A fungus that grows out of the head of dead caterpillars has evolved into a lucrative pursuit for farmers and others seeking riches in the Himalayas. This year the elusive medicinal mushroom, known as nature's Viagra, is fetching record prices, and in some cases has led to armed clashes. VOA's Steve Herman recently went to the Bhutanese capital of Thimpu to found out why.

A closeup shot of harvested cordyceps

To scientists the fungus that invades caterpillars' bodies and kills its host is known as cordyceps sinensis.

The people of Bhutan refer to it as yarchagumba where it has long been a folk medicine. For buyers in China it is a remedy for everything from anemia to impotence. And it is rapidly becoming a popular herbal treatment in the United States and Europe.

Sellers showing up at Bhutan's annual cordyceps auctions this month are finding very receptive buyers. The fungus is fetching a record price of nearly $9,000 a kilogram, an increase of 250 percent from last year. In the early 1990's, it could be had for as little as $5 a kilo.

One of the buyers at the auctions, Bio Bhutan managing director Karma Yangzom, explains what traders believe is causing the most recent price surge.

Karma Yangzom (center) inspecting cordyceps for sale at auction

"This year in the world market the supply has gone down, because the harvest was not good in China and Tibet," she noted.  "They were able to harvest a lot of cordyceps in Nepal but that was seized by the Maoist rebels which left only the Bhutanese cordyceps available in the world market."

Even in the best of times collecting cordyceps is more art than science. Some farmers and herders abandon their crops and animals in Bhutan, Nepal and Tibet to crawl flat on the harsh terrain more than 4,000 meters above sea level, hoping to spot the fungus protruding from the soil.

Nepal banned collecting cordyceps until 2001. In Bhutan, a similar prohibition was in place until 2004 to protect the rare fungus. Now limited trade is permitted so farmers can supplement meager incomes.

With prices so high for the fungus, harvesters are willing to use violence to protect supplies. A human rights organization in Hong Kong reported that earlier this month, gunfights broke out among groups of ethnic Tibetans fighting over the right to harvest cordyceps in southwestern China.

Bhutanese exporter Karma Yangzom and other buyers, hoping to satisfy a swelling demand overseas, are not satisfied with what has been brought to this season's auctions.

"Usually the price is very much based on the quality," she added.  "But this year in the auctions everything has become so crazy. In some cases, even the poor quality cordyceps is fetching very high prices because the competition is more, because the demand is high in the five auctions that we've attended not much has come into the auctions in terms of quantity. It has been very low, so everybody is competing for it."

Officials here say some 700 kilograms is exported annually - about one-third of Bhutan's estimated potential yield. But many of those hardy enough to brave the climate to search for it come up empty-handed. The lucky ones make it to the auctions, some clutching as little as a few precious grams. But even that now brings enough to provide several months of food and other necessities for a typical rural Himalayan family.