| Project Detail |
Project Name
Irrigation Modernization Enhancement Project
Project Number
56218-001
Country / Economy
Nepal
Project Status
Approved
Project Type / Modality of Assistance
Loan
The project is closely aligned with (i) ADBs Strategy 2030s operational priorities on gender equality, environment, climate resilience and disaster risk management, rural development and food security, and institutional strengthening; (ii) Sustainable Development Goals on economic growth, social inclusion and environmental protection; and (iii) ADBs Water Sector Directional Guide that aims for poverty reduction, gender equality, climate resilience, food security, and capacity building. The project also aims to: (i) empower women farmers, (ii) ensure water security and build climate resilience, and (iii) increase food security and reduce rural poverty.
Project Rationale and Linkage to Country/Regional Strategy
The agriculture sector contributes about 26% of Nepals gross domestic product. In 2018, about 55% of the working age population was engaged in agriculture, forestry, and fishing of which 62% are women and 38% are men either directly or indirectly in producing, processing, and marketing of agricultural products. Over the past decade, Nepals agriculture sector growth has stagnated to an average annual rate of 2.7% which is mainly attributed to lack of reliable irrigation. The country vulnerability to food insecurity is exacerbated by recurring climate induced natural hazards, mostly floods, droughts and heat waves, and a decline in farming systems suitability to climate variations. The agriculture sector is still dominated by subsistence farming resulting in low productivity and farmer incomes.
Nepals poverty reduction strategy recognizes that agricultural growth is essential for attaining broad-based economic growth and improving livelihoods of the poor, who are mostly in rural areas. Agriculture is largely based on low-value crops and subsistence production, with only 10.3% of households regularly selling farm products in the market, 41.5% of households selling when they have surplus after self-consumption, and the rest never selling their products. Key problems that contribute to low agricultural productivity and high vulnerability to climate change include: (i) unreliable access to water exacerbated by climate change; (ii) inadequate irrigation infrastructure, delivery services, and farmers irrigation practices leading to low water use efficiency; (iii) limited capacity and knowledge of marginal farmers; (iv) small and fragmented land holdings; (v) limited access to good quality seeds, fertilizers, mechanization, and market; and (vi) limited extension services. Many productive uplands along river valleys (tar) remains barren due to lack of access to year-round irrigation. Climate change is impacting rainfed and irrigated crops with delayed monsoon, longer dry and wetter wet seasons, and increasing frequency of extreme climatic events. The average annual economic loss from climate induced disasters is reported NRs2,778 million (equivalent to 0.08% of gross domestic product for 2018/19). |
