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NO. 02 • MAY 2018
POLIC Y BRIEFS • COPENHAGEN CENTRE FOR DEVELOPMENT RESEARCH
Pathway out of poverty for upland communities in Nepal:
“high altitude gold” and its development potential
Introduction
In Nepal, highland communities are reaping incomes,
which were unthinkable only 15 years ago. The collection
and trade of yarsagumba (Ophiocordyceps sinensis) has
contributed to larger economic transformations than any
development scheme has ever done in the region.
Endemic to the grasslands and alpine meadows
of the Tibetan Plateau and high valleys of the Himalaya,
yarsagumba is a fungus-caterpillar complex, which has a
long history of use in Tibetan and Chinese medicines,
prescribing it as a powerful tonic. More recently, its
aphrodisiac properties have been the main factor
driving a surge in Chinese demand and the associated
sharp increase in price. Currently, a single 5 cm long piece
of yarsagumba, weighing a fraction of a gram, is said to
cost up to 50 USD in retail shops in China; this price is
currently higher than the price of gold on the
international market.
Yarsagumba collectors have managed the resource on
their own to a high degree, without any policy support in
Nepal or support from external donors, to the point that
some researchers have called this an “indigenous form of
‘sustainable development’” (Childs and Choedrup, 2014).
In this brief, we summarize results from a study quantifying
yarsagumba collectors’ income and discuss possible ways
of maintaining and increasing local incomes from
yarsagumba trade. Filling in this knowledge gap is essential
to support yarsagumba-related development initiatives in
high altitude regions of Nepal.
Recent published research by Pouliot et al. (2018)
contributes to answering these questions. It is based on
intensive field work in Darchula District of Nepal (Figure 1)
for the case year 2014-2015. All Village Development
Committees where yarsagumba is collected were visited,
and collector focus group discussions (n=7), individual
collector interviews (n=56), traders interviews (n=45, all
yarsagumba traders in Darchula), and central wholesalers
interviews (n=9, all yarsagumba central wholesalers in
Nepal) were conducted.
Yarsagumba collector
The flow of yarsagumba from
Darchula District of Nepal
Every year when the snow melts in the
lower alpine meadows of Darchula, from
around 3500 masl, around mid-May,
thousands of men, women, and children
move from their home village to tented
camps close to collection areas. In the
2014-2015 case year, the average number
of days spent per collector for
yarsagumba collection was around 37. To
facilitate collection and establish
relationships with collectors, traders provide
pre-collection advance payments. The
relationship between collectors and traders
is based on trust and all advance payments
are given based on oral agreement.
While some trade takes place directly in
collection areas, most collectors transport
their harvest to the nearest road head
village by foot where it is sold to traders.
From there, products are transported by
jeep or bus to towns such as the district
headquarter of Dhangadi and then by bus
or airplane to Kathmandu, the national
capital, where most central wholesalers are
located. From Kathmandu, the products
are transported to China (Lhasa, Kunming,
Guangzhou, Shanghai, Beijing and Hong
Kong).
Yarsagumba worth USD 4.7 million for
collectors in Darchula District
In 2014-2015, yarsagumba collectors in Darchula generated
USD 4.7 million in profit by selling the 384 kg of
yarsagumba collected in the district; this income, even
though not equally distributed across the district, is huge
for Darchula which has an annual budget of USD 4.2 million
(DDC Darchula, 2015) and a population of 133,464. The
yarsagumba income is largely unrecorded in official
statistics as markets are informal and operate through
private treaty trading (buyer and seller negotiating prices
and other terms of trade).
Around 5200 collectors were involved in the collection of
yarsagumba in Darchula District in the case year, on average
generating around USD 900 per person. Yarsagumba is the
sole source of cash income for most collectors and its
commercialisation has revived the trade component of
traditional high altitude livelihoods, which had otherwise
declined following restrictions at the Tibetan border and
the expanding infrastructure in both Tibet and Nepal that
eroded the traditional comparative advantage of high alti-
tude communities trading products between the
POLIC Y BRIEFS - NO. 02 • MAY 2018
Figure 1. Darchula District with road and trail
infrastructure, and location of main yarsagumba
collection areas (purple dots). Map adapted from
MoFALD (2017), infrastructure and collection areas
added based on empirical observations.
nomads of Tibet and the farmers of Nepal (e.g. Bauer,
2004). Most yarsagumba from Darchula is traded through
Kathmandu-based central wholesalers who facilitate trade
into China.
What makes yarsagumba a potential tool
for poverty alleviation in Nepal?
Collection of yarsagumba does not require any
sophisticated technology and capital. Still, it appears that
local communities in mountainous regions of Nepal like
Darchula have until recently been able to retain control over
their yarsagumba resources. How has this been possible?
Collection of yarsagumba is done on government-owned,
community-managed alpine meadows, and collectors need
the ability to work and live at high altitude under harsh
conditions for extended periods. Moreover, despite several
attempts at establishing cultivation of yarsagumba, the
resource is still only collected in alpine meadows in Tibet,
Bhutan, Nepal, and India. While non-mountain dwellers in
Nepal are attracted to the high incomes linked to
yarsagumba collection, few are able to live and work
competitively at high altitude. Hence, the product’s
altitudinal range, coupled with the technological and
ecological barriers related to its cultivation, provides a
• Given the potential of yarsagumba to alleviate poverty in remote areas that have not benefitted from development interventions
in the past, national political attention should be focused on measures to maintain and increase collector incomes. Such
interventions should be oriented towards:
- Minimizing bureaucratic interventions such as collection and transport permits, that serve to increase costs for collectors
and traders, which are not based on documentation that harvest is unsustainable.
- Ensuring that yarsagumba incomes mainly benefits collectors, traders, and local communities.
- Establishing a clear legal framework for regulating access to yarsagumba collection sites, for example by formally handing
over alpine meadow management rights to local communities.
- Research to understand how yarsagumba availability and ecological sustainability in the wild is changing (due to factors
such as yarsagumba collection, and livelihood and climate changes in the Himalayas). This will help to develop collection
guidelines that enable upland communities in Nepal to maintain this livelihood activity in their portfolio in the future.
• Research to close the knowledge gap surrounding the drivers of demand for yarsagumba and enable collectors, traders, and
central wholesalers to adjust their production and processing to the increasing demand and its changing drivers.
Recommendations for policy and future research
distinct comparative advantage for mountain-dwellers in
the market. Buyer-supplier relationships in the yarsagumba
production network are highly trust-based; trustworthiness
is established over time in connection to successful
transactions and lack of established relationships is a
barrier to entry for new traders and central wholesalers.
Yarsagumba income is used for capital investment in upland
Nepal (Shrestha and Bawa, 2014), including the
construction of better houses, education of children,
purchase of healthcare and food, indicating the potential
of this trade to contribute to poverty alleviation.
Threats to yarsagumba collectors’
livelihoods
The traditional control of high altitude resources by upland
communities is under pressure. Lowland communities have
started to restrict upland communities’ access to winter
grazing areas at low altitude as a way to negotiate their
access to upland yarsagumba collection areas. This
inevitably affects high altitude livelihoods for which
livestock rearing is a key subsistence and cultural pillar. The
lack of a clear legal framework for regulating access to
yarsagumba, coupled with the large number of actors
involved in the market, could lead to rent seeking and to
the exacerbation of conflicts surrounding access to
collection areas, with a potential reduction of income and
benefits for upland collector communities.
Very little is known about the ecological sustainability of
current levels of yarsagumba collection. Several collectors
in Darchula have mentioned that the volume of their yearly
collection has decreased over the past years, but it is
unclear whether this is due to an increased number of
collectors in the district or to a decrease in yarsagumba
availability.
End consumer products and drivers of demand for Nepalese
yarsagumba remain unknown and undocumented, despite
evidence indicating that Tibetan yarsagumba is used as an
aphrodisiac in China. Hence, collectors, traders, and central
wholesalers are unable to adjust their production and
processing to the demand of end consumers. Establishing
a processing industry in Nepal would enable the country to
benefit from value addition.
Given the economic importance of yarsagumba to high
altitude households, public policy interventions should aim
to maintain and increase this income. The recent
Government of Nepal yarsagumba management directive
(MFSC, 2017) is oriented towards regulating collection and
trade through permits and rules on collector behaviour
based on the assumption that collection is unsustainable.
There is, however, no evidence that yarsaguma collection is
ecologically unsustainable. This indicates a need to
reorient government attention towards measures that will
act to sustain or increase collector incomes while
maintaining the resource base and avoiding relocation of
benefits to non-collectors.
Copenhagen Centre for Development Research
Pieces of yarsagumba
Series editors
Mattias Borg Rasmussen &
Tirza Julianne van Bruggen
Department of Food and
Resource Economics
University of Copenhagen
www.ccdr.ku.dk
www.ifro.ku.dk/english
Design Kent Pørksen
Layout Malene Jensen-Juul
Authors
Mariève Pouliot, Dipesh Pyakurel &
Carsten Smith-Hall
Department of Food and
Resource Economics,
University of Copenhagen, Denmark
The Copenhagen Centre for Development
Research (CCDR) policy briefs present
research-based information in a brief and
concise format targeted policy makers and
researchers. Readers are encouraged to make
reference to the briefs or the underlying
research publications in their own publications.
ISSN 2246-6800
Title: Policy briefs (Copenhagen Centre for
Research and Development) (Online)
POLIC Y BRIEFS - NO. 02 • MAY 2018
Yarsagumba collectors
References
Bauer, K.M. 2004. High frontiers. Columbia University Press, New York.
Childs, G. and Choedup, N. 2014. Indigenous management strategies and socioeconomic impacts of
Yartsa Gunbu (Ophiocordyceps sinensis) harvesting in Nubri and Tsum, Nepal. Himalaya 34(1): 8-22.
DDC Darchula, 2015. Annual progress report of District Development Committee.
District Development Committee, Khalanga.
MFSC, 2017. Yarsagumba Management (Collection and Transport) Directive 2073. Ministry of Forests
and Soil Conservation, Department of National Parks and Wildlife Conservation, Kathmandu.
MoFALD, 2017. GIS district map. Local governance and community development programme (LGCDO)
– II. Ministry of Federal Affairs and Local Development, Kathmandu.
http://lgcdp.gov.np/sites/default/files/GIS/75_Darchula.jpg (accessed 31.03.2018).
Pouliot, M., Pyakurel, D. and Smith-Hall, C. 2018. High altitude organic gold: The production network
for Ophiocordyceps sinensis from far-western Nepal. Journal of Ethnopharmacology 218: 59-68.
Shrestha, U.B. and Bawa, K.S. 2014. Economic contribution of Chinese caterpillar fungus to the
livelihoods of mountain communities in Nepal. Biological Conservation 177: 194-202.
