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 na upt 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 ho wn 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
PC. 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 i b 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-
( He ms )
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 Offi ci de
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. hi d. 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 I nda 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