After working for two years in Saudi Arabia, Raj Kumar Mahato returned to his home in Nepal’s Siraha district to become an activist against a forced labour system, locally known as haruwa-charuwa.

Haruwa is a local term to describe a person who ploughs land for others, while charuwa are the workers who herd cattle.

Under the system prevalent in Nepal’s central and eastern Terai region, a belt of flat land stretching along the Nepal-India border, landowners belonging to privileged castes entrap poor villagers in a debt-bondage by providing them loans at high interest rates. Then they compel them to work for them for years, sometimes even generations, as the poor borrowers make vain attempts to repay their loans.

The form of work constitutes forced labour, according to international conventions.

“We are like the medieval serfs serving a king. Our role in life is understood to be servants of rich men who own vast lands but cannot cultivate it themselves,” Mahato, 37, told Global News Insight.

According to a 2013 report (PDF) on forced labour in Nepal’s agriculture sector, published by the International Labour Organisation (ILO), an overwhelming 95 percent of households employed in the haruwa-charuwa system are victims of forced labour.

Nepal’s Dalit community, the lowest group in the complex Hindu caste system, is the most exploited in the haruwa-charuwa system. Discriminated in every sphere of their lives, poor Dalits fall prey to debt traps laid by landlords belonging to the privileged castes.

The haruwa-charuwa labourers often toil from morning to dusk during the peak agricultural season, but receive minimum compensation for their work.

“We provide farmers small daily wages and loans at a 3 percent monthly interest rate to buy seeds and farm tools they need to cultivate the land. After the harvest, we take 50 percent of the production and they keep the rest,” Amjad Ansari Arnama, a 35-year-old haruwa–charuwa profiteer, told Global News Insight.

“My family is the village’s biggest landowner, so we invite villagers to work in our agricultural fields. Out of 30 households in the village, about half of them work for us,” said Arnama, who lives in Mahanaur, a village close to the Nepal-India border.

The system makes Mahato furious. “None of this is legal, it is an informal system. We all aspire to be free because honestly, who desires to be rich men’s slave?” he asks.

Nepal’s Bonded Labour (Prohibition) Act, 2002 says “no one shall keep or employ anyone as a bonded labourer”. But the law could not stop debt bondage and forced labour practices in the Himalayan nation.

Many victims saw the prosperous Gulf region as the light at the end of the tunnel. The ILO report says the “opening up of foreign employment opportunities” can lead to the erosion of the haruwa-charuwa system, however modest.

In 2020, Nepal earned $8.1bn from remittances – about a quarter of its gross domestic product (GDP).

Employed by a meat packaging company in Saudi Arabia until 2015, Mahato said Gulf jobs are “better” than the haruwa-charuwa system, but the employee-employer relations are “hardly different”.

“The pay was better, accommodation and meals were provided, but I still worked for a rich person at the end of the day. There is no one to listen to us and our problems, to be compassionate. Being a poor man will always be hard, be it in Nepal or Saudi Arabia,” he says.

Also, migrating to Gulf states is not the silver bullet to escape exploitation. Nepali landowners keep a grip on those fleeing the haruwa-charuwa system, with recruitment agencies charging Gulf-bound workers large sums of money to get them a job, violating Nepal’s law that caps recruitment fees charged on workers to 10,000 rupees ($82).

With no liquid assets in hand to pay the illegal recruitment fees, aspiring workers turn to the same landowners who exploit them to fund their migration at an exorbitant rate of interest. At times, the workers even pledge one of the adult members of their family as collateral.

All the households interviewed by Global News Insight in the eastern terai region took loans to migrate.

Compelled to wire money back home every month to pay loan instalments, expat workers become victims of abusive working conditions until their loan is repaid.

*Name changed to protect the identity of the interviewee. Ramu Sapkota contributed to this report.