Abstract: In Nepal, water is often associated with disaster of landslides and floods destroy farms, even entire village, displacing hundreds of people from their place of origin. In recent times, districts of Nepal have shown signs of vulnerability to environmental stress, particularly drought related stress. The spring of the hill's local water sources are drying up rapidly, while in the Terai ground water is depleting. In order to assess the economic impact of the drought, a study was conducted using a combination of qualitative and quantitative methods in three drought stricken VDCs: Yashok, Syabrumba and Ranigaun in Panchthar district of Nepal. Altogether, 6 settlements of 3 VDCs were purposively selected and information was collected using Focused Group Discussions (FGD) and Key Informants' Interviews. Yearly, around 20-25 HHs of 3 VDCs have been displacing and settling to terrain where water is available. One third of cultivated land has become barren, area under maize and its production has declined by about 50% and paddy cultivation has ceased. Land buying and selling stopped and price of land thus has dropped too. Single HH have to spend NRs. 2,100 in buying rice in a month and this cost NRs 25, 200, annually. Annual loss and expenditure incurred NRs 1, 2700 per family to 2179 HH of 3 VDCs including expences in medicine of human being and livestock, food cost, education cost, losses in production of agriculture crops and livestock products.

Key words: drought, water scarcity, economic analysis, displacement

Authors: S. B. Thakur* ; M. Upadhyaya**; * Consultant of UNDP Nepal; Email: [email protected]; ** Poverty and Environment Initiative, NPC/UNDP Nepal Email: [email protected]