Food Corporation Bhutan Ltd (FCBL) will continue to buy locally paddy despite its poor marketability to encourage farmers in increasing food production.

More than 100 farm shops operated by the corporation across the country will buy paddy from the farmers, mill and sell them.

Agriculture marketing and cooperatives department’s chief marketing officer Yonten Gyamtsho said FCBL would implement the buy back scheme. The scheme, which was piloted last year in farm shops and is being implemented this year, will buy the surplus produce from farmers provided they meet the volume thresholds. For paddy, it’s one metric tonne.

The highest rate for a kilogramme of paddy is Nu 36 for Kalo Bhog, and the lowest is Nu 22. The most popular variety is Khamti from Jomotsangkha, which fetches Nu 30 a kg of paddy.

Yonten Gyamtsho said the farmers may not make a profit from selling to farm shops but they would at least recover their investment in production. “The scheme will help maintain the spirit to produce a surplus,” he said.

FCBL bought about 77MT during the 2016 – 2017 season worth about Nu 1.7 million from farmers.

The performance audit report of the corporation between 2011 and 2016 stated that the poor price of local rice raised the question on the marketability of local rice within Bhutan.

With the agriculture ministry’s rice commercialisation programme initiative, the Cabinet instructed FCBL to undertake the paddy procurement from Wangdue, Punakha, Tsirang, Sarpang and Samdrupjongkhar to enhance production and encourage marketing of local rice.

The MoAF and FCBL in total procured more than 400MT of local paddy between November 2014 and April 2015 worth Nu 11.21 million, primarily to market local rice in the country and supply schools through the school feeding programme. FCBL milled over 383.81MT of paddies, which yielded around 235.39MT rice in 2015.

FCBL’s response to the audit authorities stated that the agreement with education ministry was initiated for the supply of rice to school through the school feeding programme. However, the activity could not be materialised as expected.

FCBL learnt that there was no good market for IR-64 and Bhur Khamja paddy varieties.

FCBL ventured into the marketing of local rice within the country at a selling price set by the agriculture ministry at Nu 52 a kg, whereas it could fetch only Nu 20 a kg resulting in a price difference of Nu 32 per kg. The agriculture ministry paid the price difference of Nu 1.394 million according to the audit report.

Yonten Gyamtsho said the local rice varieties have to compete with cheaper and better quality imported rice varieties. “We’ve to also be mindful of the economic capacity of the general consumers in the country,” he said.

He said that rice has a short shelf life of less than six months, which added to the problem. The agriculture ministry has started large-scale commercial paddy farming on fallow wetland across the country.

Early this year, Farm Mechanisation Corporation Ltd (FMCL) took over 200 acres of private wetland at the fishery compound in Gelephu. FMCL also leased 250 acres of private wetland in Chuzagang.

While the land in Chuzagang was partially cultivated, the land at Gelephu remained fallow for more than 15 years because of unavailability of sufficient lab