Rural unemployment in Nepal : the Chitawan Valley experience

Abstract

The main aim of this study is to investigate the problem of rural unemployment in developing countries with special reference to the Chitawan Valley (in Nepal) experience. A brief review of the existing literature relating to the theoretical framework of the subject is undertaken first. This is followed by the required background information on Nepal. The general hypothesis postulated is that the valley, initiated as a resettlement area nearly a quarter of a century ago, is rapidly heading towards a labour surplus stage. Extreme inter and intra farm heterogeneity in the sample with respect to resource availability and input application necessitated the adoption of a synthetic farm approach. Farm size, land type and level of technology were considered to be the main criteria around which the synthetic farms were constructed. Various methodologies for measuring unemployment were discussed and the ’labour available versus labour required’ variant of the ’labour utilisation approach' was used. Accordingly, the labour utilisation rate was computed for each farm situation by comparing the labour employed (given by Leontief type fixed labour input coefficients) with the annual regular labour available. Given the small size of the sample (55 farming households) the application of the powerful nonparametric test was deemed effective to check the validity of the results. The analyses undertaken indicate the prevalence of underemployment in all the farm situations considered. Unemployment was generally identified as being only seasonal in nature and was concentrated during the winter months. The observed unemployment was attributed, in part, to the monsoonal pattern of agriculture. .Hence, promoting employment through irrigation development seems to be advisable. Show more