A homegrown vision of commercial agriculture in Nepal that puts small-scale farmers at its heart

A new home-grown vision for a thriving smallholder agriculture sector is needed in Nepal. Jagat Deuja reflects on how renegotiating the law as part of a package of socio-legal empowerment support could support this, and help set the food and agricultural sector on a more self-sufficient, equitable and diverse trajectory.

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Insight by 
Jagat Deuja
Executive director of Community Self Reliance Centre, in Nepal
04 May 2023
Articulating the role of law for a just transition in 2023 and beyond
A series of blogs that explores ways to navigate law, economies and justice in times of transition
Two people bend down to pick up tomatos

Smallholder farmers harvesting tomatoes in Dharam Pokhara village, Nepal (Photo: Nabin Baral/IWMI, via FlickrCC BY-NC 2.0)

Nepal’s rapidly increasing – and growing dependency on − food imports (up 65% from 2015 to 2020) is raising macroeconomic and food security alarm bells and putting the future of Nepal’s agriculture sector into question.

Nepal ranks 81st out of 121 on the Global Hunger Index, categorising hunger levels as ‘moderate’.

But it is high levels of remittances supporting food purchasing that are keeping Nepal from facing serious hunger problems − rather than any strategies to make the agriculture sector more productive or food supplies more secure.  

Meanwhile approximately 50% of Nepal’s population work in the agriculture sector. Yet, smallholder farming-based livelihoods face many challenges, especially in competition with cheaper imported produce. Unequal access to land, high levels of insecure tenant farming, shortage of year-round irrigation, high levels of outmigration, and vulnerability to climate risks compound the situation.

Nepal’s vision for ‘modern’ agriculture

There is widespread perception and discourse among policymakers, politicians, government officials and even the wider public that the sector needs ‘modernising’ – featuring considerably higher levels of commercial and mechanised farming.

Nepal’s agriculture development strategy (PDF) focuses on improved governance, higher productivity, profitable commercialisation and increased competitiveness.

Within this strategy, mechanisation is hailed as the silver bullet – capable of driving production of high value commodities such as coffee, tea, rubber and vegetables.

Mechanisation is seen as a way to address agricultural labour scarcity.  And, by increasing the scale of farming operations, able to lower production costs while raising productivity and profitability.

This vision holds that increased productivity driven by commercial and mechanised farming will push up per capita income and increase exports while also meeting the demands of urban populations in terms of food production and availability.

But this vision fails to capture a diversity of options for transforming the sector and tackling food import dependency; visions of ‘commercialisation’ also need interrogating.

Ways forward?

During critical debates conducted at local, provincial and national level as part of the Empowering Rural Producers in Commercial Agriculture (EPIC) project, two divergent pathways emerged for advancing agricultural commercialisation in Nepal.

One comprises a much greater role for private companies in production and distribution, including through accessing their own land for production as well as through contract farming arrangements that benefit wealthier farmers.

But from experiences worldwide, a significantly increased role for agribusiness companies could lead to their undue influence over national policies and available technologies, abuses of market power, and unsustainable agricultural practices. This approach could deepen inequalities, pose environmental risks and deplete life sustaining natural resources.

An alternative pathway is one that sees large numbers of small-scale rural producers playing an integral part in driving the nation’s food production. This would include a much stronger role in decisions relating to production and market access, using their voice to shape and govern the sector.

Building an alternative vision

Nepal needs a more inclusive vision that focuses on enabling landless and small-scale farmers to succeed in commercial agriculture, promoting more equitable development through opportunities for farmers to thrive in dynamic rural economies. This includes supporting farmers with socio-legal empowerment, knowledge generation, skill development and adopting appropriate technology.

Support must address the many challenges smallholder farmers face, such as those mentioned above. This would require investment in public goods, financial services and social safety nets.

As climate change is driving more natural disasters such as droughts, floods and landslides causing disruption of food supplies during the monsoon months, modernisation visions for agriculture and food systems must also have climate resilience for the majority at their heart.  

Negotiating a new legal framework

Nepal is still in political transition and is struggling to devise laws, acts and policies aligned with its republican constitution which came into effect in 2015.

Since 2018 the Ministry of Agriculture and Livestock Development has been drafting an agriculture act that has yet to be released for public consultation. As things stand, the agriculture sector still lacks an appropriate legal regime to guide local, provincial and national governments in ensuring equitable distribution of benefits across the sector.

But this state of transition brings opportunity – creating space for a new law that keeps Nepal’s vision of commercialisation but advances it by empowering small-scale farmers and promoting their agency. Any new legal framework must respect and protect the rights of farmers as stated in the 2015 constitution.

Further, federal law is not enough. Local governments should develop local policies and law based the actual context and the opportunities Nepal has. Rural municipalities can for example, build on existing experience of running inclusive dialogues and generating content for local laws considering the interconnected aspects of land rights, agricultural productivity and market linkages.

Community Self Reliance Centre is one of a number of agencies supporting landless and small-scale farmers to pilot implementation of existing inclusion policies, and to negotiate the law from the grassroots up, based on lived realities, and evidence of what can work.

Socio-legal empowerment support to boost producer agency needed now more than ever

Nepal cannot develop without transforming its land governance and agri-food systems. But the pathway is unclear. The abstract slogan of modernisation does not provide adequate guidance for improving Nepal’s agri-food systems.

Choices can be made now, as to how much land and power is handed to larger private enterprise and how much to focus on ensuring a more diverse landscape of actors and climate resilient agro-ecological production methods.

We need a clearer vision guided by public debate on the pathways the sector could take, and on the route most likely to fulfil farmers rights, as articulated in the constitution.

This process should be informed by further exploring the role of producer cooperatives, inter-cooperative trade, equitable trading arrangements between value chain actors, and innovative production and distribution models supported by SMEs as relevant.

Grassroots social movements groups must continue to come together to conduct in-depth policy analysis, shift the dominant discourses that underpin the reforms, and promote actions for enabling small-scale producers to be a stronger force in the sector.

About the author

Jagat Deuja is executive director of Community Self Reliance Centre, in Nepal, which works to secure land rights of landless, tenants and smallholder farmers through pro-poor land and agrarian reform.

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