COUNTRY BACKGROUND - Gross National Happiness Commission

Renewable Natural Resources
and the opportunity cost of collection, has been estimated at Nu.200 m. (MPFD 1991). Only 5% of this can be
considered commercial fuelwood, with the remaining 95% being collected by households and other users
themselves. The value of livestock feed has been estimated at Nu. 300m. Forest also contain plants which are used
for medicinal purposes.
Farming SystemsFarming Systems
17.11 Traditional labour intensive production methods are used, as there is little scope for mechanisation on steep
slopes. Water is not a constraint, but management of water in irrigation systems is inefficient. Crop rotation
(Tsheri) is widely practised and has traditionally been based on a long fallow period. As a result of Forest
Legislation farmers are restricted to a maximum fallow period of 12 years, and are beginning reduce the period to
8-10 years as the availability of land has declined. Restrictions on clearing of forest land for arable production are
also beginning to result in reductions in the fallow period. In most parts of Bhutan traditional soil conservation
techniques have appeared to limit soil erosion to a minimum. In the southern foothills high population pressure and
steep slope production are beginning to cause erosion in many parts, as the population are originally from plains of
India and are unaccustomed to hill farming.
17.12 Livestock are totally integrated in all farming systems. Manure is collected and spread on fields, often in
substantial quantities in the central valleys, but less so in the southern areas. Cattle are grazed in the forest areas and
fed from crop residues. They provide milk, butter, cheese and meat, while horses are widely kept for transport.
There are some communities in high altitude areas who are totally dependent on Yak and sheep husbandry.
Agricultural ProducersAgricultural Producers
17.13 The agricultural sector consists of 65,000 farm households with an average farm size of 1.5 hectares. Farm
distribution is highly skewed: 45% of farmers with less than 1 hectare cultivating 16% of the total. Conversely 16%
of farmers with holdings of more than 2.5 hectares, hold 42% of the total area. Average farm size is substantially
higher in the west. Under existing legislation farm households may only plant an area of up to 10 hectares,
excluding horticultural crops. Farm size has been decreasing as farms are subdivided between children, and many
small farmers are unable to meet their food requirements. A study in the Punakha Wangdi area during 1990,
showed that 40% of all farmers operated as part owners/tenants. A small number of landless tenants were also
identified, accounting for 3-5% of the total.
Forestry Forestry
17.14 Employment in the forestry sector has been estimated at 25,000, with the majority involved in nonmonetary
fuelwood collection, and accounting for 20,000 average person years of work (MPFD 1991). Final
demand from the private sector is estimated at Nu. 300m per annum 1991 prices, consisting mainly of consumption
items such as construction timber and fuelwood. Final demand from public sector, is estimated at Nu. 70 million.
Although no detailed figures are available, the MPFD estimates that the Bhutan Logging Corporation (BLC), the
Integrated Forestry Development Programme (IFDP), Bhutan Board Products Limited (BBPL) and Gedu Wood
Manufacturing Corporation (GWMC) pay Nu.20m annually in royalties and taxes.
Exports and ImportsExports and Imports
17.15 Bhutan is 66% self sufficient in all cereal production, being virtually self sufficient in maize, barley, millet
and buckwheat, but only 52% self sufficient in rice, 24% in wheat, and 20% in edible oils. To meet the food
deficits, cereals and edible oils are imported from India. Because unit production cost are substantially lower in
India than in Bhutan, imports of cereals are steadily displacing local produce. Imported cereals are being consumed
by farmers, both as a result of greater access to markets and rising cash incomes from the sale of horticultural
produce. Horticultural crops: oranges, apples, potatoes, cardamom, ginger, chilies, vegetables and processed fruit
products, are exported to India, Bangladesh, Singapore and Japan and the recent increases in these exports has
resulted in a surplus in agricultural trade (excluding livestock products). Total agricultural revenues in hard
currency were US$ 6.5 million in 1989, having risen from US$ 0.17 in 1986. Producers are encouraged to export to
hard currency earning countries with a premium of 30%.
Forestry exportsForestry exports
17.16 The value of wood and wood products exports has been increasing during the 6FYP, as shown in Table,
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