Program Details: 
Nepal: Focusing on Economic Development and Civil Society initiatives

Mercy Corps works in Nepal to help communities achieve greater prosperity, decrease social marginalization and to improve environmental sustainability.

The Challenge
Nepal remains one of the poorest countries in the world, with nearly a third of the country’s 26.4 million citizens living below the national poverty line – less than $0.25 per day – and another third living on less than $2 per day. While these numbers represent notable improvement over the past two decades, much of this achievement in poverty reduction has taken place in the capital city of Kathmandu. The 35 percent rural poverty rates, as compared to 10 percent overall urban poverty rates and a three percent poverty rate in the Kathmandu valley, demonstrate these rural-urban disparities. Subsistence agriculture is the country’s main source of livelihoods for 80 percent of the economically active population.

At present, Nepal is in a transitional period after a decade-long armed conflict (1996-2006). This conflict caused much damage to the social, economic and natural environment of the country. In addition to the challenges associated with formulating and implementing a new constitution, sustainable peace-building, social justice and economic growth are among the key priorities of the nation.

Mercy Corps’ Strategy in Nepal
Mercy Corps works in Nepal to help communities achieve greater prosperity, decrease social marginalization and to improve environmental sustainability. While integrating cross-cutting themes such as youth engagement, community participation, market strengthening, and social inclusion, Mercy Corps’ projects aim to strengthen local agricultural economies and reduce risk of disaster. Mercy Corps designs its projects with the recognition that facilitating private, public, and civic sector partnerships is a key aspect of sustainability.

Since the livelihoods of the rural poor in Nepal depend critically on local natural resource-based activities, Mercy Corps helps smallholder farmers to boost production, control diseases that limit productivity, access markets and services, grade and process commodities, and market commodities collectively.

At the same time, Mercy Corps helps farmers, traders, wholesalers, exporters, civic sector actors, and public sector actors work together to strengthen the value chains of high impact crops, while facilitating the expansion of financial services along these value chains.

Nepal being highly vulnerable to natural disasters, ranking 11th in terms of global vulnerability to earthquakes and 30th in terms of vulnerability to floods, Mercy Corps also works to ensure that the people of Nepal are better equipped with the right knowledge, capacities and infrastructure to reduce the risks of, and to respond to, natural disasters.

Reducing the Risk of Disasters to Protect Lives and Livelihoods
Partnering with the Nepal Red Cross Society and working with the Department of Meteorology and Hydrology, Mercy Corps supports disaster risk reduction through capacity building, early warning, education, improved coordination, and small scale mitigation works.

When target communities are affected by disasters, Mercy Corps also provides emergency relief support in the form of non-food relief item (NFRI) distribution, cash for work initiatives that speed the recovery of disaster-affected families and water point rehabilitation.

Strengthening Agricultural Livelihoods
Mercy Corps is improving agricultural livelihoods in Nepal. These are our main programs:

Strengthening the Value Chain of High Impact Commodities
Mercy Corps intervenes at multiple levels of the value chains of high-impact commodities along Nepal’s economic corridors, working with farmers, private sector actors, NGOs, and government agencies. Mercy Corps currently works with cardamom, ginger and potatoes, and supports secondary commodities such as chilies and garlic. These projects aim to increase collective bargaining power among marginalized smallholder farmers through improved business and technical practices. The projects facilitate information sharing and improved business and marketing practices among farmers, traders and exporters.

Expanding Access to Financial Services
Partnering with Nirdhan Utthan Bank Ltd. (NUBL), Mercy Corps facilitates the expansion of financial services into under-served economic corridors. In addition to Grameen-model and Self Reliance Group-model lending, Mercy Corps and NUBL are working to develop effective agricultural loan products for farmer groups.

Economic Corridor Mapping
Partnering with the University of Washington, and gathering data from various stakeholders in the agriculture and economic development sectors, Mercy Corps is mapping the value chains of high impact commodities along Nepal’s economic corridors. The completed map will contribute to decision-making regarding agricultural development interventions by the public and civic sectors, and agricultural investment by the private sector.

Short-Term Employment in Food Insecure Communities
In highly food insecure communities, Mercy Corps supports cash-for-work activities during lean seasons to rehabilitate agricultural infrastructure, repair assets that reduce the risk of disaster, and provide short-term work opportunities to food insecure or disaster-affected households.