Agriculture: The uncontrolled ever-escalating price of vegetables that is determined by a handful of suppliers could come to an end if the Renewable Natural Resources (RNR) marketing policy comes through.
The price of vegetable has no control as retailers buy from about less than a dozen suppliers who fetch the produce from the neighbouring Indian states. The problem is aggravated with lack of variety and volume of local production, agriculture officials said.
Research said besides market access barriers, such as tariff and non-tariff, the country is most likely to face a number of actual market entry barriers that stem from supply chains and markets. The impediments among others are access to distribution channels and the abuse of market power by incumbent firms, which severely hinder a new competitor’s ability to enter new export markets.
“Critical to overcome these barriers are policy options and models for integrating Bhutanese small agricultural producers in supply chains in a sustainable manner,” a paper by the department’s former director and now Gasa dzongdag, Dorji Dhradhul states.
The options are to link small producers to a guaranteed buyer who will also supply inputs, know-how, equipment and finance, these schemes can help Bhutanese farmers integrate into global supply chains and reach global markets.
Thus, protecting the small and medium farm holders is one of the main objectives of the policy that is on the department’s website for comments until January 25.
The policy also seeks to address the anti-competitive practices including cartels and monopolistic practices.
However, in the absence of a proper marketing policy, the stakeholders have been deprived of a clear mandate and proper legal support.
The department’s officiating director and marketing specialist Choni Dendup said the policy would bring about better implementation.
“The policy delineates clear roles of each stakeholder, which in this case are many, and covers every aspect of marketing farm produces,” Choni Dendup said.
The draft policy aims to strengthen trading environment, enhance value addition promote market access, set up better market infrastructure and capacities, and streamline cross cutting issues.
“Considering the situation and rise of global market competition, calls of international declarations and conventions such as WTO, it has become rather a necessity than a choice today for nations across the globe to have or develop agricultural marketing policy,” the draft policy states.
In the wake of the trade deficit resulting in Rupee crunch and the global increase in the food prices, the government has placed the sector at the centre of the development agenda.
The 11th Plan emphasizes on import substitution to narrow the trade deficits and the agriculture ministry has set an ambitious target of four percent GDP growth by the end of the Plan.
However, in the absence of a policy to guide, many issues revolving around trade and marketing for the RNR sector remain vague and cross-cutting issues involving various other sectors also need to be better coordinated and streamlined.
The policy drafting took almost five years, with the help of SNV, Food and Agriculture Organisation, and ICIMOD.
More than 62 percent of the country’s population lives on the RNR sector comprising of agriculture, livestock and forestry. It contributes 16.8 percent to the gross domestic product annually and accounts for 4.3 percent of exports.
While the department has built roadside sheds for farmers to sell their farm produce, and facilitated forming cooperatives, the challenge remains in value addition and economies of scale.
The policy also calls for the government to establish a cooperatives capacity building master plan to strengthen the cooperatives.
Agriculture marketing and cooperatives department will present the draft policy to the RNR GNHC committee in February.