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Upgrading Ginger Value Chain

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ICIMOD’s Rural Livelihoods and Climate Change Adaptation in the Himalayas (Himalica) pilot project in Myanmar has facilitated linkage between private sector actors and communities. This is expected to overcome key constraints in ginger value chain and build trust among actors working at different nodes of the value chain.

ICIMOD and the Myanmar Institute for Integrated Development (MIID) are jointly implementing pilot projects in six villages in Kalaw and Nyaung Shwe in Shan State under the Himalica initiative. Promotion of ginger value chain is one of the key interventions of the pilot project. Although the villages have good potential for ginger production, value chain analysis has identified a couple of key constraints – lack of trust between traders and producers, and low bargaining power of the communities due to unsystematized production and poor market linkages.

In a bid to tackle these challenges, the project looked into a number of issues: (i) factors that contributed to lack of trust; (ii) interest of private entrepreneurs and their specific requirements in terms of quantity, quality, delivery mechanism, etc; and (iii) strengths and comparative advantages of communities. The project, together with local stakeholders, then designed a strategy that emphasized strengthening groups and using a collective approach to supply ginger in bulk from one place. On a cost-sharing basis, six collection points/ginger seed banks (one in each village) have been established and capacity of community groups enhanced so that they can make a collective deal with the traders.

Farmers now bring their produce to a common collection point

On the other hand, an anchor company was identified which expressed interest in receiving a continuous supply of good quality ginger from Shan State. As part of market making exercise, the project team facilitated dialogue between communities and the regional agent of Phyo & Kyaw Co. Ltd., Win Myat Htun, from Taungyi. The agent saw the business benefits as the company could source bulk quantity of ginger from one collection point and make a collective deal rather than negotiating with a number of individual suppliers.

The company’s agent has so far visited the pilot site 20 times on his own tractor to buy ginger. Farmers brought ginger to the collection point and sold it collectively. The project provided a weighing scale. A total of 149 metric tonnes (95,268 viss) of ginger were sold to the anchor company at an average price of MMK 335 per kilogram, bringing in total revenue worth MMK 49,500,000.

Farmers say the price at which they sell now is 10 percent higher than the price in Heho market, and the weighing scale has ensured that the payment is made based on standard unit. Further, farmers are able to save on transportation cost and time.

At the invitation of MIID, the managing director of Phyo & Kyaw Co. Ltd., Kyaw Min Oo, came to the pilot villages from Yangon on 25 March 2016 and met the communities of three villages (Pantin, Thayetpin, and Kyaung Nar). At the meeting, Kyaw Min Oo made a commitment to buy ginger in the coming years as well. The price will be 10 MMK higher than in Heho. The company has also expressed interest in buying turmeric from the villages and promised to provide business-embedded services like the supply of quality seeds and fertilizer to grow turmeric. The company will not charge any interest on the money provided for purchasing seeds and fertilizer, and the communities will pay back the exact amount at the time of harvest.

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