Country Strategy Note of the International Fund for Agricultural Development expects to support Bhutan in achieving short-term to medium-term agrifood and rural development
Amidst Bhutan’s food self-sufficiency challenges, the Country Strategy Note (CSN) 2025-2026/2027 of the International Fund for Agricultural Development (IFAD) provides an overall framework and strategic direction to support the Royal Government of Bhutan (RGoB) in the agrifood and rural development sector. The CSN is structured around the objectives that IFAD expects to support Bhutan in achieving in the short to medium term.
The rationale of CSN is that Bhutan continues to face challenges in achieving food self-sufficiency. It states that strengthening post-harvest value chains is a critical imperative for transforming Bhutan’s food system.
The IFAD’s Country Officer for Bhutan, Sonam Jatso said that CSN is aligned with Bhutan’s 13th Five Year Plan (FYP) and the draft of 10-Year Development Vision. It also aligns with the country’s agrifood sector strategy 2034 or RNR Strategy 2030 (final draft) and Bhutan’s Food Systems Transformation Pathways 2021. The CSN also aligned with the National Adaptation Plan 2023, the United Nations Sustainable Development Corporation Framework 2024-2028, and IFAD’s Strategic Framework 2016-2025.
The reason for IFAD’s CSN alignment with the 13th FYP is that the objective of the Ministry of Agriculture and Livestock is to increase the primary sector GDP of agriculture and livestock from Nu 27 billion to Nu 50 billion by 2029 focusing on high-value agriculture and livestock production, processing and marketing. The key strategies to fulfill these objectives are the commercialization of potential commodities and building the resilience of small farmers.
The indicative engagements of IFAD are that it will remain committed to ensuring interventions are climate, gender, and nutrition-sensitive/transformative. The institution will prioritize smallholders, women, female-headed households, youth, and vulnerable communities as its core beneficiary groups. It will pursue collaboration with cooperatives and farmer groups to transform them into thriving private-sector entities.
As per the indicative engagement, IFAD and the government may invest in another project in eastern Bhutan to consolidate and scale up successful intervention in dairy, vegetables, and fruits value chains, and youth and private sector engagement among others.
The current CSN will end in December 2024 and, to guide the implementation of the ongoing projects, a new CSN for 2025-2027, fully aligned with Bhutan’s 13th Five Year Plan, has been drafted for consultation with the RGOB and development cooperation partners.
Clarifying why the CSN is just for three years, the country director for Bhutan and Nepal, Roshan Cooke said, “It is as per the financial cycling of IFAD.”
IFAD will use the next funding cycle (IFAD13) to operationalize the Strategic Objectives under the CSN. IFAD Loans are provided on highly concessional terms. It is free of interest with a fixed service charge as determined by the Fund at the date of approval of the loan. It is payable semi-annually in the Loan Service Payment Currency. The Loan has a maturity period of forty (40) years, including a grace period of ten (10) years.
The Country Strategy Note 2022-2023
The Country Strategy Note 2022-2023 (CSN) outlines IFAD’s strategic collaboration with the Kingdom of Bhutan to support the Royal Government of Bhutan (RGoB) in achieving its development objectives. The CSN aligns with key documents, including the RGoB’s 12th Five-Year Plan, the Renewable Natural Resources Strategy 2040, Bhutan’s Food Systems Pathways, and the United Nations Sustainable Development Partnership Framework, all aimed at enhancing agriculture and rural development.
The CSN has two main strategic objectives: SO1 to transform small-scale agricultural production into inclusive, equitable, and resilient agri-food systems.
SO2 is to create a supportive environment for private sector development in the agri-food sector, particularly to involve youth in successful commercial activities.
IFAD’s investments are targeted at empowering rural communities by improving food and nutrition security and increasing incomes while ensuring environmental sustainability. The strategy emphasizes engagement with smallholder farmers, women, and youth, exploring innovative agricultural and off-farm opportunities for youth involvement.
Business development support will cover various areas, including aggregation, storage, value-added processing, and distribution, with training provided for youth in key sectors such as renewable energy, organic inputs, and financial services. The goal is to foster a conducive ecosystem for profitable agroecological farming and to attract youth into entrepreneurial roles.
The CSN will also build on the existing Commercial Agriculture and Resilient Livelihoods Program (CARLEP) to enhance the commercialization of vegetable and dairy value chains within these agroecological systems.
IFAD is an international financial institution and a specialized agency of the United Nations dedicated to eradicating poverty and hunger in rural areas of developing countries.
By Sangay Rabten, Thimphu