/ 24 November 2007

Saffron pay boost casts cloud over industry

The laborious work starts well before dawn. Frigid temperatures greet pickers like Ebrahim Baratnejad as they head for the fields to set about the crocuses that yield up one of the most precious ingredients of the Eastern kitchen.

But despite the early starts, the eight-hour shifts in the open fields and the fiddly work extracting saffron stigmas from the flowers, Baratnejad is a picture of contentment. He’s been doing this kind of work for a pittance since he was 12. And now, suddenly, it has started to pay a whole lot better.

In fact, Baratnejad has never had it so good. This year his daily income has doubled to about R22 and he has no doubt about who to thank — Mahmoud Ahmadinejad, the Iranian President.

”I am better off and it’s all since the change of government. Mr Ahmadinejad has been very good for me,” Baratnejad enthuses, following a move by the president to increase at a stroke the market price of saffron.

”He has also helped us with other things, such as giving loans, for example to buy dairy cows and establish gardens for growing crops,” he adds.

The feel-good factor is shared by many in nearby Vorezg, a ramshackle village of 900 people in the heart of the saffron-growing Ghaenat region, in one of Iran’s poorest provinces, South Khorasan.

Generous government loans and grants have enabled many people to rebuild their homes and install indoor bathrooms in an area previously without running water. The public bathhouse has become derelict in the dash for modernity, while a long-established exodus of local people has been halted.

”Before, people who wanted to get married had to leave this village because it had nothing, but that’s no longer the case,” says Mehdi Vorezgi (22), a saffron, wheat and pistachio farmer. ”The reason is the government and the rise in the saffron price, which has increased by 100% to 150%.”

The feeling of well-being is a dividend of Ahmadinejad’s drive to impose his brand of populist economics on one of the world’s oldest trades. Two years ago, he raised the trading price from about R2 200 to R5 360 a kilogram.

Double-edged

But the intervention has proved double-edged. Farmers may be celebrating, but Iran’s place as the world’s pre-eminent saffron exporter is slowly being eroded. Iran has been exporting saffron — reputed to be an aphrodisiac as well as an antidote to depression and cancer — for 3 000 years and produces 96% of the spice sold globally. But the higher prices have forced many exporters out of business.

Experienced industry figures say Iran is losing its position in the highly competitive world saffron market to countries such as Morocco and India because of the government cooperative’s lack of expertise. Long-established laboratory procedures are being ignored, they say, thus undermining Iran’s reputation for top-quality saffron.

Even firms publicly uncritical of Ahmadinejad’s changes admit they are struggling. ”Now that the price is higher, the consumer is cutting consumption. With less demand, we have to reduce our supply and cannot use our full capacity,” says Mohsen Ehtesham, MD of Tarvand Saffron, which markets saffron for retail after its workers have extracted the spice from its stigmas and loaded it into high-powered drying machines.

With exports last year plunging to 60 tonnes, compared with 180 tonnes three years ago, the government has been forced to concentrate on domestic consumption. Amid a fivefold rise in saffron’s shop price, the state cooperative last year recorded a £2,3-billion profit from sales inside Iran. But exporters’ profits have been decimated.

Backlash

Ahmadinejad has dismissed complaints as the inevitable backlash from corrupt ”economic mafias”, which he has pledged to confront.

But Saeed Ghaffarzadeh, MD of Technopan, an export company that has seen earnings drop to one-sixth of their previous level, predicts that farmers’ gains will be short-lived because long-standing international customers are snubbing the government-backed dealers.

”We pleaded with them not to do this. They want to support the farmers, but really they have destroyed everything, including our export position and our name,” he says.

For now, farmers see only the incentive to produce more of the spice.

”Beforehand, the price wasn’t good enough either for workers or farmers,” says Heghdad Saffari (40), a saffron farmer and local agriculture ministry official. ”Mr Ahmadinejad’s decision was just. Pickers were working hard in the fields but it was the middle-men who benefited. Now they are paid more.”

At a glance

  • Saffron is derived from the saffron crocus, Crocus sativus, a bulbous perennial of the iris family (Iridaceae).

  • It is prized for its golden-coloured stigmas, which are dried and used to flavour and colour foods in many Mediterranean and Oriental dishes.

  • A golden-coloured dye produced from saffron stigmas has been used to dye fabric in India for thousands of years.

  • Saffron was used as a perfume in Greek and Roman times to decorate halls, courts, theatres, and baths.

  • It is grown in Spain, France, Sicily, Italy, Iran and Kashmir.

  • In the past it has been worth more than its weight in gold, and it remains the most expensive spice in the world.
  • — Guardian Unlimited Â