Nepal, IFAD sign US$120M agreement for agroecological farming
NEPAL – The International Fund for Agricultural Development (IFAD) and the Government of Nepal have entered into an eight-year partnership worth US$120 million to assist over 250,000 small-scale farmers in transitioning to commercial and agroecological farming practices.
The agreement, which became operational last month, aims to enhance food production and resilience for 60,000 farming families in 80 municipalities across Lumbini, Karnali, and Sudurpashchim provinces.
The initiative, titled the Resilient High-Value Agricultural Programme (R-HVAP), will introduce modern farming techniques to improve food security, nutrition, and economic opportunities for rural communities.
According to IFAD’s Country Director for Nepal, Roshan Cooke, the program seeks to strengthen Nepal’s food systems and reduce reliance on food imports while promoting sustainable agriculture.
Agriculture remains a cornerstone of Nepal’s economy, engaging two-thirds of the population and contributing about 25% to the national GDP.
However, Nepal’s growing dependence on food imports poses challenges to food security. Government figures show that the country’s food import bill has increased 78-fold over the past two decades.
In response, Nepal’s Agriculture Development Strategy (2015–2035) emphasizes building a competitive and self-reliant agricultural sector to ensure long-term food security.
The R-HVAP will incorporate locally developed five-year plans to guide farmers in adopting market-focused agroecological practices.
The program includes training in business and financial management, apprenticeships for young farmers, and support for producer organizations to transition into professional enterprises. It also aims to foster a network of micro, small, and medium-sized enterprises (MSMEs).
A key component of the project is the construction of a US$40 million regional wholesale market in Butwal. Situated near Gautam Buddha International Airport and close to the Indian border, the facility is expected to enhance smallholders’ access to domestic and export markets.
The program will also develop small-scale irrigation systems, water storage facilities, post-harvest infrastructure, and renewable energy solutions.
Funding for the program includes US$70.93 million from IFAD, US$24.6 million from Nepal’s federal government, US$2.02 million from provincial and local governments, and US$23.43 million collectively from producer organizations, participants, and MSMEs.
Since 1978, IFAD has supported 22 projects in Nepal, benefiting approximately 1.1 million families and addressing rural poverty.
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