Imagine a farmer in Nepal's Chitwan district. After months of hard work, he harvests a bountiful crop of tomatoes. But the local market is so oversupplied that the price drops below cost. In desperation, he is forced to throw some of his harvest on the side of the road. Meanwhile, in Kathmandu, just a few hours away, a supermarket shopper pays five times more for the same tomatoes. This stark contrast is not fiction but a harsh reality that illustrates a deep paradox at the heart of Nepalese agriculture.
Agriculture is the backbone of Nepal's economy. The sector employs more than 60% of the workforce and contributes about 24% of the country's gross domestic product (GDP). Despite this fundamental role, the millions of smallholder farmers who form the backbone of the sector live in a state of constant economic vulnerability. Their incomes are subject to sharp fluctuations due to price volatility, inefficient supply chains, and lack of access to modern inputs and markets.
This study gets to the heart of this paradox by examining the structural weaknesses, policy failures, and market dynamics that suppress farmers’ incomes. At the same time, it highlights four key pathways to empowering farmers: strengthening agricultural cooperatives, implementing fair contract farming, generating additional value through local processing, and using digital tools. All of these strategies are considered in the context of a strategic shift to more sustainable, organic production systems that can free Nepali farmers from dependence on imported inputs and build a more equitable and prosperous agricultural future.
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By Alpha Business MediaImagine a farmer in Nepal's Chitwan district. After months of hard work, he harvests a bountiful crop of tomatoes. But the local market is so oversupplied that the price drops below cost. In desperation, he is forced to throw some of his harvest on the side of the road. Meanwhile, in Kathmandu, just a few hours away, a supermarket shopper pays five times more for the same tomatoes. This stark contrast is not fiction but a harsh reality that illustrates a deep paradox at the heart of Nepalese agriculture.
Agriculture is the backbone of Nepal's economy. The sector employs more than 60% of the workforce and contributes about 24% of the country's gross domestic product (GDP). Despite this fundamental role, the millions of smallholder farmers who form the backbone of the sector live in a state of constant economic vulnerability. Their incomes are subject to sharp fluctuations due to price volatility, inefficient supply chains, and lack of access to modern inputs and markets.
This study gets to the heart of this paradox by examining the structural weaknesses, policy failures, and market dynamics that suppress farmers’ incomes. At the same time, it highlights four key pathways to empowering farmers: strengthening agricultural cooperatives, implementing fair contract farming, generating additional value through local processing, and using digital tools. All of these strategies are considered in the context of a strategic shift to more sustainable, organic production systems that can free Nepali farmers from dependence on imported inputs and build a more equitable and prosperous agricultural future.