Contract farming to promote organic agriculture

Gasa dzongkhag is proposing to start large-scale contract farming in order to promote consumption and sale of organic produce.

Dzongkhag Agriculture Officer (DAO) Tshering N Penjor said contract farming is agricultural production carried out according to an agreement between a buyer and farmers, which establishes conditions for producing and marketing farm products.

“The producer agrees to provide established quantities of a specific agricultural product, meeting the quality standards and delivery schedule set by the buyers. In turn, the buyer commits to purchase the products at a pre-negotiated price,” said the DAO.

According to the National Organic Program under the Ministry of Agriculture and Forests, Gasa and Samdrup Jongkhar are the only dzongkhags free of chemical fertilizers and pesticides.

Last year, Bhutan Agriculture and Food Regulatory Authority (BAFRA) certified a farmers’ group in Gasa, Rangshin Sonam Detshen in Khatoed gewog, to produce and sell organic produce.

It is the first and only certified organic farmers’ group in the country.

The group bagged its first biggest commercial deal when it signed a memorandum of understanding (MoU) with 11 major hotels and restaurants in Thimphu, including Taj Tashi, Druk Hotel, Aman Kora, Termalinca, Hotel Ariya, and Pedling.

The group signed a MoU for the supply of 54,000Kg of potatoes, 3,000Kg of garlic and approximately 17,000Kg of red carrots a year for the hotels.

Over 54,000Kg of potatoes is divided among 100 farmers so each farmer will get to produce a specific quantity.

The group charges Nu 123 per Kg of garlic and Nu 63 per Kg of carrot. Nu 3 per Kg of produce is included as transportation charge and daily allowance of farmers bringing the produce to Thimphu.

“Whatever we are doing right now is on a smaller scale but in our own way, we are doing contract farming even now,” said Gasa Dzongda, Dorji Dhradhul.

He said contract farming has its advantages. Farmers will benefit because the market is guaranteed and prices will remain fixed irrespective of market situation. “The effectiveness of contract farming in terms of profit for farmers would depend on when we negotiate the prices. The price has to be negotiated at the very beginning for contract farming.”

However, there are risks to contract farming. If the farmers fix a certain price at the outset but later on if the market prices increase, farmers will suffer losses.

Last year, prices were negotiated before the group planted potatoes.

Due to limited demand, most of the produce gets spoilt but with contract farming, farmers can produce only the required amount.

The chairperson of Rangshin Sonam Detshen, Tshering Zangmo, said, “At present, in absence of an assured market, farmers doubt whether we would be able to sell their produce. So once we start contract farming on a bigger scale, farmers will not only have an assured market but also get their negotiated rates.”

Gasa dzongkhag is also looking into other forms of contract farming including leasing unused land to people from other dzongkhags.

Due to farm labor shortage, most of the land in Gasa is currently left uncultivated. “If a person from another dzongkhag is interested, he can come and use the unused land for farming for a certain amount and a certain period of time. The farmers will get their share for the leased land as per the agreement between the land owner and buyer,” said the DAO.

However, Tshering Zangmo is concerned about the “organic” brand. She fears that outsiders might use fertilizers and pesticides and sell it as organic vegetables.

“We will not know how far the crops will be organic. Right now, we are certified to sell organic produce. These days everyone knows that produce from Gasa is organic but if outsiders use fertilizers, it will spoil our brand,” she said.

Pema Seldon from Gasa