Actors in customary and modern trade of Caterpillar Fungus in Nepalese high mountains: who holds the power?

Abstract

This paper assesses the supply chain of Yartsagunbu (Caterpillar Fungus) in Darchula district of Nepal to identify who holds the power and how they gain power for management and marketing. We recorded two types of supply chain: (ⅰ) open supply chain, driven by open market, where the product is transported to Kathmandu before export to international market, and (ⅱ) close chain practiced by indigenous Shauka community following customary trade route to Tibet. The open chain is longer with higher number of actors compared to the close chain. This study observed that actors have intensive horizontal competition in the open chain to collect and purchase maximum quantity. Therefore, profit is disproportionately distributed to the actors in higher level of the supply chain. The profit is based on the price the actor receives, which is determined by their bargaining power. An actor's bargaining power is determined by the capital holding capacity, market information, risk appetite, networking and social ties. The study suggests that Government's interventions such as providing security to traders, access to finance, organizing auction and providing market information can help to increase the bargaining power of lower level actors. The study also suggests to minimize the disturbance in the collection site through limiting the collection permit and revising the revenue based on the market price.