There is no word in the Bhutanese language for “hazelnut” as the tree is not native to the Himalayan kingdom.
That did not stop husband-and-wife team Daniel Spitzer and Teresa Law from starting a hazelnut business in Bhutan in 2008, which has since grown to become the country’s largest private-sector employer. Today, Mountain Hazelnuts has about 12,000 orchards across the kingdom and aims to capture 3% of the world’s supply of the nut.
“We had the vision of working with vulnerable communities in the mountains, working with smallholder farmer families, and giving them a long-term source of income and also a fair return to investors,” Spitzer, Chairman and CEO of Mountain Hazelnuts Group, said on Pinduoduo’s Agri Matters podcast. “It’s an altruistic business but with a pragmatic approach.”
Each of the 12,000 orchards is run by a family or community institution like a monastery, nunnery, or farming cooperative, said Spitzer. About 5,000 of them are run by women-led households. Before introducing the hazelnut, many of these same households were engaged in subsistence farming, producing maize, potatoes, and vegetables.
Mountain Hazelnuts provides the trees to farmers at no cost and provides them with the training and support needed to tend to the orchard. The company also guarantees to buy all the nuts at a minimum price to remove the market risk to the farmer.
Much like Pinduoduo’s Duo Duo Farm program, the farmers are also taught financial literacy and other business skills to become agriculture entrepreneurs.
It typically takes three to four years to start producing nuts, and about five years before the orchards start producing an economic benefit, said Spitzer. But the tree growing sequesters carbon from the start, which can earn income for the farmers, he said.
The trees are typically planted in fallow and degraded agricultural land, which have the added benefit of reducing soil erosion. Mountain Hazelnuts estimates 10 million hazelnut trees across Bhutan will sequester approximately 8 million metric tons of atmospheric carbon. That is equivalent to the greenhouse gas emissions from about 1.7 million passenger vehicles driven for one year.
“There was no word for hazelnut before in Bhutan. We’ve had to innovate with them and find our way jointly, the government has helped, and the farmers have really helped by telling us what they feel comfortable with and need,” Spitzer said.
Before starting Mountain Hazelnuts, Spitzer ran a sustainable forestry business in China. Law, the company’s CFO, spent much of her career in commercial and private banking. Bhutan is famous for introducing "Gross National Happiness" as a alternative measure for development and ranking it above GDP.
To ensure quality control and timely intervention, Mountain Hazelnuts has developed an app to facilitate two-way communication between field and office. The company also collects soil data to make sure that the land isn’t being depleted of nutrients.
This year, the onset of the Covid-19 pandemic has meant adjustments in the way Mountain Hazelnuts does its outreach. With restrictions on gatherings, the company has moved many of its public meetings either online or door-to-door.
A reduction in air links has also meant delays in importing raw materials and inputs from saplings to fertilizer, tools to electric fencing, Spitzer told GAFSP in June in one of its “COVID Conversations” series. GAFSP and IFC are among the investors in Mountain Hazelnuts.
The company works with some local producers on chocolate products but is interested in supplying international markets, Spitzer told Agri Matters. He believes that there will be demand for Bhutan’s hazelnuts from consumers who care that the crops are produced in a pristine environment without the use of pesticides.
“You should know where your food comes from, how your farmers work, and how that’s gotten to you,” said Spitzer. Mountain Hazelnuts provides “full traceability from farm to fork.”