Commodity Pricefall in Kerala!

Kerala is known for its spice export from pre-bibical times. Roman author Pliny has written about the pepper import from Kerala.

Today in 2002 Kerala farmers are struggling to keep both ends meet. Price of everything has gone up except that of our agricultural commodities. In 2001 even the price of Pepper had fallen. Cashew nuts too. Nothing is left behind. The leftist parties have been lamenting about the WTO agreement and Globalization. There is some truth in it. But the major cause is not WTO or Globalization, but our own worthless United Front Goverments and politicians who have been ruling the state for the last 30 years!

This is the first in a series of articles where we investigate what has gone wrong in Kerala in terms of our export - spices and coconuts.

Failure to Convert Agricultural Commodity into an Industrial Product

Even in the Golden Era our export had been raw material or raw products. This worked perfectly allright in the pre-industrial Era. Even in the Colonial Era it worked alright. For example, we didn't have the plants to process and pack tea into packets etc. but Lipton England had.

In the 80s and 90s many Asian countries have captured the World market for packed items from the tropics. We don't have the monopoly on anything today - not pepper, not any other spice. Sri Lanka is exporting more tea than India.

Coconut Export was confined to coconut oil. If Tata Oil Mills and Hindustan Lever Ltd do not buy the oil (for soap) the price falls. We should have converted the coconut into an industrial product so that the dependence on selling oil can be relaxed. What product, you may ask. In the world market there is 'Bounty' Chocolate made out of Coconut only. There is Jamaican drinks from coconut available in Western Tax Free shops. There are a variety of things one could make where coconut is a part, at least. Dessicated coconut, dried coconut, coconut milke paste etc products are all available in Europe exported from countries like Thailand and Eri Lanka. Nothing from Kerala! In fact, the rest of India can be used as a market for Coconut from the Southern India.

This is the wrapper of Coconut cream powder exported from Thailand to Europe and America. This 160 gms powder is sold for Rs 100 in a European country. This is scientifically prepared and packed and contains no preservatives! Probably made out of not more than 2 coconuts. After profit, tax, transport and production charges, may be the farmer is getting only some 20 rupees. But it gives job to many on the way! Our farmers are struggling. not able to get even 10 rupees for that!!!

Recently Indonesia and Malaysia have been packing and exporting many tropical fruits.

For example, the above is the wrapper of JackFruit (the name originated from Malayalam 'chakka'), canned in Thailand and available in most Western European Capitals. It is sold for about 2 dollars (about 95 rupees). As you can see it contains about 7-10 "chakka chula" (230 grams). We have also seen ripe Jack Fruit itself sold in the shop. It costs about 6 dollars for a Kilogram. This is the price for 'raw chakka including the shell'. A medium sixed Jack fruit weighs at least 4 Kilo. This means a Jack Fruit costs 24 dollars in the open market. The market we scanned had a tax of 12% on the foods. Removing this, the price is about 20 dollars = 800 rupees. Of course this should cover the transport by air, damage costs and the profit. In Kerala one can buy such a Jack Fruit for about 10-20 rupees! Very often many farmers don't get anything. Many just pluck what they need for home use and the excess fruits just fall and get wasted.

These are only some examples. One can take mangoes, papaya etc. Some limited quantity is indeed exported. But that number is very low and is also monopolized by some companies and they are happy with the limited market they are covering (Gulf, UK for example). The concept is not widepsread. The real farmer doesn't get the benefit.

From West to East

What we have seen above is an export from East to West. There are also plenty of products exported from West to East. Small countries like Denmark and Holland, though perceived as industrialized countries, also make billions of dollars of revenue from agricultural products - a fact very often not known by the public in India and ignored by our so called 'educated elites'. Both these countries export beer (an agricultural product), milk products. Holland also make billions from flowers alone. Danes on the other hand export frozen chicken and chicken products. Here is the wrapper of a Danish product - chicken based sausage. Normally sausages are made of pork. But many in the Eastern World do not take pork. So the easy acceptable substitute is chicken.

The wrapper says it is imported to Singapore by a company. These are all providing 'bread and butter' to many poultry families in Denmark. Middle East is also a big market for Danish Chicken products where the products are clearly marked 'Halal' to conform to religious laws and customs in those countries.

Instead of finding ways to pack and market our products (in the rest of India and abroad) our Government and people are now trying to borrow the money from the vultures like World Bank and ADB - a blueprint for ultimate disaster.

[To be continued...]