Nepal - Context and Land Governance

^{Earthquake Aftermath (Image from Nepal following the earthquake of April 25, 2015), photo by SIM Central and South East Asia (CC BY-NC-SA 2.0)} 

Two recent events have attracted significant international attention. Firstly, from 1996-2006, internal conflict involved a rebellion by the United Communist Party of Nepal to overthrow the monarchy and establish a Peoples’ Republic. This Maoist rebellion gained considerable support from a landless Dalit class (so-called untouchables) who perceived a lack of movement in national land reform. The war resulted in over 17,000 deaths and the displacement of hundreds of thousands of people, particularly in rural areas. It was also a catalyst for the outmigration of many young people to work in Gulf States and Southeast Asia, thereby creating a culture of remittance dependency. A Comprehensive Peace Accord was signed in 2006, and the country was organised into seven provinces under a federalist structure of governance⁶. The present government comprises a Congress-Maoist coalition, a cumbersome set up due to factionalised politics⁷.

The second recent event to impact on land saw two severe earthquakes on 25 April and 12 May 2015. Impacting on 14 out of 78 districts in the country, these quakes killed 8,700 people, injured 25,000, destroyed half a million homes, and left a further 265,000 houses temporarily uninhabitable⁸. Housing repairs demanded US$3.27 billion, or roughly half of the total reconstruction cost of US$6.7 billion. Particularly catastrophic was the impact on informal housing⁹.

Land legislation and regulations

In 2015 Nepal promulgated a new constitution that replaced an interim bill from 2007. Article 25 states that everyone has the right to acquire, own and sell property. When land is acquired by the state, it must be compensated. However, rights on property cannot inhibit state land reforms to improve productivity, modernise agriculture, protect the environment, and manage urban development. Article 40 gives rights for the state to provide land to Dalits and other landless groups including bonded labourers. Article 51 contains sub-sections on State policies for social justice and inclusion, including an aim to end dual ownership of land to benefit farmer-tenants.

The first codified law of Nepal was Muluki Ain in 1854¹⁰. It was formally published in 1952, including all revisions up to that point. Key land legislation was promulgated during the 1960s, following a deed registration system¹¹. These include:

• 1963 Land (Surveys and Measurements) Act – this put in place a national cadastre, set out requirements for land registration, and established a new classification system (see following section).
• 1963 Agriculture (New Arrangements) Act – confirmed the abolishment of landlordism.
• 1963 Land Administration Act – established district-level land administration offices with procedures for land records.
• 1964 Lands Act – this provided the basis of land reform. It abolished the collection of land tax by intermediaries, set a ceiling for landholdings (dependent on location and terrain), with extra land then confiscated for theoretical distribution to tenants and the landless. At the same time, private land (other than farmland) was nationalised to be brought under government management.

Reform through the 1964 Lands was only partially implemented, yet many landlords have left their land idle or leased out under informal agreements to avoid it being identified for redistribution programmes to landless households¹². In 1995, the High Level Land Reform Commission (HLLRC) was formed to re-energise attempts at reform. New proposals included tighter land ceilings and redistribution policies. Tenancy rights for those cultivating land at least 3 years were made heritable. Following the end of the Civil War, further attempts at reform were framed through National Land Use Policy and revisions to the Lands Act. The eighth amendment to the Act came into force in February 2020, which provided a legislative framework to implement policy adopted in March 2019¹³. Highlights of the policy included:

• Equal distribution of land between landlords and tenants.
• One-time provision of plot to landless households, with preference to present informal site of occupancy.
• Provision of plot to informal tenure holders residing on government land for over 10 years.

To assist with this process, a Social Tenure Domain Model (STDM) has been adopted which is pro-poor, gender sensitive, participatory and using an affordable land information system. In 2021 the government set up the Landless Squatters' Problems Resolution Commission, which operates in all 77 districts of the country¹⁴. The Commission will collect details on squatters and landless groups.

Land tenure classifications

Following partial democratic reform in 1951, the land tenure system was overhauled leaving the following three forms:¹⁵

• State land
• Raikar – land given out for private use from which the state receives taxes
• Guthi – land granted to charitable, religious, or philanthropic institutions

This system was formalised in the 1963 Land Survey and Measurement Act, and land was incorporated into a national cadastre. Raikar absorbed much land from discontinued tenure types. Owners here have the right to use, lease, mortgage, transfer, and build upon their land. In 2019, government plans to nationalise and regulate religious sites through the Guthi Bill were met with mass protest, resulting in the bill being withdrawn¹⁶.

The 2011 National Population Census stated that 32% households practice tenant farming, with 5% relying wholly on rented agricultural land¹⁷. Sharecropping is the most common form of tenancy with two principal forms¹⁸. Adhiya involves tenants providing labour while landlords provide land and some inputs, but often with an inequitable sharing of benefits. Thekka sees tenants paying a fixed share of production to the landowner.

Land inequality ties into a highly stratified social system where the Dalit (so-called untouchables) caste are frequently landless. 569,400 families are classified as landless (the 2011 national census accounted for 5.4 million households in total), without formal documentation for the land which they occupy, or with no land at all¹⁹. Many displaced people returned home after the internal conflict of 1996-2006 to find their land had been confiscated or claimed by others during their absence²⁰.

The Ministry of Agriculture, Land Management and Cooperatives (MoALMC) takes the lead in land administration in Nepal. In April 2021, the government launched the Nepal Land Information System (NELIS) through the online platform ‘MeroKitta’ (My Land)²¹. This allows survey and land revenue offices to operate digital services and store records online. Despite the federal system, decision-making is highly centralised, and land administration remains riddled with corruption²².

Land use trends

Expansion of agricultural land in Nepal has been minimal, from 24.85% of total land area in 1961 to 28.75% in 2018²³. Yet in 2019 the sector still employed 64.4% of the working population, contributing 24.2% of GDP²⁴. There is a notable underutilisation of land, with a survey from the Ministry of Agricultural Development in 2013-14 suggesting that of 4.1 million hectares of arable land, 1.03 million hectares remains uncultivated²⁵. There are many drivers for the underutilisation of land, including the imposition of economic policy by international financial institutions, outmigration and remittance dependency, an avoidance of land becoming integrated in redistributive reform mechanisms, and diversified livelihood strategies into non-farm work. 

^{Himalayan foothills in Nepal, photo by National Snow and Ice Data Center (NSIDC) (CC BY 2.0)}

Forestland has seen a slight recent increase from 39.7% of total land area in 1990 to 41.6% in 2018 (now totalling around 6.1 million hectares)²⁶. The Private Forest Nationalization Act 1957 and Pasture Land (Range Land) Nationalization Act 1974 brought forests under state management to control overuse and degradation²⁷.  The 1993 Forest Act, together with 1995 Forest Regulations, sets out the categories of community, leasehold, government-managed, religious, protected, and privately-owned forests²⁸. Community forests are given priority over the other types. Through the emergence of Community Forestry User Groups (CFUGs), such forests exist since the 1970s, gaining momentum after the 1990s²⁹. As of May 2020, there are 22,266 CFUGs in Nepal managing 2.24 million hectares of forest resources, benefitting 2.91 million households. Arrangements for CFUGs are indefinite, undergoing a review every 5-10 years³⁰.

Nepal is undergoing rapid urbanisation, even if the national population remains predominantly rural. In 2020, the urban population stood at 20.6% and is predicted to pass 30% around 2040³¹. Kathmandu is the largest urban area, with a population approaching 1.5 million people. Many informal settlements sprung up in urban and peri-urban areas, breeding land tenure insecurity for their occupants³². This is not helped by the fact that private urban residential land is limited and registering of informal land is a costly time-consuming process³³.

Nepal is susceptible to natural disasters, most clearly witnessed in the catastrophic 2015 earthquakes. The country also suffers from landslides and flooding during the monsoon season. Soil degradation is further influenced by population growth, poor soil structure, and steep sloping terrain³⁴.  There is a policy focus on land degradation with three- and five-year plans, although these are yet to significantly alleviate the issue.

Land investments and acquisitions

Land is being increasingly commoditised and commercialised in Nepal, which is impacting upon tenure security for many. In 1992, a series of industrial policies were brought in to stimulate domestic and foreign investment³⁵. These placed significant interest on growth through urban development. In 2000, an amendment to the 1964 Land Act aimed to curb land fragmentation and encourage consolidation³⁶. At the same time, a Land Use Commission and Council were set up. The 2015 constitution aligns with the 1977 Land Acquisition Act in allowing for state land acquisition in the public interest, so long as it is compensated. Concerning international investments, foreigners cannot own or rent land in Nepal. Instead, acquisition is possible through a business registered within the country³⁷.

Despite new provisions to promote investment, Nepal lacks a dynamic economy. There is a strong tourist industry, but otherwise investors are put off by poor infrastructure, poor access to finance, excessive bureaucracy, and a lack of skilled labour. The latter point is not helped by a reinforcing loop of migration, where skilled workers leave the country for better-paid employment. There is a lack of investment into industrial and service sectors, and Nepal has one of the world’s least dynamic export industries³⁸. There are only modest known deposits of minerals in Nepal, which are generally unexploited due to an undeveloped mining sector.

Land markets are more active in urban areas, where prices rose following the end of the 1996-2006 internal conflict³⁹. There is also an active land-lease market, principally through sharecropping agreements. The majority of disputes in the Nepalese court system are land-based, in the mid-2010s reaching more than 60% of cases brought⁴⁰. Influences are unreliable land records, displacement during the Civil War, increasing competition over natural resources, and inheritance claims within families. There are also many cases of developers grabbing land and taking advantage of tenure insecurity of the poor⁴¹.

Women’s land rights

Article 18 of the Constitution states that there can be no discrimination based on gender. Article 38 acknowledges rights to safety for women against physical and psychological violence, rights to political participation, and rights in family affairs between spouses. However, the new constitution is discriminatory in inheritance⁴². A child born from a Nepali man becomes a citizen of the country, while a child born to a Nepal woman and non-Nepali man does not, even if born in the country. Married women only inherit from their parents in exceptional cases. This follows gender bias in Nepal’s Civil Code (1975), where inheritance generally follows patrilineal lines of kinship⁴³. 

The 2016 Nepal Demographic and Health Survey indicates that 11% of women own land (compared to 21% of men) while 8% of women own a house (19% of men)⁴⁴.  Women are not aided by a cumbersome administration system and high costs to register land in their name. However, since 2007, the government has offered tax exemption to women wishing to do so, set at a 25% tax reduction in the 2015-16 Financial Act (35% if the woman is single, and 100% to all landless applicants)⁴⁵. The Act also states a reduced fee if registering joint ownership of land.

There are differences in women’s rights through the customary traditions of various ethnic groups. For example, Sherpa family practices are more favourable to women on matters of inheritance than statutory law⁴⁶. Due to the outmigration of men, many rural populations are dominated by women, children, and the elderly. Women-headed households increased from 12.4% in 1996 to 28.2% in 2011⁴⁷.  Yet women retain weak rights to the land they farm. This is despite 2019 figures showing 74.1% of women being involved in agriculture, compared to 52.1% of men⁴⁸. In community forestry, the Joint Technical Review of Community Forestry (established in 2001) ruled that all households should have at least one male and one female CFUG member⁴⁹.  By 2015, participation of women in CFUGs had reached 31%, which is below the target quota of 50%.

^{Rice farming in Nepal, photo by Gitta Shrestha/IWMI (CC BY-NC 2.0)}

One third of seats in all three levels of government have been reserved for women. After 2017 local elections, 41% of elected positions on local councils and ward committees were taken by women. There is also a quota system for representation by ethnic minorities⁵⁰. 

Voluntary Guidelines on Responsible Tenure (VGGT)

The VGGT is being used to support legislation that can back up the aims of the 2015 constitution, where FAO is working together with the Nepal Law Commission. Areas of focus include the right to food and property, community access to natural resources, and securing land tenure for marginalised communities⁵¹.

FAO has also been working on tenure-related issues in the aftermath of the 2015 earthquakes and the new constitution. The VGGT is used in the training of trainers, which in 2015 engaged 50 CSO representatives, and was consolidated through subsequent national and regional workshops. Further training has linked the VGGT to gender and land (with the assistance of Oxfam in Nepal), and the tenure rights of vulnerable groups located in the buffer zones of protected areas.

Timeline - milestones in land governance

1951 onwards – overhaul of tenure system
Overhaul resulted in new system with Raikar (private), State, and Guthi (religious or charitable) land

1964 – Promulgation of Lands Act
Basis for land reform, with 8th amendment in 2020.

1977 – Promulgation of Land Acquisition Act
Allows for state land acquisition in the public interest, so long as it is compensated.

1993 – Promulgation of Forest Act
Together with 1995 Forest Regulations, sets out classification system for national and private forests.

1996-2006 – Civil War
Strong presence of landless Dalits in Maoist rebellion forces. Displacement of hundreds of thousands of people during the war.

2015 – Catastrophic earthquakes
8,700 people dead and half a million homes destroyed.

2015 – New constitution
Articles on social justice and inclusion, looking to achieve greater land equity.

2021 – Launch of Nepal Land Information System (NELIS)
Update of land administration system for digital services and records.

Where to go next?

The author's suggestion for further reading

There is a dearth of material documenting the land system in Nepal, both in general terms and through case studies. The following selection is by no means inclusive of the principal texts on Nepal, but nevertheless proved useful in the writing of this profile.

Sharma et al. trace a historical overview of land access, and the attempts of reform to counter traditional inequities⁵². A report from Amnesty International Nepal, Community Self Reliance Center, and Justice and Rights Institute-Nepal, looks at reform measures in the seventh amendment to the 1964 Lands Act, looking forward to a planned eighth amendment⁵³.  To learn more about the impact from the 2015 earthquakes, a report by Displacement Solutions assesses progress pertaining to housing, land, and property issues⁵⁴. The impact of the earthquake and outbreak of COVID-19 is further considered by Gentle et al., who focus on the ability of community forestry user groups (CFUGs) to respond to natural disasters and pandemics⁵⁵.  Finally, a 2018 report from Oxfam considers the impact of programmes that address women’s land rights, and progress towards gender equity in land tenure⁵⁶.