Buy-back scheme continues to burden government coffer: Agriculture Minister

The government lost around Nu 46mn this year in the buy-back scheme

The buy-back scheme of the agriculture and forests ministry, which was put in place as a relief measure during the Covid-19 pandemic, has cost the government Nu 46mn this year. 

 “The government is incurring a huge loss to support a scheme that is helping our farmers through these difficult times,” said Agriculture Minister Yeshey Penjore. 

Through the scheme, the government bought around 5,500MT of vegetables worth Nu 29mn from the farmers last year, while buying 8,000MT of vegetables worth Nu 46mn this year.

During a recent interview with the media, Lyonpo had pointed out how the government is buying a 35kg cabbage bag for Nu 450 from farmers of Najay gewog in Paro.

“The government has to bear transportation costs when they move cabbages to other dzongkhags. When we reach Darachu to sell these cabbages, we get only Nu 350 for a 35kg cabbage bag. So Nu 100 is a direct loss to the government,” the Lyonpo explained. 

Further he added that last year during the cabbage season, just for Najay gewog the government had to bear a loss of Nu 2.7mn, not to mention the Nu 4.2mn in overall losses while considering other dzongkhags.

“Likewise, we have other vegetables including potatoes, onion, carrot, and ginger among others. For all these varieties, the government is bearing significant losses but all with the noble intention of helping our farmers,” the minister said. 

Meanwhile, the biggest hurdle in facilitating export outside the country is the certification and standardization of local produce. To this end, the ministry is collaborating with the Indian Embassy and the Government of India, including the Commerce Secretary Level Meeting (CSLM), to promote and facilitate trade between the two friendly and neighboring countries. 

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

The minister said that vegetable export dropped drastically last year, with the implementation of the Plant Quarantine Order (PQO) in India. 

Meanwhile, the ministry is still trying to meet these formalities for vegetable export to India, where farmers will not be burdened with additional official requirements like the PRA, PQ, and other restrictions. 

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

With the necessary infrastructure in place, whenever there is a demand, farmers will get better prices and for that the ministry is also working on the marketing strategies. 

Overtaxed by the buy-back scheme, the government is in talks with the Food Corporation of Bhutan to help farmers sell their produce.

Kinley yonten from Thimphu