Reviving Nepal’s rural economyNepal can take cues from post-second world war Tuscany and promote agro-tourism.
Nepal’s growing trade deficit is casting doubt over the sustainability of the economic growth rate, which has been impressive in the last 2-3 years. Last year, Nepal witnessed a record trade deficit of about Rs1,321 billion. The agricultural import bill has crossed over Rs200 billion. The trade deficit in food is due to the growing food demand because of rising income (thanks to remittance), and also owing to the decline in domestic production. When about 1/3rd of the land turns into abandoned farmland, especially in the middle hills and high mountains, it is undoubtedly challenging to produce more. Last year, Nepal imported food grains worth Rs51 billion, vegetables worth Rs28 billion and cooking oil worth Rs37 billion.
Abandonment of cultivated land has been discussed enough in recent times. But the reason for the same has been attributed to a lack of youth interest in agriculture. The capable population would instead go abroad to earn money. And herein lies the catch. This trend needs to be looked at from a development perspective.
The youth are moving on
The tendency of the youth to move away from farming has been a pattern repeated worldwide. This took place in the presently developed countries due to industrialisation. It was a conscious plan though. Labour was needed for the urban industries, and so rural populations were moved to urban areas to work in the industries. The industrial sector, on the other hand, produced machinery that was to be used in farming so that labour productivity in the farm sector could be increased. This, combined with farm subsidies and support in terms of new technological innovation and marketing, helped in producing more food. After World War II, ‘food dependency’ in other countries was seen to erode national sovereignty in times of distress. Hence, the practice of giving subsidies for food production.
Nepal also followed the urban-industrial model of development but without any effort to link the industrial and agricultural sectors. In the absence of this link, the farm population kept on increasing with low labour productivity. With job opportunities outside the country, the rural populace, especially young people, have now started moving out of farming. The youth are not working in the industrial sector within the country that would also support the farm sector. As a result, farmland has been abandoned, and money received from remittance is being used to purchase imported food.
Low productivity, small farm size, and the low social status of farm-work are primary factors that have discouraged the younger generation from getting involved in farming. In other countries too, the youth are now disinterested in agriculture. A recent report in Down to Earth magazine shows that this is a pervasive problem in India as well. What's more, the population involved in agriculture is ageing. There is less involvement of people in the agriculture sector despite a larger scale of support to farmers as compared to that in Nepal.
It has become clear that Nepal’s smallholder farming, especially in the middle hills and high mountains, will not attract the youth without alternative sources of income and urban facilities like health, education and transportation services.
There was an exciting discussion in Parliament recently on this topic. One of the intellectual parliamentarians, Pradip Giri, suggested that the finance minister should bring urban services to rural areas instead of emphasising support for urban management. Giri said that this suggestion was in line with the concept of PURA (providing urban amenities to rural areas) that the former Indian president Abdul Kalam promoted to revive India’s rural economy and development. The logic behind the concept of PURA is sound because it would also help in creating other non-farm opportunities in rural areas that could augment farm income as well as employment, thus encouraging the youth to stay in rural areas. In Nepal’s case, that new opportunity could be ‘rural tourism’. We can also learn from Italy’s policy of reviving smallholder agriculture through agricultural tourism (Agriturismo, or ‘farm-stays’) in the Tuscany region.
In post-World War II Italy, the Tuscany region had faced the same kind of problems that Nepali villages are witnessing now. Smallholder farmers were not able to generate enough income for survival. There was a rural exodus to urban areas. As a result, farms were abandoned, and rural settlements and country towns became empty. The government then developed agri-tourism as an opportunity for farmers—both smallholders and wealthier householders—to make full use of their assets like houses and land, and to diversify their activities. This had a positive impact on employment and incomes. To qualify for agri-tourism and get support, farmers had to produce their own food or purchase from the local area. Financial and technical support was provided to retrofit houses so that they become suitable for hospitality. Transportation and other infrastructure were also built as public assets and services. As a result, there was a revival of whole-farm settlements, small towns and the farming system that was abandoned during the 'rural exodus' of the 1950s and 1960s. Today, Tuscany attracts one-third of the total tourists in Italy and its rural economy has been revived. About 84 million overnight tourists stayed in Tuscany in 2017, generating a significant contribution to prosperity and employment, and this contribution is expected to grow in the future.
Nepal’s rural areas have every chance to attract tourists—both domestic and foreign—and the PURA approach will surely help accelerate this enterprise and revive the rural economy. Retaining the farm population in rural areas and producing more food is not possible without the overall strengthening of the rural economy and livelihood. For this, agricultural tourism is the most feasible way.
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