ANALYZING THE LONG-RUN DETERMINANTS OF RICE PRODUCTION IN NEPAL: EVIDENCE FROM AN ARDL APPROACH (1990-2019)

Nepal, an agricultural nation in South Asia, is characterized by its distinct topography: 35% mountains, 42% hills, and 23% Terai. This study investigates the key factors influencing Nepal's agricultural food production. Utilizing the Auto Regressive Distributed Lag (ARDL) model, it analyses data spanning 1990 to 2019, focusing on electricity generation, annual mean temperature, foreign exchange rate, and imports of agricultural food products as independent variables.The analysis reveals significant relationships. Electricity generation and the foreign exchange rate exhibit a positive impact on cereal production. Conversely, both cultivated area and annual mean temperature demonstrate a negative impact, posing risks to overall agricultural output in Nepal. These findings highlight critical sensitivities within the agricultural sector.Based on these relationships, the study forecasts agricultural food production up to the year 2060. These projections were developed using four distinct scenarios grounded in potential production growth rates. The long term outlook underscores the need for strategic planningA key recommendation emerges: policymakers should prioritize enhancing paddy (rice) production. The study strongly suggests this targeted focus offers substantial benefits. Increasing paddy output is projected to significantly reduce Nepal's trade losses related to agricultural goods. Furthermore, this strategy is identified as a crucial driver for fostering broader national economic development. By concentrating efforts on this vital crop, Nepal can leverage its agricultural sector for greater economic stability and growth amidst its challenging geographic constraints.