CHAPTER IV

TRENDS IN AREA, PRODUCTION, PRODUCTIVITY AND PRICES OF PEPPER

Spices Economy - An Outline

Spices have played a crucial role in the history of human civilization.

Christopher Morley defined spice as the plural of spouse (George, 1989).

According to Webster, spices are specifically any of various aromatic

vegetable production (Khan, 1990). In the view of International spices group,

"spices are any of the flavoured or aromatic substance of vegetable origin

obtained from tropical or other plants, coinmonly used as condiinents or

employed for other purposes on account of their fragrance, prcservative or

medicinal qualities". In brief, one can say that spices are agricultural products

significant for their taste, aroma, flavour and colours in food, beverages, as

preservative, as medicine, as a substance in perfume industry and what not.

Since pre-historic times Inan has been using spices to flavour his food

(Padinai~abhan, 1976). The significance of spice was put by Ridley (1912) as,

"the history of cultivation and use of spices is perhaps the most romantic story

of any vegetable product".

The number of items enlisted as spices differs from country to country.

Forty-one items were included by the American Spice Trade Association.

Nearly 107 spice varieties are reported by John (1969). Spices Board has

included 52 iteins in the list. Bureau of Indian standards notifies 63 spices as

grown in the country.

From time immemorial, India is known as 'the land of spices' to the

world. Let us take a historical record of spices of India. The earliest literary

record in India can be found in Rig Veda (6000 B.C). Manu, the proponent of

law (around 4000 F3.C) was awarc of the origin of spices. The epic Rainayana

also mentions about spices. References about Indian spices were made by the

Babylonians and Assyrians (around 3000 BC) and in the Old Testainent (1000

B.C) of the Bible (Sivarainan and Peter, 1999). Susruta (500 B.C.) also

mentions about spices in the writings of Ayurvedic texts.

Alexandria (Alexander the Great, 332 B.C) was a iilajor trading centre

in spices between the East and the Mediterraneans (Purseglove, et. al, 1981).

Travellers like Hiuen Tsang (629 AD), Masudi of Baghadad (890-956 AD),

A b d ~ ~ l Feda (1273-1331 AD), Rashid-Ud-Dina (1300 AD) etc. had made

valuable citatioils regarding the treasure house of Indian spices (George,

1989). By fifteenth century, European countries, especially Portugal, Spain

and U.K. showed keen interest with the East in spice trade. Thus, froin several

historical incidents, it can be observed that spices are the spring of inspiration

for waging war, expeditions, voyages and even for romance.

This treasure of spice had lured explorers to Indian shores for centuries

which became a spectator for the rise and fall of several empires. India got a

wide-range of agro clilnatic conditions suited Sor its varied cultivations. All

kinds of spices can be produced from different parts of Indian soil. That is

how India got a unique position in the world as the largest producer of spice.

Some of the important spices grown are black pepper. cardamom, tunneric,

ginger, chillies, coriander, cumin, fennel, fenugreek, celery, aniseed, saffron,

clove, nutmeg, cinnamon etc. According to the importance in foreign trade and

internal marketing spices such as black pepper, cadamom, ginger, chillies and

turmeric are grouped under major spices and the remaining as ininor spices.

Major spices and seed spices are export oriented whereas tree spices and other

minor spices are consumed internally (Ravindran and Manoj Kuinar, 200 1).

Spices contributed to 1.24 per cent of India's total export earning, and

its share in export earnings from agricultural and allied products works out to

be 8.5 per cent during 1999-2000 (Spices Board, 1999-2000). This sector

alone has the potential of earning an annual foreign exchange of over Rs.1000

crore by way of exports to the Indian economy (Behera and Indira, 2002). This

signifies the iinportance one has to attach to the spices economy of India.

Since pepper is one of the important spices, it is better to know its origin,

cultivation, propagation, harvesting, value added products and marlteting.

A Brief History of Pepper

Pepper from piper nigrum is one of the important spices o f the world. A

wide genus, with over thousand species piper is from the Botanical family of

piperaceae (Spices Board, 1993). The Greek name Pepperi, the Latin piper and

96

the English pepper all derived from the Sansltrit 'pippali', which was the name

for the long pepper (Purseglove, et. al. 198 1). Piper nigruln is a native of the

inonsoon forests along Malabar coast of south western India. Christopher

Morley has called pepper as the king of spices and cardamom as the queen of

spices (George, 1989).

'Two kinds of pepper were mentioned by Theophrastus in the fourth

century B.C. Discorides in the first century A.D. mentions black and long

pepper. Mention was also made by Roinan writers in the fifth century A.D.

(Majeed and Prakash, 2000). Pioneering sea voyages of the 1 51h century were

intended to find sea routes to the sources of pepper and other aromatic objects.

Landing of Vasco da Gaina in 1498 in the Malabar coast of India is a

landinarlc in the history of spices (Mathew, 2002). This followed intense fight

between empires to control for Eastern spice producing regions. References

about the use of medicinal properties of pepper were seen in Materia Medica

of A y ~ w e d a which dates back: to 6000 B.C. Pepper thus has historical and

geographical significance besides trade importance.

Cultivation

Pepper is mostly herbaceous or woody climbers or shrubs in the tropics

of both hemispheres. It is a perennial climber to 10 rn or more in height. The

pepper plants has 10-20 main adventitious roots from the base of the mature

stein which penetrates to a depth of 1-2 in and there is an extensive mass of

surface feeding roots (Purseglove, 1968). The climbing branch becomes stout

97

4-6 c.ln. in diameters at the base with a thick flake - like bark; the internodes

are 5-12 c.m. long. Spikes are borne opposite to leaves on the plagiotropic

branches and are 3-1 5 c.m. long; bearing 50- 150 minute flowers borne in the

axils of ovate fleshy bracts. The fruit is a sessible, globose drupe 4-6 c.m. in

diameter, with a pulpy pericarp, borne in spikes 5-15 c.m. long. Each spilte

produce 50-60 single seeded fruits. The unripe fruit is green with the exocarp

turning red when ripe and drying black. The seed is 3-4 lnin in diameters with

a minute embryo, little endosperm and copious perisperm (Purseglove, 1968).

A well-distributed rainfall and high temperature is required for this crop

of wet tropics. Generally pepper has been cultivated as far as 20' north and

south of the equator. A well drained alluvium soil with humus content is ideal

for its cultivation. Though a humid climate crop, it can be grown in places

where rainfall ranges from 125-200 cm. It can thrive well at a minimuin

temperature of 10°C and a maxiinurn of 40°C temperature and upto 1500 m

above sea level. Pepper can be grown in a wide range of soil which is acidic in

nature with pH 4.5 - 6.0 (Sit, et. al, 2002).

Pepper has been cultivated either as a monocrop or mixed crop on live

standards (i.e. live and non live support). In India the land under blaclc pepper

is classified as (Sivaraman, et. al, 2002):

(i) Coastal areas where pepper is grown in almost every homestead or

plot of land.

(ii) Slopes and valleys.

(iii) Hills at an elevation of 800 in - 1500 in with shade trees in coffee/

tree plantation.

(iv) Valleys as a mixed crop in arecanut gardens.

Pepper is generally propagated by stern cutting. Over 75 varieties /

cultivars are popular ainong farmers. Varieties of pepper are cultivated

according to the soil and climatic conditions and be naturally resistant to pests

and disease of the region. Sorne of the varieties that are popular in India are

Panniyur, Kariinunda, Icottanadan, Balanltotta, Neelamundi, Narayakodi,

Araltulamunda, Kalluvally, Ailnpiriyan etc. (Ravindran and KalIupuracltal,

2000).

Pepper plantation is beset with several diseases. Phytophthora foot root

disease is a serious problem in India. Two inajor diseases spreading in Icerala

are stunted disease caused by piper nigruin strain of cucuinber mosaic virus

(CMV - P,) and yellow inottle disease caused by piper yellow inottle virus

(PY M.V) (Govindan, et. al, 2003).

Prime harvesting of pepper is usually done in the third year. This

perennial plant lasts for about 20 to 25 years. With good yield and under

favourable conditioils it may long for more years. The maturation period of

pepper varies froin 5 to 6 months in Indonesia and 7 to 8 months in India from

flowering to harvest.

Value Added Products

The two primary products of piper nigruin that are internationally

traded are black pepper and white pepper. Black pepper is the whole dried

fruit; white pepper is the fruit from which the mesocarp has been removed.

Some of the other value added products of black pepper produced and

exported froin India are pepper powder, pepper oil, pepper oleoresin, piprine,

dehydrated green pepper, pepper in brine, pink pepper, frozen green pepper

and encapsulated spices. Being a native of western ghats, pepper constitutes an

important ingredieiit of several indigenous inedicines of India.

Since time iinineinorial India has been in the international trade of

pepper. Indian pepper called "Malabar black pepper" is popular in

international markets. The particular grade "Tellicherry Garbled Extra Bold"

fetches tlie highest price due to its size and supreme quality. Majority of

Indian exports is to the U.S.A, foriner USSR and East and West European

countries. India contributes about 25 per cent to 30 per cent of the world

production and Kerala accounts for over 96 per cent of the production in India

(George, 1989).

Tl~us, it can be observed that ainong spices, pepper is a doininant

product. It is an important contributor to foreign exchange. On an average, the

contribution of pepper in spices export earning is found to be 41.2 per cent

during 1960-61 to 1999-2000 (Table 4.1). On the domestic front, pepper is

consumed throughout the length and breadth of the country. Other than a main

spice in food items; it has several medicinal uses also. Hence, it can be

otxerved that pcpper is a universal com~nodity consumed throughout the

globe. Now as part of integrating world trade, there is unanimity about

economic liberalisation and globalisation among nations. On this global effort

Government of India too has initiated several reforrn measures.

The process of liberalisation has started in July 199 1. The initial focus

of structural adjustment was on industry. Later on agricultural trade

liberalisation also became part of liberalisation agenda. Some of the important

measures are reinoval of import control on several agricultural products,

relaxation of quantitative restriction on imports and exports, bringing a variety

of articles under Open General Licence Policy; delicensing certain imports,

slashing of basic in~port duty etc. (Gulati and Kelley, 1999). These relaxations

opened new avenues for international co~npetition for exports. Hence, these

trade policy reforms exposed Indian agriculture to world markets. Now

because of the export exposure of pepper, these trade policy reforins definitely

will have an effect on pepper econoiny.

On this background, the present chapter investigates the trend of

different iiidicators of pepper with spccial reference to Kerala state. Besides, it

also investigates the ilnpact of recent economic reform on different indicators

of pepper product of Kerala.

Methodology

Ratio and percentage methods were employed to examine the trend in

area, production, productivity and prices of pepper in India and Kerala.

Co~npound growth rate of various indicators of pepper are calculated by using

the following semi-logarithmic regression equation:

Logyi= a + b T + u

where

y; = indicators of pepper,

t = time trend, and

u = randoin error term

C.G.R. = [ Antilog b - 1 ] x 100.

Multiple linear regression analysis were carried out to examine the

impact of economic reforins on area, production and prices of pepper and it is

presented below:

Y i = a 0 + p i t+PzD+u ,a i id

Y i = a , + P I t + P 2 D + P 3 D t + u

where

Yi = different indicators of pepper,

t = time trend,

D = duinmy variable, i.e. '0' for pre-reform and ' 1' for post-reform period,

Dt = dummy x trend, and

u = random error terin.

Empirical Results and Discussion

For the sake of si~nplicity and clarity the empirical results are classilled

under the following heads:

( i ) Trends in Countrywise area, production and yield of pepper

(ii) Trends in Countrywise export of pepper

(iii) Trends in Statewise area, production and productivity of pepper

(iv) Trends in Districtwise area, production and yield of pepper

(v) Trends in Price of pepper assembling markets of Kerala.

(i) Trends in Country wise Area, Production and Yield of Pepper:

Some of the major producers of pepper in the world are India,

Indonesia, Brazil, Malaysia, Vietnam and China. Minor contribution are also

made by Sri Lanka, Thailand, Madagascar and Mexico. In this section special

emphasis will be given to India's acreage and production of pepper. Table 4.2

accounts for a country wise analysis of acreage, production and productivity

for the year 1973-2003. India's percentage share to world acreage and world

production of pepper for the same period is presented in Table 4.3.

India has earmarked the inaxilnuln area of land for pepper cultivation in

the world during the period of our study. In 1973-74 the area of pepper

cultivation in India was 121 thousand hectares which comes to 6 1.5 per cent of

the world (Table 4.2 & 4.3) and it went up to 173 thousands hectares in 1990-

91. Further, it can be observed that there is only a marginal increase in the area

of pepper cultivation after 1990-9 1. It implies that after economic reform,

there isn't any significant change in Indian acreage of pepper. This may be

because of the mixed cropping pattern and the perennial feature of pepper

crop.

The compound growth rate of area of pepper cultivation during pre-

reforin (2.5 per cent) is greater than the post reform (1.7 per cent) period

(Table 4.9).

The estimated lnultiple linear regression equation to identify the impact

of econoinic reform on area of pepper cultivation in India is presented below.

Froin the estimated equation it can 'be observed that there is an increase

of 0.0 10642 per cent of area of cultivation of pepper per year during the period

of our study. Besides, estimated coefficients reveals that econoinic reform

doesn't have ally iinpact on area of pepper cultivation in India. This non-

response on area of pepper cultivation may be because of the following

reasons. Firstly, pepper is inainly cultivated as a mixed crop. So the area of

pepper will change only if there is a change in the area of the main crop.

Change in the area of main crop depends on how far econoinic refonn will

exert an influence on it. Secondly, all of a sudden shift in the area of pepper

cultivation is not feasible due to its perennial character.

In terms of quantum of production, India ranks first in 1973-74, with a

quantity of 28.7 tliousand tonnes out of 106.8 thousand tonnes. In the later

year India iost its unique position either to Malaysia or Indonesia. In 1979-80

Malaysia got the highest production of 37.4 thousand tonnes out of 126.2

thousand tonnes. Except for few years, Indonesia ranked first and India was in

the second position in production throughout the eighties (Table 4.2).

However, India has allnost regained its position during 90's. Indonesia

and Brazil were in neck to neck colnpetition in terms of quantum of

production of pepper. The year 1993- 1994 witnessed an increased production

by India with 50 thousand tonnes out of 182 thousand tonnes which comes to

27.5 per cent. Indonesian production was nearly half of the Indian production

during 1995 to 1999. Besides, the trend of pepper production was more or less

inixed during 2000-2003.

The high level of pepper production in Indonesia is because of the

following facts. In Indonesia pepper is cultivated on a coinmercial basis.

Highly productive vines are used for cultivation. Once the vines became

unproductive and senile, new vines are transplanted. The Indonesian fanners

are considering pepper as a major crop than their Indian counter part (mixed or

subsidiary crop). Fanners producing pepper on a commercial base use dead

stead as climbers.

Indian production of pepper has increased by inore than two fold during

1973-74 to 2002-2003. During the saine period coinpound growth rate of

pepper production is worked out to be 4.7 per cent. Further, the coinpound

growth rate of pepper production during pre-reform is slightly higher than the

post reforin period in India (Table 4.9).

Multiple linear regression analysis was carried out to identify the

iinpact of econolnic reforin on pepper production in India. The result of the

estimated equation is presented below.

The value of ii shows that 75.6 per cent change in production of

pepper is explained by time trend and dummy variable. Pepper production of

India has increased 0.0 169 per cent per annuin during the period of our study.

The duininy coefficients are found to be statistically insignificant, which

implies that economic reform does not have any significant iinpact on pepper

production in India. This inay be because of the earlier experience fanners had

with other plantation. For instance, during the nineties there was a sudden

increase in the international price of cocoa. By seeing the bullish behaviour of

market prices farmers have shifted their plantation to cocoa cultivation. This

raised the quantum of cocoa production, which ultimately caused the prices to

fall even below the cost of production. This in turn, forced the farmers to keep

away froin cocoa cultivation. Such experiences may be the reason for the

immediate non-response of farmers on economic liberalisation and hence on

pepper production.

On the productivity front India is showing a dismal picture (Table 4.2).

In 1973-74 Malaysia ranlts the list with a productivity of 3,23 1 kg Per hectare,

Brazil got the second position with 2,202 kg and the Indian figure was just 236

kg. In simple terms, Malaysian productivity is 14 times inore than Indian

yield. During 70's Malaysian productivity is far ahead of other nations. Brazil

becanze a leader in productivity front in the eighties.

The nineties has witnessed another interesting picture. Thailand

became a stiff challenger to all other countries by having inore than double the

productivity of Malaysia. Throughout the entire period of our study, Indian

productivity has remained more or less in the range of 200-400 kg per hectare.

Colnpound growth rate of yield of pepper in India are found to be 1.6

per cent, 2.0 per cent and 3.7 per cent during pooled, pre-reform and post

reforin periods respectively (Table 4.9). It can also be observed that post-

reforin compound growth rate of pepper export (both in quantity and value

terms) from India is far greater than the pre-reform compound growth rate

(Table 4.9).

India can claim a better position both in acreage and production but on

productivity front its position is bleak. From the results of Table 4.3, it can be

observed that on an average India cultivated pepper about 5 1.25 per cent area

of world acreage. But Indian share to world production on an average is 24.57

per cent. This perccntage share of lndian pepper in world production clearly

indicates the predominance of India in world pepper market. But, productivity

of pepper in India is relatively low. The reasons for low Indian productivity

can be cited as follows. Majority of pepper farmers are considering pepper

only as a secondary crop. It means that it is cultivated as a mixed crop in

arecanut or coconut gardens. Here attention is inaiiily given to the primary

crop. This mixed cropping syste~n leads to another serious problem. Pepper

vines used to grow with the support of these live steads (climbers). Therefore

whatever manure is applied to pepper plant will be squeezed by these live

steads. Soine other reasons are the continuous cultivation of poor yielding

vines, existence of senile and unproductive vines, loss due to pests, diseases

and drought. All these factors kept Indian productivity to its low level.

However, concerted effort is required to increase productivity. Farmers

should be encouraged to cultivate pepper as a rnonocrop and dead steads

should be used instead of live steads as climbers. Highly productive vines

should be planted. All the senile and unproductive vines should be replaced.

Tilnely application of insecticide is required. Implementation of the above

measures will help the country to increase its productivity and hence, can

benefit froin its dominance in acreage and production.

(ii) Trends in Countrywise Export of Pepper

'l'rends in countrywise export of pepper for the period 1973-2000 is

presented in Table 4.4. India's contribution in the year 1973 was 32 per cent;

the highest ainong pepper exporting countries of the world. Tl~roughout

seventies Indian share ranged between 12 to 32 per cent. Indonesian share

ranged between 16 to 30 per cent, whereas Malaysian share is in between 24-

35 per cent. In the seventies Malaysia topped the countries. On an average

India contributed 30 per cent to world export during the period of our study.

Besides, Indonesia, Brazil and Malaysia remained stiff competitors to India in

pepper export.

Hence, one can maintain that on an average wit11 5 1 per cent share of

world acreage, 25 per cent of world production and 30 per cent of world

export, India's dominance in pepper is undoubtful. In this context it will be

interesting to kizow the statewise contribution of pepper cultivation and

production.

(iii) Trends in State wise Area, Production and Productivity of Pepper

Kerala, Karnatalta, Tainil Nadu, Pondicherry, Andaiz~an and Nicobar

Islands are the states / Uiiion Territories where pepper is produced. Treiids of

statewise distribution of area, production and productivity of pepper for the

period 1970- 197 1 to 1999-2000 is presented in Table 4.5. In 1970-7 1, Icerala

cultivated pepper in an area of 117.54 thousand hectares and accounted for

25.03 thousand tonnes of production. Kerala's acreage of pepper remained

more or less the same throughout the seventies. ICarnataka's share both in

cultivation and production was stable throughout the eighties. The union

territory of Pondiclieny contributed marginally to the Indian kitty of pepper.

One of the noteworthy point of nineties is that Andainan and Nicobar islands

has also emerged as a pepper producing region. It can also be mentioned that

some of the North Eastern states have also started pepper cultivation on an

experimental basis, but its contribution is not to an amount that call be

accoul~ted for. However, it can be observed that the highest acreagc and

production of pepper is accounted to the state of Icerala during the period of

our study.

The area under major crops of Kerala from 1960-6 1 to 1998-1999 is

presented in Table 4.6. In 1960-61, Kerala had a gross cropped area to the

tune of 2,348.86 thousand hectares, out of which paddy occ~lpied the dominant

position with 33.16 per cent. Ainong spices, pepper got the highest acreage of

99.75 thousand hectares with 4.2 per cent. Tremendous increase can be cited

in almost all the non-food crops froin 1970-71 onwards. However, it can be

observed that other than coconut and rubber, pepper recorded the highest

percentage increase in acreage during the period of our study.

Coinpoiu~d growth rate of area of pepper cultivatioil in I<erala is 2.5 per

cent (Table 4.9) for the year 1970-71 to 1999-2000. Post reform compound

growth rate of pepper cultivation (1 . I per cent) is less than the pre-reforin

coinpound growth rate (1.6 per cent) and is found to be statistically

insignificant.

The estimated equation to exainine the impact of economic reforin on

area of pepper cultivation in Kerala is presented below.

Pepper cultivation in ICerala has increased by 0.00697 per cent per

alznum. The duminy coefficient reveals that due to economic reforins acreage

of pepper cultivation in Kerala has changed positively.

Table 4.5 also shows the productivity trend of Indian states. During the

70's India's productivity turned to be in the range of 200-250 kgihectare.

Throughout the decade the highest productivity was registered by Pondicherry.

This can be cited for its small area of cultivation. Kerala's productivity

remained in between 200-260 kgihectare. After Pondicherry, the next highest

productivity was earmarked by the state of Karnataka. During the nineties

Indian productivity remained more or less above 300 ltgihectare. Kerala kept

the second rank with a good margin from Karnataka. It can be concluded that

Pondicherry maintained a triple fold productivity of India and Kerala has

recorded as the second highest productive region during the period of our

study.

Cornpound growth rate of pepper production in Kerala is 4.0 per cent

for the pooled period (Table 4.9). Besides, the post reforin compound growth

rate of pepper production (2.2 per cent) is less than the pre-reforn period (3.0

per cent). Coinpound growth rate of pepper yield in Icerala is 1.4 per cent, 1.2

per cent and 1.4 per cent during pooled, pre-reform and post-reform period

respectively (Table 4.9).

The estiinated multiple regression equation to identify the iinpact of

ecolio~nic reform on pepper production ill Icerala is presented below.

The results of estiinated regression equation reveals that there is 0.0125

per cent increase in area of pepper production in Kerala per year. Besides, the

estimated coefficients reveals that ecolloinic reforms has failed to lnalte any

significant impact on pepper production in Kerala. The reason can be cited as

follows. During the last decade there was an increase in the international price

of cocoa. Lured by this high price, Kerala farmers have shifted to cocoa

cultivation at the cost of some perennial crops. This lead to over production of

cocoa. It ultimately resulted in reducing the price below the cost of production.

This forced the Kerala fanners to revert to the earlier crops. Such a bitter

experience may be the reason for non-response of Kerala fanners to pepper

production.

On the whole, it can be observed that Icerala contributed 95 to 98 per

cent of India's cultivation and 85 to 98 per cent of India's pepper production

(Table 4.7). Thus, Kerala has a near inonopoly over pepper cultivation and

production over other Indian states.

(iv) Trends in District wise Area, Production and Yield of Pepper

Pepper cultivation can be seen throughout the length and breadth of the

state. The reason is that pepper can be cultivated as a mixed crop, either in

cocoiiut garden, in cardainoin plantation, in arecanut garden or can be grown

with jackfruit or mango tree. Pepper plant is susceptible to the various climatic

conditions of the statc. Hence, it can be considered as a more general crop than

any other spices of the state. Table 4.8 gives a district wise profile of area,

production and yield of pepper for the period 198 1-82 to 1998- 1999.

ICannur district has accounted for one-fourth acreage in 198 1-82. The

districts of Kottayam, Kozhiliode and Idukki are also dominant in pepper

cultivation. On the production front, ICannur topped the list followed by

Kozhikode, Wynad, Quilon and Idukki districts. The lowest productivity was

earmarked by Palghat district during 198 1 - 1982.

113

Out of a total plantation of 182.38 thousand hectares of pepper crop in

the state Idukki registered 49.75 thousand hectares followed by Wynad with

40.21 thousand hectares in 1998-99. Other than these two districts, Kannur

and Kozhiltode districts also play a significant role in the area of cultivation of

pepper. The district of Idukki has registered a remarkable yield of 590

kglhectare, followed by Wynad with 452 lcglhectare during 1998- 1999. Idulclci

district has registered a four fold increase in acreage of pepper cultivation:

while its production has increased 15 fold and productivity by inore than 3

fold during the study period. With inore than 5 fold increase in acreage, 6 fold

increase in production and one fold increase in productivity, Wynad accounted

the next highest increase. Thus, during the study period it can be observed that

Idullti, Wynad, Kozhiltode and Kannur are the four districts where pepper

cultivation is dominant.

The reasons for dominance of pepper production in the districts of

Iduklci and Wynad can be because of the following facts. Both these districts

are situated in high ranges which are surrounded by hilly regions. This

geographical positioil coupled with the climate and the suitable soil

culminated in higher level of production in these two districts. Alleppey

became the district with lowest area, production and productivity. This

position of Alleppey can be cited to its geographical position. The district is

inaroolled with lakes and back waters and therefore may not be conducive for

pepper plantation. However, all districts of Kerala have its ow11 share to be

contributed in the state kitty of pepper production.

We have already observed that Idukki, Wynad, 1.ozhiltode and I<annur

are the doinillant pepper producing districts of Kerala. On the above

background, the inajor pepper assenlbling inarkets of the state such as

Alleppey, ICozhikode, Icochi and Tellicherry were selected for the study.

Alleppey market is the nearest assembling centre to the soutl~ern districts of

Kerala. Wynad is the secoiid highly pepper producing districi. I<ozhikode

market itself is a high pepper producing zone and is the nearest assembling

centre to the district of Wynad. Tellicherry ~llarket is the assembling centre of

pepper to the northern districts of Kerala. These four asseinbling centres of

Icerala after collecting pepper from their respective regions transport the

product to the terminal marlcet of Kochi. And Kochi market became the centre

of international trade.

In the above context, it is worth noting the functioning of these

marltets. Farmers used to sell tlieir products to local traders throughout the

length and breadth of the state. Then these traders transport their products to

wholesalers. '111e wholesalers ill turn sell the products to the nearest pepper

assembling markets. In suc11 a trading system it will be interestiilg to know

about the price behaviour of these assembling marltets.

(v) Trends in Price of Pepper Assembling Markets of Kerala

To analyse the price trend, inonthly wholesale price of pepper for the

period April 1974 to March 2003 were considered. Graphical representation of

price trend of Alleppey, Kochi, Kozhikode and Tellicherry assembling

markets were shown in Figure 4.1.

It can be observed that prices of all these four assembling lnarltets

inoved in a steady direction till April 1985. Between April 1986 and April

1996 there were some upward movements. During 1996-1 997, price of some

inarlcet has drifted froin other inarlcets. A steep rise in the montlily wholesale

price can be observed in April 1997 which has sustained till April 2000. This

increase can be cited due to the following reasons. Dwring this period there

was a fall in production of some of the major pepper producing countries such

as Brazil and Indonesia. Indonesian vines were severely affected by pests and

diseases. Hence, the reduction in quantum of production benefited the Indian

fariners through increased prices. 011 the whole, it can be deduced that

inonthly wholesale price of all these four iliarkets were moved synchronously

during the period of our study.

The results of multiple linear regression analysis to identify the impact

of econoinic reforin on inonthly wholesale price of selected pepper marltets of

Kerala are presented below.

Note : Parentheses shows 't' value.

*shows significant at 1 per cent level.

*%shows significant at 5 per cent level.

* * *shows significant at 10 per cent level.

AL - Alleppey Marltet, KO = Kochi Marlcet, KZ = Kozhilcode Market

and TL = 'l'ellichewy Marlcet

It can be observed that the value of ranges in between 0.75 and

0.81. All the F-statistics are found to be statistically significant. The trend

coefficients ranges in between 0.0032 and 0.0037. There isn't n~uch variations

in the trend coefficients of all the marltets, which implies that prices of these

inarkets have inoved in the same direction and tlze level of increase in prices in

all the selected niarlcets are more or less the same. Even though the intercept

coefficients are negative, all the slope coefficients are found to be positive and

statistically significant. It implies that econoinic reform is able to make a

positive influence on the monthly wholesale price of pepper in all the major

pepper assembling inarkets of Kerala. This positive influence of econoinic

reforin on selected inarlcet prices of ICerala is due to the fact that there is

greater transparency in dissemination of inarlcet information and

coinpetitiveness ainong the sellers and buyers.

Concluding Remarks

From early settleinelit onwards. spices were known to hulnan beings.

Out of the total Indian exports 1.24 per cent was contributed by the spices

sector. Anlong spices, pepper got a predoininant role in India. Pepper earns a

foreign exchange to about 40 per cent in spices export. In the world area and

production of pepper, fifty per cent of the area cultivated beloilgs to India and

its contribution in world production of pepper is above 25 per cent.

Other major pepper producers in the world are Indonesia, Brazil,

Malaysia, Vietnaln and China. Minor contributions are also shared by Sri

Lanka, Thailand, Madagascar and Mexico. On productivity front Brazil,

Malaysia and Indonesia are far ahead of India. This is because of the

coininercial cropping pattern followed by these countries. Indian productivity

is low because of the use of low yielding vines, existence of senile and

unproductive vines, mixed cropping pattern, loss due to diseases and natural

calamities.

However, on an average, India contributed 30 per cent towards world

export of pepper. Similarly Indonesia, Brazil and Malaysia also have

contributed significantly towards world pepper export.

Ainong the Indian states, Kerala has a near monopoly over pepper with

95 to 98 per cent of the area and 85 to 98 per cent of production. Karnataka,

Tamil Nadu, Pondicherry and Andaman and Nicobar Islands are some other

regions from where pepper is produced. On productivity front Pondicheny

had a triple fold productivity of the country and can be accounted for its small

acreage. Second highest productivity is registered by Kerala during the period

of our study.

All the geographical regions of the state are blessed with pepper

production. The state is cultivating pepper mainly as a mixed crop. Though all

the districts contributed towards state's production Idukki, Wynad. Kozhikode

and Kannur are the dominant districts. The geographical position of Idukki

and Wynad districts (high range area) are so conducive for pepper cultivation .

Kozhikode and Kannur are producing world cIass pepper. The Iowest

contribution of Alleppey is because of the fact that, the district is marooned

with lakes and backwaters.

It can be concluded that post-reform colnpound growth rate of pepper

yield and export froin India are greater than the pre-reform growth rate.

Whereas, the pre-reforin compound growth rate of area and production of

pepper in India and area, production and yield of pepper in Kerala are greater

than the post-reforin growth rate. Multiple linear regression result shows that

econoinic reforin is not able to inake any significant impact on area and

production of pepper in India and pepper production in Kerala. This non-

response of economic reforins on pepper production may be due to the

following factors. Pepper is considered only as a secondary crop. The area of

pepper directly depends on the area of the main crop which is used as the

stead. If the area of the main crop is influenced by economic reform, the area

of pepper will also be influenced indirectly. Similarly, farmers used to make

changes in perennial crop acreage only if they are able to observe a steady

iinprove~nent in the price of the product.

However, pepper cultivation in ICerala has been slightly affected due to

econolnic reform. Silnilarly economic reforin has positively affected the

monthly wholesale price of all the selected pepper assembling markets of

Kerala. With econoinic reforms and trade liberalisation there is greater

dissemination of inarltet information which ultimately lead to co~npetitiveness

among econoinic agents.

Table 4.1. Trends in Share of Pepper in Spices Export from India

Spices Export Pepper Export Pepper Export as Year

(Rs. Crores) % of Spices

(Rs. Crores' ~ x p o r t (value)

1960-6 1 16.39 8.49 5 1.8 1961-62 17.52 8.07 -- 46.1 1962-63 13.37 6.57 49.1

Sources: Government of India, Arecanut and Spices Database 2002, Directorate of Arecanut and Spices Development, Department of Agriculture and Co-operation, Ministry of Agriculture, Calicut, Icerala.

Government of India, Spice Statistics, Fourth Edition, Spices Board, Ministry of Commerce, Cochin, Icerala.

Government of India, Statistical Abstract, Central Statistical Organisation, New Delhi.

Cou

ntry

P

Y

A

P Y

A

P

YA

P

YA

P

Y

-- --

Indi

a 10

7.35

22

.71

212

109.

40

18.2

2 16

7 12

5.12

34

.00

272

132.

81

31.3

4 23

6 14

9.93

48

.09

327

Indo

nesi

a 79

.00

39.5

6 50

1 8

0.0

01

41

.24

51

5 80

.00

32.0

0 40

0 80

.00

37.0

0 46

2 80

.00

36.0

0 45

0

Mal

aysi

a 11

.36

23.4

0 20

60

10.5

1 1

16.5

6 15

75

5.04

16

.00

3173

5.

30

15.5

0 29

25

7.70

14

.00

1818

---

-.

Bra

zil

26.4

2 29

.26

1107

20

.45

35.3

8 17

30

19.0

0 30

.50

1605

16

.00

25.3

0 15

81

19.0

0 27

.00

1421

S

ri L

anka

I

5.31

1.

51

/ 284

5.

51

2.59

'4

70

6.

38

2.68

42

0 16

.90

1.88

27

2 17

.60

2.51

1

14

2

Mad

gasc

ar

6.10

2.

39

1 392

6.

12

2.61

42

6 6.

20

2.80

45

2 6.

20

2.80

45

2 6.

20

3.00

48

4 T

otal

(inc

1udi

ng

othe

rs)

Cou

ntry

Indi

a

237.

10

124.

67

1992

-93

1988

-89

A

189.

39

98.0

0 10

.00

A

16

8.2

6

526

523

1989

-90

Mal

aysi

a

P Y

J

642

P 43

.42

A

17

1.4

95

5.1

9

47.0

0 In

done

sia

62.0

0 1 6

33 '

233.

66

---

50.7

6

449

( 95

.05

; 61

.00

1 990

-9 1

Y

258

100.

00

89.8

7 26

.00

, 27

.50

l________l_______P

--

1991

-92

26

81

P

2600

78

6 10

001

35.0

0 -

123.

66

A

184.

20

Y

276

Y

490

50.0

0

A

313

520

627

500

118.

00 1

53.0

0

P

33.0

0 B

razi

l 50

.00

2.85

3.

38

234.

58

1050

8.

80

6.50

36

7.1 1

3.26

3.

38

204.

55

529

3010

P 52

.01

173.

431

47.9

5

30.0

0 50

.00

1100

--

370

1 520

55

7

-.

Y

282

Sri L

anka

M

adga

scar

1000

244.

25

10.0

0 30

.00

I__&

218

520

537

22.8

0 31

.00

2756

30.0

0 45

1 53

8 54

8

30.0

0

-

8.60

6.

50

374.

12

7.63

1 3

.44

125.

99

10.3

0

31.5

0 22

80

9.13

6.

50

362.

77

6.30

2434

8.35

6.

47

340.

57

1.99

3.

38

194.

74

3.50

17

6.57

T

otal

(inc

1udi

ng

516

11.3

0

322.

19

11.2

5 27

.50

3.50

(

194

258.

98

31.0

0

3.38

19

0.45

52

2 52

0

121.

40

469

289.

32

141.

48

501

Table 4.3. India's percentage share to world acreage and production of pepper

Year

1973-74 1974-75 1975-76 1976-77 1977-78

200 1-02 2002-03

India's percentage share to world

acreage 61.5 60.1 58.4 57.1 53.2

23.4 19.9

India's percentage share to world production

26.9 24.0 21.6 21.1 18.4

1978-79 1979-80 1980-8 1 1981-82

Note : Calculated on the basis of Table 4.2.

47.7 53.9 52.1 51.5

16.8 21.9 21.3 20.4

Tab

le 4

.4.

Tre

nd

s in

Cou

ntr

ywis

e E

xpor

t of

Pep

per

(Qua

ntit

y in

'000

ton

nes)

Cou

ntry

Indi

a

1976

19

73

Qty

20.5

24.2

37.9

20.0

0.

01

3.9

106.

5

Qty

.

31.6

1974

19

75

Qty

. (%

'Q

ty.

(%

(%

shar

e)

19.2

22.7

35.6

18.8

0.00

9 3.

7

100

1977

lild

ones

ia

125.

5

(%

shar

e)

32.0

2

6.3

Qty

.

24.6

Mal

aysi

a

Bra

zil

16.5

34.1

19.3

1978

(%

shar

e)

23.3

24.1

13.8

shar

e)

0.1

3.8

100

Qty

.

15.7

15.2

31.4

17.8

25.8

24.4

14

.0

shar

e)

(%

shar

e)

12.8

30.2

29.8

24

.4

1.0

1.8

100

30.9

28.9

17.1

0.

6

3.7

105.

8

1979

0.1

3.5

92.2

Qty

20.8

25

.0

37.4

Sri

Lan

ka

Mad

agas

car

15

.71

17

.5

30

.21

33

.6

(%

shar

e)

18.6

22.3

33

.4

1980

29.2

27

.3

16.2

0

.6

3.5

100

15.2

0.3

2.2

26.2

Qty

26.3

29

.7

31.5

1981

29.3

37

.0

36.6

30

.4

1.2

2.2

122.

7

16.9

0.3

2.4

0.5

3.2

25.2

0.

9 2.

6 11

1.9

(Oh

shar

e)

21.3

24.1

25

.6

Qty

20.6

34.0

28

.6

24.2

100

0.5

3.2

Tot

al

19

8.7

(%

shar

e)

15.2

25

.1

21.2

46.9

2.

1

3.0

13

5.2

100

18

9.9

34.7

1.

5

2.2

100

25.9

0.

48

2.5

100

22.5

0.8

2.3

100

32.0

0.

6

3.1

123.

2

Sou

rces

: Gov

ernm

ent o

f In

dia,

Coc

oa A

reac

anut

and

spyG

Sta

tist

ics,

197

0-1 9

83,

1989

-1 99

3

Cou

ntry

Indi

a In

done

sia

Inte

rnat

iona

l Pep

per

Com

mun

ity,

Pep

per

Sta

tist

ical

Yea

r B

ook

1986

, 199

5/19

96, a

nd V

ario

us

Issu

es.

1987

19

88

1989

(%

shar

e)

28.7

Q~Y.

43.0

1

1990

19

91

1992

30.0

0

36.7

Qw

34.4

8

42.1

4

Qty

.

28.8

9 47

.68

Qty

.

19.6

6 49

.67

Q~Y.

36.1

9

(%)

shar

e 25

.4

31.1

(%

shar

e)

20.6

34

.1

(Oh

shar

e)

13.0

32.8

Qty

.

22.6

8

61.4

4 25

.6

(%

shar

e)

15.8

42.9

4

1.5

1

1 32

.9

Tab

le 4

.5. T

rend

s in

Sta

tew

ise

Are

a, P

rodu

ctio

n an

d P

rodu

ctiv

ity

of P

eppe

r

(Are

a in

'000

hec

tare

s; P

rodu

ctio

n in

'000

tom

es, y

ield

kg/

ha)

Sta

tes

Kam

atak

a

I

Pon

dich

eny

] 0.

03

1 0.

01

1 33

3 1

0.01

T

otal

1 11

9.96

1 26

.16

1 2

1s

I 11

8.63

0.01

26.1

6

1970

-71

A 2.1

6

Kem

la

, 11

7.54

T

amiI

Nad

u 1

0.23

I

1

1000

1 0.

01

] 0.

01

221

1 11

9.80

1

26.1

9

25.0

, 21

3

0.05

1

217

1971

-72

P 1.07

A

IP

2.

05

1 1.

00

Y

495

216

2.00

1972

-73

116.

34 1

25 1

0 ,

216

, 11

6.34

0.23

1 0.

05

1 21

7 1

0.25

1973

-74

1000

/ 0.

01

219

1 12

1.72

Y

488

25.1

5

0.05

AI

P

3.2

8 1

0.91

118.

25 1

27.7

5 0

1% 1

0 04

- -

-

0.01

12

1.92

I

28.7

0 1

236

Y

306

A 3.20

Y

277

235

372

118.

41

0 18

1974

-75

P 0.98

27

.23

1 23

0 1

108.

25

24.5

8 227

0 n4

1

23

7

1 n

77

I

n n

i 1

12

5

A 3.32

1975

-76

".-,

- 0.

01

28.1

8 (

231

1 11

1.93

P 1

Y

0.91

1

274

A

-.--

25.5

7

P

. "4

228 Y

3.40

/

0.94

27

6

Tab

le 4

.6. A

rea

unde

r m

ajor

cro

ps in

Ker

ala

('00

0 he

ctar

es)

Not

e: F

igur

es in

par

enth

eses

show

s per

cent

age

to g

ross

cro

pped

are

a.

Sour

ces:

Gov

ernm

ent o

f K

eral

a, S

tati

stic

s for

pla

nnin

g, D

irec

tora

te o

f E

cono

mic

s an

d S

tati

stic

s, T

l~ir

uvan

mth

apur

am, A

ug.

2001

G

over

nmen

t of

Ker

ala,

Agr

icul

tura

l S

tati

stic

s of

Ker

ala

1992

-93;

Eco

llor

nic

Rev

iew

and

Agr

icul

tura

l Abs

trac

t of K

eral

a.

Pil

lai.

P.P,

Ker

ala

Eco

nom

y - F

our

Dec

ades

of

Dev

elop

men

t.

Tab

le 4

.7. S

tate

s / U

.T. S

hare

of

area

and

pro

duct

ion

of p

eppe

r to

Ind

ia

Perc

enta

ge A

rea

of P

eppe

r te

s / U

.7'.

to T

otal

1984

-85

1985

-86

133

2.3

1 96

.7

2.1

97.2

0.

9 0.

7 0.

01

0.01

3.

6

2.0

95.2

97.4

1.

2

0.6

0.02

Tab

le 4

.8. T

ren

ds

in D

istr

ict

wis

e A

rea,

Pro

duct

ion

and

Yie

id o

f P

eppe

r in

Ker

aia

(A: A

rea

'000

ha.

, P: P

rodu

ctio

n '0

00 t

onne

s, Y

: Yie

ld K

g pe

r ha

.)

Dis

tric

ts

Th

iru

van

anth

apu

rm,

1981

-82

1985

-86

PY

A

A

PY

A

Qui

lon

9.80

1988

-89

P

IY

5.

38

2.78

8.

22

6.32

1.

58

P at

hmam

thit

ta

All

eppe

y t

4.82

- 1

.73

3.92

7.

87

4.88

2.

02

285

1.94

---

2.16

0.

41

199 1

-92

235

342

259

A

4.43

2.

39

1.71

0.

23

310

354

108

1992

-93

8.16

5.

12

1.95

0.80

7.

89

P

0.97

309

PY

A

304

350

114

P

2.53

1,

81

0.21

205

2.98

1 3

78

4.68

3.

64

- 20

1

1.57

0.

95

Y

233

4.16

32

3 21

4 0.

97

5.06

1.52

0.

65

326

178

Table 4.9. Compound Growth Rate of Various Indicators of Pepper ----

Illdicators

Export of pepper (quantity) from India

Export of pepper (value) from India

Area of pepper in India

Production of pepper in liidia

Yield of pepper in India

Area of pepper in Kerala

Production of pepper in Kerala

Yield of pepper in Kerala I I

Note : * Shows significant at one ** Shows significant at five per cent.

Pooled Period

1.9 (6.362)*

11.9 (1 8.918)*

3.2 (9.185)*

4.7 (10.990)'k

1.6 (3.667)*

2.5 (8.066)*

4.0 (8.649)"

1.4 (5.43 1)*

per cent

Pre-reform Period

1.9 (4.880)" -

11.8 (1 3.973)*

2.5 (3.875)*

3.9 (3.483)"

2.0 (2.126)""

1.6 (2.934)*

3 .O (3.403)*

1.4 (2.692)"

Post-reform Period

6.4 (1.761)

36.4 (1 1.447)"

1.7 (1.284)

3.7 (4.195)*

3.7 (3.202)'"

1.1 (0.935)

2.2 (2.390)**

1.2 (1 -368)