PARTICIPATORY SUPPLY CHAIN ANALYSIS OF HIGH VALUE SPICES …lad.nafri.org.la/fulltext/2734-0.pdf · The results of the study indicate that cardamom is a crop that neither requires

PARTICIPATORY SUPPLY CHAIN ANALYSIS OF HIGH VALUE SPICES IN NORTHERN LAO PDR

MASTER THESIS BY ANTONIA SCHNEIDER

UNIVERSITÄT HOHENHEIM

Institute for Social Sciences of the Agricultural SectorDepartment of Agricultural Communication and Extension

Agricultural Sciences in the Tropics and Subtropics

This study was fi nancially supported by Eiselen Foundation Ulm

Supervised by Prof. Dr. Volker HoffmannPD Dr. Andreas Neef

Stuttgart-Hohenheim, GermanyOctober 2009

I

Summary

This study analyses the supply chain of cardamom (Amomum spp.), a Non Timber Forest Product (NTFP) that is either obtained from wild collection or cultivated as domesticated NTFP. The study was conducted in the context of the Lao-German Programme on Inte-grated Rural Development of Mountainous Areas in Northern Lao PDR (RDMA). This is a programme that endeavours to provide economic opportunity and growth through sus-tainable cultivation, the use of natural resources, income generating activities, and eco-nomic development. The aim of this study is to investigate to what extent cardamom is al-ready part of the income of the rural population of the Luang Namtha district, Northern Lao PDR. Furthermore, to identify not only the future prospects of this perennial crop un-der increased resource scarcity but also which factors determine cardamom as an alterna-tive income source for the rural upland population.

To evaluate the suitability of cardamom cultivation as a viable income generating activity, stakeholders taking part in the supply chain were identified. Those who are active within the supply chain were interviewed by employing Participatory Rural Appraisal tools like focus group discussions and semi-structured interviews. According to this information, the supply chain was mapped. Furthermore, economic data was gathered on the prices of cardamom and all income generating activities in the target villages.

The supply chain is a network of different stakeholder groups (producers, collectors, local traders and middlemen, exporters and transboundary middlemen) and each group is in-volved in a specific activity within the supply chain. The analysis of the supply chain leads to the understanding of the relationships and interactions of these stakeholders in-volved in the supply chain of cardamom and their marketing strategies. This helps to iden-tify and tackle problems and challenges occurring during the product flow from produc-tion to consumption. On this basis possible strategies and solutions were suggested to im-prove the production and marketing of cardamom and to prevent losses during the product flow. Furthermore, recommendations can be given to improve the existing production sys-tem.

The qualitative data enables an understanding of the perception of cardamom among the rural upland population. It helps to assess the economic importance of cardamom among the producers and collectors. Furthermore it was used to identify which individuals would potentially benefit from the promotion of cardamom.

The results of the study indicate that cardamom is a crop that neither requires a high in-vestment nor demands much by way of labour and external input. Cardamom is produced mainly for the export to China. Marketing channels are well established and the good is in high demand with traders, middlemen and exporters. The prices have risen in recent years and each group of stakeholders obtains a satisfying benefit from taking part in the carda-mom business. Furthermore, problems could be identified during the drying process of cardamom, leading to a lower price and thus to a loss of income. The cultivation of the improved varieties introduced from China could ultimately threaten biodiversity and en-danger local varieties. Also, production is currently geared towards supplying the one

II

market with the highest demand; the Chinese market. This dependency on a single coun-try can lead to high losses in cases of price fluctuation.

For farmers with a higher income and a specialization in other cash crops, cultivating and selling cardamom seems to be a buffer strategy in case of crop failure of other cultivated upland crops. Collectors with a lower income depend to a large extent on the sale of car-damom. Individuals benefiting the most from the introduction of cardamom as an alterna-tive income source will be the ones practising collection of wild cardamom. Due to defor-estation caused by focusing on the cultivation of rubber, the base of their livelihood is threatened. This can be buffered partly by shifting from wild collection of cardamom to cultivation. To achieve successful cultivation, important preconditions like the availability of suitable land for planting cardamom and infrastructure for the marketing process must be ensured.

III

Table of Content

Summary .....................................................................................................I

List of Tables ............................................................................................ V

List of Figures.......................................................................................... VI

List of Abbreviations and Measures ..................................................... VII

Acknowledgements ............................................................................... VIII

1 Introduction.....................................................................................1

1.1 Scope of the study ................................................................................................... 2

1.2 The RDMA Programme.......................................................................................... 3

1.3 The study area ......................................................................................................... 3

1.3.1 Muang Sing ............................................................................................................. 4

1.3.2 Luang Namtha......................................................................................................... 5

1.3.3 Nalae ....................................................................................................................... 5

1.4 Non-timber forest products and forest in Lao PDR................................................ 5

2 Methodology ...................................................................................7

2.1 Design of the study ................................................................................................. 7

2.2 Defining and mapping the supply chain ................................................................. 8

2.3 Why qualitative research?....................................................................................... 8

2.4 Limitations of the study and critical reflection of the applied methods ................. 9

3 Cardamom in Northern Lao PDR .................................................12

3.1 Distribution and ecology of cardamom................................................................. 12

3.2 Cultivation, collection or trade?............................................................................ 13

3.3 Marketing, use and quality requirements.............................................................. 15

3.4 Export.................................................................................................................... 16

3.5 Demand ................................................................................................................. 17

3.6 Previous efforts to introduce cardamom as cash crop .......................................... 18

3.7 Harvest and yields ................................................................................................. 20

3.8 Domesticated versus wild cardamom ................................................................... 22

3.9 The impact of rubber expansion ........................................................................... 24

4 The supply chain and the actors .................................................27

4.1 Producers............................................................................................................... 27

IV

4.1.1 Labour ................................................................................................................... 28

4.1.2 Cultivation management ....................................................................................... 28

4.1.3 Yield losses ........................................................................................................... 29

4.1.4 The perennial alternative?..................................................................................... 31

4.1.3 Constraints to extend the cultivated area .............................................................. 33

4.2 Collectors .............................................................................................................. 34

4.2.1 Property rights of the protected area ..................................................................... 34

4.2.2 Knowledge of cultivation...................................................................................... 35

4.2.3 Motivation to cultivate .......................................................................................... 35

4.3 Local traders.......................................................................................................... 37

4.4 Local middlemen................................................................................................... 37

4.4.1 Fees and Taxes ...................................................................................................... 37

4.5 Exporters ............................................................................................................... 38

4.5.1 Tonlee Export-Import Company in Luang Namtha.............................................. 38

4.5.2 Chinese trader on Luang Namtha market ............................................................. 38

4.6 Transboundary middlemen ................................................................................... 39

4.7 Spice company ...................................................................................................... 39

5 Factors influencing the supply chain of cardamom...................40

5.1 Assessment of the cardamom business ................................................................. 40

5.2 Development of the price...................................................................................... 41

5.3 Is infrastructure influencing the price? ................................................................. 42

5.4 Income sources and share of cardamom ............................................................... 44

5.5 Who benefits from cardamom?............................................................................. 45

5.5.1 Producers............................................................................................................... 46

5.5.2 Collectors .............................................................................................................. 48

6 Conclusions ..................................................................................50

7 Recommendations for promotion................................................54

8 References ....................................................................................57

Appendix ..................................................................................................60

V

List of Tables

Table 1: Most common cardamom species in Lao PDR................................................. 12

Table 2: Characteristics of the two improved cardamom varieties................................. 13

Table 3: Activities in the villages ................................................................................... 14

Table 4: Amount of cardamom exported from Luang Namtha province 2007/08 ......... 17

Table 5: Amount of cardamom (in tons) sold to transboundary middlemen by the two main exporting companies in Luang Namtha................................................... 17

Table 6: Previous promotion of cardamom in Luang Namtha province ........................ 19

Table 7: Yields (kg/ha) according to literature ............................................................... 21

Table 8: Varieties of cardamom found in the districts.................................................... 22

Table 9: Key differences between wild and domesticated cardamom............................ 23

Table 10: Comparison of the characteristics of cardamom and maize ............................. 32

Table 11: Assessment of the cardamom business by the main stakeholder groups ......... 40

Table 12: Prices of dried cardamom in the villages paid by traders to producers and collectors in 2008.............................................................................................. 43

Table 13: Income sources in the producers’ and collectors’ villages ............................... 44

Table 14: Income quartiles, Income range and average income; collectors: n= 32, producers: n=36 ................................................................................................ 45

VI

List of Figures

Figure 1: Map of the study area with the target villages................................................... 4

Figure 2: Cardamom flower and dried cardamom fruits.................................................. 16

Figure 3: Model of yield evolution in a cardamom plantation in Northern Lao PDR.... 20

Figure 4: Wild cardamom in the forest and domesticated ‘Pak Song’ variety growing on an open field ................................................................................ 24

Figure 5: Sub-sector map of cardamom in Northern Lao PDR (prices according to 2007) .............................................................................. 27

Figure 6: Cropping calendar of cardamom, upland rice and maize in Northern Lao PDR.......................................................................................................... 29

Figure 7: Main factors causing loss of harvest amongst producers ................................ 30

Figure 8: Development of price per kg of dried cardamom in the years 2001 to 2008 .. 41

Figure 9: Area within the districts where interviews took place ..................................... 43

Figure 10: Share of cardamom in percent within total income in the year 2008 of producers and collectors, according to income level (producers: n=36, collectors: n= 31), letters indicate statistical differences (Values followed by the same letter are not significantly different at p=0.05)........................... 46

Figure 11: Share of cardamom 2008 within the income of cardamom producers in Pung Kok village, Muang Sing district and Kua Song village, Luang Namtha district (salary as other income source excluded, only village head earning salary)................................................................................................. 47

Figure 12: Share of cardamom 2008 within the income of cardamom collectors in Hat Lom village and Mo Kah village, Nalae district (salary as other income source excluded, only village head earning salary) ........................... 48

VII

List of Abbreviations and Measures

ADB Asian Development Bank

CIA Central Intelligence Agency

DAFO District Agricultural and Forestry Office

DPI Department of Planning and Investment (Luang Namtha)

EU European Union

FOUF Friends of the Upland Farmer

GAA German Agro Action

GTZ German Technical Cooperation

Lao PDR Lao People’s Democratic Republic

NTFP Non Timber Forest Products

NBCA National Biodiversity Conservation Areas

RDMA Rural Development for Mountainous Areas

Exchange rate (May 2009):

1 US Dollar = 8,719.60 Lao Kip

1 Lao Kip = 0.0001199 US Dollar

VIII

Acknowledgements

Many individuals and institutions contributed to the successful completion of this thesis and I want to thank them all for supporting me during the last months.

First of all, I would like to thank the Eiselen Stiftung Ulm for supporting me financially and giving me the opportunity to conduct his study.

I am very grateful for the support and supervision by PD Dr. Andreas Neef, Prof. Dr. Volker Hoffmann and Dr. Maria Gerster-Bentaya who provided guidance and feedback throughout my research and writing process.

I want to thank the staff of the RDMA Programme in Luang Namtha province, Lao PDR for their care, kind reception, the logistics and organization. Especially I want to thank Dr. Adrian Schuhbeck and Bounsong Singnamvong for supporting me and giving helpful suggestions.

Much appreciation goes to the staff of The Uplands Program in Chiang Mai, Thailand who integrated me and made me feel at home in Chiang Mai. The whole study would not have been so successful without the help and motivation of Maria Thalmann who sup-ported me all the time during my stay in Laos. I am particularly indebted to Chalathon Choocharoen and Pakakrong Makpun-Williams, who did not only serve as facilitators and translators during my field research but also made me familiar with the Thai and Lao cul-ture.

Furthermore I want to thank all interviewed villagers in Luang Namtha province for their kind hospitality and patience in responding to my questions.

Finally, I want to thank all my friends and my family who patiently supported and coun-tenanced me during the process of gathering the data and writing my thesis.

1 Introduction

1

1 Introduction

Assisting rural smallholders to participate in the market is increasingly seen as a sustain-able approach to tackling poverty and a lack of economic development in remote areas. The involvement in integrated supply chains provides diverse opportunities for small-holders in rural areas, enabling them to be part of the market and thus generate income (FRANCESCONI, 2009). Farmers are looking for a range of products they can sell to create income (WHEATLEY et. al., 2004a). Therefore, rural smallholders need to recognize what kinds of goods are in demand in the accessible markets within their locality. In this way, farmers will be able to produce correct quantities for the demand in their area and thus take part in economic development.

Smallholder farmers in the upland areas of Northern Lao PDR are the focus of this study. The upland areas of Lao PDR are characterized by remoteness and poor farming condi-tions (WORLD BANK, 2006). The base of the livelihood of most people is subsistence farming of upland crops as well as harvesting Non Timber Forest Products (NTFP) (SEI-

DENBERGER et al., 2003). Selling NTFPs is an important income source for the people liv-ing in the upland communities of Northern Lao PDR (FOPPES and PHOMMASANE, 2005). However, the occurrence of NTFPs is threatened by the overuse of the forest and by de-forestation (ADB, 2001, RAINTREE and SOYDARA, 2001). Limited access to markets re-mains a key hindrance for successful development (WHEATLEY et. al., 2004b). Therefore, identifying opportunities for income generation is crucial for rural development. In this way the rural poor will not be left out of the country’s economic development.

The domestication of NTFPs and the sale of their harvest are in focus of rural develop-ment programmes supported by the government of Lao PDR and foreign donors. They as-sist the rural population to change their livelihoods from slash-and-burn cultivation sys-tems to the cultivation of crops on determined small plots. Furthermore, the upland farm-ers will be linked to markets by introducing value chains. These activities enable the farmers to participate in the economic development of the country and to generate cash income which can be used to purchase rice (FOPPES and PHOMMASANE, 2005, RIBEIRO

and DARNHOFER, 2007).

The most important NTFP growing in the forest areas or as domesticated variety is car-damom (Amomum spp.). It is mainly used in Chinese medicine and considered to be the second biggest agricultural export product of Lao PDR after coffee. By growing carda-mom in an agro-forestry system, cash-crop production is combined with forest protection Wild cardamom grows in clearings within the secondary forest (FOPPES and KETPANH, 2000) and the improved varieties are planted at the edges of the forest.

Various stakeholders involved in the domestic part of the supply chain of cardamom were interviewed to assess the suitability of cardamom as an income source for rural small-holders in Northern Lao PDR. This was done with the aim to tackle problems occurring during wild collection, cultivation, post-harvest handling and marketing of cardamom as well as to assess the valuation of cardamom as income source among the rural population. Based on these findings, recommendations for ongoing development projects and further advice for the promotion of cardamom as an alternative income source can be given.

1 Introduction

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1.1 Scope of the study

This study aims to determine the supply chain of cardamom and to analyse the social, in-stitutional and economic relations among all stakeholders involved in the supply chain of cardamom in Northern Lao PDR. Furthermore it intendeds to assess which measures are taken to cultivate, collect and supply the respective crop into the market. On the one hand the goal is to evaluate whether cardamom is a viable income source for the people who al-ready practice the collection of wild cardamom and the production of domesticated car-damom. On the other hand, it is to investigate the potential of cardamom to become an al-ternative source of income for those villagers not yet involved in the supply chain.

Hence, the overall research question is:

How is the supply chain of cardamom in Northern Lao PDR organized and what are the future prospects of cardamom under increased resource scarcity?

This includes the following specific research questions:

•Where is the market of cardamom located, who are the main actors and how did the marketing structure evolve?

•Which activities are undertaken to supply cardamom into the market?

•Is cardamom an interesting income source for smallholder farmers in the uplands of Northern Lao and which factors determine that?

•To what extent does cardamom already contribute to the income of the rural popula-tion in the target villages?

•Who benefits most from the production and sale of cardamom?

•Is there potential to shift from collection in the wild to production of domesticated car-damom?

The paper is organized as follows: In the remainder of the first part, the RDMA Pro-gramme and the study area are described. The importance of areas of forest as a resource in the study area is pointed out. The second part explains the research methodology and limitations of the study. Part three provides background information on cardamom in Northern Lao and its importance and perception in the target villages.

Part four characterizes the supply chain of cardamom with all stakeholders taking part as well as their opinion of the cardamom business.

Part five sheds light on the factors influencing the cardamom business and determines who is benefiting from it. Subsequently, conclusions will be drawn. Finally, the last sec-tion concerns recommendations for the promotion of cardamom.

1 Introduction

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1.2 The RDMA Programme

This study is part of the Lao-German Programme on Integrated Rural Development of Mountainous Areas in Northern Lao PDR (RDMA) and therefore focuses on the target villages of the RDMA Programme. The target group is the poor population in rural areas of the northern mountainous provinces of Lao PDR. The poverty in this region stems from its alienation from the economic development of the rest of the country. The political de-cision makers do not take into account the requirements of the villagers, their accoutre-ments with natural resources and the low development of infrastructure. Thus the local population is limited in its ability to utilise marketing opportunities. They are generally not active participants in the local economy and therefore unable to improve their eco-nomic and social living conditions. Furthermore the aim of the government to abolish shifting cultivation is arguably having an adverse effect on the people due to a lack of al-ternative models for the permanent cultivation of the slopes (GTZ, 2006).

During the first phase between 1994 to 2007, the project focused on issues related to food security, rural development, infrastructure, drug control, watershed management, educa-tion and health (GTZ, 2006).

Simultaneously, in 2004 the first phase of the RDMA Programme started in cooperation with the Government of Lao PDR and other partners. The emphasis of the first phase was set in the following areas: natural resource management, local and regional economic de-velopment, social and institutional development.

The second phase of the RDMA Programme, which started in 2008 and runs until 2011 focuses on economic opportunities through sustainable cultivation and the use of natural resources, income generating activities, and economic development.

In an attempt to overcome the disadvantages people in the mountainous regions are ex-periencing, the project concentrates on the following topics: integration of villagers into value chains with market potential, concepts for the enhancement of the local economy, encouragement of new income strategies, improved use of natural resources, diverse cul-tivation and use of NTFPs as a source for commercial purpose. (GTZ, 2006a, LAO GER-

MAN DEVELOPMENT COOPERATION, 2008).

1.3 The study area

Luang Namtha province is located in the North West of Lao PDR and is divided into five districts. This study focuses on 18 villages in the three districts Muang Sing, Luang Namha and Nalae. The district Muang Sing borders Myanmar to the west, across the Me-kong River, and China to the north east. The Luang Namtha district neighbours in the north China and Oudomxay province in the east. Nalae district adjacent to Luang Namtha is the one of the three districts not bordering another country (SHI, 2008).

1 Introduction

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Figure 1: Map of the study area with the target villages

Source: The Uplands Program, 2009

The following area was chosen because in these districts cardamom, either from wild col-lection or cultivation, is a notable income source for the rural population. As it is the tar-get area of the RDMA Programme, the assessment of a viable alternative income source is of interest to the programme. Therefore the research on cardamom was connected to the work of the RDMA staff.

1.3.1 Muang Sing

Three villages in Muang Sing district (Xiaengkhaeng, Chaputon Gau and Meuto Kao) are located close to the border of Myanmar, on the Mekong River. Proximity to the river of-fers an opportunity for transport as traded products are moved by boat. The road to Muang Sing, the district centre, is a dirt road still under construction. However, in general all the villages were accessible by car in the dry season when the study was carried out.

The villages Pung Kok, Namded Mai and Pakha are located approximately 20 km from the district centre Muang Sing. These three villages are the ones located closest to the Chinese border. The road is paved and in good condition. In the area cash crops like mel-ons and sugarcane are produced for the export to China.

1 Introduction

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1.3.2 Luang Namtha

The four villages visited in Luang Namtha district are all located along a newly built road in good condition around 40 km away from the town of Boten, at the Chinese border. Most of the goods exported to China (including NTFPs and cardamom) have to pass this border check-point. The road also leads to the province centre Luang Namtha where the two interviewed exporting companies are based. The very well developed infrastructure offers the possibility of marketing cardamom as a fresh produce, as it can easily be trans-ported to its destination in China. Marketing fresh cardamom was only mentioned in the villages Kua Song, Houay Hom and Houy Dam.

1.3.3 Nalae

The road connecting the district centre Nalae to the province centre Luang Namtha, where the marketing through exporting companies takes place, is a gravel road. The village Hat Lom lies on this road. The village Thung Thon is only accessible by boat across the river from Hat Lom. Accessing the villages Hat The and Mo Ka requires a 30 minute boat trip down stream from Nalae. These two villages will be connected in the future with a road to Bokeo province and thus to the border of Thailand. It was mentioned by the villagers in Hat The that they hope for a growing cardamom business when the road is finished and the village, via Bokeo province, is connected to Thailand.

1.4 Non-timber forest products and forest in Lao PDR

Forests are a source of food and income for the upland population of Lao PDR (WFP, 2006). They provide NTFPs which are a key resource in the struggle to alleviate both food security and poverty. They are gathered in the forest areas and a share of them is sold to create cash income for rural families.

The National Protected Areas that cover 14% of the country’s land area of 30,000 km² are quite intensely used by village communities to extract NTFPs (NAFRI, 2007). NTFPs can provide up to 50% of the cash income of rural communities. The recognition of the im-portance of NTFPs within the local economy is a driving factor for forest protection. Earning a certain value with NTFPs is an incentive for the rural population for forest con-servation (BELCHER et al, 2005). Only if the forest provides a plant which can either be consumed or whose sale helps generate income and thus enhancing the economic status of the family, people will respect the land use classifications that are further defined in this paragraph. An example within this context that combines forest conservation with the production of cash crops are systems like agro-forests based on the domestication of NTFPs. This also includes activities like the domestication of cardamom (FOPPES and KETPHANH, 2000).

To protect and sustainably manage the forest resource in Lao PDR, the Forest Law of the Lao PDR gives guidance for activities connected to the use of the forest (LAO PDR, FOR-

EST LAW 2007, Art.1). The classification of the forest and the consequential options of use are of importance for the understanding of the present study as cardamom is a plant grow-ing in the understory of forests, requiring 50% shade (NAFRI, 2007).

1 Introduction

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The abundance of cardamom is due to its ecology strongly connected to the availability of forests located around the villages in the target area. The cultivation of the improved va-rieties of cardamom as an agro-forestry cash crop takes place on the edges of the secon-dary forest areas, formerly used for shifting cultivation. The wild varieties are either gath-ered in the controlled use zones of all types of forest or in areas that are left fallow after cultivating upland crops. This means that the depletion of forest and the decline of fallow periods leads to a loss of the ecosystem that cardamom requires for its development.

Furthermore, the utilization of the crop is regulated by classifying specific areas as forest because these regulations determine to what extent it can be extracted from forest areas and in which areas it can be grown as domesticated NTFP.

According to Article 9 of the Forest Law of Lao PDR (2007), forest is classified as:

1. Protection Forest

2. Conservation Forest

3. Production Forest

In Section 2 of the Forest Law, the use of the different forest types is described:

Protection Forest areas are divided into two zones (Total Protection, Controlled Use zones) In the Total Protection zones agricultural activities and the extraction of forest products is strictly prohibited. In the Controlled Use zones people are allowed to use wood and forest products.

Conservation Forest is divided into four zones (Total Protection, Controlled Use, Corri-dor and Buffer Zones). Only within the Controlled Use zone the use of wood and other forest products permitted.

Production Forest (including natural and planted forest) is classified for utilization pur-pose. Wood and forest products can be used to satisfy the requirements of national socio-economic development and people’s day-to-day lives.

2 Methodology

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2 Methodology

2.1 Design of the study

A variety of literature on Cardamom was reviewed to compile the current state of knowl-edge on this plant as NTFP and domesticated NTFPs, and to determine the current percep-tion of Cardamom’s significance in Lao PDR. The output of the aforementioned literature review is used to back up the information obtained within the interviews.

The empirical data is based on a three month field survey that was conducted from March to May 2009 in Luang Namtha province of Lao PDR. A combination of quantitative and qualitative methods was applied (SILVERMAN, 2005) consisting of structured and semi-structured interviews, focus group discussions and site visits.

18 villages in the target areas of the project were visited. These 18 were specifically se-lected due to the village population’s involvement in the collection, cultivation and trade of cardamom. This meant the people were able to provide information about the activities regarding the respective crop.

29 collectors and 41 producers were interviewed separately or in groups of 2 to 10 people using semi-structured questionnaires. 7 traders, representatives of 2 exporting companies, and 3 government officials were interviewed in single semi-structured interviews.

People were classified as “collectors” when, of the total cardamom sold, the share of wild collection exceeded the share of cardamom obtained from domesticated, planted varieties. Otherwise, they were classified as “producers”. Cardamom plantations and collection sites within the protected forest areas were visited.

The Department of Industry and Commerce and the Financial Department in Luang Nam-tha were visited to gather official data regarding production, collection, cultivation and export of cardamom. This data was used to back up the conclusions derived from the in-terviews with information from the governmental side.

The quantitative method enabled the gathering of data regarding income, development of prices and quantities of cardamom grown and collected. The qualitative data complements the quantitative figures and reflects the situation and personal perception of the respon-dents.

Based on the identification of the stakeholders, the supply chain was mapped according to the value-link methodology (SPRINGER-HEINZE, 2007). It helps to describe and visualize the flow of the product from raw material to end product. It also illustrated the main proc-esses, services or supports; the stakeholders taking part in this process and their relation-ship, as well as the prices of the product.

In 3 villages (Namded Mai, Pakha, Pu Thon), due to adverse circumstances it was not possible to gather economic data like income or harvested and sold amounts of any agri-cultural product or NTFP. Therefore these villages do not occur in the economic evalua-tion.

2 Methodology

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During the interviews the author was always present and accompanied by a translator, who translated Lao into English. Visiting Akha villages, translation from Akha to Lao was done by a second translator.

2.2 Defining and mapping the supply chain

Applying supply chain management in developing countries was discussed in many pa-pers in the recent years (WOODS, 2004), as the involvement of smallholders in rural areas in integrated supply chains provides diverse opportunities for enabling them to be part of the market and thus generate income (FRANCESCONI, 2009). To be able to successfully fulfil the aforementioned tasks, the supply chain of interest firstly had to be defined and identified. The supply chain is a network of organizations that are involved, through up-stream and downstream linkages, in different processes and activities that produce value in the form of products and services delivered to the ultimate customer (CHRISTOPHER, 1992). It involves the management of the relationship between the stakeholders to pro-duce efficiently and supply the product into the market as well as to meet the require-ments of the consumers regarding quantity, quality and price (WOODS, 2004). These state-ments can also be applied to the supply chain of cardamom in Northern Lao PDR.

According to the value-links methodology (SPRINGER-HEINZE, 2007) the supply chain of cardamom was mapped. The value-links methodology was used, since the basic concept of the value chain is similar to the one of the supply chain. Mapping of the supply chain results in a visual representation of the supply chain system. Business operations (produc-tion, packing, trade, export) are identified, as well as the operators (producers, collectors, traders, middlemen) and the relationship between the operators. The map of the chain is an essential part of the analysis. The symbols used in this study for mapping he supply chain follow the model developed by SPRINGER-HEINZE (2007) and will be pointed out in Chapter 4.

2.3 Why qualitative research?

Employing qualitative research in marketing and management, which includes the supply chain topic, can lead to a greater understanding of the subject area. The subject of qualita-tive supply chain analysis lacks - due to its multidisciplinary nature - an experimental de-sign. A great share of the research done in business-focused supply chain management is based on empirical observation and case studies (TOWERS and CHENG, 2008).

As the “supply chains in developing countries are typically long and fragmented, involv-

ing multiple smallholder producers delivering produce to collectors” (WHEATLEY et. al, 2004, p.189), it seems useful to apply qualitative methods to assess the functionality of the cardamom supply chain in Northern Lao PDR. The above quotation also applies to the circumstances in the target area of the present study.

Furthermore, in South East Asia, farmers increasingly improve their livelihoods by in-come generated by selling a diverse range of products with a high value or value-added. This leads to a greater market orientation (WHEATLEY et. al., 2004). Cardamom is pro-duced only for sale within the export market as there is no traditional use for this crop in

2 Methodology

9

the uplands of Northern Lao PDR (NAFRI, 2007). Furthermore, the biggest share of in-come in some of the target villages is generated by selling agricultural products grown on the fields or NTFPs collected in the forest. Factors supporting the statement above can be found within the research context of this study.

Focusing on existing supply is an is a way to develop more efficient chains in developing countries (WHEATLEY et. al., 2004). Therefore one aim of the study is to identify the ex-isting supply chain of cardamom, its value as an income source and to evaluate whether promotion of the respective crop will lead to an improvement of the rural population’s economic situation. This means focussing on an existing crop and its marketing rather than introducing a crop unknown to the area.

The qualitative data gathered during the interviews is backed up by quantitative data on income and economic status of the people. The combination of the two types of data of-fers the possibility of gaining a broader understanding of the importance of cardamom as a cash crop and as a potential viable alternative income source.

2.4 Limitations of the study and critical reflection of the ap-plied methods

In the following chapter, the constraints and obstacles occurring during the research proc-ess are summarized and facts are considered that might influence the outcomes of the study. Furthermore, the applied methods are reviewed to estimate whether the way of ac-complishment was appropriate for the purpose of the study.

Challenges and limitations of the study

The data used for this study reflects the present situation in the selected villages and is not attempting to provide general conclusion on the situation in whole Northern Lao PDR. The respondents were in many cases subsistence farmers, using only their memory to tell figures of price, income, and harvested and sold amounts of cardamom. In general such figures are not recorded in written form and the people had to rely on their memory, draw-ing numbers from the sales and harvest some years ago. With this in mind, it is possible that the numbers presented do not precisely and exactly reflect the reality.

Since data was in many cases collected in group discussion, individual information was possibly not disclosed by all of the interviewees. Despite the inherent flaws, this is the only way to assess the numeric situation as there is no reliable data available on export, income and prices of cardamom. Data coming from different sources (collectors, produc-ers, traders, exporters) were cross-checked and verified as rigorously as possible.

In some villages it was only possible to get hold of 1 or 2 people involved in the carda-mom business, in other villages up to 10 people participated in group discussions. There-fore, the average household income of the producers in a certain village is in some cases based on the statement of only 2 people.

The product flow of cardamom and the corresponding activities were traced until the last stage of the supply chain before crossing the border. Cardamom is mainly exported by middlemen to China where it is processed. Establishing a contact to these stakeholder

2 Methodology

10

groups, transboundary middlemen and processing industry turned out to be an obstacle that was not possible to overcome during the research period of this study.

The study took place between March and May 2009. However, it was only at the end of the study period that the cardamom plants started to flourish, which meant that the re-searcher was not present at the time of the harvest. The statements on harvested amounts are very diverse. It is hard to estimate how much cardamom can be picked in one day by one person from a specific area as the amount depends on various factors. Taking part in the harvesting or collection process would make it possible to calculate the productivity of the cardamom plots and thus give approximative statements on the productivity per area.

Apart from these limitations, this set of data is the most recent and exact that has been collected in the area on this specific topic. It provides an overview on the socio-economic situation of the producers and collectors in some of the target villages, specifically on is-sues regarding collection and cultivation of cardamom. The data set has the strength to function as a base for drawing conclusions and, in turn, providing recommendations on the promotion of cardamom in the three districts of Luang Namtha province, Northern Lao PDR.

Critical reflection on the applied methods

The target villages of the study were proposed by the RDMA project due to the fact that in these villages cultivation or collection of cardamom already takes place. Within the vil-lages the researcher tried to gather as many people as possible to conduct the interviews and focus group discussions. Applying the Participatory Rural Appraisal tools like semi-structured interviews and group discussions was the appropriate way to obtain informa-tion on the supply chain of cardamom as well as related issues and constraints.

In general all people interviewed assessed the cardamom business as positive. To learn about the attitude and the problems it was necessary to interview the experienced farmers and collectors. Conducting mainly focus group discussions, in some cases even with the local trader attendant, respondents might feel pressurized to give certain answers regard-ing good prices and the trader’s behaviour. Also the interviewed groups agreed on prices achieved in the different years possibly not exactly reflecting reality. Conducting single interviews is more time consuming but might lead to more precise statements.

Visiting the villages where cardamom is already a component of the household income is a good precondition to collect information on the supply chain of the respective crop, plus the advantages and disadvantages of collection and cultivation. In this case, a purposive sampling and selecting of interviewees in a non-random way was the most adequate ap-proach. This ensured the representation of viewpoints of all stakeholders, taking into ac-count the limited time of the study period.

Going directly to the villages where cultivation and collection of cardamom takes place was the most effective way to gather the maximum amount of information possible on one objective of the study – to identify the supply chain of cardamom, the stakeholders and their constraints. In this sense, the applied method was successful. In terms of another objective of the study - namely to identify whether cardamom has the potential serve as an alternative income source for people who are not yet involved in the supply chain of car-damom, the applied method was not quite satisfying.

2 Methodology

11

Interviewing the people already involved in the cardamom business, it was possible to learn about their opinion of cardamom and to conclude from their situation what the strengths and constraints of the cardamom business might be. The information obtained from the skilled farmers can serve to assure the newcomers of the benefits they can achieve by the cultivation of cardamom. People not currently involved in the cardamom business – i.e. people who are possible future targets for the promotion of this business – were left out and their attitude towards cardamom was not considered. Considering this limitation, it is possible to assess the constraints of the individuals involved in the carda-mom supply chain and give recommendations according to their situation. To learn about the needs and attitudes of the individuals being future beneficiaries of cardamom promo-tion these people need to be approached and interviewed.

3 Cardamom in Northern Lao PDR

12


3.1 Distribution and ecology of cardamom

The five varieties of Cardamom (Amomum spp.) that this study refers to and that are found in Northern Lao PDR, are very different to the “true” Cardamom (Elettaria carda-

momum) found from in areas stretching from the Middle East to India (NAFRI, 2007).

It is a herbaceous, perennial plant within the family Zingiberaceae and found throughout Lao PDR in the understory of mixed and secondary deciduous and evergreen forests. It is characteristic of the plant community within the secondary forest in Lao PDR and associ-ated with the practice of traditional slash-and-burn agriculture with long-rotation fallow periods (AUBERTIN, 2004). It grows mostly in humid environments of over 700m of alti-tude. Conditions most favourable for the development of cardamom include a mean an-nual temperature between 19 to 22°C and annual rainfall between 1.200 and 2.400 mm.

The plant reaches a height of between 1 and 3 meters. Leaves are about 7 cm wide and 50 cm long, the inflorescence growing from the rootstock and producing pairs of white flow-ers blossoming from April to May. In August the red, 2 cm long capsules ripen, contain-ing brown seeds with a camphor like smell (NAFRI, 2007).

Table 1: Most common cardamom species in Lao PDR

English name Botanical name

Green cardamom maak naeng khiaw Amomum ovideum Pierre

Khuang Tung

or domesticated red cardamommaak naeng khuang tung

A. xanthoides Wall. (syn.

A. villosum var.

xanthoides)

Red cardamom (in South Lao) maak naeng daeng A.longigulare T.L.Wu

Pak Song (domesticated var.) maak naeng pak song ?

A. microcarpum

Lao name

Red cardamom or forest cardamommaak naeng daeng or

maak naeng paa

Source: Adapted from KVITVIK, 2001

Two varieties, red forest cardamom, Amomum microcarpum, previously thought to be A.

villosum (known as Maak Naeng daeng) and green cardamom, Amomum ovideum (known as Maak Naeng khiaw) are currently growing wild in forest areas of Northern Lao PDR.

Two different, improved varieties are under cultivation. Most common is Amomum villo-

sum var. xanthoides, known as Maak Naeng ‘Khuang Tung’, introduced from China and found in all 3 of the districts where the study took place (AUBERTIN, 2004, DUCOURTIEUX et al., 2004a, NAFRI, 2007). The ‘Khuang Tung’ variety is grown on plots on the edge of the productive forest where wild red and green cardamom also grows.

Another variety, known as Maak Naeng ‘Pak Song’ has been under cultivation only since 2007 on open fields in 2 villages in Luang Namtha district and on 1 plantation on the way


13

from Luang Namtha to Muang Sing. Table 2 characterizes the differences between the two varieties.

Table 2: Characteristics of the two improved cardamom varieties

Khuang Tung Pak Song

Plant Leaves around 7 cm wide Slightly wider leaves

Fruits Spiny red capsules, 2 cm long Slightly bigger fruits

Marketing Sold mostly dry Sold fresh in Luang Namtha area

Area Within forest or edge of the forest Close to a stream

Rather dry, sunny areas, steep upland fields, flat areas in the lowlands No need to be planted close to stream

Shade Requires 50% shade cover for producing fruits

Does not require shade cover Not growing well in forest and shady areas No development of fruits in shady areas

Yields 80-600 kg/ha 500-700 kg/ha

Source: Interviews, NAFRI (2007), VANA PUTH (2009)

As cardamom starts its productive phase in the third year, no statements on prices and harvested amounts of the ‘Pak Song’ variety could be given in the interviews, as it was only planted in 2007 in 2 of the target villages.

The 3 ha plantation of ‘Pak Song’ close to Luang Namtha on the road to Muang Sing was visited accompanied by Mr. Vana Puth, Technical advisor for forestry and land use plan-ning of German Agro Action, Luang Namtha. He provided information on the characteris-tics distinguishing the common ‘Khuang Tung’ variety from the ‘Pak Song’ variety as it has hence not be possible to find a description of the ‘Pak Song’ variety in literature.

As the ‘Pak Song’ variety does not require a shade cover to produce satisfying yields, ac-cording to observations made on the plantation, it can be grown on upland fields. This of-fers an alternative to annual field crops like maize or upland rice. This alternative crop can be very useful especially in the districts where forests are declining and collection of the wild varieties is no longer possible.

If an introduction of this variety in the target villages is aimed for, the availability of seed-lings needs to be ensured. Therefore governmental extension workers should either bring the seedlings to the village or support the establishment of a nursery in reachable distance to the villages where the seedlings can be purchased.

Still more information on requirements and yields of this relatively uncommon variety is necessary to determine the suitability and benefits as the present information relies on limited sources.

3.2 Cultivation, collection or trade?

In most villages the people who cultivate cardamom also practice wild collection. In 3 vil-lages in Nalae district, only collection is practised and no cultivation takes place, although the people in one of the villages are also involved in trade. In Hat The, a higher share of income is generated by the sale of wild collected cardamom, which is why the people in the village are subsequently referred to as “collectors” in this study. In 3 of the villages


14

people only concentrate on trading cardamom and other NTFPs while not being involved in the production or collection of cardamom. The activities in the target villages regarding cardamom are listed in Table 3.

Table 3: Activities in the villages

District Village Collection Cultivation Trade

Namded Mai x x

Pakha x

Pung Kok x

Chaputhon Gau x x x

Xiengkhaeng x x x

Meuto Kao x x

Thung Thon x

Hat Lom x (x)

Hat The x x

Mo Kah x x

Nalae x

Nong Kham x

Nalae village x

Pu Thon x

Kua Song x x

Nam Ha x x

Houay Dam x x

Houay Hom x x x

Muang Sing

Nalae

Luang Namtha

(x)= cultivation was given up due to unproductive plants

The activities that take place in the villages are influenced by different factors: Transpor-tation of the cardamom, no matter which variety, generally occurs by motorbike, car or truck. In rare cases like in 2 villages in Muang Sing district that are located at the Mekong river, marketing also happens by boat. This explains why infrastructure is important for both, collectors and producers. Chapter 5.3 of this study elaborates on how the respective availability of infrastructure influences the price of cardamom.

For collectors, the availability of forest and the occurrence of wild cardamom within the forest area is the driving factor for their activity. As has been described in Chapter 3.1, the availability of wild cardamom is strongly connected to the agricultural practice (AUBER-

TIN, 2004). The decision of the farmers to plant the improved variety ‘Khuang Tung’, was in most cases influenced by the previous promotion of development and governmental agencies. This will be taken up again in Chapter 3.6. In addition, the availability of suit-able plantation sites, such as an area on the edge of the forest and close to a stream, are a reason the improved variety is cultivated in certain villages. Whether or not cultivation may be successful likewise depends on these factors.


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3.3 Marketing, use and quality requirements

Cardamom is primarily marketed in the form of dried capsules. The sale is effected im-mediately and takes place right after the harvesting season (AUBERTIN, 2004). In some cases, the traders fetch certain quantities of cardamom from the collectors and producers during harvesting season, as there is hardly any possibility of storage in the villages and the dried fruits are threatened to be remoisted.

In Luang Namtha district, some interviewees mentioned the marketing of fresh carda-mom. They are able to sell the fresh product to Chinese traders who will transport it di-rectly to China via the main road which is in very good condition. The possibility of mar-keting the cardamom as fresh product prevents losses that may occur over the course of the drying process. This severe problem was mentioned by many producers and will be evaluated in Chapter 4.1.3.

In some of the producing villages in Muang Sing district, located close to the Chinese border, fresh marketing could be a possibility to prevent yield losses. Still farmers did not mention this option which might be explained by the fact that the marketing structure for dried cardamom is already well developed.

For some villages in Muang Sing district, however, marketing the produce fresh would not be a solution. They are located on a road that is still partly under construction and the transport of the perishable good to its destination would probably take too long. When the road conditions have improved, fresh marketing could also be considered, provided that traders, upon being consulted, manifest an interest in buying the fresh product. This deci-sive role played by infrastructure is determining the type of marketing and, subsequently, the price finds itself illustrated in this example which Chapter 5.3 returns to below.

Cardamom has no local use in Lao PDR but it has been collected in the forest for export, mainly to China and Thailand for several centuries. About 15 years ago the improved va-riety ‘Khuang Tung’ was introduced for cultivation (AUBERTIN, 2004). In China carda-mom is used in traditional Chinese medicine (FOPPES, 2001) as an important component in various compounds to treat stomach aches, constipation and other digestion problems. The fruit contains essential oils, camphor, acetate, limonene and other esters (KVITVIK, 2001, NAFRI, 2007).

However, when asked about the use of cardamom, neither producers nor collectors were able to tell what the crop is used for. It was just mentioned that it will be sold to traders. Some specified that it might get exported to China.

As the type of use is in general not known amongst the suppliers of cardamom, quality re-quirements do not seem to play an important role. Since cardamom is known for not being a food crop and thus not cultivated for human consumption as is, for instance, upland rice, preventing the development of mould would not seem to constitute a major focus of pro-duction.

Accordingly, quality was specified by the traders as follows: low moisture content, fruits should be clean, dry, and the capsules should not be broken (NAFRI, 2007). Some traders mentioned that they would not buy cardamom that still contains very high content of moisture. Traders check for quality in terms of moisture content simply by squeezing the


16

fruits with their fingers. Alternatively there was another testing method mentioned: When the hand can be stuck down to the bottom of the sack it seems to be dry enough. A certain content of moulded fruits is also tolerated by the traders, but this topic was not further specified by the traders asked.

Figure 2: Cardamom flower and dried cardamom fruits

Since the harvest activities usually fall within the rainy season, it is considerably hard for both producers and collectors to fulfil the main quality requirement and to reach the low moisture content desired for the product. Chapter 4.1.3 focuses on the additional problems that may occur during post-harvest handling. Not surprisingly under these conditions, the occurrence of mould is one of the most severe problems faced during this stage. Neither producers nor collectors have so far found a solution to this problem. The introduction of adequate, low-cost drying facilities that can be used by many people would present one possible solution to enable producers and collectors to fulfil the required quality standards of the product. Monitoring the potential drying facilities, the necessary monetary input as well as the labour requirements constitute an essential planning step for this scenario.

3.4 Export

The cardamom harvested in the target area is mainly exported to China, Korea, Thailand and Vietnam (NAFRI, 2007, AUBERTIN, 2004, HELBERG, 2003). FOPPES and KETPHANH (2004) even estimate that cardamom represents Lao’s second biggest agricultural product for export after coffee. Information on exported amounts available in existing literature vary widely and export statistics are unreliable (AUBERTIN, 2004). The different amounts pointed out in literature are compiled in the following paragraph.

According to FOPPES (2000) and FOPPES and PHOMMASANE (2005) 400-500 tons of car-damom are annually exported to China (stemming from either forest extraction or cultiva-tion). The NAFRI handbook indicate s that an average of 258 tons was exported in the years between 1995 and 1998, whereas a strong increase is marked for recent years (NAFRI, 2007). AUBERTIN (2004) mentions amounts of 1000 to 1800 tons exported an-nually.

The available figures indicate that the countrywide exported total may reach up to an ap-proximated 2000 tons per year, even though official customs records suggest that total is no more than 500 tons. Table 4 reflects the officially registered amounts exported from Luang Namtha province in 2007/08 as well as the value of cardamom depending on the country of exportation. Table 5 reflects the amount of cardamom exported in the last four


17

years by the two main exporting companies based in Luang Namtha. Comparing the fig-ures listed in the tables below, the recorded total is about a quarter to half of the amount the is actually exported. This fact is also pointed out by AUBERTIN (2004). Possible rea-sons for this inconsistency are given below.

Table 4: Amount of cardamom exported from Luang Namtha province 2007/08

Country Amount (kg) Value ($)

China 19.920 40.919

Vietnam 8.866 18.530

Source: Statistics of Department of Investment and Commerce, Luang Namtha, 2009

Table 5: Amount of cardamom (in tons) sold to transboundary middlemen by the two main exporting companies in Luang Namtha

Tonlee Export-Import Aming (only to China)

2005 Vietnam: 50 10

2006 China: 5

Vietnam: 20

Korea:10

2007 Not able to export > 100

2008 China: 8 > 200

100

The amount of cardamom registered by the Department of Investment and Commerce is much lower than the amount mentioned by the representatives of the exporting compa-nies. The exporters stated in the interviews conducted that even though their companies are based in Luang Namtha and export takes place from Luang Namtha province to China, registration of the exported amounts can also happen at the border check point in Boten.

This is one possible way to account for the enormous difference between the official data and the numbers given by the exporting companies. Considering these disagreements, it is hard to say how much cardamom is really exported from Luang Namtha province and how much can still be supplied into the market. This knowledge gap is a fact to be con-sidered before promoting the crop. Without knowing how much cardamom is appearing in the market, promotion of the crop might lead to an oversupply that can furthermore lead to decreasing prices which would in turn be unfavourable for all the stakeholders. Chapter 3.5 evaluates the statements regarding quantity demand. Evaluation of these statements, this much may already be anticipated, lead to the conclusion that the product is still in demand within the market.

3.5 Demand

According to an article published in 1999 in the Vientiane Times, the Chinese traditional pharmaceutical industry demands approximately 2000 tons of dried cardamom annually, whereas the domestic production in China only reaches around 1000 tons (VIENTIANE TIMES, 1999). AUBERTIN (2004) states in her article, that the Chinese market demands


18

about 1500 tons of cardamom per year. In the NAFRI handbook of NTFPs (2007) a trend of increasing demand is pointed out.

Regarding the overall demand for cardamom, all stakeholders mentioned a high request on the market. This was reflected in the statements of all stakeholders. Traders and mid-dlemen demand quantities so high that the producers and collectors are unable to supply the desired quantities. Therefore traders and middlemen sometimes visit the villages where collection and cultivation takes place to deposit a certain amount of money with their suppliers (collector, producer or trader) to ensure that the good is really sold only to them. If this was not done, they might not be able to buy anything for trade because others would go to the village before them and purchase the available quantities.

All statements regarding the demand lead to the impression that a much bigger amount can be sold. Therefore, if higher quantities were produced it would be possible to find buyers. As mentioned before, the marketing infrastructure is well developed. The traders who currently purchase cardamom would be the ones who buy the cardamom from people who will in future supply cardamom, or even more people can be involved in trade.

Traders already deposit money with the suppliers to ensure the sale of cardamom to them. This seems to be a form of contract farming from which all stakeholders will benefit from. In the case of cultivated cardamom, the harvested amounts can be estimated much easier than the amounts obtained from wild collection because the cardamom grows on determined plots. For the wild varieties there is also the threat that collectors from other villages visit the collection sites and harvest the fruits because the cardamom growing in the forest areas do not belong to anyone. The problems related to the property rights of the forest area are explained in Chapter 4.2.1.

3.6 Previous efforts to introduce cardamom as cash crop

In all villages visited where people cultivate cardamom (‘Khuang Tung’ or ‘Pak Song’ variety) the crop had been promoted earlier by different development projects. This has also been pointed out in literature.

According to HELBERG (2003), in Nalae district in the year 2000, an amount of 200,000 cardamom seedlings were distributed by a company called “Friends of the Upland Farmer” Cooperation (FOUF), assisted by the Provincial Department of Agriculture and Forestry (DAFO).

In a paper published by the ASIAN DEVELOPMENT BANK in 2004, the Project “marketing support of organic produce of ethnic minorities” is described. This project, among other activities, focused on the identification and promotion of new cash crops such as domesti-cated NTFPs, including cardamom through the FOUF. The exact target area is not pointed out in the report (KATAGAMI, 2004).

Table 6 compiles the previous efforts of different institutions to introduce cardamom in three districts of Luang Namtha province.


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Table 6: Previous promotion of cardamom in Luang Namtha province

District Year Variety Organization

Muang Sing 1998 Khuang Tung ZOA

1998 Khuang Tung FOUF

1998 Khuang Tung EU-Project

2009 Pak Song GAA

2000 Khuang Tung FOUF, DAFO

2003 Khuang Tung GTZ, FOUF

Luang Namtha

Nalae

Compiling the statements from the interviews and the information found in literature about the promotion of cardamom as cash crop, it becomes clear that many attempts have been made in the 3 districts by development programmes and local agencies in recent years.

In most of the villages where a previous promotion has taken place, farmers are still culti-vating cardamom. In the village Hat Lom in Nalae district, the interviewees mentioned that they started the cultivation of the ‘Khuang Tung’ variety but that the plants did not produce fruits. Thus the plants were cut down and other crops were planted. This village is the only example of a case like this occurring. However it does bring up some ques-tions: Was the chosen area for planting not suitable for this variety? Did something go wrong while planting the crop? The farmers did not know the reasons for the crop’s fail-ure and solving a problem like this should generally be the task of the agency promoting a crop. When people are not familiar with the requirements of a new crop, the promoting agency needs to make sure that sufficient extension work is provided to prevent cases like that of Hat Lom. Before promotion, the suitability of the area is a crucial point to be fig-ured out so the plantation will be successful. But what other factors determine the success of the promotion of a cash crop?

When people are interested in starting the cultivation of cardamom and the crop is deliv-ering satisfying yields, an existing trade infrastructure is a factor that will support the suc-cess. Therefore, infrastructure for transporting the good needs to work properly. Also an established marketing structure is an important precondition for a successful introduction of a new cropping activity.

As several attempts have been made to introduce cardamom as a cash crop and the de-mand on the market is still there as shown in the previous chapter, why did not more peo-ple take the chance to enter that business? Information on the market, the demand and the prices are also issues to be considered by a promoting agency. When people are informed about the benefits and risks of new farming activities, they can estimate by themselves whether including cardamom in their cropping activities can lead to an increased cash in-come.

As cardamom was already promoted several times in Luang Namtha district, is there a need to promote the crop again and who are the people who might benefit from another promotion? Chapter 5.5 will address the question and possible target persons for a further promotion will be identified.


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3.7 Harvest and yields

Three years after planting the first fruits will appear close to the soil surface, where the flower bunch grows from the rootstock. In the first three years of harvesting the yield in-creases every year. The peak of productivity occurs in the 10th year, slightly decreasing till the 25th year (DUCOURTIEUX et al, 2004b). Harvesting takes place in a period of 15-20 days in July to August (NAFRI, 2007) or as mentioned by the interviewees, the end of August to mid September over a period of 3-4 weeks. In most cases the whole family reaps the fruits.

Figure 3: Model of yield evolution in a cardamom plantation in Northern Lao PDR

Source: Adapted from ZHOU (1999)

Wild Cardamom can yield around 50 kg of dried fruits per ha, extrapolated by calculation because under natural conditions a full hectare of cardamom can normally not be found. (AUBERTIN, 2004). According to DUCOURTIEUX et al. (2004a), planted cardamom is able to deliver 20 to 750 kg/ha/year (dry) whereas KVITVIK (2001) mentions only 14 to 40 kg of dried fruits per ha, when planted in densities of 10,000 – 25,000 seedlings per ha (AU-

BERTIN, 2004, NAFRI, 2007). The yields depend on the age of the plant and the develop-ing stage of the plantation, its condition, location and the plant density (DUCOURTIEUX et al., 2004a, FOPPES and KETPHANH, 2004). The ratio of fresh weight to dry weight is about 5:1. Table 7 summarizes the yields reported in literature.


21

Table 7: Yields (kg/ha) according to literature

min average max source

80 200 (planted var.) NAFRI, 2007

600 (Khuang Tung)

200 (planted var.) AUBERTIN, 2004

750 (Chinese farmers)

80 200 KVITVIK, 2001

20 750 DUCOURTIEUX, 2004

14 40 NAFRI, 2007

50 (wild) AUBERTIN, 2004

120 (planted var.) FOPPES and KETPHANH, 2001

dry

fresh

The different sources that are compared in Table 7 indicate that it is very difficult to esti-mate how big the yields are that can be harvested from a certain area, because the har-vested quantities depend on a wide range of factors. In case of the planted varieties the productivity depends on the age of the plants as in the 10th year (Figure 3) the cardamom reaches its peak of productivity (DUCOURTIEUX et al, 2004a). Furthermore, the suitability of the production site determines whether the plant produces satisfying yields. As men-tioned above, humid environments are favourable for the ‘Khuang Tung’ variety. Weed-ing during the establishment of the plantation leads to the development of strong plants that in future will produce sufficient marketable fruits. But overall, the planted, improved varieties achieve higher yields than the wild varieties when the right variety is planted in the right spot. Neither cultivated nor wild cardamom is susceptible for pests and diseases. Chapter 4.1.2 elaborates the problems determining yield losses.

For the wild variety, the harvestable amount is even harder to determine as it is gathered in the forest. Forest areas where cardamom can be harvested in the wild are in the decline due to deforestation and government’s policies to abolish shifting cultivation as wild car-damom grows in the areas left fallow after the cultivation of upland crops. Thus the har-vested amounts will decrease. The sites where the cardamom is picked are accessible to many people from different villages so it is possible fruits will have already been picked when a collector visits the site. Problems related to the property rights of the forest areas are evaluated in Chapter 4.2.1. As mentioned in the interviews, some families send chil-dren and family members who are not working on the fields to gather the cardamom. Adults are probably able to work more efficiently and gather more in the same time than are children. Some collectors stated that gathering only takes place when labour is avail-able, and some years all the family labour is utilised working on the fields. In this case no collection takes place at all. Due to the ambiguous statements in the interviews regarding the collected quantities, these statements are not included here.


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3.8 Domesticated versus wild cardamom

In all districts, the two wild varieties A. microcarpum and A. ovideum can be found in the protection and conservation forest areas. In all districts the improved variety ‘Khuang Tung’ is also grown. The improved variety ‘Pak Song’ was only found in Luang Namtha district. Wild and domesticated cardamom is mixed together in most of the cases (during picking or after picking) and sold dry. In 2 villages in Luang Namtha district, interview-ees mentioned that the ‘Pak Song’ variety they started to grow will also be sold fresh. In one of the villages, Kua Song, interviewees mentioned that they are not satisfied with the yields of the ‘Khuang Tung’ variety and they would rather cultivate the ‘Pak Song’ vari-ety, which can also be sold as a fresh product. This consideration of the villagers should be taken into account when cardamom will be promoted in future.

Table 8: Varieties of cardamom found in the districts

Wild red Wild green Khuang Tung Pak Song

Muang Sing X X X

Luang Namtha X X X X

Nalae X X X

In the villages Pung Kok and Pakah in Muang Sing, the cultivated cardamom is sold without mixing it with wild varieties because in these villages no wild collection takes place. Therefore, higher average prices are achieved by selling the pure cultivated varie-ties compared to the villages where wild and cultivated varieties are mixed.

A similar phenomenon can also be observed in relation to the production of paper mul-berry bark, an NTFP that is, like cardamom, both collected and cultivated in Northern Lao PDR. The cultivation of the trees leads to an increased production of young bark with a higher quality. Thus higher prices can be achieved with the sale of bark from cultivated trees (RIBEIRO and DARNHOFER, 2007). In the case of cardamom, the highest prices are achieved by selling the improved varieties pure, without mixing with the other varieties. Therefore producers planting the improved varieties, and who in addition practice collec-tion of wild cardamom, need to be informed not to mix the two different types of carda-mom. This will maximise the price per kg and thus the individual farmer will receive a higher income. In addition, better prices will increase the income of all stakeholders. In-forming the suppliers on the quality standards is actually the task of the traders. But as this is obviously not taking place, training the farmers on the issue of quality requirements could be incorporated into the role of a development project or government agency.

The same traders and middlemen buy both the cardamom collected from the forest and the improved variety introduced from China. Certain advantages and disadvantages can be observed between these two types. The following table compares the different charac-teristics of wild and domesticated cardamom.


23

Table 9: Key differences between wild and domesticated cardamom

Wild collected cardamom Domesticated cardamom

Collection areas often distant from home � access of collection sites is time consuming

Plantations usually close to or in walking distance to home

Wild, unimproved varieties produce smaller fruits

Improved varieties produce bigger fruits � higher yields from small plots

Plants widespread in large forest areasHigh planting densities � bigger amounts can be harvested

Dependency on the availability of natural forest that are declining in Lao

Plantations within Production forest

Resource

tenure

Insecure tenure over collection areas leading to premature harvest by many collectors

Only owner of the plot has the right to harvest

Production

volumesCollected amounts vary from year to year

Production volumes are predictable, depending on season

Marketing Prices paid from traders are lowerTraders generally pay higher prices for improved varieties

Resource

biology

The domesticated variety shows many advantages from an economic point of view. Higher yields can be achieved by growing improved varieties on plots that are closer to the living area as opposed to collection sites in the forest. Production volumes are more predictable, thus agreements can be negotiated with traders on the amount that will be de-livered by individual farmers. This means, a form of contract farming can be established. Also in terms of security resulting from ownership of the production sites, it is more prof-itable to cultivate cardamom than collect it. Only the owner is allowed to harvest his or her plot and there is no competition over the resource because this tends to happen when many parties have the right to gather cardamom from the collection sites. Other aspects need to be considered furthermore regarding the tenure policy that is strongly connected with the biology of wild cardamom. The Government of the Lao PDR allocates three land parcels per family for rain-fed or dry rice, resulting in a decline of the fallow periods. With the former rotation calendar spanning 15 years, the farmers would typically be left with land in every stage of rotation, favouring the wild cardamom to grow as the plants sprout spontaneously in the fallow fields. Thus, the land allocation policy interferes with the lifecycle of cardamom (AUBERTIN, 2004), leading to a decline in the agro-ecosystem in which cardamom is growing. Additionally, the conversion of forest areas into rubber plantations leads to a loss of wild cardamom what will be explained in Chapter 3.9. Fur-thermore, the system of forest zoning introduced by the Government of Lao PDR declares National Biodiversity Conservation Areas (NBCA) that prohibit slash-and-burn agricul-ture and classify cardamom-bearing forests as conservation zones with limitations on gathering of NTFPs (AUBERTIN, 2004). In this case gathering wild cardamom is prohib-ited in some areas. People are no longer able to collect the NTFP which is often an impor-tant income source, especially for upland farmers with a low income. This aspect will be elaborated on in Chapter 5.5.2.


24

Another aspect to which attention must be drawn is the ecological impact of the improved cardamom varieties on biodiversity. Traders prefer to buy the improved varieties and pay higher prices for them as discussed above and indicated in Table 9. Therefore farmers pre-fer to cultivate the improved varieties. The wild varieties only grow in the forest and do not seem to be domesticated. On the visited plantations only the improved varieties are currently being grown, in most cases the ‘Khuang Tung’ variety. This demand orientation usually leads to the promotion of the imported varieties as indicated in Chapter 3.8 rather than trying an adaptation or domestication of local varieties. In this way, the local varie-ties will be replaced by the standardised cultivars threatening the local varieties and thus threatening biodiversity (AUBERTIN, 2004).

Enrichment planting of tropical rainforest areas with the improved variety Ammomum vil-

losum var. xanthoides, (Maak Naeng ‘Khuang Tung’) is practiced by many farmers in Xishuangbanna in China and also by farmers in nearby countries like Burma and Lao PDR. This could be an alternative to cultivating the improved varieties as mentioned above and a way to obtain higher yields than is possible by only harvesting the plants growing wild. However, the practice of enrichment planting affects the structure and function of the seasonal rainforest and leads to a loss of biodiversity as described by LIU et al. (2006). This practice threatens the local biodiversity and hinders the regeneration of tree species that contribute to the complex structure of the forest. Considering the disad-vantages of cultivating local varieties within the forest, it might be advisable to cultivate the improved varieties in defined plots within the forest. This is not easy to put into prac-tice as cardamom spreads out rapidly due to the vigorous growth of the rootstock. In this case, the ‘Pak Song’ variety that can be grown on upland fields can be seen as an alterna-tive that does not threaten the biodiversity within the forest and still delivers acceptable yields.

Figure 4: Wild cardamom in the forest and domesticated ‘Pak Song’ variety growing on an open field

3.9 The impact of rubber expansion

Rubber planting has spread rapidly all over Northern Lao PDR in recent years, especially in Luang Namtha province (COHEN, 2009). According to SHI (2008), 12,585 ha of rubber were planted by the end of 2006 in Luang Namtha province and the provincial govern-ment has set the goal of achieving a plantation of 20,000 ha in 2010. As explained in


25

Chapter 3.1, the ecology of cardamom is strongly connected to the occurrence of secon-dary forests. For planting the rubber, forest is cleared and the cycle of shifting cultivation favouring the growth of wild cardamom is broken. The area suitable for planting im-proved varieties of cardamom is destroyed. Thus the environment appropriate for carda-mom growth declines. Farmers in some of the target villages also planted rubber. This is why the topic concerning the planting of rubber and how it is influencing the cardamom production evolved during the interviews. In the following section the statements related to this question are summed up.

In the village Pung Kok in Muang Sing district, one farmer mentioned that rubber was promoted by the government so he focused on planting rubber and not on cardamom even if the cardamom business seemed to be good. The areas suitable for cardamom are now occupied in most cases by rubber plantations. Another farmer in Pung Kok mentioned that forest land suitable for planting cardamom exists, but villagers would sooner consider converting the forest into rubber plantations because they have heard that planting rubber provides a good income source.

The possibility of intercropping cardamom with rubber was an issue also raised during that interview. Respondents in the village Hat Lom mentioned that during study tours to rubber plantations in China organized by the Government of Lao PDR for future rubber farmers, no intercrop could be observed. The farmer stated that obviously rubber can not be grown in mixed cultivation because of the high water demand of both plants species. As cardamom only tolerates a shade cover of 50 percent, the foliage of the rubber trees would not allow the cardamom to grow.

In Houay Dam it was mentioned that rubber has better long term economic benefits com-pared to cardamom.

Villagers in Mo Kah mentioned that since they started to collect cardamom in 1979, the forest area where wild cardamom grows has decreased. The yields are declining due to the loss of forest, cut down mainly for planting rubber. Around 15 ha of forest land one hour walking distance from the village is still available for collection of cardamom. The farm-ers have planted an average area of rubber ranging from 0.3 to 1 ha.

In this village, cultivating rubber was not considered good business due to decreasing prices and the first harvest only taking place after a delay of seven years after planting. This means no income from the plantation for a long period if intercropping is not being practiced. The advantage of cardamom is that harvest is possible within 3 years. People in Mo Kah consider planting cardamom as an interesting income source. They have ob-served in other villages that it is a good income generating activity, compatible with rice production. The crop was in general considered a reliable income source due to rising demand and low labour input. In this village buffalos used to be an income source before planting rubber. Since the animals feed on the rubber seedlings, the buffalos were sold to protect the plantations. This leads to the lack of an important source of both income and manure, and the farmers seem to regret having sold the buffalos in favour to the uncertain rubber business. The fact that buffalos are no longer found in this village is a favourable precondition for planting cardamom, as buffalos are known to feed on the cardamom seedlings.


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Even though the perception of rubber differs among the villages, the planting of rubber in Lung Namtha will continue, especially as government promotion of the crop has not stopped. In particular the collectors of cardamom will lose a part of their living base as spots for collecting wild cardamom gradually disappear. The collectors depend to a large extent on the income generated by the sale of cardamom as will be pointed out in Chapter 5.5.

Oppositional to the statements given by the interviewed farmers, RAINTREE (2004) sug-gests intercropping of rubber as a way to profit from rubber and still be able to rely on a diversified income. He points out various options combining rubber cultivation with food crops or cash crops like cardamom. These possibilities lead to an increased and diversi-fied income, plus it can increase the rubber yield and prevent soil erosion associated with mono cropping of rubber. Wild collection sites are declining and introducing improved cardamom varieties and combining them with rubber plantations is a potential opportunity for farmers. In this way farmers can take part in the “rubber boom” without threatening their livelihoods by depending on one single cash crop.

To realize the benefits of such systems, the farmers have to be trained on the intercrop-ping issue. The rubber landscape in Luang Namtha is dominated by rubber as a mono-crop. This factor as well as considering the statements within the interviews show that farmers are not aware of the various economical and ecological benefits the intercropping of rubber with another cash crop like cardamom offers.

4 The supply chain and the actors

27


The following figure illustrates the supply chain of cardamom in Northern Lao PDR. It depicts the measures that are taken by the stakeholders that are required within the prod-uct flow from production to processing.

Figure 5: Sub-sector map of cardamom in Northern Lao PDR (prices according to 2007)

Producer

Collector

Local Trader

Local Middleman

Exporting Company

TransboundaryMiddleman

Packing

Export Import

Processing

45,000 Kip/kg 52-55,000 Kip/kg

2-5,000 Kip/kg

Spice Company

5,000 Kip/kg

Domestic trade

Collection Production, Drying, Sorting

50,000 Kip/kg

VC stage VC operator Links between operators End market of VC

Prices Revenue

45,000 Kip/kg

Producer

Collector

Local Trader

Local Middleman

Exporting Company

TransboundaryMiddleman

Packing

Export Import

Processing

45,000 Kip/kg 52-55,000 Kip/kg

2-5,000 Kip/kg

Spice Company

5,000 Kip/kg

Domestic trade

Collection Production, Drying, Sorting

50,000 Kip/kg

VC stage VC operator Links between operators End market of VC

Prices Revenue

45,000 Kip/kg

Source: Modified after SPRINGER-HEINZE (2007)

7 main groups of stakeholders participating in the supply chain of cardamom were identi-fied based on the different activities they are involved in. Contact could only be estab-lished with 5 of the stakeholder groups and no interviews could be conducted with the “transboundary middlemen” and the “spice company”. Due to this constraint, prices paid by the spice companies and revenues obtained by the transboundary middlemen and by the spice companies are not included in the figure. In the following chapters the different groups of stakeholders are characterized and their role within the supply chain is consid-ered.

4.1 Producers

The producers interviewed are male or female villagers between 25 and 73 years old. The average family size is 7 people. The producers have the right to cultivate the crop on a plot with the average size of 0.3 ha within the productive forest areas. Plots are usually located in a distance up to half an hour walking distance from the village. The plots are owned by the people so the owner is the only one allowed to plant and harvest cardamom and the only one allowed to sell it.


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4.1.1 Labour

The cultivation of cardamom requires little work (VIENTIANE TIMES, 1999). This was also the first advantage mentioned by most of the producers and expressed by statements like: cardamom is not a labour demanding crop, during harvesting season the labour peek oc-curs, farmers need to pick and dry the capsules. As cardamom is a perennial plant that spreads out rapidly, planting takes place only once, in June. Before this the area needs to be cleared and the seedlings need to be placed in holes that are dug in the ground around one meter from each other. In the year of planting, weeding needs to be done twice. A few producers mentioned that they had to cut some of the branches of the shading trees be-cause the tree layer was getting too dense and shading the cardamom plants too much. This caused a loss of some plants because the branches fell down and damaged the plants. It was mentioned that after a few years, old stems of the cardamom plants will be cut to provide space for new shoots coming up.

In the third year after planting, when the productive phase of cardamom starts, labour is required for harvesting and drying. The respondents stated that planting, care of the plan-tation and harvesting is done only by family members, and no external labour is hired.

The plots on which cardamom is produced are in general not bigger than 0.3 ha and fam-ily labour is enough to accomplish the necessary duties. This explains why no external la-bour is needed. In the case of promoting cardamom as an additional crop, the selected area must not exceed the available family labour force. If a family has sufficient area available to establish a bigger plantation, it is essential that enough labour can be hired within the community to gather all the fruits during the harvest period.

4.1.2 Cultivation management

Cardamom seedlings of the improved varieties can be purchased for 1,000 Kip/seedling (VANA PUTH, 2009). This initial investment of 1,000 Kip/seedling seems to be low. But the size of the area where planting takes place needs to be taken into account. One ha re-quires the planting of 12,000 to 25,000 seedlings (NAFRI, 2007). This means, that for an average area of 0.3 ha 3,600 to 7,500 seedlings are required. This means an expense of 3,600,000 to 7,500,000 Kip. In the case of the promotion by the RDMA Programme, the farmers need to raise the initial investment by themselves, which might not be possible for people with a low annual income. Chapter 5.5 focuses on the economic situation of some villagers and aims to postulate who might be able to raise an initial investment that is seemingly “low” at first glance. In this chapter it will be pointed out that especially farm-ers in the low income classes might not be able to raise such an initial investment. With a view to promotion, either the development project needs to supply the seedlings of the suitable varieties or access to a nursery selling the seedlings must be ensured as some farmers might not be able to reach places where the seedlings can be purchased.

The application of fertilizer is not necessary because in a suitable location cardamom is proven to deliver stable yields over many years. Pesticides are not used, because carda-mom is not threatened by the damage of insects.

This means that extra costs can be saved compared to cultivating an annual crop that is susceptible to pests and diseases and needs input due to its annual increase of biomass.


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The low demand for external inputs is an advantage of the perennial cardamom compared to annual crops like maize. The advantages of cardamom compared to the common up-land crop maize will be elaborated on in Chapter 4.1.4.

The harvesting and drying of cardamom, the most labour intensive activities, take place mid July to mid September. In this period the harvesting of upland rice is yet to begin and that of maize is just starting. This indicates that during this time labour is available for the harvest of cardamom, depending on the cropping activities of the single families.

The following figure depicts the key weather seasons with their main farming activities for cardamom and two common crops in the target area, upland rice and maize.

Figure 6: Cropping calendar of cardamom, upland rice and maize in Northern Lao PDR

Cardamom

Upland rice

Maizeslash and burning, land

preparation

Land selection, preparation, slash and burning

planting and weeding

growth and weeding

harvestweedingplanting

harvest, dryingplanting

Oct NovSept

Dry season Rainy season Dry season

Dec

harvest

Jan Feb Mar Apr May Jun Jul Aug

Source: FUKUDA et al. (2008), own compilation

The fact that there is no need for external input like fertilizer and pesticides is definitely an advantage of cardamom in comparison to other perennial crops which do not deliver satisfying yields without external inputs. Time and money required for external inputs and labour can be saved by cultivating cardamom. Another advantage is the labour gap that happens in mid July to mid September when upland rice is still growing and the harvest of maize is just beginning. In this period the whole family has time to harvest the cardamom. In most of the families other activities, such as gathering of NTFPs and livestock produc-tion, are taking place as well as cultivating maize, upland rice and cardamom. Possible target families for cardamom cultivation need to be able to free up their labour force in the crucial time mid July to mid September, when harvesting and drying take place. As well as described in Chapter 4.1.1, external labour must be available in the case of a big-ger plantation.

4.1.3 Yield losses

Severe losses in the harvest are caused by rats, a problem mentioned by producers as well as by collectors. The rodents eat the ripe capsules of cardamom before the crop can be harvested and thus reduce the yield. Another cause of loss mentioned is theft since people from the same or other villages come and steal the ripe fruits off the plants.

In general, areas of cultivation are not fenced. A problem mentioned was that newly planted seedlings and also older plantations are trampled by livestock and that the animals tend to feed on the plants. Cattle and buffalo were key culprits in destroying the plants. This major damage of the plantation requires replanting.

The constraint that the plants grew very well but either did not produce big, marketable fruits or produced only a very small amount even after several years of cultivation was mentioned by some producers in the village Hat Lom in Nalae district. Therefore, plants


30

were cut down and the area was used for the cultivation of another crop. Possible reasons for the crop failure might be the selection of an unsuitable area for plantation or cultiva-tion of the light demanding variety ‘Pak Song’ on the shady edge of the secondary forest.

Another problem that creates losses relates to the post-harvest handling of cardamom; the occurrence of mould during the drying process. This difficulty was mentioned by almost all interviewees. As cardamom is picked during the rainy season and sunny periods are usually not long enough to fully dry the picked capsules on mats in the sun. In many cases the fruits are placed on a tray over the cooking fire in the living area to achieve the de-sired low moisture content. In the humid environment during the rainy season the product is still susceptible to become moist again.

Figure 7: Main factors causing loss of harvest amongst producers

Rats

Mould Harvest losses

Loss of income

Livestock

Harvest in rainy season

Harvest of unripe fruits

Additional investmentReplanting

Rats

Mould Harvest losses

Loss of income

Livestock

Harvest in rainy season

Harvest of unripe fruits

Additional investmentReplanting

Three main problems related to cultivation could be identified which lead to the loss of harvest in the first place and thus to a loss of income. Solutions need to be found to pre-vent both a decline of the possible harvest and spoilage of the already harvested good. The solutions must be adapted to the local conditions and the economic situation of the producers and collectors. The following paragraph suggests and evaluates possible solu-tions or ways to prevent yield losses.

Rats are one of the most severe problems causing a loss of the fruits during the ripening process when they are almost due to be harvested. Picking the fruits earlier before the ro-dents feed is not possible, because, as has been seen, picking unripe fruits leads to a low quality product. One solution could be to distribute toxic baits within the plantation. The baits need to be fabricated or displayed within the plantation, a task demanding money, time and labour that might not be available.

Another solution against the rodents could be traps positioned within the plantation. Traps could be developed and built by the producers themselves with low-cost local material, so that they might not be too expensive. Yet, still building the traps, placing them and emp-tying them again will demand time and labour force.

The extra job of picking up the dead rodents in the plantation is an inevitable outcome of both proposed solutions. Due to the density of the plantation access is difficult, and a lot of labour and time needs to be invested in this activity.

To find out, whether it is economically viable to prevent yield losses, an economic evaluation of the indicated solution is necessary. Does preventing the animals from feed-ing on the cardamom lead to a big enough increase in income to justify the cash, time and labour input? If the suggested solutions require too much input, other innovative low-cost solutions need to be developed or emphasis should be put on post-harvest handling to en-


31

sure that the amount harvested will not decline further by becoming mouldy during the drying process.

This leads to the third most important cause of loss: The occurrence of mould when the ripe fruits are placed on mats under the sun to dry. In rainy season, the time where harvest takes places, the sunny periods are rather short. That is why the harvested cardamom is placed on trays over the kitchen fire. In this way the product becomes dry, but not every single farmer has enough space within the house to dry the cardamom sufficiently and some traders also mentioned they prefer sun-dried cardamom as drying cardamom over the fire changes the aroma and colour and is not appreciated by the spice company, which ultimately drives the price down.

One solution could be that each farmer builds a drying place close to his or her house, covered with a plastic sheet. As electricity is either limited or simply not available and firewood is too precious to be used for that, solar drying could be a solution. But as men-tioned above the harvest takes place in the rainy season and sunshine is not abundant. AUBERTIN (2004) mentions in her paper that in Luang Namtha solar drying kilns are be-ing tested. During the interviews of the present study this was not mentioned, however by the exporters in Luang Namtha. Only Mr. Tonlee reported that he sometimes dries carda-mom before it is handed over to the exporters by using hot air drying. But that method uses up a large amount of energy and thus money. Also a labour force is needed to turn the product during the drying process so he prefers to buy the product with the right mois-ture content from the traders and avoid the additional effort.

Another option could be to install central drying facilities within the villages that can be communally used. But as all producers and collectors harvest at the same time, there might not be enough space to spread the fruits for drying on days when everybody har-vests and the weather conditions are favourable.

Fencing the plantations to prevent the damages caused by livestock might not be viable for the `Khunag Tung’ variety as it is growing on mostly sloppy areas on the edge of or within the forest. It could be reasonable for the ‘Pak Song’ variety cultivated on open up-land fields when farmers are able to raise the investment for fencing material.

4.1.4 The perennial alternative?

In Luang Namtha district, one producer of cardamom summarized the advantages of car-damom as shown in the table below. Cardamom was compared to Maize, one of the an-nual crops commonly cultivated in this area.


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Table 10: Comparison of the characteristics of cardamom and maize

Maize Cardamom

Annual crop Perennial crop

Planting needs to be done just once

Continous weeding during plant growth Weeding only in the first year

Yield losses due to insects No problems with insects, only rats cause yield losses

Fruits after three years, then harvest up to 40 years from

the same plots

Suitable for forest/shady areas (Khuang Tung) and sunny areas/fields (Pak Song)

Plantation (in case of Khuang Tung) in the forest where

other NTFPs can be harvested � no clearing of forest

Seeds have to be bought every year, planting

and field preparation every year

Evaluating the comparison of the characteristics it seems that cardamom as the perennial crop offers interesting advantages. Some of them are emphasized in the following para-graph.

An interesting aspect is the issue of forest protection in the case of the ‘Khuang Tung’ va-riety. The favourable growing condition for this variety is the secondary forest. An incen-tive not to clear forest for other crops is the cultivation of an economically interesting crop within the forest. In this way crop production is linked to forest protection. The up-land population of Northern Lao PDR depends strongly on the forest providing firewood and NTFPSs (FOPPES and PHOMMASANE, 2005). So crop production within the forest could be a way to protect the declining forest resource with its biodiversity that is an im-portant base for the livelihoods in the uplands of Northern Lao PDR.

Enrichment planting of wild stands of cardamom in the forest might lead to a bigger har-vestable amount. In this case, the emphasis should be put on planting local wild varieties and not the improved varieties as the introduced varieties can threaten biodiversity and lead to a loss of the indigenous varieties, as described in Chapter 3.8. Cultivation of the ‘Pak Song’ variety on an upland field, replacing a traditional upland crop like upland rice or maize, seems very reasonable as cardamom just needs the initial investment and no fur-ther costly external inputs. However, the suitability and benefits of this new variety still need to be verified through further studies.

The practice of shifting-cultivation leads to the decrease of soil fertility and erosion which are severe problems in the uplands of the Lao PDR. These problems can be tackled by intercropping or planting perennial crop mixtures. (FUJISAKA, 1991) Cardamom, as per-ennial crop provides a constant soil cover which in turn leads to a reduction of soil ero-sion and improved soil fertility maintenance. A benefit that occurs by cultivating carda-mom rather than common annual upland crops. An exact economic calculation comparing the benefits of an upland crop like maize with the profits obtained from cardamom needs to be conducted as it was not included in this study.


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4.1.3 Constraints to extend the cultivated area

Most of the producers considered the extension of the cultivated area an interesting option with a view to increasing income. Rising prices, a high demand on the market and low la-bour requirements make it a viable proposition. But as mentioned before, this is not pos-sible in every area. Some preconditions have to be existent to ensure that taking a bigger area under cultivation is not only possible, but also reasonable.

The most common constraint related to the extension of the area of cultivation and men-tioned continuously was the lack of areas with suitable conditions. In some villages there is no suitable area left for planting. Especially the ‘Khuang Tung’ variety needs a humid place close to a stream, since it preferring the shade of the edge of the forest (NAFRI, 2007). Suitable forest area around the villages is often no longer available. Much of the forest has been cut down for planting rubber, and there is only limited amount of land lo-cated beside a stream.

During an interview in Punk Kok in Muang Sing district, one farmer was asked why he did not plant more cardamom, especially as it seems to be a good business for him due to low labour input and the high price it fetched. He stated, that when first planted he did not know about the good prices that can be achieved with cardamom. The government also promoted the planting of rubber at this time so people in the area chose to plant rubber, as mentioned in Chapter 3.9. The areas suitable for cardamom are in most cases now occu-pied by rubber plantations.

The availability of seedlings of the improved varieties (either ‘Khuang Tung’ or ‘Pak Song’) was also mentioned as a constraint. Farmers said they do no know where to get the seedlings from. The nurseries where seedlings of the improved varieties can be purchased are located in bigger villages or the province capital Luang Namtha. For people living in remote villages it is time consuming and costly to travel, buy the seedlings, and transport them back to the village.

When no forest area is left for the cultivation of the ‘Khuang Tung’ variety, the ‘Pak Song’ variety might offer an alternative, because this not very wide spread variety seems to be suitable for open areas without shade and thus can be grown on upland fields as per-ennial crop rather than a more labour and input demanding crop like maize or rice.

The first step before promotion would be to identify suitable areas for the two improved varieties. Furthermore, if the government continues the promotion of rubber in the area, forests will be cleared and a suitable area for planting the ‘Khuang Tung’ variety will be lost.

The personal attitude is an important factor for the susceptibility of people to integrate a new plant in their cropping activities. Before promotion, families within the target vil-lages need to be identified who are willing to either grow an additional crop or dedicate parts of the land currently used for production of maize or rice to plant cardamom. Farm-ers will be more open to this innovation when they are informed about the benefits and the marketing options. When extension service is ensured, the cultivation can be facili-tated and planting will be successful. Being able to obtain seedlings of the right variety is crucial, because farmers in remote areas often do not have the chance to reach bigger towns where the seedlings might be available. The fact that prices have risen in the recent


34

years makes cardamom an interesting income source. But as mentioned by one exporter, even if the prices have recently risen recently, it is not possible to predict how the prices will develop in the future and if cardamom will continue to be such a lucrative business.

When these preconditions are met, meaning suitable areas and interested people are iden-tified, a sufficient extension service is the pivotal element required for the successful in-troduction of a new cropping activity. Only if people know how to plant the crop, harvest the fruits and handle and market their produce, they will be able to achieve the maximum benefit out of the new cropping activity.

4.2 Collectors

The collectors interviewed are male or female villager between 25 and 73 years old. The average family size is 7 people. The area where collection takes place is forest between 15 and 200 ha around the villages. The collection spots are located within the forest, which is divided into different classifications as mentioned in Chapter 1.4. However, the different classifications of the forest, as determined by the Forest Law of the Lao PDR, are gener-ally not recognized by the villagers. Talking about wild collection it was often mentioned that collection takes place simply within the forest. In this area every villager is allowed to collect NTFPs and use them for consumption or sale. In most cases the whole family is involved in going to the forest to gather wild cardamom. In the NTFP handbook (NAFRI, 2007) it is indicated that on average a family can harvest 108 kg of fresh wild cardamom (resulting in around 20 kg of dried cardamom) each year, when each person picks 5 kg per day.

4.2.1 Property rights of the protected area

As mentioned in Chapter 1.4, the forest area is classified one of three ways for preserva-tion and development (LAO PDR, FOREST LAW 2007, Art 9). Wild cardamom grows within the different forest zones, as well as in the forest areas formally used for shifting cultivation. Wild collection of NTFPs takes place in all the forest types. Even though use of the forest areas and the amount of NTFPs that is allowed to be extracted is regulated by the Forest Law, the forest is accessible to everybody. Thus villagers enter the forest areas and harvest as many NTFPs as desired for consumption and sale.

No matter how forest that yields wild cardamom is classified, the use of the forest by many parties leads to a competition for the resource (BELCHER and SCHRECKENBERG, 2007). In terms of cardamom it leads to the harvest of immature fruits (NAFRI, 2007). Unripe fruits have a higher moisture content and a lower content of substance, and they do not meet the quality standards set by the traders. These fruits tend to become mouldy more quickly than ripe fruits and in this way will spoil the ripe ones during the drying process when they are mixed together.

Local regulations have to be developed regarding how much one person is allowed to ex-tract and which village has the right to collect in certain areas. AUBERTIN (2004) states in her article that competition amongst gatherers results in overexploitation of the resource as it occurred with wild cardamom in Phongsaly and Huaphan. This leads to the collection of immature seeds that are more susceptible to mould. When some collectors shift to be-


35

come producers, less wild collection might take place and the number of people still col-lecting cardamom from the wild will decline. This might lead to a decreasing competition for the resource.

4.2.2 Knowledge of cultivation

To assess whether people who currently carry out wild collection will be able to shift to the cultivation of cardamom or additionally cultivate cardamom, they were asked about their knowledge of cultivating the respective crop.

Half of the people who practice wild collection and do not cultivate cardamom still men-tioned that they know how to cultivate the plant, in terms of clearing the area for planting, care of the plantation, and harvesting. The other half of the interviewees stated, that they do not know how to cultivate the crop. Some of these individuals then also stated they were interested to learn about the cultivation.

Knowledge of cultivation of a certain plant is crucial to the success of the cropping activi-ties. Interested collectors who want to shift from collection to the cultivation of cardamom need to be identified. Subsequently, extension service from government agencies or de-velopment programmes needs to be provided. This can happen in the form of study tours or workshops with the future producers as an initial action. Furthermore, the promotion of the right variety needs to be ensured. Without guidance it is possible that i.e. the ‘Pak Song’ variety s planted in the forest and does not produce fruits. This might result in the frustration of the farmers and they might lose faith in cardamom as a viable income source.

Accompanying people during the evaluation of the area suitable for planting, the planting itself and the growing phase will be helpful for a successful cropping. These initial activi-ties are crucial to the success of the crop. After 3 years, when the harvest starts and post- harvest handling as well as marketing become important activities, extension service and market information are a key to obtaining the highest benefit from the crop.

4.2.3 Motivation to cultivate

Before promotion of a crop, farmers who are interested in cultivating cardamom should be identified. Furthermore, the acceptance of the crop as innovative income source must prevail. Statements regarding this topic were quite diverse.

In Thung Thon village in Nalae district, collectors mentioned that cultivation would be possible because productive forest land meets the requirements for cardamom is still available around the village. Therefore an important precondition is met and the villagers are generally interested in cultivating the crop.

Farmers in Hat The in Nalae district would only plant cardamom if they knew for sure that prospectively the good will be demanded in the market. Furthermore, the infrastruc-ture must be favourable for easy marketing. This village is at the moment only reachable by boat downstream from Nalae and the road to Bokeo province will be finished in the coming year. The respondents mentioned, as soon as the road is finished the marketing situation will improve. People who already cultivate cardamom in this village consider


36

extending the cultivated area, while the people who only practice wild collection men-tioned the option to plant improved cardamom varieties. In 3 years, when the newly planted cardamom produces marketable fruits, the latter ones will directly be able to profit from the connection to infrastructure. Extending the planted area will increase the market-able amount and thus the income of the farmers. At present the highest share of the car-damom sold in Nalae district is obtained from wild collection.

Collectors in Pu Thon mentioned they would start to plant cardamom if someone was bringing the improved variety ‘Khuang Tung’, because suitable areas within the Conser-vation forest around the village are still available.

In Hat Lom cardamom was already promoted years ago but did not produce fruits. The group of farmers said they would never plant cardamom again because it will not lead to any yield and the area is already used up for the plantation of rubber. In this village a high share of income comes from the sale of buffalo which is a more lucrative business than cardamom.

In most collector’s villages the views on either changing from wild collection to produc-tion, or cultivating cardamom in addition to the wild collection, were positive. People are aware that cultivation can lead to an increased income when it is practised correctly. This is the most important precondition for successful cultivation because with a positive atti-tude people will be willing to solve problems that might come up. In a village like Hat Lom where farmers have already had bad experiences with cardamom, it would not be useful to try to promote again. People have already made up their minds and focused on other agricultural activities.

Even if farmers are motivated to grow the new crop it is still important that they do not focus on this crop as the only income source. Diverse income sources are essential in case of crop failure. As the majority of people rely on a wide range of income sources, focus-ing on one crop will not be commonly opted for.

Cardamom as a perennial crop will grow for some decades on the same plot. People need to be aware of that, and the property rights for this period of time need to be ensured. In-vesting in a perennial crop only makes sense when it can be harvested for many years and areas will not be declared for other purposes.

As mentioned above, the availability of an infrastructure is a factor influencing people’s motivation. When considering promotion, villages with a sufficient connection to infra-structure should be selected. And if the villages are not currently connected to one, infra-structure should be available within three years so by the time cardamom is due to be har-vested marketing will be easily possible. As with many of the areas in the target districts, the ongoing construction of roads will continue to allow additional suitable production sites to be opened up.


37

4.3 Local traders

The local traders interviewed are male or female persons between 40 and 50 years old, living within the village where collection or cultivation takes place. In most cases the lo-cal traders also collect or cultivate cardamom. The dried cardamom is obtained from the people within the village or from villages around, who collect or produce it. Traders are in most cases not only involved in the trade of cardamom but also buy and sell a wide vari-ety of NTFPs like incense bark, broom grass, galangal and bamboo, depending on the availability and demand within the season.

During or after harvesting season the product is sold to one or more local middlemen, who might not be the same person each year. The interviewed traders mentioned that the middlemen are mostly from China or Lao PDR.

Example of the trader Mr. B from Nalae district:

2005 � sale of 1.5 tons to Lao middleman, Mr. P � 15,000 kip/kg

2008 � sale of 1.3 tons to Chinese middleman, Mr. L � 32,000 kip/kg

4.4 Local middlemen

The middlemen are located in bigger villages or district centres that have easier access to infrastructure, such as a road or a river, as opposed to many of the villages engaged in col-lection or cultivation that are only reachable by dirt roads or roads still under construction. The middlemen are in general not involved in collection or production of cardamom. They only buy and sell cardamom, usually also trading other NTFPs obtained from the same people who deliver the cardamom. The local middlemen either go directly to the producers in villages or meet collectors to pick up the Cardamom. It is also possible that they arrange meetings with local traders who have already gathered the material. Middle-men bring the good either to an exporter located in the district centre (Muang Sing), the province centre (Luang Namtha), or sell it to another trader.

4.4.1 Fees and Taxes

As cardamom is produced only for the export market, fees and taxes have to be paid on the different levels of the supply chain.

Collectors and producers who hand the cardamom over to local traders who come to the villages in most cases do not have to pay fees and taxes, as the trade is informal and amounts are in general unregistered. Traders who sell the good to local middlemen within the same district also do not have to pay fees and taxes. Dues just have to be paid when the produce is crossing the borders of a district, province or country.

In Nalae district, one local middleman mentioned that for the transport of 1 ton of carda-mom from Nalae to the province capital Luang Namtha a fee of 2,000-3,000 Kip per kg of dry cardamom has to be paid to Nalae customs. This backs up another statement from a trader in Nalae who said that for the transport of 1 ton of dry cardamom she has to pay 3,000,000 Kip.


38

The 2 exporters interviewed in Luang Namtha mentioned the following system of pay-ment: 5 % of the whole amount has to be paid as tax, 10 % income tax and US$1 per ton has to be paid for replanting. All the dues are paid to the Government of Lao PDR.

4.5 Exporters

The two enterprises described in the following chapters are referred to as “exporters” be-cause they are the last domestic level within the supply chain before the good is trans-ported across the border.

4.5.1 Tonlee Export-Import Company in Luang Namtha

The Tonlee Export-Import Company has been selling NTFP (cardamom, incense bark, or-chids, galangal, sugar palm fruit) to China, Thailand, Vietnam, and Korea since 1999.To source the gathered NTFPs, the company has set up trading units in different villages in the districts where the local middlemen or local traders deposit the cardamom after har-vesting season. After harvesting season is finished, the sales agent visits the villages, picks up the good and brings it to Luang Namtha to the company’s headquarter. There it will be picked up by the transboundary middlemen selling it to the spice companies in dif-ferent countries.

Middlemen phone the company before harvesting season and give the amount desired and what price will be paid per kilogram. 40% of the whole value will be transferred to Mr. Tonlee’s account and the remainder will be paid to him after the delivery of the carda-mom. The sales agent of the company in Luang Namtha can offer the producers and col-lectors a certain price per kg before harvesting.

In the year 2008, Mr. Tonlee earned 10-20 million Kip revenue from the sale of NTFPs. He mentioned that cardamom can be sold almost every year, but even though the prices have risen in the recent years, it is not clear whether they will remain stable.

The prediction of the price development is difficult, as the price underlies normal fluctua-tions in the market. Still the rising prices in recent years will be described in Chapter 5.2 and the rising demand as pointed out in Chapter 3.5 are indicators for the trend of the price development in the next years.

4.5.2 Chinese trader on Luang Namtha market

Another “exporter” identified is a Chinese person based at Luang Namtha market called Aming. He also exports a big variety of NTFPs mostly to China. Cardamom is purchased from traders and middlemen in the districts Vieng Poukah, Nalae, Phongsali and Ou-domxai. The price per kg is fixed by the transboundary middlemen who sell it to a spice company in China. It is disclosed to the exporter before harvesting season so he is able to offer the local traders or local middlemen in the villages the price he can buy one kg for and still earn a certain amount. He purchases the cardamom directly from the local mid-dlemen or local trader in the villages after the harvesting season. The dried good is picked up, stored in Luang Namtha from where it is sent to China by truck or picked up by trans-boundary middlemen or a sales agent from the spice company.


39

4.6 Transboundary middlemen

The transboundary middlemen pick up the cardamom in Luang Namtha from one of the two exporters and finally bring it across the border. In case of China directly by truck. In the cases of Thailand, Korea or Vietnam the ways of the good could not be tracked fur-ther. When the exporters were asked for contact details or phone numbers, they were not willing to provide any for the transboundary middlemen they sell the cardamom to. In this way no contact could be established and no further interviews could be conducted.

The trading structure seems to be very well developed and contacts between the different levels of the supply chain are established. In promoting cardamom, the existing trade structure should be the focus. Traders and middlemen can be encouraged to go to new vil-lages where production sites are established. When the marketable amount will increase in some areas, new traders might be needed. In this case it is crucial that the competition will not be too big and existing businesses are not threatened. But a certain amount of healthy competition might lead to increased prices from which producers will benefit.

4.7 Spice company

The spice company is the last level of the supply chain. The demand from these busi-nesses is the reason cardamom is cultivated and collected in Northern Lao PDR.

None of the exporters asked would specify the final destination of the product with a name or a location and it was just called a “spice company”. Therefore this term is used within the following chapters of the study. Business contacts are a delicate topic, thus the exporting companies did not want to pass on the names and numbers so no personal con-tact could be established with the end point of the supply chain. As it was not possible to get in touch with representatives of the spice companies in the countries where cardamom it is exported to, literature is the only base for information on processing and the use of cardamom as described in Chapter 3.3.

5 Factors influencing the supply chain of cardamom

40


In the previous chapter the supply chain of cardamom was reviewed. However, there are still some factors in need of consideration that influence the activities of the stakeholders as well as the general view on cardamom as a cash crop. These determinant factors are highlighted in the following chapters.

5.1 Assessment of the cardamom business

All people taking part in the supply chain were asked to evaluate the cardamom business. The following table compiles the evaluation of the cardamom business by the three main stakeholder groups: Producers, collectors and traders

Table 11: Assessment of the cardamom business by the main stakeholder groups

Producers Collectors Traders

CostsLow investment costs (~1000

Kip/seedling) if access to seedlings

Labour

• Low labour demand, no weeding

and fertilisation

• Harvesting occurs in a time when

labour is abundant (in between

planting and harvesting rice)

• No need to plant, only

harvesting needs to be

done in the season where

labour is available

• The whole family can go

out to pick cardamom

• Easy handling of the

product (picking up from

villagers/middlemen)

• High value per weight

compared to other crops

Input

Once planted, plantation will

extend itself an can be harvested

up to 40 years, no replanting

required and no input of external

production factors apart from initial

investment

The crop is growing as a

natural resource in the

protected forest

Cardamom can be picked up

from villages together with

other products

Price

Profit

Demand

Marketing Well developed marketing channels exist

Rising Prices in the last years

High margin can be achieved (up to 5000 kip/kg)

Demand on the market is high, bigger amounts are asked for and can be sold

Within the interviews hardly any negative issues were raised regarding cardamom as a business and source of income. In general the cardamom business was estimated by the three stakeholder groups as positive. It is easy to handle and it generates profit on all lev-els of the supply chain without major risks.

Most of the single aspects were already discussed in the accordant chapters. Issues related to the price and further aspects so far unaddressed but however influencing the cardamom business will be appraised in the following section.


41

5.2 Development of the price

The following diagram shows the average nominal prices of dried cardamom from 2004 to 2008. As cardamom is sold dry in most cases within the target area, and only 3 villages in Luang Namtha sell the cardamom as fresh product, the price of dried cardamom was selected as base for Figure 8.

Figure 8: Development of price per kg of dried cardamom in the years 2001 to 2008

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2001 2002 2003 2004 2005 2006 2007 2008

Year

Kip

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

$US

nominal price (n=7) nominal price (n=50) real price (n=50)

(dotted line 2001-2005: n=7, people unsure about prices, 2005-2008: n=50). Real prices on the basis of 2005 reflect the inflation rate 2006: 6.81, 2007: 4.51 (BANK OF THE LAO PDR, 2007) and 2008: 8.6 (CIA, 2009). Influence of price fluctuation within the season and price differences of varieties not reflected.

From 2005 onwards, the price increases constantly, from an average of 25,000 Kip/kg in 2005 up to around 60,000 Kip/kg (nominal price) and 50,000 Kip/kg (real price) in 2008, with a standard deviation of 10,000 Kip/kg.

The dotted line reflects the prices from 2001 to 2005. The study took place in 2009 and only a few interviewees were able to remember prices earlier than 2005 (as mentioned in Chapter 2.4, prices in general are not written down).

A factor influencing the price is the fluctuation within the season. Thus, some interview-ees also pointed out that in the beginning of the season, prices are mostly lower than to-wards the end of the season, when the demand remains high but there is scarcity - the supply is decreasing. One trader in Nalae mentioned that he has to pay a lower price at the end of the season. This factor, due to contrary statements, is not reflected in the diagram.

The variety of cardamom is another factor affecting the price. In the manual of NTFPs (NAFRI, 2007) it is pointed out that with the sale of the ‘Khuang Tung’ variety prices around 50% higher can be achieved, compared to other cardamom varieties. The exporter in Luang Namtha confirmed the statement and mentioned that transboundary middlemen ask for the improved variety (so far only ‘Khuang Tung’ variety was considered) and pay the highest price for this. Statements of the interviewed middlemen an traders were quite


42

diverse: Two interviewed traders mentioned that they offer a higher price for the wild red cardamom compared to the wild green cardamom, but mostly the two varieties are mixed. In Xiangkhaeng it was the case that some years the collected green cardamom could be sold for only half of the price of the planted one, where as some years in Meuto Kao the trader paid even more for the wild cardamom.

In general, cardamom is sold dry. Only in 2 villages in Luang Namtha district interview-ees mentioned the sale of fresh cardamom. In 2006, 1 kg of ‘Khuang Tung’ was sold fresh by the villagers in Kua Song an Houay Hom for 4500 Kip. In 2007 the same amount was sold for 5000 Kip. And in 2008 1kg of ‘Khuang Tung’ earned 6000. This obviously indi-cates an increasing price for the fresh product as well.

The manual of NTFPs (NAFRI, 2007) indicates that prices have fallen but the demand on the Chinese medicine market seems to be expanding. The first statement could not be con-firmed by the present study, as Figure 8 indicates rising prices in the last years. The latter statement could be supported as in Chapter 3.5 it is pointed out that traders and middle-men demand more cardamom from the producers and collectors. Even if the prices have risen in recent years and the cardamom business as such was evaluated positively, an ac-curate prediction of price development is still not possible. This was also mentioned by one exporter in Luang Namth who stated that one never knows whether prices will remain stable.

5.3 Is infrastructure influencing the price?

While Figure 8 above only reflects an average price of cardamom, and points out the trend of rising prices between 2005 and 2008, the following chapter evaluates the factors influencing the price in the different areas where the study was conducted.

The red circles on the map below (Figure 9) indicate the location of the target villages, their connection to the road and the distance to China where most of the cardamom is ex-ported to. Table 12 shows the prices paid in the villages in 2008, indicating that producers in general achieved higher prices (average of 60,000 Kip/kg) compared to collectors (av-erage of 37,000 Kip/kg). Differences in prices can also be observed amongst the districts. Highest prices are paid in Muang Sing, slightly lower prices in Luang Namtha and the lowest prices in Nalae.

The Muang Sing district is the one situated closest to the Chinese border whereas the dis-trict Nalae is the one most far away.


43

Figure 9: Area within the districts where interviews took place

Muang Sing

Luang Namtha

Nalae

Muang Sing

Luang Namtha

Nalae

Source: Modified from SHI (2008)

Table 12: Prices of dried cardamom in the villages paid by traders to producers and collec-tors in 2008

Village Kip/kg (dry) District

Chaputhon Gau 72.000

Pung Kok 70.000

Meuto Kao 65.000

Namded Mai 60.000

Pakha 60.000

Xiengkhaeng 58.000

Nam Ha 50.000

Houay Hom 40.000

Thung Thon 40.000

Hat The 40.000

Hat Lom 35.000

Mo Kah 30.000

Pro

du

cers

Co

llecto

rs

Muang Sing

Luang Namtha

Nalae

The highest prices are paid in Muang Sing district. This indicates that the proximity to the country where most of the cardamom is exported to is influencing the price. In this district people practice hardly any wild collection and in most of the cases the domesticated im-


44

proved variety is sold pure. This, as mentioned in Chapter 3.8, is also a key method in pushing for higher prices. Therefore it is hard to determine which of the two reasons (the geographical proximity to China or the sale of the pure improved variety) lead to the higher prices in Muang Sing district.

The lowest prices for cardamom are paid in Nalae district. There may be two reasons for this. Firstly, there are only wild varieties gathered and sold. And secondly, this area is fur-ther away from China and therefore more difficult to access by traders. The potentially higher transportation costs from the more remote regions might account for the lower price paid to the collectors in Nalae district. In this district also road construction is un-derway and the new infrastructure will offer more marketing opportunities, especially to Thailand via Bokeo province. Marketing to Thailand could be established by other traders than the ones who focus on trade with China, depending on the demand in Thailand. In this way new working opportunities might open up.

5.4 Income sources and share of cardamom

Cardamom collectors’ and producers’ income is based on the sale of cash crops (rice is also used for home consumption), livestock and NTFPs. Table 13 reflects the diverse products collectors and producers of cardamom sell to generate income.

Table 13: Income sources in the producers’ and collectors’ villages

VillageRice

Sugar-

cane Maize Pig

Buffalo/

Cow

Chicken/

Duck Others

Galan-

gal

Tree

Bark Rattan

Bam-

boo

Broom

grass

Carda-

mom

Pung Kok (n=10) X X X X X X X

Chaputhon Gau (n=1) X X X X X

Xiangkhaeng (n=4) X X X X X

Meuto Kao (n=2) X X X X X

Kua Song (n=6) X X X X X X X X

Nam Ha (n=7) X X X X X X X

Houay Dam (n=2) X X X X X X X X X

Houay Hom (n=5) X X X X X X X X

Thung Thon (n=5) X X X X X X X

Hat Lom (n=8) X X X X X X X X

Hat Teh (n=6) X X X X X X X X

Mo Kah (n=8) X X X X X X X X

Pro

du

ce

rsC

oll

erc

tors

Income sources vary among producers and collectors and especially between the villages. Within the villages the interviewed people generally obtain their income from the same income sources.

At the moment many people focus on cultivating rubber - an income source that is not re-flected in Table 13 because planting of rubber has just started and no harvest has taken place in the villages visited. Diversification of income sources is important in order that the rural population build resilient livelihoods (BOUAHOM et al., 2004). This strategy would provide income in case of cash-crop price fluctuations and also provide income in different seasons. It will be interesting on the one hand to see which activities are ne-glected when rubber is due to be harvested, as rubber is a labour intensive crop On the


45

other hand, it will be interesting to what extend rubber will fulfil the economic expecta-tions of the people just starting this business.

5.5 Who benefits from cardamom?

Who are the people primarily benefiting most from the sale of cardamom; producers or collectors? To what extend is cardamom part of the income of the interviewed people? Is cardamom more important for people with a high or a low income? To be able to answer these questions an analysis of the income quartiles was conducted. According to the aver-age income, producers and collectors were divided into quartiles. The highest and lowest quartile of both groups are indicated in Table 14.

Table 14: Income quartiles, Income range and average income; collectors: n= 32, produc-ers: n=36

Income range (Kip/year)Average income

(Kip/year)

Average income

($US)

High income collectors 6,000,000 – 22,000,000 10,873,063 1,304

Low income collectors < 2,000,000 1,202,500 144

High income producers 15,000,000 – 30,000,000 23,064,444 2,765

Low income producers < 4,000,000 2,511,778 301

Collectors in both income classes have in general a lower income than the producers. The amount of income generated by the sale of cardamom was compared to the income gener-ated by the sale of other products to evaluate to which extent the different groups depend on the sale of cardamom. The results are shown in Figure 10.

To determine the dependence of the income groups on the sale of cardamom, a one-way analysis of variance (ANOVA) was performed. Least significant difference (LSD) was used for means comparison (p=0.05). Procedures were performed using SAS® 9.2. The numbers above the bars indicate the outcome of the statistical analysis.


46

Figure 10: Share of cardamom in percent within total income in the year 2008 of produc-ers and collectors, according to income level (producers: n=36, collectors: n= 31), letters indicate statistical differences (Values followed by the same letter are not signifi-

cantly different at p=0.05)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Low inc om e produc ers

(Ø 2,511,778 K ip/y ear)

H igh inc om e produc ers

( Ø 23,064,444

K ip/y ear)

Low inc om e c ollec tors

(Ø 1,202,500 K ip/y ear)

High inc om e c ollec tors

(Ø 10,873,063

K ip/y ear)

In co m e in p e r ce n t

Cardam om O ther inc om e s ourc es

2 .34 a

35.70 c

9 .75 ab

21.70 b

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Low inc om e produc ers

(Ø 2,511,778 K ip/y ear)

H igh inc om e produc ers

( Ø 23,064,444

K ip/y ear)

Low inc om e c ollec tors

(Ø 1,202,500 K ip/y ear)

High inc om e c ollec tors

(Ø 10,873,063

K ip/y ear)

In co m e in p e r ce n t

Cardam om O ther inc om e s ourc es

2 .34 a

35.70 c

9 .75 ab

21.70 b

2 .34 a

35.70 c

9 .75 ab

21.70 b

When compared, both producers and collectors in the high-income classes depend on the sale of cardamom to a notably lesser extent than the people in the lower income classes. Figure 10 indicates that especially for the collectors of cardamom who have a low average income, the sale of cardamom plays a significant role for generating income. The share of income generated by cardamom amongst low income producers makes up around 22%, within the group of low income collectors even up to 35% making up around a third of the whole income.

High income producers only rely on cardamom to provide up to 10% of their income and, high income collectors only rely on it for up to around 3% of theirs. No statistical differences can be observed between producers in the high and low income class. High income producers depend on a lower share on cardamom than the high income collectors. Low income collectors obtain a higher percentage of their income from carda-mom than the other income classes (p=0.05).

The following chapter takes a closer look at 4 villages; 2 villages of producers and 2 vil-lages of collectors. This gives an insight into the situation in those 4 villages and also re-flects the situation in the villages visited.

5.5.1 Producers

The income sources and the average income vary from village to village. Therefore it is necessary to take a closer look at some villages to ascertain what significance cardamom has as an income source in relation to other possible sources of income generation. Figure 11 reflects the average income of two producer’s villages, Pung Kok and Kua Song.


47

Figure 11: Share of cardamom 2008 within the income of cardamom producers in Pung Kok village, Muang Sing district and Kua Song village, Luang Namtha district (salary as other income source excluded, only village head earning salary)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Pung Kok (n=10), Ø income

21,739,500 Kip (US$ 2,607)

Kua Song (n=6), Ø income

3,015,000 Kip (US$ 361)

Rice

Sugarcane

Pig

Buffalo/Cow

Chicken/Duck

Galangal

Tree Bark

Broom grass

Cardamom

Pung Kok ranks amongst the villages with a highest average income out of the producers (21,739,500 Kip = 2,607 US$). In this village with a higher income, the income sources are less diverse and people rely only on the sale of cash crops, which include cardamom and the sale of livestock. The highest share of income is generated by the sale of sugar-cane (45%), followed by buffalo (26%) and rice (14%), cardamom contributes only 8% of the whole income.

Kua Song ranks amongst the target villages with the lowest income (3,015,000 Kip = 319 US$). More diverse income sources can be found in Kua Song compared to Pung Kok. Cardamom accounts for 20% of the income along with wild collected broom grass, mak-ing up also a share of 20%. Furthermore, tree bark and galangal contribute together around 20% as well. Hence the collection of NTFPs contributes over 50% to the income. This is a higher share in turn than the income generated by the sale of livestock like pigs (19%) and buffalos (18%).

The relative share of income generated by cardamom in Pung Kok is by comparison much lower than in Kua Song. However, in absolute terms it adds up to a much higher amount in Pung Kok with 2,461,750 Kip compared to 696,667 Kip in Kua Song.

In Pug Kok, farmers are highly specialized in terms of agricultural production. In the in-terviews it was not mentioned whether the production of sugarcane is a reliable income source that is certain to be practised in following years. Cardamom makes up only 9% of the whole income, with an absolute number of 2,461,750 Kip. This is still about two thirds of the total income in Kua Song. Cardamom in Pung Kok might be a reliable, easy to handle perennial crop that can be harvested in times of labour availability. It delivers a certain amount of income, even if the main crop, in this case sugarcane, might fail. From this perspective the cardamom business seems to serve as a buffering strategy within a village with a high agricultural specialization.


48

In a village like Kua Song with a low average income, the sale of cardamom contributes an essential part of the average household income. Farmers who obtain a high share of their income from cardamom production would be the beneficiaries of a promotion pro-gramme. The focus could be put on extending their cardamom plantations and turning cardamom into the most important cash crop with a very low risk of crop failure. Since no other cash crop is grown in Kua Song, labour might be available to cultivate cardamom. At the same time the gathering of other NTFPs and livestock production will still deliver a diverse income.

As mentioned in Chapter 3.8 people in Kua Song are not satisfied with the yields of the ‘Khuang Tung’ variety. They stated that they are interested in cultivating the ‘Pak Song’ variety. This variety also offers the option of selling cardamom fresh, a form of marketing that is practised in other villages. This shows that the farmers in Kua Song evaluate the existing possibilities for increasing the amount of cardamom, a crop that is already an im-portant income source.

5.5.2 Collectors

To clarify how high the dependence on cardamom is among the cardamom collectors, the average income of two collector’s villages in Nalae district is characterized in Figure 12.

Figure 12: Share of cardamom 2008 within the income of cardamom collectors in Hat Lom village and Mo Kah village, Nalae district (salary as other income source excluded, only village head earning salary)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Hat Lom (n=8), Ø income

8,954,313 Kip (US$ 1,074)

Mo Kah (n=8), Ø income

2,090,625 Kip (US$ 251)

Rice

Maize

Pig

Buffalo/Cow

Chicken/Duck

Tree Bark

Broom grass

Cardamom

With an average income of 8,954,313 Kip = 1,074 US$, Hat Lom ranks among the collec-tor’s target villages with a high income. In Hat Lom, the most important income source is buffalo with 39% followed by maize with 29% and pigs with around 18%. Cardamom is obtained through wild collection and only contributes a share of 1% of the overall income. In this village cardamom was promoted between 2000 and 2003 but the plants only showed vegetative growth and did not produce fruits. The plantation was cut down to


49

plant rubber. All the interviewees mentioned they would not want to plant cardamom again and rather invest into a more promising crop like rubber.

In this village where farmers are highly specialized in the production and sale of buffalos, cardamom plays with a share of 1% only a negligible role. Considering the bad experi-ences the farmers have had with the planting of cardamom, it is understandable that they would rather focus on what seem to be more promising activities in terms of income gen-eration. Still, as mentioned in Chapter 3.9, the advantages and disadvantages of rubber have to be considered carefully before investing in this crop. In a village with such a high income and specialization on livestock, the introduction of another income generating ac-tivity is not necessary, especially when due to bad experiences people will not accept this crop.

Mo Kah with an average income of 2,090,625 Kip = 251 US$ ranks amongst the villages with a lower income. In Mo Kah, the most important income sources are the sale of pigs with 27% and rice with 24%, followed by cardamom with 19%. Interviewees mentioned that the demand for cardamom is high and there is the possibility to sell more to the trad-ers. The village is located 30 minutes downstream by boat from Nalae. The road connect-ing Nalae district with Bokeo province, and therefore the border to Thailand, will be fin-ished around the beginning of 2010. This will offer another opportunity for trading car-damom, as one of the villagers explained.

Forest land, being the base for the ongoing collection of cardamom, is in decline. As this resource depletes further, the possibility to collect and sell cardamom, making up a fifth of the whole income of the collectors in Mo Kah, will also decrease. In a situation like this, people need strategies to overcome the loss of an important income source. The shift from collection to cultivation of cardamom could be a solution that delivers income when collection becomes no longer be possible. Cardamom can be planted within the forest, as long as government policies ensure the forest will not be cleared in favour of planting rubber. An alternative, that doesn’t mean relying on the forest as an insecure resource, is planting cardamom on upland fields, especially the ‘Pak Song’ variety which does not re-quire a shade cover.

Furthermore, the highest price comes from the sale of the cultivated variety as evaluated in Chapter 3.8.This is another reason why a promotion seems to make sense. Potentially this will be an especially valuable opportunity for the people who only practice wild col-lection at the moment, such as those in Mo Kah.

Considering that the infrastructure in this village will be developed in coming years, new markets for NTFPs will open up – a chance for the villagers to increase their income.

6 Conclusions

50

6 Conclusions

Cardamom, no matter if it is obtained from wild collection or cultivation, is very appreci-ated by all the stakeholders asked. It is an attractive crop for collectors, producers, and traders. Cultivating cardamom delivers reasonable yields when planted in the appropriate place. Involvement in production and trade of cardamom is economically viable and reve-nues are acceptable for the amount of labour dedicated.

The supply chain and the marketing channels are very well developed, people know who to sell the product to and it is picked up straight after harvest. This guarantees a cash in-come before the rice is harvested in times where shortage of cash income might occur in some families. Due to a high demand from the market, all suppliers have the chance to sell all of the produce until the end of the season. Traders and middlemen even demand higher quantities. Producers and collectors are not able to supply such quantities at the present time. This indicates that the market is capable of absorbing more, an opportunity for producers as well as for collectors. Since prices have risen in the past years, people consider cardamom as a good business, even though it is not possible to predict how the prices will develop. Harvest of cardamom takes place mid-July to mid-September when upland rice is not ready to be harvested. Thus in many families a labour gap can be filled by harvesting cardamom, either gathering the fruits in the forest or harvesting from culti-vated plots.

The cultivated varieties as well as the wild varieties have a range of advantages and dis-advantages that will be discussed in the next paragraph.

Cultivated versus collected cardamom

In terms of cultivated cardamom, there is a low risk of crop failure because cardamom is not susceptible to pests and diseases. In addition, it does not require external inputs com-pared to other crops.

Cultivated plants grow on plots closer to the village. The spots for wild collection are normally 1 or 2 hours walking distance from the villages. So less time is required for reaching the plantation compared to the spots of wild collection. Thus time is saved for other activities.

Only the owner of the plot is allowed to harvest. Therefore no competition for the re-source occurs in contrast to the wild collection spots.

To be able to shift from collection of cardamom to cultivation, the available labour within the farming family needs to allow for the inclusion of additional cropping activity. The availability of suitable areas for cultivation is the most important factor. When adequate areas exist, the plot size should not exceed the labour capacity within the family.

Harvesting from the wild does not require an initial investment like planting on your own plot. Gathering the NTFP is an additional income opportunity that does not require crop-ping activity.

Yields of the improved varieties are mostly higher and, due to a more rigidly defined area, more predictable. By the sale of the improved varieties higher incomes can be achieved as

6 Conclusions

51

traders and middlemen pay higher prices for the improved varieties. But focusing on cul-tivating the improved varieties might threaten the occurrence of the local varieties.

Who benefits

Cardamom has a different significance for each person depending on which of the activi-ties they participate in and their economic status. From the point of view of producers with higher income and specialization in another cash crop, cardamom can be seen as a reliable buffer strategy in case of the failure of another crop. In this way, at least the sale of cardamom ensures a certain income. These people are in most cases not dependent on including an alternative income source in their cropping activities.

Some of the producers and collectors with lower income depend on the sale of cardamom to a high degree. Cardamom in some cases adds up to around a third of their overall in-come. The producers are possible targets for extension service. Through extension they will be guided on how to make most of the existing cropping activity. By further promo-tion they can be enabled to extend the current cropping activities of cardamom. People who are currently collecting from the wild and whose livelihood is threatened by defores-tation will benefit from a promotion by including cardamom in their cropping activities. This will serve as an alternative to the collection assumed that an adequate area for the cultivation of cardamom is available in the area.

The two groups mentioned above will be those who benefit most from both the introduc-tion of cardamom and the improved extension service. For them the base of the livelihood needs to be secured and improved as they have a much lower income compared to other people in the target area. To guarantee income security and an increase of the base of live-lihoods, cardamom seems to be a viable option.

Why cultivate cardamom?

All villagers are allowed to collect NTFPs within the designated forest areas. The forest in Northern Lao PDR is declining due to deforestation and the fallow periods that provide the secondary forest wild cardamom needs for its development are disappearing. Thus the appearance of wild cardamom is threatened. In this case shifting from wild collection to production can be an opportunity for the collectors as long as enough suitable land is available.

Soil erosion is an important issue in the upland areas of Northern Lao PDR, leading to nu-trient depletion and the loss of soil fertility. The ‘Pak Song’ variety, cultivated as a peren-nial upland crop, provides a constant soil cover, an advantage compared to other upland crops which leave the soil bare during planting time every year.

Cardamom production will be more successful in villages where people are already in-volved in production and trade. The people who already produce cardamom can function as example and counsellor to the people newly involved in the business. New producers will have no problems in marketing cardamom when the trading structure is already de-veloped and traders or middlemen come to the villages. People living in the same village know each other which can be an advantage as in this way trust can be built up, an impor-tant base for a successful trade relationship. In the villages where marketing and trade re-

6 Conclusions

52

lationships still have to be developed, the introduction of a new cash crop might be faced by more obstacles.

Threats

The most common cultivated variety is the improved variety ‘Khuang Tung’ introduced from China. When farmers start planting cardamom, they cultivate the improved variety that delivers higher yields. Promotion of cardamom took place in the target area several times, and during these attempts only the ‘Khuang Tung’ variety was introduced apart from a promotion in 2009 when the ‘Pak Song’ variety was promoted. The increased cul-tivation of the introduced varieties and the loss of the local wild varieties due to depletion of the forest might lead to a complete loss of the local varieties.

The market seems to be located mostly in China and most of the cardamom produced in Northern Lao PDR is exported to this country. Even though in the interviews and in litera-ture Korea, Vietnam and Thailand are also mentioned as importers of cardamom, these countries seem to play a minor role. The improved varieties cultivated in the target area are the improved varieties from China, indicating that the Chinese traders are interested in the production of a quality demanded in there.

In case of the promotion of cardamom mostly for the Chinese market, producers will de-pend on the demand from this country to a large extent. This dependency on supplying one major market is a risk for the producers. In case of decreasing prices, the suppliers will not be able to yield a high benefit from the sale of cardamom. Therefore, income di-versification among the producers should be taken into account. Even when prices go down, farmers will still be able to sell other products and earn a certain income.

Further research

The variety ‘Khuang Toung’ is the most common variety cultivated in the target area. It requires 50% shade cover and thus grows only within or on the edge of forests. The vari-ety ‘Pak Song’ can be grown on open upland fields, not requiring shade cover to produce acceptable yields. Literature describing the advantages of this variety was so far not avail-able, the information is based on statements of single people and observations. The visits of a plantation and the personal comments from Mr. Vana Puth, the Technical advisor for forestry and land use planning of German Agro Action in Luang Namtha are the only source to comment upon the potential of this variety that seem to offers the possibility to be grown as perennial crop on upland fields. Further proof of the benefits of this variety is needed.

The most severe loss of the cardamom fruits happens during the drying process when the fruits are prone to moulding. This leads to a decline in quality and therefore a loss in in-come. Possible options to prevent losses during the drying process by implementing sim-ple drying facilities adapted to the local conditions should be considered in research. Fur-ther solutions that might exist to tackle this problem should be implemented in the area, a task for development or government agencies. Applying improved drying could be a chance for producers and collectors to increase their income by avoiding spoiled produce. This will not be an easy task as harvesting and post harvest handling take place during the rainy season.

6 Conclusions

53

Companies in other countries like Thailand, Vietnam or Korea were only briefly men-tioned by a representative of one exporting company in Luang Namtha. A survey on the marketing possibilities and demand of cardamom in countries apart from China could open up other marketing opportunities and might prevent the dependency only on the Chi-nese market.

The threat to local varieties by focusing on the cultivation of the improved varieties could be prevented by breeding activities that aim to improve the local varieties. By selective breeding, the yields of local varieties could be increased and thus they might become in-teresting for cultivation.

To identify whether cardamom serves as alternative common upland crop, the possible profits by replacing a common upland crop with the perennial cardamom need to be cal-culated. An economic calculation comparing the benefits of cardamom with the profit achieved by the sale of an annual upland is crucial to determine which crop will lead to bigger benefits. The additional benefit of cardamom preventing soil erosion when culti-vated on upland fields should be included in the calculation. This might be cardamom re-placing – for example - maize.

Considerations

Cardamom is a promising crop with a high preference among the rural upland population of the target villages in Luang Namatha province, whether obtained from wild collection or from cultivation. However, a careful inquiry is necessary about whether collection or cultivation is more suitable for which area. Furthermore, what kind of system (collection or production) is possible in which region regarding the infrastructure and the resource endowment. Established marketing structure and demanded on the market are present, thus important requirements for planting and selling cardamom are met in many places. Therefore, the key issue is the availability of suitable area for planting cardamom. This precondition is crucial for either extending the cultivated area for producers or shifting from collection to production in the case of collectors.

7 Recommendations for promotion

54


One of the objectives of the present study was to ascertain whether cardamom serves as an alternative income source for the rural upland population of Northern Lao PDR. Fur-thermore it was the goal to find out what factors need to be considered in case of promo-tion by the RDMA Programme. Many factors, like the availability of resources, land, capital, knowledge, extension service, cultivation of the appropriate variety, access to in-frastructure and marketing channels as well as the personal attitude towards a cropping activity are pivotal to its success. In the following chapter some recommendations for pro-motion are given.

Support

Planting cardamom appears to be an activity with low initial investment. For the planta-tion of an area of 0.3 ha, an initial investment of 3,600,000 to 7,500,000 Kip is necessary. This is not a sum to be neglected when compared to the annual income of some families. When promotion takes place among poorer households, the access to financial resources must be ensured. Otherwise many families will not be able to raise the money needed for the purchase of seedlings.

By promoting cardamom cultivation in remote areas, access to good quality seedlings of the desired variety (‘Khuang Tung’ or ‘Pak Song’) also has to be ensured. In many cases the seedlings are only available in bigger towns. Reaching these towns requires time and money so poor farmers might not be able to raise the money for the transportation.

Variety

The two identified varieties ‘Pak Song’ and ‘Khuang Tung’ have different requirements and are therefore best suited to areas with different conditions. The first one can be grown on upland fields and does not bear a shade cover for its generative growth. The latter one requires 50 % shade cover to flower as well as moist conditions for its growth, so a loca-tion close to a stream is favourable.

As it happened in one village, cardamom did not produce fruits and the plantation was cut down. There are several reasons why the crop may have failed and they need to be con-sidered by the promoting agency.

Promotion of the right variety is crucial for the success. As the ‘Pak Song’ variety seems to achieve satisfying yields on upland fields, this variety can be promoted for the planta-tion on fields. Thus it can as well serve as perennial alternative to an annual upland crop like maize or sugarcane.

Farmers who grow cardamom and additionally practice wild collection should be advised not to mix the different varieties. Mixing the different varieties together will lead to a lower price than selling the varieties separately.

Extension

Sufficient extension service is a crucial factor for successful promotion of a crop. People who are already cultivating cardamom can rely on their knowledge of the crop and look


55

for additional areas for cultivation. When cardamom is promoted among people who have no experience in cultivation and harvesting techniques, they need to be taught how to find suitable areas, where to obtain the seedlings, and how planting and care of that plantation takes place. Only if these preconditions are met, is the fruitful cultivation of cardamom guaranteed.

Market information systems need to be developed so that people are able to estimate the benefits they might expect from involvement in the cardamom business. People already producing the crop as well as the collectors need to be informed about the quality re-quirements. This will ensures that their produce can meet the standard demanded by the traders and on the market.

When production as well as wild collection is practised by the same people, they should be advised not to mix the fruits from the different sources. With the sale of the pure im-proved variety higher prices can be achieved.

The government will continue the promotion of planting rubber in Northern Lao PDR. Thus more people will be involved in this activity. Intercropping of cardamom with rub-ber is a promising alternative to combining rubber production with cardamom cultivation. In those areas where the cultivation of rubber will take place in the future, people should be briefed on the economical and ecological benefits of intercropping these two species. This will build awareness to combine income generating activities with environmental conservation.

Connecting farmers with traders as well as middlemen will also prove useful. In this way traders can teach the farmers about the quality requirements and farmers can deliver the product desired in the market. In return farmers can give information on the quantities they are able to produce and traders can estimate more easily how many farmers they need to contact to obtain their required quantities.

The area per family on which cardamom will be cultivated, should not exceed the avail-ability of labour within the family. Cultivation of cardamom should be an additional ac-tivity when it fits the cropping activities of the family. If no labour is available, it should be carefully considered whether replacing an existing activity with the cultivation of car-damom is worth while. Therefore cropping activities which are not economically viable, like growing cardamom, can be replaced but need to be identified beforehand.

Infrastructure and marketing

Infrastructure is a central component of successful marketing. Traders need to reach the villages where the seedlings for planting can be obtained. Concerning this issue, promo-tion should take place in villages where marketing is guaranteed and traders have easy ac-cess. There may be the danger that people in very remote places will be left out. In most cases those same people are the poor who strongly depend on new income generating ac-tivities. If production takes place in a very isolated area, communal marketing could be organized by the villagers. The dried product can be accumulated within the village and marketing can be organized by a few people who could be paid a certain share of profit achieved by the sale that would otherwise not happen. Assisting in the organization of such a village marketing group can also be the task of a promoting agency.


56

Given the factors studied and analysed in this paper, the promotion of cardamom in the target area can be recommended. It is requisite, though, that the suggested further research and considerations be taken into account.

8 References

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Appendix

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Appendix

PRODUCERS Questionnaire Date

A. Basic Information

Village/City Age

Name Sex

Size of family Ethnic Group

Types of income

B. Production Information

1. Area of cultivation (description, close to house, distance to house, size of area) 2. Time of planting (how often per year) 3. Time of harvesting (how often per year) 4. Propagation methods (generative, vegetative) 5. Cultivation management (irrigation, fertilizer, use of chemicals) 6. Seed management 7. Cultivation Problems (Drought, pests and diseases) 8. Processing (harvesting, drying, storage) C. Product Information

1. Quantity produced 2. Losses 3. Type of packaging 4. Sold to whom 5. What price D. Perspective of cultivation

1. Possible extension of cultivated area 2. Possibilities of transport and storage 3. Knowledge of organic production 4. Motivation for certified organic production, maybe in a group with other farmers COLLECTORS Questionnaire Date


Village/City

Name Sex


Types of income

Appendix

61

B. Product Information

1. Area of collection 2. Time of collection (how often per year) 3. Quantity collected 4. Variety 5. Processing (drying, storage, protection from moisture) 6. Duration of storage 7. Sold to whom 8. What price 9. Type of packing 10. What else collected

C. Perspective of cultivation

1. Motivation 2. Availability of land 3. Knowledge of cultivation 4. Possibilities of transport and storage

TRADERS Questionnaire ` Date


Village/City

Name Sex


Types of income

Independent/Employed

B. Trading Information

Buying

1. Purchasing area 2. Quantity 3. Which/How many suppliers 4. Frequency of purchasing visits 5. Kind of transport 6. Storage 7. Prices of raw material 8. Quality standard 9. Processing of raw material before selling 10.Other traded products

Selling

1. How many customers 2. Located where

Appendix

62

3. Type of customer (trader, processor, exporter) 4. Price 5. Taxes/Fees (paid to district/province/for export) 6. Means of selling (market, internet …) 7. Type of packaging 8. Transport

List of villages visited

Date Village District Ethnicity Population

People/hh

Involved in Carda-mom

27.03.09 Namded Mai Muang Sing Akha 300/61 4 families , since 1998 cultivation

1

28.03.09 Pakha Muang Sing Akha 243/43 2000, cultivation 2

30.03.09 Pung Kok Muang Sing Akha 281 /49 1998, cultivation 3

03.04.09 Thung Thon Nalae Khmu 78 hh only collection 4

03.04.09 Hat Lom Nalae Thai Lue 278/61 2003 planted but never good harvest, plants cut down, little collec-tion

5

04.04.09 Hat The Nalae Thai Lue 128/ 27 7 people planted 2003, supported by GTZ

6

04.04.09 Mo Kah Nalae Khmu 83/ 14 Only collection, since 1979

7

04.04.09 21.04.09 23.04.09

Nalae Nalae Thai Lue Only trade 8

22.04.09 Nong Kham Nalae Thai Lue No collection, only trade

9

22.04.09 Nalae village Nalae No collection, only trade, no one inter-viewed

10

23.04.09 Pu Thon Nalae Khmu 109 hh Only collection, more than 10 years, every family collects

11

28.04.09 Chaputhon Gau

Muang Sing (Xiengkhaeng)

Akha 30 hh Project supported all households 1998

12

28.04.09 Xiengkhaeng Muang Sing Thai Lue 47 hh Around 15 people plant cardamom

13

29.04.09 Meuto Kao Muang Sing (Xiengkhaeng)

Akha 40 hh Project supported all households 1998

14

06.05.09 Kua Song Luang Namtha Khmu 51 hh FOUF distributed seed-lings 2000/01,still 27 families cultivation, also wild collection

15

Appendix

63

06.05.09 Nam Ha Luang Namtha Khmu 117 hh FOUF distributed seed-lings 2000/01,still 23 families cultivation, also wild collection

16

07.05.09 Houay Dam Luang Namtha Khmu 66 hh 1999 � 6 families planted Khuang Tung (supported by EU Pro-ject) 2007: 56 families planted Khuang Tung

17

07.05.09 Houay Hom Luang Namtha Khmu 54 hh Mostly collection, 6 people planted in 2007 (more Pak Song than Khuang Tung)

18

64

Declaration

I assure that this master-thesis is based on my own fieldwork and a result of my personal work. The present study was composed independently. No others than the indicated aids have been used for its completion.

All quotations and statements that have served as source of information or have been used literally from published or unpublished writings are labelled as such. Beyond this I assure that the master-thesis has not been used neither completely nor partly for passing previous examinations.

Furthermore, I agree that this study will be displayed in the library of the department 430A in the University of Hohenheim, implying the possibility of its exploration and bor-rowing by others.

Hohenheim, Oktober 2009

_____________________________

Antonia Schneider

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PARTICIPATORY SUPPLY CHAIN ANALYSIS OF HIGH VALUE SPICES …lad.nafri.org.la/fulltext/2734-0.pdf · The results of the study indicate that cardamom is a crop that neither requires