Financial Daily from THE HINDU group of publications
Tuesday, Feb 28, 2006
Agri-Biz & Commodities
Spices & Condiments
Low cardamom prices pose problems
Growers have little to plough back from lower returns
IMPROVING SCENARIO: Cardamom plantation in the final stage of harvest at an estate in Poopara in Kerala's Idukki district. Prospects for cardamom look bright, though prices have scaled lower in the last couple of years. - K.K. Mustafah
Kochi , Feb. 27
LOW prices for cardamom in the current season have created problems for the growers, leaving nothing for them to plough back to nurture their plantations.
The average price during the current season is around Rs 200 a kg compared with the average auction price of Rs 622.87 during 2001-02. Since then the prices have been declining and it has reached such a level that it is not at all remunerative, according to Mr T. Ashok Kumar, President, Kerala Cardamom Growers Association (KCGA).
Soaring cost of agricultural inputs coupled with high wages of labour had pushed up the cost of production of late making cardamom cultivation non-remunerative, he told Business Line.
The Kerala Government, he said, has enhanced the minimum wages by Rs 5.46 to Rs 92 a day. When bonus and other fringe benefits are added the wages now come to Rs 120 a day. Thus, the picking cost comes to Rs 30 a kg while for drying Rs 35 is doled out per kg.
In addition, there would be expenses for pruning, shading etc. The cultivation expenses in 2004 per acre are estimated at Rs 87,275 excluding capital investments and interest on cultivation expenses, he said.
As against this, the yield from well-managed one acre of plantation would come to an average of 400 to 500 kg.
Thus, the income would range between Rs 80,000 to Rs 1 lakh, which lands up many growers in loss while some could hardly break even.
Last year, the weather was favourable resulting in a good crop. But, this year so far there has not been any summer showers. The water table had already dropped making irrigation difficult now, he said.
Add to this, the crop is grown in Cardamom hill reserve (CHR) and due to environmental reasons related to conservation of forests neither the Government nor the growers can think of abandoning the crop also, he pointed out.
In fact, the prevailing non-remunerative prices have resulted in the farmers' loan liabilities mounting. Currently, the total liability is put at around Rs 150 crore.
The worst affected are the growers in Kerala's Idukki and Tamil Nadu's Theni districts.
The poor return from cardamom in this belt where the growers subsist mainly on cardamom crop has also affected the commercial activities in the region.
Consequently, there was a decline in commercial activities in the areas by an estimated 35 per cent, Mr Ashok Kumar pointed out.
The only solution to ensure remunerative prices to cardamom growers was to increase the per capita consumption of the aromatic spice in the country and abroad, he said. The Centre and the Spices Board should, therefore, draw up and implement comprehensive plans to promote export of cardamom.
According to him, the Board has already in its possession a Cardamom Development Fund of Rs 7 crore, which could be utilised effectively for exploring its new applications in various other fields.
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