value chain/ market analysis of the ginger sub-sector ... - Nepal Trade

Due to the aggressive seasonal migration of laborers to overseas work, non-family memberlaborers are becoming less prevalent every day.Transportation cost: Transportation costs include transportation of the product to localmarkets or up to road-heads where traders are located.Land renting cost: Normally, farmers cultivate ginger on their own land. If they have to rentthe land, the cost will vary. The average land renting cost estimated is around 20,000NPR/hectare and is included in the production costs.2.3 Distribution of Value AdditionFresh ginger is the most traded product and is harvested during both the main season andoffseason (mother rhizome). Young ginger has a mild flavor and a pale, thin skin thatrequires no peeling. Fresh rhizomes with low fibre content but rich in aroma, pungency, fat,and protein are preferred from consumers.Fresh ginger does not go through very many value addition activities. The two most prevalentactivities include cleaning and sorting after the harvest. Cleaning begins at the farmer levelwhere only preliminary cleaning is completed by removing soil and roots from rhizome. Dueto a lack of awareness and incentives received for high quality products, farmers do notengage in a grading system. There is a practice of deducting 2 to 8 kg per sack (normally 50kg/sack) from farmers by the local traders depending upon the soil content in the product.Major cleaning is usually done at the traders level prior to exporting or sending it to themarket. However, during this study, we did not observe cleaning completed bytraders/exporters prior to exporting to India. Poor cleaning practices have resulted in a lowquantity of produce supplied by exporters and the Indian importers have been complainingabout weight loss and the soil content in packages. Fresh ginger from the eastern region iswashed in facilities at Naxalbari, the nearest Indian town on the Kakarbhitta border. Suchwashing facilities are owned by Indian traders as well as Nepali traders and employ asignificant number of women as laborers. No such washing practice was found on thewestern border. One of the traders in Bhairahawa said that washing decreases the self-life offresh ginger which is why they choose not to wash. In Naxalbari, the cleaning process iscompleted in various steps which includes washing by placing in big pits, spreading in openareas, drying by air circulation, and placing in fresh jute sacks.During this study, increases in the price of ginger and value addition activities were noted inthe eastern region. It was found that the level of value addition for fresh ginger is founddifferent in different places. Besides the way of processing of ginger, the taxes, customclearance and transportation also varied depending on geographic locations.2.3.1 Costs of Goods from Ilam to Naxalbari, IndiaTable 4 represents the distribution of value addition for fresh ginger from the productionareas of Ilam to Naxalbari where it is mostly handed over to washing facilities.Value Chain/Market Analysis-Ginger 9