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Social Economy

People achieve economic empowerment

Agriculture is the backbone of Nepal’s economy. As of 2021 it accounts for around 33% of GDP, employs two-thirds of the population, and around one-third of Nepal’s total land is used for agriculture. Land fragmentation, conventional farming methods, poor knowledge, lack of improved seeds, fertilizers, and irrigation, erratic weather patterns result in low agricultural productivity. Major cereal crops are paddy, maize, millet, wheat, barley, and buckwheat and major cash crops are oilseed, potato, tobacco, sugarcane, jute, cotton, and rubber. Even though Nepal is an agrarian country but many households in the mountain districts of Nepal experience food shortages for 4–9 months a year. More than 50% of the districts in Nepal are considered food-deficient (FAO 2021).

Agriculture in Nepal needs to be modernized, diversified, commercialized, and marketed. Towards this end, agricultural inputs, such as irrigation, electricity, transportation, and agro-credit need to be made available. Technology-driven agriculture inputs and facilities, market-based enterprises, and increased access to financial services can lead to better income generation opportunities for the rural poor in Nepal

Outcomes

Expanded employment and income opportunities

The number of absolute poor in Nepal is declining every year and significant achievements have been made in poverty reduction in the past two decades. However, poverty persists in rural areas due to a lack of income generation and entrepreneurial opportunities. Many youths are involved in low-paying and low-productive agricultural and informal sectors. Lack of adequate knowledge, skills, technology, entrepreneurship, and financial capital are major hindrances in commercializing extant conventional farming. Economic and employment opportunities for youths, women and indigenous communities are also significantly low.

GNI Nepal emphasizes the promotion of income generation and employment through community-based social enterprises and by mobilizing local resources. Market-based value chain development in agriculture and livestock and micro enterprise development are GNI Nepal’s key priorities for expanding employment and income opportunities in rural and remote areas of Nepal.

Cooperatives are leading grassroots institutions for promoting income and employment opportunities. Institutional development support for them will help bridge the financial access gap facing potential entrepreneurs. Agro-value chain development of key products creates employment and better income for farmers, producers, and entrepreneurs through diversified products and market linkages. Technical and vocational training will be targeted at youths to make them skilled to compete in the local job market and secure better-paying employment.

Interventions

  • Institutional development support for cooperatives
  • Promotion of cooperative businesses
  • Micro- and small-enterprises development support
  • Promotion of financial access through revolving fund
  • Economic infrastructure building for enterprises development
  • Agro-value chain development support
  • TEVT/on-the-job training
  • Job market promotion and improving

Enhanced community resilience for food security

Although food security in Nepal has improved in recent years, still 4.6 million people are food-insecure, with 20% of households mildly food-insecure, 22% moderately food-insecure, and 10% severely food-insecure. In rural and remote areas that are far from markets and transportation costs are high, food prices tend to be costlier and more likely to be food-insecure compared to urban households. Malnutrition among rural children and women is persistent. 36% of children and 1.84 million pregnant and lactating women are malnourished.

Climate change and natural disasters are also affecting agriculture. Rural and poor farming households seek alternative income generation opportunities and sustainable livelihood. For better agricultural yields, smallholder farmers in rural and remote areas will be supported with agricultural inputs and technology. Alternative income generation opportunities for rural farmers will be created through technology transfer, skills development, and providing small-scale production facilities.

GNI Nepal intends to introduce ‘school-to-home kitchen gardening’ to transfer kitchen gardening skills from children to their families. It will help increase the intake of green vegetables. Climate-smart agriculture and enterprises and modern and improved technologies will be introduced for increasing agricultural production in remote and rural areas.

Interventions

  • Agricultural inputs and technology support
  • Provision of alternative income generation opportunities
  • School-to-home kitchen gardening
  • Community awareness campaign on food and nutrition
  • Promotion of climate-smart agriculture and enterprises

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