Is dietary quality in Nepal improving?

Women farmers in Nepal

Nutritional deficiency is a major concern in achieving sustainable food and nutrition security, especially in the South Asian nations. Nutritional deficiency, also known as “hidden hunger” is very common in these countries where people’s diet is largely dominated by starchy staples. The macro nutrients (protein, carbohydrates and fat) and micro nutrients (vitamins and minerals) are essential for our metabolism, growth,

and physical and mental well-being. The major source of these nutrients is our diet and hence the quality of diet largely determines the intake of these nutrients. Dietary diversity is one of the indicators which can assess the dietary quality and also the extent to which our nutritional needs are met. A recent study conducted by IFPRI tries to explore the dietary diversity and the food expenditure patterns for households in Nepal using data from the Nepal Living Standards Survey (NLSS).

The findings of the study suggests that many sociodemographic and economic factors determine the dietary diversity and quality of diet of the people in Nepal. Historically, Nepal has been known as an impoverished country with poor nutrition indicators. However, in recent years it has shown the fastest rate of reduction in child stunting, in the world. Lately, there has been many positive changes such as reduction in the share of food expenditure devoted to staples, which has dropped by 32 percent between 1995 and 2011. Though still the largest share of food expenditure is on cereals yet there has been a significant increase in the expenditure on fruits, vegetables, milk and milk products.

Research shows that dietary diversity was seen more in the urban areas because of the better access to markets in comparison to their rural counterparts. The diets of small and marginal farmers were more cereal-dominated. Ethnicity also influenced the choice of food items and the Brahmins had the most diversified diet compared to the other unprivileged ethnic groups.

The study revealed that factors like poverty, educational status, ethnicity and access to basic facilities, all have a bearing on the kind of diet one consumes. The households receiving greater remittances, having higher income, better education and increased access to facilities would have more diversified diet and vice versa.

This implies that efforts are needed to adopt a multisectoral approach in order to deal with the nutritional security. Measures like social cash transfers could improve the situation for better. Initiatives to improve literacy levels and increase access to basic facilities need to be further scaled up. Special programs to improve nutritional security among the unprivileged ethnic groups must be implemented. Further fragmentation of land needs to be stopped and simple measures such as kitchen gardening need to be encouraged. A comprehensive strategy, including all the plausible factors that impact dietary diversity, needs to be put in place in order to deal with the dreadful hidden hunger.

Growing Fertilizer Market in Nepal

Landlocked Nepal faces the challenge of low crop productivity due to climate change, depletion of soil fertility, and low fertilizer use. Over the years, there has been a significant shift in the use of inorganic fertilizer in the Terai agro-ecological belt, while use has stagnated in the hill and mountain regions. The low fertilizer use may be partly due to insufficient demand, the shortage of fertilizer-responsive varieties that suit Nepali production environments, limited access to irrigation facilities, or limited market access aggravated by rugged terrain in many parts of the country.

The government is concerned about high prices and the dubious quality of fertilizers sold in the country. It is unclear why the demand for and sale of chemical fertilizer supplied through private, informal channels remain high despite the poor quality of chemical fertilizers.

Divya Pandey/IFPRI

To support the government of Nepal, USAID Nepal, through IFPRI, carried out a study to identify what determines the quantity of chemical fertilizer farmers’ use. The project also studied how variation in chemical fertilizer prices across regions between 2003 and 2010 contributed to variation in chemical fertilizer use and other economic outcomes of farm households during the same period.

Key Findings and Policy Recommendations

Analysis of past policies and panel data from the Nepal Living Standard Survey for 2003 and 2010 show that in Nepal's Terai region, lowering the price of chemical fertilizer is more advantageous for larger farms than smallholder farms. The growth in fertilizer demand has been met by private markets, despite the knowledge that chemical fertilizer from private markets is often inferior and impure compared with the chemical fertilizer supplied by the government, nongovernmental organizations, and cooperatives.

The study outlines the following policy options:

  • increasing the use of chemical fertilizer in Nepal, particularly in the hill and mountain regions, which may require the government to focus on raising returns from the use of chemical fertilizer rather than on reducing the price of chemical fertilizer through subsidies
  • conducting further research on the variation in use of chemical fertilizer between medium- to large-size farms in Terai and those in the hill region, as well as on the interactions between chemical and organic fertilizer and the long-term environmental sustainability of increased chemical fertilizer use
  • enhancing investment in agricultural research and development on production technologies

Read more: Determinants of Chemical Fertilizer Use in Nepal

Farm Size and Effects of Chemical Fertilizer Price on Farm Households

Agricultural Mechanization in Nepal

Agricultural mechanization is one of the key processes that will affect the future of smallholder farming systems in Asian countries, including Nepal, where just 8 percent of farmers use tractors, 26 percent use iron plows, and more than 60 percent of intercultural operations are managed by women. Poor infrastructure is a major constraint on the mechanization of agriculture in Nepal. But providing easy credit and raising awareness of financial intermediaries can help to mitigate those constraints and facilitate mechanization.

Divya Pandey/IFPRI

USAID Nepal, through IFPRI, aims to support the Government of Nepal in improving the policy and regulatory environment by reforming the country’s business regulations and supporting the enactment of farmer- and business-friendly input policies and procedures under the Policy Reform Initiative Project (PRIP). As part of this effort, IFPRI conducted several empirical assessments of the issues affecting the promotion of agricultural mechanization (or agri-mechanization) in Nepal.

One assessment addressed the problems and challenges faced by stakeholders—farmers, agrimachinery providers, producers and fabricators, researchers, and traders—and assessed how the adoption of custom-hired services affects farm households across farms of all size. The main objective of this empirical assessment was to identify policy solutions for the strategic implementation of the agri-mechanization promotion policy passed in 2014.


To understand the policy questions in depth, the team conducted a literature review, collected primary and secondary data for analysis of mechanization in Nepal, interacted frequently with a variety of stakeholders, and reviewed the policy environment.

Key Findings and Policy Recommendations

The study on agri-mechanization in Nepal found that smallholder farmers are likely to benefit from the adoption of tractors through custom-hiring services. But they may also have incentives to exit farming and specialize in nonfarm income-earning activities. IFPRI researchers found that operators providing machine services lacked training, which contributed to poor demonstrations and low adoption of machine use among farmers. Because the government had not made mechanization a priority in the past, the sector is currently in a developmental state, and mechanization is not widely recognized as a substantial tool for better crop productivity.

IFPRI researchers also analyzed the policies and provisions governing the agri-mechanization sector, and recommended strengthening Nepal’s agri-mechanization promotion policy and focusing on implementation. Issues surrounding taxation (that is, the custom tariff and VAT) also need to be resolved. Finally, the establishment of networks and coordination with other sectoral and cross-sectoral policies and an agricultural mechanization credit policy are needed.

Read more: Effects of Agricultural Mechanization on Smallholders and Their Self-Selection into Farming: An Insight from the Nepal Terai

The Nepalese Seed Sector

Nepal delegates for a Seed Sector Study tour. Source: Ruchi Narang/ IFPRI
Nepal delegates for a Seed Sector Study tour. Source: Ruchi Narang/ IFPRI

Seed, fertilizer, and irrigation are the major inputs that drive improvements in agricultural productivity. High-quality seed, alone, contributes a 15–20 percent increase in output levels. For major cereals, the key constraints facing Nepalese farmers are lack of access to high-quality seed and rates of seed replacement of less than 10 percent. Recent policy shifts toward private-sector involvement in the production of certified improved seed in Nepal are encouraging. Nearly 20 private seed companies are involved in producing and marketing seed, contributing around 27 percent of the country’s seed production. The public sector’s share of seed production is relatively high for wheat (for example, through the National Seed Company), whereas the community sector’s shares are higher for rice and maize. The private sector’s shares are moderate for wheat, rice, and maize, but are very high for vegetable crops.

Through the International Food Policy Research Institute (IFPRI), the Nepal branch of the United States Agency for International Development is supporting the Government of Nepal in its efforts to improve the policy and regulatory environment for seed production by addressing sales regulations and supporting the enactment of farmer- and agribusiness-friendly input policies and procedures. The main objectives of the research were (1) to critically examine constraints on attracting private investment in the commercial production and marketing of seed; (2) to recommend critical policy, regulatory, and capacity building measures both short term (less than two years) and medium term (three to five years); and (3) to provide detailed strategic inputs to increase private-sector involvement in the seed sector and to identify areas in need of institutional and programmatic support for the Ministry of Agricultural Development, the Seed Quality Control Centre, and the Nepal Seed Board.


For this study, the research team reviewed key documents; analyzed primary and secondary data; and met with key stakeholders to determine important constraints, gaps, and areas in need of reform. Recommendations and strategic formulations for policy, legal, institutional, and programmatic reform were identified and prioritized, as outlined below.

Key findings and Policy Recommendations

  1. Harmonize Nepal’s seed industry with global trade
  • Harmonize the local seed industry with the varietal research and seed production of the South Asian Association for Regional Cooperation and Asian and Pacific Seed Association
  • Enact the policies of the World Trade Organization’s Intellectual Property Rights under the International Union for the Protection of New Varieties of Plants and the Plant Variety Protection
  1. Strengthen and expand Nepal’s existing seed industry
  • Develop regional competitiveness
  • Simplify the process for registering new varieties
  • Provide incentives for Nepal’s private sector to engage in seed research and hybrid breeding
  • Improve private-sector representation within the Nepal Seed Board and Seed committee
    to contribute on policy decisions and reforms
  • Strengthen the capacity of the national research institutes to develop new, cost-reducing varieties and technologies
  • Develop programs for skills training, farm visits, and learning opportunities for staff from seed companies
  1. Attract foreign direct investment and global collaboration
  • Attract foreign direct investment for the local seed industry, as well as local and global investment
  • Promote collaboration and joint ventures in seed enterprises

In addition to the above recommendations, analysis of the legislation and policies governing Nepal’s seed sector clearly indicate that the elements required to strengthen the county’s private seed companies are largely present, but implementation mechanisms need to be developed. The analysis supports the objectives of National Seed Vision 2025 in developing inbred lines for commercialization by private seed companies, but appropriate procedures and guidelines for further multiplication are needed. This initiative could be developed as one of the models for public–private partnership in the area of hybrid research. Findings also propose that the government support the establishment of strong, viable seed companies by leasing the required land for testing the seeds before rolling in the marker. It is also advised that the government support such companies by providing (a) grants, subsidies, and tax and customs exemption for the purchase of seed equipment and machinery, and (b) skilled manpower across the chain for a fixed period.

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