Bhutan’s agricultural landscape is set for significant transformation with the launch of a major initiative aimed at modernizing and energizing the country’s rural economy. The Ministry of Agriculture and Livestock unveiled a five-year World Bank-funded project today, worth approximately USD 35 million (Nu 3 billion), which seeks to enhance the value of key agricultural products and propel economic growth.
At the heart of the initiative lies the enhancement of Bhutan’s Renewable Natural Resources (RNR) sector, with a focus on value addition and job creation. The project aligns with the national vision of achieving the goals outlined in the 13th Five-Year Plan and lays a foundational pillar for the development of the upcoming Gelephu Mindfulness City—an economic and spiritual hub announced earlier this year.
Boosting Priority Agricultural Value Chains
The project targets four major commodities: dairy, citrus, potatoes, and forest-based products. These value chains have been earmarked for their potential to substantially increase Bhutan’s agricultural contribution to the national GDP.
“Citrus and potatoes stand out as two of our most promising export products,” said Leki Choda, Senior Planning Officer at the Ministry of Agriculture and Livestock. “Their enhancement could help us reach our target of contributing Nu 50 billion annually to the GDP and achieving Nu 6 billion in agricultural exports by 2029.”
Unlike broader subsidy programs, this project has narrower reach, aiming to support farmers who specialize in the targeted commodities. This strategic focus, officials state, is essential for maximizing impact and driving economic gains where they are most feasible.
Unlocking Forestry’s Untapped Potential
For the first time, the ministry is also investing in the value chain of wood and timber-based industries. Despite covering nearly 70 percent of the country’s land area, Bhutan’s forests currently contribute less than three percent to its GDP.
“This project gives us the opportunity to fully harness the economic potential of our forests,” noted Tashi Norbu Waiba, Principal Forestry Officer. “Through value addition in the timber sector, we hope to raise our contribution to national income, while also integrating private sector engagement more effectively.”
Supporting the Gelephu Mindfulness City Vision
The project is expected to play a pivotal role in supporting the construction and operational needs of the Gelephu Mindfulness City, an ambitious development poised to promote Bhutan’s unique model of mindful, sustainable living.
“As the city will rely heavily on locally sourced timber, this initiative will help ensure supply chains are prepared to meet demand with high-quality forest products,” Waiba added.
Building Partnerships and Ensuring Sustainability
In addition to production and processing improvements, the project emphasizes the importance of building stronger, market-driven relationships between farmers and agribusinesses. According to Tomás Rosada, World Bank’s Practice Manager for South Asia, “The goal is to foster productive alliances that enhance value addition, widen market access, and foster wealth creation throughout Bhutan’s agri-food system.”
To track progress and ensure accountability, a centralized Project Management Unit has been established. The unit will oversee all implementation aspects, backed by robust monitoring and learning frameworks to drive continuous improvement.
With its focus on innovation, sustainability, and inclusion, the agriculture ministry’s latest venture aims not only to bolster Bhutan’s rural economy but also to create a model for mindful, nature-based development in the region.
