Background

Nepal achieved an average annual economic growth rate of 5% over a period of ten years until 2019. Despite this growth, Nepal is currently classified as a low-income country as of 2021. However, the country has set a goal to transition into a middle-income country by 2030. In the agricultural sector, Nepal faces significant challenges, including issues such as low productivity and production, inadequate quality, limited access to inputs such as seeds and fertilizers, insufficient irrigation facilities (with only a portion of the land being irrigated year-round), lack of essential infrastructure such as roads and electricity, and a shortage of agricultural technical expertise. To address these challenges and expand agricultural production, the government aims to promote the mechanization and modernization of agriculture. Access to financial resources within the agricultural sector is considered crucial to achieving this objective. In view of this situation, the Japan International Cooperation Agency (JICA), in collaboration with the Japan Economic Research Institute (JERI), has been conducting a data collection survey on agricultural sector financing since March 2023.
 

Objective

The objective of the agricultural economic survey is to understand the demand of farmers as well as agribusiness stakeholders for agricultural finance and identify constraints of financial accessibility. In addition, the survey result will be utilized for the project formulation by analyzing the disincentives in terms of technology, finance, and structure to identify financing needs in rural financing and technical assistance needs.

The agricultural economic survey consists of two components: 1) a household survey on small and medium-scale farmers and 2) an interview survey on agricultural cooperatives.

Methodology
The survey was carried out in 5 district: Jhapa and Morang (Terai), Sindhuli and Gulmi (Hilly) and Sindhupalchowk (Himalaya) districts. In each district, 40 questionnaire surveys were carried out with farmers involved in farming of key products identified by the project. Additionally, in-depth interviews were carried out with two cooperatives in each district. 
 

Study Team

Mr. Rajendra Khatri
Ms. Shreya Bajimaya
Mr. Ram Pd. Devkota
Mr. Santosh Kr. Mahato
 

Key findings

The survey findings reveal key insights about agricultural practices in the surveyed areas. The average number of plots per household is highest in the Hilly region, followed by the Himalayan and Terai regions. However, the plot sizes are larger in the Terai area. In terms of agricultural machinery, irrigation pumps, maize threshers, and rice mills are popular among Terai farmers, while maize threshers, mills, sprayers, and 2-wheel tractors are commonly used in the Hilly and Himalayan areas. Livestock commonly raised include cows, buffaloes, goats, pigs, poultry (chicken and turkey), and fish. Farmers predominantly cultivate crops like broom grass, cardamom, betel nut, lemon, and turmeric for sale, while millet, mustard, potato, tomato, spinach, and other vegetables are primarily for household consumption. Farmers express interest in adopting digital technology, particularly for accessing market information, weather updates, and new farming techniques.

Female farmers tend to focus on tasks within the farm or household, while males handle activities like purchasing inputs, transportation and marketing. Female farmers often rely on male family members for financial information, indicating limited decision-making power. Despite this, female farmers express satisfaction with their roles and contribution to both the household and farm.