Why Nepal’s Rice Farms are Shrinking Despite Rising Demand

While rice remains Nepal’s most consumed staple, the area under paddy cultivation continues to decline, reflecting deeper structural weaknesses in agriculture—from land conversion and labour scarcity to climate shocks and weak farm support systems.

Government figures suggest rice production in the country is estimated to decline by over four percent in the current fiscal year, largely due to structural problems in the agriculture sector.

According to a news report published by the state-owned national news agency RSS, officials at the Ministry of Agriculture and Livestock Development attribute the decline to rapid urbanisation, conversion of fertile farmland for infrastructure and industrial use, acute shortage of agricultural labour, irrigation constraints, climate-induced weather irregularities, and uncertainty over farm profitability. Large-scale migration of youths abroad has further weakened the country’s farming base, RSS further reported

Ministry spokesperson and Joint Secretary Dr Januka Pandit told RSS that paddy production fell mainly because farmers lacked timely access to improved seeds and chemical fertilisers during the planting season. Adverse weather conditions, particularly drought in Madhesh Province during the transplanting period, further affected output.

The National Statistics Office estimates that agriculture accounted for 25.16 percent of gross domestic product in fiscal year 2024/25. However, the area under cultivation has been shrinking steadily. Agricultural land declined from 2.525 million hectares in 2011 to 2.218 million hectares in 2021, according to the last two agricultural censuses.

Rice remains Nepal’s principal food crop, contributing around 12 percent to total agricultural output, the news report further stated.

The ministry informed that about half of Nepal’s cultivable land is suitable for rice farming. Out of the total cultivable land, the ministry estimates that rice was cultivated on 1,376,872 hectares this year, down from 1,402,063 hectares last year. According to RSS, the data was prepared based on information collected from agriculture offices in all seven provinces, after accounting for changes in irrigated land and farmers’ feedback.

According to joint data compiled by the ministry and the International Centre for Integrated Mountain Development (ICIMOD), rice could not be cultivated on 3.8 percent of suitable land this year, leaving it fallow.

The ministry estimates paddy output at 5.7 million metric tonnes this year, down from 5.9 million metric tonnes last year. The country requires around 6.2 million metric tonnes annually to feed its nearly 30 million population.

As domestic production struggles, rice imports have increased, driven by Nepalis’ heavy dependence on rice for both daily meals. The Department of Customs says Nepal imports agricultural products worth around Rs 5 billion every month.

Despite agriculture employing more than 4.13 million people, access to institutional support remains limited. According to the 2021 Agricultural Census, only 483,208 farmers received agricultural loans, while nearly 88 percent are still excluded from concessional financing schemes.

Dr Pandit said Nepal could significantly reduce its import dependence if traditional farming were transformed into commercial agriculture through better access to inputs, irrigation, credit and markets. – With inputs from RSS