Dorji Khandu

Recommendation I

The analysis of 10 years of data from 2010 to 2019 exposed the following cross-cutting issues related to production and marketing:

• There exists a huge gap between the import and production of vegetables for tomatoes and onions,
• The productivity of cash crops such as apples and oranges are stagnant but increase in their import
• The import of never exported fruits such as banana, mangoes, papayas, pineapples and watermelon have been increasing
• The products such as apples shelled betel nuts and ginger are imported at a higher price than export.

Some of these crosscutting issues are expected to be addressed through the implementation of 3 years marketing action plan, which was approved in the 1^st Multi-Sectoral Committee (MSC) meeting and Agriculture Economic Contingency Plan 2020.  But, MSC has become weak by reducing the quarterly meeting required in the Policy to twice in the Terms of Reference and became non-functional for having met only once since the inception of the policy. The difficulty of getting common conveyance for the Committee meeting and having indecisive representatives from other stakeholders could have been discussed and resolved if the subsequent MSC meeting was held. Moreover, any crosscutting issue would have been the discussion points in the meeting and consequently strategized the appropriate action plans. Therefore, MSC has to be functional in order to put the marketing system in place by coordinating and harmonizing the approaches of all involved stakeholders as per the Policy and Terms of Reference.

Response:

A Multi-Sectoral Committee (MSC), following the RNR Marketing Policy 2018, was formed to address the Marketing issues of the cross-sectoral agencies.

After the formation of this committee, we organized the first meeting where the ToR of the MSC was finalized. We attempted for further meetings seeking agenda from the sectoral agencies. Having received no pertinent issues as an agenda, the secretariat of MSC couldn’t organize follow up meetings.

However, as this MSC meeting is important and as recommended by NC, the ministry will activate the committee and the meeting. The next meeting is scheduled for May 2021.

Recommendation II:

Various market infrastructures such as cold store, naturally ventilated store, large market, roadside market, farm shop, cooperative shop, sales outlet, packhouse, warehouse, processing equipment and others have been established by the Ministry and most are functional. Most of the infrastructures have been established independently by the Department of Agriculture Marketing & Cooperatives (DAMC) and the National Post Harvest Centre (NPHC).  From the field visits, it was found that most farm shops have limited storage space, roadside collection sheds have no toilet facility and only a few cold stores and other farm-level stores, which could assure longer storage life of products, have been established.

Having learned a lesson from COVID-19 and to deliver faster and better services, MoAF in collaboration with Thromde is establishing vegetable market sheds at other appropriate locations without having a future utilization plan of the existing Centenary Farmers’ Market.

During the Nationwide Lockdown because of COVID-19, people had access only to a limited quantity and variety of vegetables as the import of vegetables has been temporarily restricted. Also, many locally grown products like cabbages and ginger were spoiled when the export could not be done. It confirms the limited storage and processing facilities and poor distribution channels for fresh vegetables.

Thus, there is a need to establish smaller capacity cold stores at strategic locations facilitated by refrigerated vans, other low-cost farm level stores, future utilization plan of Centenary Farmers’ Market and small-scale processing equipment to improve the distribution of fresh and processed quality products within the country and export.

Response:

The development of market infrastructure for public use is one of the important strategies to facilitate marketing. In the fiscal year 2019-2020, the Department has supported the constructions of 17 market infrastructures including a large market facility in Dagana and Mongar.

In line with the need to build storage capacity in the country, the Ministry in collaboration with FCBL has initiated the establishment of 3 integrated Cold Stores and Warehouses-one each in Sarpang, Tashigang and Wangdue. These facilities are due for completion by August 2021. Further, the establishments of 5 Cold Stores are proposed in the forthcoming fiscal year 2021-2022.  SOEs such as FCBL and BLDCL were supported with the Refrigerated Vans.

The establishment of small capacity cold stores by private parties is also encouraged and ensured with support through cost-sharing mechanisms of 80:20 ratio i.e. the share of investment of 80% by the proponent and 20% by the Government. The Ministry has also issued a letter of interests to the private entrepreneurs for leasing of land and availing financial loans for the establishment of such structures.

The Ministry, as in the past, is continuously supporting producer farmers and processors with small scale processing equipment mainly through farmers group and cooperative development programs. For the coming financial year, the department has invited expression of interest for financial support to set up the cottage and small scale RNR based enterprises

Recommendation III:

Various market studies are carried out and uploaded on the DAMC’s website. Some of the findings of the studies are captured in the action plans of the Department but there is no assured coordination among the stakeholders for the implementation of the findings of the studies, for example, initiating the production of suitable cardamom variety for an international market.

Though the RNR-Enterprise Coordination Unit is going to facilitate with regards to enterprise development, any intervention is somehow delayed because the DAMC has to collaborate with multi-stakeholders especially the NPHC, implementing the value addition as well as market infrastructure, has no direct interaction in planning since NPHC is under the management of different Department, Department of Agriculture.

Under the financial scheme such as Corporate Business Development Scheme, buyback scheme and school and hospital program have benefited the farmers though implemented based on the budget availability.

With the introduction of the Good and Service Taxation system in India, the export of fresh produce faces some problems where the products get stranded unless there is prompt intervention from the concerned authority. With these hiccups, the products get spoiled and result in economic loss to the people.

There is a need to establish mechanisms among the stakeholders for

• Discussing the findings of market studies, for example, initiating the production of suitable cardamom variety for the international market
• Adoption of technically feasible processed products through stronger and formal collaboration between DAMC and NPHC

There has to be a continuous support to the existing financial schemes with sufficient budget and good public awareness.

The current stranded problem of fresh produce export has to be resolved in advance by working in collaboration with the counterpart authority.

Response:

In reference to resolving of issue of the stranded problem of fresh produce export various actions have been taken:

• The Ministry in collaboration with the Foreign Ministry has taken up the export trade regulatory issues with GOI and resolved them.
• The Ministry deputed marketing officials at Phuentsholing and facilitated the fresh produce export through the establishment of a dedicated agricultural export transhipment facility, escorting of outbound vehicles from green zones to transhipment facility and implementing the COVID 19 containment measures during the export.
• Producers/Exporters were linked with the potential buyers across the borders.
• Activated buyback scheme for those commodities such as cabbage and ginger which has a very low export price.
• Distribution and linking with domestic markets were facilitated

Recommendation IV:

Agriculture Marketing Information System (AMIS) is accessible through an online system as well as mobile apps. The online system has real-time prices of 37 commodities located in 23 markets across the country. It will also have information on the latest auction market prices linked through the Food Corporation of Bhutan. However, there is no information on the quantity of products required by the market and the public are not aware of AMIS.

To have better information, it is good to incorporate the estimated quantity of products required per market in the AMIS and also display it on TV screens in the Market. If possible, the estimated quantity, location of the products and cost of production needed to be incorporated in AMIS. Further public awareness of AMIS has to be carried out.

Response:

The Agricultural Market Information System (AMIS) was launched towards the end of June 2020 covering price market information of 37 commodities from 23 markets across the country. In addition, the provision of information on the latest auction market process is also linked with the Food Corporation of Bhutan Limited. Recently, two additional markets under Thimphu Thromde and two additional commodities have been also added into the system- thereby taking the total number of markets covers to 25 and commodities to 39. Over time, we wish to increase the coverage both of the market and commodity-based on the requirement.  However, as submitted earlier, one of the current limitations of the AMIS is the volume traded per market. Towards this end, the department through the project (EU-ITC), which supported the development of AMIS explored various options and means to capture the volume traded in each market. However, given the complexity in capturing such data from each market and having into the system, the department was advised that from the experiences of such systems in other countries, the best option would be to go for one time survey to capture the volume aspect, which will definitely add up to the cost. At the moment, the department is exploring how best to incorporate the volume aspect with the support of EU-ITC into the current AMIS.

MINISTRY OF FINANCE (MoF)

Recommendation V:

The availability of   CSI banking service at Gewog Level has reduced the travel of people to the Dzongkhag and the online application has reduced the administrative burden but the delay of loan approval is a concern for the loan applicants.  The disqualification of loan application criteria as per the credit manual 2020 is not available on the CSI website for the public. The technical recommendation letter from the respective department has to be produced manually.  Therefore, CSI bank has to upload the disqualification of loan application criteria on the website and need to work for providing the technical recommendation letters from the respective Department electronically. Further, the management has to expedite the loan approval by setting the turnaround time for every loan portfolio.

Response:

• The delay in the loan approval happened last year mainly because of the following reasons:

1. Increase in unexpected numbers of applicants (especially in response to monetary measures of RMA wherein interest rates were reduced).
2. National lockdown on two occasions from August 11th  to 11^th September and December 2020 to January 2021, severely hampered the bank to manage the loans.
3. As the new Core Banking Solution (CBS) system was underway, all the applications were processed manually. However, CBS is on trial starting this month.

By the end of 2020, the bank had almost 2000 pending applications. The pending applications were completed only recently. Now, the bank expediting the process and reduce the turnaround time for Microloan ( Loans up to Nu. 500,000) to a maximum of 10 working days and for CSI loan to less than 21 days. To make it possible, the bank has started to approve the loans on a weekly basis and sign the legal documents at the geog level through CSE without requiring the applicants to report to the HQ/Dzongkhag office as it used to be in the past.

• CSI bank credit manual contains eligible criteria and conditions for loan application but does not specify the disqualification criteria for loan applicants and the manual is for internal use and can’t be given on the website.   Although the rejection loan applicants very low,  these are based on the nature of projects and their feasibility, completeness of required documents and consonance with the bank’s mandate. However, the bank has uploaded eligibility criteria on the bank’s website along with the checklist.
• We already have the practice of receiving technical clearances from agriculture and livestock officers from the Gewogs. This information is electronically transmitted to the approving authority of the bank.

During the deliberation, some members expressed dissatisfaction with the responses received, particularly on three recommendations (1, 3 and 5). Hence the House directed the Natural Resources and Environment Committee (NREC) to re-deliberate with the concerned members and issues to be resolved accordingly.