"FDI Proposal to Grow Hazelnut in Bhutan"
Ministry of Agriculture
Reported by Singye Wangmo ICS
October 29, 2008

October 15, 2008. Three American entrepreneurs are in the country to present a proposal to grow hazelnut in agriculturally unproductive lands in rural Bhutan, especially in the community and government lands. The proposal was presented to Hon’ble Lyonpo Dr. Pema Gyamtsho, Minister, MoA, Hon’ble Lyonpo Nado Rinchen Deputy Minister, National Environment Commission and Officials from MoA, Land Commission and Department of Budget.

Mr. Daniel Kerr Spitzer, Dr. Michael Tobias and Mr. Andrew Gordon Watson have visited RC Wengkhar, Khangma Agriculture Sub Center and Radhi village in eastern Bhutan and have presented their findings and the proposal to the ministry.

The entrepreneurs are in the country to seek the private public partnership (PPP) for hazelnut plantation. They have successfully established hazelnut plantation in Sichuan, China. They now want to replicate the venture on a smaller scale in Bhutan. According to Mr. Daniel Kerr Spitzer, one of the entrepreneurs, the business interest in Bhutan was spurred by the Bhutanese commitment to environmental conservation both spiritually and significantly. According to him, hazelnut is the second highest dollar earning tree nut after almond with low input demand, making the venture attractive for those with low income. He said that the crop can be grown in hillside and along steep gradients with minimum fertility. The venture will not only enable farmers to supplement cash income, but it will also provide employment opportunity for the local community.

The market for the products will be linked to already established markets in Europe and America through long term fair price purchase, based on international standards. Initially the venture will be funded by the entrepreneurs themselves who will eventually explore assistance from other projects and banks that support agriculture development, such as International Finance Corporation, Dutch Development Bank, Asian Development Bank and so on.

The Hon’ble Lyonpo welcomed the proposal saying that such Foreign Direct Investment (FDI) project will enable development of social, economic and ecological balance for the farmers. Lyonpo said that the proposal came at the right moment while the government is in the process of working towards ideal political environment. He said that the ministry would like to see and gain necessary confidence to venture into such project. Lyonpo also said that the ministry will try to work towards enabling policies and legal framework facilitate more FDI. He further added that we have to undertake risk and research and research not for the sake of research only.

Director, DoA suggested an alternative of planting hazelnut in the degraded soil as part of on- going land management program that the ministry is undertaking in different part of the country.

The entrepreneurs cited the close partnership with government, alignment of interest and perspectives, working with local leaders and professionals, establishment of company and building organization, importing tissue culture and know-how, training of local farmers, building processing facilities of international standards, transfer technology and develop international market as some of the factors that will contribute to the success of the venture.

On the other the entrepreneurs said that the non-existence of desired infrastructure, complex logistics, weak legal and policy framework, cumbersome regulatory processes and lack of required logistics are some of the challenges. These challenges will be addressed through long term partnership with stakeholders and concerned agencies.

With the successful implementation of the proposed venture, similar programs can be applied to other cash crops such as potatoes and lemongrass.

More information will be made available as and when we have them.