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Enhancing Agriculture in Nepal: Review of Public Expenditure

Explore successes and challenges in aligning impact and spending in Nepal's agriculture sector. Analyze budget allocation trends and factors influencing decisions. Evaluate the impact of agricultural public expenditure on household welfare and production.

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Enhancing Agriculture in Nepal: Review of Public Expenditure

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  1. Nepal Agriculture Public Expenditure Review: Successes and Challenges in Aligning Impact and Spending Krishna Prasad Pant, Nepal Government Mona Sur, The World Bank

  2. m r u B h u a M u D a d e l d h u r a u K a l i k o t D p o i A c h h a m K a n c h a n p u r D a i l e k h M u s t a n g J a j a r k o t i K a i l a l R u k u m M a n a n g S u r k h e t M y a n g d i S a l y a n B a r d i y a R o l p a B a g l u n g K a s k i L a m j u n g P a r b a t G o r k h a B a n k e P y u t h a n G u l m i R a s u w a D a n g S y a n g j a T a n a h u n A r g h a k h a n c h i N u w a k o t S i n d h u p a l c h o w k P a l p a D h a d i n g K a t h m a n d u D o l k h a K a p i l b a s t u B h a k t a p u r N a w a l p a r a s i C h i t w a n R u p e n d e h i T a p l e j u n g S o l u k h u m b u S a n k h u w a s a b h a L a l i t p u r K a v r e M a k a w a n p u r R a m e c h h a p O k h a l d h u n g a P a r s a S i n d h u l i K h o t a n g T e r h a t h u m B h o j p u r r a h B a r a t h c R a u t a h a t n a S a r l a h i P D h a n k u t a U d a y a p u r M a h o t t a r i I l a m a n u s h a D h S i r a h a S u n s a r i M o r a n g S a p t a r i J h a p a NEPAL China Kathmandu India

  3. Agriculture in Nepal • Employ 2/3 of labor force • Involves 3.36 million households • Average land holding 0.79 ha • Contributes 32% of GDP • % Contribution to the AGDP • Crops 66.16 • Livestock 25.68 • Forestry 8.07 • Fisheries (inland) 0.09

  4. National Planning Commission Budget Process Ministry of Finance Ministry of Agriculture and Cooperatives District Agencies Dept. Livestock Dept. Food Tech Dept. Agri Dept. Coop Program Directors Program Directors Program Directors Program Directors Regional level Offices (Agri., Livestock, Food Tech, Coop)

  5. Allocation of the budget higher than ceiling depends on • Strength of the proposed program • Political favor of the Ministers • Favor given by the Ministry of Agriculture while negotiation • Strength and lobby of the Departments • Strength, lobby and personal influence of the Program Director • Intention and ability of the program director to consume the fund

  6. Synthesis • Nobody denies the role of agriculture in Nepalese economy • Public expenditure in agriculture is insufficient • Allocation of expenditure to different sub-sectors not based on analysis, but on hunch and power play • Recurrent public expenditure in agriculture is increasing faster than the capital expenditure • Expenditure in agriculture is not increasing as it increased in other sectors • ODA is not in favor of agriculture • DFID-ARD Analysis of Public Expenditures in Agriculture derives some hard facts.

  7. Nepal - Public Expenditures by Sector, 1999-2003 Public expenditures on Ag/Ag GDP= 4%

  8. Impact of Agricultural Public Expenditures on Household Welfare & Agricultural Production NE: No Effect; NA: Not Applicable; IV: Instrumental variable; SE: Simultaneous equations

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