A small village at the border of Gasa and Punakha came into the limelight in 2013 when it became a part of a cooperative, Happy Green Cooperatives (HGC).
It became a subject for talks the chairperson of HGC, delivered to many Bhutanese on entrepreneurship in farming.
The farming community of 18 households, not only became members of the cooperative, Happy Chips, but according to the HGC’s website, (www.home.happy.bt) it also owned and controlled the cooperative and supplied raw materials.
The cooperative in Drakchukha chiwog of Goenshari gewog in Punakha is registered under the agriculture ministry to be regulated by the Cooperative Act of Bhutan until 2020.
Happy Chips business, according to its website was established to support the farming community by adding value to agricultural products and generate a stable market for the farmers.
Six years on, Happy Chips is surviving, but farmers no longer own it or are members.
HGC sold Happy Chips to another private agricultural business, Nob Bhutan for Nu 10.9 million (M) in November 2016 after a yearlong business negotiations.
Sources, meanwhile, have alleged the chairperson of HGC, Sangay Rinchen, popularly known as Farmer Sangay of conning the farmers of Drakchukha by pocketing the money earned through the sale of the cooperative and not sharing the profit with farmers.
A source alleged that HGC website, which is up and running, misleads people to believe that the cooperative is still operational and it also solicits donations and support from home and abroad.
“Happy Chips was out of the market for a while and it is back only through the new venture and not as HGC,” the source said.
HGC’s website stated that after two years of intensive development, Happy Chips conducted a successful test-launch in the Bhutanese market and joined Nob Bhutan in September 2015. “After transferring Happy Chips assets to Nob Bhutan, HGC is now a major local shareholder of Nob Bhutan. The cooperative is furthermore is in charge of the raw-material sourcing.”
The source claimed that HGC is not a shareholder of Nob Bhutan and farmers should know that. “The website mentioned that the cooperative intends to make their actions and decisions transparent, but the people in the locality don’t know anything.”
Another source, well aware of the issue, blamed the agriculture ministry for failing to monitor.
The source cited Article 5 of the Cooperative (Amendment) Act of Bhutan 2009 that mandates the ministry to implement the Act and discharge the regulatory powers and responsibilities. The Act also requires all registered cooperatives to submit annual report including audited financial statements and monitoring and evaluating cooperatives to ensure that they abide with and sanction those that have violated the Act, cooperative’s bylaws, policies and rules of the ministry.
“There was no monitoring and evaluating, which provided rooms for people to con farmers,” the source said.
The source said that there were external borrowings involved in the cooperative without the knowledge of members, which also violated the Cooperative Act.
Agriculture ministry’s Department of Agricultural and Marketing Cooperatives officials said the case is open and the issue is not resolved.
The deputy chief marketing officer, Thinley Wangchuk, said they asked the dzongkhag planning officer, who is the dzongkhag cooperative registrar, to investigate and submit a report. “We have not received the report.”
However, Kuensel found out that the then dzongkhag planning officer had submitted an investigation report on August 6, 2018 with details of how the villagers were informed about the sale of Happy Chips. It reported that farmers were not given any shares.
In a document Kuensel availed, the then Punakha dzongkhag cooperative registrar wrote that half of the payment from Nob Bhutan was made to cover loans from external borrowings, which would require, as per Article 18 (4) of the Cooperative Act of Bhutan, approval by a majority of the cooperative members and prior approval from the finance ministry for external commercial borrowings.
The investigation report also asked DAMC to talk to the chairperson and not to the beneficiaries about the sale of the cooperative.
Thinley Wangchuk explained that once registered as a cooperative, there should be business plan and bylaws and members should know it as per the National Cooperative Development Board of the Cooperative Act.
He said that there is no board as of now and the Act itself is under amendment. “Once amended, it would resolve a lot of these issues.”
The deputy chief marketing officer acknowledged that HGC did not submit any annual report with an updated list of members once it renewed its registration.
Drakchukha villagers said Farmer Sangay told them that he sold off Happy Chips, as he could not handle the cooperative, but nothing about the money earned from the sale of the cooperative. Drakchukha villagers have not complained. Farmer Sangay hails from the same village.
Farmer Sangay said he sold Happy Chips, but did not pocket any money, as he used it to pay salaries for the youth members, who formed farming, piggery and other groups after the sale of the cooperative.
He said he did not pay money to the farmers, as they did not make any contribution while the cooperative was formed. “Drakchukha farmers were just secondary members. The primary members were the 19 youth working for the cooperative.”
He also said he did not receive the full payment, as lots of negotiations happened.
Sangay Rinchen said he was criticised for conning farmers in social media, but it was not from the members. “The cooperative exists in principle but the youth members are doing different things,” he said.
He said he worked in DAMC before resigning to form HGC and since cooperative was new in Bhutan, there were lots of issues. “There are two types of cooperatives – RNR and youth cooperative – and mine was a youth cooperative, where we also had entertainment component.”