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Economic Development and Opportunity

SAMARTH- Nepal Market Development Programme (NMDP)

November 2012 – November 2014
Department for International Development (DFID), Adam Smith International
Eastern, Central and Western Clusters (Ilam, Makawanpur and Palpa districts)
Economic Development and Opportunity
Crop Pro Tech (CPT), Everest Agro Trade (EAT), National Ginger Producers and Traders Association (NGPTA)

The Challenge
Ginger is a herbaceous plant used primarily as a spice - popularly called aduwa in Nepali. It is indigenous to the Indo-China region; hence Nepal stands as one of the most suitable countries for ginger cultivation in the world and, according to the UN’s Food and Agriculture Organisation (FAO), Nepal ranks 4th in global ginger production. Despite the favorable conditions for growing ginger, at least one-third of Nepali ginger producers are poor. This amounts to approximately 66,000 ginger farming households - over 425,000 people - who fall below the national poverty line ($0.25/ person/ day) and many of these households are considered geographically and socially excluded (primarily Janajatis and Dalits in the mid-hills).

There are considerable challenges that ginger farmers in Nepal face. Growing ginger is labour intensive because of the lack of mechanization due to the landscape and the constant attention that is needed for disease management. Irregularity of rainfall, intense sunlight, poor soil drainage, contaminated soil and traditional farming practices, such as timing of planting and harvesting, are factors that contribute to disease-causing micro-organisms that can spread through local ginger seed, particularly rhizome rot. Rhizome rot can, in turn, lead to partial or complete crop failure. In addition to this problem, farmers are compelled to sell their produce immediately after harvest to pay debts, meet their cash needs, and avoid lowering the value of their ginger, which is usually not properly stored. This creates another challenge as farmers sell their produce when there is an over abundance of ginger and, thus, create an oversupply in the market, which lowers the price farmers get.

The Opportunity
Ginger cultivation is crucial to poor farming households because the incomes they receive from ginger directly reduces their indebtedness and allows more funds to be used for food, education and other basic necessities. Nepalese ginger farmers of the mid-hills, in particular, are increasingly recognising the value of ginger farming compared to other cash crops as an option due to suitable land, climate, market accessibility and better profit margins. Nepalese ginger holds a competitive edge in the market in terms of taste, low production cost, affordable price and durability. This is mainly because ginger cultivation in Nepal is organic by default, and both ginger varieties – low – fibre ‘bose’ and local ‘nase’ – perform well in Nepal’s agro-climatic conditions. Ginger holds greater potential for income increases among small-scale farmers due to market demand in the international market, particularly Europe and Japan, who show interest in Nepalese ginger provided that farmers adhere to quantity, quality and timing standards.

Considering the current market scenario, there exist significant opportunities to bring about systemic change in the ginger market in Nepal that benefits the small-scale farmers.

The Approach

Mercy Corps Nepal is working to catalyse systemic changes in the ginger sub-sector that will lead to improved market access and growth opportunities for smallholder farmers and small-scale entrepreneurs. The project, adopting the “Making Markets for the Poor” (M4P) approach that focuses on causes rather than symptoms, is facilitative and seeks to create systemic change. This approach will address the major systemic constraints existing within the ginger market system and bring about a change that will ultimately increase farmers’ income.

A ginger farmer selecting ginger seedA ginger farmer selecting ginger seed
reshly harvested gingerFreshly harvested ginger

The project is being implemented in significant coordination with the local implementing partner, private sector partners, Village Development Committee (VDC) Secretariats, and relevant District and Central-level government stakeholders.

The Intervention
The project will focus on two major constraints that can best leverage systemic changes in the overall market functions (core, supporting and rules) through supply of fresh ginger in the market on a regular basis, while improving the production system and the enabling environment.

Expected Results
By the end of the 2-year project, about 4,613 farmers will benefit from increased income through disease management in ginger, and about 3,360 farmers will benefit from increased income through access to improved low-cost storage for ginger and a resultant increase in off-seasonal sales of ginger.

At the market systems level, partner importers of disease management inputs in ginger will see an incentive to expand and sustain their businesses and improve supply chain linkages by raising awareness at each market actors’ and farmers’ level on the effectiveness of the disease management inputs. In addition, other market actors will also crowd in and improve market competition, product quality, and price efficiency.

Similarly, on the LCS front, partner traders will see an incentive to spread the LCS technology among farmers for off-seasonal trade in quality ginger.