Resource Allocation Decisions among Agricutural Households in Bhutan

Agricultural Policies in developing countries, especially in Bhutan is constrained by lack of evidence based policy decision making research tools. This book focuses on the resource allocation decisions of Agricultural households in Bhutan modelled through a non-separable household model approach which is solved using the General Algebraic Modelling System (GAMS) solver. In Bhutan, the farms are increasingly coming into conflict with wild life. Agriculture production in Bhutan is constraint by high input costs and the agriculture product losses to wild animals are very high. The farmers face the dilemma of losing a major part of their agricultural produce to the wild animals. As a result, the farmers have increasingly left their farms fallow. Rural to urban migration is increasing and the domestic food production is not able to meet the countrys demand. The country imports more than 80% of its food requirements from the neighbouring countries, which is vulnerable to compromising on food security, food quality and food safety. This study simulates the resource allocation behaviour of the agricultural households in response to the choice of various agricultural policies. The results suggest that the households motivation to increase production can be achieved through favourable incentive schemes. A single policy may have different impacts among the households located in different regions.