Nature and Biodiversity

What Bhutanese hazelnuts tell us about using data for good

The Buddha Dordenma statue overlooks the town of Thimphu, Bhutan, April 18, 2016.  REUTERS/Cathal McNaughton

The whole system of support, monitoring, and optimization live on a carefully crafted data platform. Image: REUTERS/Cathal McNaughton

Bruno Sánchez-Andrade Nuño
Executive Director, Clay.foundation
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How are we going to close the $2.5 trillion/year finance gap to achieve the Sustainable Development Goals (SDGs)? Whose money? What business model? How to scale it that much? If you read the recent development economics scholar literature, or Jim Kim’s new financing approach of the World Bank, you might hear the benefits of “blended finance” or “triple bottom lines.” I want to tell you instead about a real case that makes a dent. I want to tell you about Sonam.

Sonam is a 60-year old farmer in rural Bhutan. His children left for the capital, Thimphu, like many are doing nowadays. Four years ago, he decided to plant 2 acres of hazelnuts on an unused rocky piece of his land. Hazelnut saplings, training, and regular supervision all come from “Mountain Hazelnuts”, Bhutan’s only 100% foreign invested company. They fund the costs of the trees and helps him manage his orchard. In return, when the nuts come, he will sell his harvest to them above the guaranteed floor price, which will double his income; in a time when he will be too old to work in his rice field.

You could find similar impact stories for the roughly 10,000 farmers participating in this operation across the country, where the farmers are carefully selected to ensure productivity, maximize social and environmental benefits, such as vulnerable households, or reducing land erosion.

Image: Provided by the author

But Sonam also gets a visit from Kinzang every month. This is Kinzang’s first job. Otherwise, he would have moved to the city in hopes of finding a low paying job, but more likely joining the many unemployed youth from the countryside. Kinzang carefully records data on his smart-phone, talks to Sonam and digitally transmits the data back to the company HQ. There, if a problem is recorded with irrigation, pests, or there is any data anomaly, a team of experts (locally trained agronomists) will visit his orchard to figure out a solution.

The whole system of support, monitoring, and optimization live on a carefully crafted data platform that feeds information to and from the farmers, the monitors, the agronomist experts, and local government authorities. It ensures that all 10 million trees are healthy and productive, minimizes extra costs, tests and tracks effectiveness of new treatments.

Back at HQ, Pema receives shipments of tree tissue culture from a high-tech China laboratory (naturally bred varieties optimal for the Himalayas). Pema instructs his team to place the shipment on a sterile bed of nutrients that speeds up the growth stage in the nursery. The whole operation relies on carefully tuning this orchestra of workers, trees, and data. Without it, it would take decades to get such a nut harvest volume, that is poised to place Bhutan from outside the list, to the top tier of hazelnut exports.

In the background, the whole operation has been financed by private investors, and public institutions, like the IFC (World Bank’s International Finance Corporation) and the ADB (Asian Development Bank). It was, again, data that gives enough confidence in managing the risks to make this endeavor a canonical and coveted “triple bottom line” (3BL): for profit, for purpose and for environmentaly sustainable.

This is also a story which demonstrates how “Data is the new oil” is not the right approach. If Data is the new oil, you extract value from the data, without much regard to feeding back value to the source of the data. However, in this system, “Data is the new soil.” Data creates a higher ground in which value flows back and forth. It lifts the source of the data -the farmers- into new income generation, it enables optimized operations; and it also helps the whole country: Much of the data (such as road quality used by the monitors) is made open for the benefit of the Bhutanese people, without contradiction or friction with the business model.

Later this month, the World Economic Forum celebrates their “Annual meeting of the New Champions” (AMNC) in Dalian, where Science, Technology, and Data has a special spotlight “to build a future where innovation and entrepreneurship serves all of society.” This story is an example of that. As a scientist who cares about the SDGs, I see technology as a huge ally. I worked at the World Bank right when this “blended finance” push was emerging (2014-2016). Our team work on "The Innovation Labs" did great work co-financing, promoting and highlighting new approaches that involved the private sector, academia and public institutions. We saw the connection of Big Data and development, and we worked on it. Personally, I also needed to see “profit and purpose” work together at scale in this "blended finance" lens, but not from the President’s office in Washington DC, but from the field. That’s why I came to Bhutan.

As I head to AMNC, I am hopeful for these kind of innovative enterprises; I am eager to find and promote many other institutions doing triple-bottom lines at scale. We need them if we want to tackle the SDGs. That’s how we make a dent in those $2.5 trillion/year gap.

Disclaimer: I worked with Mountain Hazelnuts for two months, training their staff on Data Science, OpenStreetMap, and remote sensing.

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