Farmers’ produce

Not much

Not much

Our economy grew by 8.1% last year. That’s not the 9% growth per year promised by DPT. But, given all that happened in those 12 months, from a host of national celebrations to the global financial crisis, 8.1 is really not too bad.

The share of the primary, secondary and tertiary sectors to our GDP are 16%, 45% and 36% respectively. And, during the past year, the primary, or agriculture, sector grew by 1.7%; the secondary, or industry, sector grew by 7.5%; and the tertiary, or service, sector grew by 12.1%.

These figures were given to the National Assembly by the Finance Minister. Let’s see what they could mean for the majority of the people – our farmers. According to the Ministry of Agriculture, 79% of our population depends on agriculture. Yet, they contributed only 16% of our GDP. This means that our farmers are a lot poorer, economically speaking, than the other Bhutanese. But, we all know this, don’t we?

Now the agriculture sector grew by only 1.7% last year. And that’s much lower than last year’s inflation, which averaged about 7%. So, in real terms, our farmers produced less last year than the year before. That is, they became poorer. This, we didn’t know.

The news for the next financial year is not good either. Our government forecasts that the share of the agriculture sector to the GDP will fall even further, from 16% to 14%. Obviously, we need to focus a lot more on the agricultural sector. After all, most of Bhutan depends on it.

h

 

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  1. So that’s the new Farmers’ Market?

    I can’t understand why everything had to be laid out on the floor where shoppers are supposed to walk? Poor design on the stalls and counters? I think I noticed some garbage piled up too. Tsk… tsk.. tsk… Talk about the growth of economy. Why can’t we just get it right in the first place?

  2. Ohh common Opposition Leader!
    What are you actually trying to say? Seriously, I don’t get your logic here. Now let us cross examine what you said too. A growth rate of 8.1% is very good. According to the CIA, Bhutan’s growth rate is only estimated at 6.6%, but we proved them wrong. But even in the global financial crisis and economic downturn, we managed to have 8.1% growth rate, which other countries are trying to achieve when the environment is in good shape. We should appreciate our government and encouragement them rather than tagging the remarkable growth as “really not too bad.”

    Your logic in paragraph three is really rusty to say the least. The total GDP is determined by the three sectors and the extreme growth in the secondary and tertiary sectors will reduce the percentage contribution of primary sector. As the economy of a country progresses, it is natural for the percentage contribution of sectors other than primary to grow. In fact the economic growth is mainly supported by those sectors not the primary. Going by your logic here, during the 1960’s, 70’s and 80’s, our economy is driven primarily by primary sector and hence the agriculture sector contributed like 80% of our GDP. Do you mean to say that our farmers are much more wealthier than other people that time? Although primary sector’s contribution is 16% of our GDP, it doesn’t mean that other people (non-farmers) are getting the rest of the wealth. As you know it very well, the driving force behind our economy nowadays is the energy. Who are the direct beneficiaries here? Is it just the civil servants or corporate employees or private individuals? It is the national revenue that is getting greater portion of funds/benefits and it is ultimately all the people regardless of where they work.

    Now your second last paragraph saying that the farmers became poorer is nonsense. The inflation rate is mainly going to effect the service provider sector or the industrial sector. The higher inflation rate will cause the prices of products (basic necessities, raw materials, etc) to rise. Our farmers are mostly self-reliant people when it comes to basic necessities. By self-reliant, I mean they produce perhaps just enough to feed themselves. The rise of inflation is almost unnoticeable to those flocks. And also just because the inflation rate is higher than growth rate does not necessary entail that we produced less or became poorer.

    Your last paragraph confused me totally. While you claim that the primary sector’s contribution to our country GDP is going to be reduced from 16% to 14%, you say it is a BAD NEWS? The lowering of contribution from primary sector is not necessary because of lower production in primary sector. Although we should not lose focus from primary sector, we should focus more on secondary and tertiary sector. We should focus on how we can prevent the sale of a KG of potato for Nu. 8 and then buy it back at Nu. 10 for about two potatoes (of course in terms of manufactured items like chips). We should focus on how we can stop the export of coals, gypsum and other minerals. A economy powered by agriculture is not a good sign of growth. Especially in terms of Bhutan, it is real bad since we have only around 8% arable land. If the production from those fields are to contribute higher than 5-10%, our economy can never become reliant and the goal of economic self-reliance will remain a distant dream. Now rather than trying to find a corner on an egg, try to support our government and encourage them to develop the secondary and tertiary sector – the place wherein lies the main potential of employment for our youths.

    Last but not the least, I think the quote below rings true in your case:
    “The only people who find what they are looking for in life are the fault finders.” – Foster’s Law.

  3. Thinlay says:

    There is also a danger if we focus all our attention on secondary and tertiary sectors of economy. This means we have to compete regionally and globally for services and industrial/manufacturing sectors. in these sectors we have less competitive edge due to the fact that we have to import all necessities for economic growth such as fuel, raw materials etc. This means prices for goods and services produced in Bhutan will always remain high.

    On the contrary, Bhutan has a competitive edge to produce some very exotic primary sector produces such as organic fruits, vegetables, dyes, medicinal and aromatic products. If we can invest in this products there is a ray of hope to lift rural Bhutan from poverty.

    Putting all effort in hydropower sector is a risky venture possibily if we can not protect watershed areas from where all our rivers and streams flow. These watershed areas are where poorest of poor Bhutanese are living. It is important that we plough back some revenue from enery sale to these communities to improve their livelihood so that they do not cut down trees or destroy watershed areas.

    Cheers

    • Thinlay,
      I am not sure if your comment is an answer to my earlier comment or not, but I am going to respond anyways. Although I said we should focus more (NOW, at present) on secondary and tertiary sector of economy, I did not say we should “focus all our attention” to the above mentioned two sectors. In fact I clearly mentioned that “we should not lose focus from primary sector.” We should focus on building infrastructures which can consume our products primary sector rather than importing raw materials from outside as you seem to be envisioning. As far as energy to run those industries are concerned, we should be less concerned about.

      I will agree with your second paragraph wholeheartedly. But we must also remember that we are importing (well too many) our basic food products from India at present. Before contemplating export of organic fruits and vegetables, we have to become self-reliant at home. On the other hand, our farmers are losing all the fruit products (peaches, pears, plums, etc) to natural decay. Those tragedies can be stopped only with the development of industries.

      As for your last point, I think the government is in the process of doing so. The rural electrification projects, CGI roofing are few examples which can accomplish those goals. But at the same time, we must also remember that BHUTAN ALONE cannot stop those glaciers from melting. We we can boast of having 70-80% of our country under forest cover, it is a very tiny tiny percentage in larger picture of the world. When it comes to carbon segregation and its help to global warming, it is the actual amount of area NOT the percentage of country’s area that matters.

      peace out!!

  4. I agree that we should develop small scale on-farm food processing facilities basically to add value and save produces as sonam says from rotting. These cottage industries can employ some rural folks and will generate cash income for rural folks. If i remember correctly, two such factories are established, one in Dagapela and another one somewhere in Shemgang, to process small size orange fruits or fruits that are rejected in the market. Big food processing factories like Bhutan agro and samtsi food processing factories pay very little for farm produces. Government can negotiate with these factories for a reasonable price.

    As for rural electrification and CGI sheet etc. I agree that it may help save some precious tree species. We should not however remain complacent. We must find more alternative to subsitute trees especially for building, fuel requirements. Watershed protection is responsibility of all Bhutanese. It is where our future lies not only for water for electricity, but for eco-tourism, asthetic, general well being of our society.

    My final comment is that there is ample scope to alleviate poverty in Bhutan provided we vision out strategies and make do-able plans and implement cost effective small scale projects.

    Cheers

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