Spice of Success: Cardamom, Ginger and the Mercy Corps

Happening Issue 92 Jul, 2010
Text by Amendra Pokharel / Photo: Yi Wen Tan

Have you ever dined at an upscale restaurant in the Middle East, Malaysia or India or somewhere where they serve Mughal cuisine? Next time you do, ask the chef where did they get the quintessential element of any Mughal cuisine: cardamom. The chef will probably say India. Don’t believe him. More likely, the cardamom is from the eastern hills of Nepal.  We learned that during our recent visit to the eastern hills.

As our car whizzes along the winding roads with short, treacherous bends crisscrossing the hills of Illam, Paanchthar and Phidim, I feel my head spin. It is hardly a good time for a quiz, but our guide, or rather our mentor for the day, Sirish Pun, puts us in a tizzy. “What are the five things that farms in Illam are famous for?” he asks. He is generous enough to hint: “They all start with the sound of ‘aa’” (or ‘o’, when spoken in Nepali). As nothing comes from our side he starts out by himself: “The district is famous for aalu (potatoes), aamresha (broom grass), aalainchi (cardamom), aadua (ginger) and olan (milk),” he says.

Of all the things starting with ‘aa’, we were mainly interested in aalainchi and aadua.

For the farmers in the eastern hills, cardamom and ginger as premium cash crops are major sources of income. But, in the past, farmers barely knew the real value of cardamom, and although ginger was always a high value crop the farmers almost discarded it when a crop disease threatened to put them at a loss.

But things began to look better after Mercy Corps, an international NGO that mainly supports agriculture, disaster risk reduction and microfinance activities in Nepal, launched a string of initiatives called ‘value chain’ development designed to influence farming: from field to market.

Sirish, a Project Officer in Mercy Corps’ Cardamom and Ginger Program, quite generously agreed to give us a tour of the ginger and cardamom farms in Phidim and nearby hills.

Every season the farmers of Sidin, a village located on the hill, 25 km east from the Mercy Corps project office in Phidim, brought their harvest down in sacks. They sold the cardamom to the local businessmen or middlemen or seasonal collectors who then sold it for a higher profit to large exporters. There was no transparency in the price fixing. Farmers could hardly negotiate, and sold for whatever price they got. All the farmers cared for was to get 500 rupees more than the last year’s rate. The local traders kept their hold over a few farmers groups by lending them money during the months before harvest season. Year after year the farmers became trapped in a vicious debt cycle. It was impossible to break free, since the interest rates were exorbitant. “Sometimes as high as 65% per cent,” says Shirish.

There are several problems that confront the cardamom farmers; the most acute being the lack of information on new farming technologies and the way the cardamom trade works.

Mercy Corps applied its value chain model to cardamom farming. Tej Thapa, the Value Chain Program Manager, who singlehandedly steered the project in the beginning, helped mobilize the support of local government agencies. Together they worked to train farmers on disease management, identifying and providing improved seedlings and sharing information on cultivation and production.

Mercy Corps, however, took further steps, first it encouraged some farmer’s groups to test a new variety of bhatti (furnace for drying cardamom) with a new and improved variety that consumed less wood, emitted less smoke, did not affect the original color of the cardamom, and preserved the weight. The new technology is not only more sustainable environmentally and health wise, but also more profitable.

Next, the farmers were trained to grade the cardamom. They now differentiate between the big and small sized cardamom, segregate pink and black colored fruits and sell them at different rates with the bigger and pink ones fetching a higher price. Grading also depends on other things like physical attributes and the place where they are grown. The cardamom from Raanitaar, a hill village next to Sidin, fetches a better price than others just because it is grown there.

The most important initiative benefitting the farmers, however, was the formation of cooperatives. “It took months to organize the farmers and more than a year to understand the areas that required interventions,” says Tej. Since the trade is influenced by multiple sets of interests including those of farmers, middlemen, local traders and exporters, to get the clear picture, Tej had to divide his time between the farms up in Sidin, the project office down in Phidim and the regional office in downtown Birtamod.

Implementing the project initiatives became easier once he was able to convince the farmers about the benefits of working in a group.

The fawa system, under which the traders would scoop 1kg of cardamom per man (1man=40 kg) under various pretexts was abolished in September 2007 and an association of the cardamom traders and producers was registered in December the same year. “It has increased their bargaining power as the collective volume of the cardamom they turn up through the cooperative is much higher than what they used to sell individually,” says Tej.

“We used to bring the cardamom down to the traders individually. As individuals our volumes never went beyond 2 to 4 man,” says Surendra Rai, a Sidin cardamom farmer. “We used to get 6,000 rupees per man then.” After they started bringing the cardamom down through their cooperative the rate increased to 7,500 to 8,100 rupees per man.

Most of what is produced is exported to India and from there to other countries. Local traders, therefore, want at least a truck load of cardamom before sending it to the exporters. So when the villagers turn up a collective volume—last time they collectively marketed 136 man—they got a better price with the increased bargaining power.

But working in a group has more benefits than augmented negotiating power. “Last year our cooperative received 80,000 rupees from the District Agriculture Development Office for rebuilding the water canal (kulo) that ran through their farms,” says Surendra. “We are now in a better position to pressure the local authority and get our demands fulfilled.”

But to this date, except for the harvest season, the farmers depend on the loans provided by the local traders for subsistence. “Which is exactly why, though on a better footing now, the farmers are still unable to free themselves from the debt cycle,” says Tej. The only way out, he suggests, is finding a suitable alternative crop for cultivation for the period when the fields lay untended or else providing the farmers with livestock they can raise.

Ms Cigdem Penn, who produced The Promise of Cardamom; a documentary film about the Mercy Corps’ project notes that due to a lack of proper marketing none of the stakeholders are realizing their earning potential. Cigdem, who also conducted an evaluation of the effectiveness of the pilot project, concludes that the project contributed significantly to the livelihoods of small farm holders whilst building capacity of the exporters.

Tej points out that the way trade works cannot change overnight. Farmers still take loans from local traders and as yet they neither have the skill to understand the market nor do they have the resources to approach exporters by themselves. But through openness, fair play and understanding between the players, the earnings of the farmers can be gradually increased.

Increase in the income level of smallholder and marginalized farmers is one of the main objectives of the Mercy Corps’ value chain approach. Though the cardamom farmers are seeing a steady but slow rise of income, ginger farmers are already reaping the full scale benefits. Just a few months back, however, the ginger farmers were worse off than the cardamom farmers.

Shiva Kumar Aryal comes from a family engaged in ginger farming for more than two decades. He says there was a time when planting 1man (40 kg) of seeds yielded 10 to 12 man of ginger. “Since the last five to seven years, however, even after planting 20 man, the yield failed to exceed one man.”

The farmers reported widespread rotting and some gave up ginger farming altogether. The disease was later identified by Mercy Cops as rhizome rot. “The seeds were susceptible to the disease because farmers used the same old stock over and over again,” says Shrish. “Ginger is an annual crop and therefore in order to replenish the soil, which in turn nourishes the crop, the seed has to be changed every year.” If the seeds are not changed they lower the fertility of soil and subsequently the productivity of the crop.

Mercy Corps identified a new seed stock that is not only disease resistant but also gives better yields. The organization hauled 8,000 kg of ginger to Illam and distributed it to 96 farmer families. To arrest rhizome rot, it provided trichoderma, a type of bio-fungus that destroys the fungus that causes the disease. “Later when one of my neighbors saw the yields in my farms, he nearly fought with me,” says Shiva Kumar. “I told him it was the same seed provided by Mercy Corps which he had refused. He regretted the fact and requested me to get some of it in the next season.”

Under Mercy Corps’ seed bank rule the farmers who receive the seeds must return the exact quantity from their harvest. The ginger is then passed on as seed to other farmer families. But seeing the better yield many farmers from the first batch have already requested Mercy Corps to allow them to keep the seed, which they would return in double quantity from the next harvest.

In Shiva’s case, the 66 kg (1.65 man) he planted yielded 8 man of ginger. He has stored all the ginger products as seeds for planting next season. The ginger that Mercy Corps introduced, the bosé (low-fiber and pulpy) aadua, is of better quality compared to nasé (fibrous) aadua which has less pulp and more veins. “The demand for pulpy ginger is more and people are willing to pay double the price as compared to the other variety with more veins,” says Shiv Kumar. For next plantation, Shiv plans to store 10 man of ginger as seed.

“The farmer who used to follow traditional farming method are now trying Mercy Corps’ suggested techniques for improved seed quality and increased productivity.” says Shiv Neupane, another Project Officer directly involved in ginger promotion with Mercy Corps.

Singha Bahadur Rai, another ginger farmer, recently switched to ‘low cost ginger seed storage technology’ introduced by Mercy Corps. He stored 75 kg of seeds provided by Mercy Corps to start with. “I have already finished planting them,” he says. Though he is yet to see the yields, he was quite happy to see the stored seeds with better color and sprouting. “The added benefit of the new technology was minimal weight loss,” he says. Singha Bahadur used to stack ginger in piles in one corner of his cowshed. Stored in an open space, the ginger lost moisture and subsequently its quality and weight. He heard about the low cost technology from other farmers and decided to try it on his own.

The Mercy Corps low cost technology is done by digging a three by three foot pit. The bottom of the pit is first filled with sand and then a cushion of straw is spread at the bottom and the sidewalls. The ginger is then stored in it. The mouth of the pit is covered by tin foil or wooden slabs. The cover has a hole at the center which is fitted with a pipe that allows the circulation of oxygen in and out of the pit.

Apart from better color, sprouts and preserved weight, the farmers say, the yields from such seeds are much higher. The ginger produced following the low cost method are of improved quality and therefore fetch a better price in the market. “The traditionally stored ginger sold at 1,200 rupees per 40 kg, whereas the ginger stored following the new technology fetched 2,200 rupees owing to the short supply of good quality ginger in the market,” says Singha Bahadur.  

Shiv Kumar says nine farmers’ groups came up to him last month and filed applications for the seeds and technology provided by Mercy Corps. “Earlier it was hard to get the farmers organized, but now they themselves approach us in groups to expedite the process,” says Tej.

Shiv Kumar says he and his farmer groups are grateful to the efforts of Mercy Corps team. He says he would like to see that the project continues its work in the area at least for another 4 to 5 years. “There are times when you feel that it would be a great help if there was somebody just to show you the way,” says Shiv Kumar.

Well aware of the farming communities’ dilemma, Mercy Corps hand-picked a local from among the farmers and groomed him to provide the farmers with inputs and skills. Amar Mukhiya, a ginger farmer himself, happy to take on the new role as a private service provider for inputs supply and technology transfer.

Several other initiatives Mercy Corps has taken will go a long way in not just sustaining the trade but also promoting its expansion and growth. By institutionalizing and formalizing the cardamom and ginger trade in the target districts, the organization has provided a framework within which the players can come together to resolve a crises as well as grow mutually. Establishment of farmers’ cooperatives, formation of the Large Cardamom Entrepreneurs Association of Nepal (LCEAN) and capacity building of Nepal Ginger Producers and Trade Association (NGPTA) are some of the efforts in that direction.

To reduce the dependency of the farmers on the exploitative loans, Mercy Corps has partnered with Nirdhan Utthan Bank. The organization agreed to cover the bank’s organizational loss for three years, after which it would be operationally self-sufficient. Together, they introduced modified lending at a low interest rate. It helped to increase the profitability of the small holder farmers. Those dependent on the loans from the local traders are benefiting the most.     

Mercy Corps judges the success of its projects by the ability of farmers to carry on by themselves. “The sooner the better, as we have to move on and identify other marginal farmers who can benefit from our support,” says Tej. The organization empowers farmers through skill transfer, organizing and enabling the information flow, and facilitating improved logistics whenever necessary. By helping them better understand the value chain of their trade, Mercy Corps also encourages entrepreneurial skills in farmers. “No matter how big a project, the way we work will remain the same,” says Tej. “We work right from the bottom, bring all the stakeholders together and, most importantly, we judge our success by the rise in income and living standards of the marginal farmers we work with.”