Erratic climate takes toll on pepper output

Domestic coffee growers, who are burdened with lower bean production this year, are on the verge of facing another problem with a sharp fall in pepper production.

Pepper is normally grown as an inter-crop with coffee and arecanut in Karnataka, Kerala and Tamil Nadu. While the coffee production is set to fall by 15-20% this year, the pepper output is projected to see much sharper fall of 30%.

In 2018-19, India harvested 64,000 tonnes of pepper, while it is estimated to dip to around 45,000 tonnes for 2019-20. In 2017-18, pepper production stood at 70,878 tonnes as all districts of Kerala and five districts of Karnataka were affected by heavy rain, flood and landslide, which damaged plantations resulting in low output.

The harvesting of pepper begins in February. Karnataka accounts for about 50% of the domestic pepper production in the country and is followed by Kerala and Tamil Nadu.

“The decline in pepper production during the current crop is mainly due to erratic climatic conditions in the growing regions in South India. The crop has suffered initially due to drought till July and later excess rainfall in the months of August and September damaged the crop,” said R Sanjith, Head of Commodities, United Planters Association of Southern India (Upasi).

However, despite lower production this year, the prices of pepper have crashed to the range of Rs 319 per kg compared to around Rs 700 per kg four years ago. “The decline in prices is mainly on account of import of the commodity from Sri Lanka and Vietnam. The country has imported around 11,000 tonnes from Sri Lanka, which exports around 80% of its produce,” he said.

According to Vishwanath, Coordinator of Black Pepper Growers Organisation, Sri Lanka has been dumping its produce in India by making use of the Indo-Sri Lanka free trade agreement. The island nation can export up to 2,500 tonnes duty-free and the balance by paying a mere 8% import duty.

It was also alleged that Sri Lanka imports pepper from Vietnam and re-exports to India because direct imports from Vietnam into India attracts 50% import duty.

“This has affected the price movement in the domestic market. The prices are not moving up because of imports,” he said.

In 2017-18, India imported 29,650 tonnes of pepper valued at Rs 1,091 crore and in 2018-19, imports dropped to 24,950 tonnes valued at Rs 780 crore.

The Director-General of Foreign Trade (DGFT) had notified Minimum Import Price (MIP) of Rs 500 per kg on black pepper to control the increasing import of the commodity into the country. The prices are around Rs 300 per kg. Despite this, poor quality pepper is still being smuggled through international borders, according to the Karnataka Planters Association (KPA).

“For the last two years, coffee and pepper growers are facing twin problems of low crop and falling prices. Because of the imports, we are not able to see any spike in prices of pepper although the domestic production was low last year. This year, we expect a similar situation,” Vishwanath said.

These factors have had a cascading effect on coffee plantations and have pushed growers towards a grave financial crisis, former chairman of KPA, M B Ganapathy said.

The KPA has demanded the continuation of MIP scheme to prevent dumping of pepper and maintenance of strict vigil on the borders to avoid smuggling of pepper. Plantations also need relief in taxes and incentives from the Central and State governments to overcome this economic crisis and to be sustainable.