Farmer-Friendly Policies Essential for Agricultural Transformation

Kathmandu: Despite agriculture remaining one of Nepal’s most important economic pillars, the sector continues to struggle due to policy gaps, weak implementation, and declining farmer confidence. While the government has introduced mandatory insurance schemes and subsidy programs to promote commercial farming, the benefits have yet to reach farmers in a meaningful and sustainable way.

Agriculture, which includes farming, livestock, forestry, and herbal production, contributes nearly one-quarter of Nepal’s gross domestic product. However, this contribution is under growing pressure as cultivable land shrinks and agricultural productivity declines. Recent data show that while the number of households dependent on agriculture has increased, the total area under cultivation has decreased significantly over the past decade.

National agricultural census figures indicate that more than 300,000 hectares of cultivable land have been lost in ten years. At the same time, fewer households are fully reliant on farming for their livelihoods, and only about 45 percent of farming families produce enough food to meet their annual needs. This highlights the fragile state of food security despite constitutional guarantees of the right to food.

The contradiction is striking: food imports continue to rise while fertile land remains unused. Government records show that billions of rupees are spent annually on importing rice, grains, and other agricultural products. Meanwhile, nearly five million young people have left the country in search of employment, leaving behind abandoned farmland and weakening domestic production capacity.

Although the Ministry of Agriculture and Livestock Development allocates a substantial annual budget, a large portion is absorbed by fertilizer subsidies and administrative expenses. As a result, investment in agricultural research, innovation, and productivity enhancement remains inadequate. Experts argue that without evidence-based research and modern farming practices, public spending risks producing minimal returns.

Farmers continue to face persistent structural challenges, including fertilizer shortages, limited access to quality seeds, weak irrigation systems, and an inability to compete with imported agricultural goods. The dominance of middlemen in agricultural markets further erodes farmers’ earnings, leaving producers with little control over pricing and distribution.

Government policies, critics argue, often fail to align with the realities faced by farmers. Subsidies and incentives intended for genuine producers frequently benefit intermediaries and better-connected individuals. The absence of a clear farmer identification and classification system has allowed misuse of agricultural support programs, undermining their effectiveness.

Climate change has added another layer of risk. Erratic rainfall, droughts, floods, landslides, pest outbreaks, and wildlife attacks have increased uncertainty in farming. Limited insurance coverage and weak disaster mitigation measures have left farmers vulnerable to repeated losses, discouraging long-term investment in agriculture.

To address these challenges, analysts emphasize the need for coordinated investment strategies. The government’s proposed ten-year agricultural investment framework must be backed by secured funding, clear priorities, and cooperation among federal, provincial, and local governments, as well as the private sector. Protecting agricultural land through land-use policies and promoting land consolidation are critical steps toward increasing productivity.

Value addition remains another missed opportunity. Many export-oriented agricultural products are sold in raw or semi-processed form, resulting in lower earnings. Establishing domestic processing facilities could increase export value, generate employment, and strengthen rural economies.

Commercialization of agriculture will also require promotion of cooperative, collective, and contract farming models. Public-private partnerships can play a key role in building market infrastructure, storage facilities, and logistics networks. Leasing unused land to agricultural entrepreneurs could help revive abandoned farmland and encourage modern farming practices.

Environmental sustainability is equally important. Excessive use of chemical fertilizers and pesticides has degraded soil quality, while floods and erosion continue to damage fertile land. Stronger regulations and enforcement are needed to protect soil health and ensure long-term agricultural viability.

Access to affordable credit remains a major barrier. Simplified loan procedures, interest subsidies, and timely financing could encourage farmers to adopt modern technologies. Mechanization, supported by training and maintenance services, would help transform agriculture from subsistence-based to market-oriented production.

Agricultural insurance is another area requiring urgent reform. While insurance programs exist, they remain complex and ineffective for most farmers. A simplified, farmer-friendly insurance framework could reduce risk and restore confidence in agricultural investment.

Experts also stress the importance of integrating returning migrant workers into agriculture. Many returnees possess skills gained abroad that could be harnessed through targeted training, financing, and market access. However, without guaranteed farm-gate pricing and transparent market systems, such efforts remain limited.

Establishing modern agricultural information and collection centers at the local level could improve market transparency. These centers could facilitate storage, grading, branding, and direct sales, reducing middlemen dominance and ensuring fair prices for farmers.

Ultimately, sustainable agricultural development requires political commitment, institutional coordination, and genuine farmer participation. Without farmer-centric policies that address production, protection, and profitability, agriculture will continue to lose its workforce and economic relevance.

As food imports drain national resources and rural livelihoods weaken, the urgency for reform is growing. A farmer-friendly policy framework—supported by investment, innovation, and accountability—could not only strengthen food security but also contribute to broader economic stability. The question remains whether the state is ready to move from policy declarations to meaningful action.