. As of 1990, average landholdings remained small. *

Agriculture in the 1980s

Agriculture dominated the economy until fairly recently. In the late 1980s, it was the livelihood for more than 90 percent of the population — although only approximately 20 percent of the total land area was cultivable — and accounted for, on average, about 60 percent of the GDP and approximately 75 percent of exports. Since the formulation of the Fifth Five-Year Plan (1975-80), agriculture has been the highest priority because economic growth was dependent on both increasing the productivity of existing crops and diversifying the agricultural base for use as industrial inputs. [Source: Andrea Matles Savada, Library of Congress, 1991 *]

In trying to increase agricultural production and diversify the agricultural base, the government focused on irrigation, the use of fertilizers and insecticides, the introduction of new implements and new seeds of high-yield varieties, and the provision of credit. The lack of distribution of these inputs, as well as problems in obtaining supplies, however, inhibited progress. Although land reclamation and settlement were occurring in the Terai Region, environmental degradation — ecological imbalance resulting from deforestation — also prevented progress.

Although new agricultural technologies helped increase food production, there still was room for further growth. Past experience indicated bottlenecks, however, in using modern technology to achieve a healthy growth. The conflicting goals of producing cash crops both for food and for industrial inputs also were problematic.

The production of crops fluctuated widely as a result of these factors as well as weather conditions. Although agricultural production grew at an average annual rate of 2.4 percent from 1974 to 1989, it did not keep pace with population growth, which increased at an average annual rate of 2.6 percent over the same period. Further, the annual average growth rate of food grain production was only 1.2 percent during the same period.

There were some successes. Fertile lands in the Terai Region and hardworking peasants in the Hill Region provided greater supplies of food staples (mostly rice and corn), increasing the daily caloric intake of the population locally to over 2,000 calories per capita in 1988 from about 1,900 per capita in 1965. Moreover, areas with access to irrigation facilities increased from approximately 6,200 hectares in 1956 to nearly 583,000 hectares by 1990.

Agriculture and Land Use in Nepal

Most agricultural land is in the Hilly Region and the Terai not in the Himalayan areas. The lowland Terai region produces an agricultural surplus, part of which supplies the food-deficient mountains areas, where soil is generally poor and the landscape difficult to cultivate.

Today, almost everyone in Nepal who farms except for the poorest of the poor own land. What is important is the quality of the land., with the relatively well-off getting the best land and the poor generally getting the worst quality land. There are three main types of land: 1) “khet” (land that can be irrigated, regarded as the best quality land); 2) “bari” (land that can be cultivated but not irrigated); and 3) “pakho” (land that generally can not be cultivated because it is too rocky or steep). [Source: John T. Hitchcock, “Encyclopedia of World Cultures Volume 3: South Asia,” edited by Paul Hockings, 1992 |~|]

Land use: A) arable land: 15.1 percent (2011 estimated) (compared to 1 percent in Saudi Arabia, 20 percent in the United States, and 32 percent in France): permanent crops: 1.2 percent (2011 estimated); permanent pasture: 12.5 percent (2011 estimated) B) forest: 25.4 percent (2011 estimated); Other (mostly mountains) : 45.8 percent (2011 estimated), Irrigated land: 13,320 square kilometers (2012).
Agricultural land is divided into arable land (land cultivated for crops like wheat and rice that are replanted after each harvest) and permanent crops (land with for crops like citrus, coffee, and rubber that are not replanted after each harvest) and permanent pasture (land used for grazing animals such as cattle and sheep). [Source: CIA World Factbook, 2020]

Nepal’s mountainous terrain constrains land use options. According to government figures for 2002, approximately 18 percent of the total land area was used for agriculture, of which 88.8 percent was categorized as arable land, 4.4 percent as land under permanent crops, and the remainder as pastures, woodlands, and other categories. From 1962 to 2002, the total area of arable land increased by 57 percent (from 1.6 million to 2.5 million hectares) but declined as a proportion of land for agriculture (from 94.5 to 88.8 percent) because of the increase in land used for grazing and permanent crops, particularly fruit. Permanent crop cultivation also has reduced the proportion of land used for woodland and forest harvesting. [Source: Library of Congress, November 2005 **]

While total agricultural area increased from 1962 to 2002, and the number of landholdings grew approximately 120 percent, the population increased by 146 percent. In the same period, the amount of agricultural land declined from 0.18 to 0.13 hectares per person, and the average size of holdings has declined from 1.1 to 0.8 hectares. In 2002 nearly 60 percent of holdings did not produce sufficient food to feed a household, and almost 97 percent of these holdings were two hectares in size or smaller. Furthermore, tractors or threshers are used on less than 10 percent of total holdings, and approximately 65 percent of landholdings are rain-fed rather than irrigated. **

Image Sources: Wikimedia Commons

Text Sources: New York Times, Washington Post, Los Angeles Times, Lonely Planet Guides, Library of Congress, Nepal Tourism Board (, Nepal Government National Portal (, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Reuters, Associated Press, AFP, Wikipedia and various books, websites and other publications.

Last updated February 2022

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