The paradox of agricultural economy

January 10, 2010: In developed and developing countries the world over, farmers have traditional knowledge, expertise, skills and practices related to farming in order to ensure food security.
Like in any other developing country, agriculture for Bhutan is not just a trade issue but concerns implications on food security, rural employment and livelihoods, and economic and social stability.
However, a survey conducted by the ministry of agriculture and Food and Agricultural Organization (FAO) in 2008, states that one in four Bhutanese households is undernourished in terms of daily calorie intake.
The minimum daily energy requirement for a Bhutanese is 2,124 kilocalories and the national average intake for an adult was 3,112 kilocalories.
Zhemgang dzongkhag had the lowest consumption with an average caloric consumption of 2,555 kilocalories.
Each person of the 20% urban poor, according to the survey consume only 2,318 kilocalories in a day and 13.8% of Bhutanese is said to have no sufficient access to food for one or more months in a year.
Although agriculture is a major source of livelihood to about 80% of the rural population in Bhutan, productivity is low and constrained by small land holdings, unreliable irrigation and shortage of farm labor.
Only 7.8% (314,746 hectares) of the total land area is suitable for agriculture, other land uses are protected under forest cover (72%), or lost to steep rocky cliffs and deep mountain gorges.
According to a study A Study on the Impact of Agriculture and Agriculture-Related Issues in WTO Agreements on the Bhutanese Agriculture Sector, by Sonam Tobgay, the agricultural sector in Bhutan has performed well as a whole over the last one decade.
Bhutan has maintained a steady growth rate of 6 to 7%, exceeding the projected target of 1.3% over the plan period.
“The main impetus of the growth in the sector has come from forestry and cash crop production,” states the study.
The principal cash crops grown in Bhutan are oranges, apples and potatoes, sold mainly to India and Bangladesh.
Other cash crops include small quantities of peaches, bananas, pears, plums and walnuts, mostly sold in the domestic markets.
The major crops cultivated in Bhutan include paddy, maize, wheat, barley, buckwheat, millet, potato and mustard.
Maize cultivation stands as the highest with 66% followed by 56% of paddy and 32% potato.
Less than 20% each of rural households cultivate wheat, barley, buckwheat and millet, while 51% grow vegetables.
In terms of acres of land, maize and paddy accounted for the largest share, covering over 47,753 hectares.
Sonam Tobgay’s study states that, Bhutan’s agricultural exports are limited to neighboring countries because it is bound by quantity and diversity.
The study also suggests that Bhutanese producers will have to improve their product in quality, grading, packaging and labeling and should be able to sell at competitive price in order to compete with the rest of the world.
As the Bhutanese agriculture becomes more and more market oriented, the study states that the people will prefer to grow more cash crops for the market which will create imbalance in the food basket.
“Bhutan will be more dependent on imported cereals, which could pose a food security threat,” states the study.
It has been suggested that Bhutan needs to look for mechanisms to be protect from such situation in future.