||This report summarizes the work of two CIMMYT regional scientists who visited Bhutan Oct 18-Nov. 1 1988 to prepare a paper on wheat and wheat development in Bhutan at the request of the government. Wheat is the third most important cereal crop in Bhutan, but is not the preferred staple. As such, it has received little research attention and farmers grow it as a less important subsistence crop. Yields are low compared to other South Asian countries. The government of Bhutan wishes to intensify wheat production to help achieve self-sufficiency in food grains and increase small farmer incomes. Figures for the acreage and production of wheat for the whole of Bhutan are only available for 1984. In that year, Bhutan produced 11,880 metric tons (MT) of acres (3,735 ha). No data are available after 1984 to compare production in 1988 or to predict trends. However, it is believed that the targets set for the Fifth 5- Year Plan were not met. Reseasons for this shortfall are not known. Bhutan imported 5,519 MT of wheat from India from April 1, 1987 to june 30, 1988. Most of this wheat was distributed as flour to the urban areas of western Bhutan and major development projects in the West. Wheat is mainly utilized in Bhutan as subsistence food and prepared to resemble rice. Some is used as chapatis mainly by the foreign workers from India and Nepal. There is a growing demand for bread products in the urban centers. An undetermined amount of wheat and barley is used for production of alcohol and a certain amount is cut as green fodder for animals. Wheat ir grown in all zones of Bhutan. Mostly, it follows paddy rice or maize but no data are available on percentages. Wheat is irrigated after paddy and rainfed after maize and is always grown as winter crop. The spring wheat variety Sonalika is predominant up to 2500 masl; local winter wheats are grown at higher elevations. Production methods reflect the low importance and subsistence nature of this crop. Very little inorganic fertilizers are used and most nutrients come from applied data are available on the production practices for this crop. The Centre for Agricultural Research and Development (CARD) at Wangdiphodrang initiated research on wheat in 1982. Work on selection of suitable materials to replace Sonalika has received most attention. Little work has been done on agronomy issues, although an FAO fertilizer project has several years of data on wheat responses to N-P-K in different parts of the country. Stripe rust is the major disease problem and Sonalika is susceptible. The economics of wheat production are negative in terms of net returns and returns to labor in the Wangdi-Punakha Valley where labor costs are very high. In three other promotional areas where labor is cheaper, net returns and returns to labor are good assuming the government will procure the excess production at 3 Ngultrums (US$ 0.21)/kg. With the policy of the government to promote wheat, research must concentrate on technology that reduces the cost of production and use of labor, while at the same time increases yield. Until costs of production can be reduced, wheat production in Bhutan will not be competitive with imports from India. Crop management research offers many opportunities for increasing productivity. Improved crop establishment, earlier planting, zero tillage, mechanization, use of fertilizer and irrigation and water management are discussed in technical terms to meet this goal. Fertilizer issues especially efficiency, use of organic manures, green manuring, and the problems of sustainability and yield decline are urgent issues for research. This latter problem must receive attention to prevent the productivity of the land from declining with time.