export were not taken into account. So there is bound to be a slight variation depending upon the share of value-added products in the export basket of individual countries. However, the estimated unit value ratios help in comparing the prices of each exporting country with another and with the average of total imports. The ratio is computed by dividing the price received for a country's export by the world average price. When the unit—price ratio is less than 1, then it is considered that the country possesses competitiveness in the export market for its product. Accordingly, as it can be observed from Table 12.21, countries such as Indonesia, China, Thailand, Vietnam, and Malaysia with their unit—price ratio less than 1 are highly competitive, whereas India with an average unit—price ratio of 1.40 is considered to be less competitive in the world market.

Any country's competitive power in exporting a commodity depends crucially on its relative price and the quality of that commodity over the competing countries. India has a weak competitive position in the international market for ginger, which is mainly because of very low productivity of 3,357 kg/ha against 55,636 kg/ha in the United States and an average world productivity of 10,179 kg/ha (FAO, Rome). Moreover, the increased cost of production due to less productivity of Indian ginger compared to that of other producing countries makes it imperative for India to increase productivity, which alone can reduce the cost of production. The country has enough potential to increase its productivity, as it is shown in Figure 12.8. To be successful in the changing environment, it would be essential to be innovative and proactive. India, being the major producer of ginger in the world, stands seventh when we look toward the performance of other exporting countries.

The gross margin is a good measure for comparing the economic and productive efficiency of similar sized farms. More importantly, it represents the bare minimum that a farm must generate in order to stay in business. The cost—benefit ratio worked out for ginger production in the United States was 1.34. Productivity achieved on the ginger farms of Hawaii ranged from 50,000 lbs/acre to a low of 27,500. The reported average returns for the farm with a productivity of 46,200 pounds depends not only on the yield but also the price.

0 20000 40000 60000 80000 100000 120000

Productivity (Kgs/Ha)

Figure 12.8 Productivity gap for ginger in India. 1. National average (3,391 kg/ha). 2. Productivity level of elite farmers (20,000 kg/ha). 3. Productivity reported from research farm (22,200 kg/ha). 4. State level highest productivity (35,000 kg/ha). 5. Highest productivity reported in farmer's field (65,000 kg/ha)—Shimoga, Karnataka. 6. Highest productivity achieved in the world (115,104 kg/ha)—China.

0 20000 40000 60000 80000 100000 120000

Productivity (Kgs/Ha)

Figure 12.8 Productivity gap for ginger in India. 1. National average (3,391 kg/ha). 2. Productivity level of elite farmers (20,000 kg/ha). 3. Productivity reported from research farm (22,200 kg/ha). 4. State level highest productivity (35,000 kg/ha). 5. Highest productivity reported in farmer's field (65,000 kg/ha)—Shimoga, Karnataka. 6. Highest productivity achieved in the world (115,104 kg/ha)—China.

Risk and Uncertainty

Risk is inherent in all of agriculture, but the ginger industry appears to be more exposed to risk than many other agricultural endeavors (Fleming and Sato, 1998). A review by the Hawaii Agricultural Statistics Services (HASS) reveals considerable volatility in ginger price and yield, with relatively little correlation between the two variables. In addition to abruptly fluctuating prices, ginger is relatively susceptible to serious disease problems, providing an ever-present possibility for a disease problem sharply to reduce yields (Nishina et al. 1992). A sustainable ginger economy is possible only when these risks are minimized.

Along with price risk, cash flow implications are the perceived crop risk for a crop such as ginger. This is related to age to first bearing and longevity of the crop. Production and marketing risks are greater the longer the crop takes to bear and the greater the life of the crop. The length of the harvest period also has its risks; the longer the period, the greater the risk of failure. Vinning (1990), in an Australian Centre for International Agricultural Research (AICIAR) technical report for marketing perspectives on a "Potential Pacific Spice Industry," has given crop risk ratings for various spice crops based on the above points. It was found that ginger topped the list as a high-risk commodity, followed by vanilla.

The ginger industry is facing risk and uncertainty in different forms. Each country has to face considerable competition from other ginger-producing countries because many new countries have entered into the industry in recent years. Over the years, India has lost her market to China and Indonesia, mainly because of the price factor. From the Indian farmers' point of view, the prices have been generally good during the past 10 years, although there was a drastic fall in the 1996 to 1997 and 2001 to 2002 crop years. During 1999 to 2000, ginger farmers received an all-time high price, which was more than double the price in the previous crop year. The price was always above the breakeven point, with an average of Rs.8.80/kg for fresh ginger in the northeastern states, where fresh ginger is marketed, thus leading to profitable ginger farming. The price for dry ginger was well below the breakeven point in the 1980s and in the early 1990s as well. During 1982 to 1984 and 1993 to 1995, the price almost doubled. In addition to this abrupt fluctuation in price, the ginger crop is also highly susceptible to serious disease problems leading to a reduction in yield and an unmarketable production. At times, the farmer may lose up to 80% of the crop toward the end of the crop cycle. Thus, the ginger crop industry is influenced by the risk factors of yield and price, although they are not related as per the analysis of long-term data. However, the analysis of variance indicates that the price variability of ginger is greater than the yield variability.

Prospects and Policy Measures

1. India, being the major producer of ginger, accounts for 33% of the total share in production but contributes hardly 1.17% to the world market with enough surplus to export.

2. There is a definite pattern of cyclical fluctuation in production, mainly due to the producers' response to price. Price stabilization measures can boost production further.

3. During the 1980s, Saudi Arabia was the major market for Indian ginger with an export of 31% of its total export. In the changed scenario of the 1990s and 2000, Pakistan and Bangladesh were the major markets.

While considering policy measures to strengthen the ginger economy of the country, it is imperative to undertake action plans at disaggregated levels—the regional level to begin with, followed by the handling of national issues. Following are the suggested policy measures to overcome the constraints faced by the ginger farming industry in India:

1. Healthy seed production through the "seed village concept" by regular field monitoring and development of seed certification procedures

2. Impose quarantine regulations to restrict seed transportation from one state to the other, especially where bacterial wilt is a major problem

3. An integrated approach to control a serious problem in ginger cultivation, rhizome rot; which is complicated by insect, bacterial, and fungal attack, is the need of the hour.

The above measures can ensure disease-free seed material to the farming community and will reduce the crop risk due to disease and heavy postharvest losses at the farm level.

4. The higher fiber content in Indian ginger compared to that of its competing countries and the higher cost of production in India seem to act as deterrents in increasing our export trade. Hence, there is an urgent need to evolve high-yielding, disease-resistant cultivars with lower fiber but richer volatile oil and oleoresin contents.

Varieties with the above quality parameters are already available from research organizations in India, and there is a need for adequate extension activities to allow the technology to reach farmers' fields.

5. Another aspect where a major thrust has been wanting is to develop cropping systems with ginger as a component, although it could be grown as a intercrop in coconut and arecanut plantations, we are yet to develop ideal systems with attention to a cost:benefit factor, soil disturbance, the shade and root effect, and other factors.

An issue related to the above point is that treating ginger as an agricultural commodity while in its raw form and as a spice when dried is creating certain logistical problems in realizing the fullest potential of ginger in the world market. An effort should be made to solve this definitional ambiguity and due consideration should be given as in other spice commodities.

6. With sweeping changes occurring in the standard of life, life style, and consumption patterns in the buying countries, and with the focus being shifted toward value addition and branded consumer packs, the market development activities need to be geared up.

7. Since importing countries show a definite preference to an uncontaminated and clean product, there is a need for collective efforts on the part of the farmers, traders, and exporters to upgrade the quality of ginger through improved preharvesting practices, postharvest handling, processing and packaging, and storage to keep up with the grade specifications, pesticide residues, aflatoxin level, and microbial load.

8. Indian farmers need to be educated and trained to stand up effectively to the challenges. The need to adopt measures to be more competitive in terms of both quality and productivity assumes greater significance in view of the opening up of the agricultural sector and lowering of agricultural tariffs in accordance with World Trade Organization (WTO).

9. Since a high-value product line is emerging through organic farming, efforts should be made to popularize organic farming in ginger, so that it fetches a high demand in foreign markets.

10. One should not get the feeling that by value addition we just mean production of ginger derivatives alone. One EU document reveals that in the export market, "buyers are looking for clean, well flavored, artificially dried product with high hygiene levels, in contrast to the bulk of the materials which has been sun dried on the ground" (Commonwealth Secretariat, 1996, p. 45).

For the successful implementation of above the policy related-suggestions, there is a need to develop a special database regarding all aspects of ginger-based activities such as marketing, employment potential, production techniques, cost of cultivation, and value addition. This, in turn, will help in creating decision support systems to benefit the stakeholders.

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