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G.K. Nair

KOCHI, June 27

WITHDRAWAL of minimum purchase price (MPP) and minimum export price (MEP) for coir has driven thousands of coir workers and small-scale manufacturers in deep crisis.

There are 12,000 small manufacturers of coir products employing around 35,000 workers. Following the withdrawal of the MEP and MPP as part of the liberalisation policy, the exporters brought down the prices by 35 per cent while the wages were cut by 25 per cent, Mr M.P. Pavithran, President, Kerala Small-Scale Coir Manufacturers Association, told Business Line.

He said that the exporters were attributing the reduction in minimum purchase price to the sharp fall in the prices in the international market.

"The exporters claim that to remain competitive in the global market in terms of value, there should be a cut in cost of production, which is possible only by reducing the price of the raw materials and the wages," he added.

But, he alleged, the exporters were competing among themselves and had resorted to undercutting so as to get orders from the foreign market at the cost of the poor workers and small manufacturers.

"Besides, they are not buying directly from the manufacturers; instead, purchases are made through intermediaries - depot agencies."

According to Mr Pavithran, an agreement was reached with the major exporters on December 26, 2001 and it was agreed upon that existing prices would be paid apart from effecting three per cent increase in wages.

Besides, it was also accepted that the companies would place orders directly with the small-scale producers. "But these clauses of the agreement have been violated."

In 1973, Kerala had introduced the minimum purchase price and therefore, the State Government must bring it back. Similarly the minimum export price should also be restored, he said.

The workers and the small manufacturers are on the warpath now, and are holding dharnas before the major exporting firms.

Admitting that the withdrawal of the MEP and MPP had its negative impact on the manufacturing sector Mr George Varughese, Vice-Chairman, Coir Board, and coir industrialist, said: "It is a weak sector and the sustenance of so many people depends on coir manufacturing. But such a crisis could not be avoided when the prices are determined by demand and supply."

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