Increasing Incomes of the Rural Poor though Bay Leaf Value Chain Development

Story of Madan Singh, Chamoli District, India 

Madan Singh is a farmer living with his wife and two sons in Nizmullah, a village in Chamoli District in the northcentral part of Uttarakhand State in India. He also owns a small grocery store and a nursery – the only one in his village other than the nursery run by the Forest Department. He started his nursery around 1999, primarily selling fruit trees (peach and Malta).

In 2008, ICIMOD, with support from the Oversees Development Institute (ODI), implemented a pilot value chain action research project in the district, which educated and trained villagers on the benefits of cultivating bay leaf trees and potential value additions. After the ICIMOD intervention, the price of bay leaf increased from INR 3 - 22 per kg in 2010 to INR 39 in 2011.

With demand for bay leaf trees increasing, the Himalayan Action Research Centre (HARC, the implementing partner of the project in India) and the Herbal Research and Development Institute (HRDI) had to import bay leaf saplings from outside of the district as the local production could not meet the growing demand.

With the new demand for bay leaf unmet locally, Mr Singh saw an opportunity. Through an initiative of HARC, he was able to participate in training on the appropriate techniques of collecting and keeping a nursery of bay leaf trees. He collected almost 24,000 saplings in 2010 and sold them at INR 6 per saplings to HRDI and MAREGA. His income from selling the saplings in 2011 was INR 32,000; in 2012 it was INR 40,000, and in 2013 it was INR 38,000. He used the profits to support his children’s education, as well as to repair his house and expand his grocery store. He has also created new employment opportunities in Nizmullah: each year, he hires five to six labourers to work in his nursery, each receiving INR 250 per day.

He has also planted about 150 bay leaf trees on his land, for which he expects get returns after five years. By planting bay leaf trees now, he says, he hopes to reap the benefits in his old age.

Story of Ranga Bahadur Rana Magar, Udayapur District, Nepal 

Ranga Bahadur Rana Magar, 68, lives with his wife, four sons, and five daughters in Kopche village of Routa VDC in Udayapur District, Nepal.

The family’s main source of livelihoods is in agriculture: growing maize, rice, and raising livestock. He used the money he earned selling maize, rice, and livestock to support his children’s education at a local school. It was enough to survive a simple life.

Initially, 150 bay leaf trees also grew on their land, but they were of little significance to the family. Collecting and selling bay leaf was considered an occupation of marginal farmers, and the return was also very low. However, each year, the Magar family would collect 500–700 kg of bay leaf to sell for NPR 2–3 per kilogramme to traders in Lahan in Siraha District, a seven-day walk from Kopche.

The construction of a road connecting Gaighat in Udayapur District to Murchuche relieved the family from having to walk the long distance to Lahan to sell their products. However, there was no improvement in the price of bay leaf, which they were collecting and selling to traders in Murchuche.

In 2009, ICIMOD implemented a project on bay leaf. The intervention resulted in the formation of Bay Leaf Cooperative (‘Khamare Masala Udyog’), with local villagers as the stakeholders. The cooperative has 60% women and 40% men, and the women were more actively engaged in processing and sorting the bay leaves according to their quality.

The cooperative was able to help increase the bargaining power of the farmers. With the support of FECOFUN, a local NGO, the project was able to bring the sellers and buyers of bay leaf together in a single platform for discussion. After negotiation between the traders and the cooperative, the price was fixed at NPR 20-21 for bay leaf with needles and NPR 40-45 for the leaves only. There is now a collection point in Kopche village, and bay leaf producers have to walk a shorter distance to sell their products.

The increase in price was a major attraction for other farmers to plant and sell the bay leaves to the local traders, which was also increasing. After this intervention, Mr Magar started growing more trees: at present he has 400 trees growing on his land. He sells10-12 quintals (1,000-1,200 kg) of bay leaf each year at the price fixed during the intervention by ICIMOD. He also has ample seedlings available, which he now sells to other people in his community.

Selling bay leaf has increased his income, which has helped him achieve his desire of providing a quality education for all of his children. Now, his children attend a better school in Ghaighat, the headquarters of Udayapur. His three youngest children are still studying, while the rest are working; two of his sons have migrated to the Gulf countries in search of further economic opportunities. Using profits from bay leaf cultivation, he was also able to buy one buffalo and three ropani of land, on which he cultivates maize, millet, and rice. He also bought a solar panel to provide electricity to his house, which also enables him to collect bay leaves at night. His wife, Lali Maya Rana, says they will use the income from next year’s bay leaf harvest to pay the back the debt they took for their daughter’s marriage. Lali Maya Rana attended various trainings provided by ICIMOD, including training on improving the quality of bay leaf, grading, and plantation. She later on passed on these trainings to other women farmers in her village. Lali Maya Rana is also one of the shareholders in the cooperative