Few now dispute that most of the poor countries are unlikely to meet the Millennium Development Goals (MDGs), set in eight key sectors, on schedule, that is, by 2015. Now, the World Bank has brought out a report titled “Agriculture for Development” which states that the goal of reducing extreme poverty and hunger by half will remain unmet if the governments concerned do not reverse the ‘neglect and under-investment’ that has characterised the agricultural and rural sectors over the past 20 years. The report divides South Asian countries into two categories — the transforming economies (Bangladesh, India, Pakistan and Sri Lanka) and agriculture-based economies (Nepal and Afghanistan). In the former, agriculture is no longer the principal source of economic growth; their GDP contribution averages at seven per cent but their poverty remains overwhelmingly rural (82 per cent of all poor). But, for the latter, the average contribution of the farm sector to the economy is 32 per cent and 70 per cent of the poor live in rural areas.

In the case of Nepal, the GDP growth rate swings up or down depending on whether farm harvest — which is largely at the mercy of the unreliable monsoon rains — is good or poor. The report says farming can be the chief source of growth for countries like Nepal, cut poverty and improve the environment. For the Nepal-included group, it enumerates those remedies with which school and college students of Nepali Economics have been familiar for decades — boosting productivity, making smallholder farming more competitive, creating more job opportunities in non-farm sectors, thus reducing agricultural underemployment, and boosting the share of manufacturing and service industry to GDP, and so on. The World Bank, in the report, pledges to increase its lending to the countries in these groups to stimulate agriculture and rural development. Indeed, in Nepal’s periodic plans for the past 56 years, high (almost often topmost) priority has been accorded to agriculture, and huge funds have gone into improving it. But Nepal has turned from a net exporter into a net importer of food grain during the period.

Now, to most farmers, agriculture has grown less attractive. A general complaint is that it is not cost-effective. Farm subsidy has virtually been abolished mainly on the advice of multilateral donors, whereas rich countries, including Nepal’s bigger neighbours, still continue with the practice to keep their farmers happy and competitive. Cheaper imports from across the border have made domestic crops like paddy even less competitive. Other problems exist, such as increasing land fragmentation, inefficient and inadequate irrigation system, obsolete technology, shrinking arable land, environmental degradation, failure to introduce far-reaching land reforms, poor marketing and the middlemen’s lion’s share of the profit from farm produce. It is also necessary for Nepal to assess properly where and why the advice and loans from multilateral (and bilateral) donors have gone wrong, apart from its own blunders.