Economic impact of earthquake – Agriculture

The impact of the earthquake on the agriculture sector is yet to be assessed in terms of the anticipated losses in production and output.  While the agriculture land might not have been severely affected, agriculture labor, inputs, markets and infrastructures such as irrigation systems, drainage canals, and roads have incurred damages. As a result, output of this sector is anticipated to drop significantly leading to potential food security problems.

Disruption of Agriculture

With the harvesting season approaching farmers have been unable to prepare the fields for sowing which will eventually impact the output of the sector. Additionally immediate agro-input supply for sowing preparation is impossible due to damages to roads, distribution centers, and agro-vets.  The monsoon is further expected to trigger landsides in the hilly areas as the earthquake has loosened the soil and made the land more vulnerable. Livestock farming has also suffered colossal damages as domesticated and commercial farmed livestock have perished. Similarly, damage of livestock inputs might limit the food supplies to the remaining ones. To address these issues, the Government of Nepal has plans to set aside NPR 3 billion to distribute 400 tons of fully subsidized paddy seeds and chemical fertilizers to the most affected area.

Losses of the sector

According to the Ministry of Agricultural Department the total loss to the agriculture sector amounts to NPR 10 billion. Losses of food stocked by farmers in houses alone stood at NPR 8.11 billion. Similarly, livestock losses amount to NPR 887.5 million.

The Food and Agriculture Organization (FAO) estimated Nepal’s wheat production in 2015 to stand at 1.8 million tons, 5% below last year’s harvest. But the estimation is likely to change due to damages to agricultural inputs and the inability of farmers to harvest. The output of rice and maize is also expected to decrease as the earthquake affected districts contribute approximately 9.3% and 18.1% of the total national output.

Employment and food prices

As the agriculture sectors employs 33.7% of the total population, damages to the sector is also likely to impact employment within the country. With direct and indirect employment provided by the sector, severely impacted; slow economic growth should be expected this year.

Transportation and infrastructural damages are also expected to limit internal trade and have negative impact on food prices. Likewise, with internal production of food likely to decline an increased dependency on imported food is expected eventually leading to rise in food prices. The Ministry of Agricultural Development has however stated that it has sufficient food balance to meet the extra demand, due to which a food deficit is unlikely to occur. The biggest challenge for the government will therefore be to create a proper distribution channel that is effective in the distribution of food.


The government will need to implement special programs to support agricultural programs in order to respond to the crisis caused by the earthquake and address food security. Policies for input distribution and seed production that support production should be developed along with rehabilitation of infrastructures through proper mobilization of funds.


The monsoons are a key factor for irrigation in Nepal, and any disruption will have a major impact. In quake hit areas, how quickly people can resume plantation work will impact food production. Impact of livestock losses are already visible and schemes to replenish livestock will be important. The Nepali markets have always been habituated in taking advantage of crisis situations to push prices, therefore major increase in agricultural output will be noticed and this is expected to impact inflation in the first two quarters of next fiscal year.