The opening of a "regulated market place" for yartsa gunbu in Lhasa planned for May 2011 is potentially a significant setback for Tibetans communities, many of whom rely on the trade with the fungus as their main source of income. The new market, which runs under the name 'Shun Xing Market', is located at the crossing of East Lingkhor (Chin: Linkuo) Road and Jiangsu Road. More than 20 guards, working shifts will ensure 24-hour security and safety for the market. All available information indicates that the market will be run by Chinese Muslim (Hui) traders who are also ethnic Tibetans' main competitors in the yartsa gunbu trade.

Yartsa gunbu (Cordyceps sinensis, or caterpillar fungus) is a finger-length fungus that grows out of the head of the ghost moth larvae while it hibernates in the ground'(1). It is widespread in many parts of the Tibetan plateau itself as well as in neighbouring Himalayan regions. Both the desiccated larva and the fungus are collected and used for medicinal purpose. Yartsa gunbu is known in traditional Tibetan medicine (TTM) but is not very commonly used, whereas its huge popularity in traditional Chinese medicine (TCM) has led to an explosion in demand in the Chinese mainland as well as among Chinese communities outside the PRC. Recent years therefore have seen a rush for yartsa gunbu in the regions where it naturally occurs. Accounting for an estimated 40% of cash income for rural households, yartsa gunbu has become a key resource for Tibetans, allowing for whole villages to raise themselves out of poverty where government-run development programmes have failed for decades'(2).

While Tibetans collect the fungus, the trade with it has long been a quasi-monopoly run by Chinese Muslim (Hui) immigrant networks that, in contrast to Tibetans, have easy access to markets in the Chinese mainland and control most of the general trade in Tibetan regions. These networks have branches in all strategic trade hubs and entertain excellent relations with the authorities, the basic condition of successful business in the PRC and in particular in the western regions.

In recent years, however, Tibetans yartsa gunbu collectors successfully organised themselves, ensuring that at least the regional trade remains in Tibetan hands. Particularly successful were new trade networks run by eastern Tibetans (Khampas) who could organise parts of the distribution of yartsa gunbu out of Tibetan regions. With that, alternatives to the market structures dominated by Chinese Muslims have emerged which significantly augmented the Tibetan share in profit from the yartsa gunbu business.

The rationale given for opening the new market in Lhasa, an important hub of the trade, is, according to its designated manager, Ma Junsheng, who is a Chinese Muslim, to secure "credibility and quality" of the traded yartsa gunbu. Major problems in that regard are, however, not known. Fraud, where it occurs, takes place at the retail level or in the manufacturing of products derived from yartsa gunbu, both of which take place in the Chinese mainland, not in Tibet. Another rationale mentioned by Ma is to "save consumers" their trips "to other places". It is not, however, consumers who travel to Tibet to buy yartsa gunbu but mainly distributors from the mainland. These represent the market that the Tibetan producers have been attempting to access by bypassing the Hui businesses. Additionally, the annual lease for space at the new market varies between 25,000 yuan and 100,000 yuan (UK£2,320; US$3,830; EUR€2,620 and UK£9,290; US$15,315; EUR€10,480). These amounts are viable for trading networks like the Chinese Muslims', as they deal in huge quantities of yartsa gunbu but they would in most cases overstretch the financial capacities of many smaller local traders, i.e. Tibetans.

In other words, the officially backed new market in Lhasa builds on consumer protection regulations for which there is no apparent need in Tibetan regions, while it potentially undermines the market share of independent Tibetan producers and their efforts to enhance their share of profit.

Regulations in Tibet, chaos in Nepal

While trader networks bank on the enforcement of laws and regulations in Tibet, their efforts to find cheaper alternatives to Tibetan producers has resulted in a wild growth of the yartsa gunbu business beyond the Tibetan border and into Nepal, adding to the rampant lawlessness and corruption there. Yartsa gunbu collection was illegal in Nepal until recently, except for personal consumption, but the pressure generated by demand in the PRC led the Nepali government to withdraw this policy.

Reports from Karnali district, the region in the far west of Nepal that borders Tibet, indicate that corrupt officials have compelled locals to harvest yartsa gunbu, threatening to otherwise withdraw the government rations of rice and salt they are entitled to. District forest officials have sold licenses to collect yartsa gunbu, along with other medicinal products, without disclosing any regulations. This allows officials to fine the collectors if they make any transgressions of rules that they are ignorant of. Traders then pay a very low fee to locals who are ignorant of the high market value of the fungus, while paying only a third of the required customs duties at the local airport in Jumla from where some of the yartsa gunbu is taken out of the country.

In order to avoid duties and maintain low prices, other smugglers hide yartsa gunbu and other medicinal plants in sacks of rice and pulses, which are then brought across the border via the Arniko Highway, the Chinese-built road between Kathmandu and Lhasa which runs through the Sindhupalchowk region. In spring 2010, border security force are said to have seized up to 36 tonnes of banned plant products in three months alone. Seized trucks were handed over to the District Forest Office (DFO), according to the law, but in many cases the vehicles were released the following day after payment of a 'fee' to the forest officers. There have also been several cases of Chinese nationals being arrested in Nepal's border regions for illegally collecting yartsa gunbu or smuggling the fungi across the border.

Locals often oppose the collection of yartsa gunbu, sometimes violently, for a number of reasons. It might simply be that they are protecting their resources from outsiders, or because the collection of yartsa gunbu raises objections in these remote communities for more complex, religious reasons. In June 2009, for example, seven men from lowland areas of Nepal, who came to the Annapurna region to collect yartsa gunbu, were attacked with sticks and knives by local villagers and their bodies thrown into mountain ravines. Thirty-six men from a remote village were arrested and are still awaiting trial.

Notes:
1: For more details about yartsa gunbu, see: Yartsa gunbu, Tibet's underground cash cow (www.tibetinfonet.net/content/update/98).
2: On the economical significance of yartsa gunbu and related issues, see: "It reaches into every aspect of rural Tibetan life" (www.tibetinfonet.net/content/update/127).