Gopal Parajuli has come all the way from Sankhuwasabha to Biratnagar to attend a workshop for those involved in the ginger value-chain from Eastern Nepal. Clad in a suit and a Nepali dhaka-topi, Parajuli hopes that this workshop will give him and others like him the hope to re-invest in ginger.

Gopal Parajuli is a farmer. At one point he was involved with ginger farming, but now he says, “jangar nai mori sakyo.” Most farmers in Nepal share this sense of disenchantment with their work—the work is labour intensive, the pay is unrewarding, and the recognition in non-existent. 

Ginger is the main cash crop in the mid-hills of Nepal. The geography and topography of Nepal make ginger farming particularly conducive. It requires low investments and maintenance, and yields high returns. In the last fiscal year alone, 21,869 hectares of land produced a total of 246,630 metric tons of ginger. Out of these, Rs477.48 million worth of ginger was exported from Nepal. But despite this data, it seems that the profits are not trickling down to farmers. 

Enter middlemen

The middlemen often keep high profit margins. After farmers like Parajuli sell their goods to the middlemen, they include their costs as well as a significant profit margin to the product before selling them. Not surprisingly, an oft-cited complaint on part of customers is how expensive ginger is. The profits seldom find their way back to the farmers.

Gopal Parajuli shares that there was no easy road access from his village in Sankhuwasabha to the market even just a few years ago. This meant that he would use mules and tractors to transport his goods over 150 kilometres of land to bring them from his hometown to Birtamod. It is here that he would try to sell the ginger from his farm to the middlemen, who would often try to persuade him to sell at lower costs. Having made the arduous commute, his only goal would be to sell the ginger so that he could earn a decent amount for him and his family. For Parajuli, this meant that he was willing to sell the ginger for as low as Rs25 per kilogram. The Nepal Ginger Producers and Traders Association (NGPTA) estimates that the middlemen would often be selling the same goods for Rs60 to 80 per kilogram.

From consumer trends nationally and internationally, if one thing is clear, it is that there is demand for ginger. According to the Ministry of Agricultural Development, Nepal exports almost 60 percent of the ginger produced here. India is the major market for Nepali ginger, consuming over 90 percent of the shipments. But despite this, the NGPTA claims that the farmers have not been receiving a fair price for the ginger in the Indian market.

Therefore, a need to diversify ginger’s export market arises—Nepal has possibilities of exporting to countries like the US, Saudi Arabia, United Kingdom, Japan and Spain, which are among the world’s largest consumers of ginger. Moreover the Nepal Trade Integration Strategy (NTIS) 2016 recognises the potential for ginger value chain development, identifying it as a niche market.

Revamping Ginger 

In order to compete effectively in the market, the ginger sector needs to engage in effective branding, which may be as simple as washing and processing the ginger. The fact that Nepal exports unwashed ginger hurt its chances of effectively competing in the international market. According to the Nepal Ginger Profile 2016, ginger has a high overseas trading potential if substantial improvements can be made in yield, quality and volume. Thus establishing a washing facility along with enhanced cultivation methods, distribution of quality seeds, efficient processing and improved storage facilities, and proper monitoring of good agricultural practices can significantly help increase ginger exports. 

Steps and measures to regulate the ginger value chain will also go a long way in ensuring that ginger farming is profitable and that the farmers enjoy a share of the profits. This may be achievable through contract farming. Contract farming has been executed in many parts of the world and is shown to increase agricultural productivity and reduce rural poverty (barring contextual differences). However contract farming agreements must be guided by a proper contract farming act to get the best results.

Investing in infrastructures and technology as well as research and development may also boost ginger productivity. Ginger has shown that is it a lucrative sector to invest in—with the investment and the right environment, it promises lasting and sustainable results to support national economic growth. After all, agriculture holds the power to lift farmers out of poverty. And an enabling environment for farming will motivate the farmers to do what they do best—feed the country.

- Basnyat holds an MSc from the University of Oxford and is a communication consultant