PEMA TSHOMO
Thimphu
Bhutan is taking bold steps to modernize and enhance its agriculture sector, aiming to not only ensure food security but also to become a global leader in sustainable agriculture. This ambitious vision was unveiled at the first-ever Bhutan Agri-Food Trade and Investment Forum (BATIF), held in Thimphu recently.
The forum, a collaborative effort between the Bhutanese government, the Food and Agriculture Organization (FAO), and various other stakeholders, brought together policymakers, entrepreneurs, and investors from around the world to explore opportunities in Bhutan’s first-ever clean green agri-food sector. The program was carried out for five days accordingly, which included a business session, exhibitions, food fairs, a food recipe contest, and a field visit.
PM Tshering Tobgay and Minister of Agriculture and Livestock (MoAL) Younten Phuntsho both emphasized the importance of innovation, technology adoption, and sustainable practices in achieving Bhutan’s goals.
PM highlighted the challenges faced by Bhutanese agriculture. “Rugged terrain, climate change, human-wildlife conflict, labor shortages, and land fragmentation pose farming challenges. Yet, opportunities are equally compelling.”
However, he also stressed the immense growth potential, particularly in areas like organic apple production.
The agriculture minister Younten Phuntsho highlighted these sentiments, emphasizing the need for collective effort and collaboration to achieve a modern, efficient, and market-oriented agri-food system.
A key outcome of the forum was the announcement of a new Country Programming Framework (CPF) between Bhutan and the FAO. This strategic document outlines a collaborative effort to support Bhutan’s agriculture, livestock, food systems, and environmental initiatives. The CPF sets out four priority areas, including sustainable agri-food systems transformation, food security and climate-smart agriculture, sustainable natural resource management, and evidence-based planning.
Moreover, transforming the agri-food system in Bhutan significantly contributes to socio-economic impacts by creating employment, income, and business engagements. Further, it will serve proactively by mitigating 15 percent of carbon emissions.
Perhaps the most significant announcement at the forum was the Bhutanese government’s decision to allow 100 percent Foreign Direct Investment (FDI) in the agriculture sector. This move aims to attract investment in six key commodities: citrus mandarin, quinoa, rainbow trout, black pepper, organic asparagus, and strawberries. Previously, the FDI limit in agriculture was 74 percent. The government hopes that increased investment will lead to a significant boost in the production of these commodities, benefiting thousands of Bhutanese smallholder farmers.
Enabling aconducive environment for investment in the agriculture sector, the Officiating Director of the Department of Agriculture Marketing & Cooperatives Tshering Wangmo shared details of leveraging opportunities for investment in agri-food systems in Bhutan through these initiatives, with a total of 26000 ha of fallow land having the potential to be brought under agriculture production. So, the government is identifying suitable land for agriculture and demarcating it to make it available for farmers and private investors.
Particularly, under the Hand in Hand investment initiative, Bhutan has identified the following key expansions in production and processing areas:
Investment case one: Citrus
Bhutan has been engaged in citrus cultivation for more than half a century. The citrus production is targeted for 5000 acres of area, and it will benefit many households with 1056 full-time employees. Particularly in Samdrup Jongkhar, Dagana, Samtse, Trongsa, Pemagatsel, and Zhemgang. The processing will be allocated through Phuntsholing,Samdrup Jongkhar and Gelephu.
Investment case two: Quinoa
The agro-climatic condition is suitable and could be produced right from altitudes of 300 to 2500 masl, where the targeted areas are Samtse, Dagana, Samdrup Jongkhar, Zhemgang, Trongsa, Trashiyangtse, and Wangduephodrang.
These production projects assume a quinoa introduction planned on 4,000 acres over a span of four years, with the proposed investment amount over a period of 20 years of USD13.76 for production and USD1.68 for processing, which will benefit over 4,000 households, and it will create 893 additional full-time jobs.
Investment case three: Rainbow Trout
The fisheries sector is experiencing a swift expansion in the country, with particular attention directed towards the emerging cold-water aquaculture industry. Bhutan can enjoy conducive conditions in production with an abundance of fresh water in areas like Paro, Thimphu, and Chhukha, with the initiatives of 14 households and an investment over the period of 20 years of USD1.34 million in production and USD0.50 million in processing. So, the BATIF targets creating employment opportunities by recruiting 53 full-time workers.
Investment Case four : Introduce and Promote Black Pepper Production
BATIF highlighted that in the country, experience in growing black pepper is limited. So, these forum investments of USD 9.25 million over 20 years in Samtse, Chukha, Sarpang, Samdrup Jongkhar, and Dagana will benefit over 3000 households with 900 direct employment seats.
Investment case five: Expand organic asparagus in open-field conditions
These agro-climatic conditions are suitable, and the Paro and Thimphu people are well known for growing the best quality of asparagus for several years. So, they targeted over 1000 acres and benefited over 2000 households over a span of four years.
Accordingly, 206 full-time employment opportunities will be provided with a total investment of US$4.84 million for 20 years.
Investment case six: introduce organic strawberries under protected conditions.
As per the BFTA information, strawberry production is seen as one of the potential areas for investment with high returns, and the targeted areas are Thimphu and Paro. Further, they even targeted exports in potential markets like Thailand, Singapore, and Bangladesh with an investment of USD 2.76 million. Particularly, it will be a huge benefit to those 500 households over 500 targeted farms with 130 direct employees.
PM said, “Although soil is available for farming, not having farmers is a key challenge. Where, youth who are dropped are back on farming on high-quality production to the firm field.” The PM emphasized that with these investments, there will be educated farmers who produce pure organic and juicy vegetables with zero fat content.
The government is most comfortable with this investment since Bhutan is known for having the fourth-highest per capita water availability throughout the globe. While suitable energy could be utilized for improving water supplies and climate control systems, production and operation will be at a lower cost.
Now, Bhutan has adequate experience in agriculture production, and even urban people have shown a keen interest in pursuing agribusiness both for production and processing. So, indirectly, there is an opportunity to engage unemployed youth in various economic activities. Whereby the rural areas are now even connected to exports in various countries.
The forum also saw the launch of a new initiative called “One Country, One Priority Product (OCOP).” Under this program, Bhutan has identified quinoa as its priority product. The new initiative aims to address hunger, food insecurity, and malnutrition while supporting the development of smallholder farms. The sustainable value chain of quinoa is expected to play a crucial role in achieving goals.
Bhutan’s investment plan is USD 76, and its impact will be on 14513 households. Overall, the IRR will be 32 percent.
Although the agriculture production system in Bhutan is largely subsistence, a gradual transition has been observed in recent years, including an increase in the semi-commercial farming system and climate-smart farming practices. Most of the farmers have a natural farming system with limited use of synthetic inputs and organic farming. The production of high-value, low-volume commodities is realized for better opportunities in the niche market, for better returns, and long-term sustainability.
Will be benefiting in addition to the policy announcements, the forum also featured an exhibition and food fair showcasing Bhutan’s unique agricultural products. The fair provided a platform for local businesses to connect with potential investors and buyers.
With its ambitious plans, innovative approaches, and commitment to sustainability, Bhutan is poised to become a leader in the global agri-food sector. The success of BATIF 2024 demonstrates the country’s strong resolve to transform its agricultural landscape and ensure a brighter future for its farmers and citizens.
