External Assistance in Agriculture Underutilized in Nepal

Nepal is among the countries which gets very low external support from donor agencies and foreign governments. However,it worth's higher  to Nepal, due to it's small economy. At the same time agriculture get's very high percentage of assistance from external sources, however the performance of  projects in agriculture sectors are not as effective as of other sectors. This may lead to diversion of external fund from agriculture sector and this has to take seriously before it departs.

In past 14 years (2000-2014) total commitments to Nepal government for external assistance was 3309858.47 Thousand USD of which 84.3 percent (2789266.15 Thousand USD) was disbursed. Agriculture sector got commitment of 506,048.36 thousand USD  which accounts 15.3 percent of total commitment. However,  the disbursement in agriculture sector was only 46 % ( 231,737.73 thousand USD ) of commitment and accounts only 8.3 Percent of total disbursement. About 9 percentage of total projects (i.e 73 out of 817) are in agriculture sector during the same period from 30 different organizations. The average size of project remained 2,792.02 thousand USD in agriculture whereas it was 3126.98 thousand USD for all the implemented projects.

I am not in position to explain why funds are underutilized, however, it is sure that if the same remains in future, donors will loose the confidence and the investment in agriculture will decrease remarkably. Some improvements or modifications may be needed immediately like revisiting external fund utilization methods, service delivery mechanism and/or changes in functional structure. 

The top 10 higher invested projects in agriculture are as follows. The monetary value of assistance shown is in Thousand USD ( Source: MoF, 2014 ).

1. Community Livestock Development Program (CLDP) (20,331 USD)

2. Project for Agriculture Commercialization and Trade (PACT) (16,258 USD)

3. Irrigation and Water Resources Management Project (IWRMP) (15,884.79 USD)

4. Social Safety Nets Project (Nepal Food Crisis Programme) (15,387.16 USD)

5. Commercial Agriculture Development Project (CADP) (14,888 USD)

6. Avian Influenza Control Project (Animal Health Component) (8,842.02 USD)

7. Community-Managed Irrigated Agriculture (Sector) Project CMIASP (8,265.62 USD)

8. WFP Commodity values for Nepal (GIK) (8,230 USD)

9. Nepal Economic, Agriculture and Trade Program (NEAT) (7,442.21 USD)

10. Heifer Project International/Nepal Program, Phase IV (7,076 USD) Top 10 Organizations in-terms of total investment in agriculture are: 1. Asian Development Bank (57,906.36 USD) 2. International Development Association(56,372.03 USD) (World Bank Fund) 3. U.S. Agency for International Development(19,772.09 USD) 4. European Union (13,782.16 USD) 5. Swiss Agency for Development and Cooperation(11,824.77 USD) 6. Japan International Cooperation Agency(8,674.13 USD) 7. Save the Children (8,559 USD) 8. Heifer International Nepal (7,076 USD) 9. Norway (6,904.55 USD) 10. Deutsche Gesellschaft für Internationale Zusammenarbeit (6,664.24 USD)