The urban population is mostly concentrated in Kathmandu. The government is trying to reduce the high population density in the Tarai region with improved transportation and communication networks, area-development projects, and the installation of small industries in rural areas to encourage the growth of smaller urban canters. Less than one-fifth of the total land area is arable, and agricultural productivity is very low. A hydroelectric station southeast of Kathmandu has increased the land under irrigation to about 5 percent. Nepal is agriculturally self-sufficient, but regions of the country suffer major dislocations in food supply and demand.
Rice is the leading staple.
Nepal is a major producer of medicinal herbs, which grow on the slopes of the Himalayas. Cattle, buffalo, goats, and sheep are raised. Forestry is an important industry. The wide use of wood for fuel has resulted in widespread deforestation and severe erosion. The growing industrial sector accounts for much less than one-tenth of the GNP and employs less than 1 percent of the work force.