In spite of its remote and land-locked location, Bhutan has been relatively successful as an agricultural exporter. The value of agricultural exports has grown at an annual rate of almost 9% since 2000. Taking advantage of the cooler climate, Bhutan exports oranges, potatoes, vegetables, and apples to India and Bangladesh.
At the same time, agricultural imports have been growing at 10% per year. Rice accounts for more than two-thirds of the value of agricultural imports, which is not surprising given that Bhutan depends on imports for about half of its consumption needs. Wheat, vegetables, fruits, and spices are also imported.
A key question, however, is whether this trade in agricultural products is beneficial to Bhutan in general and to poor farmers and consumers in particular?
From the farmer’s perspective, the appeal of growing horticultural crops is clear: the gross returns per hectare are higher than for rice and maize. The returns per hour of labour are less clearly in favor of horticulture because they tend to be more labour intensive than cereal crop. Given the labour requirements, cost, and risks associated with horticultural production, very few farmers are able to specialize fully in horticulture but many can produce some fruits and vegetables in addition to their cereal crops. The optimal mix will vary from farmer to farmer depending on skills, ability to finance input costs, tolerance of risk, distance to markets, and other factors.