Country Context

Agriculture sector engages around 66% of the total population in Nepal. It creates a diverse array of jobs and employment from farming to small-scale enterprises. Nepal is vulnerable to food insecurity and recurring natural disasters like floods, drought, landslides, earthquake, diseases and pest outbreaks. The agriculture sector in the country is still dominated by subsistence farming resulting in low productivity and production of agricultural commodities.

FAO Nepal is working in close coordination and cooperation with the Government of Nepal (GoN) from 1977 A.D aiming to promote agricultural development, achieving food and nutrition security, uplifting livelihoods of rural farming community and promoting sustainable natural resource management through policy support, strengthening institutional capacity and providing technical assistance in the implementation of projects and programmes aligning with government strategy and priorities.  

Nepal has experienced a notable recovery despite the devastating earthquake in 2015, the COVID-19 pandemic (2020-21), and. Despite these adversities, there has been a decline in absolute poverty from 25.1 percent in 2010 to 16.7 percent in 2020, and multidimensional poverty reduced from 39.1 percent in 2011 to 17.4 percent in 2019. However, the nation's economy still exhibits vulnerability to external shocks.

In 2015, Nepal transitioned to a Federal Governance System with a three-tier structure, consisting of a federal, 7 provincial, and 753 local governments, aiming for decentralized decision-making and resource allocation. While the local governments focus on local development and service delivery, federal and provincial authorities handle policy formulation, enforcement, and coordination. In this existing structure, strong and effective coordination in the agriculture sector is required for the better implementation of crucial plans and programs.

Agriculture, a major contributor to GDP (23.9 percent) and employer of 60.4 percent of the population, faces challenges in ensuring domestic food sufficiency (Source: MoF Economic Survey). Despite its significance, agricultural productivity is insufficient, leading to a growing reliance on imports. Over 50 percent of agricultural production is rainfed, making it susceptible to climatic variability, with climate change further threatening crop and livestock production.

Other issues also persist in livestock and fishery productivity due to limited capacities in feeding and breeding, due to emerging and endemic diseases. The budget allocation for the fiscal year 2023/2024 is NPR 58.98 billion for the development of agriculture and livestock which is rise of Rs 3.9 billion compared to the last year. The country has made progress in reducing undernutrition, but challenges like high stunting levels and micronutrient deficiencies persist. Despite allocating a substantial 12 percent of its national budget to social protection, Nepal grapples with significant inequalities, as evident in the Human Development Index, Gender Inequality Index, Gini coefficient, and poverty rates for socially excluded groups.

FAO incorporates a gender-responsive approach in the project cycle management to safeguard the sustainability of the intervention and ensuring equitable growth. It focuses on the ecosystem restoration, adaptation and mitigation actions against the impacts of climate change in the agriculture and forest sectors encouraging synergies and trade-offs between the two.

CPF Priority 1: Sustainable agri-food systems transformation and inclusive socio-economic development. The interventions under this priority are primarily aimed at achieving the FAO strategic objective - Better Production (with focus on Innovation for sustainable agriculture production; Blue transformation - mainly fresh-water fisheries; Small-scale producers’ equitable access to resources; and Digital agriculture). The interventions will also contribute towards achieving other strategic priorities for Better Nutrition, a Better Environment, and Better Life.

CPF Priority 2: Food security, safety and sustainable consumption for reduction of hunger and malnutrition. Focus of the interventions under this priority is to achieve the FAO strategic objective - Better Nutrition (mainly Healthy diets for all; Nutrition for the most vulnerable; Safe food for everyone; and, Reducing food loss and waste). In addition, the interventions will contribute to achieve Better Production and Better Life.

CPF Priority 3: Sustainable natural Resource management; climate resilience; and, disaster risk reduction and management. The interventions under this priority are focused on achieving the FAO strategic objective - Better environment (mainly Climate change mitigating and adapted agri-food systems; Bioeconomy for sustainable food and agriculture; and Biodiversity and ecosystem services for food and agriculture). In addition, the interventions will also help in achieving Better Production and Better Life.

CPF Priority 4: Inclusive, gender responsive agri-food systems governance. The interventions under this priority are designed mainly to achieve the FAO strategic objective - Better Life (Gender equality and rural women’s empowerment; Inclusive rural transformation; Achieving sustainable urban food systems; Agriculture and food emergencies; Resilient agri-food systems; Hand-in-Hand (HIH) Initiative; and, Scaling up investment). Additionally, the interventions will also contribute towards achieving other strategic objectives of Better Production.

FAO will support stakeholders who contribute to agri-food systems transformation. The FAO’s direct interventions across all outputs will be more focused on supporting deprived, marginalized and vulnerable households, while involving women, youths and inclusion (leave no one behind – LNOB) as much as possible as the cross-cutting priority.