Agriculture in the Himalayas: the Economics of Nepal

The Federal Democratic Republic of Nepal is a mid-sized landlocked country located in Central Asia, in between China and India. The country is famous for its location along the Himalayan mountain range and is frequented by many adventurous tourists because it is the southern entrance to Mount Everest’s summit. Currently, Nepal has a total territory of little over 147.000 square kilometers, which is somewhat larger than the state of New York. The rugged Himalayas to the north and the Ganges river valley to the south dominate the country’s landscape. Nepal has a total population of over 29 million citizens, less than 20% of which live in an urban setting. Even though the capital city of Katmandu has approximately 1.2 million inhabitants, Nepal is amongst the minority of countries in the world where most of the population lives in a rural setting. The national annual gross domestic product (GDP) is about US$70 billion (PPP) and the country has experienced positive economic growth in recent years. The Nepalese economy is divided into 32% agriculture, 14% manufacturing, and 54% services. Similarly, it is estimated that the agricultural industry employs 69% of the national labor force, while manufacturing employs 12% and services employ another 19%. Meanwhile, the agriculture industry utilizes 29% of the national territory, while another 25% is forested.

In terms of natural resources, Nepal has quartz, water, timber, hydropower, lignite, copper, cobalt, and iron ore. Within manufacturing, the national industry is focused on carpets, textiles, sugar, oilseed mills, cigarettes, cement, and brick production. Simultaneously, the country’s agricultural industry has as main products pulses, rice, corn, wheat, sugarcane, jute, root crops, milk, and water buffalo meat. In terms of trade, during 2015, Nepal imported US$6.6 billion worth of goods and exported US$909 million, resulting in a trade deficit of US$5.7 billion. Furthermore, that same year, Nepal’s main export, representing 9.1% or US$83 million of the country’s total, consisted of flavored water. On the other hand, the country’s main import, representing 8.7% or US$576 million of all international purchases, was refined petroleum. Likewise, Nepal’s main trade partners are India, China, the United States, and the European Union.

Agriculture in the Himalayas: the Economics of Nepal

Unfortunately, in Nepal, some 2.2 million people suffer from undernourishment. In recent years, the average per capita protein intake of animal origin amongst the Nepalese population has been of 11 grams daily. Meanwhile, cereals, roots, and tubers supply 70% of the average food energy intake in the country. Land distribution and output in Nepal have also evolved throughout the last half century. Back in 1961, permanent pastures and meadows in the country covered little over 1.7 million hectares, while arable land covered 1.8 million hectares and permanent crops accounted for 25.000 hectares. More recently, by 2014, permanent pastures and meadows had increased to approximately 1.8 million hectares, while arable land represented 2.1 million hectares and permanent crops covered 212.000 hectares. In 1961, the cereals market in Nepal utilized little over 1.7 million hectares of land and yielded almost 3.2 million metric tons annually. Finally, in 2014, the country devoted some 3.5 million hectares of land to cereals production and yielded more than 9.5 million metric tons.

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