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CHAPTER I1

SPICES AN OVERVIEW

Contents of the chapter

Page No.
History of spices trade Global spices trade - Present scenario Major centres of pepper cultivation and trade Major centres of cardamom cultivation and trade lntemational Pepper Exchange

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Indian spices trade -Present scenario


Spices in Kerala Spices Board of India - Role and functioning

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SPICES - AN OVERVIEW

It is not at all an exaggeration to say that the history of the world is highly obliged to the history of spices. The continuous efforts of the Westerners to explore the original sources of spices led to many adventurous ventures and resulted in the discovery of many continents, economic rivalries and in certain cases economic tie ups among different countries, war and what else! So any study about spices will be incomplete if proceeded without observing their historical background and significance.

2.1. History of spices trade


The f i r s t authentic records about spices, though hgmentary, belong to the pyramid age of Egypt approximately 2600 to 2100 B.C. There are plenty of historical evidences asserting the significance of south India as a source of high quality spices even from the periods of Babyloman and Assyrian civilizations. I Until the beginning of the Christian era the source of spices was a mystery to the western world. Oriental spices were popular as priceless assets during the periods of Egyptian civilization. The ancient Egyptians used oils prepared from spices to preserve the dead bodies in 'mummies'. Ebers Pappirus written in B.C 1500 says about the medicinal values of pepper and cinnamon. Pany
(1969) writes that Cinnamon formed part of the aromatics used by the

Egyptian queen Hatshepsuth. There are evidences for proving that Hatshepsuth sent five ships to the east for procuring spices. He continues that Marduk the leader God of

Assyrians used to consume wine made from sesame and consequentIy sesame became the first spice recorded in the Semitic civilization.

In the second and third millenium B.C., Arabian traders had the monopoly of
carrying goods between east and west among which spices and other aromatic resins were the most important. Similarly, excavations in the Indus Valley have substantiated the fact that spices were abundantly used during that period. Arthasasthra written in the third century B.C. has plenty of remarks about spices including pepper, cardamom, ginger, fenugreek, coriander and mustard.

Greek medical science also r e c o r n the importance of medicinal values of


spices. Hippocrates (460 - 377 B.C.), known as the father of modem medicine, the Greek philosopher and scientist Theophrastus (372- 287 B.C), Dioscorides, known as the fa& of Botany (A.D. 40 - 90) all had mentioned about spices in their writings. These all clearly indicate that spices were inevitable part of l i e even 6om the very early stages of human history.

'

Romans were very lavish in the use of spices, which they used not only for cooking but as cosmetics also. It was customary for them to use cosmetics heavily for which they used spices extensively. Spice flavored vines were very popular while scents, balms, and oils made fiom spices were used as after bath. Spices were expensive during the middle ages and were in great demand among those who could afford them. History says that peppercorns were used as currency in ancient times to pay taxes, tolls, rents and even dowries. 6

h p n t spices came &om those hot regions of Asia that were abundantly exposed to sun. Along with pepper and cardamom, almost all other spices were in use during the period. Pliny, in some early written reports, says even about the price of pepper at that time.12 According to hun the price of long pepper was 15 Dinaries, white pepper 7

Dinaries, and black pepper 4 Dinaries per pound. During his time Rome developed an
active spice trade with Saudi Arabia and India Critical observers blamed the constant

drain of gold h m Rome to the East was due to the high prices paid for spices, silk,
gems, balms and sandalwood. Plmy continues that by the time the spice reached Rome, their prices got doubled. 'Small in bulk, high in price and steady in demand', spices were specially desirable articles of commerce. It has also been remarked that the balance of trade of Rome with India became highly unfavourable during the period amounting to some 20 million Dinars a year by which large amounts of gold and silver were shipped to the East to pay imported articles. Roman coins unearthed recently on the west coast of India substantiate the same. 13 The prices of these imported luxuries had gradually become exorbitant due to losses by shipwrecks. storms, robberies and the insatiable greed of the Arabian merchants. As a result. an effort was made to incorporate the Saudi Arabian 'spice kingdom' into the Roman Empire by Augustus but the attempt was a failure. 14 Several ancient trade routes were used to transport spices and other luxury goods ftom India to the western world, some by land, some by sea and some by the combiiation of the two. During the age of the Roman Emperor Claudius (A.D. 40), a Greek merchant named Hippalus discovered the full power of the wind system of Indian Ocean and the monsoons, observing that they reversed their direction twice a year.

Hippalus, by talung advantage of these winds showed that it was possible to make the round trip between Berenice, on the Egyptian coast of the Red Sea and the pepper producing Malabar coast in less than one year, a voyage that had taken at least two years previously. As a result of this, the role and importance of the Arabian spices traders declined soon and led to the ruin of many Arabian cities, which also resulted in sharp decline in the price of spices. One of the earliest Westerners. to visit the East was a sixth century merchant and traveler, Cosmas Indicopleustes from Alexandria who visited India and Ceylon. In A.D. 548, he wrote a book entitled 'Topographia Christians' in which he described the importance of spices trade in Ceylon. He anived at Malabar in India and in his book described accurately how pepper was harvested in the hill country including the manner in which this pungent spice was dried and prepared for market. There were well-organised spices trade between India and Rome, which came to an end when the Arabs conquered Alexandria in A.D. 641. By the middle of the eighth century the great influence of Muslim philosophy extended some 7000 miles from Spain in the West to C people. Following the examples of Arabs, the European spice traders and apothecaries of the Middle Ages prepared their spices drinks and other pharmaceutical preparations from spices. In 1453 Constantinople was captured by the Turks, which again influenced the trade history of spices and the world as a whole.

b in the East. which was mainly due to the trading habits of the Arab

''

During the reign of Henry I1 a peppers guild of wholesale merchants was established in London (A.D.1180), which was subsequently incorporated into a Spicer's

guild and later named as Grocers Company in A.D. 1429. This guild was granted a charter by Hetuy VI permitting wholesale trade in spices and medicinal products. In the thirteenth century one pound of pepper cost the equivalent of 60 U.S cents and over $ 1 in England. Peppercorns were accepted as currency to pay tax, tolls and rents partly because of shortage of gold and silver coins. Many European traders kept their accounts in pepper and 'fortunate brides' received pepper as dowry. By the late middle ages oriental spices were valued roughly as one pound of saffron cost the same as a horse, one pound of ginger as much as a sheep, two pounds of mace could buy a cow. A German price table of A.D.1393 lists a pound of nutmeg as worth seven fat oxen. After the fall of Constantinople to the Turks in A.D.1493, the need for a sea route to the orient became more urgent than ever. The spread of Ottoman Empire made the old land routes to the sources of silk and spices unsafe. Muslim rulers imposed heavy duties on spices trade, which practically ruined the European spices trade.I6 Prince Henry of Portugal established a naval college at Sages in A.D. 1418 which gave a great impetus to the exploration of spices. Christopher Columbus of Spain was appointed in the year 1492 as the Admiral of the Ocean sea and Viceroy and Governor General of all the lands and Islands he would discover, and a tax free share of 1 Opercent of the spices, stones or pearls he wodd bring to Spain. He started his voyage along with his crew and after much troubles and toils he reached Bahamas Islands and then Cuba, mistaken as Indian shores. Without finding spices he went back to Spain. In 1493, Columbus started his second voyage with 1500

men to establish Spanish power in the 'new world' and continue the search for gold and spices, which was not fruitful as expected. " During 1497 and 1498, England took up the search for sea route to Asia By the order of Henry VII, Italian navigators undertook voyages to the east in search of spices. During the same period, King Manuel I of Portugal ordered Vasco de Gama to search for a sea route to India He started his voyage and taking advantage of monsoon winds, Gama arrived at Calicut on May 20" 1498, one of the most important landmarks in the history of India and the spices trade as well. The Portuguese, under Albuquerque had won several naval battles over the Muslims by A.D. 151 1, thereby, gaining control over many spices producing areas like Malabar Coasf Ceylon. Java and Sumatra. The Portuguese imperial taxes in Ceylon included a land tax to be paid one third in pepper and two third in currency. Portugal grew rich directly from spice trade while the Dutch prospered indirectly by providing ships and crew to carry goods northward and subsequently they expanded spices trade to the Far East. The British founded their East India Company in A.D. 1600 as 'The Governor and Company of the Merchants of London Trading into the East Indies'. Two years later the United East India Company of the Dutch, was formed with sufficient share capital to undertake ambitious ventures. Their entry in the field increased rivalry in spice trade.

Between A.D. 3 605 and 1621, the Dutch managed to drive the Portuguese out of the Spices Islands achieving a monopoly in spices trading.
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It has been aptly remarked by Rosengarton that the story of spices in the East Indies in the seventeenth and eighteenth centuries was written in blood. This was due to the ruthless competition between the Dutch, the British and the Portuguese for domination over the spices producing countries and trade. However in A.D.1799 the Dutch East India Company went bankrupt due to many reasons and the Dutch ports of Malabar Coast were taken over by English. By the end of the eighteenth century, the United States, having achieved stature as

a national power. entered the scene of world spices trade. The most remunerative trade of
the time was that of spices. especially pepper. However piracy was so common that the United States authorized the arming of the American merchant vessels to fight off such attacks. Soon the American port of Salem became a major trade centre of spices,

particularly pepper. After 1846. the overproduction of spices brought a general decline in the trade. which ended in the demise of the Salem pepper trade. However by the time Salem had produced some of the fust milliners of America.
2.1.4. Modern spice trade

The international spices market was exclusively centered in India until the 16" century but the situation has changed considerably during the subsequent centuries. Substantial spice plantations were established in the Central and South American countries. Cardamom is produced now in large quantities in Guatemala, which is a Central American country. Similarly. pepper is being produced in the Latin American counby of Brazil on large scale. The inception of an international pepper exchange under the auspices of IPSTA is the latest development in the history of global spices trade. The exchange was

i n a u p t e d on 17th Kovember 1997 at Cochin in Kerala The Forward Markets Commission of lndia regulates it and it functions under a steering committee constiMed by the Government of India for the purpose. The exchange is only at the early stages of functioning and in future it may help our country to regain the past glory of being the centre of the world spice trade.
2.1.5.
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Important Landmarks in the History of Spices at a Glance

Remarks about the importance and use of spices in Vedic texts. Remarks about spices in Epics. Pyrarmd age remarks about spices in Egyptian history and the use spices in 'Mummies' as preservative. Pepper referred to in Eber's papyrus.

Panini recorded the use of pepper in spicing wine,

Charaka, and Susrutha mentioned the use of pepper in medicine


4&Century
1'' Century

Theophrastus described the use of pepper. Pliny reported about South Indian spices. A Chinese envoy visited the Malabar Coast in search of pepper. Rome Captured Egypt and the ancient pepper trade came under the control of Rome. Mariner Hippalus discovered the velocity of wind system of Indian Ocean. The Greek physician Dioscorides mentioned about the medicinal use of spices. Customs duty imposed on black pepper imported to Alexandria.
Fall of Rome Alaric demands a ransom of 3000 pounds of pepper

!?om Romans, The Arabs regain control over spices trade. The Identity of Pepper as the fruit of vine growing in the
Malabar coast of India was established.

Chinese traveler, Sulaiman visited Kerala coast, recorded the black pepper cultivation and trade with China

Raja Raja Chola and his son Rajendra, the powerful South Indian Kings extended their empire to Malay Archipelago and to Java - Bali Islands ( at present Indonesia) which were major spices growing regions of the time Reign of Henry 11 in England and the formation of pepper's wild. China imports large quantity of pepper from Malabar Coast and Java Marcopolo described in detail the pepper growing regions of Java Nicolo Contai described the pepper trade in Kollam and Kozhikkodu of Malabar coast and pepper cultivation in Sumatra. Vasco de Ciama discovered the sea route to India and anived at calicut. Pedro Alvares Cabral landed in Calicut and established supremacy of Portugal over spices trade in the Malabar coast. Albuquerque sailed to Malacca and captured the land and spices trade. Portuguese was in full control of black pepper trade. Establishment of the British East India Company for trading in spices. British landed in India on 24 August. 1600 at Surat. British East India Company reached Sumatra and started trading
in pepper. The establishment of United East India Company

by Dutch

merchants

British started export of spices f?om Malabar Coast. Dutch conquered Malacca and the entire pepper trade from Far East came under their control The Portuguese were driven out from their settlements in Cochin and Cannonore by the Dutch and the Dutch East India Company gets control over the splces trade. Dutch suffered defeat at the hands of the King of Travancore . The rise of British presence in Malabar who entered into contracts with local rulers to ensure for monopoly of spices trade. The French came for spices trade. America entered the pepper trade Brazil and some African regions Pepper introduced ir~ First research station for pepper established in India at Panniyur. Kerala.

Establishment of Intemational Pepper Community at Jakarta (Indonesia) Establishment of National Research Centre for Spices (NRCS) NRCS Upgraded as Indian Institute of Spice Research. (IISR) Establishment of International pepper exchange at Mattancherry, Kerala Source: Compiled kom various books and journals.

From the above. it is obvious that the present scenario of spices production and trade is the result of thousands of years of events and changes. During the process, spices directly or indirectly became the cause for changes in the standard of living. culture and even the economic and diplomatic relations between countries. So at this juncture an overview of the present global spices scenario will be appropriate before going deep into the problems and prospects of the sector.
2.2. Global Spices Trade

The world spices trade 1s mainly concentrated on black pepper because it is the largest traded spice in the international market both in terms of quantity and value. That is why. pepper is called the 'King of Spices'. Naturally there arises a question, who is the queen? No doubt, cardamom is the 'Queen of Spices', thanks to her significance in the international market
As noted elsewhere. pepper rules the spice trade both in terms volume and value.

Intemational Trade Centre-UNCTAD has estimated that pepper contributes 34 percent of the total of spice trade by volume followed by chilly at 22 percent, seed spices 17 percent tree spices 14 percent, turmeric 5 percent, ginger 4 percent, cardamom 3 percent and vanilla at lpercent -"

In terms of value and volume. the global spice trade is estimated at US $ 1.5 to 2
billion and 400 to 450 Thousand Metric Tonnes in quantity. Spices market world over, is growing and significant growth has been noticed in specific spice segments like hot spices in U.S., aromatic culinary herbs in France etc. Major growth of spices is accounted for by the industrial & food service sectors.

In developed countries, the usage of pepper in food industry has increased


substantially because of its taste, flavor and seasoning characteristics. More than 60 percent of pepper is consumed in industrial and food service sectors and the balance is used for domestic consumption, medicines, perfume, health and beauty segments. Ethnic foods particularly Indian. Chmese and Thai are having a growing impact in many countries and expanding to cover a wide range of tastes in food. In developing countries 90 percent of the pepper is consumed in the household segment.

23. Major centres of pepper cultivation and trade


Pepper is cultivated in about 26 countries and majority of them are Asian ~ountries.~' The area of cultivation and quantity and production of pepper is briefly outlined below. 2.3.1. India India is the leading country in terms of area of cultivation and volume of production of black pepper. About 1.85,000 hectares of land are used in India for

Pepper cultivation and we produce about 60,000 tonnes of pepper annually. Kerala is the homeland of black pepper. whlch now contributes more than 95percent of the country's

area and production. The states of Karnataka and Tamilnadu contribute the remaining
Indian pepper.

Indonesia is the second most ancient pepper growing country. Prior to the Second World War, Indonesia (then known as Dutch East Indies) was the largest pepper producing country In the world with an annual production of over 50,000 tonnes. During the Japanese occupation of Indonesia most of the plantations were abandoned and pepper production declined sharply. In the pre-war days there were about 40.000 acres of pepper gardens in Sumatra 20.000 acres in Banka and about 2,500 acres in Java. Now pepper production is restricted to certain areas and the Indonesian Government is trying to recapture the past glory through developmental activities. At present the total area of pepper cultivation in Indonesia is about 1.25.132 hectares and the average annual production is estimated as 48,109 tonnes.

2.33. Brazil
Brazil entered the field of commercial pepper cultivation in 1933 when a group of Japanese immigrants started pepper cultivation on a large scale. There was remarkable success and Brazil became one of the major pepper producing countries and started exports to the nearby market of U.S.A. Currently pepper is grown in Paraiba, Espirito Santo ans Ceara in the state of Para where the pepper estates are owned by the members of the co-operative Agricola Mista ( Mixed agricultural Co-operative) and in the area of Belem the pepper gardens are owned by individuals. The average area of pepper cultivation in Brazil is 28.050 hectares and the annual production is 26.393 tonnes

2.3.4. Malaysia

The European settlers introduced black pepper in Malaysia during the early seventeenth century. In Malaysia, pepper cultivation is concentrated in SarawakHere pepper cultivation is in the hands of Chinese farmers and they evolved an intensive production technology, which led Sarawak to achieve high productivity levels. Pepper is grown in some parts of Malaysian main land also, especially in Johore region. The average area under pepper cultivation in Malaysia is about 9,915 hectares and the annual production is 2 1.3 10 tonnes.

23.5. Sri Lanka


Pepper is grown as a mixed crop in Sri Lanka in cocoa plantations and in house compounds. Major cultivation is in the dry zones of elevation of less than 600 meters from MSL. The most important growing regions are the Dumbara valley and the Matale district. The foreign occupation of Sri Lanka was responsible for the expansion of pepper cultivation to other areas especially to the province of Kandy. The cultivation practices

are similar to that of India. The total area of pepper cultivation in Sri Lanka is estimated
as 12,080 hectares. with an average annual production of 5,058 tonnes. 2.3.6. Malagasy Republic The pepper cultivation of Malagasy started after the Second World War when there was huge hike in the price of pepper. Here the pepper cultivation is concentrated in the east and northeast coasts on the Comoro and Nossi-Be Islands and in plains of Samb~rano and Mohavavq in Maunga province. Their average production comes to 2.160 tonnes from an area of 4.128 hectares.

23.7. South East Asian Countries


Commercial production of black pepper in South East Asian nations started only after the Second World War. Pepper is grown on a large scale in Thailand, Vietnam, Combodia, parts of South China, and South Korea The productivity of pepper in

Thailand is very high which comes around 4,500 kg. per hectare. Thailand practices an intensive production technology, which is believed to be copied from the Chinese. The area under cultivation is very low but the farmers are united and they help each other at various stages of farming with an unwritten agreement for mutual cooperation. The average annual production of Thailand comes to 10.091 tonnes from 2.808 hectares of cultivation. Combodia is another South East Asian Country having sizeable pepper production. The civil war and military insurgency in the country had a devastating influence on Combodian pepper production The production of the country is around 2.000 tomes annually. Vietnam is one of the important countries raising a severe threat to all other pepper producing countries. Vietnam started pepper production much early but it became common during the post war period. Under the French occupation there was considerable progress in pepper production but it declined during 60's and 70's. Pepper production in Vietnam is fast shooting up and at present their average production is around 60.000 tonnes from 13.856 hectares of land. However it is expected that their potential of pepper production is much more than the present contribution due to considerable expansion of area during the end of the last decade.

Small quantities of pepper are produced in China South Korea China produces about 15000 tonnes of pepper annually and further increase in area and production and productivity are anticipated in the coming years because they have enough growth potential.

2 3 . 8 . South pacific Islands


Some of the South Pacific Islands have succeeded in pepper cultivation. Micronesia, Fiji and Somoa are the prominent among them. Fiji has an annual production of about 175 tonnes while the contribution of other countries in the region are less than
that of Fiji. Philippines also produces pepper but in small quantities only.

2.3.9. Latin America


Brazil is the major Latin American country producing pepper on a large-scale basis. However there are counmes like Mexico, Guatemala Honduras, Saint Lucia, Costa Rica, and Puerto Rico etc. producing pepper though not in large quantities. Mexico has

an average annual production of 1200-1300 tomes while Guatemala produces about 375
tonnes annually. Saint Lucia and Costa Rica produce about 400 and 160 tonnes respectively.

23.10. African Countries


There are many African countries like Madagaskar, Malawi, Zibabwey, etc producing pepper on commercial basis. In addition to this,pepper is grown in many other African countries like Benin, Kenya, Cote de Voir, Cameroon, Ethiopia, Zambia, Nigeria, Congo, Gabon and Sierra Leone etc. Madagaskar produces about 3000 tonnes, Malawi

900 tonnes, Zimbabwey 750 tonnes, Kenya and Benin 300 each while the other countries
produce smaller quantities of pepper only.

2.4. Production and export of Pepper


Production of pepper depends very much on agro climatic factors, pests, diseases etc. High price coupled with good cultivation practices, favourable weather situation and less incidence of pests and diseases often lead to higher production level. Reversing the situation of the above factors would normally lead to lower production. During the last ten years, world pepper production and export shifted within the range of 1,71.000 tonnes to 2.33.000 tonnes for production and 1,27.000 tomes to

1,67.000 tomes for export. The IPC member countries are major producers and exporters
of pepper. They produce. on an average 1,66.000 tonnes of pepper or 84 percent and export 1.24,000 tonnes or 87 percent of world pepper export. 22 The non-IPC member countries like Vietnam, China and Madagascar produce. on an average, about 60,000 tonnes or 16percent of world production and supply about 13 percent of world export However the pepper production in Vietnam is showing an unbelievable growth and if the present growth continues, they will push all other producing countries to the back in the immediate future. 23 Table 2.1 glves a much better picture of the global production and export share of various pepper producing countries.

Table 2.1 Production and Export of pepper Country-wise (200041)


Country Production ( Tomes)

Rank

Export
( Tonnes)

Rank

Brazil

40.000
I

4
I

36,785
I

3
5
I

India
1 I

1
I

22,593

Indonesia

59,000

53,594

Sri Lanka
1

5.700
I

8
I

2,096
I

6 8

Thailand

8.819

800

15.000
Madagascar

6 9

606 1,500

9 7

3.376

jowce: - IPC Website.www.ipcnet.org.

Pepper. both black and white. is a principal spice being traded in the international spice market. Majority is traded in wholelunground state, though in recent pears however, there has been a significant increase in the trade of value added pepper products from producing countries. Pepper products. popularly traded internationally are pepper powder, green pepper. pepper oil and pepper oleoresin.

Figure 2 . 1 .

Production and export of pepper ( M.T.'s)

Table 2.1 and Figure 2.1. show that Vietnam is far ahead of India in export of pepper though
we have top rank in production. In other words, Vietnam, Indonesia,

Brazil and Malaysia and are exporting more pepper than India. It also implies that a considerable portion of Indian pepper is used for domestic requirements. This situation
should be viewed in terms of the productivity ranking of the producing countries.

Table 2.2 shows the productivity ranking of the major pepper producing countries

of the world.

Table 2 2

r
(Hectares) 182268 Indonesia Brazil Vietnam Malaysia 125132
28050
1 3856

Average Area, Production and Productivity of pepper - Country -wise (2000)


Production (tomes) 58729 (30) 48 109 (24) 26393 (13) 15594
(kgd hectare.)

9915 Not available

(8) 21310
(1 1) 27790 (14)

Source : - V.Alagappan and M.Manoharan, Production of pepper in India a global perspective. Vol. 1, Spice India, January 2001. pp 5-7. Note : - Figures in brackets represent percentages to total The deplorable position of productivity of Indian pepper is evident from the table. Compared to other pepper producing countries, India has the lowest average. 24 It may be noticed also that area wise we have the top position but the entire advantage is lost due to low productivity. The above figures shows that many of the pepper producing countries are able to supply pepper at a price far below the price of Indian pepper. thanks to their high productivity This is something, which points to the potentials of our country in the field. It also indicates the possibilities of raising our productivity. It implies that the position of Indian

2.6. Major Centres of cardamom production


India and the South American country, Guatemala are the major cardamom producing countries of the world. Though quality-wise Indian cardamom is popular, presently Guatemala has domination in the international market due to their achievements in production, productivity and resultant cheaper prices. It is to be noticed that India and Guatemala are the only countries in the world is producing cardamom on a commercial basis.

In India, cardamom production is mainly concentrated in the high ranges of


Idukki district, Kerala state. Certain pockets of the states of Karnataka and Tamilnadu also have cardamom cultivat~on but they are not in a position to raise much competition to the state of Kerala Vandenmedu, Nedumkandom. Kumily, Munnar, Santhanpara etc are the major centers of cardamom producQon in Idukki ditrict. Cardamom is produced in certain parts of Wayanad district also, but only on small scale.

There are cardamom auctlon centers at Vandenmedu, Kumily, Puliyanmala,


Bodinaykanoor, Cumbum etc. where the cardamom is marketed under auction system.2s

2.7. Import and Re-export of Pepper and Cardamom


There are only less than ten countries producing pepper and cardamom on commercial basis. However on a close observation of the export statistics of various countries reveals that there are more than fifty countries exporting spices without producing the same and some of them are contributing significantly. It indirectly implies that there are counuies commerciall~exploiting the spices producing countries with or

without their awareness.

For example the total export of pepper from producing

countries during 1999 was 1,38.799 tonnes whereas the total import of pepper by countries all over the world was 2,29,078 tonnes. So it can be safely assumed that the difference is the result of re-exports. Those countries re-exporting spices some times make value additions and some of them re- export without any value addition at Singapore is one of the important countties acting as an enterpot of spices, particularly pepper. During the past, major share of pepper produced in Indonesia and Malaysia were imported to Singapore and were re exported to other countries. Recently it has been estimated that about 38,000 tonnes of black pepper is imported by Singapore from Vietnam and the major buyers of the same are U.S.A, Netherlands, Germany, Ukraine etc. Netherlands is reported as another major entrepot of pepper who re-exports to European countries. European countries are more quality conscious and Netherlands capitalizes the opportunity by supplying spices as per the European standards. For example, during 1999 alone the Netherlands imported 18,098 tomes of pepper and reexported 12,261 tonnes of pepper.27 Other major re-exporting countries are U.S.A, Germany, U.K. Belgium and Austria These countries import spices from producing as well as re-exporting countries like Singapore and Netherlands. Thus it is evident that the spices are traded at different centres and countries before they reach the final consumer. It is to be specially noticed that such re-exports are done after value additions and some times without any value addition at all. Either of these situations offer vast scope for spices producing countries.

2.8. International Pepper Exchange


Unexpected fluctuations in production and the prices of the spices, cause considerable losses and disappointment to the producers, traders and exporters of spices. The inception of the International Pepper Exchange was the result of the efforts to rejuvenate the depressed stage of global pepper trade. Even though we produce best quality spices, we do not have a scientific and systematic method of marketing them either in the domestic or international markets. The producers of spices majority of whom do not know the international significance of their produces. sell to the local traders who in turn hand over the same to the traders at major towns. The products then move to the hands of wholesalers or to the exporters who make shipment as per foreign or domestic orders. As the number of intermediaries involved in the channel is more, the actual international price and the price earned by the producers will be entirely different. Further. all types of speculations are possible leading to unjustifiable price fluctuations. The credibility of export deals also is often doubtful due to regular default of contracts by foreign importers as well as domestic traders. These all are the reasons, which led to the emergence of an international pepper exchange.

2 . 8 . 1 . IPSTA ICE
The international pepper exchange h o w n as IPSTA ICE (International Pepper and Spices Trading Associat~onInternational Commodity Exchange) is functioning at Mattancherry, the Jews town of Kochi. It is the latest contribution of our little Kerala to the world of spices trading

The international pepper exchange, which started functioning on 17th November

1998, was the result over 40 years of highly reputed domestic trading. The integration of
the global trade in pepper through the inception of the international pepper exchange will definitely help the concentration of world spices trade again in Kerala, which may be aptly remarked as a historical regression.

2.8.2. Genesis of International Pepper Exchange


The IPSTA ICE was the outcome of a feasibility study by UNCTAD (United Nations Conference on Trade and Development.) undertaken with the purpose of promoting international pepper trading. The basic aim of UNCTAD while undertaking the study was to set up a market based institution and a market driven price determination for black pepper, which is the most favoured spice of the world. The UNCTAD report was accepted by the International pepper community (IPC) at its 22"* session in Changmai (Thailand). The idea of pepper futures contract was designed by a working group set up by

P C . comprising the representatives of the producing countries with the purpose of


extending price discovery and risk transfer functions for the benefit of all the participants of the global trade in black pepper. The Government of India and the International pepper and spices traders association were given the authority to suggest an appropriate market place for the international pepper exchange and C o c k the most deserving city was selected for the functioning of the exchange.28

2.83. Functioning and Importance of the Exchange


The method of functioning and the significance of the IPSTA ICE can be better explained like this

- On 01.01.2003. X Ltd, a pepper exporting company in India obtains

an order form U.S.A for 500 tomes of black pepper @ $ 2500 per tonne, to be delivered in May 2003. X Ltd estimates that they should get pepper @$ 2000 per tonne to earn a reasonable profit from the deal.

If the company immediately purchases the commodity at the prevailing market


rate and ship the same in May, it will have to pay huge amount for storage which may engulf a major part of its profits. if the interestrates also are taken into consideration, the deal may turn futile to the company. The second alternative before the company is to wait till May 2003 and hope to buy pepper @ $2000 per tonne, from the domestic market. However, this option may become more risky if the price of pepper goes up in May and the company may not be able to purchase the required quantity at the desired price. The third option before the company is to enter into a forward contract with another company Y Ltd. Which is a producer or supplier of pepper, for supplying the required quantity in May. 'This option also may turn to he risky if the price of pepper goes up and Y Ltd. defaults the forward contract. Further, if the prices go down, below $2000 per tonne. X Ltd will be again in trouble because they could have purchased the required quantity from the market had there been no contract with Y Ltd. Here is the significance of the Lnternational Pepper Exchange. The safest method of handhg the issue for X. Ltd is to buy pepper through the pepper exchange with

future contract expiring in May 2003 at a future price of $2000 per M.T. X Ltd can take

delivery of pepper in May at the designated warehouse, pay $2000 per M.T. and get relieved of all the troubles and saving a lot of money and risk by not adopting the other alternatives.

2 . 8 3 . 1 . Membership of IPSTA ICE.


In order to become a member of ICE, one should obtain registration from the Forward Market Commission and the Reserve Bank of India The registration may be done through an application submitted to the International Pepper and Spices Traders Association of India IPSTA. However to obtain registration for composite clearing membership or trading membership, the approval of the Foreign Investment Promotion Board (FIPB) must be obtained. Members only are allowed to transact through the exchange and there are six types of members in the international pepper exchange as follows.
1

Composite Clearing Members (C.C.M) having full trading and clearing rights. They can enjoy 1 1 1 trading right on the trading floor, execute their own contracts, contracts of other members and clear their own accounts.

2.

Composite Tradiig Members (C. T. M) having full trading right on the floor but having no clearing rights.

3.

Trading cum Clearing Members (T.C.M) having the right to trade and clear only fbr their account but they cannot execute contracts, customer contracts or contracts executed by others.

4.

Tradiig Members (T.M) who can trade for their own account but have no clearing rights.

5.

Institutional Clearing Members (1.C.M) The membership is open only to Commercial banks and financial institutions. They have full clearing rights but have no trading rights.

6.

Registered non-members (R.N.M)

- having customers and they can have

trade

executed by Composite Clearing Members.

2.83.2. Terms and conditions for transactions

The ICE insists for certain mandatory restrictions on all transactions to ensure the credibility and standard of the dealings to the international specifications. The following procedure is the important among them. 1) Quality

- Regarding quality, it has been restricted that the pepper traded should

be of MVLSB specifications. This quality specification permits moisture contents up to l2percent of the total weight, light berries up to 2percent. mould visible to the naked eye up to lpercent, extraneous matters up to lpercent mammalian excreta up to 1 m.g per ib and insects up to 2 per ib. 2) Contract size - The minimum contmct size is determined as 2.5 tonnes

3) Contract Months

- All calendar months are allowed for contracts with the

restriction of a maxlmum of six contracts at a time and with duration of six months each.
4) Delivery units

- The delivery

of the commodity must be in units of 15 tonnes or

the multiples thereof which is intended for the convenience of shipment

5) Quotation - the quotations must be in Indian rupee alone and the price should be
per quintal. Further, the minimum price fluctuation is decided as Rs. 5 per quintal i.e. maximum of Rs. 125 per contract. 6 ) Trading time - the trading time is 9.30 a.m. t 01.30 p.m. h m Monday to Friday and h m 9.30 a.m. to 12.30 on Saturdays.

7) Position Limit

--

Every trader can have a maximum position limit of 200 M.Ts

across all contract months. This means that at any time there should not be pending contracts of 200 M.T. or above for a member.

8) Daily Price L~mit-The daily price fluctuation has been decided as Rs.6000 per
M.T fiom the previous settlement price. Trading will be stopped whenever the price fluctuates above or below this permitted range.

9) Margin money- m order to ensure the safety of the transactions the IPSTA ICE
restricts that every trader should deposit a margin of Rs.15000 per contract. 10) Transaction fee- The IPSTA ICE collects a transaction fee of Rs.5 per contract and the FCCCI (the cleanng agency- First Commodities Corporation of India) collects a clearing fee of .03 percent of the contract value as their remuneration.

2.833. Trading procedure


The trading floor of the pepper exchange is in the buildings of IPSTA at Mattancheny, Emakulam. Each member has a cabin on the trading floor where they receive buying and selling orders from the different parts of the world. Through bid system they enter into contracts after amving at consensus on terms and conditions. The timely delivery of the commodity and timely payment of the consideration are ensured by IPSTA ICE with the help of the clearing agency FCCCI.

2.8.4. First Commodities Clearing Corporation of India (FCCCI)


The financial performance of the futures contract is guaranteed by FCCCI Ltd., which is owned. capitalized and managed by the clearing members of the ICE. 45 percent of the equity capital of FCCCI is resewed exclusively for institutional clearing members. Banks and financial institutions alone are eligible to become institutional clearing members. All the clearing members are members of IPSTA also. All the members of the intemational pepper exchange must have a clearing agreement with a clearing member. FCCCI collects margin money also to ensure timely fulfillment of the contracts by the 'trading members. 25 percent of the clearing fee paid by the clearing members to FCCCI is accumulated into a guarantee fund with the purpose of assuring maximum safety for the transactions.

It is worthwhile to note that within a short span of time the exchange

could

achieve remarkable role in the intemational pepper transactions but the exchange has much to progress to achleve the aims fully.

2.9. Indian Spices trade


Tropical climate is considered as ideal for spices cultivation and the best quality spices are available in the latitude belt between 25 O North and 10 O South of Equator. Spices do not grow in extremely hot and cold regions. This peculiarity gives a special privilege for the spices producing countries like India in the spices production and trade

because those countries which cannot produce spices have to fully depend on spices producing countries to meet their inevitable medicinal and culinary needs. As mentioned elsewhere. it was this factor, which turned the history of the world itself. In the future also this advantage will help the spices producing countries like India to have a sizeable share of the world trade in a globalised economy. Table 2.9 shows the domination of South India in the spices production of our country. An interesting and at the same time important point is that the lion's share of spices produced in our country is used for domestic consumption and only 6 - 7 percent of total production is exported.

'' More than 100 crores of people with rapidly changing

food habits, offers a very good domestic market for all types of spices produced in India. It indirectly implies that the increase in production is not likely to affect the market considerably.

Table 2 3 Pepper statistics D o m e s t i c

Source : - Compiled from various issues of Spice India, Spices Board, Cochin.

* Half yearly average.

Table 2.5 Cardamom statisties Domestic

Half yearly average

The following table shows the trend in the quantity and the value of export of total spices fiom India.

Table 2.6 Export of total spices from Indii ( 2000-2001)


Qwtity

Value

(Tonnes) Pepper Cardamom (small) Cardamom ( large) Chillies Ginger Turmeric Coriander Cumin Celery Fennel Fenugreek Other seeds Garlic Other spices Value added spices. (cuny powder, oils. oleoresins etc.) 19,250 1,100 1,645 61,000 6,580 34,500

(Rs. Crores)
326.32 56.54 27.68 195.23 22.95 91.06 27.41
1 17.43

1 1,700
13,800 5,250 4,000 9,050 2,425
1 1,000

17.00 17.78 17.88 8.96 10.40 144.90 530.47

35,000 13,700

Report, Spices Board of Indiq2000-01.P.52. Source :-Annual

2.10. Spices in Kerala


There are many countries producing these spices but the 'little Kerala' is considered as the only source of top quality pepper and cardamom, which are the most important spices aptly, called the 'Royal Couples' of spices. Kerala contributes the lion's share of total spices production of India. 2,69,178 hectares of land in Kerala is used for spices cultivation producing more than 1,60,000 tonnes of spices annually. Pepper alone is cultivated in 1.85.000 hectares, producing on an average more than 50,000 tonnes of black pepper. It has been estimated that more than 90 percent of Indian pepper is produced in Kerala

''

Similarly, about 40.000 hectares of land in Kerala is under cardamom cultivation. producing more than 5,000 tonnes of cardamom annually. This is about 60 percent of the total cardamom cultivation in India. More than 70 percent of the cardamom produced in India is the contribution of Kerala. Along with pepper and cardamom Kerala has remarkable contributions of ginger. clove. turmeric, nutmeg etc. From the above statistics it is clear that the name 'spices land of India' is suitable to the state of Kerala. It is equally important that a large number of families in Kerala resort to the spices sector for their livelihood. Figure 1.1 gives a better picture of the position.

2.10.1. Major centres of pepper and cardamom production in Kernla


Another notable factor is that the lion's share of the spices production in Kerala is fiom Idukki and Wayanad districts. As regards cardamom, Idukki district has almost monopoly while in the case of pepper there are Wayanad and Kannur districts

contributing a sizeable share . Table 2.7 and 2.8 show the district-wise contribution of pepper and cardamom." Table 2.7.

IDishict Kozhikkodu Kollam Kottayam Malappurarn Kasargod Pathanamthitta

Area and production of Pepper in Kerala - Diitrict-wise Area Production

(Hems)

(Tomes)

39,547 41,635 34,837 12,779 8,912 8,715

13,528 18,484 4,181 3,304 2,770 1,695

Emakulam
Thiruvanthapuram Thrissur Palakkad Alappuzha
I

1,813
I

223 52,010

1,88,687
Source- Area and production of spices in India and the world, Cochin, Spices Board, 1997. p .47

Table 2.8
District wise production of Cardamom (small)

District

Area (Hectares)

Production (Tonnes)

Palakkad

3,685

210

Others

2,613

23

Total

43,459

4,430

Source :- Area and production of spices in India and the world, Cochin, Spices Board. 1997, p .47 The table 2.8 shows the share of each district in the total pepper production of the state of Kerala. Idukki district has domination both in the area of pepper cultivation and the quantity of production, followed by Waynad and Kannur districts. Kozhikkodu district also has a notable contribution of more than 3000 Tonnes. 32 It is evident from the above table that Idukki District has clear domination over the cardamom production of Kerala with largest share in the area of cultivation and production. Since the major share of Indian cardamom comes from the state of Keralq it follows that Idukki district alone contributes the sizeable share of Indian cardamom.33

,
pepper All India Kerala Idukki & Waynad

Table 2.9

Area and Production of Pepper and Cardamom (Overall)

Cardamom Kerala Idukki

All India

Production (Tonnes)

: : : :5
i

1,93.270 (100)

1,88.687 (97.62) 52,010 (94.56)

81,182 (42.1) 32,012 (58.2)

83,651 (100) 7,000 (100)

44,237 (52.88) 4,720 (67.42)

32,536 (39) 4,200 (60)

Source : - Area and production of spices in India and the world, Cochin, Spices Board, 1997, pp.1 and 47, Note : - Figures in brackets represent percentages to total.

The table clearly shows the domination of the state of Kerala as well as the significance of the districts of Idukki and Waynad in Indian spices production. Kerala has only 97.62 per cent of the total area of cultivation of pepper but contributes 94.56 per cent of Indian pepper. Further, Idukki and Waynad districts together contribute about 58.2 per cent of Indian pepper from about 42.lper cent of cultivated area

Similarly Kerala contributes 67.42 per cent of Indian cardamom from 52.88 per cent of area of cultivation. It is really appreciable that the Idukki district alone contributes 60 per cent of Indian cardamom from just 39per cent of the cultivated area

2.11. Spices Board of India


Spices board is a statutory body, which is responsible for the development and growth of all the major ltems of Indian spices, having commercial significance. The Board was constituted as per the Spices Board Act, 1986. Up to the year 1960. the Spices Export Promotion Council was responsible for looking after the export affairs of Indian spices excluding Cardamom, for which there was 'Directorate for Cardamom Development' constituted in the same year. Subsequently, the Government of India

constituted a Cardamom Board. in the year 1966 instead of the Directorate for Cardamom Development. Understanding the significance of the coordination of the activities in the export of spices. the Spices Export Promotion Council and the Cardamom Board were clubbed together and the Spices Board was constituted in1986. The Board consists of: a) A chairman, b) Three members of the Parliament of whom two shall be elected by the House of the People and one by the Council of states, c) Three members to represent the Ministries of the central Government dealing with
i) Commerce ii) Agriculture

"

iii) Finance

j) Seven members to represent the growers of spices


k) Ten members to represent the exporters of spices 1)
Three members to represent major spice producing states

m) Four members one each to represent

a) The planning Commission.

b) The Indian Institute of Packaging Bombay.


c) The central Food Technological Research Institute, Mysore. d) Indian Institute of spices research, Calicut. n) One member to represent spices labour interest
As per the provisions in the Spices Board Act, 1986, the

following are the

functions assigned to the spices board. 1) Develop, promote and regulate export of spices,

2)
3)

Grant certificate for export of spices


Undertake programmes and projects for promotion of export of spices

4) Assist and encourage studies and research, for improvement of processing and
maintenance of quality
5) Strive towards stabilization of prices of spices for export.

6) Evolve suitable quality standards and introduce certification of quality through


'quality marketing' of spices for export.
7) Control quality of spices for export.

8) Give licenses, subject to such terms and conditions as may be prescribed to


the manufacturers of splces for export

9) Market any spice, it considers necessary in the interest of promotion of export.


10) Provide warehousing facilities abroad for spices.

11) Collect statistics with regard to spices for compilation and publication. 12) Imporf with the previous permission of the Government, any spice for sale and 13) Advice the Central Government on matters relating to import and export of spices.

In addition to the above the Board may also


1) Promote cooperative efforts among growers of cardamom

2) Ensure remunerative returns to growers of cardamom.


3) Provide financial or other assistance for improved methods of cultivation and

processing of cardamom, for replanting cardamom and for the extension of cardamom
growing areas.
4) Regulate the sale of cardamom and stabilization of prices of cardamom.

5) Provide training in cardamom testing and fixing grade standards of cardamom


6) Increasethe consumption of cardamom and carry on propaganda for the purpose.
7) Register and license brokers (including auctioneers) of cardamom and persons
engaged in the business of cardamom.

8) Improve the marketing of cardamom 9) Collect statistics from growers, dealers and such other persons as may be prescribed
on any matter relating to the cardamom industry, publish statistics so collected or portions thereof or extracts there from.

10) Secure better working conditions and the provision and improvement of amenities
and incentives for workers and
1 1) Undertake, assist or encourage scientific, technological and economic research

At present there are fifty-two items of Indian spices under the control of the

Board. As regards cardamom, the Board has the responsibility of looking after the production, processing and marketing and it has to assist the production function of

other spices also. As per the Acr, the Spices Board has control over the following spices.

Table 2.10
Spices under the Control of the spices board of India
SL.
No.

Name in English Pepper Cardamom (small) Cardamom (large) Chilli Ginger Turmeric Coriander Cumin Celery Fennel Fenugreek Nutmeg Mace Clove Cinnamon Cassia Garlic
S&on

Botanical Name Piper Nigrum Eletaria Cardamomum Amomum Subultatum Roxburg Capsicum Annum Zingiber Officide Corandnon Sativum ApiumGravaeolens Foeniculum Vulgare

Name in Malayalam Kuru~nulaku Elam Perelam Vattal mulaku

3
4

I
1
I

Inchi
Manjal Malli Jeerakam Celery Penungeerakam Uluva Jathikka Jathipathri Grampoo Elavarngam Karuvapatta Velluthully Kumkumapoow Vanilla Cuny vepila Sarvasugandhi Chompu Pudiia Kaduku Seemamalli

5
6
7

1 Curcuma Longa

! CumiOum Cyminum

9
10 11 12 13 14 15 16
17

:
I

j Trigonella Foenum Graecum


1 Myristica Fragrans
1

Myristica Fragrans Syzygium Aromaticum Cinnamomum Zeylanicum Blume Cimamomum Aromaticum Allium Sativum Crocus Sativus Vanilla Planifolia Murraya Koenigii Pimenta Dioica Pimpinella Anisum Mentha Longifolia BrassicNigra PetroselinumCrispum

18 19 20 21 22 23 24

Vanilla
Curry Leaf

Allspice (Pirnenta) Aniseed


Mint Mustard

Parsley

25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
44

Name in English Pomegranate Kokam Tejpat Campodge


I

Botanical Name

Punica Granatum
Garciia Indica Cinnamomum Tamala Garcinia Campogia Thalisapathram Kudampulli Sathakuppa Seemageerakarn

Bishops weed

! Trachyspermurn Ammi

Dill seed
Caraway Poppy seed Asafoetida Juniper Tamarind Basil Bay leaf Caper Horse-radish Hyssop Lovage Marjarom Oregano Pepper Long Rosemary Sage Savory
Star- Anise

1 Anethum Graveolens

1 Carum Carvi

1 Papaver Somniferum Linnaeus


I Ferula Alliaceaboiss
Juniperous Cornmunis Tamarindus Indica Ocirnurn Basilicum Laurus Nobilis Capparis Spinosa Armonica Rustocana Gaertn Hyssopus Officianalis Levisticum Officianle Majrorana Hortensis Oregano Vulgare Piper Longum
i

Kasakasa
Kayam Junipazham Valanpulli Thulsi Bayila Kareeram Kattumullanki Soofa Levi Maruva Kattumaruva Thippali Rosemary Salvithulasi Savory Thakkolam Vayampu Tharagon Thottathulasi Chittaratha

45 46 47
48

Rosemarinus Officinalis Salvia Officinalis

; Satureia Hortenis
!

lllicium Verum

49 50 51 52

Sweet flag Tarragon Thyme Greater Galanga

I! Acorns Calamus
Dracunculus II Artemisia Thymus Vulgaris

1 Alpina Galanga
I
I .

source: Website, Spices Board of India. :. '

:,..

.;:.:.:.

.-_-.I

2.11.1. Registmtion of owners


Spices Board grants registration to those cardamom producers who apply for registration, which is mandatory as per the provisions of section 8 of the Act. Such a registration shall continue to be in force until the registering authority cancels it. The

a n n e r as may be registered owners shall furmsh returns to the Board in such form and m
prescribed in this regard.

2.113. Certificate for export of spice

As per section 11 of the Act, certification for export of spices is mandatory to all
those who are engaged in the business of spices export. The board, in nonnal cases will grant certificate on receipt of application in prescribed form and as per the terms and conditions laid down in thls regard. However such registration may be cancelled on violation of the terms and conditions of the certificate or when the Central Government

think it is necessary to cancel the registration for the general interest of the public.
2.113. Control by the Central Government

As per section 16 (1) of the Act the Central Government may, by order notified in the official Gazette, fix in respect of cardamom of any description specified therein

a) The maximum price or the minimum price, or the maximum and minimum prices,
which may he charged by a grower of cardamom or cardamom dealer, whether for the Indian market or for export and b) The maximum quantity, whch may be sold to any person in one transaction. The Act also provides powers to the Spices Board to insist any person engaged in the process of production, supply or dismbution or trade and commerce in cardamom to

maintain and produce for inspection such books, accounts and records relating to their business and furnish such information relating there to. Further, the Act empowm the Board to enter and search the premises, vehicles, vessels and aircraft if required to prevent contravention of the orders. The Central Government has the power to

prohibit, restrict or otherwise control the import of cardamom on a case-by-case basis or generally.
2.11.4. Financial Sources of the Board

The major source of finance for the Board is the appropriation made by the Parliament by law on its behalf
in the form of grants and loans of such sums of money

as the Government considers necessary. The Government constitutes a fund named


'Spices Board fund' and crecfits thereto a) Any grants and loans made to the Board by the Government b) AU fees levied and collected in respect of certificates granted C)

AU sums received by the Board from such other sources as may be decided by
the Central Government. The fund so constituted shall be applied for meeting salary, allowances and other

remuneration of the members. officers and other employees of the Board, expenses of the Board in the discharge of its fimctions and other incidental expenses as may be necessary for the proper discharge of the functions specified in the Act. The Board prepares a budget for each financial year with estimated receipts and expenditure and forward the same to the Government. The Board shall also prepare a report of the activities and functioning for each financial year and a copy of the same shall be forwarded to the Government. The accounts of the Board shall be maintained

and audited in such a manner as may, in consultation with the Comptroller and Auditor

General of India, be prescribed and a copy of the audited accounts shall be forwarded to
the Government. Table 2.1 lgives a general view of the financial sources and nature of expenditure of the ~ o a r d ? ~

Table 2.11
Income and Expenditure of the Spices Board

1 Head of Account

1999-2000 ( Rs-1 Budget Actual


Grant.
!

2000-2001 ( Rs.) Actual Budget Grant 280.00 723.00 191.00 94.00 464.00 12.00
Expenditure

Expenditure

Adrmnistration Export oriented production Export oriented Research Quality improvement Export development Works and Human Resources development
I
I
I

285.73

285.93 676.12 168.01 65.06 410.00 12.06

279.95 722.07 191.20 93.41 464.12 11.68

1
1

679.00 170.00 65.00 411.00 30.00

I
I

I
I

/
I

I
I

Source: - Annual Reports of the respective years, Spices Board of India

2.11.5. The Spices Cess Act 1986

Along with the Spices Board Act, the Government of India has passed a Spices Cess Act in 1986, to provide for the imposition of cess on all spices, which are exported h m India with the purpose of carrying out measure for the development of export of spices. The Act says "there shall be levied and collected by way of Cess for the purpose

of the Spices Board Act 1986, a duty of customs on spices at such rate not exceeding five percent ad valorem as the C e n d Government may specify from time to time." The duty of customs so levied shall be in addition to the duty of customs leviable on spices under the Customs Act 1962 or any other law for the time being in force. 36

2 . 1 1 . 6 . The Spices Board Rules


The Government of ln&a has b e d certain rules for the exercise of the powers conferred by the Spices Board Act, 1986. Such rules were originally passed in the year and amended many times subsequently. These rules specify the constitution and composition of the Board and its committees. It also deals with the research and development of cardamom. market development committee for spices, provision for the constitution of special committees etc. The Spices Board Rules include provisions relating to the certificate of registration to the exporters, the minimum conditions which should be followed by an exporter for the grant of the 'Spice House Certificate' and also the provisions for appeal or complaint by any aggrieved party and the opportunities for the appellant.
2.11.7. OBlices of the Board

The head ofice of the Board is located at Cochin in Kerala. Twelve regional offices of the board headed by joint directors at NewDelhi, and Saklespur, deputy directors at Cochin, Gangtok Guavahati, Ahmedab* Secunderabad, Mumbai, Chennai
37

and Bangalore, assistant directors at Calcutta and Unjha are funcitioning at present.

There are hrteen zonal offices headed by assistant directors located at Trivandrum, Muvattupuzha Calicut, Vandenmenu, Chikmagalore, Madikeri, Shimoga, Bodinayakanur, Guntur, Tadong, Mangan, Jorethang and Kalimpong. Besides market

development offices headed by Assistant directors are funcitioning at Sakleshpur, Bodinaikanur and Gangtok. The Board operated field units also as per requirements. The board has

maintained five department nurseries in Karnataka and two in Kerala during the year. Main research station headed by director (research) at Mylamdumpara and regional stations headed by seinor scientists at Sikkim, Sakleshpur and at Thadiyankudisai are also functioning.

2.11.8. Programmes and activities of the Board


Spices Board is responsible for the formulation and implementation of development programmes for Improving productivity and quality of cardamom as well as post harvest improvements of spices having export potential. It implements production programmes for other important spices also. The development activities are carried out through six regional offices headed by joint director I deputy directors, thirteen assistant directors, and thn-ty field offices. These offices maintain laison with growers,

agricultural departments of the states, agricultural universities, banking institutions, local bodies, traders and exporters. The board maintains departmental nurseries also to meet the requirements of cardamom growers.38 In order to assist the cardamom growers, the board implements the following programmes 1. Extension Advisory scheme

2. Production and supply of quality planting materials


3. Cardamom replanting schemes for economically unprofitable plantations providing
subsidies

4. Irrigation and land development programmesa) Western Ghats Development Programmes in Kerala, Karnataka and Tamilnadu with joint financial support from the respective Governments.
b) Tribal development programme - There are large number of cardamom plantations

in tribal areas and so the board undertakes tribal development programmes to improve the quality and productivity of cardamom in such areas.

5. Development of mfrastructure for post harvest improvement and storage of spices.


6. Training programmes for quality improvement of spices

7. Development of technology, infrastructure and collaborative studies.


8. Scheme for promoting organic farming in spices 9. Plantation labour welfare schemes like providing educational stipend to the children
of cardamom estate workers.
10. Researches for crop improvement through Biotechnology, Crop management, Post

harvest technology etc.


11. Market development programmes

Along with the above the Board is expected to participate in various national and international seminars and conferences related to spices.

References

1.

Bal81~man Nair M.and. Madhusoodhanakurup P., Sugandhakeralam, Cochin: Spices Board, 1989. p. 4 1.

2.

Parry J.W. Hand book of spices Vol. 1, New York: Chemical publishing
company Inc.,1969, pp.11-12.

3.

Khan M.T., Spices in Indian Economy, Delhi: Academic foundation,l990, pp.2527.

5.

Rosengarten. F. Jr., Book of spices, Wynewood: Livingston publishing co.,1969, p.24

6. 7. 8. 9.
10.

Purseglove J.W., Spices Vol.1, New York: Longman Inc.,1981, p.1. Rosengarten, op.cit., p. 3 1

Mahindru S.N., Spices zn Indian lijie, Delhi: S. Sultanchand and sons, 1982.p~. 26.
Good News Bible, Bible society of India, Bangalore. Rosengarten, op.cir . pp 28-29.

15. 16. 17. 18. 19.

Rosengarten, op.cii. pp.62-71


Mahindw op.cit., p.3.

Rosengarten, op.cir., p.59.


hid. p.71. Bid. p.79.

Spices Board of India, Spices Erport Review, Cochin :2000.p. 2.

Ravindran P.N, Medicinal and Aromatic plants, Amsterdam: Hard wood


Publications, 1998, pp. 2-5.

Website IPC, www.i~c.net.org. Website IPC, www.ipc.net.org.

Alagappan, V. and Manoharan, M.,

"

Production of pepper in India, a global

perspective", Spice Lndia Vol. 1, January, 2001, pp. 4-5. Chan-

K.M., Spices Development, Institutions and Departments,

Cochin: Spices Board, 1989, pp. 15-17. Sreekumar, B.,


"

World trade in spices- Import and Re- export of Pepper ",

S~ice India ,Vol. X l I. 1999, pp. 17. Ibid p.18.

Annual report,lPC,1999.
29. Website, Spices Board of India, w~w.indiansuices.com.

30. Spices Board of lndia Spices statistics, Cochin: 1998,p.16. 3 1. Spices Board of I n d a Area and production of Spices in India, 1997. p.47. 32. Ibid.p.48. 33. Ibid.p.48 34. The Spices Board Act 1986, Government of India. 35. Annual Reports, Spices Board 1999-00 & 2000-00.

n d i a 36. The Spices Cess Act 1986. Government of I


37.

Annual Report, Spices Board, 2000-01.

n d i a 38. The Spices Board Rules 1987, Government of I