The U.S. Agency for International Development (USAID)/Nepal commissioned this study to assess the potential to leverage digital technology to support Nepal’s agricultural input systems. USAID hypothesizes that digital technology, deployed effectively, can increase cost and productivity efficiencies for public and private input service providers, ultimately leading to a stronger agricultural sector. This study examines the market systems and subsidy programs for the inputs of seed, fertilizer, machinery, and irrigation. Conducted by Strategic Impact Advisors, this work is based on a literature review and key informant interviews (KIIs) that took place in the fall of 2020.
The Government of Nepal is heavily involved in the agricultural input sector through its regulations, subsidies, and other support. This involvement limits the role of the private sector in some areas — especially fertilizer — and makes the Government of Nepal the necessary key component for digital solution development. As the Government of Nepal has undergone frequent structural change in the past few years toward decentralization, so too have many market system and subsidy processes.
Nepal’s digital infrastructure and usage have advanced rapidly, but last-mile limitations remain. The majority of fiber-optic cable infrastructure exists in urban centers, while the challenging topography in northern parts of Nepal limits network reach. Mobile phone usage has grown but remains limited in rural areas — smartphone use is particularly limited — and digital literacy is low. A variety of AgTech solutions have emerged in Nepal.