Increasing Agribusiness Growth in Bhutan

Abstract

The policy note assesses Bhutan's agribusiness sector and recommends steps the Royal Government of Bhutan (RGoB) might consider to increase the sector's growth. The analysis relies primarily on Enterprise Survey conducted in 2015, supplemented by extensive literature reviews and fieldwork. Several overarching conclusions emerge: (i) public sector institutions supporting agribusiness have the opportunity to refine their incentive structures for greater impact on the growth and development of Bhutan's private agribusinesses; (ii) Bhutan is already endowed with the agro-climatic conditions and technical capacity to produce and market several agricultural products, providing the RGoB with the opportunity to increase agribusiness export volumes and value; (iii) although Bhutan has policies in place to promote both domestic and foreign direct investment (FDI), the RGoB has additional opportunities for spurring greater investment and innovation in agribusiness; and (iv) while the agribusiness sector has experienced significant gains in access to finance, more can be done in the banking sector to support marketing, processing, and exporting agri-food products.