Track 2: Revitalization of Agriculture, Forestry and Construction Industries

Track 2: Revitalization of Agriculture, Forestry and Construction Industries

The discussion below deals with the prospects of optimizing the agricultural land use in Bhutan through the overall governance framework i.e. policies, legislation, land administration, land reforms, and strategic land use planning. They are initiatives that should be adopted early in the twenty-year plan as they form a fundamental framework for the more practical land management options discussed later in the strategy paper. They are also initiatives that are related to other sectors and types of land use such as urban development, industry, mining, hydropower generation, tourism and local development, and therefore partly need to be planned and implemented in a multi-stakeholder context.

Good governance and management of Bhutan’s land resources are arguably the most important precondition for sustainable economic development and poverty alleviation. Rural poverty is largely a result of inadequate land holdings and of the lack of road and market access that have constrained the opportunities for land use intensification, and thus retained many farming families at a marginal near-subsistence level of production. The serious rural poverty situation is highlighted by the 2003 poverty assessment, which showed that 38% of the rural population lives on less than Nu 741 per month (compared to only 4% among the urban population).

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  Developing a comprehensive, multi-sectoral land policy.
  
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  Revising the legislation pertaining to land governance and management.
  
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  Strengthening the administration of, and information systems on, land resources.
  
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  Continuation of the land reform processes to ensure that landless and marginal farming families have sufficient land to make a viable living.
  
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  Improving the strategic management of land resources through land use planning at national and local level.
  
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  Supporting farmers in adopting sustainable land management technologies.
  

These initiatives would be able to clear some of the basic constraints on optimizing agricultural and other land usages in Bhutan on which more practical land use development initiatives could be based.

Bhutan has a comprehensive system of policies, legislation and administrative tools to govern the land resources. However, it has not been fully able to solve conflicts or to balance different development priorities such as agriculture, urban development, industry, mining, hydropower generation, recreation and tourism. It is therefore proposed that the land policy framework be strengthened through the development of a formal, multi-sectoral Land Policy that should provide an overall framework for a balanced socio economic development and environmental conservation.

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  Aligning the governance of land resources with overall land capability and with the national policy, legislative and strategy framework.
  
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  Clarifying the institutional responsibilities and authorities in the governance of land resources.
  
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  Enabling effective poverty reduction through socially balanced and pro-poor land governance and management.
  
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  Enabling economic excellence by optimizing the use of the limited land resources.
  
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  Facilitating an appropriate balance between economic development, environmental conservation, cultural preservation and national security.
  
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  Ensuring that the tenure rights are secure and that the obligations and rights of land users are upheld according to the law and the overall development goals of the country.
  
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  Ensuring that land administration at central and local level is rational, efficient, equitable and transparent.
  
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  Providing an overall framework for development of specific legislation related to land resources use and management.
  

Formulating a land policy to improve the governance and management of land resources in Bhutan would entail information and comprehensive analyses of the status of land management, the current governance system, and the problems and development opportunities that the land policy ought to address. From the comprehensive analysis of the land use and governance, a number of critical issues are likely to emerge that would have to be dealt with through policy resolution, e.g. related to:

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  The means of balancing the economic utilisation and conservation of land resources, for instance related to wild life damage to crops and livestock, the access to non-timber forest products, and the utilisation of forest for livestock development, tourism, commercial and rural timber production, etc.
  
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  The principles for a land zoning and allocation system that would clarify the applicable management regimes, taxation, compensation, the administrative authority, and legal framework.
  
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  The principles for strategic land use planning as a tool to optimise the utilisation of land and the investment in land development, infrastructure construction, etc.
  
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  The strategy for increasing the land holdings of marginal and land-less farming families.
  
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  The institutional responsibilities and authority over land governance and management among sector institutions, central and local governments.
  
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  The principles for tenure over land resources including traditional rights and management systems.
  

The GNH Commission Secretariat, as a neutral agency without any sector interest should take the lead in formulating this policy through compilation of land use constraints and conflicts related to each sector.

The current legislation on land and land utilization is composed of numerous Acts and byelaws under the authority of several Ministries. This legislation contains various gaps, contradictions or uncertainties, which needs to be sorted out e.g. related to the authority vested with local governments and central government bodies. Such shortcomings would become even starker if major land policy changes are being made. It is therefore recommended that a comprehensive review and possibly amendment of relevant acts and their interrelationships be made once the comprehensive land policy is formalized. This would probably include the Land Act, Forest and Nature Conservation Act, the draft Water Act, the Municipality Act, the Mining and Mineral Exploitation Act, the Inheritance Act, and the DYT and GYT Chathrims.

Land administration pertains to the government systems at central and local level that deal with:

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  Cadastral and land deed records
  
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  Land tax and royalty system
  
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  Land reforms, redistribution and resettlement schemes
  
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  Land inheritance, sale and leasing regulations
  
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  Land acquisition, expropriation, and swapping rules
  

Problems relating to the tenure, ownership, taxation, acquisition and expropriation of land have long been a major constraint for farmers who have been subject to administrative decisions. In recent years the issues of excess land and land overgrown by trees have triggered much public debate, as they are seen by many as unfair impositions on poor farmers and by others as effective means to safeguard forest and other natural resources. Another often criticized aspect of land administration is the perceived inefficiency or bureaucracy involved in even simple transactions, permits, etc. With decentralization and further democratization it is vital that the land administration at central and local level is guided by strong but simple rules and procedures, and is conducted in a transparent manner.

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  Safeguard ownership and security of tenure
  
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  Support land and property taxation
  
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  Facilitate access to credit through information on security in land
  
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  Reduce land disputes through formalized and transparent land registration
  
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  Facilitate land use planning and infrastructure development
  
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  Produce statistical data and information for administration and for practical and strategic decision-making
  

The strengthening of land administration procedures and systems should be in line with the revised Land Act.

The insufficient landholding for most farmers is a major cause of poverty, rural-urban migration, and low agricultural output. Land allocation aimed at landless and marginal farmers has been practised for many years in Bhutan. This includes the major land reforms in the 1950s, the resettlement programmes that have now included 4,071 households through 8 phases, and the granting of Kidu by His Majesty the King.

Furthermore, food security is increasingly understood as a function of physical availability of food, accessibility to food by the population and proper utilization of food to enhance nutritional intake by the population. The policy instrument of protecting Chhuzhing is expected to contribute to food availability by increasing domestic production of rice. Availability of food refers to the physical presence of food which need not be based on domestic production alone. It can also be enabled through importation.

There is considerable scope for improving the land management in Bhutan by adopting a more systematic approach to land use planning as a tool to:

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  Optimise land use so it contributes to poverty alleviation and socio-economic development.
  
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  Ensure the use of land resources comply with national and regional strategies, master plans, plans for socio economic development and national security needs.
  
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  Prevent or reduce land degradation caused by unsustainable use of the land.
  
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  Ensure that important habitats and biodiversity resources are duly protected.
  
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  Ensure a suitable balance between land utilisation and land resource protection.
  
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  Support rational investments planning in roads, irrigation, market development, and social services.
  

Land use planning is choosing land use objectives and methods suitable to the environment, the socio-economic conditions, the infrastructure and markets opportunities, the development priorities, and to the needs, interests and capability of the land users.

Most of the agricultural land in Bhutan is subject to various kinds of land degradation such as erosion, landslides, chemical and physical soil degradation, flooding etc. Without proper remedies, these processes are likely to accelerate with the planned agricultural intensification and the gradual abandonment of traditional practices such as shifting cultivation, Sokshing and extensive cattle rearing. Suitable land management practices must therefore be promoted according to the specific needs and potentials of the land, including measures that safeguard soil fertility and prevent erosion and other land degradation. Such work is already underway through the MoA’s land management campaigns and the Sustainable Land Management Project, although the extension and implementation support must quickly be offered to all Bhutanese farmers. The land management campaigns carried out so far have shown very good progress in terms of reclamation of degraded land, particularly in the eastern part of the country. The remaining Dzongkhags should be covered during the 10^th FYP.

Bhutan does not face abject hunger and starvation. However, food insecurity, in terms of deficit in cereals is a problem faced by a majority of rural Bhutanese households. The RNR Census 2000 has estimated that only about 44% of the rural households were able to produce enough food grains for their year round requirement. The rest of the households could produce enough to last for on an average 10 months. The food insecure households generally cope up with this situation through purchase or borrowing from neighbours, barter with livestock products or sell labour in exchange for food.

Chronically hungry and/or malnourished people can seriously constrain building the necessary human, physical and social capital, necessary to facilitate their exit from poverty or for national economic advancement. Therefore, food security has consistently been an important part of Bhutan’s development agenda since the 5^th FYP and should continue to remain so.
1.2 Dimensions of Food Security

The World Food Summit in 1996, recognized that “food security exists when all people at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life” ⁶. This definition integrates availability of nutritionally adequate food, access to food, stability, and the biological utilization of food. This definition implies that addressing food security requires ensuring availability of food, access to food, ensuring proper biological utilization of food and facilitating a stable environment for progress in all these dimensions.

The main focus of Bhutan’s food security agenda has however, been limited to achieving national food self sufficiency, particularly in food grains, rice being one of the most prioritized cereals. The consumption patterns are changing. Although rice is considered as the most important cereal, other food items are also becoming important part of Bhutanese food basket with the changing consumption pattern (refer Table 1).

Therefore, a comprehensive approach that considers all other food items as well as non food items that relates to enhancing food security was missing all along.

a. Food availability has been addressed through both domestic production and imports. On the production side, maintenance of a minimum of 70% self-sufficiency in food grain production has been a policy objective. At present domestic production is not adequate to provide for the total domestic requirement. The RNR Census 2000 estimated a cereal self-sufficiency level at 65% only. Domestic production meets only about 25% of the requirement for edible oil and vegetable items, fruits and diary products which are imported heavily. With virtually no imports recorded, the country is self-sufficient in maize, barley, millet and buckwheat. However, import of rice increased from 31,200 tons in 1995 to 54,910 tons in 2003. The import of wheat, although not very significant, increased from 5 tons in 1997 to 12.40 tons in 2003.

1. 
   There are significant differences in road access across the country. Headquarters of all the Dzongkhags except Gasa are connected by road. However, at the Geog level, disparity in road access is pronounced. One-third of the Geogs do not have feeder roads while another one third has only some parts connected by feeder roads signifying inadequate road connectivity in terms of road kilometer density. 49 Geogs are still more than 8 hours away from the nearest highway and for 57 other Geogs, the nearest highway is 3 to 8 hours away. Some of the more remote places are found in northern Thimphu, Gasa, Lhuentse, Trashigang, Samdrupjongkhar, Pema Gatshel, Mongar, Zhemgang, Trongsa, parts of Wangdue, Chhukha and Haa. In these remote areas, people face difficulties in accessing markets and basic services. In Gasa and Zhemgang, for instance, 58% and 56% of farm households are at over eight hour’s walking distance from services such as a phone, hospital, bank and bus station. The transport difficulties also constrain the food distribution system.
   

2. 
   Available data shows that markets play an important role in providing people with access to food, in both urban and rural areas. In rural areas, an average of 60% of the food consumed is accessed through the market. This includes rice (50% purchased) and dairy products (57% purchased) – which constitute the bulk of calorie consumption - as well as fish, meat, fruits and vegetables¹⁰. Increasing incomes and access to markets, therefore, has an important role to play in increasing people’s access to food in both urban and rural Bhutan. However, interventions for increasing income generation are not equally relevant in all parts of the country.
   

1. 
   Iron deficiency in diets has been identified as the most common and controllable factor for anemia in the country. Anemia, measured on the basis of haemoglobin levels in blood, is especially prevalent among children (81%) and women (55 %), with little difference between different parts of the country¹¹. 60% of anemic children experience moderate to high severity of anemia, indicating that there is a large magnitude as well as high severity of anemia among children. Anemia is highest among children between 6 and 23 months, with no difference between females and males and negligible differences between urban and rural areas. Among children between 6 and 23 months of age, anemia can lead to permanent brain damage, leaving anemic children about 10 IQ points behind their counter parts with adequate haemoglobin values. In addition, malnutrition during pregnancy leads to inadequate foetal nutrition, which compromises the child’s healthy growth and development.
   

2. 
   The availability of nutrient-rich traditional crops, including barley and buckwheat, that until recently were a staple part of diets is declining. The production of barley and buckwheat has respectively plummeted from 4,672 MT and 3,016 MT in 1999 to 2,190 MT and 1,015 MT in 2003. This decline can be largely explained by the increased availability of cheap rice imports from India which acts as a disincentive to the production of other cereal crops. In addition, the policy context of 70% cereal self-sufficiency has been interpreted as increasing rice production. RNRRC staff and extension workers have been encouraging farmers to cultivate high-yielding rice varieties. Relative to buckwheat and barley, rice is poor in proteins.
   

1. 
   Accessing food by communities during extreme climatic conditions like floods, landslides and drought increases poverty incidences and emergency food needs. FCB outlets in all Dzongkhags and 12 depots store and distribute essential food items. With global warming, extreme monsoon and drought conditions could be more severe and therefore emergency food requirement can be a serious issue. Transport difficulties, especially during the monsoon months, threaten the food distribution system and can lead to food shortages in parts of the country. To counter these negative fluctuations, strategic grain reserves need to be held in areas that are susceptible to seasonal shortfalls of food availability.
   

2. 
   Availability of cheap and poor quality rice through FCB acts as a disincentive and across the border competition make field crops production not economically feasible.
   

3. 
   The need to ensure environmental sustainability and the limited availability of agricultural land calls for the increased adoption of improved and sustainable land management practices. The 2004 landslides in the east of Bhutan testify to the importance of these.
   

a) Laws restricting culling of non endangered species of wild animals, specifically wild boars, should be relaxed so that farmers can prevent crop and livestock losses caused by wild animals. Culling could be regulated with the intention of preventing distortions in the food-chain or predator-prey relationships. If these laws are relaxed, an additional option could be for rural communities to sell game-hunting rights, based on sustainable management plans, to tourists. This problem of wild boar depredation of crops should be converted into an economic opportunity through:

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  Game hunting as a source of revenue with the wild boars so that revenue can be generated through hunting fees as well as through savings on crop losses.
  
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  Rearing trapped wild boar piglets in farms specializing in producing wild boar meat which can be supplied to hotels as a delicacy.
  
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  Encourage use of farm dogs to guard the crops.
  

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   The availability of food at the national level need not be based on domestic production alone. It can also be enhanced through importation. Therefore, it is proposed that land use within agriculture land should not be subjected to any form of restriction. For addressing food security in rural areas, the present level of efforts in enhancing production should continue since imported food products will continue to be too costly for these areas due to high transportation costs. Full commercialization and specialization in the remote areas should be triggered only after the transportation facilities are well established and connectivity to not only Indian roads but also to South Asian highways is secured. This will enhance national food security even if geo political conditions, particularly with immediate neighboring countries, change.
   

c) Farm mechanization should be intensified not only to reduce farm drudgery but also to increase productivity of land and labour both of which are in limited supply.

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  Mechanization should not be limited for specialized farm operations such as ploughing, rice transplanting, harvesting, threshing, but also for value addition of farm products such as ‘ara’ distillery units, meat dryers, fruit processors, etc. Therefore use of improved technology for value addition should receive attention.
  
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  Machineries should be made available not only at regional centers of AMC but service centers should also be opened up in strategic townships and Dzongkhag Headquarters eventually. At the Geog level, machinery-sharing arrangements between groups of farmers should be developed.
  
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  Private entrepreneurs and agents responsible for renting out machinery could take up specialized services in agriculture such as seedling production, pest management, harvesting, etc. Incentives, such as tax exemptions, could be introduced to encourage private entrepreneurs to provide such services. The machinery that is made available must be suitable for farming systems (e.g. paddy transplanters in Paro and Wangdue, corn-flake makers in East) that the poor are involved in.
  
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  Traditional practices of labour sharing among households will be promoted through farmer groups and associations.
  
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  People hired on public works schemes should receive adequate financial compensation and these should be timed with periods of underemployment or outside peak agriculture activities in rural areas.
  

1. 
   So as to ensure that roads are constructed where they are most needed, road construction should be based on assessments of access to markets and basic services. In order to optimize the provision of such services, provision of roads should also be based on the size of settlement. Where there are only few households, such settlements should be resettled to areas with bigger settlement or get more households to settle there, depending on feasibility, to create critical mass for optimum use of road connectivity.
   

2. 
   Some indications on the likely relevance of different types of interventions, depending on the agricultural potential and extent of market access of the area being targeted, are provided below:
   

In these areas, income-generating interventions focusing on private-sector development in on-farm and off-farm activities will be most relevant.

Road development is likely to have the highest returns by enabling marketing of high-value commodities and inputs for producing these.

Extensive livestock production with marketing of livestock products is likely to be more successful.

Interventions should focus more on ensuring that households meet a minimum food consumption threshold through subsistence production and safety nets and on supporting long-term human capital investments in children. The purpose of these human capital investment interventions is not to keep people on farms or in rural areas but to promote the opportunities and mobility in geographic and economic terms for future generations.

3. 
   By creating on-farm and off-farm employment opportunities in rural areas with high concentrations of poverty, the incomes of the poor and their access to food can be increased. Off-farm activities also diversify livelihood portfolios, thereby making people less vulnerable to risks affecting farm production, on condition that these off-farm activities are not vulnerable to the same risks as on-farm activities. Developing on-farm and off-farm employment opportunities requires interventions at different levels.
   

4. 
   Since cereal production has lower scope of income generation, horticulture enterprises niche production should be promoted to generate income to the farmers so that their food purchasing power is enhanced. These enterprises should be based on highly skilled manpower and modern technology. Therefore improvements in services infrastructure and institutions required for high value and low volume exports should be put in place. Given the small population and limited land resources, technology intensive and skilled production is the only option for increasing human and land productivity in future.
   

5. 
   In addition, access to input and output markets and the food distribution system should be developed. The food distribution system needs to be linked with domestic and international suppliers. Because of the logistical constraints to distributing food across the country (from east to west) and the fact that more developed trading systems run from north to south, the focus should be on developing distribution channels within regions from surplus to deficit areas, rather than across the whole country.
   

1. 
   Bhutan’s success in eradicating iodine deficiency shows that the country is capable of addressing micro-nutrient deficiencies. A nation-wide anemia control programme in both rural and urban areas for poor and non-poor is required for all age groups with priority to be given to pregnant and lactating women and children of 6-23 months. Options for anemia eradication include iron fortification of selected food vehicles and iron supplementation. Previous experiences with food fortification suggest that salt is an appropriate food vehicle to be fortified with iron. A recent iron-supplementation programme targeted at pregnant women had limited success. Although 90% of women had received IFA tablets, the prevalence of anemia was not reduced. Once there is an understanding of why IFA tablets failed to reduce anemia an improved approach to iron supplementation can be developed.
   

2. 
   A significant percentage of children less than 5 years of age are stunted. This is an outcome of insufficient micro-nutrient contents of diets and inadequate caring practices. As a short-term measure, until access to nutritionally adequate foods and feeding practices are improved, children under two and their mothers should be provided with micro-nutrient fortified foods, together with education for improving feeding practices.
   

3. 
   Nutritionally adequate foods – including cereals, pulses, roots and tubers could be identified and their availability increased. Farmers should be encouraged to grow the traditional nutrient-rich crops that they have a comparative advantage in producing. This could involve developing and disseminating technologies for increasing yields of these crops. The purchase of nutrient-rich traditional foods by school feeding programmes could also be used for stimulating the cultivation of these crops. Alternatively, and particularly for foods that the country does not have a comparative advantage in producing, tariffs on imports of nutrient-rich foods, including staple foods, vegetables and fruits could be reduced or lifted in order to increase the availability and reduce the prices of these foods.
   

4. 
   Processing of and value-addition to nutritionally rich crops should also be increased.
   

1. 
   In Geogs where the food distribution system is poorly developed, community and/or household level food storage capacities will be more effective in stabilizing food availability since households in these areas will not be able to rely on the food distribution system.
   

2. 
   A disaster management strategy should be in place, which includes a food security component. Transport difficulties, especially during the monsoon months, threaten the food distribution system and can lead to food shortages in parts of the country. To counter these negative fluctuations, strategic grain reserves need to be held in areas that are susceptible to seasonal shortfalls of food availability.
   

3. 
   A food import policy, strategy, legislation and monitoring mechanism needs to be put in place to aim at increasing competition between food traders. It will also have to specify FCB’s role in food import, market stabilization and ways to deal with the import of subsidized rice, which can act as a disincentive to private sector food traders and to the cultivation of rice by farmers in Bhutan. In formulating the policy, the impacts of Bhutan’s accession to WTO on food imports and on local producers should be considered.
   

The different dimensions of food security are inter-dependent. For instance, one cannot be food secure if he/she has sufficient income to purchase food but there is no food in the market. Likewise, if one is able to access sufficient food but is too ill to absorb it, he/she will not be food secure. Therefore, food security is a multi-dimensional and multi-sector issue. It has to be addressed through multi-sector coordination.