The Agri Conclave, promoted by MCX in association with BusinessLine , has recommended holistic solutions to problems in the pepper and cardamom sector in such a way as to balance the interests of the growers and consumers, and at the same time, promote value addition for exports.
The focus of the session, conducted in Kochi on Thursday, was on growers. The panellists were unanimous in their view that growers should get remunerative returns to help them continue in farming. However, fluctuating volumes in production and volatile prices due to climate vagaries discouraged processors and exporters from taking a long term view. It was also argued that the sector needed investments to develop climate-resilient varieties.
There were also contrasting views on the imposition of minimum import price (MIP) on pepper. While this may have been intended to support domestic prices, there was a view that it actually distorted the market and prevented natural price stability.
Suggesting that farmers must look at net farm returns rather than the price per kilogram, industry veteran Philip Kuruvilla urged scientists to make efforts to increase farm returns. To achieve this, he said, innovations would have to take place at the farm level with local technology for selection and multiplication of high yielding varieties. There was a need to shift the focus from commodity to manufactured products to reduce price risks and gain high value addition. With direct selling opportunities in online sales platforms, he said farmers should be in a position to add value and sell directly to consumers.
Shaji Varghese, president of the Cochin Chamber of Commerce and Industry, pointed out that besides pepper and cardamom, commodities such as cashew, tea, rubber were passing through a difficult phase due to drop in prices. To achieve competitiveness and revival of the sector, he suggested captive farming, digitalisation at different stages, increasing productivity, enhancing transparency, developing in-house marketing as well as attracting the younger generation to farming.
Later in the panel discussion, V. Unnnikrishnan, senior vice president, A.V. Thomas Group of Companies, highlighted climate change, price instability, and labour shortages as the biggest challenges in the commodities sector. It was important for a crops such as cardamom and pepper to employ experienced hands to get the optimum yield. Today, the sector was forced to depend on migrant labourers, who lacked expertise in farm-related activities.
Given that quality planting material was the need of the hour during the times of climate change which was affecting production, A.B. Rema Shree, director (R&D), Spices Board, said that the board had developed several high yielding pepper varieties. She suggested that export-oriented quality control should be maintanined at the farm level.
Prakash Namboodiri, chairman, All India Spices Exporters’ Forum, said that since pepper production had been on the rise globally, there was a need for collaborative work among all the stakeholders for the survival of the industry. “India should not try to work in isolation. We should be in sync with the global trends”, he said.
Deepak Mehta, head, energy and agriculture, MCX, said the exchange was planning to start an additional delivery centre for cardamom at Bodinayakannur in Tamil Nadu for the next season to improve physical deliveries. There were also plans to rejuvenate black pepper contracts this month, as the markets right now were volatile due to various factors.
According to G. Chandrasekhar, commodities market specialist, the pepper market was full of uncertainties. There was production uncertainty, quality uncertainty, market uncertainty. All these risks converged into one factor, which was the price. If the price risk was managed properly, one could manage all the other underlying risks. Therefore, price risk management was critical. “It is erroneous to believe that hedging is speculation. The fact is, hedging is not speculation”, he said.
The Indian market was increasingly integrating with the global market through its trade and investment routes. Therefore, stakeholders in the pepper value chain must have a world view rather than only a domestic view, he said.
Rajalakshmi Nirmal, Deputy Editor, BusinessLine, moderated the panel discussion.
Earlier, Lokeshwari S.K., Associate Editor and Chief of the Research Bureau, BusinessLine, welcomed the gathering comprising producers, traders, exporters and representatives of industry bodies.
