Drought and unseasonal rain hit agriculture sector, Value added growth falls to 1.58%

KATHMANDU: Nepal’s agriculture sector has been affected by drought and unseasonal rainfall, leading to a sharp slowdown in growth, according to the Economic Survey 2082/83 presented by Finance Minister Dr. Swarnim Waglé in Parliament.

The survey shows that agriculture, long considered the backbone of Nepal’s economy, has experienced a notable decline in value-added growth this fiscal year, mainly due to adverse weather conditions during key farming periods.

Growth Slows to 1.58 Percent

According to the report, the agriculture sector’s value-added growth rate is estimated to decline to 1.58 percent in the current fiscal year, down from 3.05 percent in the previous year.

The slowdown is largely attributed to climate-related disruptions, including drought during the rice planting season and excessive rainfall during the harvesting period.

Rice Production Declines

The survey projects a 4.16 percent decline in rice production, Nepal’s most important staple crop.

Prolonged drought in the Terai region during the plantation season reduced the cultivated area, while heavy rainfall during harvest time damaged crops, significantly affecting overall agricultural output.

Rice is a major contributor to the agricultural sector, and its decline has had a direct impact on overall growth performance.

Mixed Performance in Other Crops

Despite the decline in rice production, growth in other agricultural sub-sectors has helped prevent the sector from slipping into negative growth.

The survey notes improvements in:

• Wheat and maize production
• Millet (kodo) cultivation
• Industrial crops
• Livestock production
• Winter crops and fruits

These gains have provided partial stability to the agriculture sector, offsetting losses in major cereal production.

Declining Contribution to GDP

The contribution of agriculture to Nepal’s GDP continues to decline gradually as the economy shifts toward non-agricultural sectors.

For the current fiscal year, agriculture is expected to contribute 24 percent of GDP, down from 24.5 percent in the previous year.

Over the past decade, the average contribution of agriculture has remained around 25 percent, but this year it has fallen below that level, reflecting structural changes in the economy.

In contrast, the share of the non-agriculture sector is projected to rise to 76 percent, indicating growing dominance of services, construction, and industry.

Expansion of Agricultural Modernization Programs

Despite challenges, the government’s efforts toward agricultural modernization are showing progress, the survey states.

As of Falgun 2082, the following structures have been developed under the National Agricultural Modernization Programme:

• 21 Super Zones
• 206 Zones
• 1,699 Blocks
• 9,393 Pocket Areas

These initiatives aim to promote commercial farming, improve productivity, and strengthen value chains in agriculture.

Irrigation Coverage Improves

The survey also highlights gradual improvement in irrigation infrastructure.

• 54.6 percent of total agricultural land now has irrigation access
• 62.6 percent of irrigable land is covered under irrigation facilities

This expansion is expected to support long-term productivity gains and reduce dependence on monsoon rainfall.

Climate Pressure Remains a Key Challenge

The report concludes that while modernization and diversification efforts are supporting the sector, climate change remains a major structural challenge for Nepal’s agriculture.

Erratic rainfall patterns, droughts, and extreme weather events continue to disrupt production cycles, making the sector increasingly vulnerable.

However, ongoing modernization efforts and diversification into livestock, fruits, and industrial crops are helping maintain sectoral resilience.