Bhutan, the South Asian kingdom that tracks Gross National Happiness, is banking on hazelnuts to deliver some joy. A massive tree-planting effort is turning a deforested landscape into a prime growing region for the nuts, a favorite ingredient among European confectioners. When the first harvest is ready for export in 2015, thousands of subsistence farmers from the Himalayas expect to see their livelihoods improve.
“Nobody’s ever done anything on this scale in agriculture before in Bhutan,” says Daniel Spitzer, co-founder and CEO of Mountain Hazelnut Venture (MHV), a for-profit that combines commercial, social, and environmental objectives. “We’re planting 10 million trees, involving 15,000 smallholder farming households.” Getting the ambitious project to take root has required not only R&D in agriculture and mobile technology but also scrutiny from the highest levels of government in this young democracy.
Before officials would approve the first 100 percent foreign direct investment in Bhutan’s history, they wanted to know about anticipated social, cultural, and scientific impacts—for the next 30 years. Pema Gyamtsho, minister of agriculture and forests, is convinced the collaboration will be a “win-win” for Bhutan, a biodiversity hot spot. The variety of hazelnuts being planted grows on steep slopes, survives on rainwater, and requires little attention from farmers. “We are not competing with agricultural land that is used for food production,” Gyamtsho explains, “so there is no threat for food security.” Tree planting improves the ecosystem by stopping erosion and sequestering carbon. The agriculture minister sees raising hazelnuts as “very much in line with our belief of careful balance between nature and the people.”
In MHV, Bhutan has found a foreign investor willing to think big and be patient. Spitzer is applying lessons learned from a previous for-profit social venture in China. He launched Plantation Timber Products in 1993 to produce sustainable wood panels. Eventually, some 700,000 Chinese subsistence farmers replanted deforested areas with fast-growing pine and poplar trees. The company also opened its own home decoration stores, expanding to 1,000 locations throughout China. When the company was sold in 2004, backers saw a threefold return on their investment.
The plan for Bhutan is no less ambitious. To rapidly become a large-scale producer of hazelnuts, MHV has invested in developing a tissue culture process for fast propagation. “Plantlets” start in a lab in southern China and are shipped to eastern Bhutan for hardening in an innovative nursery facility, employing about 150 workers. The young trees are planted on family-owned plots, typically at the end of dirt roads high up in the Himalayas. To train farmers on best practices for cultivating an unfamiliar crop, MHV employs 65 community representatives, who will provide quality control and monitoring.
Putting Bhutan on the map as a hazelnut producing region will mean providing an alternative to growers from Turkey and Italy, who together produce 85 percent of world supply.
MHV has invested in developing a remote monitoring system. Outreach workers visit each orchard once a month, using an Android-based phone app to gather data and take photos. Standardized digital reports are submitted via the mobile network, allowing plant pathologists and horticulturalists to determine plant health and if interventions are needed. The app also helps MHV verify social and environmental conditions and keep track of its field staff as they make their way across hilly territory, often hiking 12 kilometers in a day.
Justin Finnegan, MHV managing director, sees opportunities for such systems to go “way beyond agriculture. They have potential to give power to some of the world’s most marginalized people.” The mobile monitoring system, developed in collaboration with Stanford University technologists, allows MHV “to leapfrog inefficient legacy systems. We’re able to implement technology that has not been used in the United States yet,” Spitzer says. “We’d love for this company to be an incubator and testing ground for good, pragmatic ideas.”
Teresa Law, CFO and co-founder of MHV, says the enterprise already is opening new opportunities—especially for women, who make up about 40 percent of the staff. Many employees take part in informal literacy education after work. As more women move into mid-level management roles, “that sets an example for their families,” she says. “We’re looking at this as a multigenerational endeavor. It’s exciting to see the ripple effects.”