The agriculture ministry will revamp the buy-back scheme and improve the agricultural marketing system in the next three years, according to Agriculture Minister Yeshey Penjor.
The scheme was introduced to provide an assured market for agricultural commodities to ensure that the farmers do not run into total loss and to encourage them for future production.
Lyonpo Yeshey Penjor said the current buy-back scheme helps farmers, but the government risks incurring heavy loss since there is no assurance to market the produces.
The government buys potato, cardamom, areca nut, ginger, cabbage, beans, carrot, maize and paddy under the scheme.
Under the scheme, the government spent Nu 20.74 million (M) in 2019 to buy 50 metric tonnes (MT) of farm produce and Nu 70M in 2020 to buy 3,000MT of farm produces.
To buy cabbage under the scheme, the government incurred a loss of more than Nu 2.7M and the Food Corporation of Bhutan Limited incurred the loss for Nu 30M last year.
Sources said the cabbages were dumped in Wangchhu at Damchu later.
According to Lyonpo Yeshey Penjor, the ministry will soon revamp the current buy-back scheme and call it buying-back at the source.
He explained that under the new scheme, price of the produce would be considered on three criteria like location of the produce, seasonal growth and nutritional index.
He cited how the price of chilli should be different in Trashigang and Thimphu, and that the price in December should be different from June. “If the chilli does not hold nutritional value, then the buy-back price should be lower.”
He also claimed the buy-back price set by the government should be competitive, meaning that the price the government fixes should be attractive for the farmers to sell to the government. “If the price is fixed based on availability during the season, farmers would attempt to produce during the lean season.”
He said that with the buy-back scheme if the price is competitive and market assured then people would be encouraged to produce more.
Lyonpo said that after buying from the farmers, the government also must create two avenues of marketing like value addition export and raw export.
“After buying the produce, the produce should not be wasted but exported with a better price or set up value chain and storage system,” he said, adding that cold storage system allows an opportunity for the government to sell at a good price when the produces are in demand.
Three cold storages are under construction in Wangdue, Sarpang and Khaling. The ministry plans to construct five more cold storage units within this fiscal year.
Lyonpo said that there are opportunities for the private sector or youth cooperatives to invest in certification systems, packaging, storage or transportation of the farm produces.
“The risk factor in the RNR sector is high so the private sectors are not bold enough to venture into it and the government should prove that it is worth investing,” he said.
He, however, said that until buy-back at the source is implemented, the current buy-back scheme will continue. “We need to continue this in the pandemic situation so that the farmers do not run into a total loss.”
The minister also claimed the ministry is working to improve the agricultural marketing situation, which is a production-driven market today.
He said that the proposal to revamp the agricultural marketing system will be submitted to the government. “By 2023, the country would have a better marketing system.”
He said that with the closure of the border and when trade was formalised, they realised that they had been complacent on informal trade.
He said that exporters did not bother about maintaining the quality of agricultural produce, good packaging or adding value to the produce. “After the auction, they did not explore where the produces were exported to or the price fetched.”
To improve the agricultural marketing system, the ministry is working on an application to show the production of RNR produces in different dzongkhags.
“The application would also allow the extension officers to provide information about the quantity of production and the timing of harvest to the Department of Agricultural Marketing and Cooperatives (DAMC),” Lyonpo said. “DAMC will then facilitate sharing the demand from market centres and give it to the farmers.”
The application was developed to manage the agricultural marketing chain in the first and second lockdown.
Edited by Tashi Dema