‘The future of Bhutanese hazelnut is secure’

Lhaki Woezer, the Communications Officer with Mountain Hazelnuts in Bhutan talks to Chencho Dema of Business Bhutan about the establishment of the company, the challenges and solutions, role, and responsibilities of the workers in the project.

Q. Can you tell me us about the Mountain Hazelnuts project in Bhutan?

A. Mountain Hazelnuts (MH) is a social enterprise and Bhutan’s first 100% FDI company. In an MoU signed by the Royal Government of Bhutan and MH in 2009, both parties committed to enabling MH to establish a profitable business that benefits investors, farmers, and communities by planting 10mn hazelnut trees on fallow and degraded land. The company’s social objectives include significantly increasing household income for farming households and community groups in rural farming communities and providing long-term direct and indirect employment for thousands more Bhutanese. Besides, planting hazelnuts on degraded and fallow land has significant environmental benefits, helping to stabilize eroding soil, restore habitats, and will sequester approximately 8mn metric tons of atmospheric carbon.

Q. Employing more than 800 people, many of whom are rural women without formal education or employment, and more than 1,200 people derive their livelihoods by providing support goods and services to the Mountain Hazelnuts Can you elaborate on this?

A. Mountain Hazelnuts works with more than 11,000 farming households and employs about 700, of which 36% are female.

MH’s business model focuses on the needs of women in Bhutan and incorporates ways to bring women into leadership positions in the company. Income opportunities for women in mountain communities are hard to come by. Rural-to-urban migration has depleted villages of working-age males; however, hazelnut orchards can be maintained and harvested by women without requiring heavy manual labor. MH has made it a priority to hire women as Community Lead Growers (CLGs) in the villages to be a model on what a well-maintained orchard looks like and serve as a coach to other growers. This gives them greater status and increased authority in their communities. Also, recognizing that female growers are likely to be making saving and spending decisions for their families from the income earned from their hazelnut harvest, MH has trained more than 4,400 female hazelnut farmers on financial literacy. The primary targets of this training were women with little or no formal education.

MH has a goal of 50% female staff and has consistently employed more than 35%. These roles range from executive C-suite positions to supervisory roles in the nurseries and management positions in the office. To support female employees, Mountain Hazelnuts constructed a Hazay Baby Centre to provide sustained support for working mothers at MH. This helps working mothers to balance their responsibilities as mothers and employees of the company. Besides, MH has continued to organize specialized health screenings for female employees, supporting them to maximize their potential across all aspects of life, both within the workplace and outside.

Q. Can you describe the role and responsibility of the Bhutanese workers in the project?

A. It is important to note that of the almost 700 staff in Mountain Hazelnuts, only 6 are non-Bhutanese. The company is run by Bhutanese, for Bhutanese. We have Bhutanese in different roles in the company, ranging from Field Extension workers in Gewogs to Directors.

Q. Farmers in many parts of hazelnut plantation areas back in 2019 have lost hope of reaping the benefits as hazelnut trees refuse to fruit even after a decade or so. Can you explain if the situation has improved? To date how much has been purchased from the farmers and at what cost?

A. We collected and paid farmers for 21.5MT of Hazelnuts in 2020.

The floor price established with the Ministry of Agriculture and Forests (MoAF) is 0.442 US dollars per kilogram. On behalf of farmers and the RGoB, MoAF performed an extensive analysis to establish a hazelnut floor price that would provide attractive income compared to other cash crops, such as potatoes and apples, when considering inputs and labor invested. The floor price shields Hazelnut farmers from market risks; other cash crops have been exploited by regional traders leaving Bhutanese farmers vulnerable to fluctuating economics (e.g., cardamom, potatoes, apples).

In 2019, we grafted nearly 4,000 acres of orchards, which amounts to roughly a million grafts. In 2020, we grafted an additional 1,000 acres of orchards, as well as re-visited the 4,000 acres of orchards already grafted in 2019, to re-graft where necessary. MH is continuing to graft trees during this 2021 grafting season, targeting 700 acres of new orchards in addition to 4,300 acres of previously grafted orchards.

This will boost the productivity of orchards across the country until all orchards have sufficient compatible pollenizer varieties. We have also grafted at our Nursery in Ngatshang which will serve as mother blocks to be used for future grafting and as rooted saplings of pollenizer varieties in the coming years. So, the future of Bhutanese hazelnut is secure.

While grafting allows us to quickly add more pollenizers to fill the pollen gap, MH is also implementing an immediate manual pollination program to fill the pollen gap in the years that it takes the grafted plants to mature and produce catkins. In the first quarter of 2021, the company imported more than 60kg of compatible pollen from the Republic of Georgia and collected up to 10kg of pollen from Bhutan. We are currently in the process of undertaking manual pollination of 3,500 acres of mature orchards by using a suitable pollen suspension medium to apply pollen by spraying. This program is based on proven technology developed for successful commercial manual pollination programs undertaken by Ferrero shipping pollen from Georgia to apply in South Africa.

This dual approach helps us to ensure growers have increased harvests this year, in addition to assuring bountiful harvest in the future. The situation has improved and is continuing to improve. Some patience is required for our programs to take effect, but we have left no stone unturned. When our growers do well, the company also does well.

Q. In 2019, 13 tons of hazelnuts were produced; can you share in 2020 -to date how much hazelnut has been produced? Where are the hazelnuts exported besides Asia and Europe?

A. We exported the first two harvests to Malaysia, and are in the process of exporting 2020’s harvest to Australia.

Q. What was the impact of the Covid-19 pandemic on the project and workers?

A. For MH operations, the lockdown decision coincided with the scheduled start of the hazelnut harvest. This is a big event for us as we and our growers work all year round to see it come to fruition. Hazelnuts are harvested from August to September. The timing of the first lockdown created significant problems. Many growers across the nation saw much more nutting in 2020 due to the increasing maturity of hazelnut orchards across the country, as well as higher quality and more consistent orchard care.

However, the challenges posed by COVID-19 also presented an opportunity for innovation. Instead of Collection Centres in communities, MH implemented a system of Mobile Collection, with a small group of staff moving through the Dzongkhags to collect the harvest from growers’ orchards. Despite the challenges all our growers were paid, no staff furloughed, no payouts, and our major programs are still being undertaken with modified COVID19 practices.

Q. How many farmers are into hazelnut plantations and how have they been benefited from such plantations?A. We have about 11,000 farming households. Hazelnut by nature of it being grown on degraded fallow land and not on prime agricultural land serves as a stable additional source of income. Hazelnut farming also actively reverses climate change.