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Livelihoods

Main Activities and Income Sources

The economy of Bhutan is characterized by self employed households, particularly those working on their own land. The number of persons working for wages is relatively small. Among the employed persons in Bhutan, two thirds are employed in the agriculture sector; three out of twenty work in industry (private business, joint stock company, cooperative and joint venture); three out of twenty work in the services sector (government. corporations and armed forces); and one out of forty work in other enterprises.

The table below presents the distribution of male and female employment by major sector in urban and rural areas. There are contrasts between the urban and rural population. In urban areas, half of employed persons work in services, two fifths in industry, seven percent in agriculture, and the remaining three percent in other enterprises. In rural areas, more than eighty percent of employed persons work in agriculture. There are also contrasts between males and females. In rural areas, 90 percent of employed females work in agriculture, while among employed males in rural areas, three fourths work in agriculture. In urban areas, about three out of five employed males work in services, while among employed females, half work in industry and three out of ten works in services.

Distribution of Employed Persons by Major Sector, Sex and Area (Percent), 2007

Area/Sex

Main Sector of Employment

Total Number of employed persons

Agriculture

Industry

Services

Others

Total

Urban

6.9

42.0

48.2

2.9

100.0

60,400

Male

2.3

24.0

37.5

1.0

100

39,000

Female

13.2

51.1

30.2

5.5

100

21,400

Rural

83.5

6.8

7.4

2.2

100.0

213,600

Male

76.9

8.3

11.9

2.8

100.0

107,700

Female

90.3

5.3

2.9

1.6

100.0

106,000

Bhutan

66.6

14.6

16.4

2.4

100.0

274,100

Male

57.4

16.0

24.2

2.5

100.0

146,700

Female

77.3

13.0

7.4

2.3

100.0

127,300

Note: Figures rounded off to nearest hundreds; totals may not add up due to rounding.                                                                                                  Source: BLSS 2007, NSB

The private sector is emerging as a very important sector that is generating employment opportunities in response to the increasing labor supply.

 

Main Sources of Vulnerability in Bhutan

 

 Limited Land Holdings

The majority of farmers own a limited amount of land. About two in five households are landless: the proportion of landless households (82%) in urban areas is twice the national average. In rural areas, only one out of five households is landless. Although owning land is more common in rural areas, the area of land owned by rural households is usually not very large: seven out of every ten rural households own lands less than 5.0 [4] acres, and only one out ten rural households own more than 5 acres. Land ownership is observed to be inversely related with per capita expenditures.  Less than half of the richest households own land, with only about one in twenty rich households owning more than five acres of land, while among the poorest quintile a large proportion of households (85.5%) own land, although most of these households (74.2%) own less than 5 acres of land.

 

Low Agricultural Productivity 

Food grain production is characterized by low soil fertility, low usage of chemical fertilizer and plant protection materials due to lack of funds, access and environmental concerns. Agricultural productivity in Bhutan is constrained by the rough, rugged terrain, outdated technologies, pests and diseases, poor farm management, limited physical and human capital and fragmented land parcels.

 

Rural to Urban Migration

 Rural to urban migration has negatively impacted farm productivity. The emigration of younger portions of the populations from rural areas has left vllage homes to aging sections of the population. Total land holdings per household, which are already low, are expected to decline further because of land fragmentation. Poor soil conditions and the lack of knowledge of modern agriculture practices limit farm productivity. Farm mechanization has the potential to enhance the economic efficiency of farms, alleviate farm labor shortages, reduce the drudgery associated with farming, and improve the image of farming, thereby reducing rural to urban migration. However, farm mechanization is limited by the rugged topography, small landholdings and lack of funds.

 

Crop Damage Increasing Due to Attacks by Wild Animals and Pests

The destruction of crops by wild animals, pests and insects is one of the most damaging factors effecting farmers in recent times. Substantial farm losses were reported by 42 percent of all households during 2005. [5]

Shortage of Farm Labor 

Land use practices in Bhutan are very labor-intensive. Unfortunately, there is a shortage of labor in the villages. Although improvements in farming practices are contributing to labor saving and increased production, inefficient production and post-harvest practices are prevalent, reducing food security and lowering returns to cash crop production.

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Lack of Opportunity

Among the employed persons in Bhutan about 77% are employed in agricultural sector (including agriculture farmaing and collective farm).  13%  work in industry, 8% work in service sector, 2% work in other enterprices. The employment status shows that the majority of the households are employed in the agricultural sector. Employment opportunities in secondary and tertiary sectors are still limited which means that the agricultural sector, which is faced with low productivity, will continue to absorb the majority of the labor force until the secondary and tertiary sectors become expanded.

 

Coping Strategies

About 79 percent of Bhutanese farmers are engaged in food grain production, mainly rice, wheat, maize and buckwheat; many supplement their crops with small scale pig and poultry holdings. Few families own cattle, those that do usually use them for milk and milk products. Small farmers face production constraints, particularly in land acreage, technology, research, access to markets for farm inputs and surplus produce. The total arable land in the country is roughly 7.8 percent, out of which 21 percent is devoted to wet land crop production, 43 percent to dry land, and 27 percent engaged in shifting cultivation.

Government interventions in supporting farm activities are leading to diversification into cash crops. This has benefited a small number of farmers with alternative, supplemental sources of income. However, due to structural and geographical problems related to accessibility, economies of scale, research and extension, technology, high per unit cost of infrastructure and high transportation costs, making large-scale commercialization a huge challenge. Due to this shortfall in asset ownership on small farms, adjusting and adapting to the rapidly changing global environment is daunting.

Food grain shortages are seasonal, mainly from May to July, which coincides with the planting season and bad weather conditions that affects transportation. About 56.1percent of rural households suffer 2.2 months of food shortage a year. [6] During these periods, households with adequate income procure food grains from the Food Corporation of Bhutan (FCB).

 

Food Consumption and Dietary Diversity

Total food consumption in Bhutan amounted to Nu. 681  [7] Million, 37 percent of which was consumed by urban populations (Nu. 255 Million) and the remaining from the rural population (Nu. 425 Million). The share of consumption expenditure of meat, and food taken outside the home in the total food consumption of urban households is much more than those of rural households. Rice has a higher share in the food consumption expenses of rural households than that of urban households.

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Vulnerable Profiles

About 23 percent of Bhutan’s population is poor (per capita consumption below poverty line of Nu.1,096.94) and 5.9 percent are subsistence poor (per cpaita consumption below food poverty line of Nu.688.96). The districts of Zhemgang, Samtse, Samdrupjhongkhar, Monggar and Lhuntse districts are the five districts with the lowest food consumption and the highest incidence of poverty. In general, people in food deficit areas experience an average of over 2 months of food shortages. Bhutan’s food production is not yet at the self-sufficiency level.  Domestic production has not been able to keep pace with demands, and the country continues to import food grains and cereals, especially from India.

Bhutan is not spared by the external shocks affecting markets/trader’s activity, it is prone to many kinds of natural, economic and political shocks. Monsoon flash floods, landslides, GLOF, hailstorms, windstorms, crop damage by wild animals and pests, inflation, market closure due to ban on movement of commodities, strikes and lockouts etc. leads to fluctuations in market as there direct relationship between the market price of goods with seasonal variability and shocks. During periods of shocks, prices are usually unstable, making consumers pay higher than normal market price.

 

Geographic Distribution of Food Security

Bumthang, Paro, Thimphu, and Punakha are the most food secure areas. On the contrary, more than 90 percent of the geogs in Chukkha, Samtse Dagana, Gasa, Samdrup Jongkhar, Sarpang and Trongsa have groups of women and children that are vulnerable to food insecurity.



[1] PAR 2007

[2] NSB, QUARTERLY CONSUMER PRICE INDEX BULLETIN, 1st qtr 2008

[ 3] BLSS 2007

[4] BLSS 2007

[ 5] Agriculture Statistics-2005, Dept. of Agriculture, MOA, July 2007

[6]  Bhutan MDG Needs Assessment and Costing Report (2006-2015), Planning Commission, Nov.2007

[7]  BLSS 2007, NSB

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