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Background

Bhutan was in the initial stage of planned socio-economic development when it faced difficulty in providing emergency food supplies to the drought stricken parts of the country in the early seventies. The local economy also could not provide enough food supplied to the large number of expatriated engaged in the developmental activities in the country. These difficulties of meeting food shortages drove RGoB though its Five-year development plans to seek assistance from the government of India to supply subsidized essential food items to Bhutan on the basis of quota allotment. Number of ministries and departments were independently engaged in the procurement and distribution of subsidized essential food items. However, under this system, it was observed that the procurement & distribution of essential food items was not properly organized & there were difficulties in identifying the actual beneficiaries in the country.

Therefore, in order to establish a centralized system to ensure better control & organized form of procurement & to have effective system of storage & distribution of essential food commodities in the country, the Food Corporation of Bhutan was instituted under the Royal Charter on 16th August 1974. It was constituted as an autonomous corporation functioning as a government department with the Board of Directors under the Chairmanship of HRH Ashi Dechen Wangmo Wangchuk, the then representative of His Majesty in the Ministry of development. With this the Food Corporation of Bhutan was primarily entrusted with the following mandatory functions:

  • Procurement & Distribution of food grains and other essential commodities for the country.
  • Trading in Agricultural and Horticultural produce in order to endure fair price for both growers and consumers of the country.
  • Building up and maintaining stocks of essential food commodities for meeting emergencies.
  • Construction and operation of warehouses in different parts of the country to ensure better storage facilities.
  • Maintaining the market study for establishing better market outside the country for Agricultural & Horticultural produce in Bhutan.
  • Administering & supervising the functioning of the Co-operative Marketing Societies in Bhutan.
  • To look after any other matter which may be entrusted by the government which later included SAARC Food Security and logistics of WFP (World Food Programme) commodities.

The Food Corporation of Bhutan functioned under the Ministry of Development until it was transferred to Ministry of Trade and Industry in 1979. The Ministry of Agriculture was subsequently created in 1983 and since then FB came under its administrative framework.

Until 1992 FCB functioned as a government department with direct budgetary support from the Royal Government. Following the government’s privatization policy initiated in the early 90s, FCB was converted into a corporation with functional and administrative autonomy. In 1992, it was further delinked form the administrative set up of the Royal Civil Service Commission and registered under the Companies Act of 1989. Subsequently, FCB registered itself under the Companied Act of 2000.

With the change of the status as a Public Limited Company, the functions of FCB have been broadly grouped under two sets-one to fulfill its social functions and the other to play the role of a commercial profit earning organization.

Considering the nature of the business that FCB is undertaking, the social & business functions to be achieved with the following objectives are identified after its incorporation.

  • To maintain and service the “National and SAARC Food Security Reserve to meet emergencies.
  • To facilitate free and fair trading in the marketing of cash crop through the regulated auction yards.
  • To look after the logistics of the World Food Programme food aid program.
  • Ensure price stabilization of the essential food commodities through effective procurement, development of nationwide distribution and sales network.
  • To achieve market leadership in selling diversified consumer products with the domestic market.
  • Introduce convenient product lines and assert quality management to the satisfaction of the consumers.
  • Enhance market share by establishing itself as one of the dependable and reliable firm exporting quality cash crop products