Promoting small towns for rural development: A view from Nepal

Abstract

Two small villages in Nepal are the subjects of case studies that illustrate the role of small towns in provision of services, employment, and market operations. Some general findings are that small towns act as service centers for distribution of basic essential goods such as food grains, salt, kerosene, and fabric for hill and mountain areas. The role of small towns as market centers and in the provision of employment is limited. In resource-poor areas small towns are less diversified. Towns with agricultural surpluses are more developed. Small hill towns satisfy consumption rather than production needs. The growth of rural areas and towns in rural areas in Nepal is dependent on arable land and levels of production in hill areas. Limited land and low levels of production have an adverse impact. Movement of people, goods, and services is limited by difficult terrain and lack of access to good roads. Variability in access to off-farm jobs and services available in small towns varies with ethnicity and place of residence. The best development strategy for small towns in Nepal is market-oriented territorial development, which retains surpluses in the local area and integrates markets in the larger economy. The strategy would decentralize planning into small territorial units that include both small towns and groups of villages, provide institutional support for the rural poor, expand off-farm employment, and include investment in region-serving functions. Subsistence agriculture needs to include diversification of high value cash crops based on local comparative advantage suitable for hill climate and terrain. Small farmers must produce both cash and subsistence crops. Government should provide market space and paved areas, weighing facilities, and overnight storage facilities. Products would be processed at the village level. Subdistricts must be established according to spatial and social linkages between villages and the service center and coordinated at the district level. Group marketing, transport to large urban centers, and agricultural technical services are needed.