Towards a competitive, efficient and lucrative marketing system

The policy aims to develop an agricultural marketing system to influence agricultural production plans in response to domestic, regional and global market dynamics

Domestic market demand for agricultural produce is considered to be limited, given the country’s population, with relatively low income and the unique dietary preferences of the Bhutanese people. However, the domestic market is expected to grow as the population and income increase, and as the dietary diversity and quality changes.

This is what the agriculture and forest ministry’s (MoAF) draft agricultural marketing policy reflects. It further states, based on Bhutan’s seasonal and agro-climatic comparative advantages, there is a substantial potential for local farmers and market agents to meet this increasing and changing domestic demand.

The ministry found there is also a substantial potential to export agricultural produce, both in the region and on the wider world stage, and a scope  for cultivating, both domestic and export agricultural markets, to grow towards Bhutan’s development strategy.

“While an enabling domestic and external trade-policy environment is a critical element of an export-led growth strategy, the increased level of competition in the local, regional and global economy demands that government needs to design measures to improve the competitive edge of their own producers,” states the draft.

Vital elements of a competitive sector include the transmission of information on subjects ranging from market locations to packaging, labeling and meeting certain technical requirements, the organization of producers to secure the critical quantities of produce desired by various markets, the provision of quality control services, and the development of infrastructure, states the draft.

The draft says, “The main constraints faced by Bhutanese exporters, which also play out in the growing local market, include; the ability to meet SPS (Sanitary and Phytosanitary Measures) standards, as well as minimum quantity requirements; a lack of information and skills; inadequate access to financing, unfair competition practices- often driven by syndicates; and poor infrastructure.”

It further says some of them fall in the “public good” category, and public efforts to assist the private sector in dealing with these problems will improve the competitiveness of the sector.

The policy objective is to establish efficient and effective agricultural systems and structures to promote the domestic markets and their contribution to agricultural and rural development and national food security.

The policy statements includes supply to institutional consumer markets where the government will encourage and facilitate supply cooperatives, groups and individual producers to high consumption national institutions like schools, mega hydro projects, hospitals, army barracks, and others.

For promotion of inter-dzongkhag trade, the government will monitor food production, availability and consumption patterns at the regional and dzongkhag levels, and ADMC will coordinate and liaise with producers, handlers, and sellers to facilitate the market-driven movement of food and produce from food-surplus to food deficit areas. Whereas, the private sector will take the lead in taking advantage of inter-dzongkhag trade opportunities

And when it comes to promotion of domestic niche markets, it says quality and processing of RNR products should be improved based on adequate market information on quality and other market requirement or the demands. Departments, including DAMC, will support in capacity building support and required equipment or materials to selected, larger scale value chains.

While the private sector involvement such as public-private partnerships will be promoted to connect to the rural producers and help them to enter downstream activities.

For the promotion of organic products, the Royal Government is committed to increase production marketing, and consumption of organic agricultural products, and will encourage and facilitate local producers to meet domestic demand for organic products.

With the scope of the country’s biodiversity framework, “natural” products will be promoted as part of the nature and culture conservation.

The National Organic Program (NOP) will be mandated to develop, implement, and administer national production, handling, and labeling standards for organic agricultural products. The NOP will also accredit the certifying agents (foreign and domestic) who inspect organic production and handling operations to certify that they meet standards.

Producers and small enterprises will be supported in promoting their products into new domestic markets through transportation subsidies, fairs, exhibitions, expo, trial marketing, pilot, etc. and also cost sharing measures will be adopted basis for products with more obvious market demands, and with clear recognition that makes forces will determine actual viability.

In collaboration with the Extension Service stakeholders, DAMC will promote consumer awareness of awareness of the advantages organic products, and will also promote separate Organic Sales Outlets (OSO) at Sunday markets and other outlets.

When it comes to promotion of regional and international trading environments, farmers and agricultural marketing actors will be supported to negotiate and compete effectively in regional and international markets.

The Government will protect agricultural marketing stakeholders against unfair trade practices, as well as, collaborate with private sector and other stakeholders to ensure that trade policies, rules and regulations in regional markets are harmonized, and to raise awareness on the opportunities inherent in bilateral, regional, and multilateral trading systems.

It is also mentioned that the Royal Government will encourage producers to directly enter the markets instead of using middlemen, while DAMC will work with and provide support to MoEA and MoFA in their efforts to develop and implement the “Bhutan Brand” and also support promotion of “Bhutan Natural” with linkages to encourage and facilitate local producers to meet regional and global demand for organic product.

The policy has been developed by the Department of Agricultural Marketing and Cooperatives (DAMC) with technical assistance (TA) support from Food and Agriculture Organization (FAO).

The draft which has been distributed to various concerned agencies for comments shall be endorsed after it is submitted to MoAF by the end of the month.

Tashi Deki / Thimphu


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