A Brief Case Study on Socio-Economic Effect of the Caterpillar Fungus on Contemporary

Tibet

Over the past four decades rapid economic development in China has led to massive urbanisation in
the interiors and significantly improving healthcare and education levels. However, this urbanisation
and increased literacy and health has not been uniform, leaving behind the traditionally
marginalised hinterlands like the Tibetan Community mostly concentrated in the Tibetan
Autonomous Region (TAR) and the Qinghai Province. This misalignment is a result of the inherent
differences in traditional Tibetan lifestyle and Chinese state policy implementation and the resultant
conflict this difference leads to. While a popular traditional Tibetan way of life is as Nomadic
pastoralists, the Chinese state emphasises on the importance of a sedentary life for both socio-
economic progress but also, more significantly, easy monitoring and state security. To achieve this
objective, the government even implemented the Ecological Migration Policy to encourage and in
some cases even force the nomadic pastoralists to sell their livestock (mostly yaks) and settle down.
Thus, the contemporary Tibetan population can be classified as either pastoralist herders tending
yaks and living a nomadic life, or as resettled former pastoralists trying to integrate into urban life
and receiving a monthly stipend called PES (Payment for Ecological Services) as compensation for
migration. In either case, their economic situation is far from comfortable and they do require
additional sources to substitute income either from pastoralism (sustenance at best) and PES (not
enough to cover event the basics). This is where the need for harvesting the Cordyceps Sinensis or
caterpillar fungus, as it is called in the west, becomes necessary.

The booming caterpillar fungus economy, according to some reports contributing to as much as 40
percent of the cash income of rural Tibetans, has over time come to be an integral part of Tibetan
political, economic and social life. Yartsa Gunbu, as it is called by the locals, is formed when the
fungal spores enter the ghost moth caterpillar who subsequently die during hibernation and the
fungus slowly fills the caterpillar’s entire body and even mushrooms out of its head. The
environmental conditions required for such biological set of events to transpire means that this
fungus grows only in the alpine Tibetan plateau at altitudes greater than 5000 meters. In May it is
harvested by children and workers alike who scavenge through the earth on all fours looking for the
fungus infested dead caterpillars on the plateau. Its economic significance to the economy is
elucidated by the fact that in 2013 the retail value of nearly 50 tonnes of the fungus harvested was
1.2 billion USD, or equivalent to 50 percent of the earning form tourism, the biggest industry in the
area. One specimen of the caterpillar fungus costs roughly 125 USD, making it more expensive than
an equivalent amount of gold, justifying its name as ‘Tibetan Gold’.
The demand and soaring price of the fungus can be attributed to a variety of factors such as the
Chinese state mandate to promote Traditional Chinese Medicine (TCM) granting it official
legitimacy, its revival post the 1993 World Athletics Championships where a team of unknown
Chinese runners posted world recording breaking speeds and their coach attributed enhanced
performance to a tonic made of the fungus, the 2003 SARS epidemic and claims of the fungus
exacerbating recovery rates, and most importantly rapid economic development in China and the
burgeoning number of super rich seeing consumption and gifting of the fungus as a status symbol.
However, the ensuing gold rush has had an unalterable effect on the landscape of the Tibetan
plateau.

First, the economic opportunity presented by the fungus has enticed Han Chinese workers to
immigrate to TAR during harvesting season. This has fuelled the feeling of resentment within the
Tibetan population who see it as another form of economic mistreatment by the majority ethnic
group who not only get preference in the job market in the industries of mainland China but are now
stealing their source of wealth as well. This feeling is particularly amplified in the face of increased
mining and other resource extraction projects being undertaken by Chinese companies, destroying
the natural environment seen as sacred by the Buddhist Tibetans, who often bring their own (Han
Chinese) workers with them. This resentment is often projected through an increase in separatist
sentiments and movements as well as cases of physical violence and riots, such as those in 2008.

One of the main reasons of economic backwardness of the Tibetan population is poor education
which prevents participation in the urban workforce. This problem is further exacerbated by the
booming caterpillar fungus industry in the long run as during the harvesting season in May parents
often keep their children at home instead of sending them to school as their sharp vision and small
body stature makes them perfect for looking for fungus. As research by Wang and Tang (2017)
indicates, increase in wealth by successful fungus harvest has a negative correlation with education
and actually leads to disinvestment from that sector, as to avoid the need to justify absences and
deal with government officials wealthy pastoralists choose to withdraw their kids altogether. This is
caused as the promise of a better life through education seems vague to most tibetans, as first the
poor quality of primary and secondary education received in the rural areas makes them unqualified
for most urban jobs, there is also the mental stigma that they are going to be discriminated against
in the cities anyway. This leads to complacency among the recently wealthy who become
“complacent when life becomes satisfying … (than) strive for a vaguely understood ‘better life’”.
While the caterpillar fungus economy has integrated Tibetan pastoralists into the Chinese economy
it has also increased their marginalisation by making them traders of a luxury good and so “highly
vulnerable to the whims of the Chinese urban consumer demands” while limiting their livelihood
options. On the positive side however, it has increased short term welfare and quality of life by
increasing investments in healthcare products while also causing greater social cohesion through
greater cultural and religious activities. Moreover, it has given the pastoralists a degree of autonomy
and independence from the wage economy while allowing the government means of providing
economic mobility and relief in times of calamity and emergency such as during the earthquake in
Yushu in 2010 which killed 2,600 people and devastated the economy, in response to which the
government launched an annual “caterpillar-fungus culture festival”, attracting buyers and so
providing monetary liquidity.

To conclude, I would argue that the economic benefits brought about through trade and harvest of
caterpillar fungus has led to an improvement in the quality of life of the Tibetan population by
providing them access to the basic necessities of life. However, this short term increased welfare
could lead to the characteristic negative outcomes associated with the resource curse in the long run,
through stifling development of other sustainable industries in the region. Given that annual harvest
is consistently decreasing due to over exploitation this becomes a particularly pertinent topic.
Similarly, the divestment from education would have a negative economic effect in the long run,
even though it’s leading to the preservation of the Tibetan cultural way of life in the short run by
allowing parents to directly teach vocational and life skills to their children in time that they would
have spent at school. Instead of seeing it as a panacea for the economic ills in the plateau, a more
balanced approach should be taken while evaluating the issue, possible regulating harvest through
state assigned quotas to avoid over harvesting, more numerous and accessible public schools in the
plateau which prepone summer vacations during the harvest season, and state investment in setting
up industries in the region that both hire Tibetans as well as provides them with economically
valuable technical skills.

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