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Geography,
agriculture and the economy of Nepal
Nepal is located in South Asia between India to the south and China to the north. This landlocked, largely mountainous country stretches from the flat river plain of the Ganges to the mountains of the Himalayas and occupies a land area of 140,800 km 2. It is home to eight of the world’s tallest peaks, including Mount Everest, the tallest, at an altitude of 8,850 m, on the border with China. The country has three distinct ecological zones, each differing in altitude, resources and living conditions. Climate ranges from tropical and subtropical in the lowlands, or Terai, to cool and temperate in the middle hills and alpine in the Himalaya. The population is about 25.2 million and is currently growing at an annual rate of 2.3 per cent. Agriculture Agriculture is the country’s major economic sector, employing about 70 per cent of the population and accounting for about 40 per cent of gross domestic product (GDP) in 2005. Forests and farmland together occupy half of Nepal ’s total land area. Cereals such as rice, maize, wheat and millet account for nearly 90 per cent of crops produced, and for 56 per cent of all agricultural production. Agriculture’s contribution to GDP has fallen gradually from 72 per cent in the mid 1970s. The decline in the sector’s growth over recent decades has in part been the result of an expansion in trade and tourism, transport and other services, and in part a consequence of conflict and its devastation of rural areas. But it is also a result of population pressure and cultivation of marginal hillsides, which has caused severe soil erosion and declining crop yields. Agricultural productivity has not kept pace with population growth and Nepal has gradually become a country with a food deficit problem. The ratio of population to arable land is now one of the highest in the world. In a country already dominated by marginal and small farmers, landholdings are becoming smaller and more fragmented than ever. Some positive trends in agriculture include an increase in dairy production and the strong performance of the tea and coffee industries. The vicinity of China and India affords access to huge markets for agricultural products, which could be better exploited by Nepal especially through high-value commercial agriculture.Economy With a gross national income per capita of US$260, Nepal is one of the poorest and least developed countries in the world. After a decade of satisfactory growth in the 1990s thanks to a liberal, market-oriented policy and the introduction of a number of reforms, the economy has stalled in recent years and now barely keeps pace with population growth. The Maoist insurgency in the hills and mountains has contributed to economic stagnation and has led to a decrease in tourism, one of the country’s major sources of revenue. After a decade of fighting, a ceasefire was called in April 2006 and the country has been moving tentatively towards resolution of the conflict. The landlocked nature of the country makes it costly to import and export goods, and the rugged terrain has limited development of the transport and communication network. Despite these constraints, there is good potential for economic development in the hill and mountain areas, once these areas become more secure. Tourism and hydropower are among the main opportunities for foreign investment. In response to the deteriorating economic situation, more than a million Nepalese are now working abroad, and one in three households is sustained by remittances. Migration is particularly common in the hill and mountain areas. Source: IFAD |
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