Friday, December 14, 2018

Cardamom - Oh No --- Not Again!!!!

Over my Bathu lunch at a restaurant in Kawajangtsa, I chanced upon today’s Kuensel article on the cardamom issue ….. The article says “Govt. to buy back about 380MT of cardamom”. What does that mean? Was the stock of cardamom lying with the farmers sold to them by the government? Otherwise how does it qualify as “buy back”?

Our variety of Cardamoms - Brown Jacket Cardamom - it is also sometimes called Black Cardamom. This is different from the more expensive Green Cardamom grown in Guatemala, India and Sri Lanka. The Arabs use them in tea. Pakistan use to be the country that imported most of our Brown Jacket Cardamoms.

Unknown to almost 99% Bhutanese, Cardamom export trade in the late 70's / early 80's saw some unexpected twist of events - primarily because the RGoB was involved in its purchase and export. By the time I became wise to the game, it was too late and it was impossible to prove any wrong doing.

I am doing this hasty article - immediately upon reading of the proposal - because I know that this is fraught with all kinds of peril. The confusion has already started - beginning with the Kuensel headline.

Question: Does the government have that kind of money? Even at Nu.350.00 per KG that total stock of 350 MT works out as follows:

380 MT x 1,000.00 = 380,000 Kgs
Nu. 350.00 x 380,000.00 Kgs = Nu.133,000,000.00

That is Nu.133.00 million. Do we have this kind of money to dole out?

And do not forget - this is only the price of cardamom. You have to factor in collection and transportation cost to a central point (Phuentsholing), re-bagging, labelling/export marking, stuffing into containers, export documentation at exit point, haulage to port of shipment (Kolkata), freight forwarding charges, stevedoring, ocean freighting to destination, transit insurance, Customs formalities at port of exit, etc. All this will take the cost to over Nu.900.00 per KG.

Next, the contemplated price offer of Nu.350.00 includes Nu.20.00 profit to the farmer. Isn’t it enough that the government is bailing them out? Do the farmers deserve profit, over and above their cost? For what?

The DNT government has to remember that you are dolling out Nu.133.00 million over which other farmers have a claim too - not just the cardamom farmers. This is not fair to other farmers who are buckling under multiple problems - the most serious among them - loss of crop to wildlife predation and the creation of Goongtong - some tell me even Yuetong! Why not compensate these farmers too?

But my concern is not so much about the government dolling out money to a select section of farmers - my worry is lot more complicated and consequential.

I fear that we are all set to repeat the disaster that happened - some four decades back - also cardamom related.

Civil servants went to jail, a substantial number of senior officials lost their jobs, thousands upon thousands of acres of government land was usurped, Finance Ministry's coffers went almost dry and some corrupt government officials made millions. One Indian trading firm made hundreds of millions from the well intended but mismanaged good intention. Worst of all, for the first and last time, Bhutan saw the nationalization of private property. Thousands of acres of forest was devastated - all because of cardamom.

If the Royal Government of Bhutan and Ministry of Agriculture is seriously considering taking over the cardamom stock from the farmers for export, I would like to advice that they should consider the perils associated with such a move very, very seriously - before they embark on it. Only yesterday I was telling 3 friends about the sordid affair that was the cardamom trade.

I suggest that a detailed discussion be held - between the Ministry of Agriculture, Ministry of Economic Affairs and all other agencies that will be involved in this misadventure. Having headed the export section of the Ministry of Trade, Industry & Forests in the late 70’s and early 80’s, and having been involved in the business for the entire duration of Bhutan’s cardamom trade with third countries, I can offer some pointers on how NOT TO BE DUPED, once again. Trust me, the country will end up paying three times more than Nu.350.00 per KG!

Remember, as Samuel Johnson said; “Hell is paved with good intentions.”

I re-read the Kuensel article once again - after going out to buy a copy of the paper. There appears to be some kind of unfounded urgency to buy off the stock of cardamom from the farmers - "within this month itself" - according to the paper. Why? Please remember - there is no rush. Cardamom is not a perishable commodity - its shelf life runs into decades. Before doing anything in haste, it is important to work out the modalities of purchase and take over, if the government really must.

One idea: Why buy? The Royal Government of Bhutan is not a cardamom trader. Instead, why not act as a facilitator? This could be more beneficial to the farmers over the long haul.

Also, this is huge sum of money - can it be just decided between the Ministries of Agriculture and Finance? Does it not require Parliamentary approval - to incur such huge expenditure that is not within the plan?

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