Agriculture and Natural Resources Sector in Nepal

Evaluation Document | 30 June 2009

This sector assistance program evaluation assesses ADB's operations in the agriculture and natural resources (ANR) sector in Nepal from 1997 to 2007.

Despite some decline in recent years, agriculture remains by far the largest sector in the Nepali economy, employing 71% of the population and accounting for 33% of gross domestic product in 2007.

The sector is also an important source of livelihood for a majority of poor people in the country; indeed, poverty in Nepal is primarily a rural problem, one strongly associated with gender, ethnicity, caste, and religion.

This study assesses ADB's assistance to Nepal's agriculture and natural resources sector from 1997 to 2007 to identify opportunities for improving future program performance. Overall assessment of the sector assistance is partly successful.

ADB assistance to the sector reached about $228 million during 1997-2007, or about 21% of total assistance during the period of about $1.08 billion. Of this, $82.7 million went to agricultural production and marketing; $73.7 million to the agricultural and rural sector; and $50.6 million to irrigation, drainage, and flood protection.

Among the findings, the study recognized ADB's lead position as development partner in agriculture and natural resources in Nepal, while its strategies and programs helped address poverty and inequality. Noteworthy in this regard was its support to foster inclusive development by addressing gender, caste, and ethnic discrimination through inclusive public policies. ADB is also credited with helping to improve agricultural productivity through greater use of irrigation facilities, and with advocating and providing support to diversify and commercialize agriculture.

The study recommends, among other things, that ADB increase its strategic focus in supporting agriculture and natural resources by increasing investment in rural infrastructure, such as irrigation, rural roads, and market infrastructure.