Concept of Economic Environment Agricultural Sector Status of agriculture sector in Nepalese economy Features of Nepalese Agriculture Issues of Agriculture Development in Nepal The Economic Survey, 2016/17

1. Agricultural Sectors
Dilisha Shrestha
Business Environment

2. Content
• Concept of Economic Environment
• Agricultural Sector
• Status of agriculture sector in Nepalese economy
• Features of Nepalese Agriculture
• Issues of Agriculture Development in Nepal
• The Economic Survey, 2016/17

3. Concept of Economic Environment
• Economic environment refers to all the economic factors that affect the
behavior of business.
• Economic environment consists of all the external factors in the immediate
market place and the broader economy.
• Economic environment refers to all the external economic factors that
influence the buying habits of consumers and businesses and therefore affect
the performance of a company.

4. The basic macroeconomic factors which have considerable influence on business are:
 Unemployment
 Inflation
 Interest rates
 Gross Domestic Product (GDP)
 Economic Planning
 Exchange rates
 Economic system
 Industry
 Agriculture

5. • Traditionally, agriculture has been a major occupation for livelihood. With progress in science and
technology, contribution of the agriculture sector to the economy is declining while that of
industries and services sector is gradually increasing. The share of the agriculture sector in GDP is
27.6 percent while about two third of the population is engaged in this sector.
• More than 40 percent of total land area is covered by forests. Progress in Agriculture and Forestry
sectors could not be achieved to the desired level for failing to link these sectors with other sectors
of the economy.
• A series of problems including destruction of agricultural land; difficulty in acquisition of land for
development and construction works; rise in encroachment of forest and river-based products;
growth in unplanned settlements; and rising environmental destructions exist due to absence of law
and action plan commensurate to scientific land-use policy.
Agricultural Sector

6. Status of agriculture sector in Nepalese
economy
Food Crops: Paddy, maize, wheat, millet, barley, buckwheat, etc.
Cash Crops: Oil seeds, potato, tobacco, jute, sugarcane, etc.
Other Crops: Vegetables, fruits, spices like ginger, garlic, turmeric, chilly, etc.
Livestock: Meat, milk, egg, wool, etc.
Forestry: Timber, firewood, etc.
Fishery: Fresh water fish.

7. Four types of production, processing and industrial centers have been determined
by Pocket, Block, Zone and Super Zone in order to commercialize the agricultural
sector in Prime Minister Agriculture Modernization Project. For this project, the
programme has been conducted in total 143,300 hectare area including 69,600
hectare land area in the FY 2016/17 and 73,700 hectare land area in the first eight
month of the current FY.

8. Features of Nepalese Agriculture
As a larger GDP supplier of national economy, agriculture sector has been laid more emphasis
during the planning period of Nepal.
1. Subsistence Farming
2. Depends on Monsoon
3. Size of Land Holding
4. Low Productivity
5. Primitive
6. High Pressure of Population on Agriculture
7. Predominance of Food Crops

9. Issues of Agriculture Development in
Nepal
1. Lack of Irrigation Facility
2. Lack of Agricultural Credit
3. Lack of Storage Facility
4. Lack of Marketing Facility
5. Use of Traditional Method
6. Defective Land Tenure System
7. Defective Government Policy

10. The Economic Survey, 2016/17 has highlighted the following
issues and challenges in agriculture sector:
• It is a challenging task to manage and organize settlements by disintegrating irrigable
agricultural lands in areas where large irrigation infrastructures are being built.
• Constructing infrastructures such as roads, electricity, food reservoirs and cold storage
required for the development of agriculture sector and making available of agricultural
inputs like fertilizers, improved seeds and seedlings, irrigation, agricultural credits to boost
agricultural productivity have remained a challenge.
• Aside from meeting basic needs from geographically and biologically diverse forest
resources, developing such resources that would expand the size of economy and create
employment opportunities upon linking them with industries is a challenging task.

11. • Addressing problems such as haphazard usage of land, encroachment of public land,
difficulty in the availability of land for public use, illogical land use disputes etc through
land-use policy is a daunting challenge.
• There remains a challenge to develop local entities as a center of economic activities by
exploring the production potential on the basis of the availability of geographic
uniqueness, comparative advantage and means and resources.
• It is a daunting task to expand cooperative sector up to village level by making this sector
more organized, transparent and effective thereby making it dedicated towards the task of
collective interests, productive and developing it in the form of social capital.

12. THANK YOU