On 8 November 2022, the Association of Friends of Bhutan, Austria and Tarayana Foundation in Bhutan signed a cooperation agreement. The City of Vienna awarded our association a grant of 29,000 Euros to enable 35 women mountain farmers from the Lhuentse district to purchase small motorized ploughs with the help of microcredits. Tarayana will implement the project, the goal of which is to enable the women, who currently practice only subsistence agriculture, to expand their agricultural productivity, thereby generating income and improving the livelihood of their families.
Fertile land unutilized
The mountain farmers in Lhuentse have lived from subsistence farming for generations. For two generations, however, most of the men have left the villages to look for work in the cities. Many educated young people are also moving to the city. The women farmers are left alone with the elderly, the farm and the children. There is a lack of male labor to manage the work with traditional ox ploughs, which is too heavy for women. An ever-increasing proportion of fertile fields are left fallow. This is not only a problem for the families of the women mountain farmers, but also one for the Bhutanese national budget, since today a large proportion of the food required in the country has to be imported from India. Profitable cultivation of the fields is much more difficult today than it used to be. Because labor would have to be purchased, traditional rice cultivation is no longer competitive. If small motorized ploughs are used, not only can costs be saved, but a larger area of the fertile land can be cultivated. Without help, however, the women mountain farmers cannot afford the small motorized ploughs.
A pilot project shows impact
Tarayana has been supporting farming villages in Lhuentse for several years. In 2021, the mountain farming families served asked for help in gaining access to mini motorized ploughs on credit. Tarayana and the communities of Lhuentse worked together on a plan to carefully mechanize mountain and small-scale farming on a modest scale, thereby also providing income from agricultural production. What the families lack is funding. A mini motorized plough costs about EUR 1,000, unaffordable for a Lhuentse mountain farming family. As a solution, Tarayana 2021 launched a contractual collaboration with local agricultural machinery wholesaler Karma One Stop Shop (KOSS): KOSS would supply machinery at a discounted rate to Tarayana’s women clients, and also take care of free on-site maintenance and training.
Tarayana used its own financial resources to implement this development assistance intervention as a pilot project. During this pilot project, Tarayana received 143 applications from Lhuntse hill farming families to purchase a mini motorized plough on credit. From these applicants, Tarayana selected 22 families. The mini-motor ploughs are now all successfully in use, and the families rarely have problems repaying the loan installments. The 2021 pilot project participants report that they are now able to cultivate previously unused agricultural land, and that they have begun to grow a variety of vegetables in addition to rice. Some project participants reported that the additional income is being spent on more balanced food and on children’s education. Some families reported that they were able to accumulate savings in addition to loan repayments. The mini power plows were life-changing for the 22 families.
Financial literacy training
Not all of the 143 applicants could be considered for a microloan during the 2021 pilot. Apart from limitations in funding the loan amount, Tarayana felt that many applicants were not ready and mature for a microloan in terms of financial knowledge and habits. Many applicants did not even have savings accounts. Tarayana takes its fiduciary duties very seriously. As a result, Tarayana provides financial literacy training prior to accessing credit and facilitates the opening of savings accounts in partnership with the Bank of Bhutan, the country’s largest bank. Only after beneficiaries have built saving habits does Tarayana consider providing access to microcredit.
As a result of these financial literacy efforts in 2021, many Lhuentse farmers now have savings accounts and saving habits and are ready to receive a mini motor plough on credit. With the help of funding from the City of Vienna, this 17-month project will now help 35 female mountain farmers in Lhuentse make the leap from subsistence farming to earning their own income. The strategy of focusing on microfinance deliberately distances itself from a classic donor-recipient approach to the target group. The women mountain farmers are business partners from the very beginning and bear responsibility for the success of their ventures.
Beyond the duration of the project, loan repayments in each subsequent year will similarly enable about 15 more subsistence mountain women farmers and their families to take a step towards more profitable agriculture and the creation of a livelihood-securing income.Project data
Project name: Mini moto ploughs for women mountain farmers through microcredits
Funding: City of Vienna with a grant of 29.000 Euro
Project partner: Tarayana Foundation
Project duration: November 1, 2022 – March 31, 2024
Thematic focus: Poverty reduction and gender
SDG Tracker: SDG 1 End poverty in all its forms and everywhere; SDG 5 Gender equality