Project ID: 1296
Executive Board document: EB-2005-84-R-13-Rev-2

Agriculture, Marketing and Enterprise Promotion Programme

Who are the beneficiaries? The programme area comprises the six eastern dzongkhags (districts) of Bhutan, with a population of some 226 200 persons living in 26 600 households. Approximately 22 000 of these households (over 80% of the total) will form the primary target group. These rural households are located in isolated areas that lack access to infrastructure. Women are a significant part of the target group since they contribute most to farm production and livestock-raising, in addition to their other household responsibilities. Women’s roles are expanding with the growing out-migration of male household members, leading to the gradual feminization of agriculture.

Why are they poor? A recent poverty analysis indicates that the programme districts are among the poorest in the country. Main causes of poverty include: remote location and rugged terrain that make access to the outside world difficult; a growing imbalance between limited productive resources and rapid population growth; a lack of productive skills that constrains the application of modern agricultural techniques; a lack of income-generation and remunerative employment opportunities; and a lack of rural financial service providers. Since the programme area is characterized by very rugged terrain with high mountain ranges separated by deep valleys, inadequate road infrastructure represents the most severe constraint. Many rural communities are still cut off from the road network and depend on animal and head-load transport.

How will they benefit from the programme? The programme aims to improve the livelihoods of the target group on a sustainable basis by enhancing their productivity and income growth, and improving their access to economic and social services. The programme objective will be achieved through support for both land-based and non-land-based production. Specifically, the programme will benefit the target group by: (i) promoting capital formation in crop, livestock and niche-crop production; (ii) improving the conditions under which small rural enterprises and income-generating activities are started and operated; (iii) facilitating access to rural financial services, especially credit, to enable beneficiaries to acquire the necessary capital inputs for productive activities; (iv) supporting capacitybuilding of organizations at the grass-roots level and promoting skills development for programme beneficiaries; and (v) improving the common socio-economic infrastructure, especially the road network and marketing support systems.

Loan and grant amount:
Loan: SDR 9.25 million (equivalent to approximately USD 13.9 million) Grant: SDR 70 000 (equivalent to
approximately USD 100 000)

Total programme cost: USD 19.7 million

Project ID: 1094
Executive Board document: EB-99-67-R-17-Rev-1

Second Eastern Zone Agricultural Programme

This eight-year IFAD-initiated programme builds on IFAD's experience in the country and on the successful implementation of the First Eastern Zone Agricultural Project. It will be implemented in two phases of three and five years under the flexible lending mechanism. The programme's specific objectives are to:

- increase ag riculture and livestock production by extending agricultural and livestock technology and development programmes;

- raise target-group household incomes;

- establish sustainable food security;

- generate technologies for extension through participatory research and on-farm testing;

- develop/implement approaches encouraging beneficiary participation in order to increase the sustainability and effectiveness of all programme activities;

- improve farmer access to markets, agriculture and livestock inputs; and

- support the timely and cost-effective delivery of credit services.

The overall objectives also focus on the conservation of natural resources and the establishment of an equitable system of development. The programme covers the six districts of the eastern region, where about 81% of the rural households are food-insecure. The target group comprises 22 840 rural households (155 312 people). It is estimated that 25% of the total rural households in the programme area will directly benefit from programme activities, particularly from increased crop production, greater household food security, improved nutrition and higher cash incomes. All farms will benefit from improvements to extension, research and support to the input supply farms and other units.

Innovative Features:

- The programme gives a central role to the village representative bodies (GYTs), which will become the focal points for local area development. Their ability to perform this role will be progressively increased as they gradually take over development activities. A "local initiatives fund" placed at their disposal will further enable them to learn to plan and execute small-scale infrastructure and other local, need-based activities. Temporary task forces will provide training and technical assistance to the GYTs, tapping the resources of all stakeholders - the Government, NGOs, the private sector and farmer organizations.

- Research trials will be taken out o f research stations and brought down to the village level and into farmers' fields. This move represents a quantum shift towards participatory on-farm testing and demonstration in which researcher, extension agent, farmer and trainer all collaborate.

- The programme will also encourage private-sector involvement in tasks previously undertaken by the public sector. For example, the programme will support commission agents in the districts to take responsibility for distributing farm inputs and some other extension tasks.

- Opportunities for entrepreneurial development will be provided to farmers through contract breeding of animals (contracted between farmers and government livestock centres), the establishment of private para-veterinarian practices and the development of farmer-owned and managed nurseries. To enable farmers to take advantage of these opportunities, a village-based, group savings-and-lending scheme will be promoted by the Bhutan Development Finance Corporation.

Loan Amount:

SDR 7.0 million (approximately USD 9.5 million) on highly concessional terms.

Total Programme Costs:

Estimated at USD 17.8 million, of which USD 2.1 million will be provided by the Netherlands Development Organization, USD 525 000 by the United Nations Capital Development Fund, USD 5.1 million by the Government and USD 622 000 by the beneficiaries.

Cooperating Institution:

UNOPS.