Indian coffee farmers, who have been burdened with lower yields this year, are facing another problem with sharply declining pepper output.
pepper often intercropped with coffee and areca in the states of Karnataka, Kerala and Tamil Nadu in India. While coffee production is estimated to fall by 15-20% this year, pepper output is expected to decline by more than 30%, according to Deccan Herald.
In 2018-2019, India harvests 64,000 tons of pepper and is estimated to decrease to about 45,000 tons in 2019-20.
In 2017-2018, pepper production reached 70,878 tons due to the districts of Kerala state and 5 districts of Karnataka affected by heavy rain, floods and landslides, causing damage to plantations resulting in low yields.
Harvest of pepper begins in February. The state of Karnataka accounts for about 50% of domestic pepper production, followed by Kerala and Tamil Nadu.
The current decline in pepper production is due mainly to erratic climatic conditions in crop areas in southern India.
The crop was initially affected by the drought until July and then excessive rainfall in August and September destroyed the crop, said R Sanjith, Head of Commodity Division of the Growers Association in South India. (Upasi) said.
However, despite lower yields this year, pepper prices down to 319 rupees / kg from about 700 rupees / kg 4 years earlier.
The decline is mainly due to excessive imports from Sri Lanka and Vietnam. India has imported about 11,000 tons from Sri Lanka, which exports about 80% of its production.
According to Vishwanath, Coordinator of the Black Pepper Growers Organization, Sri Lanka has exported pepper to India using the Indo-Sri Lanka free trade agreement.
The island nation can export up to 2,500 tons of duty-free pepper and the remaining balance only has to pay 8% import tax.
It is also said that Sri Lanka imports pepper from Vietnam and re-exports to India because direct import from Vietnam to India loses up to 50% of import tax.
“This has affected price volatility in the domestic market. Prices have not increased because of excessive import ”.
In 2017-2018, India imported 29,650 tonnes worth 10.91 billion rupees and in 2018-2019, imports fell to 24,950 tons worth 7.8 billion rupees.
General Director of Foreign Trade of India (DGFT) announced the minimum import price (MIP) of 500 rupees / kg for black pepper to control the increasing import of goods into the country. Prices are currently at 300 rupees / kg.
Despite this, poor quality pepper is still being smuggled across the border, according to the Karnataka State Cultivation Association (KPA).
Over the past two years, coffee and pepper growers have faced two major problems: low yields and falling prices.
“Due to import, pepper prices have not increased despite low domestic production last year. The same situation is expected to continue this year, ”Mr. Vishwanath said.
These factors put increasing burdens on plantations and pushed growers into a severe financial crisis, former KPA president M B Ganapathy said.
KPA has requested the continuation of the MIP program to prevent pepper exports and to maintain vigilance at the border to avoid pepper smuggling.
Plantations also need tax breaks and incentives from the government to overcome this economic crisis and develop sustainably.
