Working with Farmer

The Druk Horticulture Pvt. Ltd. (DHPL), a private sector company has begun its journey with farmers.  It works with farmer in two ways: 

(1) Contract Farming with farmers organized into Producers Group, and

(2) Collaborative Farming with land owners having idle land who are willing to invest in their farm. 

The mode of contract farming has been adequately deliberated and refined. 

The concept of collaborative farming is being refined. 

Collaborative Farming

Idea: If someone is having 10 acres or more land and has the will and capacity to invest and share profit, the Druk Horticulture Pvt. Ltd. is willing to collaborate.

The modus operandi for Collaborative Farming:

1.      Land owner

1.       Hire Druk Horticulture Pvt. Ltd. for technical evaluation of farm and generate detailed report on investment economics including infrastructure and facilities, and crops and cropping calendars, and profit scenario.

2.       The owner, if accepts the plan, shall invest either directly or through Bank loans.  The total cost shall be borne by the owner including capital investment cost and operating cost including the salaries of managers and wages for worker.

Druk Horticulture Pvt. Ltd.

1.       Execute the work as planned and agreed upon and report to the owner.

2.       Maintain accounts of expenditure and submit to the owner on monthly, quarterly and annually (Balance sheet and P&L account). 

3.       Maintain complete transparency of the operation.

4.       Use technologies and agricultural inputs dealt by DHPL.

Profit Sharing

Once all the investment costs are paid and net profits is accrued over and above the operating cost, the net profit shall be shared at a ratio of 75:25 between the owner and the Druk Horticulture Pvt. Ltd. till the agreed period is over.

Social Benefit

1.       The unemployed youth will get job, who in turn upon gaining experience and confidence may like to go back to their own farm.

2.       Substitute import and increase export.

Pending Issue

Policy support to reduce the initial capital investment cost

Farming in Bhutan

Many farms in Bhutan are either not cultivated, semi-cultivated by aging farmers or poorly cultivated by care takers. 

Many farm owners are financially capable to make investment in their farms but the question arises as who will manage the farm. 

Youths are showing their back to the farms simply because profitability is low.

Farmers are not using technologies to increase labor productivity and hence they continue to practice low input subsistence farming.  

The input cost are exceedingly high.  For instance a farmer in India across the border pays Rs. 350/= to Rs. 400/= for a 50 kg bag of Urea or Single Superphosphate (SSP) in Jalpaiguri district (at Falakata), while a Bhutanese farmer pays Nu. 895/= for the same bag of fertilizers.

In India the green house is subsidized to the extent of 50 to 75%.  In Bhutan there is no subsidy.  The cost of green house is very high as 20% custom duty and 10% sales tax is levied on the actual cost of green house.  

Vermicompost and bio-organic manure to practice organic farming is not allowed to import.  As such constraints for taking up agriculture as an enterprise are many more.

Until we bring down the cost of production technologies and inputs, and thereby bring down the cost of production vis-à-vis increase profitability, desiring youths to take up agriculture will be a wild goose chase.