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The agricultural sector in Nepal is important in terms of providing employment and contributing to the economy. Although structural change in this sector has been observed over the years, its real growth is about 2.64% per annum. Many public policies and plan documents indicate this sector as a priority sector. However, priority is not reflected in terms of public resource allocation. This paper aims to analyze the trend in public resource allocation to the agricultural sector and examine the factors contributing to agricultural total factor productivity growth (ATFP) from 2001 to 2022. It also analyzes the annual budget allocated to agricultural research, which can add new and useful knowledge for a sustained increase in productivity. It is revealed that the compound annual growth rate of real resource allocation to agricultural research was 5.69%, which is lower than the growth of the national budget and resources allocated for agriculture. The average annual share of this sector is 7.2% of the national budget while only 3% for agriculture and livestock. Out of the share of agriculture and livestock, only about 14% is capital expenditure, which is lower than other subsectors such as irrigation, forestry and land management. Agricultural research is underfunded and has received on average only 8.9% of the budget allocated to agriculture and livestock per annum. Nepal’s agricultural research receives only 0.30% of the value of agriculture gross domestic product (AGDP), which is far below the international norms of 1–2%. The ATFP growth shares about only 26% of AGDP growth, which is influenced by capital investment and expansion in roads and irrigated area. The allocation of public resources to the agricultural sector is inadequate to support infrastructure development, generate employment and improve livelihoods, and foster innovation for generating sustainable technologies tailored to diverse agro-ecosystems. Hence, if this sector is accorded priority in policy and strategies, its share of national public resources should be increased substantially for enhancing productivity and contributing to national prosperity.

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Public Resource Allocation and Agricultural Growth: An Empirical Analysis in the Nepalese Context

  • 章节

  • 发表日期：

    2025年

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  • Ganesh R. Joshi,
  • Gunjan Joshi

摘要

The agricultural sector in Nepal is important in terms of providing employment and contributing to the economy. Although structural change in this sector has been observed over the years, its real growth is about 2.64% per annum. Many public policies and plan documents indicate this sector as a priority sector. However, priority is not reflected in terms of public resource allocation. This paper aims to analyze the trend in public resource allocation to the agricultural sector and examine the factors contributing to agricultural total factor productivity growth (ATFP) from 2001 to 2022. It also analyzes the annual budget allocated to agricultural research, which can add new and useful knowledge for a sustained increase in productivity. It is revealed that the compound annual growth rate of real resource allocation to agricultural research was 5.69%, which is lower than the growth of the national budget and resources allocated for agriculture. The average annual share of this sector is 7.2% of the national budget while only 3% for agriculture and livestock. Out of the share of agriculture and livestock, only about 14% is capital expenditure, which is lower than other subsectors such as irrigation, forestry and land management. Agricultural research is underfunded and has received on average only 8.9% of the budget allocated to agriculture and livestock per annum. Nepal’s agricultural research receives only 0.30% of the value of agriculture gross domestic product (AGDP), which is far below the international norms of 1–2%. The ATFP growth shares about only 26% of AGDP growth, which is influenced by capital investment and expansion in roads and irrigated area. The allocation of public resources to the agricultural sector is inadequate to support infrastructure development, generate employment and improve livelihoods, and foster innovation for generating sustainable technologies tailored to diverse agro-ecosystems. Hence, if this sector is accorded priority in policy and strategies, its share of national public resources should be increased substantially for enhancing productivity and contributing to national prosperity.