With the financial and technical support from the Food and Agricultural Organization (FAO) and the Netherlands Partnership Program (FNPP), the Ministry of Agriculture (MoA) initiated a program in 2006 called Commodity Chain Analysis (CAA) of various pro-poor crops of Bhutanese farming communities.

CAA is the identification of the various actors and processes that contribute to the initiation of a product that is consumed by a market, such as raw materials, produces or consumption goods.

It includes a sequence of operations ranging from the extraction of raw materials, the assembly of intermediate goods, to the distribution to consumption markets.

The objective of the program was to address Bhutan’s food security issues by developing suitable growth strategy of some commodities, namely apple, which is accorded high priority as a cash crop.

Apple production and marketing is an important source of income not just for farmers and traders, but also generates revenues for the government, states the report, Apple Commodity Chain Analysis.

There are 3,580 acres of land under apple cultivation in Bhutan, behind only citrus in acreage and production. Most orchards are confined to the four dzongkhags of Thimphu, Paro, Haa and Bumthang.

In 2004, the production from the four major dzongkhags accounted for 96% of the production, or 5,800 metric tons (MT) of the total production of 5,900 MT.

According to Vision 2020, Bhutan’s target is to achieve a 300% increase in horticultural exports by the end of the 10th plan.

The export market of apples is currently limited to two countries, Bangladesh and India. Annually, about 37% of the production is exported to Bangladesh and 19% to India.

In 1992 and 1995, Bhutanese apples were also marketed to Sri Lanka, Thailand and Nepal but the trade was discontinued due to heavy competition and high transportation costs.

The report states that the price trend for the Bangladesh market indicates 100% increase between 1998 and 2005. However the same does not reflect for India.

The steady increase in the import of apples from India has been disconcerting even with continued and steady effort to improve the ‘shelf life’ of the Bhutanese apple, according to the study.

The import has increased from 0.3 MT in 1992 to 51 MT in 2005. Domestic consumption of fresh apple was 2,988 MT. The per capita consumption of fresh apple fruits was 4.7 kg annually.

Marketing during the off-season to take advantage of higher prices have been recommended to growers and exporters.

Despite efforts in the past three decades the yield of apple in Bhutan is still low compared with the regional level. The quality of the fruits in general is also poor.