FCBL buys back 2,937 MT of ginger worth Nu 84 million after GoI refuses to allow import into India

The Agriculture Minister says the Buyback system has to be changed

The Government of India (GoI) refused to buy ginger from Bhutan, as India does not allow ginger imports from any country other than Nepal.

To ensure that farmers are not affected, the government initiated a ginger Buyback scheme in the midst of the COVID-19 pandemic.

Food Corporation of Bhutan Limited (FCBL) purchased 2,937 metric tons (MT) of ginger worth Nu 84 million (mn) from the farmers in the country till 17 August. In addition to ginger, FCBL also bought 402 MT of cabbage, carrot, beans and beetroot worth Nu 4.3 mn.

The Buyback scheme has caused losses to the government while providing financial relief to farmers.

Agriculture Minister Yeshey Penjor said that neither the government nor the farmers have any say in the present Buyback scheme because the circumstances were not favorable, and the informal system failed to work, despite all their best efforts to resolve it, case by case.

The Agriculture Minister said that the present Buyback system is an emergency measure. To stimulate increased output, the country needs a codified Buyback scheme.

“If we maintain the Buyback price high and add value to the product, find a market for it by the government or other private traders, and export it, to attempt to get a double price, the government can benefit as well, and then pump back and raise the Buyback price. The farmers fetch fewer price with the present Buyback scheme since it is the last resort for the farmers when there is no export happening,” the Agriculture Minister said.

Lyonpo said that the government will ensure that vegetable costs change according to the season. For example, during the lean season, the same product that is available in June and July, which is peak season, should not be priced the same.

“We can’t have the same prices in different places, thus we need to know where the produce comes from. The price of a product traveling from Thimphu to Trashigang, for example, cannot be the same. We’ll need a pricing that varies depending on the area, season, and nutrition index,” Lyonpo said.

Lyonpo added that the government must announce it early, for example, if farmers produce green chilies in December, the government would buy them for Nu 400 per kg, and during peak season, buy them for Nu 50. If they produce, the government will have no choice but to purchase it.

“And if they receive more money than the government-set price, they can trade in their own way. Otherwise, the repurchase price is based on 10 to 20 percent of the cost of production, which is not a good system to have. The price of Buyback should be set at a high level,” Lyonpo added.

Lyonpo also added, “Farmers will increase production when the price rises. The Buyback price should be the driving force behind the farming interest. The government will Buyback the goods and then let the private exporters to market it.”

 Currently, the DAMC is working on addressing the issues with a marketing strategy.

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