The initiative has helped farmers gain access to the nearest market and they do not have to travel longer distances now
The entry of Food Corporation of Bhutan's (FCB) into cardamom trade is set to provide competition with local traders in the market. Now the farmers can use the opportunity to explore better prices. Till now only local and Indian traders used to deal with the product and the price remained constantly below the farmers' expectation and even decreased over the few years.
FCB ventured into procuring cardamom following the government's directive. FCB has employed four teams in these dzongkhags to buy back the unsold cardamoms from the farmers. They are paid Nu 390 to 470 per kilogram. FCB expects another 15 MT of cardamom this year.
Food Corporation of Bhutan Limited has so far procured 17 Metric Tons (MT) of cardamom from the farmers of four dzongkhags within two weeks.
Having fetched undesired prices continuously for a few years, these farmers had lived in constant discontentment and the government had vowed to help them as per their manifesto.
Most farmers started cardamom cultivation along the southern foothills when the price soared in the the market decade ago. They focused on the crop which had become a prime source of income until recently skipping other agricultural works. However, plummeting prices have now compelled them to return to farming. The price once rocketed to Nu 1,800 per kg and now has drastically fallen to Nu 450 for the supreme quality.
FCB, as a state-owned company is carrying out the initiative, 'Buy back Scheme' to boost the morale of the farmers to continue cultivating. "With the government's support, we are initiating to help the farmers uphold the brand of the country as organic," Dorji Tashi, officiating Chief Executive Officer of FCB said. The government has provided Nu 150mn for the scheme to FCB to procure the cardamom fixed by agriculture and marketing department under agriculture ministry.
The initiative has helped farmers gain access to the nearest market and they do not have to travel longer distances to reach the market. They have identified convenient centers at every region for their deals. Also the scheme provides instant payments for the farmers without negotiations.
FCB management claimed that with the initiative, the price that local traders offer have increased in the market. "We are helping them indirectly to fetch better price," said Dorji Tshering. Till now most of the cardamom trade was done by Indian traders along the bordering towns of Phuentsholing, Samtse, Samdrup Jongkhar and Gelephu.
FCB has graded cardamom into five different categories with price ranging from Nu Nu 390 to Nu 470 per kg.
The cardamom would be stocked in Phuentsholing godown, cleaned and repacked to be exported to the international market where the demand is higher. FCB has started exploring the opportunity to find reliable and sustainable market, according to Officiating CEO. Cardamom is next after potato to go online after its success over two years.
Since the farmers take credit from the traders during need, they have been victimized with lower rates. Therefore, the farmers will sell to FCB if the agency provides similar facilities. "We need cash during emergencies and cardamom is the only mortgage we keep with the traders for immediate cash. Since we have agreed, we have to give it to them irrespective of the price," a farmer in Phuentsholing said.
However, the prices of cardamom have not changed in Phuentsholing. The traders say that farmers are still bringing the cardamom to them dissatisfied with the price offered by FCB. The current cardamom price in Phuentsholing stands at Nu 540.
Meanwhile, the price has soared till Nu 525 for supreme and Nu 450 for small cardamom for the few days in Samtse. Pemaling Gup, Khem Raj Ghalley said that the entry of FCB has enhanced competition with the local traders and the farmers are benefited. "Until now, the farmers had lost hope due to price and disease. It's a good initiative. Farmers will now have choice," he said.
With better packaging and creation of a brand image, FCB hopes to receive increased demand in the future. The price is also expected to rise in the future with more demand.