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Although productivity in rice production has increased over the past decades, Nepal has become strongly dependent on food imports, mainly due to its population growth. The development and increase of agricultural production is of high importance and with that the need to optimise the organisation of the seed sector. Seed is one of the most vital inputs for agriculture and food security. The use of quality seed of high-yielding, stress-tolerant varieties is an important means to increase grain yields. However, as in many developing countries, in Nepal the existing formal seed system is not able to meet the whole demand for seed.

In Nepal, more than 90% of cereal seed comes from traditional or informal systems in which farmers save their own seed for the next planting season. Local seed systems have proved to be dynamic and flexible in many aspects, but they also have weak points which require improvement. Institutional challenges, limited land for seed production and lack of skilled manpower persist and hamper a continued improvement towards better organised seed supply systems in Nepal. Current seed replacement rates (SRR) in Nepal are low with 12%. The topography of the country makes it particularly difficult (I) to make seed available to all regions and (II) difficult to produce seed of required varieties for very different agro-ecological zones and different needs of farmers. Truthful labelling is a seed certification method that is widely applied in Nepal and benefits small-holder farmers, as it provides seed at lower costs than the conventional seed certification method (certified seed).