August 15: The contribution of the agricultural sector to the country's gross domestic product (GDP) seems to be gradually declining.

The contribution of this sector to the GDP has been comparatively low because of the lack of chemical fertilizers, lack of marketing of agricultural products, misuse of agricultural subsidies and lack of adequate irrigation facilities.

A total of 62 percent of the households out of the total population of Nepal are involved in small or large scale agricultural work. The agricultural sector provides direct or indirect employment to about 57 percent of the economically active workforce.

The growth rate of the industrial and service sector is higher than that of the agricultural sector, so the contribution of the agricultural sector to the GDP is less. This does not mean that agricultural production has decreased.

According to the National Statistics Office, the contribution of the agricultural sector to Nepal's GDP has decreased by 5.29 percentage points in the last 9 years. According to the data of the office, the contribution of the agricultural sector to the GDP was 29.39 percent till the fiscal year (2071/72). By the year 2079/80, it has decreased to 24.1 percent. The share of non-agricultural sector is 75.9 percent, in which 13.9 percent is of the industrial sector and 62 percent of the service sector.

Economist Gyanendra Adhikari said that the contribution of the agricultural sector to the GDP has been decreasing recently due to the migration of agricultural workforce to foreign countries, the extreme shortage of chemical fertilizers during the planting season, the lack of proper marketing of agricultural products, the misuse of agricultural subsidies and the lack of adequate irrigation facilities.

According to him, due to the failure of the government to pay attention to the very basic aspects of agriculture, its contribution to the GDP has decreased.

“The decline in the contribution of agriculture to the GDP means that the contribution of other sectors including industry and services is increasing. However, the contribution of the industrial sector in Nepal does not seem to have increased significantly. Instead, the contribution of the service sector to Nepal's GDP is more," he told New Business Age, adding, "The contribution of the service sector is higher only in countries that are considered developed."

Economists argue that if we can advance agriculture by modernizing it, we can achieve better results.

It is estimated that the size of Nepal's GDP in terms of consumer prices has reached Rs 5381 billion.

According to Sunil Kumar Singh, Senior Agricultural Economist of the Department of Agriculture, the current contribution of the agricultural sector to the GDP cannot be considered to be so bad.

If we look at the proportion of the population involved in the agricultural sector in Nepal, this contribution is not satisfactory, he said. According to the National Statistics Office, more than 57 percent of people above 10 years of age are engaged in agriculture. Singh's argument is that decline in the contribution of the agricultural sector which is dependent on such a large population is not good for the economy.

In the year 2048 BS, 81.23 percent of the total population was dependent on agriculture..

Out of 1,49,83,300 people involved in economic activities, 57.3 percent are in agriculture, forestry and fishery sector. Nepal has 3.3 million hectares of arable land. Out of that, about 1 million hectares are barren. The area of land where food, vegetables and fruits are produced has decreased as of last December.

According to the data of Nepal Rastra Bank, such land has decreased by 2.1 percent compared to the same period of the previous year.