Bhutan was traditionally self-sufficient in food production. Most of Bhutan’s citizens and a significant amount of its GDP were devoted to the agricultural sector in the late1980s. Bhutan is a small landlocked eastern Himalayan country which is bordered by India in the east, west and south and china in the north. Its geographical land area is 38,394km which is almost entirely mountainous. According to the Population and Housing Census, 2005; the Bhutanese population is close to 700000, out of which almost 70% reside in country sides.Moreover the NSB report 2007 also states 23. 2 % of Bhutanese people are poor and of that 98. 1% of the rural population are poor based on the national poverty line of Nu. 1096. 94 per month. As per the vision of 10th five year plan rural livelihood in Bhutan is supported by farming which is characterized by inherent inter-dependence among forests, livestock and agricultural enterprises. Therefore, enhancement of rural livelihood will involve improvement of economic returns from these enterprises.Commercialization of farming and diversification of utilization of forest resources will be promoted to facilitate development of rural-based small-scale industries to process and add value to the products. Through this alternative employment and livelihood opportunities will be enhanced. The pursuit of this objective will lead to increase in food production and enhancement of cash income to the rural population and contribute to poverty alleviation. Before going further it is important to know what agriculture is.Most of us believe that agriculture is something to do with farmers. Yes of course it is but agriculture is more than this. According to the web definition “agriculture is the art and business of cultivating soil, raising livestock and producing crops. It is also called farming or husbandry”. Agriculture in Bhutan is still centered on smallholders, primarily subsistence –orientated, mixed crop- livestock farming systems with variable access to the marketing opportunities for small surplus production.Traditionally because of the farming challenges such as geographical location, limited access to farm road, limited information about market, and limited variety of seeds for farming farmers in Bhutan are only engaged in producing what is needed for themselves. Tobgay (2005), also argued that majority of Bhutanese farmers are small and marginal. A small farmer in Bhutan subsists on farming by growing crops ranging from rice, wheat, maize, buckwheat, potatoes and barley depending on the climatic conditions. A sub-sector or certain section of the farmers also dwells on animal husbandry by rearing cattle.Farming in Bhutan is a challenge because of small land size holding and rugged topography with steep slopes of most agricultural land, making farm labor intensive and mechanization difficult. Further, majority of the farms are located at a distance of roughly five to six hours walk from the nearest road head. Gurung (2012) also stated in his study that “Bhutanese agriculture is still largely based on the traditional subsistence oriented mixed farming systems that integrate cropping, livestock rearing, and use of forest products”.As a subsistence farming, Bhutanese farmer grows crops ranging from rice, maize, wheat, buckwheat, potatoes, barley, millet and mustard depending on the climatic conditions, apart from livestock rearing which is also an integral part of the farming life in Bhutan. It is important as it supports food, draught power and nutrient recycling (Gurung, 2012). However, the agriculture contribution to GDP has been declining over the years, its contribution has declined from 26% in 2001 to 19% in 2008 (NSB,2009), yet agriculture still is still one of the most important sector in the Bhutanese economy and development process.As important it is the government of Bhutan has also initiated its development and growth in its development policies. The government has also instituted RNR sector particularly to develop and increase agricultural output not only for consumption but also for surplus production which government intends to export. This mission is in line with the vision 2020, in which Bhutan aspires to be self sufficient or self reliance by the year 2020. However, by looking at the annual budget allocation to the agricultural sector, annual budget has been declining over the years; i. . 44% in 4th five year plan to 5. 5% in 10th five year plan. Moreover, the land use for the agriculture is only 2. 93% which is far less I believe; for achieving the self sufficiency vision. As per the current production of the cereals under the current use of land for agriculture only 60% of the domestic demand is met and rest is imported and despite 23 varieties of rice cultivation in 22550 ha (DoA,2010) with the total production of about 71,737 MT of rice annually, Bhutan still imports about 50% of its rice demand (Ghimiray, 2012).Tobgay (2005), in his study stated that within the broad framework of the national development strategy, the specific policy objectives are: • The sustainable development of arable agriculture, animal husbandry and forestry. • Improvement of income, living and nutritional standards of the rural population. • Environmental conservation, emphasizing an integrated crop/livestock/forestry system’s development. • To intensify the integrated approach towards achieving at least 70% self-sufficiency in food grains. • To maintain at least 60% of the country’s area under forest cover. To develop and promote high value low volume cash crops that offer comparative advantages over other crops. Looking at the current employment of the Bhutanese population in agriculture sector with almost 60% of the population engaged in agriculture there is utmost need for growing alternative food or fruit trees to diversify a traditional farm practices to increases profits for the rural population. Agricultural diversification can spread economic risk and offer profitable niche markets, lessen impact on environmental resources strained by monoculture and, sometimes, offer new opportunities to strengthen communities (Tobgay, 2005).If we do not diversify our agricultural practices then the economy one of the worlds smallest and least developed is dominated by small-scale subsistence farming based on traditional technology and with relatively little economic interaction outside local communities (Tobgay, 2005). However, diversification of agriculture in my opinion would mean producing more variety of crops, vegetables and fruits for not only consumption but also for sales. For this to happen there is a need for more land for farming, which is not possible without converting the forest cover into farming land, which I guess is not possible because of the government olicy and constitutional requirement of minimum of 60% of forest cover for all times to come and top of that increasing in the rate of forest fire poses even higher threat. On the other hand, government has been constructing and connecting all the 205 gewogs with the feeder/farm roads, providing farming supports, variety of seeds through the support of RNR sector and on top of that RNR sector personals are also providing training and infrastructural requirement for raising mushroom and lemon grass oil.Not only that the government is also encouraging rural farmers in producing more agricultural product by helping them to market their products both within and outside country which can generate farmers some income (Tobgay, 2005). Bhutan is also focusing on producing and supplying of organic agricultural product into the world market owing to the changes in the world demand for organic product as people are becoming more health conscious.Dem and Minot () also stated in their study that organic farming is increasing being promoted worldwide as a better option to conventional farming in terms of producing healthy food and alleviating poverty with a huge sustainability potential paradigm coupled with relatively less environmental damage. Barclay (2012), in his article pointed out that in Rio+20 Conference on Sustainable Development, Ex. Prime Minister Jigmi Y Thinley also said that Bhutan government is developing a National Organic Policy with the believe that Bhutanese farmers are convinced that working in harmony with nature will help sustain the flow of natures bounties.But, in reality going 100% organic is not possible because farmers covet chemical fertilizers and pesticides to enrich their soil, boost production and keep diseases and pests at bay. Moreover, consuming organic product will be expensive for consumers and as a result only wealthy section of the society will be benefited. And an article last year in the Bhutan Observer notes that many farmers who grow export crops like apple, Mandarin orange, and potato already rely heavily on chemical fertilizers and could be reluctant to give them up.As such going 100% organic by 2020 for Bhutan is a huge challenge. Some of the limitations to the agricultural productivity in Bhutan are: Institutional Constraints A number of institutional constraints are present in Bhutan and they create considerable challenges to the existing institutions that are trying to ameliorate food insecurity. Some of the constraints are: • Shortage of agricultural land • Despite being a pre-dominantly agrarian economy, the share of the Bhutanese agriculture sector’s (cropping, horticulture, livestock and forestry) contribution to the GDP is declining drastically.Only 7. 8% of the total land cover is used for agriculture and food production. Inequalities in land ownership and tenancy exist significantly. About 14% of the total farming community owns less than an acre of land. • Inadequate agricultural inputs and subsidies • A number of essential subsidies for farm supplies and inputs have been discontinued increasing the drudgery of farm work. Even the distribution of farm machinery and equipments has been biased across regions. • Rural credit and micro-finance have not been adequate for the rural poor.Farmers are unable to provide security for individual loans and/or are not able to participate in innovative pro-poor lending schemes, which is nonexistent. Localized Shocks The presences of localized shocks (environmental, economic and political) are present, but a proper mitigation for coordinated stakeholder preparation and response is yet to be put in place. Road Connectivity Although it has been proven that road connectivity is a leading pre-condition for rural access, road networks are still short of the desired targets. About 49 geogs are still more than eight hours away from the nearest navigable road.Market Development Because of poor roads and rugged terrain, the high costs of commodities are significant barrier to the competition of products, particularly in the international market. Because of this, the prospects of benefiting from international markets, other than the regional and domestic markets, is likely only high-value goods that can overcome high transportation costs. The Food Corporation of Bhutan’s system of importing and maintaining a reserve stock of essential commodities appears to be loosing its effectiveness.Markets have diversified compared to levels, but prices are almost on par with commercial rates, a destabilizing factor for market performance. Shortage of Farm Labor The increasing shortage of farm labor, because of rural to urban migration, coupled by competition from growing imports of cheaper food items is a constraint for addressing internal food production rates. Conservation vs. Productivity The policy of maintaining 60% of the land under perpetual forest cover, inter-alia the strong policy of environment conservation is conflicting with productivity, commercialization and food self reliance objectives.High Cost of Agricultural Production Agricultural pricing policy in Bhutan is market based, with minimal price distortions. The Bhutanese money, Ngultrum, is pegged to the Indian Rupee, trade with India is free, causing prices in Bhutan to be closely linked to market activities in India. As such, the use of measures like price incentives for boosting productivity is limited. In order to supplement the availability of food grains and other essential commodities such as rice, wheat flour, sugar, tea, edible oil etc. , the Food Corporation of Bhutan (FCB) operates what is called “Fair Price Shops” in various parts of the country.However, the government removed a number of subsidies related to supplies and inputs like seeds, saplings and fertilizers, in order to minimize price distortions and financial pressures on the government. Problems of Low Soil Fertility Agriculture production is significantly constrained by the difficult terrain that reduces the possible available land for mechanized farming. Share cropping by many landless farmers has impeded agricultural productivity because they have little incentive to increase yields, maximize cropping intensity or invest in land improvements.Other constraining factors that have encumbered agricultural productivity are poor soil quality and associated low levels of nitrogen and phosphorous content, inadequate irrigation infrastructure, lack of access to and quality of seeds, fertilizers and other essential inputs, and issues of access to credit, markets information, post-harvest services and facilities. The RNR sector as stated in the presentation is moving forward with the sector objectives in 11th plan.Some of which are enhancing food and nutrition security with which the sector attempts to make various kinds of foods available through improved production, access and enabling effective utilization of food, enhancing sustainable rural livelihood; where sector aspires in making rural livelihood productive and sustainable by generating employment opportunities, increasing rural house hold cash income and implement REAP in the selected vulnerable geogs, accelerating RNR sector growth to 4% through agriculture commercialization /diversification, private sector participation & value addition on export and to promote ustainable management and utilization of natural resources for health, happiness and economy. However, the challenges that the government and the RNR sector in particular will face the challenges such as higher production and marketing costs, small scale family farm production systems are barriers to product competitiveness, lack of assured water for irrigation. Irrigation infrastructure development is constrained due to hilly terrain conditions.There is still insufficient investment s in irrigation and farm mechanization infrastructure, Increasing shortage of farm labour, because of rural to urban migration, coupled by competition from growing imports of cheaper food items resulting in disadvantages for domestic food production Increased land fragmentations – Inheritance and opportunity costs, loss of prime land to urbanization and industrial sites such as chang geog in Thimphu and Paro town and airport, shortage of farm labour though agricultural employs 59% of the Bhutanese population, Rising food prices – food insecurity, Declining trend in allocation of budget to agriculture development as mentioned earlier, Limited aggregation in production and marketing, Low export growth with low Market surplus, Small number of export commodities and cheap imports. Conclusion The economy, one of the worlds smallest and least developed, is based on agriculture and forestry, which provide the main livelihood for more than 60% of the population. Agriculture consists largely of subsistence farming and animal husbandry. Rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive. Agriculture in Bhutan is still centered on smallholders, primarily subsistence –orientated, mixed crop- livestock farming systems with variable access to the marketing opportunities for small surplus production.To establish a well founded understanding of an agrarian system and its transformation, a holistic analysis that provides scope to investigate within a time-scale the social, economic, and ecological factors and their interactions is crucial. Commercialization of farming, integration of farm enterprise into market through enhanced connectivity, upstream improvement of farm products, product specialization, improvement of trading of farm products, professional management of farm enterprises, and application of information and communication technology to integrate farm enterprise into the market are critical elements of enhancing sustainable rural livelihood. References Barclay. E (2012) “Bhutan Bets Organic Agriculture Is The Road To Happiness” retrieved from http://www. npr. rg on 10/7/2013 at 5:30pm Dem. P & Minot. N (), “the Prospects of Organic Farming in Bhutan” Department of Agriculture (DoA), 2010. Agricultural Statistics of Bhutan. Vol I. Ministry of Agriculture. Thimphu, Bhutan Ghimiray. M (2012), An analysis of rice varietal improvement and adoption rate by farmers in Bhutan, Bhu. J. RNR. Vol 8, No. 1, 13-24: 2012 Gurung. T. R (2012), “Agricultural transformations in a remote community of Kengkhar”, Mongar, Bhutan, Bhu. J. RNR. Vol. 8. No. 1, 1-12:, 2012 Ministry of Agriculture (MoA), 2009. “Bhutan-Biodiversity Action Plan”, National Biodiversity Centre, Ministry of Agriculture, Royal Government of Bhutan, Thimphu.National Statistical Bureau (NSB), (2009). Statistical yearbook of Bhutan 2009. National Statistical Bureau, Thimphu, pp-184. National Statistical Bureau,. 2005. Population and Housing Census Royal Government of Bhutan. National Statistical Bureau, 2007. Poverty analysis report Royal Government of Bhutan. Tobgay. S (2005), “Agriculture diversification in Bhutan, ministry of agriculture” Tobgay, Sonam (2005). “Small Farmers and Food Systems in Bhutan”. A paper presented at the FAO Symposium on Agricultural Commercialization and the Small Farmer, Rome. [pic] ———————–  Retrieved from http://whatisagriculture. com/ on 10/7/2013 at 5:30 pm.