Poverty in Bhutan: How Hazelnuts Are Helping

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TACOMA, Washington — When traveling through Bhutan, one witnesses the beautiful landscape composed of towering Himalayan mountains blanketed by dense forests. The country is home to around 750,000 people who are typically known for their ingrained spiritual culture and holistic approach to living. The country is now becoming known for the production of a tiny yet resourceful specialty crop—the hazelnut which is helping alleviate poverty in Bhutan. 

The social enterprise Mountain Hazelnuts is responsible for the introduction of hazelnut production in Bhutan. Mountain Hazelnuts developed an innovative agri-business model that helps bring a stable income to rural smallholder farmers facing poverty in Bhutan. The unique shared value system created by Mountain Hazelnuts has developed a hazelnut market attractive to investment, offered numerous benefits for rural communities, and positively impacted the environment.

Mountain Hazelnuts

In 2008, Daniel Spitzer and his wife Teresa Law founded Mountain Hazelnuts. Before its founding, they wanted to recreate Spitzer’s business model from his previous sustainable forestry company, Plantation Timber Products. PTP helped rural smallholder farmers plant trees on fallow Himalayan soil, which PTP then produced into sustainable wood products. The company was a considerable success by 2004, growing more than 200 million trees and improving nearly 700,000 farmers’ lives.

Four years later, the couple found a growing demand in a relatively small global hazelnut market. The couple saw this as an opportunity to use business practices from PTP and compete with hazelnut producers around the world.

In 2008, Bhutan had just elected to open the country to foreign investment for the first time. Bhutan’s climate and elevation are ideal for hazelnut production to thrive. The perfect opportunity was at hand, and Spitzer and Law founded Mountain Hazelnuts in Lingmethang, Eastern Bhutan.

Creating Shared Value Business Model

Mountain Hazelnuts operates on an innovative Creating Shared Value (CSV) business model that aims to include a positive social impact as a key focus in its operations. The company dedicates itself to producing high-quality hazelnuts while using the business to attain social and environmental goals.

The CSV model follows a six-step process:

  1. Producing: High-quality, non-GMO hazelnut plantlets are made from tissue culture micropropagation in a world-class laboratory. Lab technicians transport different varieties of hazelnut plantlets off to the Mountain Hazelnuts nurseries.

  2. Raising: Mountain Hazelnut’s experts grow the young plants in the world’s largest innovative hazelnut nurseries for three months to a year, carefully monitoring their growth and development.

  3. Distributing: Field monitors assess whether farmers have fallow, degraded land to grow an orchard. If farmers do not have the appropriate land, Mountain Hazelnuts helps them secure land through government leases or agreements with local landowners. Distribution teams drop off the hazelnut trees to farmers. Field experts then help farmers choose the orchard location and provide them training and support with planting and cultivation.

  4. Support: Field experts monitor farmers’ trees every 30-45 days during their early years of growth. The experts gather extensive data on the trees and the surrounding environment and build electronic data that is fully traceable with their innovative app FieldCompanion.

  5. Harvesting and Buying: After three to five years of growth, the hazelnut trees begin to produce. Farmers harvest and dry the nuts, then sell them directly to Mountain Hazelnuts for a minimum price.

  6. Processing: The hazelnuts are then dried, cleaned, separated and tested at Mountain Hazelnut’s processing facility, then exported internationally.

Impact

Mountain Hazelnut’s business model has benefitted Bhutan’s rural communities in several ways. Sheryl Loke, Partnerships and Communications Director of Mountain Hazelnuts, says, “The most rewarding part of the work is just looking at the impact hazelnut cultivation has on communities.”

Because hazelnuts do not require hard manual labor, men and women of all ages can grow them. This inclusivity opens the door for female and elderly farmers to partake in work, and all members of rural communities can benefit.

The profitable career path created by hazelnuts decreases the rural-to-urban migration in communities because younger people do not need to seek employment in urban areas. Poverty in Bhutan exists mainly in rural communities due to the lack of employment opportunities. Poverty in Bhutan’s rural population was 11.9% in 2017 but could potentially decline as hazelnut production takes off.

Hazelnut production is also helping to fight land erosion and climate change. Deforestation in the Himalayan mountains has caused land erosion to exponentiate, leaving topsoil less productive. Growing hazelnuts restores soil fertility by stabilizing topsoil with roots, reducing hillside erosion and reducing carbon dioxide absorbed into the atmosphere.

Hazelnuts grow on infertile soil, increase production each year of growth, and are cost-free to farmers. This supplies smallholder farmers with an easy and reliable additional long-term income. Extra household income allows families to invest in their children’s education and make advancements in rural development.

Looking Ahead

Mountain Hazelnuts currently works with 12,000 smallholder farmer households that have planted 7 million hazelnut trees. The goal is to plant 10 million trees and reach 15,000 smallholder farmers soon. Nearly 15% of Bhutan has benefited financially from hazelnut production so far. The company is now one of Bhutan’s most prominent companies, employing more than 600 people holding agricultural, business and development roles.

Mountain Hazelnuts promotes gender equality and female leadership, offering mentorship through the Women’s Leadership Initiative. Its workforce is nearly 50% female and the company works with more than 4,000 female farmers. Mountain Hazelnuts also developed its Youth Engagement and Livelihood Program that provides youth a 12-month agricultural business internship.

The CSV model of Mountain Hazelnuts has turned hazelnut production into a business that benefits everyone involved and inspires other companies to follow suit. It ensures the world can enjoy high-quality hazelnuts, while the rural farmers and communities facing poverty in Bhutan can improve their livelihoods. All of this is possible while enhancing the surrounding environment and keeping a holistic approach to business and life that coincides with Bhutan’s value system.

Dalton Dunning
Photo: Flickr

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