Ginger: Trade-Off Between Price Spike And Commodity Glut
This year, many ginger farmers have witnessed astronomical increase in their output. The story isn’t the same with the extreme poor farmers who couldn’t afford their aggregate input due to skyrocketed prices pushed by inflation. As such, they watched haplessly as their farming businesses trudged like everyday toils of their peasant life. Their situation is worsened by the combine effect of middlemen and the manipulative prowess of rich players in the market, at the 2017 post-harvest, shockingly; ginger was sold as low as N6, 000, a commodity that was sold as high as N24, 000 last year.
The ginger industry is in dire strait – prone to climatic fluctuations, environmental hazards and externalities. The challenge faced by ginger farmers is like any other market where middlemen are having a filled day. Middlemen in the market and money bag dealers/exporters are smiling to the bank at the expense of local ginger farmers because of decades of unfettered access to the preceding deregulated market. Ginger dealers used to buy the commodity at a giveaway price in southern kaduna and sell it in the international market at an outrageous price. It is mindboggling to think of the unfair deal because the region is acclaim for the quality of ginger it produces, comparatively in-terms of strong pepper condition and oil viscosity; however their income is not commensurate to their agro-endowment ratings.
What do local ginger producers in southern Kaduna have in common with the money bag exporters in kano? Of course, business– definitely not partnership, the single common interest in the market is profit. Often time is tug-of-war between who want to sell and the potential buyer, each want to maximize profit but, the buyer has upper hand because he determines market trend for the simple fact that the market understand only one language – money. Base on the understanding that the local farmer lacks the requisite information on the international trading system, his marginal profit is naively a jackpot to him.
Recently in Kachia, I sat side-by-side a pair of dudes at a local tavern sipping alcohol; they talked with sheer arrogance, ordering beer for known and unknown drunkards in their sight, celebrating their new found latitude. Later, I was told they just sold a truck load of ginger, and the world, temporarily, around them was theirs. If they had information on how much their truck load will be sold abroad, they probably would have been biting their fingers. The big players in the ginger industry have made stupendous wealth from the ignorance of the local farmers and their impatience, too.
Praise God for the new thinkers on the bloc and the prevailing consensus, they have creatively built a buffer round the ginger market for an efficient management of their resources. With this move, things will definitely change for good because the newly independent market control board will regulate any likelihood of commodity glut and the attendant price crash. Meaning, it has shifted ground to a rule-based market. The new cartel is to safeguard the market from vulnerabilities while allocating the gains of the business to the impoverished farmers. This is not only timely but, strategic. What a way out of a debacle! Mr. Jatau Douglas, a local ginger farmer resident in Kachia – said emphatically when the news was transmitted to him.
Like Jatau, many farmers are excited with the new board, to them; it represented new hope. Before now farmers have seen their prospect plummeted under the manipulative tendency of the middleman in the market place. Glut in the market sphere have previously traded-off the capacity of ginger producers to enjoy competing bargain. But, how the new market dynamic will guarantee a sustainable win-win market regime against the foregoing zero-sum depend largely on the board deep knowledge of mafia style market intrigue to counter middlemen resilience and tactics.
For instance, to address the downward trend of oil prices, the world’s major Arabs oil producing countries came together under a common interest and created a cartel, OPEC, in 1973 with the primary aim of safeguarding oil prices from market manipulation which immediately nudged up oil prices.
It is disheartening to note that, ginger with all its alluring prospects and the potential to raise the nation GDP and lower unemployment has not attracted government intervention fund – they only pay lip service. The ginger producing community resorted to self-help to take control of the market side of the business and of its future – too.