POLICY SETTING, GOALS, AND ECONOMIC OUTCOMES 5
• Programs to ensure a continuous supply of fertilizer through the involve- ment of the private sector in both the procurement and the distribution of fertilizer
• Programs to increase the flow of agricultural credit for the Agricultural Development Bank
• Programs to develop agricultural roads and electrification • Agricultural research and extension programs aimed at enhancing produc- tivity in crop as well as livestock production
Overall Economic Performance during the Period Covered by the Ninth Plan
Despite the objectives of the Ninth Five-Year Plan, growth in the agricultural sector showed a mixed performance. The agricultural sector grew by 3.36 per- cent from 1995 to 2005 compared to 4.04 percent for the nonagricultural sector over the same period (Table 2.2). The agricultural growth rate fluctuated con- siderably; it was negative (–0.5 percent) in the first part of 1990s and positive (0.7 percent) in the second part of the 1990s (ANZDEC Limited 2002). Poverty declined sharply in Nepal between 1995 and 2003 (Table 2.3), but the decline was quite uneven between rural and urban areas. Poverty reduc- tion, measured by the headcount poverty rate, declined by 26 percent for Nepal as a whole over the eight-year period. However, declines in urban poverty (56 percent) overshadowed declines in rural poverty (20 percent). Inequality mea- sured by the poverty gap also decreased by 36 percent. Declines in the urban sector (67 percent) likewise surpassed declines in inequality in the rural sector (30 percent).
When poverty rates are disaggregated by the sector of employment of the household head, as in Table 2.4, the declines in headcount poverty rates for both the self-employed (24 percent) and wage earners (4 percent) in agricul- ture can be seen to have been the lowest within these subgroups relative to self-employed traders (66 percent decline) or wage-earning professionals (74 percent decline). This table illustrates that despite large decreases in pov- erty, these decreases were not equally distributed across Nepalese society. Specifically, over the eight years in question, the lowest amount of poverty reduction occurred in the agricultural sector relative to other sectors of the economy. Table 2.5 illustrates the importance of landholdings to poverty sta- tus and the changes in poverty rates based on a household’s initial landhold- ings between 1995 and 2003. For households that held less than 0.2 hectares, the poverty headcount ratio was the highest (39 percent) compared to those in the other landholding categories. Poverty decreased by 17 percent for this group compared to 15 percent for the group of households who held 0.2–1.0
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