Bhutan Announces 100% FDI in Agriculture Sector

The government of Bhutan has announced a significant policy shift, allowing 100 percent foreign direct investment (FDI) in the agriculture sector. This move aims to boost the production of six key commodities: mandarin, quinoa, rainbow trout, black pepper, asparagus, and strawberry. This is an increase from the previous limit of 74 percent FDI.

The announcement was made at the inaugural session of the Bhutan Agrifood Trade and Investment Forum (BATIF) 2024, where Lyonchhen Tshering Tobgay emphasised the need for modern technologies and climate-smart approaches to enhance agriculture in Bhutan. He acknowledged the challenges posed by rugged terrain, climate change, human-wildlife conflict, farm labour shortages, and land fragmentation, but also highlighted the compelling opportunities for growth.

Lyonchhen discussed the potential for growing organic apples in Bhutan, developing feasible markets, and exporting them to support smallholder farmers and entrepreneurs. Minister of Agriculture and Livestock, Younten Phuntsho, stressed the importance of innovation, technology, and sustainable practices to achieve a modern, efficient, and market-oriented agri-food system. He emphasised the need for collective effort and collaboration to harness these opportunities.

Bhutan aims to reshape and transform its agri-food system to contribute to the nation’s food and nutrition security and global sustainability efforts. The sector is supported by a robust macro-policy framework, including key policy documents such as the Food and Nutrition Security, National Food System Pathways, and Low Emissions Development Strategy, all aligned with Bhutan’s Gross National Happiness (GNH) framework.

Industry Minister Namgyal Dorji highlighted that investments in agriculture should empower farmers, noting that Bhutan already hosts several foreign investors and has the potential for further collaboration. The government will also allow the employment of foreign expatriates in Bhutan without restrictions, facilitating the inflow of expertise and investment.

Currently, approximately 8,000 smallholder farmers are operating in Bhutan. The government’s support aims to help them achieve innovative, resilient, and sustainable outcomes in agriculture. The primary sector’s contribution to GDP has steadily declined from 38 percent in 1992 to 14.67 percent in 2022, despite employing 43.5 percent of the population on 2.75 percent of arable land.

This strategic move to open up 100 percent FDI in agriculture is expected to revitalise Bhutan’s agri-food sector, enhance production capabilities, and ensure sustainable economic growth.