Development of Agribusiness Enterprises - Asian Productivity ...

7. NEPAL
INTRODUCTION
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Arjun Prasad Aryal
Acting Marketing Manager
Kalimati Fruits and Vegetable
Wholesale Market Development Board
Kathmandu
The Nepalese economy is primarily an agricultural economy. The agriculture sector
contributes 39.2 percent of total GDP. The real growth rate of the economy has been low
because of the slow growth rate of the agriculture sector. In 1999/2000, the growth rate of
real GDP was 6 percent. With the improvement in the global and regional economies, and
political stability in the country, the growth of the Nepalese economy remained satisfactory
with several economic indicators signaling positive development.
Agriculture is the main contributor to GDP in Nepal, as well as the main source of
income and employment generation. Income generated through the industrial sector as well
as internal market expansion of the non-agriculture sector depends upon the development of
the agriculture sector. As such, a market-oriented approach and the commercialization
process have been initiated in the agriculture sector. The goal of the Ninth National Plan is
to attain higher economic growth, and thereby help to alleviate poverty through commercial
farming, develop the industrial base by safeguarding and promoting agro-based enterprises,
and the promotion of employment. The production of principal food crops and cash crops
was projected to rise by 8 percent and 7 percent, respectively in 1999 and 2000; in 1996, the
figures were 2.4 percent and 4.5 percent, respectively. This growth is attributed to the
favorable climate, an adequate supply of agricultural inputs, an increase in cropped land area,
and pest control.
Development of the industrial sector is equally essential to the rapid economic
development of the country. Given that the majority of the population is dependent on
agriculture, there is a need to create job options for them in the non-agriculture sectors
through the development of productive industry.
In view of the share of agriculture in GDP (39.2 percent) and labor force engaged in
the sector, it is evident that the productivity and the per capita income of labor engaged in
agriculture is much lower than those in the non-agriculture sectors. Therefore, the incidence
and depth of poverty is greater among workers in agriculture sector.
Ninth Plan and Agriculture Perspective Plan
The Ninth Plan and the Agriculture Perspective Plan (APP) form the basic policy
document that guides the agricultural development programs in Nepal. It has adopted the
policy of building a foundation for the development of agro-based industry through
agricultural diversification and commercialization.
APP aims at intensive agriculture with strong complementarity among the priority
inputs particularly irrigation, fertilizers, technology, roads in the Terai for cereal grains