A 2012 Social Accounting Matrix (SAM) for Bhutan with a detailed representation of the agricultural sector

This paper develops a 2012 Social Accounting Matrix (SAM) for Bhutan with a detailed representation of the agricultural sector. Given the availability of extensive household, labour force and agricultural survey data as well as a large dataset of audited company reports, a bottom-up approach is applied to estimate the 2012 SAM, including the estimation of 2012 supply and use matrices. In case of missing data, the SAM relies on information from Bhutan's 2007 supply and use table. The bottom-up approach allows for a detailed depiction of economic activities and their interlinkages with markets and institutions. The SAM consists of a total of 221 accounts, including 108 commodity, 52 activities, 31 factor and 16 household accounts. There are 14 agricultural and 5 postharvest activities producing 48 agricultural commodities. Agricultural commodities are differentiated by marketed and home-produced-home-consumed (HPHC) commodities to account for the large prevalence of subsistence farming in Bhutan and the differences in prices due to transportation and trade margins. Important features of farming systems and rural livelihoods in Bhutan such as the role of manure, bullock draught power, crop residues, community forestry and brewing of ara, a widely consumed local alcoholic beverage made of cereals, are depicted. Given the increasing importance of hydropower generation within Bhutan's economy, the SAM also represents significant level of detail of the electricity generation sector and the input structure of energy intensive industries. The final SAM is estimated using an information-theoretic, cross-entropy approach. Taking a Bayesian perspective, uncertainties of cell entries' prior values are set such that they reflect the availability and quality of data sources.