CHAPTER I1

SPICES AN OVERVIEW

Contents of the chapter

Page No.

History of spices trade 32

Global spices trade - Present scenario 42

Major centres of pepper cultivation and trade 43

Major centres of cardamom cultivation and trade 53

lntemational Pepper Exchange 55

Indian spices trade -Present scenario 61

Spices in Kerala 66

Spices Board of India - Role and functioning 70

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

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. ''

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. 15 1 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. 18

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. 19

2.1.5. Important Landmarks in the History of Spices at a Glance

4& Century

1 '' Century

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

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

Pepper introduced ir~ Brazil and some African regions

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 1 0 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.

23.8. 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

Brazil I I I

Production

( Tomes)

40.000

India 1 I I I

1 I I I

15.000 6 606 9

Madagascar 3.376 9 1,500 7

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

Rank

4

1

Indonesia

Sri Lanka 1 I I I

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,

59,000 3

Thailand

there has been a significant increase in the trade of value added pepper products from

producing countries.

Export ( Tonnes)

36,785

22,593

5.700

Pepper products. popularly traded internationally are pepper powder, green

pepper. pepper oil and pepper oleoresin.

Rank

3

5

53,594

8.819

2

8

7

2,096 6

800 8

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

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

(Hectares) r Indonesia

Brazil

Vietnam

Malaysia

182268

125132

28050

1 3856

9915

Not available

Production

(tomes)

58729

(30)

48 109

(24)

26393

(13)

15594

(8) 21310

(1 1)

27790

(14)

(kgd hectare.)

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.

24 Compared to other pepper producing countries, India has the lowest average. 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 re-

exported 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~on International 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.

2.83.1. 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 - Domestic

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)

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.)

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

Qwtity

(Tonnes)

19,250

1,100

1,645

61,000

6,580

34,500

1 1,700

13,800

5,250

4,000

9,050

2,425

1 1,000

35,000

13,700

Value

(Rs. Crores)

326.32

56.54

27.68

195.23

22.95

91.06

27.41

1 17.43

17.00

17.78

17.88

8.96

10.40

144.90

530.47

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.

Area and production of Pepper in Kerala - Diitrict-wise 1 Area Production 1

Malappurarn

Pathanamthitta

Kasargod

Emakulam

Thiruvanthapuram

Thrissur

Palakkad

Dishict

Kozhikkodu

Kollam

Kottayam I- ( H e m s )

39,547

41,635

34,837

12,779

8,912

8,715

Alappuzha

(Tomes)

13,528

18,484

4,181

3,304

2,770

1,695

I I

1,813

1,88,687

223

52,010

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)

1 District Area Production 1

1 Palakkad I 3,685 I 210 I

(Hectares) (Tonnes)

I I

Others

The table 2.8 shows the share of each district in the total pepper production of the

Total

state of Kerala. Idukki district has domination both in the area of pepper cultivation and

2,613

the quantity of production, followed by Waynad and Kannur districts. Kozhikkodu

23

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

43,459

district also has a notable contribution of more than 3000 Tonnes. 32

4,430

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

Table 2.9

Area and Production of Pepper and Cardamom (Overall) , pepper

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

Cardamom

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

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.

Idukki & Waynad

81,182 (42.1)

32,012 (58.2)

All India

1,93.270 (100)

Production , 5:::: (Tonnes)

!

Idukki

32,536 (39)

4,200 (60)

All India

83,651 (100)

7,000 (100)

Kerala

1,88.687 (97.62)

52,010 (94.56)

i

Kerala

44,237 (52.88)

4,720 (67.42)

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) Grant certificate for export of spices

3) 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) Increase the 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.

1

2

3

4

5

6

7

8

Name in English

Pepper

Cardamom (small)

Cardamom (large)

Chilli

Penungeerakam

Uluva

Jathikka

Jathipathri

Grampoo

Elavarngam

Karuvapatta

Velluthully

Kumkumapoow

Vanilla

Cuny vepila

Sarvasugandhi

Chompu

Pudiia

Kaduku

Seemamalli

Botanical Name

Piper Nigrum

Eletaria Cardamomum

Amomum Subultatum Roxburg

Capsicum Annum

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

Name in Malayalam

Kuru~nulaku

Elam

Perelam

Vattal mulaku

Ginger I Zingiber Officide

Turmeric 1 Curcuma Longa

Coriander 1 Corandnon Sativum I

Cumin ! CumiOum Cyminum

Celery 1 ApiumGravaeolens

Fennel : Foeniculum Vulgare

Fenugreek j Trigonella Foenum Graecum I

Nutmeg 1 Myristica Fragrans

Mace 1 Myristica Fragrans

Clove Syzygium Aromaticum

Cinnamon Cinnamomum Zeylanicum Blume

Cassia Cimamomum Aromaticum

Garlic Allium Sativum

S&on Crocus Sativus

Vanilla Vanilla Planifolia

Curry Leaf Murraya Koenigii

Allspice (Pirnenta) Pimenta Dioica

Aniseed Pimpinella Anisum

Mint Mentha Longifolia

Mustard BrassicNigra

Inchi

Manjal

Malli

Jeerakam

Celery

24 Parsley PetroselinumCrispum

25

Thalisapathram

Kudampulli

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

source:

Sathakuppa

Seemageerakarn

Kasakasa

Kayam

Junipazham

Valanpulli

Thulsi

Bayila

Kareeram

Kattumullanki

Soofa

Levi

Maruva

Kattumaruva

Thippali

Rosemary

Salvithulasi

Savory

Thakkolam

Name in English Pomegranate

Vayampu

Tharagon

Thottathulasi

Chittaratha

Botanical Name Punica Granatum

Kokam

Tejpat

Campodge

Garciia Indica

Cinnamomum Tamala

Garcinia Campogia I

Bishops weed ! Trachyspermurn Ammi i

Dill seed 1 Anethum Graveolens I

Caraway 1 Carum Carvi

Poppy seed 1 Papaver Somniferum Linnaeus

Asafoetida I Ferula Alliaceaboiss

Juniper Juniperous Cornmunis

Tamarind Tamarindus Indica

Basil Ocirnurn Basilicum

Bay leaf Laurus Nobilis

Caper Capparis Spinosa

Horse-radish Armonica Rustocana Gaertn

Hyssop Hyssopus Officianalis

Lovage Levisticum Officianle

Marjarom Majrorana Hortensis

Oregano Oregano Vulgare

Pepper Long Piper Longum

Rosemary i Rosemarinus Officinalis

Sage Salvia Officinalis

Savory ; Satureia Hortenis !

Star- Anise I lllicium Verum

Sweet flag I Acorns Calamus !

Tarragon I Artemisia Dracunculus

Thyme I Thymus Vulgaris

Greater Galanga 1 Alpina Galanga I

- Website, Spices Board of India. :. ' I. :,.. .;:.:.:. .-_-.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

registered owners shall furmsh returns to the Board in such form and manner as may be

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 2000-2001 ( Rs- -1

Grant.

!

I Export development I I 411.00 I 410.00 / 464.00 I 464.12

Budget ( Rs. -)

Adrmnistration 285.73

Export oriented production 1 679.00

Export oriented Research 1 170.00

Quality improvement 65.00

Actual Budget

Expenditure

I I I I

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

Actual

285.93

676.12

168.01

65.06

Works and Human 30.00 I

Resources development I

2.11.5. The Spices Cess Act 1986

Grant

Along with the Spices Board Act, the Government of India has passed a Spices

Expenditure

280.00

723.00

191.00

94.00

12.06

Cess Act in 1986, to provide for the imposition of cess on all spices, which are exported

279.95

722.07

191.20

93.41

h m India with the purpose of carrying out measure for the development of export of

12.00

spices. The Act says "there shall be levied and collected by way of Cess for the purpose

11.68

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

2.11.6. 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

and Bangalore, assistant directors at Calcutta and Unjha are funcitioning at present. 37

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 programmes-

a) 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.

1 1. 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.25-

27.

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

p.24

6. Purseglove J.W., Spices Vol.1, New York: Longman Inc.,1981, p.1.

7. Rosengarten, op. cit., p. 3 1

8. Mahindru S.N., Spices zn Indian lijie, Delhi: S. Sultanchand and sons, 1982.p~. 26.

9. Good News Bible, Bible society of India, Bangalore.

10. Rosengarten, op.cir . pp 28-29.

15. Rosengarten, op.cii. pp.62-71

16. Mahindw op.cit., p.3.

17. Rosengarten, op.cir., p.59.

18. hid. p.71.

19. 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. 15-1 7.

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

S ~ i c e 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 Inda 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.

36. The Spices Cess Act 1986. Government of India

37. Annual Report, Spices Board, 2000-01.

38. The Spices Board Rules 1987, Government of India