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...

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