ADB to Help Smallholder Farmers in Bhutan Boost Incomes From Hazelnuts

ADB to Help Smallholder Farmers in Bhutan Boost Incomes From Hazelnuts

ADB to Help Smallholder Farmers in Bhutan Boost Incomes From Hazelnuts

The FINANCIAL -- The Asian Development Bank (ADB) has approved an equity investment of $3 million and Canadian and Swedish-financed technical assistance for Mountain Hazelnuts, an organization promoting hazelnut production by smallholder farmers in Bhutan to help them diversify and boost their incomes. 

Other financing for the project is being provided by IFC, a member of the World Bank Group with $3 million, and $6 million from the Global Agriculture and Food Security Program. ADB will administer a $1.3 million grant from the government of Canada to help the participating farmers adopt climate-resilient production techniques and a $0.2 million grant from the government of Sweden to support the inclusion of poor farmers and women in the value chain, according to ADB.

“The project will help develop an inclusive and environmentally sustainable hazelnut value chain in Bhutan, promote private sector agribusiness development, and help reduce poverty,” said Martin Lemoine, head of agribusiness in ADB’s Private Sector Operations Department. “The technical assistance, meanwhile, will train thousands of farmers, including women, to use farm practices that will help minimize crop losses from climate change.”

Mountain Hazelnuts is investing more than $25 million in climate-resilient hazelnut trees to be handed over to smallholder farmers for free. The saplings will be planted on thousands of hectares of previously fallow or degraded land, aiding soil retention, watershed stability, and carbon sequestration. Once the trees produce hazelnuts, the company will purchase them at a guaranteed minimum price and market them to international buyers.

The project is estimated to help lift incomes for up to 15,000 participating farmers by 2020—with at least half of them women. As much as 15% of Bhutan’s total population is eventually expected to benefit from the project.  

Bhutan is highly vulnerable to climate change impacts including temperature spikes, water scarcity, and landslides from glacial lake bursts as ice melts. The technical assistance will provide training in climate-resilient farming techniques, including harvest and post-harvest crop management, and pest management. It will help improve irrigation systems and water storage, introduce a smartphone application to allow the easy swapping of weather information and best farm practices, and provide research and development support into new crop varieties.