Tashi Yangzom, from Lhuentse, started growing hazelnuts in 2010. Ten years on, her first commercial harvest this year, was 18 kilograms (kg) from which she earned Nu 594.
She has 300 trees in her one-acre land. After intervention from Mountain Hazelnuts (MH), the plants started fruiting in seven years. But she regrets her decision.
She said that in the last two years, the price increased by Nu 3. Currently, the price of nuts is Nu 33 per kg.
According to her, when the MH first introduced the project, growers were promised Nu 200 per kg.
“It is a useless venture. We hoped to enhance our livelihood but we can barely earn Nu 2000 in a year.”
MH provides inputs like seedlings, technical guidance, and field extension staff. The plants mature within three years.
Recently, many farmers complained about the low prices of the hazelnuts although they agreed that it increased compared to past years.
Problems with fruiting was another challenge. Sonam Wangdi, a farmer, said that he could harvest only about two kilograms of nuts so far.
Dechen Lhaden, another farmer, said that she was now planning to cut all her 50 hazelnut tress. “Growing vegetables could be by much more profitable.”
MH buys the nuts and process at a factory in Jangdung, which is then dried, graded by size, cleaned and polished, weighed, and packed for export to Australia and Malaysia.
“In the factory, the nuts also go through a rigorous quality check to ensure that the nuts to be exported meet both Bhutanese and international standards,” said a communications officer with MH, Lhaki Woezer.
Another source said that issues were faced mostly by people in Mongar. “People have sacrificed acres and acres of their agricultural land risking their livelihood. Despite all the hyped promotions over the years, the promises to the farmers were not kept.”
He said that Lingmethang was the most fertile area in the district but the yield was low in the area. “After waiting for years, they are getting only few thousands. Farmers are taking the biggest cut. Price monitoring should be there so that farmers are not left at the mercy of international companies who promote premium quality products in the beginning.”
Chief marketing officer with the Department of Agricultural and Marketing Cooperatives, said that without complaints the department could not intervene. “If there are complaints related to the prices from one side, the department would intervene and rectify depending on the issue.”
The price should have been pre-fixed by the growers and the company, he said.
An expert with the Ministry of Agriculture and Forests said that the government must be careful about equitable distribution of the income from the sale of hazelnut and its products. “Farmers must be given the choice to sale to those providing higher rates if the current contract buyers are not paying satisfactory price to the farmers.”
“We want to avoid a situation where farmers tend to the plants like their babies for more than a decade to only reap a tiny percentage of what the product is sold for in the global market,” he added.
He said that it was important to focus on the economic returns particularly equitable access to returns from the sale.
As of yesterday, 453 grams of hazelnut on Amazon costs USD 16.48, which amounts to Nu 1,200. In India, the price for a kg of hazelnut ranges from Nu 300 to Nu 1400.
Lhaki Woezer said that the agriculture ministry carried out an 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 labour invested.
This is a guaranteed floor price of 44.2 US Cents / kg of quality hazelnuts.
She said it is an attractive price considering that hazelnut trees will produce nuts for more than 50 years and the price will increase over time as the cost of the initial investment to establish orchards, build processing facilities, and develop export operations are repaid. “The price of hazelnuts will only become more attractive over time.”
There was a misconception that MH makes profit by giving growers low prices, she said.
The prices of hazelnuts seen on the internet or in the market are retail prices. These retail prices, according to her, changes at the final stages of the value chain.
MH provided seedlings and other inputs to 12,000 growers across 18 dzongkhags with 150 field extension staff deployed for monitoring, technical guidance, and inspection.
MH was founded by Daniel Spitzer and Teresa Law in 2008. It aims to capture three percent of the USD 7 billion global hazelnut market and expects to significantly increase the income of 15 percent of Bhutan’s population.
It has employed 800 Bhutanese people.