The Royal Government of Bhutan will not face additional financial obligations from the implementation of the Cooperatives and Farmer Groups Bill of Bhutan 2025, according to the Financial Memorandum submitted alongside the Bill earlier this week in the parliament. The proposed legislation does not require any new institutions or restructuring, and instead aims to improve transparency, accountability, and equitable distribution of resources among co-operatives and farmer groups.
According to the Financial Memorandum, the Bill will not incur additional recurring financial burden on the government. However, a one-time budget will be required for drafting the new Rules and Regulations (Nu. 0.30 million); printing the revised Act and Rules (Nu. 0.05 million); and, conducting stakeholder consultations (Nu. 3.00 million).
These costs, officials say, are essential to ensure smooth implementation of the revised Act.
In addition, the government has proposed a major revision of the Cooperatives (Amendment) Act of Bhutan 2009, introducing a new Cooperatives and Farmer Groups Bill 2025 to address longstanding implementation challenges and strengthen the cooperative movement across the country.
The existing legal framework—rooted in the Cooperatives Act of Bhutan 2001 and later amended in 2009—has seen limited enforcement, particularly after the mandate for cooperative development was transferred from the then Ministry of Home and Cultural Affairs, to the then Ministry of Agriculture and Forests. Since then, the Department of Agricultural Marketing and Cooperatives (DAMC) has registered 719 Farmer Groups, 120 Cooperatives, and two Cooperative Federations across both RNR and non-RNR sectors.
However, officials acknowledge that fragmented compliance standards, unclear procedures for receiving grants, unaffordable auditing requirements, and the absence of corrective sanctions have hindered the growth, accountability, and long-term sustainability of these groups.
Under the current Act, Farmer Groups and Cooperatives must undergo annual audits by certified auditors—a requirement most cannot meet. In addition, non-compliance cases can only be resolved through court-ordered dissolution, an approach that has proven impractical and counterproductive to private-sector development in rural communities.
The proposed Bill aims to replace these rigid provisions with a more responsive and enabling legal framework. Key reforms include clear legal status and separate criteria for Farmer Groups and Cooperatives; decentralized registration authority, with DAMC as the central registry and regional or field offices empowered to approve registrations; introduction of administrative sanctions to correct non-compliance without resorting to dissolution; a strengthened monitoring, evaluation, and reporting system to ensure greater transparency and accountability; provisions allowing internal auditors to conduct audits for Farmer Groups and Cooperatives, while federations and unions will be audited by empanelled auditors; establishment of regional dispute settlement mechanisms to resolve conflicts more efficiently; and, clear procedures for merger, up-gradation, association, and dissolution of groups and cooperatives.
Officials say the revisions will help streamline coordination with technical agencies, civil society organizations, and other stakeholders to improve service delivery and promote equitable access to resources. The Bill is expected to enhance economic returns for members and strengthen social cohesion in rural communities.
The accompanying Co-operatives and Farmer Groups Rules and Regulations will outline detailed procedures; on registration, governance structures, election of office bearers, fund utilization, compliance requirements, and dispute resolution. The rules will also define the roles and powers of the national and regional registrars, as well as the advisory committee composed of representatives from relevant agencies and civil society organizations.
Once enacted, the new Bill is expected to modernize Bhutan’s cooperative governance framework, improve accountability mechanisms, and foster sustainable development of Cooperatives and Farmer Groups across the country.
Tashi Namgyal
From Thimphu
