1. The Government of Japan agreed today to extend a grant assistance of 200 million yen (approximately 2.6 million US dollars) to the Royal Government of Bhutan for “Non-Project Grant Aid (NPGA)”. The ‘Exchange of Notes’ to formalize the grant aid was conducted in New Delhi between H.E. Mr. Akitaka Saiki, Ambassador of Japan to the Kingdom of Bhutan, and H.E. Vetsop Namgyel, Ambassador of the Kingdom of Bhutan to Japan.

2. The Royal Government of Bhutan has placed high priority to the development of agriculture in the 10th Five Year Plan as Bhutan is an agrarian country with over 60% of population engaged in agriculture and forestry. Although most of the farmers in Bhutan are engaged in subsistence agriculture, yet 50% of the rice consumption in the country requires to be imported. Therefore, enhancing food self-sufficiency and promoting agricultural commercialization are main targets among the policy objectives in Bhutan.

3. Under this grant scheme, the Government of Japan will support Bhutan in importing goods which are necessary to promote agricultural development in Bhutan. Further benefits of the aid can be obtained by utilizing the profits (Counterpart Fund), which would be generated from sale of goods procured under the grant.

4. Japan has already extended a Non-Project Grant Aid to Bhutan in FY2009, and the farm machinery procured under the aid is currently being utilized for rice commercialization programme. Today’s grant is expected to further help the Royal Government of Bhutan raise food productivity in the country.

5. The Government of Japan hopes that this grant assistance would help towards the development of agriculture in Bhutan, especially enhancement of food production, as well as contribute to further strengthening of the friendly relationship between Japan and Bhutan.