At IFC headquarters in Washington, DC, husband and wife team Daniel Spitzer and Teresa Law—CEO and CFO respectively of Mountain Hazelnuts—sat down with communications officer Elizabeth Price to discuss hazelnuts, development needs in Bhutan, and the largest motorcycle gang in the Himalayas.
HOW DOES MOUNTAIN HAZELNUTS’ BUSINESS MODEL WORK?
Mountain Hazelnuts engages subsistence farmers who don’t have other sources of income—or who have limited sources of income. We find farmers who have fallow land, provide them with trees and other critical resources, and contract with them to raise these trees and to sell us their nuts. We give farmers a floor price, and guaranteed offtake of all their nuts. We supervise farmers as they raise the trees and visit every orchard every thirty to forty-five days. We keep a very detailed digital record of the orchard health, of what’s going on overall on the farm, and what’s going on in their household, because that helps us develop a sustainable model.
CAN YOU TELL US A LITTLE BIT ABOUT DEVELOPMENT NEEDS IN BHUTAN?
Bhutan has a very high level of rural-to-urban migration, and yet it has a very rich cultural and religious heritage. Part of what Mountain Hazelnuts does is to provide a sustainable income to rural communities, especially in parts of Bhutan where there aren’t other economic opportunities or other types of employment. We help to preserve that fabric of community, to help families stay together, and to provide an income for these communities so they don’t have to migrate to a city to look for employment.
What are the environmental benefits of planting hazelnut trees on degraded land?
We plant on degraded land that was either deforested and became vulnerable, or was subjected to what is known as ‘slash and burn’ or ‘shifting cultivation’. We plant trees along the contour, essentially like retaining walls. Every six feet—every two meters—we plant a tree. Then, on the dropping down slope, every four meters, we plant another row. This acts as a series of retaining walls, capturing the soil and spreading roots. It stabilizes the soil, reducing erosion and landslides, and also cleans up the water.
What is the role of women in Bhutan in agriculture?
In Bhutan, women have a very large role in family life and in religious and cultural life. Of the 600 staff we now have in Bhutan more than half are women, and they play major roles in our company. We place a large premium on providing training—both scientific training and technical training—to all of our staff. We actively mentor our young managers in terms of professional skills, but also soft skills. We have a women’s leadership program, teaching our female staff how to network, how to develop skills that they may not have had previously and how to be effective managers.
How do you ensure the traceability of your supply chain?
Mountain Hazelnuts has established what I think we can call the biggest motorcycle gang in the Himalayas. We have about 150 people, all of them are trained in outreach, science and hazelnut cultivation and they visit each of the farms on motorcycles on a regular basis. They collect data and they correct the farmers who have taken on wrong practices. If intervention is required—for example if there is a pest or limited water supply - they’ll teach the right practice or intervention. And they build a really valuable library of digital information about every orchard that we work with so that we have complete traceability.
How has GAFSP helped make this investment happen?
Mountain Hazelnuts is a risky investment. It’s a very long-term venture. Trees take time to grow, they don’t produce hazelnuts immediately. The conventional financial mechanisms and financial institutions didn’t have the patience to provide capital to us on terms that made sense. GAFSP takes an interesting approach to the development of Mountain Hazelnuts. It thinks about the risks involved. It thinks about the actual needs of the project and it really plays a bridging role. We are delighted to have GAFSP involved.