MEMBER VOICE — NEPAL

As a landlocked country with no domestic fertiliser or petroleum production, Nepal is structurally exposed to global supply-chain shocks. The Nepal Agricultural Cooperative Central Federation Limited (NACCFL) explains how the disruption in the Strait of Hormuz is testing farmers’ resilience and the cooperative systems designed to support them.

What farmers are facing

The disruption in the Strait of Hormuz has highlighted Nepal’s vulnerability to global supply chain disruptions. As a landlocked country, Nepal relies heavily on imported petroleum products and chemical fertilisers, making agricultural production highly sensitive to international shipping disruptions and fuel price increases.

Although government procurement efforts have limited the immediate physical shortage of fertilisers, uncertainty over future supplies and transportation costs has already shaped farmers’ decisions this season. Many have become more cautious with chemical fertiliser use — reducing application rates, delaying purchases, or supplementing with locally available organic manure and compost where possible. Some have prioritised staple crops over higher-input commercial crops to reduce production risk.

Risk management has taken the form of staggered input purchases, greater reliance on cooperative-managed input distribution, and growing interest in integrated nutrient management. Agricultural cooperatives affiliated with Nepal Agricultural Cooperative Central Federation Limited (NACCFL) have played a central role in disseminating information, coordinating fertiliser distribution, and helping members access available inputs during the uncertainty.

The impact has not been felt equally. Smallholder farmers, who make up the majority of Nepal’s agricultural producers, are more exposed: limited financial reserves, lower purchasing power, and fewer alternative input sources mean that any rise in fertiliser or fuel prices directly affects their production decisions and household income. Larger commercial producers generally have greater financial capacity to maintain input use, procure in bulk, and absorb temporary price fluctuations — though they too face rising costs and reduced profitability.

Building resilience through cooperatives

From NACCFL’s perspective, strengthening fertiliser market resilience requires coordinated action among government agencies, cooperatives, the private sector, and development partners. Key medium-term measures include:

• Strengthening cooperative-based fertiliser procurement and distribution systems to improve timely access for farmers across rural areas
• Advocating for strategic national and provincial fertiliser reserves to buffer temporary supply disruptions
• Promoting domestic production of organic fertilisers, biofertilisers, compost, vermicompost, and other bio-inputs
• Enhancing access to affordable agricultural credit and input financing through cooperatives

The measures NACCFL prioritises differ by scale. For smallholder farmers: targeted fertiliser subsidies, affordable cooperative credit, collective input purchasing, training on efficient fertiliser use, low-cost organic alternatives, and crop insurance and climate risk management. For larger commercial producers: bulk procurement mechanisms, precision agriculture technologies, mechanised fertiliser application, long-term supply contracts, and investment incentives for sustainable input production and storage.

Strengthening agricultural cooperatives remains central to both approaches, as they can aggregate demand, reduce transaction costs, and improve farmers’ bargaining power.

Toward sustainable fertiliser use

Persistent global market uncertainty requires a gradual transition away from heavy dependence on imported chemical fertiliser toward more resilient and sustainable nutrient management.

NACCFL promotes Integrated Pest Management (IPM) and the Participatory Guarantee System (PGS), encouraging the balanced use of chemical fertilisers alongside organic manure, compost, green manure, crop residues, livestock manure, biofertilisers, and legume-based crop rotations — preserving soil health while reducing production costs.

Farmers are adapting by applying fertiliser based on soil test recommendations rather than blanket application rates, increasing use of locally produced compost and farmyard manure, promoting biofertilisers and microbial inoculants where appropriate, diversifying cropping systems, improving water management to raise fertiliser-use efficiency, and adopting climate-smart practices more broadly.

For smallholder mixed farming systems specifically, NACCFL points to household- and cooperative-level compost production, better utilisation of livestock manure, farmer-to-farmer learning through cooperatives, and community composting initiatives that let farmers collectively produce and access quality organic fertiliser at lower cost.

“Long-term fertiliser resilience cannot rely solely on increasing fertiliser imports,” NACCFL Chairperson Khem Bahadur Pathak, representative of the Asian Constituency on the WFO Board of Directors, notes. It requires strengthening cooperative institutions, promoting integrated nutrient management, investing in domestic organic fertiliser production, improving soil health, and building farmers’ capacity to adopt climate-smart, resource-efficient practices. Through strong farmer cooperatives, Nepal can build a more resilient, sustainable, and inclusive agricultural system — one capable of withstanding future global market shocks. This report is part of an ongoing series in which WFO is gathering and amplifying contributions from its member organisations worldwide in response to the Middle East crisis.

About NACCFL

The Nepal Agricultural Cooperative Central Federation Limited (NACCFL) is the national apex organisation representing Small Farmers Agriculture Cooperative Limited (SFACLs) and other agricultural cooperatives across Nepal. Established in 2008, NACCFL was formed following the transformation of the Small Farmers Development Programme into community-owned and community-managed Small Farmers Agriculture Cooperative Limited (SFACLs), to improve livelihoods, reduce poverty, and promote inclusive rural development through the active participation of smallholder farmers.

Currently, NACCFL’s network comprises more than 1,150 member cooperatives, representing over 1.2 million smallholder farmers and cooperative members across all 77 districts of Nepal. Over the years, NACCFL has been actively engaged in strengthening the capacity, governance, and institutional development of its member cooperatives, while promoting inclusive, sustainable, climate-resilient, and agriculture-based livelihood development.

Cover photo: ©NACCFL