Huge growth in number of holdings

Huge growth in number of holdings

The Census of Agriculture 2021/22 has reported 4,130,789 holdings including 3,999,285 holdings with land and 131,504 holdings without land in Nepal. The first Census of Agriculture 1961/62 reported 1540 thousand holdings in Nepal. The number increased to 3360 thousand in 2001/02. It has further increased to 4130 thousand in 2021/22. Over a 60-year period, there has been a huge growth of 168 percent in the number of holdings. The total area of holdings increased from 1680 thousand hectares in 1961/62 to 2650 thousand hectares in 2001/02.

However, there has been a continuous decrease in the area under cultivation since 2011/12. The area has decreased from 2520 thousand hectares to 2220 thousand hectares in the last 10 years as shown by last two censuses (2011/12-2021/22). Despite 8 percent increase in the number of holdings, there has been 12 percent decrease in the total area of holdings during the last two censuses. The area under holdings increased by only 32 percent over the sixty-year period though the number of holdings increased by 168 percent during the same period. The recent trend of the last two censuses shows a discrepancy as the number of holdings increased by 8 percent, but the total area of holdings decreased by 12 percent. These trends suggest changes in agricultural practices, land use, or economic factors influencing farming in Nepal over the years. It requires further analysis to understand the factors driving these trends and their implications for the agricultural sector in Nepal.

When examining land use patterns across the provinces of Nepal, Koshi Province emerges with the highest total area of holdings and then followed by by Madhes Province, Lumbini Province, Bagmati Province, Gandaki Province, Sudurpaschim Province, and Karnali Province. This sequence is also observed in the distribution of agricultural land. Notably, Madhes Province stands out with the largest area of arable land, constituting approximately one-fourth of Nepal’s total arable land. The remaining provinces show a consistent pattern, with Karnali Province having the smallest share. Detailed information on land utilization across these provinces is provided in the subsequent tables, with a comprehensive insight into the diverse agricultural landscapes within the country.

The information from the Census of Agriculture 2021/22 focuses on the categorization of land into wet land and dry land, indicating changes in their respective areas over the past 10 years. The Census of Agriculture 2021/22 result has shown 1,429,981 hectare of wet and 788,429 hectare of dry land out of the 2,218,410 hectare of total land. As the total land has decreased, wet and dry land has also decreased by 10 and 16 percent respectively as compared to the previous census.

Overall, this information provides insight into the changing dynamics of land use in Nepal, particularly in terms of wet and dry land, emphasizing the need for further analysis to understand the underlying causes and potential implications for the agricultural sector and beyond.

According to the recent agriculture census 2021/22, 2,218,409.9 hectares of land were operated by agriculture holdings. 95.6 percent (2.12 million hectares) of the total land was used for agriculture. 80.7 thousand hectares were covered with forest and other wooded land, showing a significant increase of 46.9 percent compared to the previous Census of Agriculture. 12.9 thousand hectares were used for ponds, which is more than three times the previous census. The remaining 3.2 thousand hectares were classified as other land, either unused or underdeveloped but potentially usable for agricultural activities with some more human effort.

The majority of agricultural land, 1,730.9 thousand hectares, was used for temporary crops as shown by the Census of Agriculture 2021/22. The area under permanent crops was 145.4 thousand hectares, indicating a decrease in both the areas of temporary and permanent crop. Over the last ten years, there has been a decrease in the land used for temporary crops by 392,316 hectares (18.5%) and for permanent crops by 23,093 hectares (13.7%). The land under temporarily fallow has almost doubled, reaching more than sixty thousand hectares in the 2021/22 census. This information provides insights into the changing scenario of land use, with shift in areas allotted to different types of crops and other land uses.

Arable land in Nepal occupies approximately 1.803 million hectares (12 percent) of the total land area of 14718 thousand hectares in 2021/22. Madhesh Province reported the largest arable land area, totaling 437,203 hectares and is followed by Koshi Province (398,773 hectares). Karnali Province reported the lowest proportion of arable land, amounting to 96,934 hectares.

The historical trends in land distribution over the past 60 years reveal a consistent pattern across the various types of land, including total holdings, agriculture land, and arable land. Notably, when there is a decrease in the area of holdings, there is a corresponding decline in both agriculture land and arable land. Conversely, from 1971/72 to 1981/82, there was an overall increase in all types of land. However, from that point onward, there has been a continuous and notable decrease in land areas. The most significant decline occurred in the last decade, spanning from 2011/12 to 2021/22.

Source: National Sample Census of Agriculture Nepal, 2021/22

75% Population drinking contaminated water

Central Bureau of Statistics (CBS) conducted a national level survey, Nepal Multiple Indicator Cluster Survey 2019 (NMICS 2019) from May to November 2019. It was a part of sixth-round of the global MICS household program.

NMICS 2019 provides valuable information and the latest evidence on the situation of children and women in Nepal. The survey presents data from an equity perspective by indicating disparities by sex, province, location, education, household wealth, functional limitation and other characteristics.

NMICS 2019 interviewed 12,800 households, of which 14,805 were women aged 15-49, 5,501 were men aged 15-49, 6,658 were mothers/caretakers of children under-five years, and 7,792 mothers/caretakers of children 5-17 years. The survey also performed water quality testing for E. coli and arsenic in 2,536 households.

Survey report says 68.7% population of age group 15-24 years are living happily. Similarly 63.4% population of age group 15-49 years said they are living happily. 97.1% of population use improved source of drinking water. 75.3% of population using improved source of drinking water tested with E. coli contamination, out of this 89.1% was in Karnali Province. Similarly, 90.3% of women and men of age group 15-24 years are able to read a short statement about everyday life. Out of this only 70.6% of women in Province 2 are able to read and write. 89.9% of total population has access to electricity with Karnali Province counting the least, 44.9%.

CBS claims that the findings of the survey will be used to monitor 15th Five Year Development Plan (2076/77-2080/81) of Government of Nepal, establish Multidimensional Poverty Index (MPI) 2020. It will also contribute to the voluntary national report (VNR) as well as the UN Secretary-General’s report to UN general assembly on the achievements of Sustainable Development Goals. The survey was conducted with the technical and financial support from United Nations Children’s Fund (UNICEF) Nepal.

Investment Gap in Agriculture

Investment Gap in Agriculture

Agriculture in Data

An agricultural holding is defined as an economic unit of agricultural production under single management comprising all livestock and poultry kept and all land used wholly or partly for agricultural production purposes. According to Nepal Sample Census of Agriculture 2011/12 there are 3,831,093 such agricultural holdings in Nepal. Compared to 2001/02 census there is an increase of about 13.89% (466993) holdings. This increase is very low than previous censuses, 23% in 2001/02 and 25% in 1991/92. In a span of 60 years, from 1961/62 to 2011/12 the number of holdings increased by 2.29 million. Nepal Outlook has taken this effort to bring together agricultural scenario and challenge in data.

However, there is a huge change in number of agricultural holdings; Nepal’s agriculture sector is still far behind from being commercialized and mechanized. Commercialization and mechanization of agriculture needs investment. Looking in to the data enumerated by the agriculture census the proportion of holdings availing agricultural credit to finance their farming is very low. Comparing previous year’s data there is no visible change seen in agriculture financing. In 1991/92 out of total holdings only 23% availed agricultural loan. Similarly in 2001/02 it was 24%. In 2010/11 it further dropped to 21.82%.

Growth of Financial Institutions (numbers) as of 21 August 2020

Financial Institutions 1990 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Commercial Banks 5 18 20 25 26 27 31 32 31 30 30 28 28 28 28 27
Development Banks 2 28 38 58 63 79 87 88 86 84 76 67 40 33 29 20
Finance Companies 70 74 78 77 79 79 69 59 53 48 42 28 25 23 22
Micro-finance Financial Institutions 11 12 12 15 18 21 24 31 37 38 42 53 65 90 85
Total 7 127 144 173 181 203 218 213 207 204 192 179 149 151 170 154

If we look at the table above we can see increase and decrease in its number of financial institutions. In 1990 there were only 7 financial institution including 5 commercial banks and 2 development banks. In 2011 there were 218 financial institutions. Currently there are 154 financial institutions, including 27 banks, 20 development banks, 22 finance companies, 85 micro finance development banks. These data do not include Insurance Companies, Infrastructure Development Bank, Citizen’s Investment Trust, Employ’s Provident Fund, Cooperatives and Other financial institutions licensed for financial intermediary operations. The existing provision requires commercial banks to disburse minimum 10 percent of their total credit to agriculture sector and minimum 15 percent to energy and tourism sector. Similarly there is policy provision for the development banks and finance companies to extend at least 15 percent and 10 percent of their total credits respectively to the priority sector. But table below shows that commercial and development banks are far below central bank’s mandate. Last three years data shows that agriculture sector loan did not exceed 6 percent in commercial banks.

Sector wise loan and advances of Commercial and Development Banks (mid  July 2019)


S.NSectorPercentage of Total Loan
201720182019
1Agriculture Forest4.234.65.26
2Fishery0.120.110.14


  Percentage of Total Loan
201720182019
1Agriculture Forest5.55.966.24
2Fishery0.130.130.21

These data’s show that however, number of financial institutions is increased in last two decades, agricultural financing is not satisfactory. Agriculture Census data shows that farmers had most of the source of credit from non-institutional or informal types of source likes relatives, private lenders and others. If we observe sources of credit we can see 34.57% of holdings borrowed agricultural credit from relatives, 5.78% from undisclosed sources, while 8.68% borrowed from commercial banks, 12.61% borrowed from Agricultural Development Bank/Nepal and 15.68% from savings and credit cooperatives. In total scenario, only 21.82% of agricultural holdings borrowed agricultural credit. That means still 78.18% of agricultural holdings have no agricultural credit or investment.

Number, area of holdings and number of holdings reporting agricultural credit by total area of holding


Number, area of holdings and number of holdings reporting agricultural credit by total area of holding

ProvinceHoldings with credit by main source (%)
No. of holdingsHoldings without agricultural credit %CooperativesADB/N Commercial Bank/financial institutionFarmer's groupWomen's groupRelativesOther
Province 171714879.4816.6216.7612.29.6412.3129.712.76
Province 267292773.769.6618.7511.023.978.4239.129.05
Bagmati65877679.5425.237.424.5412.7616.11312.93
Gandaki41330085.8419.9712.0410.557.0615.3133.221.86
Province 569729378.4514.8413.739.9510.1514.0132.454.87
Karnali26177072.1416.923.874.3413.319.342.929.34
Sudurpaschim40987976.669.67.484.9214.5517.4736.489.51
NEPAL383109378.1815.6812.618.689.7412.9534.575.78

Examining Provincial data, we can see 27.86% of holdings in Karnali Province have agricultural credit, the highest among the Provinces. Province 2 comes second with 26.24% and Sudurpaschim Province with 23.34%. Similarly, 14.56% of holdings in Karnali province have agricultural credits from relatives and individuals and only 7% of credit from financial institutions like commercial banks, ADB/N and cooperatives. Sudurpaschim province is among the provinces having least agricultural credit from financial institutions, which is 5.13%.

Investment in agriculture is directly related to production and food security. Less investment in agriculture results less production and high food insufficiency. Agriculture Census report reveals food insufficiency in various provinces, among all Provinces Karnali province has the highest insufficiency of own produce for household consumption, which is 74.71%. Similarly, Gandaki Province has 67.80%, the second highest insufficiency of own produce for household consumption. Overall scenario showed that 59.91% of holdings reported that they are insufficient in food from their own produce. So, how are farmers coping with year round insufficiency of food? Income earned through own non-agricultural business, wage earnings (within district and outside district), pension, borrowings and other means of earning are adopted by many of the farmers for livelihood.

Province Total number of holdings Percentage of holdings reporting insufficiency of own produce for  household consumption
Province 1 717148 57.01
Province 2 672927 57.69
Province 3 658776 54.28
Province 4 413300 67.80
Province 5 697293 56.66
Province 6 261770 74.71
Province 7 409879 65.85
NEPAL 3831093 59.91
Source: NATIONAL SAMPLE CENSUS OF AGRICULTURE 2011/12

 ‘A declining long term trend in public investment particularly in agricultural support and productivity limits the productive capability in the agriculture and its ability to benefit from the rise in output prices.’ (Prof. Dr. Pyakuryal Bishwamber ; ‘Nepal’s Development Tragedy Threats and Possibilities’)

However declining, Nepal’s agriculture sector still has highest share in GDP. And there is still huge number of population depending on agriculture for livelihood. To fill the investment gap in agriculture and productivity an urgent review of investment financing strategy is needed.