Rooting out distress

A marketing cooperative in Diphu spices up the lives of ginger growers in Karbi Anglong.

LAST winter, 32-year-old Leader Tisso, a Karbi ginger grower of Phangchou village in the Jirikinding area in Central Assams Karbi Anglong district, had no alternative but to resort to distress sale of his ginger crop at Rs.2.50 to Rs.3 a kg, against a production cost of Rs.4 a kg, to a middleman. This winter (the season generally begins in October and lasts until February), Tisso was not even tempted by the Rs.15 a kg offered by the same middleman.

Instead, in December, he undertook a 128-kilometre journey across the hills to Diphu, the headquarters of the hill district, in order to be the first among 3,500 shareholders of the Ginger Growers Cooperative Marketing Federation (GIN-FED), started in Karbi Anglong in April 2007, to receive a bar-coded all-purpose G-Card, the first commodity-based debit-cum-credit card to be issued in India. The G-Card will enable Tisso and other stakeholders to avail themselves of cash advances up to a maximum of Rs.10,000 from banks to cultivate ginger on two bighas of land. Moreover, because of the market intervention by GIN-FED, tribal ginger growers like Tisso will no longer be at the mercy of middlemen.

A brainchild of Karbi Anglong Deputy Commissioner M. Angamuthu, GIN-FED has, since its inception, procured 200 tonnes of ginger from its shareholders at Rs.8 a kg and sold it at the Azadpur mandi in Delhi and at markets in Ludhiana, Jalandhar and Amritsar. GIN-FED recently tied up with the Northeast Frontier Railway for using railway wagons to transport ginger from Diphu.

A big consignment of ginger will soon be despatched in a rail wagon to a leading ginger buyer, Ray Fam, in the Azadpur mandi. This will also be the first goods wagon to be loaded and despatched from Diphu. The entire consignment has been procured by GIN-FED at Rs.13 a kg. Angamuthu told Frontline that Ray Fam had placed an order for 10,000 tonnes with the federation.

The demand for organic ginger produced in Karbi Anglong is phenomenal. Because of market intervention by GIN-FED, ginger growers are now happy. Initially, we had advertised a procurement price of Rs.7 a kg to procure about 40 tonnes of ginger. Now, some farmers are not ready to part with their produce at Rs.13 a kg, the new procurement price fixed by GIN-FED. This is because middlemen are now offering them Rs.13 to Rs.15 a kg, Angamuthu said.

Ginger from Karbi Anglong has also found a market in Germany. The Secunderabad-based Sresta Natural Products Private Limited has entered into a tie-up with GIN-FED for the export of 22 tonnes of organic ginger produced in Karbi Anglong. Transportation of ginger in railway wagons is expected to bring down the transportation cost from Rs.4 a kg in case of trucks to 30 paise a kg, and GIN-FED will plough back the savings to assist ginger growers further.

Karbi Anglong produces the best organic ginger in the world. The average annual production of 30,000 tonnes is grown by about 10,000 farmers. The ginger grown in Karbi Anglong has a low fibre content. Varieties such as Nadia and Aizol, having high dry rhizome and high recovery of oleoresin oil, are in demand among domestic buyers and exporters. Karbi Anglong has a total geographical area of 10,343 square kilometres, which accounts for 13 per cent of Assams total geographical area.

In 2003, the hill district witnessed a series of clashes between Karbi and Kuki ginger growers of the Singhsan hills. The district was rocked by gun battles between the militant Kuki Revolutionary Army (KRA) and the United Peoples Democratic Solidarity (UPDS), militant outfits of Kukis and Karbis respectively, in October and November 2003, and 50 persons died in these. Several hundred people were injured and thousands of villagers belonging to both communities were rendered homeless in the two-month-long violence.

The UPDS banned ginger cultivation in the Singhsan hills, terming it a threat to the environment, as the slash-and-burn method of cultivation was adopted. It called a seven-day economic blockade against the alleged destruction of forest by ginger growers, an overwhelming majority of them Kukis. The organisation set fire to several ginger-laden trucks during the agitation.

Kuki organisations, on the other hand, alleged that each ginger-laden truck was forced to cough up between Rs.5,000 and Rs.20,000 to the UPDS, and the refusal by Kuki farmers to pay the money infuriated the organisation. The clashes continued in 2004.

GIN-FEDs market intervention and support mechanism have also gone a long way in reducing the ethnic tension. The spice crop has now brought under one umbrella not only Karbi and Kuki ginger growers but also ginger growers belonging to other tribes. In order to prevent extortion by militants, GIN-FED has arranged crediting payment against ginger procured directly to the growers bank accounts.

Having succeeded in ensuring a better price and in averting distress sale, GIN-FED is now busy developing a brand image for the ginger grown in Karbi Anglong it has initiated steps to get the organic certification for the crop.

It also wants to motivate its shareholders to go in for value addition so that the ginger products fetch a higher price in the global market, said federation chairman Mansing Rongpi. To set an example, GIN-FED will procure 200 tonnes of raw ginger to be processed as dry ginger and ginger powder.

As part of the effort to promote the organic ginger from Karbi Anglong, Angamuthu led a delegation deputed by the Federation of Indian Export Organisations, New Delhi, to participate in the Natural and Organic Products Europe, 2007, in London.

This global event attracted participation from 51 countries and had 6,050 trade visitors. The foreign buyers showed great interest not merely in raw ginger but also in ginger products such as dried ginger, flakes and oleoresin, and they preferred cooperative and community-sponsored projects, he said. Initially, a GIN-FED pilot project was taken up and procurement was made at centres at Manja, Longnit, Hidipi, Hamren and Jirikinding from February 9 to 17, 2007.

Not less than 170 tonnes of raw ginger, at the rate of Rs.8 a kg, was procured within a span of eight days. Value addition was done by cleaning, grading and packaging it in a factory at Manja for despatch to the markets in Ludhiana, Amritsar and Jalandhar at Rs.12 a kg. The pilot project brought benefits to about 850 ginger growing families of Karbi Anglong and had a multiplying impact among ginger growers of other areas.

Karbi Anglong supplies raw ginger to the rest of India (Delhi, Siliguri, Kolkata). and this is exported to West Asia and the western countries. North-eastern India, particularly the Karbi Anglong district, can play a major role in the fast-expanding organic market. It has a natural advantage in terms of large tracts of land, particularly in the tribal belt where traditional agricultural practices are still in vogue.

Ginger being sold

In most of these places, no chemical fertilizer or pesticides are used. But the advantages and profits had not percolated down to the poor and marginal tribal farmers. The farmers were always at the mercy of middlemen. These middlemen made a profit by selling the high-quality ginger in metropolitan mandis.

Most of the farmers belong to ethnic groups with marginal landholdings and are easy prey to middlemen. Ginger cultivation has an immense potential for improving their lot if they receive appropriate returns for their produce, said Angamuthu.

Although the total annual worth of Karbi Anglong ginger sold at the Azadpur mandi was about Rs.20 crore, not even Rs.2 crore reached the growers as middlemen had been forcing them to go for distress sale.

According to him, the prime objectives of GIN-FED, a Rashtriya Sam Vikas Yojana (RSVY) initiative, are

To bring all ginger growers of the district under one umbrella;

To avoid distress sale of ginger;

To link the growers directly to the market in order to enhance their profitability;

To ensure more income by value addition (cleaning, grading, waxing, dehydration and packaging)

To find out various avenues in for marketing ginger;

To uplift the economic condition of ginger growers by linking credit facilities (bank loan) as seed capital through banks by means of the G-Card; and

To introduce to the national and international markets.

The norms of procurement and marketing of ginger have been fixed as follows:

GIN-FED will collect all market information, tie-up with prospective buyers, obtain bulk supply orders with suitable payment norms, and arrange the shipment in bulk through rail/road transport.

It will arrange procurement and primary processing, such as cleaning/grading, waxing, packaging, along with suitable transportation.

It will not be bound to procure all the ginger produced by G-Card holders, and the growers are free to sell their produce to any buyer as the basic aim of GIN-FED is to maintain a basic minimum price on arrival at local mandis.

Procurement price will be fixed for a stipulated period of one to two weeks only according to the national-level mandi price in that particular period. Basically, it may vary from a minimum of Rs.6 to a maximum of Rs.35 a kg for the ensuing season.

GIN-FED will arrange the sale of bulk purchases at a competitive price, which will include Rs.1.50 a kg as handling charge and 30 paise to Rs.1 as administrative cost. Whatever extra money is earned over the above cost will go in the shareholders coffers.

More than half the ginger oil and oleoresins traded in the world market is from India, and the ginger produced in Assam, particularly in Karbi Anglong, qualifies for export. It is estimated that if the potential for ginger in Assam is properly exploited, the annual volume of business could be more than Rs.200 crore. GIN-FED is now flooded with trade queries not only from Ray Fam and Sresta but from ITC, Reliance, NERAMAC, Dabur, Nafed and APEDA.

Shareholders of GIN-FED are now dreaming of sending Karbi Anglong Ginger Express, a train with all its wagons loaded with organic ginger grown in this remote hill district, chugging from Diphu to Delhi and other places.