This paper outlines the key areas of literature that have been used to inform empirical research on food security. The literature also informs the academic debates that are current within the fields of food security and aid dependency. These areas of academic interest are particularly relevant in a regional economic development context; specifically the case of Nepal, and also within the context of changes taking place in both China and India. The research follows a case study approach in which Grounded Theory, systems thinking and ethnographic tools are used. This paper shows some of the key areas such as environmental change, agriculture, governance and livelihood and poverty narratives in light of the empirical approach taken. The qualitative causal loop model is developed following a systems thinking approach based on the coding that was done using the NVivo software tool. The model presented here is the sub-model that emerged from the narrative of the respondents who were involved in agricultural activities. Following the narrative, research shows that the market itself has exogenous factors, which indicates the vulnerabilities of Nepali peasants in the long term, especially those who depend on the marketplace of India and its ability to enforce non tariff barriers on Nepali products.