Photo Courtesy: Mountain Hazelnuts

Farmers unhappy with poor production and price of Mountain Hazelnut

Farmers and local leaders across Bhutan have expressed their disappointment that their much anticipated hazelnut plantations are not bearing fruit even seven to eight years after plantation.

Currently, there are more than 10,000 households and community groups engaged in hazelnut cultivation in more than 14,000 acres of hazelnut orchards across 18 dzongkhags, with the exception of Sarpang and Samtse.

This is a USD 30 mn project that started in 2009 with Mountain Hazelnuts Venture Private Limited signing an agreement with the first elected government and the Agriculture Ministry.

Mountain Hazelnuts has guaranteed to buy back the nuts upon harvest and then processes and exports the hazelnuts to international markets to optimize pricing and generate foreign exchange.

However, farmers who have invested their time, labour and dry lands on the project have strongly expressed their resentment on the poor outcome of the plantation even after 7 to 8 years —despite being told that the trees will bear nuts after 4 or 5 years. So, given this, some farmers in the rural communities have even totally given up hope on any outcome from hazelnut plantation.

“We didn’t engage in extensive plantations but for the few we planted some 6 years ago, we haven’t seen any progress on the plant and it isn’t bearing any fruits. Now, the trees lay neglected and abandoned,” said Kezangmo from Jaray Gewog under Lhuentse.

“We were told the trees will bear nuts after 4 or 5 years and we will earn a better economic rate of return if we engage in hazelnuts plantation. Now, it has been more than 6 years and nothing has come of the project. So far, none of the households in my village came out with any positive outcome. We worked really hard to plant the hazelnut saplings and incurred 30 percent of the expenditure on electric fences— even if the plantation was done on fallow land,” said Jamyang the Samkhar gup in Trashigang.

The Radhi Gup Kulung, said that there are almost 160 households engaged in growing hazelnuts in the gewog but the trees bore no fruit even after 6-7 years. “We worked hard on the plantation of the hazelnuts in collaboration with the company. However, we are disappointed with the outcome so far. But the company’s recent grafting program of male plants has given us fresh hope.”

The gup said that although they don’t want to make a fuss about it at the moment, he feels that issues might arise in the future if the trees do not bear fruit even after the grafting program.

Expressing similar disappointments, Chume Gup Jambay in Bumthang said that the trees did not bear any fruit even after 5 to 6 years of plantation. He said that the public has lost trust in the project, although a little was rekindled after the recent grafting program carried out by the company. “We were assured that the trees will bear fruit after 4 or 5 years but that didn’t happen even after 6 or 7 years. However, we heard of cases where two households reported that a few trees started bearing nuts last year, not extensively, but just on a tree or two,” said the gup.

All the local leaders the paper contacted said that although people are disappointed with the outcome of the plantation, they have some hope after a nationwide grafting program carried out by the company.

Jambay Wangchuk, Dzongda of Lhuentse said that people are losing faith in the hazelnuts project and feel that it was a complete waste of time, labour and space. He questioned the delay in the intervention from the company. “If grafting of male plants with female was an option, it should have been carried out early. Why did they have waited for more than 7 or 8 years,” he asked.

Similarly, farmers and local leaders also questioned the delay of the intervention program.

One complicating factor is that not all Hazelnut trees have been planted on non-fertile soil but some farmers have planted it on land that could have also been used for food crops.

Fair Price?

Another issue is if farmers are getting a fair price for their hazelnuts.

Mountain Hazelnuts has committed to purchase all harvested nuts from growers with a guaranteed floor price established with the Ministry of Agriculture and Forests (MoAF).

Lhaki Woezer, Communications Officer with the Mountain Hazelnuts Venture Private Limited said on behalf of farmers and the government, MoAF performed 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 current floor price is Nu 30.34 per kg which Lhaki said is expected by the MoAF to make hazelnut a relatively attractive cash crop. She said the floor price and long term partnership with Mountain Hazelnuts ensure hazelnut growers have no uncertainty about demand and pricing for their harvest.

While the company claims the price to be fair there is already discussion among farmers on how the regional and international prices are much higher then what the company is offering.

However, given that a legal agreement has been signed between farmers and the company there are not a lot of options for farmers.

Jigme Namgyel, the former gup of Radhi said that the Gewog withdrew its involvement with the company after friction over the price of the nuts. “Initially, we were called for a meeting with the company representatives and we clearly remember saying that the nuts will fetch us US$ 14 per kg.  However, they changed their stance during the second meeting and said they promised Nu 14 per kg which discouraged many villagers and the gewog office wasn’t involved with the project thereafter.”

He said that after that the agreement was signed between the Company and the interested households without the involvement of Gewog at all. The agreement he said, also mandated the farmers involved to sell the produce to the company at the set floor price.

The price differs internationally but there are much higher prices available for processed Hazelnuts and higher quality hazelnuts which Bhutan is expected to produce.

In neighboring India processed hazelnuts are being sold for around INR 1200 to INR 1,300 per kilo online and prices go up even higher.

Addressing the pollen challenge

Lhaki said that Mountain Hazelnuts has been consistently focused on addressing the pollen challenge and they have invited several leading international hazelnut experts to Bhutan to undertake trials to ensure that the large-scale grafting program would succeed.

“After extensive research, including achieving success rates over 80 percent on grafts at the Ngatshang nursery, Mountain Hazelnuts sourced material for the program, trained staff, and developed the capacity needed to support logistics,” said Lhaki Woezer.

With people losing faith in the project after being assured of outcomes by 4 or 5 years and with no convincing results so far, the company clarified that most of the millions of hazelnut trees in Bhutan are 4 years old or less. She said that Mountain Hazelnuts only planted a total of 1,000 trees 8 years ago in demonstration orchards, which according to the company are doing well.

“Only a few numbers of trees are 7 years old. When those trees were distributed, farmers were told that the pollinizer trees (for male pollen) would not be ready for at least 2 years. The farmers agreed to go ahead with planting the production varieties, even though the nuts would be delayed. While this was unfortunate, it has been addressed by both distributing pollinizer trees and the grafting program,” said Lhaki Woezer.

The company has so far collected and paid for more than 30,000 kg of hazelnuts and they have set a target where the production of hazelnuts is to be over 30,000 metric tonnes—within five years especially after the recent grafting program that the company carried out.

Mongar and Trashigang have the largest production of hazelnuts so far.

The company says it invested more than Nu 20 mn to carry out a large-scale grafting program in more than 4,000 acres of hazelnut orchards to boost the nut production earlier this year. The grafting program is expected to increase production by 2021.

The response to the program, according to the company’s Communication Officer, has been very positive overall.

The company said it employs more than 800 Bhutanese nationals.

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One comment

  1. Read between the lines. A 100% foreign-owned company headed by two Stanford business graduates (married to each other) coerces the Bhutanese government to provide millions of dollars in funding so they can give free hazelnut seedlings to farmers on the pretense of “social enterprise”, becomes the largest private-sector employer in the country, and forces farmers to accept the lowest price on the planet with a locked-in monopoly for their produce (they can’t sell their nuts in the local market, or anywhere on the open market for that matter), so they can then make millions of dollars more by delivering these same hazelnuts to mega-corp Ferrero (owner of Nestle) to mix with palm oil and sugar from similarly exploited farmers. To top it off, this guy likes to brag he was once a Buddhist monk!

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