Bhutan hazelnut farmers wait for high-value crop to pay

A hazelnut-growing project in Bhutan is trying to give subsistence farmers a higher-value crop, but its backers and growers say the effort has required years of patience after planting delays, pandemic disruption and climate-related setbacks.

Mountain Hazelnuts began in 2009 as Bhutan's first fully foreign direct investment project in agriculture. The company says about 9,000 families now grow hazelnuts on 6,000 acres across the country.

The business recruits farmers to plant trees only on fallow or degraded land, with the aim of raising farm output and improving soil conditions. Hazelnuts can grow on steep mountain slopes, need no ploughing and can help hold soil in place.

Farmer Pema Dema, in Bhutan's Thimphu region, now has more than 140 hazelnut trees after first joining the project without knowing what hazelnuts were. She said she hoped the crop would bring a better price and said the trees had already helped stop soil sliding toward her home during heavy rain.

Mountain Hazelnuts distributed its first 145,000 saplings to 800 growers in 2011. The company later had to graft polliniser plants into orchards after an early mismatch between production and polliniser saplings delayed fruiting.

The pandemic then cut farmers off from outreach officers, and warmer conditions created another problem. The company said its first hazelnut variety needed about three months of cool temperatures, but trees at lower altitudes were getting as little as six weeks. It responded by grafting stock from Georgia that needed fewer chill hours for plants growing between 1,600 and 2,400 metres.

The project still produces limited income for many growers. Farmer Dawa Dhendup, who has 1,400 trees, said neighbours who abandoned hazelnuts were reconsidering as he harvested nuts and prices rose.

Mountain Hazelnuts CEO Sean Watson said investors have put $36 million into the company. He said it remains reliant on “patient capital” and hopes to be cash flow positive by 2031, when it aims to reach 10,000 metric tons of production. Current output is about 30 metric tons, but Watson said production is expected to at least double each year.