More than 57% of the total population in Bhutan comprises of farmers who practise subsistence farming on small landholdings. Although smallholders are the future of sustainable agriculture, they are often at the crossroads of climate change which poses a growing concern for rice growers in Bhutan. Some farming communities use traditional knowledge and experience to build resilience towards climate change. This paper presents a case study of paddy growers in Punakha valley, who have adopted traditional rice breeds which provide a way forward in sustaining their livelihoods in the face of climate change. We provide an account of the institutional context in which these farmers operate and compare it with communities that face similar situations but use other varieties. The study uses the latest Renewable and Natural Resource Survey of 2019 combined with focus group discussions and key informant interviews and provides insights for an evidence-based policy.