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Country profile - Bhutan


Bhutan, or the 'land of the thunder dragon', is a small, land-locked, mountainous country in South Asia, bordered by China and India. Land rises from about 150 metres in the south to about 7,000 metres in the north. Although a small country, Bhutan has a wide range of agro-ecological zones and climates, ranging from sub-tropical to temperate and alpine vegetation, providing opportunities to cultivate a wide variety of crops. This isolated Buddhist kingdom, identified as a global biodiversity hotspot, began to open up to the world in the 1960s, adopting a policy of cautious modernisation.


The country's economy is based on agriculture, forestry, tourism and the sale of hydroelectric power to India. About 70 per cent of the population live in rural areas and most depend on subsistence agriculture, including livestock and forestry. The average farm size is about 1.7 hectares. Poverty is almost entirely a rural phenomenon, and affects more than 30 per cent of the population.

With much of Bhutan too steep, too high or too cold to farm, only 8 per cent of land is cultivable, and most of this is fragmented and scattered in difficult terrain, making farm labour intensive and mechanisation difficult. Characterised by remoteness and inaccessibility, marketing and large-scale commercialisation is a significant challenge. In many rural communities, people have to walk from a few hours to a few days to reach the nearest road head. As a result, barter trade is prevalent in the country. Smallholder farmers also face other constraints, including the small size of landholdings, lack of irrigation, poor soil fertility, limited access to technologies and inputs, few off-farm employment opportunities, poor access to markets and high transport costs.

Rice is the main staple crop (© IFAD/Anwar Hossain)
Rice is the main staple crop
© IFAD/Anwar Hossain

Rice is the main staple crop and is grown by about 60 per cent of rural households. Over 500 varieties of local rice have been collected and catalogued. Bhutan consumes about 100,000 tonnes of rice a year but only produces half of that amount. Low-altitude rice is often grown in rotation with crops such as mustard, wheat, pulses and tropical fruit. Other major crops include maize, buckwheat, barley, foxtail millet, finger millet, potatoes and soybean.

While most households rear livestock for home consumption, livestock farming and nomadic herding are the predominant activities in the alpine and cool temperate zones. Over 80 per cent of rural households own cattle. Other significant livestock include poultry (reared by about 65% of rural households), pigs (38%), horses (23%), goats (15%) and yaks (2%). Inadequate pasture land and poor access to markets are significant constraints to improving production, but increasing urban demand for livestock products is encouraging farmers near urban areas to keep better breeds and improve feed and fodder management.

Making the most of trees

About 70 per cent of Bhutan is forested and 40% of this is protected. A significant proportion of the population depends on forests for timber, fuel wood and non-timber forest products (NTFP). Most NTFPs are used for subsistence purposes but, according to FAO, there are several that have great cottage industry potential, including Cordyceps sp. (parasitic fungi used in traditional medicine), Matsutake mushroom, lemon grass, and bamboo. To protect forests, the government is promoting community forestry and the establishment of fuel wood plantations in degraded areas.

About 28 per cent of rural households own orchards. The main crops include apple, orange, walnut, plum, peach, pear, guava and areca nut. To transform degraded mountain slopes, and address landslides and declining soil quality, the Mountain Hazelnut Venture is aiming to plant 10 million hazelnut trees over five years. It is hoped that the trees will stabilise the soil, sequester carbon and provide a sustainable source of firewood to thousands of farmers. By 2020 the venture hopes to be exporting more than 40,000 tonnes of hazelnuts worldwide.

Boosting trade

Bhutan has pledged to become the first completely organic country (© IFAD/Anwar Hossain)
Bhutan has pledged to become the first completely organic country
© IFAD/Anwar Hossain

With high mountains and narrow valleys, opportunities for producing food and generating cash income are limited but the government is committed to strengthening agricultural marketing by expanding local markets for primary products, exporting high value products and improving infrastructure, including roads, irrigation and research facilities.

In 2013, Bhutan's Minister of Agriculture and Forests also pledged to ensure that the country became the first completely organic country. The aim is to slowly ban the sale of pesticide and herbicide, and rely on manure and crop waste for fertiliser. The Buddhist state has also made commitments to protect its biodiversity, including the preservation of at least 60 per cent of its land as forest.

Statistical information
  • Country: Kingdom of Bhutan
  • Capital: Thimphu
  • Area: 38,394 sq km
  • Population: 725,296 (July 2013 est.)
  • Population growth rate: 1.15% (2013 est.)
  • Life expectancy: 68 (2013 est.)
  • Languages: Sharchhopka 28%, Dzongkha (official) 24%, Lhotshamkha 22%, other 26%
  • Inflation: 10.9% (2012 est.)
  • GDP purchasing power parity: US$5.036 billion (2012 est.)
  • GDP per capita: US$6,800 (2012 est.)
  • GDP composition by sector: agriculture: 14.7%; industry: 41.8%; services: 39% (2012 est.)
  • Land use: arable land: 2.49%; permanent crops: 0.46%; other: 97.06% (2011)
  • Major industries: cement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourism
  • Agricultural products: rice, maize, root crops, citrus; dairy products, eggs
  • Natural resources: timber, hydropower, gypsum, calcium carbonate
  • Export commodities: electricity (to India), ferrosilicon, cement, calcium carbide, copper wire, manganese, vegetable oil

Date published: January 2014


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