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๐€๐ ๐ซ๐ข๐œ๐ฎ๐ฅ๐ญ๐ฎ๐ซ๐š๐ฅ ๐’๐ž๐œ๐ญ๐จ๐ซ ๐€๐๐š๐ฉ๐ญ๐ฌ ๐ญ๐จ ๐๐ž๐ฐ ๐‘๐ž๐š๐ฅ๐ข๐ญ๐ข๐ž๐ฌ ๐š๐ฌ ๐ญ๐ก๐ž ๐๐š๐ญ๐ข๐จ๐ง ๐Œ๐จ๐ฏ๐ž๐ฌ ๐“๐จ๐ฐ๐š๐ซ๐ ๐‡๐ข๐ ๐ก-๐ˆ๐ง๐œ๐จ๐ฆ๐ž ๐’๐ญ๐š๐ญ๐ฎ๐ฌ

โ€ฆ๐’”๐’•๐’“๐’‚๐’•๐’†๐’ˆ๐’Š๐’„ ๐’Š๐’๐’—๐’†๐’”๐’•๐’Ž๐’†๐’๐’•๐’”, ๐’”๐’‰๐’Š๐’‡๐’•๐’Š๐’๐’ˆ ๐’‘๐’“๐’Š๐’๐’“๐’Š๐’•๐’Š๐’†๐’”, ๐’‚๐’๐’… ๐’”๐’–๐’”๐’•๐’‚๐’Š๐’๐’‚๐’ƒ๐’๐’† ๐’‘๐’“๐’‚๐’„๐’•๐’Š๐’„๐’†๐’” ๐’”๐’‰๐’‚๐’‘๐’† ๐’•๐’‰๐’† ๐’‡๐’–๐’•๐’–๐’“๐’† ๐’๐’‡ ๐’‚๐’ˆ๐’“๐’Š๐’„๐’–๐’๐’•๐’–๐’“๐’†

By Lhendup Wangmo

As the country sets its sights on achieving high-income status by 2034, the agricultural sector, particularly the Renewable Natural Resources (RNR) sector, plays an indispensable role in shaping the future of the economy. Over the years, this sector has undergone significant transformations, marked by strategic shifts in budget allocation, changing priorities in agricultural policies, and evolving trends in production and export. While agriculture continues to be a cornerstone of the nation’s economic strategy, the focus has progressively moved from basic infrastructure development to more sophisticated and sustainable practices aimed at driving growth, enhancing productivity, and addressing global challenges such as climate change and food security.

In the early stages of the country’s development plans, particularly during the first four Five-Year Plans (FYPs), the government made a substantial commitment to the agricultural sector, which received a significant portion of the national budget. During this period, nearly 40% of the total national budget was allocated to the RNR sector, reflecting the priority placed on ensuring food security and the development of agricultural infrastructure.

Key investments during this time included the construction of irrigation systems, the establishment of regional research centers, and the expansion of agricultural offices across the country. These initiatives laid the groundwork for future agricultural development, helping establish a strong foundation for food production and agricultural self-sufficiency.
Dr. Karma Dorji, a former agriculture minister, commented on this phase, stating, โ€œThe early investments in infrastructure were critical for the development of agriculture in the country. They set the stage for food security and helped farmers increase their productivity at a time when the nation was focused on self-reliance.โ€

From the Fifth FYP onward, however, there has been a notable shift in the priorities of the RNR sector. The percentage of the national budget allocated to agriculture began to decline significantly. By the 12th FYP, the share of the national budget dedicated to the sector had dropped to just 2.4%, a sharp contrast to the previous decades when agriculture received a far larger portion of government spending. This decline was not due to a reduction in commitment to the sector but rather a strategic reorientation towards enhancing agricultural productivity, improving service delivery, and fostering commercialization.

Despite the relative decline in the percentage of the national budget allocated to the sector, the absolute budget for the RNR sector has continued to grow. The sectorโ€™s budget increased from a modest Nu. 6.6 million in the First FYP to Nu. 7.49 billion in the 12th FYP. In the upcoming 13th FYP, the expected budget allocation is even higher, projected to reach Nu. 14.98 billion, signaling continued government investment in agriculture, albeit with a more focused approach to modernizing practices and boosting the sectorโ€™s contribution to the nationโ€™s economic diversification.

Economist Tshering Norbu commented on this trend, saying, โ€œThe decrease in the percentage of the national budget allocated to agriculture should not be seen as a retreat from agricultural development. Instead, it reflects a broader economic strategy where the government seeks to modernize agriculture, diversify the economy, and invest in sectors with higher potential returns.โ€

The agricultural sectorโ€™s contribution to the national economy has seen steady growth, both in absolute terms and in its share of GDP. From 2000 to 2023, the sectorโ€™s contribution to the national GDP has consistently increased, reaching 12.48% in 2023, up from 9.15% in 2010. This steady increase in agricultural output highlights the sectorโ€™s resilience and the success of recent initiatives to improve productivity and efficiency.

Even as fewer people are employed in the sector, the contribution of agriculture to GDP has remained strong. This reflects the rising productivity per worker, a trend driven by the adoption of more efficient farming practices, the introduction of modern technologies, and a greater focus on value-added agricultural activities, such as agro-processing.

Dr. Nima Wangchuk, a senior researcher at the Royal University, noted, โ€œThe increase in agricultureโ€™s contribution to GDP, despite the decline in the share of the workforce employed in agriculture, is a clear sign of the sector’s growing productivity. This shift towards more productive and sustainable farming practices has been key to the sectorโ€™s ongoing success.โ€

In recent years, the country has seen significant growth in its agricultural exports. In 2023, the nation exported 27 different agrifood products, generating Nu. 2.3 billion in revenue. However, this increase in agricultural exports has not been enough to balance the growing trade deficit in the agrifood sector. The trade deficit has steadily widened, from Nu. -157 million in 2010 to Nu. -905 million in 2023. This trend highlights the challenges the country faces in achieving a more balanced trade relationship in agrifood products, particularly as demand for imports continues to rise.

The widening trade deficit highlights the need for continued investment in boosting domestic agricultural production and enhancing competitiveness in the international market. While export growth is encouraging, policymakers face the ongoing challenge of ensuring that the nationโ€™s agricultural sector can meet both domestic demand and the growing export potential, all while managing environmental sustainability.

The agricultural sector continues to provide a significant source of employment, particularly in rural areas. However, between 2010 and 2023, the percentage of the labor force employed in agriculture has declined from 59.4% to 43.5%. This decrease is indicative of a broader shift as the nation diversifies its economy, with more workers moving into industries like services and manufacturing.

Even though fewer people are employed in agriculture, the sectorโ€™s GDP share has continued to rise, reflecting higher productivity and value-added activities. The decline in agricultural employment is also a result of modernization efforts, as farming becomes increasingly mechanized and efficient.

Tshering Norbu remarked, โ€œThe shift in employment patterns is a natural consequence of economic diversification. While fewer people may be working in agriculture, the industry is becoming more productive, with a growing focus on high-value-added activities.โ€

As the country aims to meet its goal of high-income status by 2034, the RNR sector will continue to play a central role. The 13th FYP focuses on enhancing agricultural productivity through sustainable practices, increasing the adoption of modern technologies, and improving market access for farmers. Special emphasis will be placed on empowering women and youth, ensuring that they play an active role in shaping the future of agriculture.

โ€œThe future of agriculture lies in innovation and sustainability,โ€ said Pema Choden, a young agripreneur. โ€œWe need to embrace modern farming techniques and ensure that the next generation of farmers is equipped with the knowledge and tools needed to succeed.โ€

The 13th FYP also aims to align agricultural policies with the United Nationsโ€™ Sustainable Development Goals (SDGs), ensuring that the sector grows in an inclusive and environmentally sustainable manner.

The agricultural sectorโ€™s evolution reflects both the challenges and opportunities faced by the nation as it balances the need for growth, sustainability, and economic diversification. While the percentage of the national budget allocated to agriculture has decreased, the absolute budget increase signals the sectorโ€™s continued importance in the broader economic strategy.

As the country works toward its goal of becoming a high-income economy by 2034, the agricultural sector will remain central to its development, providing food security, addressing climate change, and supporting rural employment. The shift towards modernized, sustainable, and efficient agricultural practices will be key to the sectorโ€™s continued success and its ability to contribute to the countryโ€™s economic growth.

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