The Global Agricultural and Food Security Program (GAFSP), a multilateral mechanism established by the G20 group of 20 large economies, has approved an equity investment of USD 6 million in Mountain Hazelnut Venture Limited (Mountain Hazelnuts), a for-profit promoter of the production of hazelnuts in Bhutan. Along with GAFSP’s investment, the Asian Development Bank (ADB), a Philippines-based multilateral development finance institution, and the International Finance Corporation (IFC), a member of the World Bank Group, each have made equity investments of USD 3 million. Mountain Hazelnuts will use the money raised to provide farmers with free hazelnut tree saplings for planting and then it will purchase qualifying hazelnuts from the farmers at a guaranteed minimum price for resale on the international market. ADB will also administer a donation of USD 1.3 million from the Canadian government to assist participating farmers in adopting climate-resilient production techniques and a donation of USD 300,000 from the Swedish government to support the inclusion of poorer farmers and women in the value chain.
By 2020, the funding and technical assistance is expected to increase the incomes of up to 15,000 farmers, half of them women. Martin Lemoine, the head of agribusiness in ADB’s Private Sector Operations Department, noted that “the project will help develop an inclusive and environmentally sustainable hazelnut value chain in Bhutan, promote private sector agribusiness development, and help reduce poverty. The technical assistance, meanwhile, will train thousands of farmers, including women, to use farm practices that will help minimize crop losses from climate change”.
By Imke Herholdt, Research Associate
About Asia Development Bank (ADB)
Established in 1966 and headquartered in Manila, the Philippines, the Asian Development Bank (ADB) is a development finance institution that consists of 67 member countries. ADB has three strategic priorities: to foster inclusive growth, to facilitate regional integration and to ensure environmentally sustainable growth. To accomplish these objectives, ADB uses loans, technical assistance programs, grants, equity investments and guarantees in member countries in the region. As of 2014, ADB reported total assets of USD 33.1 billion.
About International Finance Corporation (IFC)
The International Finance Corporation (IFC), a US-based member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of December 2014, IFC has 184 member countries that drive its policies and approve disbursements. As of the same date, IFC reported total assets of USD 84.1 billion, net income of USD 1.48 billion and return on assets of 1.8 percent.
Global Agricultural and Food Security Program (GAFSP)
GAFSP is a multilateral mechanism established to assist in the implementation of the pledges made at the 2009 meeting in Pittsburgh, Pennsylvania, USA, of the Group of 20 (G20), an association of financial officials from 19 countries and the EU. The aim of GAFSP is to improve incomes, nutrition and food security in low-income countries by boosting agricultural productivity. The public-sector office of GAFSP mobilizes grant funding for development efforts led by countries and groups of countries. The private-sector office, which is managed by the World Bank Group’s International Finance Corporation, provides loans, credit guarantees and equity to support agricultural development. As of August 31, 2015, GAFSP had received the equivalent of approximately USD 1.38 billion from its donors.
Mountain Hazelnut Venture Limited (Mountain Hazelnuts)
Mountain Hazelnuts is a for-profit organisation based in Bhutan that was co-founded in 2009 by Daniel Spitzer and Teresa Law. It consists of a team of agricultural, business and development professionals that promotes hazelnut production among smallholder growers in Bhutan. The company employs approximately 600 people. No financial information on the organisation has been made available.
Sources and Additional Resources
[1] ADB to Help Smallholder Farmers in Bhutan Boost Incomes From Hazelnuts
[2] Bhutan: Expanding hazelnut production
[3] Mountain Hazelnuts
[4] GAFSP
[5] GAFSP case study on Mountain Hazelnuts
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