http://www.fao.org/fileadmin/templates/olq/documents/documents/PresentationAGNS19M.pdf Presentation of the proposal for the national strategy (english)

1. 1
Establishment of a national strategy for
promotion and preservation of specific
quality products
The case of yak
traditional products
Dr D. Barjolle & Dr E. Vandecandelaere
In collaboration with Marie Dervillé
Based on the experts’ reports of Marie Dervillé, Sonam Tobgay, Nedup
Tshering and the comments and help of Jigme Wangchuk

2. Acknowledgements
This presentation is based on the reports provided by the 3 experts
contracted by FAO
• Marie Dervillé
• Sonam Tobgay
• Nedup Tshering
We thank them very warmly for their work, and we also thank Jigme
Wangchuk for his comments and support in carrying out the studies,
and Chadho Tenzin for his support in coordinating the work.
2

3. General framework
The Project “Establishment of a national strategy for promotion and
preservation of specific quality products: the case of yak products” is part of
the FAO Multidonor Partnership Project – Bhutan and has been formulated in
2009 on the basis of:
• RGoB project proposals related to yak products development and yak community based
ecotourism;
• consultations with RGoB staff, in particular during the FMPP workshop in June 2009;
• recommendations from previous reports on value chain analysis on yak products and
specific quality products in Bhutan
The first step (2009-2010) objectives :
• To estimate the market potentials and requisites for quality schemes for Yak traditional
products, including the potential linkages with tourism.
• To assess the relevance and need at the institutional level.
• To define a national strategy for preserving and promoting high-quality traditional products of
Bhutan, amongst yak products.
• To raise awareness of policy makers and stakeholders.
3

4. Outline
Action Plan
Value chain and
institutional capacity
building
Technical support of
grazing and rearing
Standardization and
Labelling
Promotion and
market’s development
Strategic options
2 scenarios for the
evolution of yak rearing
Strategic choice Main goal and vision
Pressures and opportunities
Technical constraints Consumption Tourism
General context
Country and agriculture Markets and products of the yak’s rearing
4

5. CONTEXT
Country and Agriculture
5

6. Situation and main pressures
• Traditional society open-minded to the international community
• Bhutan is in the process of accession to the WTO (request submitted in September 15th 1999,
still in examination)
• Amplification of monetary exchanges (barter remains but decreases) within the country and with
foreign countries
• Environment and well-being are strong political concerns;
• Priority is given to the development of both sectors : hydro power and
tourism;
• Tourism is strongly regulated to prevent negative externalities
• The Bhutanese agriculture has been developed but unequally
according to the regions
• Regions close to urban areas and situated in more moderate and flat zones benefit from
technical progress. A food-processing sector is emerging. Small supermarkets have been
created.
• People in remote areas suffer from deteriorated conditions for barters, from lacking technical
support, isolation, and from unsatisfactory hygienic conditions for the preservation and the
transport of their products to the urban areas.
6

7. Main challenges/constraints in the agricultural
sector
• Agriculture and craft industries still remain a primary importance in the
Bhutanese life. The geographical origins of these products are well recognized in term
of reputation, especially for craft industries’ products
• Increase of imports and competition from abroad
• Imports 2006: 7% of cheese consumption, 28% of butter, 83% of the milk
• Lack of infrastructure
• Needs for new market channels
• Needs for Farmers / Herders organization to supply urban markets
7

8. PRODUCTS AND MARKET
SITUATION
Yak Pilot Rearing
8

9. Yak rearing activities (Marie Dervillé)
Yak rearing is strongly linked to the Bhutanese identity and
culture. The herders still live in a traditional way, preserving the
natural resources and sustaining the traditions
• Key data
• 1 416 households in 2000 (in 10 Dzongkhags in the North)
• 48 800 yaks in 2008 (59% Western, 16% Central, 25% Eastern Bhutan)
(average:34 yaks/family).
• The productivity level is low and work is very
arduous
The activity is not very attractive (hard labour, low remuneration (from 2$ to 4$/day)
despite the fact that it is still considered as the main stable activity from the herders
communities’ point of view.
9

10. Traditional yak products and specific qualities
Food products
• Butter : quality varies and the storage (temperature, container) and the transport conditions
are key-factors for the improvement of the final quality
• Cheese: 3 types of local traditional cheeses (white chugo, black chugo, regional fermented
cheese, see next slide). They represent the main cash source for producers’ households; more
than 85% of the production was estimated to be sold in 2006
• Meat: Dried meat and fresh meat. Slaughter takes place at the road, fresh meat is
checked by BAFRA inspectors before being sold on the Sunday market.
By-products
• Hair for wool, used for making traditional tissues and tents for transhumance. The
wool made from yak hairs can be a high quality product, which starts being
developed in other countries
• Dung to be burned (only burning material in certain regions)
• Skin, tail, Horns
Services
• Transport for trekkers
• Draught power to carry loads
Data collected by Marie Dervillé (2009) and Sonam Togbay10

11. Market channels for yak products
9
19
56
53
34
11 7
7
7
3
35
7
26
18
47
22 4
35
60
30
10
0
20
40
60
80
100
120
dried
meat
meat Butter white
chugo
black
chugo
export
Indian processors
Sunday markets+retailers
Middleman
ruralconsumers
relatives
herders
owners/ taxes
In Percentage
Elaborated with data collected by Marie Dervillé (2009)

12. Market access: main findings
• Animals represent a capital for herders
• Traditional cheeses are unique, while other Bhutanese yak products are
generally not very different from those originating from other Himalayan countries
• Not all products are available for promotion and marketing;
• Food safety hinders the access to new markets. The problem is more acute for
butter and other highly perishable products (butter / fresh meat / fresh cheese)
• Importance of self consumption and herders do not have easy direct access to
urban markets, hotels and supermarkets
• The consumption of fresh meat is limited due to religious concerns
• Logistical problems hinder the availability of the traditional products on the urban
markets
 Needs for up-grading products quality and supply chain / channels
organization
12

13. PRESSURES, CHALLENGES
AND OPPORTUNITIES
Future of yak products and rearing
13

14. Imports
& New
technologies
Substitution
(imports and
new Bhutanese
cow products)
Difficulties to
access urban
markets
Lower price to
consumer
Lower
attractiveness
for herders
Risk is the
decrease of
volume of
production
Risk is the
decline of yak
rearing
A way to reverse
the Vicious
circle? Emergence of new values
of urban consumers
Problems to meet
food safety requirements
Logistic difficulties
Population growth
Political willing to enhance
well-being of the population

15. Remuneration for Yak products per day
is not attractive compared
to other activities
Yak production remains the main activity
in terms of occupation
(highest number of working days / year)
but young generations are not very motivated
From data collected by Marie Dervillé (2009)
0
100000
200000
300000
400000
Cash per
year (min)
Cash per
year (max)
0
2000
4000
6000
8000
10000
12000
Return to
family per day
(min)
Return to
family per day
(max)Risk of a decline in yak rearing
and rural migration (e. g. in Haa,
the yak population decreases)

16. General consumption trends
+++ Food consumption increases (food intake increases)
- - Food habits change
- Consumption habits (food consumption patterns) change (for example,
traditional yak’s butter is not as much demanded as in the past)
+ + + There is a certain urban demand for safe products, originated from
Bhutan. There is also a certain potential of selling traditional
Bhutanese products to tourists
-- - These two potentials (urban and tourism demand) are only partially
activated because food safety and logistical problems are important
obstacles
16

17. Situation in the tourim sector
(Nedup Tschering)
• National Council for Tourism is in charge of the policy regarding the
development of tourism. Any activation of tourism opportunities
needs to be discussed and decided in strict cooperation with them.
• Tourism activities started being developed in Bhutan few decades ago
• Basically, yak rearing and the survival of yak rearing cultural aspects
contribute to the attractiveness of the country for cultural tourism
products
• No tourism products related to yak are developed yet
17

18. Potential linkages with sustainable tourism
The potential synergies between rearing activities and tourism have
been identified (Nedup Tshering)
• Possible linkages
1. Sale of traditional products
– products for immediate consumption (hotels and trekkers)
– products that can travel and therefore be taken back home
2. Provision of services (transport for trekkers).
• Conditions to activate the sale of traditional yak products to tourists
– Adoption of basic food safety standards, labelling and indication of
content (to meet the basic expectations and needs of the tour operators
and the tourists).
18

19. STRATEGIC OPTIONS
19

20. Future of yak rearing and of yak traditional
products
In other high-mountains of the world, very similar constraints or pressures have
already produced measurable long-term effects. The two main scenarios of
effects are the following:
• Scenario 1 : Decreasing production : as a result of lower work input, yak
will essentially be used for transport, until abandonment of rearing in certain
cases
• Scenario 2 : Developing a value chain approach, linked to the marketing
of specific products that will trigger consumers to buy even at high prices
and allowing thus covering the high production costs
Without a strong policy in favour of a transition to the second
scenario, the implicit evolution would be the first described
scenario.
20

21. Scenario 1: Decreasing
production In this scenario, at long-term perspective (30
years), due to the increasing difficulties to
sell dairy products at a correct price and the
arduous work necessary for dairy products,
the activities of the herders will move to :
- A provision of services for tourists and
transport activities.
- Milking and butter/cheese-making will cease
progressively
- Depending of the number of yaks, by-
products and meat may continue
As consequences:
1. The rural herders communities will
decrease.
2. The traditional culture of cheese making
will disappear.
3. Butter and cheese will be produced in
regions outside the mountains.
4. A lot of cultural traditional by-activities
and events will slowly disappear.

22. Scenario 2: Value
Chain approach
In this scenario, a fair reward of the
production will allow the herders to develop
their activities of milking and cheese
making.
As consequences:
1. Livelihoods of the herders communities could
increase, allowing the maintenance of family
herders all over the territory.
2. The traditional culture of cheese making
could remain.
3. Traditional products could increase in terms
of volumes and prices.
4. The maintenance of cultural traditional by-
activities and events, strengthening the
Bhutanese identity.
5. Long-term benefits of positive externalities of
yak rearing could be preserved

23. Strategic choice
Scenario 2
Strengthening the
yak value chain Emergence of new values
of urban consumers
Problems to meet
food safety requirements
Logistic difficulties
Population growth
Political willing to enhance
well-being of the population
Imports
& New
technologies
Substitution
(imports and
new Bhutanese
cow products)
Difficulties to
access urban
markets
Lower Better
price to
consumer
Lower
Better
attractiveness
for herders
Risk is the
decrease
Stabilisation of
volume of
production
Risk is the
decline
Survival of yak
rearing and of
traditional
dairy products
•Organisation of herders
•Adoption of standards
•Differentiation though
information to
consumers
•Activation of new
marketing channels,
incl. tourism

24. Strategic choice
We suggest setting-up a program in order to implement technical
support in the direction of the scenario 2.
The main questions are:
– Do decision makers want to engage a policy in
order to go in this direction thanks to a “value
chain approach” ?
– Which priorities to set ?
24

25. General goal and vision
The general goal of Bhutan is to increase the well-being
and happiness of the population with respect to the
preservation of natural resources.
In this frame, the entire value chain of yak rearing (from the grazing
to the consumption of traditional yak products) will contribute to:
1. The improvement of the herders communities livelihoods
2. The survival of the cultural and culinary heritage and the identity
of the Bhutanese population as a whole (as consumer and final
beneficiaries of a preserved environment)
3. The preservation of natural resources in a sustainable way
25

26. Value Chain Approach
From the grass to the consumer
Grazing
• Grazing
techniques
• Management
of the natural
resources
Rearing
• Labour
management
• Herd
management
• Prevention of
diseases
Processing
• Dairy
products
• Meat
products
• By-products
Trade
• Seeking for
best
opportunities
• Storage
facilities
management
• Transport
Promotion
• Visiting
buyers
(hotels /
urban
buyers)
• Communicati
on towards
the
consumers
Consumption
• Choice of the
best
price/quality
product
Gives the value
and rewards
26

27. National Strategy for preserving and promoting high-
quality traditional products of Bhutan:
Strengthening the Yak’s Value Chain
Goals :
– To improve livelihoods and therefore the quality of herders communities life
– To differentiate the yak products from imported products and from local
cow products
Means:
• Identification of products specific qualities
• Modernization of production techniques
• Streamlining the production processes
• Up-grading of the quality of the products (butter, cheese, and other products
and by-products) and implementation of food quality standards (Codex,
Indian standards, others)
• Improvement of market access through better storage facilities and better
logistics
• Promotion through differentiation downstream of the value chain
• Seeking for adequate labelling and communication tools towards the
consumers
27

28. 4 Pillars for the strategy
2. Technical
support of
grazing and
rearing
3.
Standardisation
and labelling
4. Promotion
and market’s
development
1. VALUE CHAIN AND INSTITUTIONAL
CAPACITY BUILDING
Grazing Rearing
Proces-
sing
Trade
Promo-
tion
Consum
-ption
28

29. ACTION PLAN
29

30. Develop overall policy
and institutional support
dedicated to the yak
subsector.
Initiate dedicated policy support and
institutional arrangements with
adequate funds and equipped with
qualified human resources.
E.g Institutionalize a new division within
the DoL for yak subsector
development.
Enhanced yak subsector
development.
Herd size and quality
improved.
Income generation and
improved livelihoods.
Human resources
development and technical
capacity building dedicated
to the subsector.
Human resource planning, training and
appointment through rightful
placements.
An enhanced
government and
private sector
research and
development
capacity capable of
addressing current
and future needs of
the subsector in
particular and the
livestock sector in
general.
Pillar 1 Capacity building
Value chain and public administrations (Sonam Tobgay)
1. VALUE CHAIN AND INSTITUTIONAL
CAPACITY BUILDING
30

31. Proposed activities for the Pillar 1
1. Information and training
1.1 Information, communication and dialogue to increase awareness among all stakeholders
1.2 Training of the officers and facilitators in order to get knowledge and self-confidence
2. Build up a consistent organisation framework
2.1 Build up a national working group with all the institutions (public and private) concerned to set
up coordination between several policies / administrative issues
2.2 Build up the national association among the herders, with regional and local sections to bundle
their interests and promote them in the fine-tuning of the working plan and the implementation
of the activities - they will represent the herders’ interests at national level and be involved in
the choice and implementation of activities (participatory approach), composed of
representatives of all yak rearing areas, including pilot areas
2.3 Build up a new group (for instance a “National Council of Yak Value Chain”) among all the
stakeholders to establish a strong private/public partnership
3. Change the general frame
3.1 Identification of the gaps in the current policies to facilitate the general frame at all steps of the
value chain
3.2 Workshop and elaboration of formal documents to establish the long term vision and the
adequate policies
3.3 Coordination among the donors to boost synergies
31

32. Improve yak production
and environmental
sustainability.
Attend to animal health
and welfare.
Develop alternative
sources of feeds and
veterinary services.
Support dedicated policy, institutional,
and financial support towards the
subsector.
New product development and value
addition.
Access to animal feedstuffs (forage,
fodder, and concentrate feeds) at
affordable prices needed to optimize
animal production.
Effective programs to control and
eradicate disease in animal populations.
Improved herd size and
animal health.
Increase income of
herders and secured
livelihoods.
Land degradation
reduced.
Pillar 2
Technical support of grazing and rearing
(Sonam Togbay)
Grazing Rearing
32

33. 1. Selection of pilot areas to increase chances of success and efficiency of the program
1.1 Selection of 2 pilot areas for a pilot group of herders willing to participate
1.2 Fine-tuning of the activities according to the local needs of the herders community
2. Implement applied research, agriculture extension through training, experience
sharing and advices, to facilitate modernization, to improve animal health, herd size
increase and to improve labor conditions and reduce land degradation
2.1 Define Good Agricultural Practices
2.2 Implement training for the local sections of the herders on best practices for grazing and rearing (book keeping,
fodder cultivation, quality products )
2.3 Organize study tours among herding communities (Bjee and Sephu geog for example), and study tours in
dynamic yak herding regions abroad
2.4 Looking for and introduce new technical solutions and equipments (raise awareness on the possibility to
invest some of the cordyceps money collectively into infrastructures for the community)
2.5 To establish a yak farm “model” on the governmental land in Rukupji (Sephu geog) to improve the breeding
stock
3. Facilitate the generation of cash in order to increase the investment capacities of the
herders and their income
3.1 Support opportunities of monetary income diversification in para-agricultural activities (cordyceps) / exploring
micro-credit solutions
3.2 Seek for opportunities of better local synergies with the tourism
Proposed activities for the Pillar 2 Grazing Rearing
33

34. Pillar 3
Standardization and Labelling
• Developing food
safety and quality
standards, proper
packaging, labels
and brands.
• BAFRA certification and
inspection strengthening
required.
• Technical capacity
building with other
product value additions.
• Trusted and quality products
in the market.
• Increased income of supply
chain players.
(Sonam Togbay)
Proces-
sing
Trade
34

35. Proposed activities for the Pillar 3 Proces-
sing
Trade
1. Selection of 3 relevant traditional products and active herders to address activities which
are suitable both for the herders and the consumers (trusted quality products)
1.1 Selection of 3 products in the 2 pilot-areas, based on appropriate criteria – see 3 next slides
1.2 Do the characterization of the selected products and fine-tuning of technical assistance activities (Products sampling
could be organized as well and delivered to BAFRA laboratory in Yusipang)
1.3 Identify 2-3 persons by product and within a pilot area as leaders: organize study tour to visits retailers, restaurants,
processing enterprises to discuss requirements and define standards and certification schemes with BAFRA
2. Up-grade the quality of the final products to meet food safety requirements
2.1 Analyze with BAFRA gaps between current practices and these which are required to fit market requirements and
standards (Codex alimentarius, etc.)
2.2 Define Best Practices for each selected product
2.3 Develop BAFRA controls/certification strategy and capacity
3. Implement applied research and advices about process of transformation of the milk into
butter and cheese to facilitate the streamline of the dairy processes and storage
conditions, and to improve labour conditions
3.1 Research for the development of equipments in order to reduce labour intensity and arduousness all along the
process until the delivery at selling point (e.g. Pelela: supply of cream separator and butter churner, organization by the
herders group of milk collection and supply of wet cheese)
3.2 Training for herders, experience sharing and advices regarding dairy production
3.3 Introduce new equipments / new logistical solutions
4. Improve cooling systems and transportation to develop trade
4.1 coordination between herders and buyers to facilitate implementation of cooling system and transportation
4.2 Coordination with other institutions to favour new roads and transport means35

36. Pillar 3- Activity 1.1 Selection of 3 products
Step 1 - Criteria of selection
First step is to define proper criteria to judge the adequacy of the
product with a range of requisites
– Food safety
• Compliance with food safety requirements
– Market specificity (uniqueness)
• Specificity compared to cow products
• Specificity compared to yak imported products
– Access to urban markets
• Storage ability & logistical aspects
• Quantity available
– Consumers
• Attractiveness for Bhutanese urban consumers
• Capacity for tourists to take home the product
Second step consists in a ranking of each criteria for each product,
giving them an evaluation between -5 (very hard) to +5 (very easy)
See table after – to be adjusted by consultations during the workshop
36

37. Pillar 3- 1.1 Selection of 3 products
Step 2 - Ranking
37
Proces-
sing
Trade
Food safety:
compliance
with food
safety requi-
rements
Specificity
compared
to cow
products
Specificity
compared
to yak
imported
products
Access to
urban
markets:
Storage
ability &
logistical
aspects
Access to
urban
markets:
quantity
available
Attractivity
for
Bhutanese
urban
consumers
Capacity for
tourists to
take home
the product
TOTAL
Butter -3 5 0 -3 2 2 1 4
Black chugo -3 4 4 2 2 4 1 14
White chugo -3 4 4 2 2 4 1 14
Regional
fermented
cheese
-3 4 5 2 0 4 1 13
Dry meat 1 5 1 2 0 5 5 19
Fresh meat 1 5 0 2 1 1 0 10
Hair for
tissues
5 5 0 5 1 2 5 23
Hair for tents 5 5 0 5 1 0 0 16
by-product:
skins
2 1 0 5 1 0 0 9
Ranking -5 very hard / bad 5 very easy / good
37

38. Proposed selection of the products
• We propose to focus on the following products
– Traditional Cheeses
• There are the most sold products
• They are already known in the urban markets
• They have the highest degree of specificity (uniqueness)
– Dried meat
• This product is known as a « must » (=niche product which is well-known as speciality)
• It is a product which can be stored for a long time
• It can be taken home by the tourists
– Hair / Wool / Tissues made from hair
• These products are very traditional
• They can be taken home by the tourists
• They face no problem with sanitary issues
• It can be a good opportunity to earn money at periods when the labour is less intensive
for yak’s rearing activities / it is an activity which has interest for the women (gender
issue)
38

39. • Development and
marketing of value
added yak products
and explore the
comparative
advantage of
natural resources.
• Public-private partnership
engagements
• Technical assistance,
training and government
subsidy support.
• Increased income of herders and
ex-herders in targeted areas
based on improved productivity
of their yak stock and income
diversification.
• Strengthening
marketing supply
chains.
• Integrated
subsistence herders
with a market
economy.
• Encourage public-private
partnerships.
• Favorable policy support for
takers to come in.
• Developing project proposals
with secured funds and
technical assistance.
• Specialized players resulting to
efficient economy.
• Strengthened resilience of
herders to vulnerabilities in the
livestock sector and improved
disaster preparedness and
environmental stewardship.
Pillar 4
Promotion and market’s development
(Sonam Togbay)
Promo-
tion
Consum
-ption
39

40. Proposed activities for the Pillar 4 Promo-
tion
Consum
-ption
1. Elaboration of a promotion strategy by the National Council of Yak’s supply chain to
raise awareness of consumer and tourists about uniqueness of yak products
(compared to imported or wow milk products), and their contribution to sustainable
development
1.1 Raise image of Bhutaness or Bhutan made or...
1.2 Promote the adoption of the standards among the buyers (compliance with food safety standards)
1.3 Information campaign and tools (leaflets, web-site, TV-spots) towards urban consumers and tourists
2. Visit the retailers / restaurants in the urban centres to discuss their specific needs and
organise feed-backs to the herders communities
2.2 Identify the gaps between the needs / expectations of the retailers / restaurants and the supply (quality /
quantities / prices) and give feed-backs to the herders communities
2.3 Facilitate contacts between herders, buyers and consumers (fairs, festivals, study tours...)
3. Develop access to new and remunerative markets to increase selling
3.1 Enhance local markets by activating and relocate the RNR outlets for all yak product sale counter and other local
products
3.2 Define properly the packaging and the labelling of final products to make a difference for the end-consumers
3.3 develop linkages between herders association and Tour operators
4. Coordinate with the National Council of Tourism and other stakeholders concerned to
leverage synergies to promote the yak products and image of Bhutan as a whole
4.1 Coordination of the promotion abroad between tourism and traditional products
4.2 Coordination between quality seals for handicrafts products and traditional food products
4.3 Creation of trekking paths, festival, house of yak products and other attractions related to yak rearing and
products
40

41. Planning
41
Year 1 Year 2 Year 3
Technical support of grazing and rearing
Standardisation and Labelling
Promotion and
market's
development
Institutional capacity building
41

42. CONCLUSION
PERSPECTIVES
42

43. Revival of yak rearing and new ways of
commercialisation will engage new dynamics
• Strategy “strengthening value-chain approach” = Improved agricultural
practices and processing methods, up-grading of the quality and a
better identification towards the consumers to support the
development of yak products and improve livelihoods
• The characterization and promotion of Bhutanese traditional products
could help to maintain intact the cultural heritage, so that the yak
rearing could survive in long term in Bhutanese mountainous areas
despite very arduous conditions of work.
• The proposed strategy should be accompanied with a broader
« Bhutaness » strategy, addressed both to the Bhutanese urban
consumers and to the tourists, to make stronger the image of the
country in general
43

44. Expected Work-Shop Outputs
Questions to be answered during the workshop
• Do decision makers agree on implementing a policy favouring the
technological and economic transition ?
• Do they agree on the scenario 2 strategy ? (slides 39-44)
• What is their opinion about the 4 pillars ? (slide 45)
• What is their opinion about the activities for each pillar? (slides 51-
65)
– Activity to remove?
– Additional activities?
– Some reformulations?
• What are the pilot areas ? (slide 56)
• Do they agree on the criteria and ranking for the selection of the
products ? (slides 59-61)
• What are the final pilot products selected ? (slide 62)
44

45. Next steps
1. Communicate findings to decision makers and FAO
2. Decision makers do the clear the strategy
3. Fine-tuning of the description of the general conception of the
program
4. Identify gaps in order to set up complementary programs
(certification of agro-food products for ex.)
5. Decision makers set up a working group at national level to
manage the program
6. Fine-tuning of the working plan
7. Implementation
45