Introduction
Agriculture is the mainstay of Nepal’s economy, with nearly 60% of the population dependent on the sector for their livelihood. Contributing to 25% of the GDP and being an important provider of raw materials for industries, it serves as the backbone for the national economy. Globally, technological advancements and the emergence of digital solutions have transformed agriculture by making it increasingly digitized. Nepal is undergoing a similar transformation and has witnessed rising usage of digital technology across the agriculture value chain. The past decade, in particular, has seen significant progress on this front, as both the government and private sector have directed efforts in developing digital solutions that cater to local farming in Nepal.
Current Status
Nepal’s agriculture sector is experiencing a gradual shift towards digitization, as cost-effective tools, that can be used on smartphones, are becoming increasingly available to farmers. Private companies have introduced digital solutions like online advisories, digital veterinary services, and inventory management, which are tailored to the different agro-ecological zones of the country. Domestic startups are leading this change, and although the current stage focuses more on replicating foreign technology rather than innovation, it is still a promising sign. Additionally, the government, with support from development partners, has developed agri-focused digital public infrastructure like the Digital Soil Map, online weather advisories, and early warning systems.
Rising smartphone and internet penetration, with 98% of the population having access to mobile broadband and wide electricity access (94% as of 2023) have served as key enablers for this digital transition. Progress in financial inclusion, a cornerstone of digital banking solutions, has further supported the ground for agriculture digitization, enabled by targeted initiatives by the Nepal Rastra Bank.
Despite these advancements, several challenges hinder the widespread adoption of agricultural technologies. On the demand side, while farmers’ access to smartphones and mobile broadband remains notable, they mainly use this technology for entertainment. Past donor-funded projects that distributed smartphones to farmers to promote the usage of digital services found that farmers eventually ended up using the devices for social media. This highlights Nepali farmers’ general lack of awareness and readiness to adopt digital agricultural solutions. Further, farmers’ capacity to access customized agro-met information or operate online web portals is limited. Undereducation, non-familiarity with new software, and unstable internet connectivity are major barriers that limit their access to digital tools. The World Bank reported that, despite the wide availability of internet access, only 54% of the Nepali population uses the internet regularly. This limits the optimum usage of digital tools that are currently available to farmers.
Role of the Government
The government has prioritized agricultural digitization by announcing key policies like the Digital Nepal Strategy, and the National Agriculture Development Strategy 2035. These two umbrella initiatives serve as guiding documents for driving digital agriculture in the country, while sectoral policies and plans by sub-national governments deal with local adaptation and implementation of digital agriculture interventions. Additionally, the National Adaptation Plan (NAP) includes provisions on establishing a climate information system and digital public weather services, which align with the broader agriculture digitization strategy of the country.
Moreover, the 16th Plan of the National Planning Commission (NPC) aims to improve agricultural productivity through private sector partnership and technology integration in production and market linkage. Specifically, the plan’s ‘Vision 2043’ prioritizes economic growth through agricultural transformation by setting quantified targets for commodity production for major crops in the country leveraging domestic and international technology. Within this, E-haatbazar (digital commodity markets), remote sensing, and smart irrigation techniques are some solutions that the government aims to promote. Precision farming and Internet of Things (IoT) are additional technologies that are proposed to be implemented in pockets of the Terai region with a high cultivation of vegetables and fruits.
Role of the Private Sector
The private sector plays the role of an innovator and connector in Nepal’s digital agriculture landscape. Given the fact that government-provided digital public infrastructure for agriculture in Nepal is in its infancy, the role of private companies is extremely important in advancing digitization. While private firms operating in agricultural activities are traditionally dominated by agro-vets, trading companies, and transport businesses, which are less technology-intensive, with the advent of digital tools, businesses have emerged that have technology at the center of their offerings. For example, companies like GeoKrishi and Smart Krishi have introduced online marketplaces that facilitate easier access to markets.
Besides established companies, startups in Nepal have launched solutions that deal with services such as real-time farm monitoring, soil moisture optimization, satellite-data-enabled advisory, e-marketplaces, and automated communication services, among others. Such innovation has been supported by development agencies and bilateral cooperation, such as the UN Capital Development Fund and the Embassy of Switzerland which have prioritized agriculture digitization.
Way Forward
Nepal’s progress in digital agriculture is notable, though there is a long way ahead before the use of agri-tech solutions becomes more integrated in Nepal’s farming. The government has prioritized digital agriculture and has even developed some tools, but their low awareness and usage among farmers are a concern. Scaling up existing technologies and making solutions like weather advisories available in local languages, not limited to Nepali and English, is a key needed intervention. Close collaboration with the private sector and development partners is also imperative. In the private sector, companies and startups need to continue the momentum of technology transfer to Nepal from abroad. But looking ahead, the focus must shift to domestic innovation informed by local needs and indigenous knowledge. Public-private partnerships (PPPs) will be critical for this digital push as it will ensure resource pooling. A collaborative approach with political ambition is needed for the digital agriculture Nepal has envisioned, and all stakeholders must play their part to achieve this national goal.
Anurag Gupta is a Research Fellow at the Nepal Economic Forum. He holds a Bachelor's in Economics from Kirori Mal College, University of Delhi. He is passionate about public policy, with a particular interest in public finance, fiscal federalism, and governance.
