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CHANGE HAS COME ON SUCH
quiet feet that it startles you at every
turn on the scenic pepper routes from
Idukki to the terminal markets on the
spice coasts of Kerala.
Dreams built on pepper fortunes
no longer seem to turn real in Idukki,
the most important centre of its culti-
vation in India, as elsewhere in the
State. Along with some other mon-
soon-drenched districts such as
Wayanad in the north, central Kerala,
including parts of Idukki, used to pro-
duce such copious quantities of the
black beads that it never failed to as-
tonish the ancient traders who came
in search of its mysteries.
Black pepper is indigenous to Ker-
ala, known better in a historical con-
text as the Malabar Coast, and its
plentiful supply here had for long
been kept a secret to the outside world
by the seafaring traders insecure
about everlasting prots. Of all the
spices of the East, pepper was much
in demand in the old worldbecause its
origins remained a mystery and the
transfer of the produce across the
shores an enormous chore.
In Europe of yore, the land of se-
vere winters where pepper refused to
grow and where starvation was com-
mon, it was valued as a food preserva-
tive and avouring agent. Pepper set
off several voyages of exploration
seeking to nd its source and control
its supply, and these led to the discov-
ery of a sea route to India from Europe
and changed the course of history in
state revenue, weapons and control
over the principalities. It saw the
growth of a well-connected trade net-
work, from the hills to the coasts,
along rivers and across backwaters.
Huge pepper godowns were built on
the banks of rivers, near estuaries and
ports, which ensured controlled sup-
ply of spices to the trade ships visiting
the coast.
But not all of Malabars pepper
reached the eager traders who came
across the ocean blue. It also went, at
times surreptitiously, without their
knowledge, across the Western Ghats,
to the rest of India, where, too, pepper
was in great demand.
Surely, all this history is anchored
on a singular fact: the abundance of
black pepper in Kerala.
DECLI NI NG PRODUCTI ON
In spite of the prodigious demand for
pepper, its cultivation, curiously, was
for a long time conned mostly to the
accessible lowland and midland re-
gions of Kerala. An important centre,
for example, until the turn of the cen-
tury was the present-day rubber
growing areas of central Kerala,
where pepper was earlier the major
crop. The hills of the Western Ghats,
especially, were left largely unmolest-
ed until about half a century ago. But
by the late 1960s, the present-day
boom towns in Idukki district, from
Kumily to Thodupuzha on either side
of the Idukki reservoir, were already
full of pepper enclaves where ambi-
many parts of the world. No other
commodity was perhaps so romanti-
cised in the ancient world.
Throughout history, its produc-
tion and trade was sought to be mo-
nopolised by various players. In its
own homeland, pepper wealth was of-
ten used to great advantage by erst-
while rulers, among them the
Zamorin of Calicut, whose kingdom
Vasco da Gama sailed into in 1498,
and Marthanda Varma, the founder
of Travancore, during whose rule the
rst pepper monopoly was establish-
ed in 1743.
State control over the trade in
pepper lasted for more than a century
and made the rulers of Travancore the
sole distributor of pepper to a variety
of European powers. It ensured a kind
of forced cultivation of the crop for
The last stand
Pepper cultivation is on a never-before decline in Kerala, the land of
its origin. Are we witnessing the end of a regions historic role?
BY R. KRI SHNAKUMAR I N KOCHI AND I DUKKI
FRONTLINE SPECIAL
BLACK PEPPER is indigenous to
Kerala, or the Malabar Coast.
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OCTOB E R 1 9 , 2 0 1 2
tious settlers began their hard strug-
gle with nature and their tryst with
the crop.
Among them was T.T. Thomas,
now 71, a settler farmer in the remote
forest village of Kanchiyar near Kat-
tappana, an important primary mar-
ket centre for pepper in Kerala (see
life story). Life was hard then, but we
used to get nearly 18 quintals [1,800
kg] of pepper from an acre [0.4 hec-
tare]. Today, most farmers would be
lucky if they get at least 10 kg, he said.
Production has dropped
throughout Kerala because of terrible
infestations in ageing pepper gardens,
changes in weather patterns, un-
friendly market conditions, and a
frantic shift to more remunerative
crops by growers, A. Jayatilak, Chair-
man of the Spices Board, told
Frontline.
Farms and plantations across
Kerala are unable to contain diseases
affecting pepper, such as foot rot
(quick wilt) caused by certain fungi
(Phtyophthora), slow wilt (slow de-
cline) caused by parasitic nematodes,
NO OTHER
COMMODI TY
was perhaps
quite so
romanticised
as black pepper
in the ancient
world.
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OCTOB E R 1 9 , 2 0 1 2 36
T.T. THOMAS farmhouse is a
cold, dingy three-room shack, with a
ledge for his cat on the kitchen win-
dow. Outside is a curious yard of un-
ruly plant growth, mainly rogue vines
of pepper plants smothering their
support trees, strawberry, tomato,
Italian malta, brinjal grafted with oth-
er plants, a variety of medicinal plants
and fruit trees.
A little beyond is a breathtaking
panorama: stretches of greenery that
merge with the majestic heights of the
Western Ghats, the constant chatter
of a nearby stream, the stillness of an
articial pond, the hoots and cries of
an assortment of birds and animals.
Thomas likes to remind visitors
that the part of the Ghats that dom-
inates the grand scenery lends sup-
port to the Idukki arch dam, one of the
biggest in Asia. On the other side of
the mountain is the huge Idukki
reservoir.
Thomas is 71 years old. He came to
the forest village of Kanchiyar in the
high ranges near Kattappana in Iduk-
ki in the early 1960s, much before the
arch dam was built.
The 1960s were a hard time to be
here for settler farmers like me. The
place is 2,500 feet above sea level. It
was so cold that you would hesitate to
step out. The rain drops used to fall
like threads, and we had copious
monsoons. The neighbourhood was
full of green pepper vines, Thomas
said.
Today his farm is a healthy pepper
island amidst a sea of thick green car-
damom clusters and mostly withering
and diseased pepper growth.
My rst pepper farm here had
about 3,000 vines. I nurtured it for
four years but lost the entire crop to
quick wilt disease. Then I tried a dif-
ferent variety of pepper that required
less shade. That crop was good, but
the prices dropped to hell. The early
years were full of such disappoint-
ments. I used to hunt in the forests
and became familiar with several new
varieties of plants. I had only one
dream thento nd a variety of pep-
per that would be tolerant to diseas-
es, Thomas told Frontline.
In the late 1980s, Thomas nally
found what he was searching for: a
unique pepper vine. It had branched
spikes (unlike the single spike varie-
ties found everywhere else in Kerala).
The plant grew well in shade, in sun-
light and in water. After several exper-
iments with it in his farm, he
Hardy graft
Pollu disease (Anthracnose) again
caused by some pathogenic fungi, and
some viral diseases. Moreover, the
monsoon pattern has been uctuating
wildly. Farmers say that the compara-
tively warmer regions of Kerala are
increasingly becoming unsuitable for
pepper.
In the hill tracts near Kattappana
that causes spikes to fall at the time of
maturity] to spread. This year, when
the pepper berries began to sprout
and the plants needed regular spells of
rain, the monsoon failed us. My two-
acre crop, some of which would other-
wise have had individual pepper
strings at least one and a quarter feet
in length, is therefore as good as lost.
overlooking the beautiful Cumbum
valley in Tamil Nadu, the havoc on
pepper cultivation caused by these
factors is quite evident. Alex, a pepper
grower, explains the farmers woes
thus: Last year there were contin-
uous spells of rain for seven to twelve
days, and it was cold, which was ideal
for the Pollu disease [a fungal disease
Are the farmers getting maxi-
mum returns? But maximum
returns for what? One acre of pepper in Vietnam gives
more than 10 times the yield of a holding measuring
more than an acre in Kerala. They do not use fertilizers;
they use drip irrigation. In contrast, nobody is taking
care of the plant in Kerala. In Vietnam, they take great
care of the plant, and for every acre they are getting a
much bigger yield.
There are no pepper plantations in Kerala, and
pepper is grown in household gardens. Obviously, pro-
duction will be low. Whereas in Vietnam they do it on
an industrial scale25 acres of pepper, for example.
Their yield is up to 15 times higher. The price may be 10
per cent less, but for every acre they are getting so much
more pepper. In Kerala, the good plantations get 400
kg of dry pepper per acre. In Vietnam, it is 1.8 tonnes per
acre.
Manish Bafna,
owner of the spice company Bafna Enterprises, Fort Kochi.
LIVE BITES
LIFE STORY
37 F R ONTL I NE
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OCTOB E R 1 9 , 2 0 1 2
When this cruel cycle repeats itself, a
farmer loses all hope.
Pepper is a fragile plant, especially
when it is young, and requires great
care, being quite vulnerable to varia-
tions in the weather. It needs rain,
scattered and at specic intervals, and
sun and warmth, in almost the same
measure. If needed, the cultivators
have to spend much time watering the
plants during the summer and drain-
ing out the water during the mon-
soons. And, there is no yield from the
plant for the rst three years, or more,
when the crop is most vulnerable and
is usually ravaged by severe ailments.
After the vines are planted and
the farmer nurtures them for three
years, suddenly, when they are expect-
ed to start owering, they wither
away. It is exasperating and demotiv-
ates the farmer, and he is not willing
to cultivate pepper any longer, said
P.S. Sreekantan Thampi, Deputy Di-
rector, Spices Board.
With labour costs going up to
Rs.400/Rs.500 a day, the majority of
farmers are shifting to cardamom,
which starts to yield from the rst year
and is more protable. An acre of
cardamom would give up to 1,000 kg
of it and 1 kg will fetch you Rs.600 to
Rs.700 this year. But an acre of pep-
per hardly gives you 10 kg or so in
most farms [at a price of below
Rs.400 a kg], Thomas said.
A study conducted by Kerala Agri-
cultural University in 2010 found that
there was a nearly 24 per cent deple-
tion in the area under pepper culti-
vation in the State (from 2.02 lakh
hectares to 1.54 lakh hectares) be-
tween 2001 and 2009. Production
went down from 60,000 tonnes to
42,000 tonnes, a decline of 44.21 per
cent. Productivity per hectare drop-
ped from 301 kg to 221 kg during the
same period. Farmers say more areas
have gone out of pepper cultivation in
the two years that followed.
The transformation is shocking
because the yearly harvests from
smallholder farms in Idukki and
Wayanad districts accounted for a
major chunk of independent Indias
pepper production even a decade ago.
Farmers say that the coming years
will see a severe fall in production.
EFFECT ON PRI MARY MARKETS
Nowhere are the effects of this change
more evident than in the primary
market towns in Idukki. Most mid-
dle-level traders, who used to stay
open well past midnight as trucks
were loaded, are now pulling down
eventually grafted it with a disease-
tolerant variety of wild pepper of Bra-
zilian origin. The result was amaz-
ing, Thomas said. It gave 10 times
the quantity of pepper than the usual
varieties. Its spikes were fully
branched, whereas other varieties had
only single spikes with 60 to 80 pep-
per berries on it. But each spike in the
new variety had several branches and
would have 800 to 1,000 berries.
Recently, Thomas received an
award from the President of India for
his innovative, high-yielding variety of
Pepper Thekkan (after his family
name). According to the Indian Coun-
cil of Agricultural Research (ICAR),
while the normal pepper varieties in
the high ranges of Idukki yielded up to
3,000kg/ha [dry weight] and are
highly susceptible to wilt disease,
Pepper Thekkan yields about
8,600kg/ha and is highly disease
tolerant.
The grafts from his small nursery
are today in much demand, but mostly
from big plantations and universities
in other States, like Karanataka and
Goa, he said. He sells them at Rs.50
each and plans to apply for a patent.
Fellow farmers in the neighbour-
hood, however, show little interest in
the new variety. It looks different, in
the way its spikes are branched. Its
roots stand like stilts about 50 cm
above the ground and are resistant
especially to the most prevalent (quick
wilt) disease caused by a busily mul-
tiplying fungus that strikes at the roots
and makes the leaves grow pale, caus-
es the vines to droop and the leaves to
curl inwards.
Then the leaves drop and the fruits
diethe nightmare of pepper farmers
throughout Kerala today.
R. Krishnakumar at Kanchiyar
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T. T. THOMAS I N HI S FARM in Idukki
district. He grows a unique, high-
yielding variety of pepper vine (left) with
branched spikes carrying 800 to 1,000
berries, whereas other varieties have
single spikes with 60 to 80 berries.
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their shutters by six in the evening.
From the small procurement shops
where the neighbourhood farmers
regularly sell their produce, to dealers
in bigger markets such as Kattappana
and Kumily, cold, cemented shop
oors lie empty, with only tiny
mounds of pepper dumped in corners.
Early this year, when the price of
pepper rose to a record Rs.400-plus
level, there was a rush among farmers
and traders to sell all their stock, un-
usual in Kerala where people tradi-
tionally tend to hoard the commodity,
just like gold, as a store of value for use
during hard times.
When the price of pepper rose,
we all sold our stocks. There is noth-
ing left. Every day, tonnes of pepper
used to be sent from Kattappana,
nearby, to Kochi and other big mar-
kets. But now it has come down to a
load (nearly 10 tonnes) a week or so.
Even small traders used to procure up
to two tonnes of pepper daily during
the harvesting months from January
to February, and a minimum of 200-
250 kg a day during off-season
months like September. This year it
was bad. In 100 days I havent got
even 1 kg of pepper from the farmers,
said Biju Thomas, a rst-post pro-
curement dealer at Irupathekkar,
near Idukkis main pepper market at
Kattappana.
MI DDLE MEN AND MARKETS
Idukki produces one of the nest va-
rieties of pepper in the world, and
even a casual drive through the wind-
ing roads in the district used to offer
pleasant sights of robust vines cling-
ing on majestically to every tree or
trellis in sight. But a visitor making
the trip today will not nd a single
ourishing small-holder pepper gar-
den easily. The change, which started
happening from the mid-1990s, has
become very much evident at present.
In most places, even on the road-
sides, pepper has given way on a mas-
sive scale to cardamom; or it is grown
without much care among a multiple
other crops. It is ironic that at a time
when end-users, including processing
rms, exporters and international
spice companies, are increasingly try-
ing to cut out intermediaries and buy
pepper directly from source markets,
its cultivation is declining in the land
of its origin.
Cutting out middlemen is good for
the big buyers, but most traders still
go on the defensive when they answer
the question: how much will the farm-
er get for his produce? If today the
Kochi price is Rs.388 for a kg of pep-
per, I can only buy from the farmer at
a price that is below Rs.384 because
what I get from the dealer at the next
stage will be only Rs.384 a kg, Biju
Thomas said. Indeed, the pepper cul-
tivators of Kerala, the majority of
them with holdings of less than a hec-
tare, still prefer to sell only to neigh-
MOST SMALLHOLDER GROWERS in Idukki are switching over to a multi-crop pattern of cultivation, with cardamom as the
leading crop (left) and pepper as a subsidiary crop. Pineapple (centre) and tea (right) plantations are located in the lower
reaches of Idukki district. Most pepper and cardamom gardens are further up along the Ghat road.
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I remember the rst time in
history when pepper prices
rose to Rs.200 a kg and we sold it to AVT
company. I would go down the Ghat road to
Kochi, nearly 170 km away, and come back
by bus, with a sack load or two of the pro-
ceeds of the sale. We did not have 500-
rupee notes then. So, throughout the jour-
ney I would be holding on to the sack, with
Rs.40 lakh to Rs.50 lakh inside it, all in
100-rupee notes. I would not get down
from the bus even for a cup of coffee. The
pepper business involved such risks too at that time, in
addition to our lack of awareness about the outside
markets. We had no other option but to
take such risks then. Today, we have more
awareness about the market, and the pro-
ceeds of our sale are promptly transferred
to our bank accounts. But now, there is no
pepper to sell.
Biju C.Kuruvila,
second-generation spice dealer,
primary market, Kattappana, Idukki.
LIVE BITES
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39 F R ONTL I NE
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OCTOB E R 1 9 , 2 0 1 2
bourhood traders and have largely
delinked themselves from the world
of big traders and powerful purchas-
ers. Some sell their harvest in advance
to contractors, among them, report-
edly, agents of big spice companies.
However, farmers are now well
aware of the price of pepper at various
markets and of the daily price swings
through online traders. This is an im-
portant change in the primary mar-
kets, where, earlier, it took more than
a day for even the price of pepper in
the Kochi market to be widely known.
There is a new animal in the pep-
per marketthe national commodity
exchanges, where people unrelated to
the trade play their games like they do
in the stock exchanges and speculate
on future pepper prices. The volume
of trade is increasing as a result, but it
is also causing wild uctuations in the
market. For example, on some days,
prices canbe down until about 4.30 in
the evening, and then it shoots up all
of a sudden by the time the market
closes. This happens without any tan-
gible reason, and many people who
actually deal with the commodity are
taken by surprise and have lost a lot of
money. But, you could also gain from
it equally, at times, if you are lucky,
said Biju C. Kuruvila, a second-gener-
ation primary market dealer at
Kattappana.
Clearly, the big purchasers are
now in the primary markets and in the
national commodity exchanges seek-
ing cheaper pepper, than, for exam-
ple, what has been available from
historical times at terminal markets
such as Kochi.
By the same logic, they have been
seeking pepper at lower prices in oth-
er countries as well. Companies like
ours will import from wherever it is
cheap because we are into this value
addition business. For our customers,
it is ground black pepper, cleaned,
processed and value-added in tune
with international quality standards
it is not origin specic, Jojan Malayil,
CEO of the Kochi-based spice compa-
ny Bafna Enterprises, told Frontline.
COMPETI TI ON, AT HOME
AND ABROAD
Until the late 1980s, India (and with-
in it Kerala) was a big player in the
world pepper market. But gradually,
within a decade of rst venturing into
pepper cultivation, Vietnambecame a
huge player in the global market. Viet-
nam today generates nearly 1.5 lakh
tonnes a year, very little of which is
used for its domestic consumption.
Similarly, pepper produced by com-
paratively late entrants such as Sri
Lanka, and also traditional producers
such as Indonesia and Brazil, is giving
strong competition to Indian pepper
on the world stage. Indian pepper
production has come down from
nearly 80,000 tonnes to about
40,000 tonnes during the same peri-
od.
The realisation that Vietnam, and
not their own State, is the new pepper
factory is yet to sink in among growers
in Kerala. Perhaps, more galling for
Kerala pepper growers is the fact that
just across the State border, in the
neighbouring regions of Karnataka,
pepper cultivation is ourishing,
while they face disastrous circum-
stances. Many farmers and officials
believe the production of pepper in
Karnataka is set to overtake that in
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Kerala very soon. The reasons for bet-
ter production are similar in both
Vietnam and Karnataka: pepper is
grown in fresh soil, unlike in the de-
graded, disease-prone farms in Ker-
ala; disease-tolerant varieties are
used for planting; and there is a lot of
stress on achieving economies of scale
through plantation-type cultivation.
Nearly 75 per cent of the pepper
cultivation in Kerala is in small and
medium-sized holdings that are less
than a hectare, whereas in Karnataka
pepper is grown by large corporate
houses, in huge coffee plantations and
areca nut gardens. Similarly, in Viet-
nam, pepper is raised as a mono-crop,
in vast areas, and gets more care and
attention from the growers, as against
the small-holder, careless, multi-crop
pattern in Kerala.
Vietnam is a big threat to India.
We are totally lost there. They have
vast areas under pepper, their produc-
tion and productivity are high and
they keep their prices low, said Kish-
or Shamji Kuruwa, owner of Kishor
Spices Company, a traditional spice
business house in Kochi.
NOT JUST A GAME OF DEMAND
AND SUPPLY
The high price of Indian pepper is
what gives farmers in Idukki and
Wayanad some consolation in an oth-
erwise bleak background of dropping
production. Pepper prices rose to a
record Rs.400-plus a kg early this
year. However, not everyone is happy.
Bhavesh Vijaysingh is one of the
few surviving spice brokers in Jew
Town, Mattancherry, a dying pepper
trading enclave in Kochi that once
had a concentration of his breed.He
(Kishor Shamji Kuruwa is a for-
mer president of the Indian Pepper
and Spice Trade Association and the
proprietor of Kishor Spices Company,
a traditional family-run spice busi-
ness house in Kochi.)
PEPPER trade in Kerala was con-
centrated initially in the Malabar re-
gion, in places like Tellicherry and
Calicut. Then it shifted to Alappuzha.
Until the mid-1960s, Alappuzha was
the centre for pepper. All the leading
exporters were based there. The do-
mestic inter-State business was han-
dled from Alappuzha.
It was the main trading centre for
pepper, coir and turmeric in India.
There were huge warehouses there for
storing these commodities. Kochi was
then famous only for the ginger busi-
ness. Pepper reached Alappuzha in
small boats from places like Kot-
tayam, Kanjirappally, Muvattupuzha,
Kothamangalam and Thodupuzha.
Such places constituted the pepper
belt then. Today, it is mostly a rubber-
growing area.
Pepper harvests from all such
places would be loaded on bullock
carts the previous day and would be
taken to the boat jetty in Kottayam.
The they were then loaded in boats
and sent to Alappuzha. Barges would
then transfer the pepper loads to Ko-
chi, from where they would be sent by
steam ships to Calcutta or Karachi
and places across the world. Compa-
nies like India Sea Navigation had a
regular passenger-cum-cargo vessel
running between Karachi and Kochi.
Every Sunday, one vessel would be in
Kochi, another in Karachi.
The Idukki arch dam had not yet
been built then and most parts of
Idukki were inaccessible jungle. Pep-
per and other goods were coming to
Alappuzha from as far away as Palak-
kad. The other major pepper centre
then was, of course, Calicut.
I think accessibility is the key that
changes the fortunes of a trading cen-
tre. When the Aroor bridge was built,
goods started moving from the culti-
vation centres to Kochi directly. By the
late 1960s, Alappuzha, where labour
militancy too was on the rise, had lost
its relevance as a pepper trading cen-
tre. Kochi came into prominence.
By then, people had started mov-
Those were the days
feels strongly about the helplessness
of the traditional players and about
the dramatic way the trade is being
hijacked by market players with
money power.
With the coming of the national
commodity exchanges in 2002 and
the central and private warehouses,
the ways of the pepper business have
transformed. Kochi had the rst ex-
clusive pepper exchange in India [es-
tablished by the Indian Pepper and
Spice Traders Association, IPSTA],
and it was run by the people who were
in the trade, who would not do any-
thing that would harm it. The ex-
change was well regulated by the
traditional players here, without any
default [on supply or delivery of the
commodity] and without much vola-
tility. But today, volatility within a day
itself is in the range of Rs.10 to Rs.15,
he said.
According to him, prices are no
longer linked to the demand and sup-
ply of pepper, but to money power:
People in the trade are not happy
about what is happening, even though
we get good business. The changes are
not healthy. The trade is concentrat-
ing in the hands of a few, and most of
the traditional players are being
wiped out.
But what exactly is pushing up the
price of Indian pepper? Jojan Malayil,
whose company has processing and
export businesses in India and Viet-
nam, said: Production has come
down. The monsoon was delayed, and
speculation pushed up the price. But
Indian prices are very high. The spec-
ulators have now become very power-
ful and Indian prices close at Rs.75 to
Rs.90 higher than the international
market. Therefore, India is strongly
out of the league, and today there is
hardly any pepper export from the
country.
According to Kishor Shamji, with
the government actively encouraging
people to participate in the national
commodity exchanges, very big oper-
ators, even cartels of operators, have
joined the game and their interest in it
had pushed up the prices of some oth-
AN EMPTY PEPPER STORE at a major spice trading centre in Idukki
district. With the price of pepper crossing Rs.400 a kg, farmers and traders
have been selling all their pepper stocks before another price fall in the
commodity markets.
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MEMORIES
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OCTOB E R 1 9 , 2 0 1 2 40
er commodities earlier. Since last De-
cember, these big cartels of
commodity operating groups are into
pepper. In June, July and August they
cornered large quantities of the com-
modity and are holding back. They are
anticipating that since there is not
much pepper, the prices will go fur-
ther up to about Rs.500 a kg. [Now it
is between Rs.375 and Rs.400 a kg.]
So they are holding their stocks.
But are the farmers not happy that
the prices are up and they are getting
per than he needs at a time. Similarly,
farmers have become more cautious.
Now he sells when the prices are high,
and only when he needs the money.
The buyer also buys only when it is
needed. Nobody wants to create big
inventories.
CHANGES I N THE
TERMI NAL MARKET
The way the pepper business and its
priorities are evolving is best illustrat-
ed by the changes in the terminal mar-
ket in Kochi in the past two decades.
Right in the middle of Mattan-
cherry, on Jew Street, Kochis tradi-
tional spice centre, is Indias rst and
only international Pepper Exchange,
a nondescript building into which the
visiting Queen of England once walk-
ed in to get a sense of the bustle and
din of the open outcry system of pep-
per trading. The bustle is long gone.
Parts of the building have been rented
out; the remaining halls are empty,
except for a few online traders.
The exchange is run by the IPSTA,
but its members can now do their
trading from anywhere. The volume
of trade is only 10 tonnes to 15 tonnes
a day, whereas it is 5,000 to 6,000
tonnes in the national commodity ex-
changes, said Kishor Shamji, who is
good returns? The trouble is, it can
go the other way too. Once they nd
that there is more production, they
can push down the price, he said.
Thus, whether they understand
the new market realities or not, more
and more pepper farmers are being
exposed to the vagaries of the com-
modity markets and intense interna-
tional competition. We are now
seeing a marked change in the buying
and selling patterns of pepper. No
trader or exporter is buying more pep-
SPI CE STORES line the main road at Kumily, on the way to Thekkady,
near the Kerala-Tamil Nadu border checkpost.
S
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G
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P
A
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ing deeper into the jungles of Idukki
and large forest tracts were being con-
verted into pepper gardens. Later,
cardamom too started being cultivat-
ed there.
When the Idukki arch dam was
built, a lot of area under pepper went
under water. People then shifted to
the upper areas of Idukki, such as Kat-
tappana, Nedumkandamand Adimali
to grow the crop.
Every year I used to go to these
places with my father. We have links
with three generations of dealers
there who procure pepper for us from
the local farmers. We still hold on to
these links. Some of the dealers are no
longer there; in some cases a new gen-
eration has taken over. Somewhere in
between, the trade patterns changed.
With banks providing generous
credit, the breed of commission
agents, like my father, who used to
nance the traders from the primary
markets to the exporters and inter-
State dealers and who acted as a sort of
middlemen in the pepper trade, have
now completely disappeared. Dealers
from the primary markets have started
supplying pepper directly to the
exporters.
Of late, some dealers have started
exporting pepper on their own. Some
such dealers in Sulthan Bathery and
Kalpatta in Wayanad district and Ku-
mily and Nedumkandam in Idukki
district have established their own fa-
cilities for grading and processing
pepper for exports and also for the
Indian domestic market.
Earlier such processing facilities
used to be concentrated invariably
around Kochi. Now you can see them
all over Kerala.
As told to R. Krishnakumar KI SHOR SHAMJI KURUWA
41 F R ONTL I NE
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OCTOB E R 1 9 , 2 0 1 2
F R ONTL I NE
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OCTOB E R 1 9 , 2 0 1 2 42
market with our products. So we buy
from Vietnam at less than the Indian
price and re-export it after value addi-
tion, said Jojan, whose company has
now established a presence in Viet-
nam too.
In recent months, Indian pepper
has been thoroughly outpriced in the
international markets. So who will
buy our pepper at a higher price? The
world over, people are looking for the
cheapest available source of the com-
modity, Kishor Shamji said.
No doubt, lax pollution control
laws and comparatively cheaper la-
bour costs are also among the main
reasons why there is such a concentra-
tion of spice extraction units in Ker-
ala. Such units have become a
difficult proposition in European
countries and the United States be-
cause of the norms for controlling pol-
lution. There are strict requirements
for destroying the residue from sol-
vent extraction units there. The laws
are very liberal here, Kishor Shamji
said.
To take advantage of such a toler-
ant scene, perhaps, and to reach out to
the source markets, several multina-
tional companies also have been es-
tablishing themselves in Kerala
through joint ventures or buying out
shares from existing companies to
launch subsidiaries here. Among
them are U.S.-based McCormick, the
worlds largest spice rm, which has a
well-established joint venture with
AVT (called AVT-McCormick); Neth-
erlands-based Ned Spices; and Singa-
pore-based Olam. Such companies
have invested heavily in India, and
their main target has mostly been the
half, right nowIndia is generating on-
ly just about enough pepper to meet
its own internal demand. This shift in
the destination of pepper produced
from within is also signicant, be-
cause a major share of the pepper pro-
duced in Kerala was earlier exported
to other countries.
We dont have enough produc-
tion to depend on here, for example to
make pepper powder or oil. So we
import from a low tariff area, a low
cost area, we process it and export at a
bargain. Sometimes we may not be
able to compete in the international
also a former president of IPSTA. The
commission agencies in Jew Town
and nearby areas, who used to nance
the chain of pepper traders in the pre-
liberalisation era, have all disap-
peared or altered their proles. Their
presence now is restricted mostly to
the ginger trade. Out of nearly 70
spice export rms, only a handful are
still functioning at Mattancherry, to
date the main centre for procurement,
processing and export of pepper, gin-
ger and other spices, and coir. The
huge warehouses on the waterfront,
where pepper arriving in boats and
barges used to be unloaded and
stored, have all been re-engineered as
marts selling huge antiques and
handicrafts.
Such changes are not directly link-
ed to the decline of pepper production
in Kerala, but, strangely, to an expan-
sion of business opportunities in pep-
per (and in all spices), especially in the
export market. Big business has
adapted quite deftly to the reality of
declining production by turning away
from bulk pepper exports and concen-
trating more on extraction, process-
ing and export of value-added pepper.
It offers them better economies of
scale, whether it be with regard to
storage space, shelf life, price or vol-
ume, Sreekantan Thampi said.
By changing their focus to the pro-
duction of value-added pepper prod-
ucts, the companies have also reduced
their dependence on the supply of
pepper from within Kerala. They can
now source it from wherever it is plen-
tiful and cheap, Vietnam, for instance.
Today, therefore, even as the once
famous Malabar Coast is fast turning
out to be quite a marginal player in
bulk pepper trade, 90 per cent of the
worlds spice extraction units are lo-
cated in India, out of which 75 per
cent are located within the State itself,
mostly in Ernakulam district. Eighty
per cent of the world market share for
oleoresin, spice extract and spice oil is
accounted for by companies now in
Kerala.
India has a huge domestic de-
mand for pepper. It remains the
worlds largest consumer of the com-
modity, with domestic consumption
estimated at 40,000 tonnes a year.
With pepper output falling almost by
Earlier, people used to buy
whole black pepper. Now they
prefer to have it in convenient
packets, 100 grams, 400 grams,
and so on. We used to buy the
bulk of our needs from the pri-
mary markets. For the past
three years, we buy from the na-
tional commodity exchanges,
through designated ware-
houses. Our company alone
must have picked up 15,000
tonnes to 18,000 tonnes of raw
pepper from the commodity ex-
change platforms. So we buy
whole black pepper, grade it ac-
cording to standards, grind it,
sterilise it and pack it in small
pouches. We do from 100 grams
to 25 kg. The big packets are for
the industrial customers.
Jojan Malayil,
CEO of Bafna Enterprises.
LIVE BITES
Regulatory authorities in the
major international markets in the
United States now insist on pepper
exporters having their own proc-
essing facilities. Earlier anybody
with a telex connection and a fax
machine and a warehouse could be
an exporter. Once you get an order,
you buy the pepper from the mar-
ket and ship it. That was all. But
things have changed. Now an ex-
porter has several responsibilities.
It has reached a stage when you
will have to identify even the vil-
lage from where the pepper is
sourced. So the traditional export
houses had no option but to engage
professionals and enter into mech-
anisation and marketing. The
change is not voluntary. It is a
forced change. Those who have re-
fused to change have disappeared.
P.S. Sreekantan Thampi,
Deputy Director, Spices Board, Kochi.
LIVE BITES
43 F R ONTL I NE
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OCTOB E R 1 9 , 2 0 1 2
traditional family-owned spice export
rms operating in Kerala.
According to the reports of the
International Pepper Community
(IPC), Indian production is projected
to decline by 5,000 tonnes to 43,000
tonnes in 2012. With trends so bleak
for pepper cultivation in Kerala, the
National Horticultural Mission had
launched a special package for the re-
juvenation of pepper in Idukki and
Wayanad districts. The Rs.120-crore
project implemented in Idukki
through the Spices Board aims at re-
placing old, senile or disease-affected
pepper vines with disease-tolerant,
high-yielding varieties.
The project has crossed its third
year, but there is much scepticism in
the farming community about its pro-
spects. Thomas, for example, saidthat
farmers had mainly made use of the
opportunity to plant new vines on a
big scale with the aim of getting the
subsidy of Rs.28 for every vine that
came with it. It is doubtful whether
they have subsequently taken care of
the plants.
There is a clear trend both in
Idukki and Wayanad not to depend
on pepper as a mono-crop or to re-
place pepper with cardamom. More-
over, in almost all farmer households,
the new generation is moving away
from agriculture. As a result, most
smallholders are forced to depend on
labourers and often sell the entire har-
vest in advance to contractors.
The care that used to go into the
cultivation of pepper is lost and, de-
spite the rejuvenation project, at the
end of ve years, if my guess is right,
pepper production is going to be low-
er than what it is today. If pepper is to
survive in Kerala, new disease-resist-
ant varieties and good care through-
out the year for the plants are
essential. That is the bottom line. The
new-generation farmers cannot really
be bothered about Keralas glorious
history in pepper production or trade.
Farmers go where the money is. They
switch over to more remunerative
crops or they quit farming altogether
and seek other avenues, Thomas told
Frontline.
Consequently, the famed Malabar
Coast has already become a marginal
player in the global black pepper mar-
ket. Instead, it is fast turning out to be
a huge centre for back-end operations
of big spice companies.
With the pepper processing in-
dustry growing in sophistication,
there also is a signicant consolida-
tion of the trade in the hands of the
most powerful players and margin-
alisation of a lot of traditional and
smaller players. Cheaper pepper sup-
plies available from Vietnam and oth-
er nations and the entry of retail
giants and spice multinationals have
transformed the game altogether and
is driving out smaller traders and
exporters.
The big purchasers may have
come in initially to get their hands on
the source markets for obvious price
benets as well as for ensuring quality
and food safety norms, which have
become a premium requirement in
American and European home mar-
kets.
But now they seem to have turned
their attention to value-added prod-
ucts and are increasingly looking at
the huge Indian domestic market to
sell them. They have established joint
ventures or subsidiaries in several
other pepper-producing countries
too.
We need to be cautious that un-
controlled imports or interference of
these big players in the market does
not adversely affect Indian farmers,
traders and export companies. Many
of these big multinationals are now a
direct threat to Indian companies in
the value-added spice products sector
too. And it is the huge Indian domes-
tic market that is increasingly becom-
ing a major attraction for them,
Kishor Shamji said.
The most famous story about Ker-
alas pepper wealth and trade is the
one about Vasco da Gama asking the
Zamorin of Calicut for a few pepper
vines for replanting in his own coun-
try. As his courtiers remained
alarmed, or so the story goes, the su-
premely condent Zamorin asked da
Gama: You can take our pepper but
can you take our monsoons?
Certainly, in the ancient world,
among the long-held secrets of the
pepper trade had been the inevitabil-
ity of the twin monsoons and the trop-
ical climate in Kerala for its
cultivation, and the ways in which the
local traders ensured control over its
supply.
Today, however, the climate is
changing fast, the mysteries of the
trade are long gone, the supply-chain
is being snatched away by multina-
tionals and big retailers, and pepper
has long ceased to be a store of value
or an exclusive prize to be had in the
Kerala coast.
The most surprising part of this
tale of decline and perhaps the end of
the regions historic role is the sense of
resignation about it that pervades in
the pepper tracts of Idukki and the
rest of the Malabar Coast.
A MONO-CROP PEPPER PLANTATI ON in Vietnam, where production and
productivity are very high.
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