Landlocked between India and China, and home to the highest mountains, Nepal is one of the poorest countries in the world. The country is struggling to lift the large share of its population out of poverty; 44% live in the multiple poverty index. Political instability following a decade-long Maoist insurrection and ousting of the monarchy worsened the situation.
Nepal has a flourishing tourism industry but faces problems of deforestation and encroachment and degradation of animal habitats. About 80% of the population depends on agriculture, which generates more than a third of the GDP. Nine farms out of ten are too small to make a decent living. Foreign aid is vital to the economy, and Nepal is also heavily dependent on trade with neighbouring India.
Nepal has three distinct agroecological zones depending on the topography. The sub-tropical lowlands of the Terai, bordering India, have the best agricultural potential. Rice is the main crop but pulses, wheat, barley and oilseeds are also grown, as well as some jute, tobacco, indigo and opium. In the densely populated temperate hill regions, rice and maize are grown in the summer season, and wheat, barley and vegetables in winter. Mustard, grown for its oil and used in cooking, is another important crop. Higher still, in the mountains of the sparsely populated north, crops are limited to potatoes, barley and buckwheat, with yaks providing meat, milk and wool.
Climate change and population growth have worsened the food security situation for the rural poor. Melting of glaciers is impacting the seasonal water supply and there is also an increased risk of flooding. Deforestation and erosion of topsoil also reduces crop yields. Better management of watershed resources through community-based organizations is therefore crucial for the livelihoods of most Nepalese families. Recurrent droughts force many farming families to sell their assets.
Chronic malnutrition among children is among the worst in Asia, especially in mountainous areas.