A System Rigged Against Farmers

There is a striking irony in Nepal’s agricultural landscape: the very farmers who work the land struggle to obtain loans, while “fake farmers” living in concrete jungles receive the largest share of agricultural credit. This exposes the gap between Nepal’s agricultural policy and its practice. Much of the Kathmandu Valley is now densely settled, with urban expansion reaching the foothills. In these plots, grain no longer grows—land sales do. That such areas receive the highest volume of agricultural loans is deeply troubling. It shows how real agricultural development has been sidelined, with loans routinely misused for non-farming activities. Of the agricultural loans disbursed across the 13 districts of Bagmati Province, 52.6 percent has gone to Kathmandu. For non-farmers in a largely non-agricultural city to receive agricultural loans is a blatant misuse of the system. This has blocked genuine farmers from accessing the support meant for them. According to a Nepal Rastra Bank study, Rs 121 billion in agricultural loans has been disbursed in Bagmati Province, of which an astonishing Rs 64 billion was concentrated in Kathmandu alone. The Valley has only 19,943 hectares of land used for food and vegetable production. Meanwhile, Kavrepalanchok—a major vegetable-producing district—has received only Rs 5.17 billion, despite having nearly 29 times more cultivable land at 590,662 hectares. These figures reveal a disturbing pattern: agricultural loans intended for farmers are being captured by influential groups and used for non-agricultural purposes.