Bhutan, World Bank Sign $8 Million Grant to Increase Agricultural Productivity

May 19, 2017

Thimphu, May 18, 2017 — The Royal Government of Bhutan and the World Bank signed a $8 million Global Agriculture Food Security Program (GAFSP) grant that will help increase agricultural productivity and enhance access to markets for farmers in selected gewogs in Southwest Bhutan. The World Bank will be the supervising entity while the United Nations Food and Agriculture Organization (FAO) will provide technical assistance for the project. 

Bhutan has made impressive progress in poverty reduction and economic growth in the past decade driven by accelerating commercialization of agriculture, rapid development of rural infrastructure, and recent hydro-electric projects. Despite this growth, the agriculture trade deficit has been increasing and farmers still lack adequate access to markets.

Recognizing the importance of the food and agriculture sector to the national economy, the Royal Government of Bhutan has assigned significant priority to agricultural development in its 11th Five Year Plan (2013-2018). Agriculture employs the majority of the rural poor, providing livelihoods to 58 percent of the total population, and has the potential to ensure greater inclusiveness of growth, while reducing the country’s food import bill and combatting malnutrition affecting children (less than five years of age) countrywide.

“The World Bank is extremely pleased that through this grant we will be able to support the Royal Government of Bhutan’s strategic plan of improving food security and agriculture productivity said Yoichiro Ishihara, the World Bank’s Resident Representative for Bhutan. The growth and expansion of the agriculture sector will play a key role in Bhutan’s economic development and deficit reduction.

This project will be implemented in Bhutan’s five south-western dzongkhags: Chukha, Dagana, Haa, Samtse and Sarpang. By focusing on some of the dzongkhags in the southwest, the project represents an opportunity to significantly reduce pockets of extreme poverty in Bhutan and build the capacity of smallholder farmers to move from subsistence farming to commercial market-driven agriculture.

The GAFSP funded Food Security and Agricultural Productivity Project (FSAPP) will be implemented over five years (2017-2022) and will support Bhutan’s efforts to reduce rural poverty, food insecurity, and malnutrition. The project seeks to address multiple problems faced by farmers and rural households through a set of integrated, consolidated, and area-specific interventions responding to local constraint and opportunities. Specific interventions include strengthening farmers’ groups and building their technical and business capacities; increasing the productivity of food and high-value crops through water use efficiency and improved agri-inputs and technologies, and enhancing access to markets for farmers through post-harvest and market infrastructure support and linkages to domestic and export markets.

“The agriculture sector is seen as one of the ‘five jewels’ of Bhutan and the lives of so many Bhutanese depend on it. The Food Security and Agriculture Productivity Project will support the Royal Government’s goal of moving from subsistence farming to the commercialization of agriculture through value chain development says Yeshey Dorji, Royal Governments Minister of Agriculture and Forests.  This new project will further enhance Bhutan’s agriculture production which has steadily been increasing after years of decline.  

The GAFSP financed FSAPP grant builds on past World Bank projects supporting the agriculture sector and rural development in Bhutan. A productive and market-driven agriculture sector has the potential to play a significant role in meeting food and nutrition security, poverty reduction through higher rural incomes, and equitable and sustainable economic development goals.

Media Contacts
In Thimphu
Yoichiro Ishihara
In Washington
Joe Qian