Is Something Going Nutty With Our Hazelnut Project?

It appears that in recent times, Bhutan’s biggest horticulture based FDI project - the hazelnut project that was started over a decade back in the East of the country, has run into rough waters. This is a big bucks project initiated by the privately owned Mountain Hazelnut Venture Private Limited (MHV). One Asian Development Bank project document describes Mountain Hazelnut Venture Private Limited thus:

“Mountain Hazelnut Venture Private Limited (MHVL) is a privately owned company engaged in promoting hazelnut production by smallholder farmers in Bhutan. MHV is 100% owned by Mountain Hazelnut Venture Limited (MHVL), a Hong Kong, China company, which is 100% owned by MHGL, a British Virgin Islands company. MHV, MHVL, and MHGL together form the Mountain Hazelnuts Group (MHG).”

Very complicated parentage indeed.

As I said, this project is a big bucks project. To date, gathered from information available in the public domain, funding is said to be as follows:

Asian Development Bank                                      3.00

International Finance Corporation                         3.00

Sponsors and existing investors                             1.80

Global Agriculture and Food Security Program 6.00

Internally generated cash                                       1.00

TOTAL                                             US$ 14.8 million

Additionally, the Government of Canada is supposed to have made a grant of US$1.3 million - “to help the participating Bhutanese farmers adopt climate-resilient production techniques”, including US$0.20 million from Government of Sweden, “to support the inclusion of poor farmers and women in the value chain”.

According to one very levelheaded Bhutanese, this is a “big idea” project that Bhutan needs. I certainly agree. Look at the promised benefits:

The project targets 15,000 farmers, mostly in the poor Eastern region of the country;

The project is already the single largest employer of rural Bhutanese population – close to a 1,000;

The foreign exchange earning from the export of hazelnut yield, when the targeted eleven million trees start fruiting, will be phenomenal;

The project will use degraded and barren land that is not productive as agriculture land;

The income derived from hazelnut plantation will entirely be incremental to the farmers’ existing income, while not replacing crops that are traditionally planted in the household farmlands;

So, with all these positive aspects to the project, why has this project drawn so much attention in recent times and why are some people so passionately opposed to it? What is the real reason behind such vehement protestations, to the point that some people don’t even want to discuss the subject?

But discuss we must, because this project is too important to be allowed to go awry. It is a rare “big idea” project that has come to Bhutan and it could benefit thousands of poor farmers. It is the responsibility of every single Bhutanese to ensure that we allow this project to succeed.

If mistakes have been made, we must have the courage and humility to accept and correct them. If the project has deviated from its initial promises, we have to point them out and make sure that the project promoters stand by their promises, and remain on track.

Above all, we have to make sure that the project promoters make money so that they remain interested. The farmers must make money because they have been promised that their income would be doubled, through the plantation of the hazelnuts in their degraded and barren lands.

But in our quest to reap benefits all around, we must also be wary of the means we employ to achieve the end. It is here that we must remain vigilant.