ISSN 2330-717X

Nepal: Livelihood Approach To Peace-Building – Analysis


By Hari Bansh Jha


Hunger anywhere threatens peace everywhere. Poverty and deprivation is the primary cause of conflict. Conflict can be tamed if livelihood of the people is guaranteed. In fact, livelihood not only ensures better working environment but also generates conducive environment of wealth creation as it raises income, creates employment opportunities and adds to the purchasing power of the people. In Nepal, the decade-long conflict between the period 1996 and 2006 was the result of lack of adequate support to livelihood of the people. Investment in agriculture which is one of the vital components of livelihood is only 1% of the remittance. Other livelihood base made possible through industrialization, constructive activities, etc. is weakening due to the labour problems, strikes and forced donations. Climate change is also bringing negative impact on the growth of agricultural sector and thereby affecting the livelihood of quite a sizeable sections of the Nepalese population. Learning lesson from the past, some efforts have been made in the country to strengthen the livelihood base of the people in the recent years, particularly throught the implementation of High Mountain Agribusiness and Livelihood Improvement (HIMALI) project in 10 districts in the mountain region and Livelihood Recovery for Peace (LRP) project in three districts of Terai region of Nepal. Yet the existing livelihood projects appear to be only piecemeal approach as they cannot resolve people’s quest for livelihood for the sizeable sections of the Nepalese population.



It is rightly said that hunger anywhere threatens peace everywhere. In this context, poverty and deprivation is among the primary causes of conflict and violence in a society. Most conflicts have multiple drivers, but poverty is among the most pervasive factors. The havens of terror often appear when the government in a country fails to meet the basic needs of the people.

Significantly, most of the deprivations are rural based as seven out of ten of the world’s poor live in rural areas alone.[1] Persistent violent conflict inhibits investment, displaces families and workers and stifles productivity. Therefore, determined action against poverty and inequality is prioritized and due support is given to livelihood of the people in order to establish lasting peace in the society.

Livelihood is widely regarded as a means to support one’s own existence as well as the existence of the family members, which is quite often linked to financial and vocational aspect. Everyone has the fundamental right to be free from hunger. The right to adequate food is indispensable part of human rights. Livelihood support in this sense is not merely a moral imperative, but it is an economic phenomenon. Better livelihood ensures better working environment, which in turn generates a more conducive atmosphere for wealth creation. It adds to productivity, raises income, creates employment opportunities, raises the purchasing power of the people and thereby supports the growth of GDP. Besides, it also helps to bring about political stability and remove tension and conflict in the society. Therefore, in the recent years livelihood is increasingly being recognized as a tool for establishing peace in the conflict-torn countries all over the world – be it in Asia, Africa, Latin America or other parts of the globe.

Correlation between livelihood and peace

Food security largely ensures livelihood. There is a direct correlation between food security and conflict. With the deterioration in food security or its long-term stagnation, there is a growing tendency for the conflict to emerge. On the other hand, the conflict itself creates ground for the deterioration or long-term stagnation of food security.[2] During the time of conflict, the food production is largely disturbed on account of physical destruction of crops, livestock, harvests and food reserves. Food production is also disturbed during the conflict as an environment is created to discourage farming partly by diverting investment away from the agricultural sector and partly by taking young and able-bodied workers away from the farming activities. Even in the post-conflict period, the farm activities are badly affected for many years as the assets are destroyed and people are killed.

Therefore, for restoring peace, food security is ensured through agricultural activities in many parts of the world. In 1996, for example, over 28,000 Moro National Liberation Front (MNLF) combatants in Philippines were provided means to begin sustainable and small-scale commercial agricultural production under the Livelihood Enhancement and Peace (LEAP) programme. The combatants were made to transform themselves into productive farmers and fish producers following the Final Peace Agreement between the Government of the Philippines and the Moro National Liberation Front.[3] This enabled them to make earning needed for their own support and also for the support of their family members. Such initiative largely helped restore peace as the combatants stopped confrontation with the government forces thereafter.

Weakening Base of Livelihood in Nepal

As is well known, the lack of adequate livelihood support was one of the main reasons for the growth of unemployment and involvement of the youth in the insurgency movement during the decade-long conflict (1996-2006) in Nepal in which more than 16,000 people were killed. Therefore, following the signing of the Comprehensive Peace accord between the Government of Nepal and the Communist Party of Nepal – Maoists (CPN-M) in 2006, there has been a growing realization in certain quarters to bring about improvement in livelihood to the conflict-affected population both in the hills and in the Terai region of Nepal.

Most importantly, the agricultural sector is the main source of livelihood of the people in Nepal. Paddy, maize and wheat are the main food crops, while livestock, vegetable and fruit production are also important sources of livelihood of the people. About 78% of the people depend on agriculture for their livelihood. Between 1960s and 1980s, the share of agriculture in GDP ranged from 60 to 70%. But it declined to 40% in 2000 and 33% in 2007.[4]

However, the agricultural production is a risky affair because of its dependence on the vagaries of monsoon. The agriculture sector is largely subsistence or semi-commercialized. Statistics show that the real per capita crop income for the average rural households was 4% lower in 2003-04 as compared to 1995-96. Also, the average returns on agricultural per hectare of land declined. On average, the real profits per hectare of land were lower by 10% during this period, which was due to the higher production costs and lower output prices.[5]

The Three Year Interim Plan (2007/08-2009/10) of the National Planning Commission reveals that the average annual growth rate of agricultural sector during the Tenth Plan period was only 2.67% against the targeted annual growth rate of 4.11%.[6] Most of the households in the country produce food sufficient for only four to six months because the land owned or rented by them is small, irrigation facility is largely lacking, intensity of cultivation and livestock breeding is limited. Many households depend for most part of the year on the purchase of additional foodstuffs. Outputs from agricultural sector are limited as no tangible effort has yet been made to achieve the goal set by the planners and policy makers to boost foodgrain production in the Terai region and livestock and horticulture production in the hills and mountain regions. Study report shows that of the total receipts from the remittance only 1% is invested for increasing production and productivity in the agricultural sector, which, in fact, paints a bleak picture of the agricultural sector in Nepal (Table 1).

Source: ADB, DFID and ILO: Nepal Critical Development Constraints, p. 89 quoted from Ferrari, Jaffrin, and Shrestha (2007).
Source: ADB, DFID and ILO: Nepal Critical Development Constraints, p. 89 quoted from Ferrari, Jaffrin, and Shrestha (2007).

Other than the agricultural sector, the industrial, tourism, trade and service could develop only in certain pockets in the Terai or in the hills. The larger part of Nepal remained neglected. Unfortunately, many of the industrial and commercial ventures were closed or terribly suffered during the conflict and in the post-conflict period on account of frequent labour problems, strikes, forced donations, etc.

Besides, out-migration was promoted largely due to the insufficiency of agricultural yields and also due to the limited range of jobs in non agricultural sectors such as in manufacturing industries, construction, transport, education and health in the national labor market. Initially, poor and disadvantaged population from the hills mainly chose India as their destination for gainful employment and better access to livelihood. Later on, many of poor people from the Terai region also began to migrate to India, particularly to Punjab, Haryana in 1980s and later period for better livelihood.

India accounted for nearly 85% of the migration from Nepal until 1995-96, but it declined to 65% in 2003-04.[7] During this period, India’s share in Nepal’s total foreign remittances declined from nearly 60% to 30%. Households with illiterate background often migrate to India. On the other hand, those who are better off educationally and economically have countries other than India as their destination for employment and they normally go to countries like Qatar, Kuwait, Malaysia, Saudi Arabia, Iraq, Israel, Afghanistan, South Korea and USA.

The Nepalese started to migrate in bulk to the overseas countries from the late 1980s. Initially, they migrated most eastwards to Southeast Asia and Far East. Migration of the Nepalese westwards to Gulf countries began only from mid-1990s. The decade-long conflict in the country beginning from 1996 proved turning point in the history of migration. There was a spectacular growth in the number of women, apart from the men, migrating to overseas countries during this period. Lack of security at home, debt and will to live a better life pushed many of the youth to the foreign countries for employment. Between 2003 and 2006 itself, their number doubled.[8]

Statistics available from the Ministry of Labor and Transport Management show that the annual outflow of the migrants reached 266,666 in the year 2008. Until recently, around 600 Nepalese used to leave the country for overseas employment every day. But now 1,300 people are fleeing the country each day for overseas employment.

Despite the fact that the government of Nepal spends nearly 6% of GDP on activities related to poverty reduction and rural development, the impact on the rural economy is severely restricted due to poor targeting, funding problems, supply driven investments, high administrative costs and complex procedures.[9] Also, the rural poverty and rural-urban divide is a serious problem. The status of poverty in the rural areas is 35% against 10% in the urban areas. Incidence of poverty is highest in the mid-Western region (45%) and least in the Central region (27%).[10] Interestingly, the insurgency movement during the conflict period (1996 – 2006) gained ground more in such areas where livelihood base of the people was weaker.

Climate Change and Livelihood

Nepal’s agricultural productivity was highest in South Asia until early 1960’s. But the productivity in this sector was found to be the lowest one in the region by 1990’s.[11] Many parts of the country have virtually turned into food deficit area. The increased level of population growth together with the decline in productivity of land is largely responsible for the food deficit situation in the country. In the recent years, the situation is aggravated as the climate change has started making adverse impact on agricultural production and productivity in Nepal. Unexpectedly, the weather, water and environmental conditions have changed.[12] People in the country have gradually been realizing that the climate change is no more an issue of international concern, but it is an acute local problem. The reduced level of rainfall together with shifts in precipitation patterns, longer drought, flash floods and deficit in recharge of groundwater has started making adverse impact on the agricultural sector, which has been affecting the livelihood of millions of people in the country.

Efforts for Promoting Livelihood

Certain efforts have been made in Nepal to strengthen the livelihood base of the people. During the Panchayat regime (1960-90), the concept of saving scheme such as Dharam Bhakadi was introduced to ensure food security in each village in the country. After the political change in 1990, Man Mohan Adhikari led government in 1994-95 introduced a programme in which the Village Development Committees (VDCs) and the District Development Committees (DDCs) for the first time were given funds to implement community development activities and infrastructural facilities, which indirectly meant to provide livelihood support to the local people at the grassroots.

Additionally, in December 1994 the government of Nepal made a provision to provide all the elderly above 70 years (earlier it was 75 years) old age allowance. Later on in 1996, the government introduced additional social security programmes to provide certain allowance to the helpless widows above 60 years of age and also for the disabled.[13]

Moreover, many of the NGOs and INGOs in post-1990 period launched different kinds of income generating activities to support the weaker sections of the society and improve their livelihood. Food for Work programmes is well known for providing livelihood support to thousands of workers in various parts of the country, particularly in the hills. The workers are given foodgrains against their involvement in certain development activities such as construction of roads.

Recently, the government is in the process of drafting a law to guarantee employment to at least one member of each family lying below the poverty line. Interestingly, the people below the poverty line constitute 13% of the total population of the country, which earlier was in the range of 31%. If such a law is really executed under Employment Guarantee Act, it will substantially address the livelihood problem of many of the youths in the country. Significantly, 400,000 youths are added to the domestic job market each year on top of the 2.5 million populations who are either unemployed or underemployed.[14]

Most importantly, mention may be made of High Mountain Agribusiness and Livelihood Improvement (HIMALI) Project introduced in the mountain region and Livelihood Recovery for Peace (LRP) project in the Terai for their plan to provide livelihood support to more especially the conflict-affected population in Nepal.

Livelihood Support in the Mountain Region

Plans are afoot to implement High Mountain Agribusiness and Livelihood Improvement (HIMALI) Project in 10 districts of the mountain region of Nepal, including in Humala, Mugu, Jumla, Dolpa, Mustang, Manang, Rasuwa, Dolakha, Solukhumbu and Sankhuwasabha.[15] These districts have ever been remote from the mainstream road network of the country and so they are not that easily accessible. Also, these districts are vulnerable to high incidence of poverty. Over dependence of the people of this region on limited land and forest resources for livelihood has resulted into environmental degradation. People find it difficult to scratch their living through the semi-commercial crops such as fruits and vegetable production and livestock farming. Expectations are that the Project would help improve the livelihood of nearly 0.8 million people, particularly from Brahmin, Chhetri and Tibetan-origin groups. Trade is common among the people of Tibetan-origin ethnic groups such as Thakali, Sherpa and Tibetans; whereas tourism is the source of livelihood for many of the people living in Mustang, Manang and Solukhumbu districts. High value medicinal plants are also source of income, particularly in Dolpa. Apple farming is popular in Jumla and Mustang.[16]

Livelihood Support in the Terai Region

Nepal has 20 districts in the Terai region that border different states of India. This region is known for productive farmland, valuable forest resources and also for the growth of industries. But there is rampant poverty in the midst of plenty in the region. This problem came to surface with the emergence of Madhes Andolan in 2007. Sporadic case of strikes, shutdowns (bandhs) and weak law and order problems in the region has created insecurity among the larger sections of the people. Therefore, the Livelihood Recovery for Peace (LRP) project was introduced in 2009 for five years between August 2009 and December 2014 in three poorest districts of the region, including in Mahottari, Sarlahi and Rautahat, to improve the economic conditions of the people.[17]

Under the LRP, most vulnerable communities and economically disadvantaged population such as the Dalits were identified across 271 Village Development Committees (VDCs) in 2010 in order to make them empowered both socially and economically. The project amounting to $18 million is being implemented by UNDP with the support of NGO partner organizations, government agencies including the three District Development Committees (DDCs). The project aims at mobilizing communities for improvement in social status, peacebuilding and livelihood choices; building new community infrastructure and rehabilitating damaged or degraded ones; facilitating the poorest and vulnerable individuals and households to get better access to livelihoods through skills and vocational training, income generating programmes, micro-finance and solar home lighting systems; empowering women and strengthening the VDCs, municipalities, district and national level key institutions to get their support in livelihood recovery of the targeted population in the districts.[18]

Piecemeal Approach

However, it appears that many of the efforts made to promote livelihood of the people is just the piecemeal approach, which cannot resolve people’s quest for livelihood for the substantial sections of the population in the long-term perspective. It is still doubted if the government would ever be able to provide employment opportunity to at least one member of the family lying below the poverty line because it is too ambitious.

Of course, the foreign employment has provided the people a great relief as it has largely addressed their livelihood problem, but this is merely a palliative measure in the short term. The long-run and permanent solution of the livelihood problem could be ensured only when a tangible base is created within the country, which could be ensured through the modernization of agriculture or growth of industrial, trade and service sectors. It could also be ensured through the development of such infrastructural facilities as the development of tourism, educational, health, roads, irrigation and other sectors of the economy.

Significantly, the prospects for the development of agricultural or other such sectors are limited. Agriculture cannot sustain almost 400,000 youths that are added to the country’s total population each year. In view of the growing competition from China and India, the Nepalese industries have marginal comparative advantage. Water resources sector is, however, treated to be comparatively more advantageous to Nepal as it has enormous market in India or South Asia. Unfortunately, not much has been done in this area as well. Despite the potentiality to harness 83,000 MW of hydropower, Nepal has not been able to harness more than 600 MW of power or so. Inadequate and erratic supply of power has caused long-hours of load shedding in different parts of the country, which in turn has affected the production in industrial, agricultural, tourism, service and different other sectors.

Unfortunately, the large hydro-power projects like Upper Karnali (900 MW) and Upper Marsyangdi (600 MW), the undertaking of GMR of India, are lying in suspended state on account of the troubles created by certain elements in the local areas.[19] Similar is the fate of the Mahakali Project with potentiality to produce around 6,000 MW of hydropower. This Project could not take off, though the Treaty for its implementation was signed in 1996 and endorsed by over two-thirds of the members of Nepalese parliament. Since the power sector has potentiality to create base for livelihood for many of the people through the development activities, it is sad that the hydro-projects are targeted at the cost of people’s interest. This in turn will not merely affect the growth of different sectors of the Nepalese economy but it will also affect the livelihood prospects for the great majority of the Nepalese population resulting into further deterioration in the country’s economic condition.

A Way Forward

Peace is essential for improving the livelihood of the citizens of Nepal. Also, improving the livelihoods prospects for the people is essential for peace. As peacemaking initiatives progress to resolve political, regional and ethnic conflicts; strategies to improve livelihoods must be implemented. Improving livelihood is the foundation for lasting peace and economic progress in a country. Building peace requires not only resolving the immediate political conflict, but also addressing its root causes. No country or society will live in peace if the livelihood of the people declines.

In Nepal, the erosion in livelihood in a way was responsible for the decade-long conflict between 1996 and 2006. Taking lessons from the conflict, some stray efforts are being made in the country to address the livelihood issue both in the hills and the Terai regions of the country. Yet these efforts are merely piecemeal. They cannot solve the livelihood problem and ensure peace among the great majority of the population in the long-term perspective. There is still inherent danger of conflict to re-emerge in case people don’t find permanent and reliable base for livelihood.

Therefore, what is needed is to do something concrete to create surplus food in the districts or at least to boost up agricultural production in a way that the districts become self-sufficient in food production. But for all this investment in agricultural sector has to be enormously increased, which at the moment is as low as 1% of the total earnings from the remittances. Wherever it is not possible to grow food enough to meet peoples’ requirements, purchasing power of the people will have to be substantially increased through different development activities. They need to be empowered in a way that they could make earnings for their livelihood and are able to buy needed food for themselves and their families.

It is high time to recognize climate change as a serious issue in Nepal as it is a potential threat to peace and security of the country. All possible efforts should be made by the concerned units to introduce drought tolerant, less water demanding crop varieties and climate change adaptive cropping practices in the Terai region to mitigate the impact of climate change on the agricultural sector.

Besides, the water resources need to be harnessed for hydro-power production and irrigation as it has multiplier effect on the growth of different sectors of the economy – be it education, health, agriculture, industry, trade and service sectors. It is only through the joint efforts made through agricultural activities, development efforts and restoration of good governance that proper livelihood could be ensured for the common mass of the people. Only such an effort could ensure permanent peace and stability in the country. In this context, the foundation set up by former US President Jimmy Carter, Future Harvest, rightly observes, “rehabilitation of agriculture is a central condition for development, reducing poverty, preventing environmental destruction – and for reducing violence. Poor conditions for agriculture hold grave implications for socio-economic development and sustainable peace. We also see good governance as crucial in building healthy conditions for agriculture, and thus in breaking the vicious cycle of poverty, scarcity and violence.”[20]

[1] Food and Agricultural Organization of the United Nations. 2002. World Food Summit: five years later in
[2] Ibid.
[4] ADB, DFID and ILO. 2009. Country Diagnostics Studies: Nepal Critical Development Constraints. Mandaluyong City, Philippines, p. 8.
[5] Ibid, p. 62.
[6] NPC, 2007. Three Year Interim Plan (2007-08 – 2009-10). Kathmandu, p. 141.
[7] ADB, DFID and ILO, no. 4, p. 52.
[8] Ibid, p. 30.
[9] WFP and EU. 2006. Nepal: Comprehensive Food Security and Vulnerability Analysis. Rome: United Nations World Food Programmed, p. 20.
[10] Ibid, p. 21.
[11] Prakash Kharel, “Grains of Truth,” in Republica, 21 October 2009.
[12] Livelihoods and Forestry Programme. 2009. Impact of Climate Change on Forests and Livelihoods: Issues and Options for Nepal. Kathmandu: DFID, pp. 52-53.
[14] My Republica, August 11, 2011 in
[15] Asian Development Bank. 2010. Nepal: High Mountain Agribusiness and Livelihood Improvement Project, p. 6.
[16] Ibid, p. 25.
[17] UNDP. Peace and Livelihoods in the Terai, p. 1.
[18] Ibid, p. 1.
[19] Yubraj Ghimire, “Running in place: Nepal’s politicians may fail to meet yet another deadline” in The Indian Express, August 10, 2011.
[20]Food and Agricultural Organization of the United Nations, no. 1.

Click here to have Eurasia Review's newsletter delivered via RSS, as an email newsletter, via mobile or on your personal news page.


SAAG is the South Asia Analysis Group, a non-profit, non-commercial think tank. The objective of SAAG is to advance strategic analysis and contribute to the expansion of knowledge of Indian and International security and promote public understanding.

Leave a Reply

Your email address will not be published. Required fields are marked *