Spices Board decision on cardamom selling draws mixed reaction

THE decision by the Spices Board to allow farmers to decide whether to sell cardamom directly to licenced dealers or through auction has met with a mixed reaction, The Economic Times of India has reported.

The newspaper noted that traders felt that the farmers had the choice earlier too but were using the auction route as it guaranteed payment. However, Spices Board officials said that selling through auctions was compulsory until now and the farmers can now sell independently if they get more money.

Most of the spice harvested in the country is sold through auctions in Kerala and Tamil Nadu. After a month’s auction disruption from September 25 on the issue of raising the bidding rates, the auctions resumed in October last week with a revised bidding rate of Rs2.

The auctions had full participation on Wednesday with the average price reaching Rs709 ($13.03) per kg. The decision to revamp the marketing system will boost the exports, according to a senior officer of the Spices Board.

The exporters can buy good quality cardamom from the farms directly while the grower stands to get a better rate. “Traceability in case of any contamination has become a big issue in exports. It will be easier to trace the defect if the exporters buy directly from farms,” the official said.

Exporters were said to have got used to the idea. This year, exports have been down by nearly 50% until October from over 1,000 tonne in the corresponding period previous year.

“Instead of spending time bidding in the auctions at the revised rate, I can buy from a farm by paying a little more. Many farms have good grading facilities too,” said leading exporter SPGR Nithyanandan.

However, the traders do not accept this argument. They argue that the growers prefer auction as they get the payment. The time for the payment has been reduced to seven days now.

“Even before the board’s declaration, the rules allowed the farmers to sell outside the auctions. But they did not do it,” said PC Punnoose, general manager, Cardamom Processing and Marketing Co-operative Society.

The growers also agree that the payment is easier through auctions.”The price realisation is prompt through the auctions, which is the reason most farmers prefer the auction route,” said KK Devassia, secretary of the Cardamom Growers Association.

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