The Commercialization of Smallholder Farming—A Case Study from the Rural Western Middle Hills of Nepal

Abstract

A vast majority of farmers in the rural middle hills of Nepal are smallholders who often use family labor and follow traditional agricultural and water management practices. This study examines a range of perspectives (from rural farmers to development experts) on the limited commercialization of rural agriculture in this region of Nepal and the potential approaches to promoting agricultural growth and commercialization among small landholders. An analysis of household surveys, key informant interviews, and focus group discussions in three wards of Kaski, Syangja, and Palpa districts of Nepal revealed that nearly one-third of farmers left their agricultural lands barren or only partly cultivated, and more than one-third were not motivated to engage in agricultural activities. This lack of motivation was found to be connected with limited or no access to irrigation water, poor production systems, a lack of access to markets, a low return on investment in agriculture, the low social status of farm-work, the incidence of crop infestations, and fear of production risks due to extreme climatic factors (such as low/high rainfall, droughts, etc.). Remittances related to outmigration were also found to be important factors limiting a farmer’s involvement in agriculture, which also creates labor shortages. This research confirms that, for agricultural production to be profitable and commercial, households need to receive qualified technical support to introduce new technologies, engage in markets, access input suppliers and service providers, and adopt high-value production crops and related techniques. Households that receive an income from government jobs, private sources, and remittances reported agriculture being a laborious and difficult task. Addressing these mediating factors along with the provision of effective crop insurance and subsides for the lower-income segments of the population, has the potential to (re)engage rural households in farming activities. Such an approach could provide a way to realize the government’s plans to commercialize smallholder farming.