PESTEL ANALYSIS ON

AGRICULTURE OF NEPAL

Presented by
Bipin Lal Shrestha, Nitish Raj
Pandey, Pujan Maharjan, Saurij
Regmi, Sumana Khanal, Vivek
Kumar Panjiyar
(EMBA- Fall 2019)
POLITICAL
“Food security and adequate nutrition for all is
where sustainable development starts.”
GHANASHYAM BHUSAL
MINISTER AT MINISTRY OF AGRICULTURAL AND LIVESTOCK DEVELOPMENT
PARTY: NEPAL COMMUNIST PARTY

CHAKRAPANI KHANAL-FORMER MINISTER (CHIEF POLITICAL ADVISER OF PUSHPA KAMAL

DAHAL)
AGRICULTURE SECTOR IN NEPAL
 More than 2/3 of Nepalese live in Rural Depending upon Agriculture

 Income of Agriculture sector-

• 811.3 billion (18/19 )

• 26.50 contribution to GDP

 Two side of coin –Rural Area and Agriculture

 Declining phase
• Cannot attract young people
• Migration of rural to urban
 AGRICULTURE SECTOR IN NEPAL
• Article (51 E)Government Emphasize Agriculture Development for
• Poverty Alleviation
• Food Safety
• Export earnings-Higher Economic growth
Through-
1. Policy intervention and Relation building with FAO,UN
• Women empowerment in Rural-Livestock (AFSP)
• Climate Change adaptation.(GEF)
• Technical assistance-USAID
2. Allocation of Budget (41.40billion)
3. Policy of minimum acceptance price in agriculture outputs with buy-back
guarantee from the government.
4. Nepal Agricultural Research Council (NARC)
5. Attracting FDI
 CHALLENGES ON AGRICULTURE SECTOR

• Climate-Flood, landslide, soil erosion, deforestation and

desertification

• under-investment from both public and private sectors.

• Only 3% of total Budget allocated

• subsidies have usually been politically sensitive agenda

• Infrastructure-Roads,Irrigation

• Technology-fixation of base price,Machinery

• Government Emphasis - Close Cooperation with FAO,GEF
 CONCLUSION AND RECOMMENDATION
 Agriculture friendly economic policy
 supportive policies and programs such as incentives,
opportunities, easy access to needed inputs and safety nets-
compensation
 cash-transfer program
 Agriculture Insurance Policy(Mandatory for insurance
company)
 Creating favorable investment climate.

 policies should promote those agribusiness models which

are in favour of small scale producers.
 MOVING FORWARD ...
 Ensure strategies that do not sideline or further marginalize
the poor, small scale farmers
 Ensure strategies that transform subsistence farming to a
more profitable venture
 Ensuring the participation of youth in agriculture - capitalize
on media coverage
 cross-sector strategic linking - for the point 3 above,
agricultural policies need to link with the national youth
policy
 need to bring the FNCCI and NCC and other federations of
trade and business into the fold of the agricultural plan
ECONOMICAL
HISTORY

Amounts are in NPR million

 IMPACT
 If we look at recent time of covid, when the lockdown
was announced people did not went to buy gold or shares
or clothes etc but they rushed to buy groceries. It clearly
shows how much of an economical impact agriculture
sector has.
 If we can export properly then will contribute a large
sum in GDP.
 Growth in GDP = individual growth of countrymen.

 Overall skillset of the workers can be improved.

CURRENT SITUATION

Amounts are in NPR million

EXPORT OF NEPAL
(COUNTRY)
EXPORT OF NEPAL
(PRODUCT)
 ECONOMIC ANALYSIS
OPPORTUNITIES CHALLANGES
• New technologies. • Irrigation.
• Growing market of organics. • Land topography.
• Organic manure. • Poor road conditions.
• Emerging newer markets. • Cheaper imports.
• Middle man.
• Quality and trust issues
 POSSIBLE SOLUTIONS
 Agriculture needs to be portrayed like a role model. Just
like the way we hype up actors farmers need to be hyped
up because they keep us alive (literally).
 Good roads will be beneficial for all of us.

 Incentives programs for farmers to give them something

to look up for.
 Various land structure.

 Economical labour.

 Easy financing facility.

 Easy to establish.
SOCIAL
 History
Nepal is a very small country that is found landlocked
between India and China. Around 80 percent of the
population relies on agriculture. There are three major
climatic regions in Nepal, each providing unique crops.
Nepal government has put agriculture in high priority.
Further, from 1995 to 2015, government implemented
Agriculture Perspective Plan (APP) with felt need to
commercialize and modernize the sector.
 IMPACT

 Lack of Sustainable Intensification in the policy

 Agriculture Knowledge/Education/Implementation/ Co-

ordination/ Training/ Research.

 Genetic Intensification.

 Insurance.

 Markets.
CURRENT SITUATION ON SOCIO-CULTURE
FACTOR
 OPPORTUNITIES & TREAT OF NEPALESE
AGRICULTURAL POLICIES
 Opportunities
 Growing Concern
 Increasing foreign cooperation
 The revolution on Information
 Agriculture Mechanization Promotion Modernization

 Threats
 Rapid changes in the preference, Competitiveness
 Nepalese agriculture is dependent in weather conditions
 Centralized funding mechanism
 Being a landlocked country
 SOLUTION OF SOCIO-CULTURE ON
AGRICULTURAL
As a result of the economic growth and globalization, increase in food
consumption, diversification of the diet away from traditional food and
decline in the share of food in household expenditure are expected. Thus, a
sound agricultural policy should foresee the future along with addressing
these current issues. However, the policy-making processes in Nepal are
highly complex and they are influenced by political, social and economic
environment to a great extent.

Considering these factors, the NAP-2004 has achieved to overcome some

of the constraints in Nepalese agriculture and can be classified as a good
agricultural policy. Nevertheless, limited considerations on climate change,
global trading system, innovation in agriculture, ensuring competitiveness,
reducing poverty and providing fair prices both for the farmers and the
consumers and higher dependency on other sectoral policies are the serious
setbacks of the NAP-2004.
TECHNOLOGICAL
OVERVIEW OF TECHNOLOGICAL ENVIRONMENT
 Large yield gap in agricultural crops and commodities.
 Conservation and use of available biodiversity
indigenous knowledge
 Management and use of natural resources and ecosystem
services
 Links to infrastructures and markets.

 Technology policy and adaptation practices

 use of natural as well as external inputs in food

production systems
 use of modern technologies, biotechnology, and
information and communication (ICT) technology
OVERVIEW OF TECHNOLOGICAL ENVIRONMENT
 Sixty five percent of the total population rely on agriculture as
their main source of occupation. Agriculture accounts for
nearly one-third of the nation’s GDP, and its growth rate has
averaged around 2.9 percent during the last decade.
 Low level of investment and technology inputs in agriculture
in Nepal
 Nepalese agriculture-characterized by low productivity, low
yields and volatile pattern of growth.
 low rates of adoption of improved technology and poor access
to suitable technology and limited availability of inputs
 Appropriate technology hard to find due to ecological
differences
 ONGOING CHALLENGES
 Lack of awareness about and access to appropriate and
quality agricultural machineries, equipment and tools
among farmers and entrepreneurs
 Machineries and tools appropriate for the small farmers
are not identified and developed
 Difficult terrain of the hills and mountains not allowing
mechanization
 Lack of rural infrastructure and energy

 Problem of spare parts and maintenance of imported

implements
 Inadequate program, budget and institutional provisions
 RECOMMENDATIONS TO IMPROVE
TECHNOLOGICAL ENVIRONMENT
 Technology and its Transfer Policy
 Investment in technology development

 Customized interventions

 Returnee migrant workers

 Prioritization of subsectors

 Farmers' participation

 Women focus
ENVIRONMENTAL
 CURRENT STATUS
 Nepalese climate is suitable for many crops like Rice, wheat, Paddy, Pulse,
and vegetables based on the climatic regions which have produced for both
personal and commercial use.
 Good potential for Organic Vegetables and Crops.
 Lack of knowledge about activities, insects, pest and disease.
 Forest cover almost 38 % of total land of Nepal.
 Only 21 % of total land can be used for agriculture in Nepal, 32 % is
irrigated.
 Increased health risk due to use of contaminated water, air and soil
pollution.
 Nepal is rich in different types of medicinal herbs and crops like
“Yarshagumba” which has high demand in international market.
 ENVIRONMENTAL ISSUES
 Nepal had a total of 6.4 million hectares of forest in 1964, reduced to 3.9
million hectares by 2000. The nation's forest coverage has declined from
37% in the late 1970s to 29% in the early 1990s. The forests are used as fuel
for cooking and heating and also used for infrastructure development, such
as roads, schools, buildings, and houses. Nepal have the highest
deforestation rate i.e., 1.8 % in south east asian countries.
 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.
 Mountain biodiversity is suffering due to ecological fragility and instability
of high mountain environments, deforestation, poor management of natural
resources, and inappropriate farming practices.
 Delay in monsoon season has been experienced due to climate change in
Nepal which has changed the cropping pattern and crop maturity period.
 ENVIRONMENTAL ISSUES
 Soil pollution due to high uses of insecticides and pesticides among which
60 % remains in soil decreases the fertility of soil.
 Intensive rainfall events, increases in frequency and intensity floods, and
changes in monsoon patterns triggering physical loss of fertile soil and
sedimentation problems.
 Increase in population growth rate annually results over exploitation of
natural and land resources cause an increase in demand for fuel wood,
timber, fodder and land to grow more food.
 Improper management of waste generated by domestic and industrial area
causing environment degradation.
 POSSIBLE REMEDIES
 Afforestation and conservation of forest through community based
conservation. Nepal government has established many National parks and
wild life reservation.
 Government should make proper policy, law, rules and regulations to protect
the natural resources and protect environment.
 Farmer should minimize the excessive and unwanted use of pesticides
which deplete the fertility of soil. Instead government should regulate the
policy to encourage to use organic fertilizer.
 Proper and scientific management of Domestic and Industrial waste.
 A planned and proper policies should be made to control urbanization.
LEGAL
 LEGAL ASPECT
 Act

 Policy Documents

 Regulation

 Research
STRATEGIC FRAMEWORK
AGRICULTURAL INSTITUTIONAL MECHANISM
 ISSUES AND CHALLENGES OF AGRICULTURAL
INSTITUTIONS
 Inconsistent Institutional Structure with Poor Communication
Mechanism
 Overlapping Power, Authority, and Jurisdiction
 Weak Human Resource Capacity
 Shifting Policy Regime
 Weak Linkages among Research, Education
THANK YOU