The tiny Buddhist-majority nation wedged between China and India has an unusual and some say enviable approach to economic development, centred on protecting the environment and focusing on mental well-being.

Its development model measuring "Gross National Happiness" instead of Gross Domestic Product (GDP) has been discussed at the United Nations and has been publicly backed by leaders from Britain and France, among others.

It banned television until 1999, keeps out mass tourism to shield its culture from foreign influence, and most recently set up a weekly "pedestrians' day" on Tuesdays that sees cars banned from town centres.

"Bhutan has decided to go for a green economy in light of the tremendous pressure we are exerting on the planet," Agriculture Minister Pema Gyamtsho told AFP in an interview by telephone from the capital Thimphu.

"If you go for very intensive agriculture it would imply the use of so many chemicals, which is not in keeping with our belief in Buddhism, which calls for us to live in harmony with nature."

Bhutan has a population of just over 700,000, two-thirds of whom depend on farming in villages dotted around fertile southern plains and the soaring Himalayan peaks and deep valleys to the north.

Overwhelmingly forested, no more than three percent of the country's land area is used for growing crops, says Gyamtsho, with the majority of farmers already organic and reliant on rotting leaves or compost as natural fertilisers.

"Only farmers in areas that are accessible by roads or have easy transport have access to chemicals," he explained, saying chemical use was already "very low" by international standards.

In the large valleys, such as the one cradling the sleepy capital, chemicals are used to kill a local weed that is difficult to take out by hand -- a challenge compounded by a lack of farm labour.

Elsewhere, the fertiliser urea is sometimes added to soil, while a fungicide to control leaf rust on wheat is also available.

"We have developed a strategy that is step-by-step. We cannot go organic overnight," Gyamtsho said, describing a policy and roadmap which were formally adopted by the government last year.

"We have identified crops for which we can go organic immediately and certain crops for which we will have to phase out the use of chemicals, for rice in certain valleys for example."

Bhutan's only competitor for the first "100-percent organic" title is the tiny self-governing island of Niue in the South Pacific, which has a population of only 1,300. It aims to reach its objective by 2015-2020.

Nadia Scialabba, a global specialist on organic farming at the UN's Food and Agriculture Organisation, says the organic food market and its premium prices are attractive for small countries and territories.

"This is happening in very small countries who are not competitive on quantity, but they would like to be competitive in quality," she told AFP.

The global organics market was estimated to be worth 44.5 billion euros ($57 billion) in 2010, according to figures from the Research Institute of Organic Agriculture and the International Federation of Organic Agriculture Movements.

Bhutan sends rare mushrooms to Japan, vegetables to upmarket hotels in Thailand, its highly prized apples to India and elsewhere, as well as red rice to the United States.

By shunning fertilisers and other chemicals, the country also stands to gain by reducing its import bill -- a particular concern for a country short on foreign currency.

Peter Melchett, policy director at Britain's organic Soil Association, says the main benefit of becoming 100-percent organic is an assurance of quality to consumers.

"Because there won't be pesticides or other chemicals on sale in the kingdom, they would be able to offer a high level of guarantees that products are organic," Melchett explained.

In countries like Spain, for example, there is a problem of contamination when organic farms are next to highly industrialised producers using large quantities of artificial chemicals, Melchett said.

"It's difficult for organic farmers in those circumstances to keep their crops and supply-chain free of contamination."

Bhutan's organic policy would "start to give the country a reputation of high-quality organic food, which in the long-run would give them a market advantage and the possibility of price premiums," he added.

Jurmi Dorji, a member of the 103-strong Daga Shingdrey Pshogpa farmers' association in southern Bhutan, says his fellow members are in favour of the policy.

"More than a decade ago, people realised that the chemicals were not good for farming," he told AFP. "I cannot say everyone has stopped using chemicals but almost 90 percent have."