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Marketing of Organic Ginger produced by farmers of Karbi Anglong

Project submitted to
Prof. Mithileshwar Jha

In partial fulfillment of the requirements of the course


Rural Marketing
By
Group-10
Amit Kumar Bhagat(144011)
Biren Son Timung (144026)
Chiranjeev Hazarika (155039)
Jugapratim Gohain (155055)
Kuntal Deka Baruah (155064)
On 9thDecember-2016

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Acknowl
edgement
This report would never have given a shape without the cooperation of hundreds of ginger growers of
Karbi Anglong district, who took time out of their busy day to day schedule to sit and talk with us and
given us the clear idea of what all factors and the players involved. All the process of meeting and
interviewing was done on the month of April-May 2016, which was a summer internship period and it
was a part of my internship project. I am afraid that I would not be able to take out the name of each
individual with whom I got the opportunity to talk, but it is worthy to mention few of them whom I think
without their help for me it was an impossible task.
I am very much move by the kind and warm cooperation by the growers and a special thanks to Mr. Engti
, the head master of the Zerikengdeng high school without whom we could never be able to meet the and
extract the information from the hundreds of growers from that area. He acts as a facilitators, convince the
growers to give us the actual data that we are looking for.
Mr. Bidya Bey of Hamren seems to become one of us; he accompanied us and also took the initiative to
lead the process of meeting and interviewing the growers. Having someone who is very well acquaintance
with the people and places makes me and my friends comfortable and confidence to talk with the farmers.
Also a many thanks to the heads of the villages of Singhason and upper Deopani area who took the
initiative to gather the farmers of their villagers.
I would also like to thanks few honest people from GIN-FED, whose identity we cannot share here. They
were the first people who had earlier work closely with the growers; their briefing about their experience
was an immense source for us.
With the Geographical Indication (GI) rights or tag given by the GI Registry of India in 2015 to their
organic ginger, I hope in the near future these small and marginal farmers will be able to make way their
produce in the commercial market.

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Contents
Acknowledgement.......................................................................................................................................2
Executive Summary.....................................................................................................................................5
Objectives:...............................................................................................................................................6
Scope:......................................................................................................................................................6
Data were collected based on primary and secondary research...................................................................7
Secondary research..................................................................................................................................7
Primary research......................................................................................................................................7
Analysis and Findings.................................................................................................................................8
Understanding the rural market for Ginger in Karbi Anglong.................................................................8
Classification of concerns of rural market for Ginger in Karbi Anglong...............................................10
4 C analysis of Ginger market:..............................................................................................................11
Recommendation.......................................................................................................................................12
References.................................................................................................................................................13
Exhibit.......................................................................................................................................................14
Exhibit 1................................................................................................................................................14
Exhibit 2................................................................................................................................................15
Exhibit 3................................................................................................................................................15
Exhibit 4................................................................................................................................................16

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Executive Summary

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Introduction- chichi

Objectives and Scope


Objectives:

To provide a platform for poor and marginal tribal farmers of Karbi-Anglong to sell organic
Ginger in national market.
To eliminate the participation of middleman.
Ensure more income by value addition and processing of Ginger.

Scope:
The Northeastern states produce more than 70% of organic ginger and the growers of Karbi Anglong
district alone contributes more than half of this. Yet, nearly 2,000 families are facing a tough time due to
lack of proper marketing facilities, awareness and training, resulting in vast commercial potential
remaining untapped. So there is a tremendous opportunity for this spice to scale up at national and
international level like Assam tea which has gain its name and fame internationally.
GIN-FED was the brain child idea of Dr M. Angamuthu Karbi Anglongs deputy commissioner in 2007 to
bring all the ginger growers under one umbrella with the help of various agency and several NGOs. The
response they got from the growers was tremendous for the first four years; but to the surprise, it came as
a shock to the people of karbi Anglong that due to the conflict of interest between the NGOs and the
GIN-FED official they failed to deliver their promises i.e. by deceiving the farmers, they lost their
credibility amongst the growers, and as of today the growers dont have an option but move back to the
same plight that they came out of a few years back, selling their product to the middleman.
Following is the purpose of this paper:
1. To study the practices that are prevalent throughout the chain, starting from ginger growers to the
end customers.
2. To study the reasons of failure of GIN-FED.
Studying the current practices, as a Corporate Executive, we will be able to introduce better practices and
help improve the effectiveness and efficiency of the process. Also, by studying about the reasons of
failure of GIN-FED, we will be able to come up with a sustainable plan for the whole process.

Data were collected based on primary and secondary research


Secondary research
Before proceeding towards the primary research, we did a secondary research in the internet mainly from
the official website of GINFED (Ginfed), NERAMAC (Neramac) and some national, regional
newspapers along with the national magazine like Frontline (TALUKDAR). GINFED (Ginger Growers
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Co-Operative Marketing Federation, Karbi Anglong, Assam) is a co-operative started by the then Deputy
Commissioner of Karbi Anglong district Dr. M. Angamuthu in collaboration with the Governor of Assam
Ajai Singh in 2006. It was mainly implemented to eliminate the middle men who always tricked the
innocent and illiterate farmers into selling the ginger stock at a very low price to them. The ginger
produced in this region is the best organic ginger worldwide and has a huge demand for it. NERAMAC
(North Eastern Regional Agricultural Marketing Corporation Limited) has got registered GI
(Geographical Indication) tag for ten Horticulture Crops of North East. And one of them is the Assam
Karbi Anglong Ginger. This ensures that none other than the registered users can use the name of the
product. NERAMAC was also setup with the motive of supporting the farmers in terms of providing them
with remunerative prices for their produce and bridging the gap between them and the market.
According to the data collected, about 30000 MT of ginger is produced alone in Karbi Anglong with
around 25000 MT of surplus. The two popular varieties of ginger produced are Nadia and Aizol. The soil
conditions for growing these are naturally organic. It is slightly acidic (pH 5.03-6.41) and availability of
P2O5 (Phosphorous) and K2O (Potash) and nitrogen content is high. With these natural organic matters, the
farmers do not add any fertilizers or manure into the soil. The seeds are only sowed into the soil. The
planting time of gingers is April-May and it is reaped after 6-7 months. The gingers produced have a very
low amount of fiber.
GINFED has tied up with various NGOs in assisting them in the procurement of ginger from various
locations as per direction of the GINFED Executive body by providing them with necessary amenities
and funding. Also the agricultural department guides in terms of all the technical matters relating to the
various processes. They arrange various workshops for the farmers and also educate them about various
schemes and channels of marketing and motivate them for better production and post harvesting
procedures. (GINFED)(NERAMAC)

Primary research
For the purpose of our study the data was extensively collected by me along with the help of my friends
through meeting and interviewing the groups of ginger growers as much as possible to get a fair idea or a
real scenario of what was going on the ground. The visit only cover areas were ginger are mainly
cultivated and availability of transportation. Few of the interesting observation that we found out during
our interaction was that head of villages and a literate person like head master of the school plays a very
important role in decision making.
In all cases the growers were facing the same problem, they are selling their hard earn produce at a very
low price to the middleman. They are exploiting these poor and marginal growers as chain of dealers and
prices are control by them. The sample of the data that we collected is shown in the Exhibit-1: Data from
the four ginger growing regions of Karbi Anglong.
From the data from Exhibit 1, we can see that its the middleman who is eating up the big portion of the
pie. They buy at Rs 15 from the growers where the price of the ginger at Mandi was Rs 50. At the same
time they charge a very high interest rate which result in a vicious cycle for the farmers, they can never
profit nor will they be ever able to come out this situation.
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Analysis and Findings


Understanding the rural market for Ginger in Karbi Anglong
1. Participants Growers of Ginger are the dwellers of the hilly ranges of Zerikendeng, Hamren, Singhason, and
Deopani in Karbi Anglong district. There are around 2,000 growers in the area who cultivate
ginger in their fields. They produce around 30,000 tonnes every year.
Sellers of ginger in the mandi of Majkhowa, Guwahati are those people who buy the ginger from
the rural people (the growers) at a much lower price than the quoted in the mandi. In order to
facilitate the growers to sell their produce (ginger) in the Mandi, GIN-FED was formed. GINFED was the brainchild idea of Dr M. Angamuthu Karbi Anglong's deputy commissioner in 2007
to bring all the ginger growers under one umbrella with the help of various agencies and several
NGO's. The response they got from the growers was tremendous for the first four years; but to the
surprise, it came as a shock to the people of Karbi Anglong that due to the conflict of interest
between the NGO's and the GIN-FED official they failed to deliver their promises i.e. by
deceiving the farmers, they lost their credibility amongst the growers, and as of today the growers
don't have an option but move back to the same plight that they came out of a few years back,
selling their product to the middleman.
Regulators dont exist in the system. Thus, the market is inequitably shifted towards the
middleman.
Buyers in the mandis are the retailers, wholesalers, and other enterprises, etc. who manufacture
process food items. Total demand for ginger in the market is around >>>>>
Share of demand for retailers, wholesalers and other enterprises are>>>>
2. ProductsThere are mainly three varieties of ginger that is cultivated by the inhabitant growers in
Zerikendeng, Hamren, Singhason, and Deopani. They are namely Hanso-so, Hanso, and Aizal.
The ginger varieties are different in sizes and fibre content. Hanso-so is the smallest in size but
the fibre content is the highest among the three varieties. Hanso is the medium sized and has
medium fibre content. The largest variety in size is named as Aizal and it has the lowest fibre
content. The price of the Hanso-so variety is the highest among the three.
3. ModalitiesGIN-FED (Ginger Growers Cooperative Marketing Federation Limited), Diphu, Karbi Anglong
is a cooperative body under Societies Registration Act, 1886. It is a consortium of marginal tribal
farmers of Karbi Anglong. GIN-FED would do facilitator role with fixed procurement based on
market demand with quality assurance. The cropping cycle is expected to produce around 35,000
MT spread over a period of 5 months (Mid December to April end). The peak arrival of ginger is
in January and February.
4. NormsPeople in the region dont believe in any written marketing agreement that could protect them
from opportunistic behavior. There is a general thinking in the minds of the rural people that these
types of agreements would protect only the rich and not the poor who lack the power to enforce
them. The depth of the relationship between the middleman and growers vary based on the
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number of repeated transactions with the same person leading to the emergence of trust. The
growers believe in the values of reciprocity and make them close to the family mindset.
When GIN-FED was formed with the support of the local people and district administration, the
system was formalized to benefit the growers. They paid to the grower in advance for 50% of the
produce that they collected from them, and the remaining portion was paid after the produce was
sold in the mandi at a fair price after deducting the logistic cost and keeping a part of the money
as commission. They kept 5% on a commission basis. GIN-FED procured ginger from the
growers at a minimum cost of 5.25 rupees per kg at a collection Centre.
5. Outcome
The marginal tribal farmers were dissatisfied with the middleman who procured from them and
sold at the mandi. The price that the middleman paid is very less, and the farmers are at the mercy
of these people. The growers have no alternative but to resort to distress sale of the produce at
around Rs.3 per kg against a production cost of Rs. 4 per kg., to a middleman.
GIN-FED since its inception procured around 200 MT from its shareholders at Rs.8 per kg and
sold it the mandis of Delhi market, Ludhiana, Amritsar and Jalandhar.

Classification of concerns of rural market for Ginger in Karbi Anglong

Fig1- Classification of Concerns of Ginger Market in Karbi Anglong

After the cooperative society was formed by GIN-FED in Karbi Anglong, the growers did not want to sell
their produce to any trader. The growers were directly going to sell ginger to the traders in Guwahati and
Azadpur mandi in New Delhi. This is an effort from the facilitator, GIN-FED to shift the transaction from
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Quadrant 2 to Quadrant 1 as shown in figure - Classification of Concerns of Ginger Market in Karbi


Anglong. GIN-FEDs intervention to support the concerns of the rural society has gone a long way to
reduce ethnic tension in the area. The ginger crop has brought the Kukis and Karbis under one umbrella.
In order to curb the extortion by militants, the organization has collaborated with local banks in the area
to transfer the benefit directly to their bank account. This clearly shows a concern for the social cause
taken up by the organization. The response they got from the growers was tremendous for the first four
years; but to the surprise, it came as a shock to the people of Karbi Anglong that due to the conflict of
interest between the NGO's and the GIN-FED official they failed to deliver their promises i.e. by
deceiving the farmers, they lost their credibility amongst the growers, and as of today the growers don't
have an option but move back to the same plight that they came out of a few years back, selling their
product to the middleman.

4 C analysis of Ginger market:


Customer:
1.
2.
3.
4.

Food and Restaurant Chains, FMCG companies, Pharma companies


Needs High Quality, Organic, Low Fibre content to extract maximum possible juice
Procures in bulk amount
Purchases after testing sufficient amount of samples

Competitors:
1. Low competition geographic conditions favoring Karbi Anglong like rich soil with high content
of phosphorous and nitrogen etc.
2. Other ginger growing location outside Karbi Anglong
Company:
1. No organized company as of now
2. Farmers selling the produce to middle men who in turn sells in the mandis from where the big
customers buy
3. Many Government initiatives are taken to establish it as an organized sector like NERAMAC,
GINFED, etc
Context:
1. According to the secondary data, 30,000 MT of ginger is produced of which 25,000 MT are
surplus
2. Huge potential to increase the production with the help of agricultural technology and post
harvesting methods
3. Through proper channel of market, the farmers can get remunerate prices for their produce
4. This will lead to the development of the district of Karbi Anglong as a whole as most of the
inhabitants there focuses on the cultivation of ginger.

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Recommendation
The main focus is to eliminate the middleman and to leverage their high quality organic
produce, so that the growers get the income they deserve
1. E-auction through platform like NERAMAC, Kisan Mandi etc. where they can submit their
produce in groups or directly sell in the local mandi or big mandi like Azadpur mandi in
Delhi, Kolkata, Ludhiana, Jalandhar and Amritsar. Where buyers in this mandi had shown
interest for procurement in earlier years.
2. Link with the leading ginger buyer organizations that procure quality ginger from the farmers
like ITC, Reliance, Dabur, Ray fam, Sresta Natural Products Private Limited etc., who had
already in earlier time shown interest in procuring the ginger from the karbis ginger grower.
3. Avail government scheme for agriculture produce and low rate interest loan from national and
regional banks. Train the growers for value addition to fetch a bargain power for their quality
produce.

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References

(n.d.). Retrieved from http://karbianglong.nic.in/ginfed.htm


(n.d.). Retrieved from http://www.neramac.com/showpage.asp?id=102
Ginfed. (n.d.). Retrieved from http://karbianglong.nic.in/ginfed.htm
Neramac. (n.d.). Retrieved from http://www.neramac.com/showpage.asp?id=100).
TALUKDAR, S. (n.d.). Frontline. Retrieved from http://www.frontline.in/navigation/?
type=static&page=flonnet&rdurl=fl2503/stories/20080215250303800.htm

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Exhibit
Exhibit 1: Data from the four ginger growing regions of Karbi Anglong.

Area
No. of villages under cultivation
No. of growers
Avg Cultivated land
(per household) in bighas
Avg Cost of cultivation (Rs/bigha)
Avg production(kg/bigha)
Avg Area wise productions(Tons)
Avg selling price (Rs/kg)
Avg Transportation cost (Rs/kg)
Avg realized selling price (Rs/kg)
Rate at Mandi (Rs/kg)
Avg profit (Rs)
Avg Loan (Rs)
Interest@20% p.a
Avg cash in hand (Rs)

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Zerikendeng

Hamren

Singhason

14
500

13
700

6
200

Upper
deopani
4
80

11000
2500
3750
15
2.38
12.62
50
61650
30000
36000
25650

11000
2500
5250
15
2.38
12.62
50
61650
30000
36000
25650

11000
2500
1500
15
2.38
12.62
50
61650
30000
36000
25650

11000
2500
600
15
2.38
12.62
50
61650
30000
36000
25650

Total

11100

Exhibit 2- Ginger fields in Karbi Anglong

Exhibit 3- Location of Karbi Anglong in the map of Assam

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Exhibit 4- A GIN-FED drying unit in Diphu

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