Bhutan - Agricultural sector review

In collaboration with the World Bank, the Investment Centre has published an agricultural sector review of Bhutan in two volumes that provides an overview of Bhutan’s renewable natural resources (RNR) sector and identifies priority areas for future investments.

The first volume provides a review of agricultural issues that contribute to gross national happiness (GNH) including sources of agricultural sector growth, rural labour markets and migration, and policy and planning issues. The second volume is composed of two Working Papers that deal with the preliminary review of the marketing and labour situation within Bhutan’s RNR sector, and look at the research, extension and input supply systems of Bhutan’s RNR sector.

About 65 percent of Bhutan’s population is rural and thus depends on the RNR sector for their livelihoods. The publication points to a trend of positive growth in fruit and vegetable crops, both high value, but a decline in staple crops like cereals. Turi Fileccia, Senior Agronomist in the Investment Centre and co-author of the report, explained: “Today 50 percent of rice consumed in the country is imported. There’s no option because there’s not sufficient land... and soil fertility needed cannot go beyond certain levels so it’s obvious that the country will always continue to import food in order to fulfil the food requirements of the population". Bhutan must work with its comparative advantages, including off-season, high value fruits and vegetables, to diversify and improve rural income.

The report, which was requested by the World Bank, was written to present information and background on the RNR sector for the 10th five-year plan (FYP) mid-term review while also raising issues that should be addressed in the 11th FYP. In doing so, it highlights potential areas of World Bank support to be discussed with the Royal Government of Bhutan. The next steps, once the study was written, included formulating a new investment project for Bhutan to be financed by the Bank, “Remote rural communities development project”, which was prepared and appraised in August 2012 and will be presented to the board of the Bank in November 2012.

For the full report, please click here: volume I volume II