We have heard of cases where intermediaries (middlemen, syndicates, etc.), who do not add much value in production and processing processes, have raked in huge margin and inflated wholesale and retail prices in Nepal. More on this here and here.
Here is a new case of ginger production (Nepal is the third largest producer of ginger in the world) and role of middlemen, who take more than 50% of total retail value of ginger in the market. Per kg cost of ginger production is estimated at Rs 18 and is higly labor intensive.
Nepal has become the world’s third largest producer of ginger after India and China, according to the statistics of the Food and Agriculture Organization (FAO) of the United Nations. The country produced 216,289 tonnes of ginger in 2011 compared to the global output of 2.02 million tonnes.
Based on the average market price of Rs 62.29 per kg in 2010-11 at the Kalimati Fruit and Vegetable Market, Nepal’s ginger output was worth Rs 13.47 billion. Officials said that farmers only get Rs. 25-30 per kg out of this while the rest is gobbled up by middlemen.
Ginger production increased marginally by 2.6 percent in 2011 compared to 2010. However, output has jumped 146 percent in the last decade. In 2002, ginger production was recorded at 87,909 tonnes.
In FY2011, Ilam produced 44,310 tonnes of ginger, followed by Salyan with 23,500 tonnes, Nawalparasi 12,255 tonnes and Palpa 12,226 tonnes.