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Agricultural Production

 

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Agriculture production, mainly cereals, in Bhutan is generally based on a low level of purchased inputs, cultivation primarily undertaken with animal draught power or human labor. Purchased inputs are limited to improved seeds and small amounts of fertilizer and pesticides, for which seasonal credit is often used. Soil fertility depends primarily on the use of farm yard manure and compost. Recently, sustainable land management campaigns by the government have increased the use of contour building and other land management tools by farmers. Paddy and maize, the two major cereals of Bhutan, both suffered severe production losses in the past. However, in recent years, production trends have improved as a result of improved agricultural practices, including integrated pest management and improved irrigation services. Rice and maize account for 90 percent of total cereal production in Bhutan, with 67,606 metric tons and 93,968 metric tons produced, respectively.

 

 Cereals Production ('000 tonnes), 1999-2006

Cereals

1999

2000

2003

2006

Paddy

44.7

68.6

45.8

74.4

Maize

47.5

77.3

49.7

 

71.1

Wheat

5.7

4.4

4.7

9.6

Barley

3

1.7

1

4

Buckwheat

4.7

2.9

2.2

9.4

All Cereals

105.6

154.9

103.4

168.5

 Source: Ministry of Agriculture Statistics 2006

 

National Food Balance

The agriculture sector consists of crops, animal husbandry and forest. Accounting for 21.4 percent of the GDP, agriculture is the biggest sector in Bhutan, although its share has been shrinking during the past years. In 2006, the agriculture sector grew at a rate of 1.7 percent, in real terms, a slow growth rate reflective of the emergence of other sectors.

 

Domestic Productions and Imports of Food Grains, 2002-2007

Food Grain Requirement

   2002

   2003

   2004

   2005

   2006

   2007

Domestic production

(000’ MT)

  64.7

   75.4

   113.0

    137.9

   108.7

   111.2

Imports (000’MT)

  10.6

   11.7

   18.1

   8.3

   6.3

   8.6

Requirement (000’MT)

  75.2

   87.1

   131.1

   146.2

   114.9

   119.8

Per capita/month (KG)

  8.6

   9.8

   14.4

   19.2

   14.8

   15.1

Sources: RNR statistics for production and FCB for imports.

 

 Geography

 

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Bhutan is a small, landlocked, mountainous Himalayan kingdom situated in the southern slope of the Eastern Himalayas, wedged between the two giants of China (Autonomous Region of Tibet) in the north and India to the east, south and west. The country has a total land area of 38,394 square kilometers. The terrain is among the most rugged and mountainous in the world. The topography varies from an elevation of about 100 meters above sea level in the south to more than 7,500 meters above sea level in the north. Bhutan is divided into three geographic regions: eastern, central and western, with six, seven and seven administrative districts respectively in each region. The country can also be divided longitudinally into six major agro-climatic zones, with substantial variations in agro-ecological conditions and development features, as shown below. 

Agro-Ecological Zone










 

Altitude (m.a.si)            

 

 

Rainfall (mm/annum)

 

 Farming Systems, major crops and agricultural produce.

Alpine









3,600-4,600

<650

Semi-nomadic people, yak herding, dairy products, barley, buckwheat, mustard and vegetables.

Cool Temperate









2,600-3,600

 650-850

Yaks, cattle, sheep & horses, dairy products, barley, wheat & potatoes on dryland, buckwheat & mustard under shifting cultivation.

Warm Temperate









1,800-2,600

650-850

Rice on irrigated land, double cropped with wheat and mustard, barley and potatoes on dryland, temperate fruit trees, vegetables, cattle for draft and manure, some machinery and fertilizers used.

Dry Sub-tropical









1,200-1,800

 850-1,200

Maize, rice, millet, pulses, fruit trees and vegetables, wild lemon grass, cattle, pigs and poultry.

Humid Sub-tropical









600-1,200

 1,200-2,500

Irrigated rice rotated with mustard, wheat, pulses and vegetables, tropical fruit trees.

Wet Sub-tropical









150-600

2,500-5,500

As for the humid zones - irrigated rice rotated with mustard, wheat, pulses and vegetables, tropical fruit trees.

 




Land Cover

Areas (sq.km)

     Percentage (%)

 

Forest

25,787

64.4

Scrub Forest

3,258

8.1

Pasture

1,564

3.9

Tseri/Fallow-rotation

883

28.1

Agriculture

3,146

7.8

Snow & Glaciers

2,989

7.5

Water spread/Marshy

339

0.9

Rock Outcrop

2,008

5.0

Others

985

2.5

Total

40,076

100

 

Water Resources

Bhutan is endowed with abundant water resources with a potential for multiple uses. The Royal Government of Bhutan recognizes this as one of the main resources for fulfilling Bhutan’s objectives of socio-economic development, increasing agricultural self-sufficiency, harnessing hydropower and industrial development. The Water Resources Management Plan (WRMP) 2004 estimated the average flow draining the country to be 2325 m3/s. Per capita, the mean availability of water per annum at 109,000 m3, the highest in the region. Bhutan’s water resources are sustained by a forest cover of around 72 percent of the total surface area, snow and glaciers (which form another 7.5 percent), and the bountiful precipitation on its mountainous topography during monsoon season (MOA). Fed by fresh snow each winter and slow melting in the summer, the glaciers bring millions of liters of fresh water to Bhutan and downriver areas each year. Bhutan has four major river systems: the Drangme Chhu; the Puna Tsang Chhu; the Wang Chhu; and the Amo Chhu. Each flows swiftly out of the Himalayas, southerly through the Duars to join the Brahmaputra River in India.

 

Rainfall

Annual precipitation ranges widely in various parts of the country. In the severe climate of the north, there is only about forty millimeters of annual precipitation- primarily snow. In the temperate central regions, a yearly average of around 1,000 millimeters is more common, and 7,800 millimeters per year has been registered at some locations in the humid, subtropical south, ensuring the thick tropical forest. Thimphu experiences dry winter months (December through February) and almost no precipitation until March, when rainfall averages 20 millimeters a month and increases steadily thereafter to a high of 220 millimeters in August, a total annual rainfall of nearly 650 millimeters. Bhutan’s generally dry spring starts in early March and lasts until mid-April. Summer weather commences in mid-April with occasional showers and continues through the early monsoon rains of June.

 

Surface Water

Three sources of water have been identified by the WRMP 2004. The main rivers provide water for hydropower generation, waste assimilation, tourism, recreation and ecology, with sparse use for irrigation (Paro Chhu). Tributaries and streams are the main source for most water users, with headwater streams used for irrigation and water supply. Subsurface sources in the form of springs and aquifers provide water for domestic water supply and small-scale irrigation. Agriculture accounts for around 90 percent of consumptive water demand, which is mostly through traditional irrigation conveyance systems that are small, gravity-based with few properly engineered headworks or feeder canals. Industrial demand is currently less than one percent and municipal, rural and livestock demands make up the remaining nine percent of the total consumptive water demand in Bhutan.

 

Soil Classification 

The topography of Bhutan is characterized by rugged mountains separated by river valleys. Elevations range from just below 200m in the south to almost 8,000m in the north. Geologically, most of Bhutan consists of crystalline sheets with large masses of tertiary granite intrusions in the north. Information on Bhutan’s soils is very scarce. An FAO/UNESCO report classified ~27 percent of Bhutan as having either cambisols or fluvisols (cambisols are most common in the medium- altitude zone, while fluvisols mostly occur in the southern belt). Less fertile acrisols, ferrasols and podzols were estimated to cover 45 percent of the country. The same study also reports that 21 percent of the soil-covered area suffers from shallow depth with mostly lithosol occurring on steep slopes.


Rice Production

In the commodity chain analysis, rice producing regions have been categorized as: low altitude, mid altitude and high altitude.

Production of Paddy in Different Producing Regions (2004 and 2001)

 

        Area

     Production

       Yield

 

2004

  2001

2004

  2001

  2004

   2001

Low

17,688

  15,996

  17,787

  12,484

  947

   830

 

38%

  33%

  33%

  28%

 

 

Midium

22,797

  24,143

  28,027

  24,189

  1,192

   950

 

49%

  51%

  52%

  54%

 

 

High

5,971

  6,963

  8,395

  7,434

  1,302

   943

 

13%

 14%

  15%

  16%

 

 

Total

46,585

 47,314

  54,325

  44,301

  1,166

   957

Source: INVESTMENT PLANS FOR FOUR COMMODITIES IN BHUTAN BASED ON PRO-POOR COMMODITY-CHAIN ANALYSIS, MoA and FNPP, December 2007.

To address food security issues in Bhutan, rice was selected for pro-poor commodity chain analysis (CCA) under the Food and Agriculture Organization (FAO) of the United Nations and the Netherlands Partnership Program (FNPP) . As evidenced above, the yield in the low altitude regions is the lowest, hence the focus of CCA in the low altitude, producing regions on enhancing productivity and production. In the mid and high altitude regions, the emphasis is on enhancing processing and marketing. This will result in improved food security of the country in the coming years and lead to higher earnings for farmers because of improved marketing efforts and higher earning of exports.

 

Low-Altitude Rice Zone

The low altitude zone contains about 38percent of the producing land of Bhutan. Nevertheless, much of the land is unused; yields are low (about 950 kg/hectare); and the low altitude zone produces only about 33 percent of the rice in Bhutan.

 

Medium Altitude Rice Zone

The medium altitude zone has the largest proportion (50 percent) land planted with rice in Bhutan. The zone also produces about 50 percent of the rice output in the Kingdom, and yield is about 1,200 kg/ha. Much of the internally traded rice in Bhutan is from this zone.

 

High Altitude Rice Zone

While accounting for around 13 percent of the rice producing land in Bhutan, the high altitude zone produces about 16 percent of the output. At around 1,300 kg/ha, the high altitude zone has the highest yield of rice among the three agroclimatic zones. The zone has also established itself as a producer of sought after Red Rice Varieties that have a high premium in the domestic market and even higher premium on the international market.

 

Main Crops Cultivated

 

Rice

Bhutanese farmers mainly grow rice, maize, wheat, buckwheat, barley and millet. The staple food of the Bhutanese people is rice, closely followed by maize. Rice is grown mainly in the western region, in Thimphu, Paro, Punakha and Wangdue districts. It is also grown in the Southern region in Sarpang, Tsirang and Samtse districts. Bhutan’s rice production, 55,762mts in 2006, meets about half of national demand. Total cultivated rice area is estimated at 19,410 hectares and represents 74 percent of all farming households. Production of rice on a commercial scale is limited – total paddy cultivation is limited to 19,410 hectares – due largely to a shortage of arable land and farm labor, low cropping intensity, inadequate irrigation and crop losses to pests, especially wild animals. Studies have shown pest damage from boars, monkeys and elephants ranging from 18 to 71 per cent of crop values.


But domestic production and supply has not been able to keep pace with the rising demand. From the total supply of about 67,038 tons of rice in the country in 2005, a significant proportion of domestic demand is met by importing it from India, a total import of 30,000 metric tons in 2005. The consumption of rice in the urban areas indicates that there is a substantial difference between local and imported rice from India. While the percentage of consumption is 26 percent for the local red and white rice, the percentage of consumption for imported white rice (basmati, bhog and ordinary-551 etc.) from India is as high as 74 percent, indicating a high dependence on imports. The table below shows the differentiation of rice consumption in urban areas.

 Consumption of Rice in Bhutan’s Urban Areas

Rice type


Percent (%)

Local red rice

22

Local white rice

4

Imported Indian rice

 7
 

 Maize

 Maize is grown all over the country, but is more popular in the Eastern region. About 45 percent of the total maize production comes from the six eastern districts of Trashigang, Samdrupjhongkhar, Pemagatshel, Trashiyangtse, Monggar and Lhuntse[5] According to the 2007 Commodity Chain Analysis for maize, production in 2001 was recorded at 48,523 Mt and 90,566 Mt in 2004, a 40 percent increase from 2001. Maize constitutes 49 percent of the national food basket and represents 42 percent of the cultivated area. While maize products are consumed in different forms, such as Tegma (beaten flake), pop corn, roasted maize and Bangchhang and Ara, it is normally consumed as cooked “Kharang” (maize grits). Sometimes it is served as a substitute of rice, for similarities of cooking procedure and eating style.

Potato

Potatoes are the most important cash crop in Bhutan. Around 27,745 households, located mostly at mid and high elevations, are dependent on potato production for a significant portion of their livelihood. Most potato farmers meet their demand of annual supply of rice and household needs using the cash earned from selling potatoes. The cash crop thus has one of the important influences on the socioeconomic conditions of poor rural households of the country.

 

2001

2004

No. of Potato farmers

10,725

10,725

Production(MT)

21,703

47,403

Harvested Area(Acres)

7,715

8,455

Source: INVESTMENT PLANS FOR FOUR COMMODITIES IN BHUTAN BASED ON PRO-POOR COMMODITY-CHAIN  ANALYSIS, MoA and FNPP, December 2007.

 

Vegetables

A variety of vegetables are cultivated in the country; most are produced for household consumption on a subsistence basis but a few are also sold in the market. Potato, some fruits, and chilis constitute the major cash crops, cultivation of vegetables on a commercial scale is limited. Vegetables cultivated on a lesser scale include radish, turnip, carrot, cabbage, cauliflower, tomato, ginger, garlic, and onion. 


Vegetable

Area (Acres)

Production (MT)

Yield

Potato

17,628

68,048

3,860

Chili

5,971

11,606

1,944

Radish

4,016

10,218

2,544

Turnip

2,111

12,914

6,118

Beans

4,501

4,632

1,029

Tomato

831

1,108

1,333

Carrot

598

997

1,667

Cabbage

2,026

4,298

2,121

Cauliflower

600

798

1,332

Ginger

4,425

7,571

1,711

Garlic

1,519

803

529

Source: Agriculture Statistics 2006 (Volume I), MoA


Industrial Crops

Major industrial crops include potatoes, chilis, oranges and apples. Potatoes, oranges and apples are exported to Bangladesh and India. A small quantity of highland red rice is being exported to the United States, United Kingdom and Germany; high value mushrooms are exported to premium markets in Japan, Thailand and China. Lemon grass oil is mainly exported to India and Europe. It is used as a fragrance by the perfumery and cosmetic industry. The lemon grass oil is mainly produced in the east part of the country by the farmers on a contractual basis with the technical backstopping from governmental agencies. Agricultural exports to countries, other than India, constitute 50 to 70 percent of total exports. Oranges were ranked seventh among commodities exported, followed by juice mixture as the ninth largest commodity export, earning USD 5.69 million. A closer look at the table below indicates that the aggregate volume of cash crop exports increased by about 19 percent between 1997 and 2004.

 

  Export of Major Cash Crops

Crops

Quantity (t)

Value (Nu. Million)

1997

2000

2004

1997

2000

2004

Orange

18,647

     11,305

    18,578

    178.928

    105.485

    219.07

Potatoes

13,016

11,356

22,835

43.109

46.968

  162.61

Apples

4103

470

2439

81.669

22.183

  37.87

Ginger

1150

676

250

4.609

6.868

 3.257

Cardamom

527

402

818

36.922

75.045

  81.180

Areca nut

326

173

77

3.013

1.248

2.299

Vegetables

1660

4235

1994

22.536

26.741

12.54

Total

39,429

28,617

46,991

370.786

284.538

518.826

Source: Bhutan Trade Statistics (various issues)


Exported Value of Major Commodities, 2005 - 2007

Commodities

Nu. In Millions

2005

    2006

       2007

Apple

77.2

     40.7

        77.1

Oranges

145.5

     110.5

        218.8

Potatoes

181.7

     227.5

        262.1

Mushrooms

6.5

     4.0

        7.0

Cordyceps

13.0

     42.9

        41.2

All commodities

374.8

     407.6

        548.5

Source: Renewable Natural Resources (RNR) Statistics, MoA, PPD 2008

 

Land Distribution
 

Bhutan has a low population density, with less than 45 people per sq. km, out of the total land area of 40,076 sq. km, only 311,098 ha or 7.8 percent is agricultural land. The area suitable for agricultural production is limited by the steep and rugged terrain, altitude and the high priority given to maintaining forest cover. Kamshing or dryland accounts for the largest area of agricultural land, followed by tsheri/pangshing or shifting cultivation. Chhuzhing or wetland, used primarily for rice cultivation, accounts for around 1 percent of the total land cover and orchards account for less than 1 percent. Almost 4 percent of the country is used for tsamdrok or pasture.

Landholdings are fairly evenly distributed in the country but fragmented with small parcels of land in different locations. The majority of the farmers own only a limited amount of land, with around 33 percent of farming households owning less than three acres each. In fact, more than half of the total farming households (55.7 percent) own less than 5 acres each, accounting for one third of the total agricultural land.

 

Cropping Season

Rice is the staple food for most people in Bhutan. The majority of farm households are engaged in rice production. Rice is grown mainly in the western region of Thimphu, Paro, Punakha and Wangdue districts. It is also grown in the Southern region of Sarpang, Tsirang and Samtse. Most of the rice cultivation in the country revolves around the wet season which extends from May to September.

 

Livestock

Livestock are an integral part of the Bhutanese farming system. The value of keeping livestock extends beyond the immediate benefits of milk, meat and fiber production. In many areas, the primary purpose of keeping livestock is to provide draught power and manure to support crop production. In addition, livestock provide a sense of security for rural farmers in times of crop failure since they can be exchanged readily for cash or food grain. There is a strong emphasis on milk production and processing at the household level since butter and local cheese are major components of the Bhutanese diet. The main types of livestock owned and reared by farmers are cattle, yak, buffalo, equine (horses, mules and donkeys), sheep, goats, pigs, and poultry.

 

Livestock Population (000’heads), 1999-2007

Livestock

1999

2000

2001

2002

2003

2004

2005

2006

2007

Cattle

345

321

287

295

294

296

316

323

325

Yaks

40

35

39

31

39

42

46

41

41

Horses

31

21

22

22

23

25

25

25

25

Pigs

52

42

41

40

39

35

28

42

42

Poultry

294

184

185

192

166

195

189

211

 

212

Sheep

25

20

22

20

25

21

18

23

23

Goats

36

23

23

24

23

24

21

26

 

2

Source: RNR census 200, RNR survey 1999,2002 & 2003 and Livestock Population & Production Bulletin, June 2007

 

Limitations to Agricultural Productivity

 Institutional Constraints

A number of institutional constraints are present in Bhutan ad they create considerable challenges to the existing institutions that are trying to ameliorate food insecurity. Some of the constraints are:

  • Shortage of agricultural land
  • Despite being a pre-dominantly agrarian economy, the share of the Bhutanese agriculture sector’s (cropping, horticulture, livestock and forestry) contribution to the GDP is declining drastically. Only 7.8% of the total land cover is used for agriculture and food production.Inequalities in land ownership and tenancy exist significantly. About 14% of the total farming community owns less than an acre of land.
  • Inadequate agricultural inputs and subsidies
  • A number of essential subsidies for farm supplies and inputs have been discontinued increasing the drudgery of farm work. Even the distribution of farm machinery and equipments has been biased across regions.
  • Rural credit and micro-finance have not been adequate for the rural poor. Farmers are unable to provide security for individual loans and/or are not able to participate in innovative pro-poor lending schemes, which is non existent.

 

 Import and Export Trade Imbalance

External imports have always outpaced Bhutan's domestic production capacities, indicating the inability of the government to achieve its goal of becoming self sufficient in food production.  Because the Bhutanese currency is pegged with the Indian Rupee, closely linked to Indian markets, and there is free trade with India, price and pricing mechanisms are closely affected by economic activities in India, making the use of price incentives to boost productivity unattractive. While food self-reliance/food security is a desired goal, it remains untenable, there is a clear trade deficit between food exports and imports. More food has been imported from third countries than exported, implying the need for increased outputs. Moreover, the bulk of the exports are concentrated to India and the payment is received in Indian Rupees.

 

Localized Shocks

The presence of localized shocks (environmental, economic and political) are present, but a proper mitigation for coordinated stakeholder preperation and response is yet to be put in place.

 

Road Connectivity

Although it has been proven that road connectivity is a leading pre-condition for rural access, road networks are still short of the desired targets. About 49 geogs are still more than eight hours away from the nearest navigable road.

 

Market Development

Because of poor roads and rugged terrain, the high costs of commodities is significant barrier to the competiition of products, particularly in the international market. Because of this, the prospects of benefiting from international markets, other than the regional and domestic markets, is likely only high-value goods that can overcome high transportation costs. The Food Corporation of Bhutan's system of importing and maintaining a reserve stock of essential commodities appears to be loosing its effectiveness. Markets have diversified compared to levels, but prices are almost on par with commercial rates, a destabilizing factor for market performance.

 

Shortage of Farm Labor

The increasing shortage of farm labor, because of rural to urban migration, coupled by competition from growing imports of cheaper food items is a constraint for addressing internal food production rates.

 

Conservation vs. Productivity

The policy of maintaining 60% of the land under perpetual forest cover, inter-alia the strong policy of environment conservation is conflicting with productivity, commercialization and food self reliance objectives.

 

High Cost of Agricultural Production

Agricultural pricing policy in Bhutan is market based, with minimal price distortions. The Bhutanese money, Ngultrum, is pegged to the Indian Rupee, trade with India is free, causing prices in Bhutan to be closely linked to market activities in India. As such, the use of measures like price incentives for boosting productivity is limited. In order to supplement the availability of food grains and other essential commodities such as rice, wheat flour, sugar, tea, edible oil etc., the Food Corporation of Bhutan (FCB) operates what is called “Fair Price Shops” in various parts of the country. However, the government removed a number of subsidies related to supplies and inputs like seeds, saplings and fertilizers, in order to minimize price distortions and financial pressures on the government.


Problems of Low Soil Fertility

Agriculture production is significantly constrained by the difficult terrain that reduces the possible available land for mechanized farming. Share cropping by many landless farmers has impeded agricultural productivity because they have little incentive to increase yields, maximize cropping intensity or invest in land improvements. Other constraining factors that have encumbered agricultural productivity are poor soil quality and associated low levels of nitrogen and phosphorous content, inadequate irrigation infrastructure, lack of access to and quality of seeds, fertilizers and other essential inputs, and issues of access to credit, markets information, post-harvest services and facilities.

Interventions in the first cluster of agriculture and rural development are aimed at increasing agricultural productivity of smallholder farmers, because they often do not produce subsistence levels. Investments in soil fertility is critical for increasing yield, depleted levels of nitrogen in the soil can severely curb agricultural production. Chemical fertilizers, organic manure, and nitrogen-fixing trees and crops have been identified as inputs for improving soil health.


Lack of Diversity

Improved seeds, in combination with more soil nutrients, are essential for increasing agricultural productivity of smallholder farmers. The interventions identified to help smallholders grow improved crops include crop seed, vegetable seed and fodder crop production, vegetative propagation, tree nurseries, and seed delivery.

 

Challenges and Priorities


Besides their rural locations, the poor living in remote areas are characterized by restricted access to markets, credit, market information post-harvest services and facilities, infrastructure and essential social services, high dependency ratios in families, low educational attainments. Households that suffer from food insecurity and extreme poverty are largely located in remote and isolated communities. The PHCB 2005 found that about 10 percent of the total population live beyond six hours walking distance from a motor road.

The interventions in this cluster include:

  •  Expanding the coverage of power tiller tracks and farm roads to boost agricultural productivity and other rural income generating activities, as well as increase access to social infrastructure
  •  Establishing Community Information Centers (CICs) to provide shared facilities for rural communities to use basic telecommunication and media services, access the internet, e-post and other ICT applications and services for socioeconomic activities

Food security at the national level is constrained by the small percentage of arable land for cultivation, subsistence cultivation, low productivity and the small size of land holdings. Bhutan is not self-sufficient in terms of food production and has been a net food importer, particularly of grains. The long-term challenge is: how can Bhutan progress towards greater food security? At a time when farming populations are increasingly shrinking due to outbound migration to urban areas and there is the ready availability of cheaper grain imports that make rice and other food grain cultivation less and less economically feasible, how can food insecurity be decreased. Other challenges related to household food security concerns are the rapid fragmentation of land holdings, high vulnerability to natural disasters, crop depredation by wild animals, birds and pests, poor food storage facilities and low food stocks. Rural farming communities also are faced with limited off-farm incomes, which heightens their vulnerability to food insecurity. The poor use of food stocks, such as the diversion of food grains for the brewing of alcohol, exacerbate the food deficits that communities face. Addressing these constraints effectively will greatly consolidate progress toward the target of reducing to zero the proportion of the population with the minimum dietary energy consumption of 2,124 Kcal per day.

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