Bhutan farmers’ groups find sustainable markets by catering to local schools and institutions

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Bhutan farmers’ groups find sustainable markets by catering to local schools and institutions

The IFAD-supported Market Access & Growth Intensification Project instead is providing new and sustainable markets in rural Bhutan. The project is already helping to increase farmers' income while contributing to diversifying and improving students' diets.

The school-linking programme is implemented by the Project Coordination Unit of MAGIP, the Regional Agricultural Marketing and Cooperatives Office (RAMCO) and with technical assistance support from SNV.

In the eastern part of the mountainous Kingdom of Bhutan, villages are isolated and the terrain is extremely rugged. In many poor communities people have to walk from a few hours to a few days to reach the nearest road head. Students in some villages have to walk two or three hours each way to reach the nearest primary school.

For years, schools and institutions located in this part of the country have procured vegetables from India through a tendering system. While it was cheaper than buying local products, they were rarely fresh, as shipments only came once a month. And they contained varieties that would not spoil quickly, such as potatoes and cabbage, which meant diversity was limited. The tendering system also contributed to Bhutan's trade imbalance with India. But because of a project supported by the International Fund for Agricultural Development (IFAD) that contractually links local schools and institutions with nearby smallholder farmers' groups, students are able to get the fresh, nutritious vegetables and fruit they need to get them through their studies. 

©IFAD/Rik van Keulen

The Market Access & Growth Intensification Project (MAGIP), funded by IFAD, and cofinanced by SNV, Netherlands Development Organisation and the government of Sweden, started in 2011 to improve smallholder farmers' food security and to connect them to markets that they would not otherwise be able to access. IFAD has concentrated its operations in the eastern part of the country, which has a relatively dense population. It is also the area where food insecurity is highest. The project, which aligns with the government's policies of achieving self-sufficiency in vegetable production and of increasing the incomes of rural households,  is expected to reach more than 5,000 farming families.

While farmers' groups have been able to secure regular income through this initiative to enhance their livelihoods, participating institutions, such as local schools have, in turn, gained access to a wide variety of vegetables — about 20 — freshly picked from a nearby field. Depending on the weather, products are delivered once or twice a week. Prices are negotiated for one year while quantities are agreed over the telephone on a regular basis.

So far, about 60 farmer groups, representing 800 farming families, have signed contracts with 27 schools, two vocational institutes and one monastery. In 2013, farmers' groups supplied 456 tonnes of vegetables and generated approximately US$111.800 in revenue.

©SNV/Thinlay Wangchuk

In addition to the obvious financial opportunities for small farmers, the project is changing the business-as-usual approach of producing and marketing vegetables in Bhutan. It introduces a new business model based on increased production volumes, lower transaction costs — thanks to guaranteed sales and the proximity of buyers — and pre-agreed prices. This differs quite radically from the traditional model where farmers sit the entire day at roadsides and local markets, selling directly to consumers, which is often characterized by low volumes, high prices and high transaction costs.

Also, the obligatory nature of the contracts motivates the farmers' groups to be more efficient and reliable. In order to help support them, they are provided help identifying a paid marketing coordinator to keep track of customer preferences, control quality of products and, in case of shortage, source supply from elsewhere.

Finally, a year-round, regular delivery to schools requires the farmers to ensure off-season production as well. This, in turn, calls for production planning among members, diversifying vegetable production and access to new seeds, sprinklers, and other simple technologies.

In addition to schools, institutions like hospitals, army camps or monasteries have a high demand for vegetables. Recently, the central (Buddhist) monastic body sent a directive to its monasteries around the country asking them to buy locally-grown vegetables. This is an important opportunity that will require further support to farmers' groups, new agricultural inputs and regular monitoring to ensure successful implementation.

©SNV/Rik van Keulen