Buy-back scheme causes loss to govt: Agriculture Minister

Last year, the government had to bear a loss of around Nu 4.2mn for cabbage alone

Despite implementing the buy-back scheme to help farmers in the Covid-19 situation, the government is incurring a big loss with the scheme, the Agriculture and Forests Minister said.

Lyonpo Yeshey Penjor explained that the government is buying a 35kg cabbage bag for Nu 450 from farmers at Najay gewog in Paro.

“When we transport the cabbage to other dzongkhags, all this transportation cost is a loss to the government. When we reach Darachu to sell these cabbages, we get only Nu 350 for a 35kg bag of cabbage. So Nu 100 is a direct loss for the government,” the Lyonpo added. 

According to the minister, last year during the cabbage season, just for Najay gewog the government had to bear a loss of Nu 2.7mn for cabbage, and overall from the country, the government had to bear around Nu 4.2mn for cabbage alone.

“Likewise, we have other vegetables including potatoes, onion, carrot, and ginger among others. For all these, the government is bearing the loss but the government is trying to help our farmers,” the minister said. 

Meanwhile, the biggest hurdle in facilitating export is the certification and standardization of local produce.

Although the Bhutan Agriculture and Food Regulatory Authority (BAFRA) is the designated competent authority to coordinate all bio-security activities, India, the biggest market, does not recognize test certificates issued by the BAFRA for processed food. 

With the implementation of the Plant Quarantine Order (PQO) of India for which a Pest Risk Analysis needs to be conducted, Lyonpo Yeshey Penjor said that vegetable export dropped drastically. 

He said that summer vegetable export to India had been disturbed due to additional requirements like PRA, PQ, and other restrictions. “Importers in India need an import license and those vegetables being imported need to be notified.” 

Lyonpo shared that despite a growing local food industry, finding viable export markets beyond the country is going to be a big challenge.

According to the minister, for the best-quality ginger, the government is paying Nu 35 to the farmers. But across the borders, it usually fetches Nu 8 per kg. However, if the price is negotiated, it may go up to Nu 15-18. From all these, the government is bearing the loss. 

“Before Covid-19, informal trade gave some advantages to us but with such formal trade costs of all these have to be systemized,” the minister said. 

“What our farmer are doing now is that they are taking their produce from the fields to Phuentsholing for auction, where local produces are sold at lower prices to other countries,” the Lyonpo said, adding that the government needs to establish food industries where we can store, process and package local produces. 

“Whenever there is a demand, we will get better prices,” Lyonpo said, adding that the ministry is also working on marketing strategies. 

With all the loss that the government is bearing from the buy-back scheme, Lyonpo said that the ministry is in talks with the Food Corporation of Bhutan Limited (FCBL) to help the farmers. 

“If farmers are willing to exchange their produce with rice, oil, and others, the ministry has ordered the FCBL to issue these to the farmers,” Lyonpo said, adding that the FCBL can exchange 50kg of potatoes with 50kg of rice and it will benefit the farmers and government as well.

Kinley Yonten from Thimphu