Speciality Crop, Ginger Levy, Adding Value and Returning Home

Farm World reported last week that federal funds are available for farmers who wish to grow ginger as a speciality crop in Indiana, USA. My knowledge of US geography is fairly basic but I would have thought that the state was too far north to be capable of producing ginger on an economically viable scale. Trusty Wikipedia tells me that the climate is humid continental which means that the summers are warm to hot and often humid. Acceptable at a push but the growing season is only up to 185 days. Ginger typically requires nine months but six months will do if you want to harvest young, immature rhizomes. So I'm a little puzzled by this. Unless, of course, the ginger is grown indoors!

A hospital in Jamshedpur in India has invited tenders for the supply of ginger for its diet department. I'm used to reading about hugely expensive tenders for IT systems and construction projects but there must be a low end to any scale. With India being the world's largest producer of ginger, this must be the most cost-effective way to find an acceptable supplier.

Time is running out for those of you who have not yet applied for a position on the Ginger Industry Research and Development Advisory Committee. This new body is run by the Australian government's Rural Industries Research and Development Corporation (RIRDC) and will consist of a small group of people with a range of skills and experience covering the production, research, and value-adding sectors of the ginger industry. The closing date for applications is tomorrow.

Still with the RIRDC, the Australian government has introduced a 0.5 per cent levy on the sale price of fresh ginger, seed ginger and processing ginger that is produced in Australia and sold or processed in Australia. The levy, introduced on 1st April 2011, will provide funding for ginger research and development conducted by the RIRDC.

It is well known in the ginger industry that selling raw ginger generates a lower economic return than processed ginger. With this in mind, the Raw Materials Research and Development Council (RMRDC) in the Nigerian state of Imo is collaborating with the Mbaitoli Ginger Growers Association to increase the value of the crops by converting the raw ginger into ground ginger. The RMRDC has now awarded contracts to two local engineering companies to create the machinery for slicing, drying and grinding the raw ginger. It is planned that the ground ginger, which has a considerably longer shelf life than raw ginger, will be used in the domestic food and drink industry and also exported.

The Malnad region of Karnataka state in southern India has been known for its coffee, green chillies and rice. But soon, according to the Deccan Herald, it will also be known for its ginger. The financial returns from growing ginger have now become so attractive that not only are farmers switching crops but young men who were previously driven away to the cities in search of work are now returning home to start a new career in ginger farming.

Whilst prices are looking good in parts of India, the price of ginger in neighbouring Bhutan has more than halved compared to a year ago. For many Bhutanese farmers, ginger is their only source of income. The farmers say that the prices are set by the buyers who all come from India. I can't help but wonder whether these buyers are indulging in a spot of speculating; buying cheaply in Bhutan from farmers with no other established means to market and storing the ginger whilst the price in India rises. As agriculture provides employment for 80 per cent of the population, is it not time for Bhutan to start expanding and widening its export markets and thereby reduce its reliance on a small group of international traders.

Chinese Speculators, Dog Biscuits And Fairtrade Fortnight

This is a busy time of the year for ginger growers in Thailand as crops are being harvested, processed and exported. It should also be a profitable time but this year exports have been severely reduced because Chinese ginger prices are lower. This should be a classic example of free-market competition but in reality is an example of commodity speculation. Chinese speculators have been buying huge quantities of ginger at low prices which forces the market price down. They then buy more at a higher price and wait for the market price to rise. When the price has risen sufficiently, the speculators offload their stocks bought at the low prices and pocket the difference. Last year the Chinese government intervened to prevent speculating and hoarding in an attempt to re-introduce a level playing field. Unfortunately, the Chinese government measures were implemented too late to prevent the Thai harvest coinciding with the low price point in the speculation cycle.

The Organic Hound Company from New Hampshire, USA, last week announced the launch of a range of organic dog biscuits which includes Organic Pumpkin Ginger for dogs with sensitive systems. Apparently many dogs suffer from sensitive stomachs and nerves during thunderstorms and car journeys and they can be calmed and settled by eating ginger.

The Indian Commodity Exchange (ICEX) has announced that it will soon start to trade ginger from Nagaland, a state in the far north-east of India. In the past, Naga farmers have only grown enough ginger for home consumption. Now these farmers are being asked to produce a surplus to trade. This follows a scheme in Sikkim, another north-eastern state, where ginger farmers have received state-funded ginger 'seed' and federal government training.

This year's UK Fairtrade Fortnight will be held from 28th February - 13th March. Fairtrade is a scheme which aims to provide better prices and working conditions for farmers and workers in the developing world. Fairtrade Fortnight encourages supporters and Fairtrade-accredited business to actively promote the scheme.