Agriculture is the backbone of the Nepalese economy. 21% of the total land area has been cultivated out of the 28% of cultivable land of the total irrigable land. Irrigation is available only in 50% of the land. Nepalese agriculture depends on monsoon still today. The cultivated land is about 0.50 hectare per farmer. Agriculture has provided employment to 64% of the labor force. Agriculture sector still contributes one-third of the GDP.
Importance of Agriculture:
1. Source of livelihood: Agriculture is the source of livelihood of Nepalese people. About 66% of the population is dependent on agriculture for their food, income, and employment.
2. Source of national income: Agriculture is the main source of national income in Nepal. It is because the non-agriculture sector is not developed properly. It contributes more than 30% annually to GDP.
3. Source of raw material: Agriculture helps in the promotion of industries. It supplies the raw materials like sugarcane, tobacco. Tea jute, Food grain, milk, hides (skin), wool, etc. to many big industries.
4. Development of Industries: The capital for industrial investment is available from agriculture. The increase in agricultural income increases the purchasing power of rural people. It widens the markets for industrial products.
5. Basis of foreign trade: The main basis of the export trade of Nepal is agriculture. The exports of agricultural products in Nepal include jute, jute products, rice, oilseeds, pulses, food grains, hides, live animals, tea, beverages, etc.
6. Source of Public Revenue: Agriculture is a source of public revenue. The registration and land revenue constitute more than 30% of the direct tax revenue in Nepal. The government also receives revenue from the export of agricultural products.
7. Supports developmentally of other sectors: Agriculture development stimulates and supports the development of other sectors. Agricultural growth increases capital formation. The increased saving can be invested in health, education, people’s welfare, etc.
8. A unique instrument for development: According to the World Bank (WDR 2008), Agriculture has a feature that makes it a unique instrument for development. Agriculture contributes to development in the following ways:
a) As an economic activity.
b) As a livelihood.
c) As a provider of environmental sectors.