ADB exhorts Bhutan to prioritise agriculture

Further drop in sector’s share of GDP could widen income disparities and regional imbalances 

Report: Amid agriculture’s falling share of gross domestic product (GDP) of the country, the Asian Development Bank (ADB) has urged Bhutan to prioritise the sector’s development equally like hydropower.

The bank’s latest report “Asian Development Outlook 2015” states that agriculture, which employs 56 percent of the workforce in Bhutan, is the main source of income for farmers.  The share of agriculture to GDP was 24 percent in 2004, but came down to 16 percent in 2013.

“The challenge is to improve the sector to help achieve more balanced and inclusive growth in the economy,” the ADB states.  In recent years though, the contribution of agriculture to GDP has started to stabilize, with only 1 percent decrease from 17 percent in 2010 to 16 percent in 2013.

The decrease in the share of agriculture in GDP is attributed to structural changes from an agrarian economy to a hydropower and service dominated one.  The country’s higher GDP growth rates have been propelled by hydroelectricity and construction, which have a narrow employment base.

The report doesn’t however mention the loss or fallowing of agriculture land because of urbanisation, human-wildlife conflict and rural-urban migration, which many feel are the main factors.

The slow growth of agriculture, some economists feel, is a cause of concern, as it can widen income disparities and regional imbalances in income levels and development.

According to ADB, agricultural production itself grew at an average rate of 2.1 percent per annum in the 1980s and declined to 1 percent in the 1990s.  The growth picked up to 3.5 percent in 2011.

“Since the development of the hydropower subsector began in the 1980s, the share of agriculture in GDP has been steadily displaced,” the report states.

Constraints on agriculture and economic diversification in Bhutan have been attributed to lack of infrastructure, fluctuating yields, inadequate market links, and high transaction costs.  Another constraint to export is difficult entry into potential markets and meeting their quality requirements.

One advantage that Bhutan does have in relation to its neighbours is seasonal diversity, which allows the country to produce a wider range of crops.

The report states that, compared with other landlocked countries, Bhutan fares better on access to foreign market.  The ADB has urged Bhutan to address market constraints and infrastructure challenges to improve agriculture.

“This (addressing market constraints) would help to expand food exports and boost rural incomes.”

The ADB also states that strategic diversification into new markets, particularly the emerging Asian economies, could help expand the export base.

By MB Subba

3 replies
  1. MIGNIEN
    MIGNIEN says:

    I notice that my comments concerning that issue were not quoted neither in recent comment nor in latest forum topics . Is it a censure problem against Yeshey DORJI ??? I hope I am wrong !

  2. depbaap
    depbaap says:

    Correct intervention at the right time. Yes, RGOB has neglected the most important sector since the onset of activities started for hydro-power. While hydro-power is equally vital for Nation’s economy, but agriculture can not be neglected. Large majority of Bhutanese, rightly observed by ADB, is in agriculture sector. The sector enables rural folks to send their children to school, build houses, improve their living standard. There are several constraints in agriculture development, and the most important among them, in my opinion, is irrigation. Government should now prioritize irrigation. If water is available Bhutan can grow any types of food year around. I applaud ADB intervention and it is high time RGOB makes the right decision and develops sector that employs most Bhutanese, but also is the most important part of our culture-Agriculture.

    Cheers

  3. MIGNIEN
    MIGNIEN says:

    Has any reader take account with the ten excellent articles called ” A MALADY CALLED RURAL URBAN MIGRATION BUTHAN ” ???

    If the conclusions of that problem of the redactor YESHEY DORJI ( who help me very actively to help me to explain me the specific words in Dzonkha in english , so that all my tranlation of different articles of kuensel in french laguage can be done ) would be understanded and taken account by policy makers , measures to help peasants would be applied from a longtime , Instead of being superbly ignored . It is regreatable that an international organisation ADB has more weight than an inner investigation journalist to solve that problem. I do not understand this contempt who ignore the good ideas exposed in those texts

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