𝐑𝐮𝐫𝐚𝐥 𝐋𝐢𝐯𝐞𝐥𝐢𝐡𝐨𝐨𝐝𝐬 𝐓𝐨 𝐓𝐫𝐚𝐧𝐬𝐟𝐨𝐫𝐦 𝐓𝐡𝐫𝐨𝐮𝐠𝐡 𝐑𝐍𝐑 𝐕𝐚𝐥𝐮𝐞 𝐂𝐡𝐚𝐢𝐧𝐬 𝐏𝐫𝐨𝐣𝐞𝐜𝐭

By Sonam Choden

Bhutan’s rural economy stands at a crossroads. Agriculture, livestock and forestry, long the backbone of the nation’s livelihoods, employ the majority of the rural population. Yet, most workers remain in low-income, subsistence-level jobs. For women and youth in particular, opportunities to generate higher earnings and stable employment have been limited, leaving many households dependent on seasonal incomes and constrained by market access.

Despite the country’s reliance on natural resources, domestic markets remain underdeveloped. According to the World Bank, nearly a third of Renewable Natural Resources (RNR) workers are already engaged in processing, retail or service roles, indicating potential for diversification. However, value chains remain fragmented, and much of the country’s food and dairy demand continues to be met by imports.

Recognizing these challenges, the Ministry of Agriculture and Livestock (MoAL), in partnership with the World Bank, the Ministry of Health and the Ministry of Energy and Natural Resources, has launched the “Accelerate Bhutan’s Job Transformation through Renewable Natural Resource (RNR) Value Chains Project.” This five-year initiative, funded with USD 34.7 million, aims to enhance value addition, employment generation and competitiveness in key RNR value chains, focusing on dairy, citrus, potato and forest-based products. The project is expected to benefit around 42,000 individuals, with 65 percent being women. It reflects the 13th Five-Year Plan’s goal of fostering an inclusive, high-income economy.

The RNR Value Chains Project seeks to address gaps in domestic value chains by connecting smallholder producers with enterprises, helping them meet quality standards, reduce post-harvest losses and access higher-value markets. By integrating production, processing and marketing, the initiative aims to transform subsistence farmers into market-ready entrepreneurs, creating jobs and sustainable income streams in the process.

Key commodities such as dairy, citrus, potatoes and forest-based products have been strategically selected for their market potential. Citrus and potatoes are among Bhutan’s major horticultural exports to India, while forest products provide sustainable income opportunities under the country’s strong conservation mandates.

For many rural households, this project represents more than just policy- it offers a potential lifeline. Women, who make up the majority of RNR workers, will receive targeted support through labor-saving technologies, entrepreneurship training and access to grants to grow small businesses. Youth will be encouraged to enter emerging markets and higher-value production activities, moving beyond traditional farming practices.

Women’s empowerment is central to the initiative. Around two-thirds of beneficiaries are women, who will receive support through labor-saving technologies, training in enterprise management and access to matching grants to expand business opportunities.

Dorji Wangmo, a young entrepreneur in Punakha, explains, “Programs like this could help women like me scale up and create jobs for others in the community.”
Pem Lham, a smallholder dairy farmer from Wangdue Phodrang, also sees hope in the project. “With training and support, I can process my milk into cheese and yogurt and sell them in Thimphu,” she says. “It could change how my family earns and plans for the future.”

Yet challenges remain. Small producers often lack access to modern technologies, finance and market information. Infrastructure constraints, such as inadequate cold storage and transportation, continue to limit competitiveness. Ensuring environmentally sustainable practices while scaling up production is equally critical, given the constitutional requirement to maintain at least 60 percent forest cover and the country’s commitment to carbon neutrality.

If implemented effectively, the project could reshape the rural economy. By creating over 12,000 full-time jobs, empowering women and youth, and promoting high-value, climate-smart agriculture and forestry, it aligns economic growth with environmental stewardship. Farmers connected to reliable markets and trained in entrepreneurship are expected to see improved incomes, potentially slowing rural-urban migration.

Through this integrated approach, the initiative seeks to redefine rural livelihoods, making value-added agriculture and forestry a path to both prosperity and sustainability. The project accentuates nation’s goal of turning its natural resources into a foundation for inclusive and long-term growth.