Abstract

<p>Nepal has been receiving agricultural sector foreign aid since 1950/51. Agricultural
output growth has remained relatively low despite continuous aid inflows in agricultural
inputs. This study examines the trend of foreign aid in agriculture and its impact to
agricultural growth in Nepal. The study used a quantitative research design using annual
data from 1975 to 2020. Simple linear regression was used to examine the impact of
agricultural sector foreign aid on agricultural GDP. Besides, the study used irrigated
land, imported chemical fertilizers, agricultural sector credit, government expenditure in
agriculture, and the economically active population engaged in agriculture as
independent variables. The findings revealed that foreign aid, irrigated land, imported
chemical fertilizers, government expenditure in agriculture, and the economically active
population and agricultural sector credit had positive and statistically significant effect
on agricultural GDP. The results show that both external financial assistance and
complementary agricultural inputs play important roles in promoting agricultural
production in Nepal. The study concludes that maintaining and expanding agricultural
inputs by utilizing foreign aid is essential for achieving higher agricultural growth.
Keywords: foreign aid, agriculture credit, government expenditure, economically
active population&nbsp;</p>