KINLEY KHANDU CHODEN | Thimphu
Bhutan’s effort to revitalise the agriculture sector through concessional financing is beginning to show results, as farmers across the country experience both the opportunities and challenges of government support aimed at strengthening domestic food production.
Agriculture remains the backbone of rural livelihoods in Bhutan, but the sector continues to face structural challenges such as labour shortages, wildlife damage, limited market access, and heavy dependence on imported food.
Through initiatives such as the Economic Stimulus Programme (ESP), the government is seeking to address these issues by providing concessional loans and other support to farmers.
According to government data, more than Nu. 685 million has already been disbursed to farmers and livestock producers under the ESP’s primary agriculture and livestock category.
A total of 3,252 loan applications were received, of which 1,866 were approved, amounting to more than Nu. 709 million in financing.
Initially allocated Nu. 500 million, the fund was later increased due to higher-than-expected demand from farmers seeking financial assistance to expand their agricultural activities.
As of the latest update, about 96.65 percent of the approved loans have already been disbursed, with the remaining funds expected to be released as projects progress.
Most of the financing has been directed towards livestock and fishery farming, which account for more than 70 percent of the approved loans.
Crop and vegetable cultivation and agricultural machinery make up the remaining share. Policymakers say this reflects growing demand for livestock products such as dairy, poultry, and meat, while investments in machinery are aimed at addressing labour shortages and improving farm productivity.
For many farmers, access to concessional loans has significantly changed how they carry out their work.
58-year-old farmer Wangda from Khawajara village in Tsephu-Khawakha Chiwog of Toewang Gewog in Punakha said the government loan scheme has enabled farmers to purchase machinery that was previously beyond their financial reach.
“In the past, the government said farmers could take loans to buy cattle or power tillers,” Wangda said. “But when we asked about the process, we were told that the loan amount would not be given directly to us. Instead, we had to take an official letter issued by the authorities and choose whether we would repay the loan over three or five years.”
Although the process initially appeared complicated, Wangda said the repayment structure ultimately made the purchase manageable.
“If we choose the five-year repayment option, we have to pay an additional Nu. 20,000 as interest, But the monthly payment becomes only about Nu. 1,400, which makes it easier for farmers to repay gradually instead of paying the entire amount at once,” he added.
For many small-scale farmers, such arrangements have made mechanisation possible for the first time.
Farmers say the benefits of mechanisation are already visible in their daily work. Pem Dorji, 53, from Tsephu village under Goenshari Gewog,Punakha, recalled how agricultural tasks were far more demanding before machines were introduced.
“In the past, we had to borrow oxen from neighbours to plough our fields,” he said. “It required a lot of coordination and extra effort.”
After obtaining a power tiller through the loan scheme, Pem Dorji said farming has become significantly more efficient.
“The machine has reduced the physical burden on both people and animals, and it allows us to complete work much faster,” he added.
Mechanisation has also enabled farmers to diversify their crops and expand cultivation.
“With the power tiller, we are able to grow crops that we did not cultivate before,” Pem Dorji said. “Mixed cultivation has become easier, and we can manage our land more effectively. Sometimes our neighbours hire the power tiller. They cover the fuel and maintenance costs while we operate the machine,” he said.
While farmers highlight the benefits of the programme, observers say financial support alone may not be sufficient to transform the sector.
Sangay Dorji, 60, from Rinchengang, Wangdue, said increased financial assistance can strengthen Bhutan’s food security but must be supported by broader reforms.
“Increasing financial support can help farmers invest in better seeds, equipment, and irrigation, which can improve productivity,” he said. “Stronger local production can reduce reliance on imported food and make the country more self-sufficient.”
Agriculture continues to play an important role in Bhutan’s economy, particularly in rural areas where employment opportunities are limited.
“If the sector is modernised and innovative practices are introduced, it can attract young people and create jobs where industrial or service opportunities are not available,” Sangay Dorji said.
Other community members say farmers also require greater technical support.
Namgay, 46, from Nabji, Punakha, said improving productivity depends on access to agricultural knowledge and resources.
“Farmers need training in modern farming techniques, quality seeds, fertilisers, irrigation systems, and storage facilities,” he said. “Extension services and advisory programmes are also important so farmers can improve productivity and increase their income.”
Despite the government’s efforts to expand financing, several challenges remain.
Passang Dorji, 39, from Mendrelgang, Punakha said many farmers still face difficulties when applying for financial support.
“Some of the challenges include complicated application procedures, lack of awareness about the schemes, and collateral requirements,” he said. “Small-scale farmers sometimes struggle to meet these conditions.”
Even when farmers succeed in increasing production, limited market access continues to affect their ability to earn sustainable incomes.
Tshering Dorji, 40, from Shongphu in Trashigang said marketing challenges remain one of the most serious issues. “Government support has improved both the quality and quantity of production,” he said. “Farmers can cultivate larger areas and adopt new technologies.”
However, he added that higher production does not always translate into better income. “Limited market access is often the biggest challenge, because even if farmers produce more, they cannot always sell their products at fair prices.”
Labour shortages and wildlife damage also remain persistent concerns in many farming communities. Rural migration has reduced the number of people available to work on farms, while crop losses caused by wild animals continue to affect productivity.
Government officials say it is still too early to measure the full economic impact of the concessional loan programme.
An official assessment is expected next year to evaluate whether the loans have improved productivity, increased farmer incomes, created rural employment, and strengthened national food security.
For now, the experiences of farmers suggest the programme is already bringing visible changes to rural communities.
Mechanisation, improved access to livestock and equipment, and growing interest in farming indicate a gradual shift in how agriculture is practised.
However, the long-term success of the initiative will depend on how effectively financial support is combined with training, infrastructure development, and stronger market systems.
Farmers say the concessional loan programme has opened new possibilities for rural communities, but sustained investment and better market connections will be critical to ensuring agriculture remains a viable and productive sector for future generations.
