Nepal, a landlocked kingdom, has only 2.3 million hectares of cultivated land of which less than one-third is located in the hills supporting two-thirds of the nation's over 18 million people. Hills are deficit in food supply. With the population growth rate at 2.3 percent annually, if the agricultural production remains at the present level, Nepal would have to import 2.2 million tons of food in the year 2000. To increase food production including crops and livestock is therefore the prime responsibility of the government and the people in the coming years. Potentials do exist but special efforts are required. Government policy in the early years gave heavy emphasis on tarai development, then shifted its attention the hills, and finally focused on the balanced regional development. Experience show that effective means to develop hill agriculture have to rely more on the mobilization of local resources particularly the surplus rural manpower. To build a strong foundation for future modernization of hill agriculture, the immediate development strategies by mobilizing local resources are the establishment of garden farming the construction of track network, the development of rural markets, and the extension of non-formal education.