Contribution of Agriculture to GDP

Agriculture sector has been a major sector of the economy in terms of income, employment and food security. Although the contribution of the agricultural sector to the GDP has been steadily declining over the years. 

According to Economic Survey 2019/20 contribution of agriculture sector to GDP is decreasing whereas non-agriculture sector’s is increasing. In fiscal year 2019/20, contribution of agriculture sector to GDP is estimated to be 27.6 percent and non-agriculture sector 72.4 percent. The contribution of agriculture and non-agriculture sector to GDP were 27.5 percent and 72.5 percent, respectively in fiscal year 2018/19. Compared to that of the last fiscal year the structure of agriculture and non-agriculture sector is slightly changed this year.

Plantation and Production of Agriculture Products

During the past two decades, Nepal’s agricultural sector’s production has increased by 3.2 percent. While the growth rate of agriculture sector was 2.7 percent in FY 2017/18, it is expected to stand at 5.1 percent in FY 2018/19. The growth in agricultural sector has been supported by the increase in the production of the major food grains and vegetable crops. Moreover, availability of seeds, fertilizers and other agricultural inputs, expansion in irrigation facility and favorable weather condition also supported the growth.

The total area of paddy cultivation, which occupies more than 80.0 percent of the total cultivated land, is expected to increase by 1.5 percent in FY 2018/19 in comparison to the area of FY 2017/18. The production and productivity of the paddy has increased by 8.9 percent and 7.3 percent respectively in the corresponding periods due to the smooth supply of chemical fertilizers, favorable weather condition and the development and expansion of new technology.

In comparison to the FY 2017/18, the area of maize cultivation has decreased by 1.3 percent and reached to 9,42,079 hectares in the current FY 2018/19. However, the production and productivity have increased by 3.5 percent and 4.8 percent respectively during this period. The increments in the production and productivity have been caused by the increase in use of improved seeds due to the increase in seed replacement rate from 13.5 percent to 15.3 percent for more than 90 percent area of maize cultivation.

Due to the attraction of the farmers toward vegetable farming, fishery and other cash crops, the total area for wheat cultivation has decreased by 2.9 percent to 686.557 thousand hectares in FY 2018/19 as compared to the area in FY 2017/18. However, during this period, the production and productivity of wheat have increased by 4.5 percent and 7.6 percent respectively due to the increase in the usage of improved seeds, increase in seed replacement rate (14.0 percent to 15.1 percent), hence it is estimated that production of wheat will be 20,36,706 metric tons in FY 2018/19.

The area of millet (known as traditional crop) cultivation has been gradually decreasing for the last few years. The total area covered by millet farming, which was 263.596 thousand hectares in FY 2016/17, has decreased by 6.4 percent to 246.77 thousand hectares in FY 2018/19 in comparison to the area covered by millet in FY 2017/18. Although the use of fertilizer and improved seeds has not been significant in case of millet cultivation, its production is expected to increase by 2.2 percent to 300.585 metric tons in FY 2018/19.

The use of fertilizer and improved seed has been very low in buckwheat farming which is cultivated in more than fifty mountainous and Himalayan districts. In FY 2018/19, it is estimated that productivity of the crop will increase by 1.2 percent to 9.883 metric tons.