Over 30 per cent of Nepalese live on less than US$14 per person, per month, according to the national living standards survey conducted in 2010-2011. While the overall poverty rate for Nepal is 25 per cent, this figure increases to 45 per cent in the Mid-Western region and 46 per cent in the Far-Western region. In these remote hill and mountain zones, the terrain is rugged, rainfall is low and the poor-quality soil is difficult to farm. Agricultural holdings per household are the smallest in the country.
About 80 per cent of Nepal's people live in rural areas and depend on subsistence farming for their livelihoods. Household food insecurity and poor nutrition are major concerns in these areas, where about half of children under five years of age are undernourished. Most rural households have little or no access to primary health care, education, safe drinking water, sanitation or other basic services.
Poor rural people in Nepal generally have large families, very small landholdings or none at all, and high rates of illiteracy. They are also concentrated in specific ethnic, caste and marginalized groups, particularly those of the lowest caste (dalits), indigenous peoples (janajatis) and women. Population density in the country varies according to altitude – averaging more than 1,000 persons per square kilometre (km2) in the low Terai region, about 300 persons per km2 in hilly regions and as few as 30 persons per km2 in mountainous areas.
The rural poor in Nepal include:
- Destitute people, such as those who are sick, disabled or displaced, and abandoned children
- Extremely poor people, such as illiterate or landless individuals, and those with very few assets
- Moderately poor people, such as those who have small farms but are heavily indebted
- The ‘nearly poor' – including small farmers who are at risk of falling back into poverty as a result of factors such as conflict, debt and land degradation.
Land ownership in Nepal has traditionally been concentrated in a feudal system under the monarchy. For most poor rural families, access to land is extremely limited. Almost 70 per cent of households have holdings of less than 1 hectare, and many depend on plots that are too small to meet their subsistence requirements. Productivity levels remain low as a result of limited access to new farming technologies, inputs and extension services.
Because of poor growth in the agricultural sector, living standards in rural areas are deteriorating. The growing population has put heavy pressure on cultivable land, especially in the Terai region, where there are also many landless migrants from the hills.