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G.K. Nair

Kochi , Oct. 10

THE delay in announcing the WTO-compatible subsidy by the Union Commerce Ministry for export of black pepper even after clearance from all the concerned ministries and the expert committee has upset growers and traders.

A delayed announcement will not yield expected results, as harvesting of the new crop is expected to commence next month. Besides, the grinding industry and wholesalers are said to have gone for imported pepper already.

"If the announcement is made without further delay, an estimated 10,000-12,000 tonnes of unsold stock with the exchanges would get absorbed, besides creating a positive impact on the domestic price," trading sources told Business Line.

Once the new crop enters, liquidating the old stock in the market might become a problem, they said.

According to sources in the Ministry, it is working on the scheme amount, the volume to be exported and the scheme validity, etc. They added that the proposal would be announced soon.

The expert committee seems to have excluded cardamom for export subsidy, besides deleting certain components relating to pepper. As a result, the total amount agreed upon is said to have been reduced to Rs 14 crore from Rs 22 crore proposed originally.

The WTO-compatible subsidy would make the Indian produce competitive in terms of price in the overseas markets.

Besides, it would help regulate the supply, which in turn would arrest the fall in prices while the farmers would get a remunerative price, they said.

The Kerala Government had procured around 4,800 tonnes of black pepper directly from the growers through its agency — the Cooperative Marketing Federation (Marketfed) — at Rs 75 a kg.

If the entire quantity is released in the domestic market at the prevailing price of Rs 56-60 a kg, that would not only cause heavy losses to the Marketfed, but would also lead to sharp fall in prices.

Hence the Government had decided to export the entire quantity.

But holding the stock for long in warehouses would lead to loss in weight and deterioration in quality, they claimed. Subsidy has become inevitable to make the price competitive in the international market, State Government sources said.

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