Bhutan’s annual fertilizer requirement is about 2,500 metric tonnes

YK Poudel

Considering Bhutan’s relatively low annual fertilizer requirement, which is about 2,500 metric tonnes, importing fertilizers is a more cost-effective solution than setting up a domestic production facility.

Agriculture and Livestock Minister Younten Phuntsho said this in response to a query from Kuenga, Member of Parliament (MP) for Nyishog-Saephu Constituency. The MP quizzed the minister on the government’s pledge to set up a fertilizer production unit in the country.

MP Kuenga said  that farmers often have to rely on illegally imported fertilizer that are sold at exorbitant prices.

Lyonpo said that the government is in advanced discussions with Brahmaputra Valley Fertilizer Corporation Limited (BVFCL), the leading producer of urea in India, to establish a formal agreement on import of fertilizers to address rising demand, illegal import, and inflated cost of fertilizers in the country.

“Our role is to regulate imports to prevent illegal trade and price exploitation while ensuring environmental and public health safeguards,” Lyonpo said.

The National Seed Centre (NSC) under the Ministry of Agriculture and Livestock (MoAL) is finalising the agreement.

The discussions on finalising the agreement between NSC and BVFCL for supply of fertilizers to Bhutan was also discussed at the recent India-Bhutan Commerce Secretary level meeting on September 27-28.

Several MPs also quizzed the minister on subsidy mechanisms and supply of fertilizers and agricultural machinery to farmers.

Wamrong MP Lam Dorji expressed concerns that the finance ministry’s cost-sharing and subsidy policy, which requires farmers to shoulder a certain portion of the costs, could discourage their participation. “This assistance should either provide a 100 percent subsidy or follow the previous model, where farmers contributed minimally,” he said.

Shompangkha MP Tek Bahadur Rai (PhD),  and Gangzur Minjey MP Loday Tsheten also pressed the minister on whether subsidies could be extended to fertilizers like other crops and other agricultural machinery.

Lyonpo said that transportation subsidies are already in place to standardise fertilizer costs nationwide. He said that donor-supported projects continue to follow an 80:20 cost-sharing ratio, with the government bearing the larger share. However, government programmes under the 2019 Cost-Sharing Mechanism Policy require a 60:40 split between the public and government.

The National Assembly discussion also revolved around the government’s plans to enhance food and nutrition security, improve farmers’ income, and increase the agriculture sector’s contribution to Gross Domestic Product (GDP).

MoAL has allocated Nu 10.23 billion to renewable natural resources for the fiscal year 2024-25, aiming to grow the sector’s contribution to GDP from Nu 36.48 billion in 2023 to Nu 58.68 billion by 2029.

The government also plans to increase the sector’s growth by 8.3 percent in the 13th plan by prioritising high-tech farming and establishment and expansion of large-scale commercial farming.

The government has also committed Nu 343.7 million for irrigation projects in 2024-25, with 24 new irrigation schemes in the pipeline and a total of 83 planned by 2029.

The target is to increase the agriculture sector’s contribution to GDP to Nu 50 billion by the end of the 13th Plan and create 125,160 jobs. As of date, the agriculture sector employs 43.5 percent of Bhutan’s population.

Lyonpo said that the government will continue implementing the million fruit tree and high value fruit seedlings project to increase the production of high-value fruits and nuts from 37,997 metric tonnes (MT) to 73,862 MT in fiscal year 2024-25, and 104,024 MT by 2029.

The ministry also plans to establish four agricultural food hubs in Paro, Sarpang, Mongar and Wangdue in the 13th Plan.