Neglect of agriculture aggravates poverty

  • 31/03/2008

  • Kuensel (Bhutan)

Chronic neglect of the agricultural sector in Asia and the Pacific is condemning 218 million people to continuing extreme poverty, and widening the gap between the region's rich and poor, according to the Economic and Social Survey of Asia and the Pacific 2008, which was released in multiple locations, including Thimphu, on March 27 by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). The survey says that a third of the region's poor, largely living in rural areas, could be lifted out of poverty by raising agricultural productivity. It also calls for a comprehensive liberalisation of global trade in agriculture, as this would take a further 48 million people out of poverty in the region. "Agriculture appears to be neglected even though it still provides jobs for 60 percent of the working population and generates about a quarter of the region's gross domestic product,' ESCAP said in its survey. "In South Asia, growth in agriculture dropped from 3.6 percent in the 1980s to three percent in 2002-2003.' According to the 2007 Bhutan Living Standard Survey (BLSS), carried out by the National Statistical Bureau, 23.2 percent of the Bhutanese population was found to be poor, mainly among the rural populace in Zhemgang, Samtse, Mongar, Lhuentse, and Samdrup Jongkhar dzongkhags. The national poverty line was established at a minimum monthly earning of Nu 1,096 a person, with estimated food requirement at Nu 688 and non-food requirement of Nu 408. Previously, the poverty line put the minimum monthly earning at Nu 740 a month. The Bhutan Living Standard Survey of 9,798 households put the number of people below the poverty line at 146,100 out of an extrapolated population figure of 630,000, based on the 2005's National Housing and Population census. In rural Bhutan, 30.9 percent fall below the poverty line, compared to 1.7 percent in the urban areas. While the survey noted that Bhutan's economic growth accelerated in 2007 to 17.6 percent, buoyed by private investment in housing and public investment in infrastructure, together with a major hydropower project coming on-stream, it noted concerns over inflation triggered by higher oil prices and other commodities in international markets. "Food prices in general rose more rapidly, imposing extra burdens on low and fixed income groups,' it said. Inflation in Bhutan has hovered around five percent in recent years. Price changes in Bhutan largely follow those of India with which it has a free trade agreement and the Ngultrum is pegged to the Indian Rupee. It also warned that "very high oil prices will not only compromise economic growth but add pressures on inflation, budget and balance of payment' and called for measures to contain oil imports by way of selective energy conservation and measures. The survey states that Bhutan's overall budget deficit, excluding income from grants, is quite large. The budget deficit, including income from grants, rose to 3.5 percent of GDP in 2007, from 0.8 percent in 2006. By Dema