Repeat of History?

…….. Around the same time, strangely, Bhutan emerged as the world’s largest grower and exporter of brown jacket cardamoms – something that is totally IMPOSSIBLE – given that India, Nepal and Sikkim were much bigger growers of this variety of cardamom! How it came about is rather ticklish – something that I am still unwilling to write about :)

The above is the last paragraph of my post on Bhutan’s export of brown jacket cardamoms, about which I blogged on May 17, 2017. Please read the full article at:

http://yesheydorji.blogspot.com/2017/05/the-curious-case-of-bhutans-cardamom.html

When writing out my last post on this Blog relating to the Ministry of Agriculture’s “Buy-Back” scheme, memories of one particular aspect of Bhutan’s cardamom export business during the late 70’s and early 80’s came flooding back.

I was the Head of the Third Country Export Section of the Export Division under the then Ministry of Trade, Industries & Forests. I handled all the exports to the third countries – countries other than India.

In 2017 when I was writing out my blog post titled “The Curious Case of Bhutan’s Cardamom Export”, I did not wish to write about the “ticklish matter” – but today I think I need to write about it, so that a repeat of history is averted. I hope this will serve as a caution to the Ministry of Agriculture. By the way, then too the Ministry of Agriculture was the parent Ministry of the Food Corporation of Bhutan that was in the thick and thin of the events I am now going to narrate.

Those days Bhutan was happily exporting millions of Ngultrum's worth of brown jacket cardamoms. The export was routed through an intermediary in Singapore. Why such a round-about route was necessitated is given in my article of 2017 of which the link is provided above.

One day, as the person responsible for all third country exports, I represented Bhutan in an international conference on GSP (Generalized System of Preferences) conducted by the UNCTD – now called WTO of the UN. I cannot remember where the meeting was held.

During the meeting, when Member countries’ export figures were presented, to my consternation, Bhutan was listed as the world’s largest exporter of brown jacket cardamoms – over all other growers of the world. Certainly for a country our size, our export figures would have been pretty impressive – but NO WAY we can be the biggest. Ours would be minuscule compared to India’s or Nepal’s or Sikkim’s. Whatever the reasons, I was intrigued and when I am intrigued, I get to the bottom of things.

I began a systematic investigation into how we came to be declared as the biggest grower and exporter of brown jacket cardamoms. This personal initiative (I was not required by my organization to undertake this exercise) was necessitated by one other situation that I was faced with – the FCB’s blatant refusal to surrender their stock of cardamoms to me – even at a price better than they were offered by others. They claimed that they had no stock to offer me - total bullshit! I had a Letter of Credit amounting to over US$ one million – but not enough cardamom to meet the export obligation.

I was not about to sit idle and tweedle my thumbs - I went on an offensive. I did what I had to do – I will not go into the details of what I did. Eventually the FCB was left with no choice - but handover their entire stock to me. Unfortunately, their entire stock fell far short of what I needed - I had to make up from other sources - which is another calamitous story, to be told another day.

Back to the main story.

I met the Department of Agriculture’s officials to find out what ought to be our rough annual production – based on the acreage of land under cardamom plantation. There was a humongous gap between what we exported and what we could have produced.

Next stop – the entry and exit points for all export/import goods – Samtse, Gelephu, Sarpang, Samdrup Jongkhar and Phuentsholing. From these regional exit points, I gathered what volumes were dispatched and what was received at the central store of the FCB in Phuentsholing.

Figures from Phuentsholing Gate showed that there was huge, huge, disparity in what was dispatched from the exit points – and what entered Phuentsholing gate. Since FCB had their central store in Phuentsholing, all cardamom purchased by their regional offices had to come to the Central store in Phuentsholing.

Records showed that the FCB bought more than three times our national production capacity. How is that possible? Where did the excess tonnage come from?

It did not take me long to figure out what had happened.

AAA.  The FCB was the only agency to which the growers would sell their cardamoms – because under the directives of the RGoB, FCB was mandated to offer, what used to be then known as “Support Price”. The “Support Price” was more than generous so that farmers are encouraged to grow more. What the RGoB did not realize was that the “Support Price” was much, much higher than those offered by Indian traders – a situation ripe for manipulation.

BBB.  The Export Division of the Ministry of Trade, Industries & Forests was charged with the responsibility to export the cardamoms, and earn most urgently needed foreign exchange. During those days there was a strong push towards earning foreign exchange, something that does not seem to be the case today. The Export Division did a sterling job of exporting so much so that Bhutan shot up to number one position – as the world’s top exporters of brown jacket cardamom – even while being clueless that we were exporting far in excess of what we are capable of producing.

CCC.  During that period, there was a ban on export of brown jacket cardamom out of India. Thus the Indians could not export their cardamom outside the country. They would have not bothered about the prices in the international market – all that they would have been concerned about would be an opportunity to export their "black" money and park them in offshore accounts – through over invoicing of their exports.

Enter Bhutan – with its benevolent “Support Price”. The support price was way higher than prices offered in the Indian cardamom market.

The Indian traders in Phuentsholing, Jaigaon and Siliguri entered into deals with some unscrupulous Bhutanese traders and even FCB directly – and started to dump Indian cardamom into the stockyards of the FCB – as Bhutanese cardamoms.

Bhutan’s “Support Price” ended up supporting the purchase of Indian cardamoms which was fetching much lower prices in their own markets - for export by the Export Division, in the process helping Bhutan achieve the unachievable – top place as the largest exporter of brown jacket cardamom in the world.