Farmers benefit from ginger storage

In some local levels, farmers receive double the price for their produce when it is not immediately sold in a warehouse. A prime example is the ginger storage house in Tansen-13, Palpa, where 34 farmers benefited in the first year of the trial period.

One of them, Yagya Basyal, a farmer from Palpa, did not sell the 152 kilograms of ginger he produced last year at the price of about Rs 95 per kilogram. Instead, he paid rent and stored the ginger at the Tansen-13 storage house, even though it was some distance from his home. After four months of storage, he sold it for almost double the price—Rs 180 per kilogram. According to his calculations, he earned a total of Rs 24,900, making an additional profit of about Rs 8,000.

Farmer Basyal says, “The storage house made it very easy when the produce was not sold immediately or was priced low. Moreover, there is no need to find a trader because they come directly to the warehouse.” He also learned that when storing agricultural products, ‘C’ grade should not be kept in storage, while ‘A’ and ‘B’ quality should be prioritized. Basyal shared this insight at a workshop organized by Catholic Relief Services (CRS) Nepal in the capital on pilot learning of the Inclusive Warehouse Receipt Financing Model.

Palpa, a region known for its high-quality ginger production, was targeted for the warehouse, says Prachanda Kattel of CRS Nepal. The warehouse was built in collaboration with Tansen Municipality in the first phase, and infrastructure development took place in the second phase. The municipality invested Rs 40m in the construction, while CRS Nepal contributed Rs 20m. The warehouse has a storage capacity of 25,000 kilograms.

Kamala Bhandari, chairperson of the Friendly Social Entrepreneur Women’s Cooperative Society Limited, which operates the warehouse, shared that 4,900 kilograms of ginger from 34 farmers were stored during the first year. She also mentioned plans to increase storage to 20,000 kilograms in the second year. The facility, which targets small farmers, allows each farmer to store up to five quintals of ginger. Bhandari explained that small farmers benefit more from storing smaller quantities.

The cooperative charges Rs 2 per kilogram as a service fee for storage. Tansen Municipality Deputy Mayor Pratiksha Sinjali informed that the municipality encourages farmers by providing a subsidy of Rs 5 per kilogram for storage. The total investment in the warehouse is Rs 4m, with Tansen Municipality contributing Rs 1m. Sinjali added that the municipality has also supported the building’s structure and has ensured the provision of services like electricity and water. This year, a Rs 5 per kilogram subsidy is available for farmers, even though no federal regulations for the warehouse have been enacted.

Under Section 102, Sub-section 2 of the Local Government Act 2017, the municipality has been empowered to operate the ginger storage house, according to Deputy Mayor Sinjali.

Swiss Contact Nepal representative Padmalal Bhandari emphasized that farmers need credit and insurance facilities to invest in production and protect stored goods. He urged Nepal Rastra Bank to adjust its monetary policy to allow farmers to take loans using storage receipts as collateral. While NGOs and INGOs have shown the way, Bhandari believes it is now up to the government to take action. Nepal Rastra Bank is reportedly studying potential policy changes on this issue.

A representative from the Ministry of Industry, Commerce, and Supplies advised caution in expanding warehouses, noting that over 300 warehouses exist in Nepal, yet half are non-operational, and those that are functioning operate at only 35 percent capacity. However, agriculture expert Jeevnath Sharma pointed out that Nepal loses 89 kilograms of produce per capita per year, underscoring the need for improved warehouse operations.