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CHANGE HAS COME ON SUCHquiet feet that it startles you at everyturn on the scenic pepper routes fromIdukki to the terminal markets on thespice coasts of Kerala.

Dreams built on pepper fortunesno longer seem to turn real in Idukki,the most important centre of its culti-vation in India, as elsewhere in theState. Along with some other mon-soon-drenched districts such asWayanad in the north, central Kerala,including parts of Idukki, used to pro-duce such copious quantities of theblack beads that it never failed to as-tonish the ancient traders who camein search of its mysteries.

Black pepper is indigenous to Ker-ala, known better in a historical con-text as the “Malabar Coast”, and itsplentiful supply here had for longbeen kept a secret to the outside worldby the seafaring traders insecureabout everlasting profits. Of all the“spices of the East”, pepper was muchin demand in the old world because itsorigins remained a mystery and thetransfer of the produce across theshores an enormous chore.

In Europe of yore, the land of se-vere winters where pepper refused togrow and where starvation was com-mon, it was valued as a food preserva-tive and flavouring agent. Pepper setoff several voyages of explorationseeking to find its source and controlits supply, and these led to the discov-ery of a sea route to India from Europeand changed the course of history in

state revenue, weapons and controlover the principalities. It saw thegrowth of a well-connected trade net-work, from the hills to the coasts,along rivers and across backwaters.Huge pepper godowns were built onthe banks of rivers, near estuaries andports, which ensured controlled sup-ply of spices to the trade ships visitingthe coast.

But not all of Malabar’s pepperreached the eager traders who cameacross the ocean blue. It also went, attimes surreptitiously, without theirknowledge, across the Western Ghats,to the rest of India, where, too, pepperwas in great demand.

Surely, all this history is anchoredon a singular fact: the abundance ofblack pepper in Kerala.

D E C L I N I N G P R O D U C T I O NIn spite of the prodigious demand forpepper, its cultivation, curiously, wasfor a long time confined mostly to theaccessible lowland and midland re-gions of Kerala. An important centre,for example, until the turn of the cen-tury was the present-day rubbergrowing areas of central Kerala,where pepper was earlier the majorcrop. The hills of the Western Ghats,especially, were left largely unmolest-ed until about half a century ago. Butby the late 1960s, the present-dayboom towns in Idukki district, fromKumily to Thodupuzha on either sideof the Idukki reservoir, were alreadyfull of pepper enclaves where ambi-

many parts of the world. No othercommodity was perhaps so romanti-cised in the ancient world.

Throughout history, its produc-tion and trade was sought to be mo-nopolised by various players. In itsown homeland, pepper wealth was of-ten used to great advantage by erst-while rulers, among them theZamorin of Calicut, whose kingdomVasco da Gama sailed into in 1498,and Marthanda Varma, the founderof Travancore, during whose rule thefirst pepper monopoly was establish-ed in 1743.

State control over the trade inpepper lasted for more than a centuryand made the rulers of Travancore thesole distributor of pepper to a varietyof European powers. It ensured a kindof forced cultivation of the crop for

The last standPepper cultivation is on a never-before decline in Kerala, the land of

its origin. Are we witnessing the end of a region’s historic role? BY R . K R I S H N A K U M A R IN KOCHI AND IDUKKI

FRONTLINE SPECIAL

BLACK PEPPER is indigenous toKerala, or the “Malabar Coast”.

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tious settlers began their hard strug-gle with nature and their tryst withthe crop.

Among them was T.T. Thomas,now 71, a settler farmer in the remoteforest village of Kanchiyar near Kat-tappana, an important primary mar-ket centre for pepper in Kerala (seelife story). “Life was hard then, but weused to get nearly 18 quintals [1,800kg] of pepper from an acre [0.4 hec-tare]. Today, most farmers would belucky if they get at least 10 kg,” he said.

“Production has dropped

throughout Kerala because of terribleinfestations in ageing pepper gardens,changes in weather patterns, un-friendly market conditions, and afrantic shift to more remunerativecrops by growers,” A. Jayatilak, Chair-man of the Spices Board, toldFrontline.

Farms and plantations acrossKerala are unable to contain diseasesaffecting pepper, such as foot rot(quick wilt) caused by certain fungi(Phtyophthora), slow wilt (slow de-cline) caused by parasitic nematodes,

NO OTHERCOMMODITYwas perhapsquite soromanticised as black pepperin the ancientworld.

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T.T. THOMAS’ farmhouse is acold, dingy three-room shack, with aledge for his cat on the kitchen win-dow. Outside is a curious yard of un-ruly plant growth, mainly rogue vinesof pepper plants smothering theirsupport trees, strawberry, tomato,Italian malta, brinjal grafted with oth-er plants, a variety of medicinal plantsand fruit trees.

A little beyond is a breathtakingpanorama: stretches of greenery thatmerge with the majestic heights of theWestern Ghats, the constant chatterof a nearby stream, the stillness of anartificial pond, the hoots and cries ofan assortment of birds and animals.

Thomas likes to remind visitorsthat the part of the Ghats that dom-inates the grand scenery lends sup-port to the Idukki arch dam, one of thebiggest in Asia. On the other side ofthe mountain is the huge Idukkireservoir.

Thomas is 71 years old. He came tothe forest village of Kanchiyar in thehigh ranges near Kattappana in Iduk-ki in the early 1960s, much before thearch dam was built.

“The 1960s were a hard time to behere for settler farmers like me. Theplace is 2,500 feet above sea level. Itwas so cold that you would hesitate tostep out. The rain drops used to falllike threads, and we had copiousmonsoons. The neighbourhood wasfull of green pepper vines,” Thomassaid.

Today his farm is a healthy pepperisland amidst a sea of thick green car-damom clusters and mostly witheringand diseased pepper growth.

“My first pepper farm here hadabout 3,000 vines. I nurtured it forfour years but lost the entire crop toquick wilt disease. Then I tried a dif-ferent variety of pepper that requiredless shade. That crop was good, butthe prices dropped to hell. The earlyyears were full of such disappoint-ments. I used to hunt in the forestsand became familiar with several newvarieties of plants. I had only onedream then—to find a variety of pep-per that would be tolerant to diseas-es,” Thomas told Frontline.

In the late 1980s, Thomas finallyfound what he was searching for: aunique pepper vine. It had branchedspikes (unlike the single spike varie-ties found everywhere else in Kerala).The plant grew well in shade, in sun-light and in water. After several exper-iments with it in his farm, he

Hardy graft

Pollu disease (Anthracnose) againcaused by some pathogenic fungi, andsome viral diseases. Moreover, themonsoon pattern has been fluctuatingwildly. Farmers say that the compara-tively warmer regions of Kerala areincreasingly becoming unsuitable forpepper.

In the hill tracts near Kattappana

that causes spikes to fall at the time ofmaturity] to spread. This year, whenthe pepper berries began to sproutand the plants needed regular spells ofrain, the monsoon failed us. My two-acre crop, some of which would other-wise have had individual pepperstrings at least one and a quarter feetin length, is therefore as good as lost.

overlooking the beautiful Cumbumvalley in Tamil Nadu, the havoc onpepper cultivation caused by thesefactors is quite evident. Alex, a peppergrower, explains the farmer’s woesthus: “Last year there were contin-uous spells of rain for seven to twelvedays, and it was cold, which was idealfor the Pollu disease [a fungal disease

Are the farmers getting maxi-mum returns? But maximum

returns for what? One acre of pepper in Vietnam givesmore than 10 times the yield of a holding measuringmore than an acre in Kerala. They do not use fertilizers;they use drip irrigation. In contrast, nobody is takingcare of the plant in Kerala. In Vietnam, they take greatcare of the plant, and for every acre they are getting amuch bigger yield.

There are no pepper plantations in Kerala, and

pepper is grown in household gardens. Obviously, pro-duction will be low. Whereas in Vietnam they do it onan industrial scale—25 acres of pepper, for example.Their yield is up to 15 times higher. The price may be 10per cent less, but for every acre they are getting so muchmore pepper. In Kerala, the good plantations get 400kg of dry pepper per acre. In Vietnam, it is 1.8 tonnes peracre.”

Manish Bafna,owner of the spice company Bafna Enterprises, Fort Kochi.

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When this cruel cycle repeats itself, afarmer loses all hope.”

Pepper is a fragile plant, especiallywhen it is young, and requires greatcare, being quite vulnerable to varia-tions in the weather. It needs rain,scattered and at specific intervals, andsun and warmth, in almost the samemeasure. If needed, the cultivatorshave to spend much time watering theplants during the summer and drain-ing out the water during the mon-soons. And, there is no yield from theplant for the first three years, or more,when the crop is most vulnerable andis usually ravaged by severe ailments.

“After the vines are planted andthe farmer nurtures them for threeyears, suddenly, when they are expect-ed to start flowering, they witheraway. It is exasperating and demotiv-ates the farmer, and he is not willing

to cultivate pepper any longer,” saidP.S. Sreekantan Thampi, Deputy Di-rector, Spices Board.

With labour costs going up toRs.400/Rs.500 a day, the majority offarmers are shifting to cardamom,which starts to yield from the first yearand is more profitable. “An acre ofcardamom would give up to 1,000 kgof it and 1 kg will fetch you Rs.600 toRs.700 this year. But an acre of pep-per hardly gives you 10 kg or so inmost farms [at a price of belowRs.400 a kg],” Thomas said.

A study conducted by Kerala Agri-cultural University in 2010 found thatthere was a nearly 24 per cent deple-tion in the area under pepper culti-vation in the State (from 2.02 lakhhectares to 1.54 lakh hectares) be-tween 2001 and 2009. Productionwent down from 60,000 tonnes to

42,000 tonnes, a decline of 44.21 percent. Productivity per hectare drop-ped from 301 kg to 221 kg during thesame period. Farmers say more areashave gone out of pepper cultivation inthe two years that followed.

The transformation is shockingbecause the yearly harvests fromsmallholder farms in Idukki andWayanad districts accounted for amajor chunk of independent India’spepper production even a decade ago.Farmers say that the coming yearswill see a severe fall in production.

E F F E C T O N P R I M A R Y M A R K E T SNowhere are the effects of this changemore evident than in the primarymarket towns in Idukki. Most mid-dle-level traders, who used to stayopen well past midnight as truckswere loaded, are now pulling down

eventually grafted it with a disease-tolerant variety of wild pepper of Bra-zilian origin. “The result was amaz-ing,” Thomas said. “It gave 10 timesthe quantity of pepper than the usualvarieties. Its spikes were fullybranched, whereas other varieties hadonly single spikes with 60 to 80 pep-per berries on it. But each spike in thenew variety had several branches andwould have 800 to 1,000 berries.”

Recently, Thomas received anaward from the President of India forhis innovative, high-yielding variety of“Pepper Thekkan” (after his familyname). According to the Indian Coun-cil of Agricultural Research (ICAR),“while the normal pepper varieties inthe high ranges of Idukki yielded up to3,000kg/ha [dry weight] and arehighly susceptible to wilt disease,‘Pepper Thekkan’ yields about8,600kg/ha and is highly diseasetolerant”.

The grafts from his small nurseryare today in much demand, but mostlyfrom big plantations and universitiesin other States, like Karanataka andGoa, he said. He sells them at Rs.50each and plans to apply for a patent.

Fellow farmers in the neighbour-hood, however, show little interest inthe new variety. It looks different, inthe way its spikes are branched. Itsroots stand like stilts about 50 cmabove the ground and are resistantespecially to the most prevalent (quickwilt) disease caused by a busily mul-tiplying fungus that strikes at the rootsand makes the leaves grow pale, caus-es the vines to droop and the leaves tocurl inwards.

Then the leaves drop and the fruitsdie—the nightmare of pepper farmersthroughout Kerala today.

R. Krishnakumar at Kanchiyar

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T.T. THOMAS IN HIS FARM in Idukkidistrict. He grows a unique, high-yielding variety of pepper vine (left) withbranched spikes carrying 800 to 1,000berries, whereas other varieties havesingle spikes with 60 to 80 berries.

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their shutters by six in the evening.From the small procurement shopswhere the neighbourhood farmersregularly sell their produce, to dealersin bigger markets such as Kattappanaand Kumily, cold, cemented shopfloors lie empty, with only tinymounds of pepper dumped in corners.

Early this year, when the price ofpepper rose to a record Rs.400-pluslevel, there was a rush among farmersand traders to sell all their stock, un-usual in Kerala where people tradi-tionally tend to hoard the commodity,just like gold, as a store of value for useduring hard times.

“When the price of pepper rose,we all sold our stocks. There is noth-ing left. Every day, tonnes of pepperused to be sent from Kattappana,nearby, to Kochi and other big mar-kets. But now it has come down to aload (nearly 10 tonnes) a week or so.Even small traders used to procure upto two tonnes of pepper daily during

the harvesting months from Januaryto February, and a minimum of 200-250 kg a day during off-seasonmonths like September. This year itwas bad. In 100 days I haven’t goteven 1 kg of pepper from the farmers,”said Biju Thomas, a first-post pro-curement dealer at Irupathekkar,near Idukki’s main pepper market atKattappana.

M I D D L E M E N A N D M A R K E T SIdukki produces one of the finest va-rieties of pepper in the world, andeven a casual drive through the wind-ing roads in the district used to offerpleasant sights of robust vines cling-ing on majestically to every tree ortrellis in sight. But a visitor makingthe trip today will not find a singleflourishing small-holder pepper gar-den easily. The change, which startedhappening from the mid-1990s, hasbecome very much evident at present.

In most places, even on the road-

sides, pepper has given way on a mas-sive scale to cardamom; or it is grownwithout much care among a multipleother crops. It is ironic that at a timewhen end-users, including processingfirms, exporters and internationalspice companies, are increasingly try-ing to cut out intermediaries and buypepper directly from source markets,its cultivation is declining in the landof its origin.

Cutting out middlemen is good forthe big buyers, but most traders stillgo on the defensive when they answerthe question: how much will the farm-er get for his produce? “If today theKochi price is Rs.388 for a kg of pep-per, I can only buy from the farmer ata price that is below Rs.384 becausewhat I get from the dealer at the nextstage will be only Rs.384 a kg,” BijuThomas said. Indeed, the pepper cul-tivators of Kerala, the majority ofthem with holdings of less than a hec-tare, still prefer to sell only to neigh-

MOST SMALLHOLDER GROWERS in Idukki are switching over to a multi-crop pattern of cultivation, with cardamom as theleading crop (left) and pepper as a subsidiary crop. Pineapple (centre) and tea (right) plantations are located in the lowerreaches of Idukki district. Most pepper and cardamom gardens are further up along the Ghat road.

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I remember the first time inhistory when pepper prices

rose to Rs.200 a kg and we sold it to AVTcompany. I would go down the Ghat road toKochi, nearly 170 km away, and come backby bus, with a sack load or two of the pro-ceeds of the sale. We did not have 500-rupee notes then. So, throughout the jour-ney I would be holding on to the sack, withRs.40 lakh to Rs.50 lakh inside it, all in100-rupee notes. I would not get downfrom the bus even for a cup of coffee. The

pepper business involved such risks too at that time, inaddition to our lack of awareness about the outside

markets. We had no other option but totake such risks then. Today, we have moreawareness about the market, and the pro-ceeds of our sale are promptly transferredto our bank accounts. But now, there is nopepper to sell. ’

Biju C.Kuruvila, second-generation spice dealer, primary market, Kattappana, Idukki.

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bourhood traders and have largelydelinked themselves from the worldof big traders and powerful purchas-ers. Some sell their harvest in advanceto contractors, among them, report-edly, agents of big spice companies.

However, farmers are now wellaware of the price of pepper at variousmarkets and of the daily price swingsthrough online traders. This is an im-portant change in the primary mar-kets, where, earlier, it took more thana day for even the price of pepper inthe Kochi market to be widely known.

“There is a new animal in the pep-per market—the national commodityexchanges, where people unrelated tothe trade play their games like they doin the stock exchanges and speculateon future pepper prices. The volumeof trade is increasing as a result, but itis also causing wild fluctuations in themarket. For example, on some days,prices can be down until about 4.30 inthe evening, and then it shoots up allof a sudden by the time the marketcloses. This happens without any tan-gible reason, and many people whoactually deal with the commodity aretaken by surprise and have lost a lot ofmoney. But, you could also gain fromit equally, at times, if you are lucky,”said Biju C. Kuruvila, a second-gener-ation primary market dealer atKattappana.

Clearly, the big purchasers arenow in the primary markets and in thenational commodity exchanges seek-ing cheaper pepper, than, for exam-ple, what has been available fromhistorical times at terminal marketssuch as Kochi.

By the same logic, they have beenseeking pepper at lower prices in oth-

er countries as well. “Companies likeours will import from wherever it ischeap because we are into this valueaddition business. For our customers,it is ground black pepper, cleaned,processed and value-added in tunewith international quality standards –it is not origin specific,” Jojan Malayil,CEO of the Kochi-based spice compa-ny Bafna Enterprises, told Frontline.

C O M P E T I T I O N , A T H O M E A N D A B R O A DUntil the late 1980s, India (and with-in it Kerala) was a big player in theworld pepper market. But gradually,within a decade of first venturing intopepper cultivation, Vietnam became ahuge player in the global market. Viet-nam today generates nearly 1.5 lakhtonnes a year, very little of which isused for its domestic consumption.Similarly, pepper produced by com-paratively late entrants such as SriLanka, and also traditional producerssuch as Indonesia and Brazil, is givingstrong competition to Indian pepperon the world stage. Indian pepperproduction has come down fromnearly 80,000 tonnes to about40,000 tonnes during the same peri-od.

The realisation that Vietnam, andnot their own State, is the new pepperfactory is yet to sink in among growersin Kerala. Perhaps, more galling forKerala pepper growers is the fact thatjust across the State border, in theneighbouring regions of Karnataka,pepper cultivation is flourishing,while they face disastrous circum-stances. Many farmers and officialsbelieve the production of pepper inKarnataka is set to overtake that in

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Kerala very soon. The reasons for bet-ter production are similar in bothVietnam and Karnataka: pepper isgrown in fresh soil, unlike in the de-graded, disease-prone farms in Ker-ala; disease-tolerant varieties areused for planting; and there is a lot ofstress on achieving economies of scalethrough plantation-type cultivation.

Nearly 75 per cent of the peppercultivation in Kerala is in small andmedium-sized holdings that are lessthan a hectare, whereas in Karnatakapepper is grown by large corporatehouses, in huge coffee plantations andareca nut gardens. Similarly, in Viet-nam, pepper is raised as a mono-crop,in vast areas, and gets more care andattention from the growers, as againstthe small-holder, careless, multi-croppattern in Kerala.

“Vietnam is a big threat to India.We are totally lost there. They havevast areas under pepper, their produc-tion and productivity are high andthey keep their prices low,” said Kish-or Shamji Kuruwa, owner of KishorSpices Company, a traditional spicebusiness house in Kochi.

N O T J U S T A G A M E O F D E M A N DA N D S U P P L YThe high price of Indian pepper iswhat gives farmers in Idukki andWayanad some consolation in an oth-erwise bleak background of droppingproduction. Pepper prices rose to arecord Rs.400-plus a kg early thisyear. However, not everyone is happy.

Bhavesh Vijaysingh is one of thefew surviving spice brokers in JewTown, Mattancherry, a dying peppertrading enclave in Kochi that oncehad a concentration of his breed.He

(Kishor Shamji Kuruwa is a for-mer president of the Indian Pepperand Spice Trade Association and theproprietor of Kishor Spices Company,a traditional family-run spice busi-ness house in Kochi.)

PEPPER trade in Kerala was con-centrated initially in the Malabar re-gion, in places like Tellicherry andCalicut. Then it shifted to Alappuzha.Until the mid-1960s, Alappuzha wasthe centre for pepper. All the leadingexporters were based there. The do-mestic inter-State business was han-dled from Alappuzha.

It was the main trading centre forpepper, coir and turmeric in India.There were huge warehouses there for

storing these commodities. Kochi wasthen famous only for the ginger busi-ness. Pepper reached Alappuzha insmall boats from places like Kot-tayam, Kanjirappally, Muvattupuzha,Kothamangalam and Thodupuzha.Such places constituted the pepperbelt then. Today, it is mostly a rubber-growing area.

Pepper harvests from all suchplaces would be loaded on bullockcarts the previous day and would betaken to the boat jetty in Kottayam.The they were then loaded in boatsand sent to Alappuzha. Barges wouldthen transfer the pepper loads to Ko-chi, from where they would be sent bysteam ships to Calcutta or Karachi

and places across the world. Compa-nies like India Sea Navigation had aregular passenger-cum-cargo vesselrunning between Karachi and Kochi.Every Sunday, one vessel would be inKochi, another in Karachi.

The Idukki arch dam had not yetbeen built then and most parts ofIdukki were inaccessible jungle. Pep-per and other goods were coming toAlappuzha from as far away as Palak-kad. The other major pepper centrethen was, of course, Calicut.

I think accessibility is the key thatchanges the fortunes of a trading cen-tre. When the Aroor bridge was built,goods started moving from the culti-vation centres to Kochi directly. By thelate 1960s, Alappuzha, where labourmilitancy too was on the rise, had lostits relevance as a pepper trading cen-tre. Kochi came into prominence.

By then, people had started mov-

Those were the days…

feels strongly about the helplessnessof the traditional players and aboutthe dramatic way the trade is beinghijacked by market players with“money power”.

“With the coming of the nationalcommodity exchanges in 2002 andthe central and private warehouses,the ways of the pepper business havetransformed. Kochi had the first ex-clusive pepper exchange in India [es-tablished by the Indian Pepper andSpice Traders Association, IPSTA],and it was run by the people who werein the trade, who would not do any-thing that would harm it. The ex-change was well regulated by thetraditional players here, without anydefault [on supply or delivery of thecommodity] and without much vola-tility. But today, volatility within a dayitself is in the range of Rs.10 to Rs.15,”he said.

According to him, prices are nolonger linked to the demand and sup-ply of pepper, but to money power:“People in the trade are not happyabout what is happening, even thoughwe get good business. The changes arenot healthy. The trade is concentrat-ing in the hands of a few, and most ofthe traditional players are beingwiped out.”

But what exactly is pushing up theprice of Indian pepper? Jojan Malayil,whose company has processing andexport businesses in India and Viet-nam, said: “Production has comedown. The monsoon was delayed, andspeculation pushed up the price. ButIndian prices are very high. The spec-ulators have now become very power-ful and Indian prices close at Rs.75 toRs.90 higher than the international

market. Therefore, India is stronglyout of the league, and today there ishardly any pepper export from thecountry.”

According to Kishor Shamji, withthe government actively encouragingpeople to participate in the nationalcommodity exchanges, “very big oper-ators, even cartels of operators, havejoined the game and their interest in ithad pushed up the prices of some oth-

AN EMPTY PEPPER STORE at a major spice trading centre in Idukkidistrict. With the price of pepper crossing Rs.400 a kg, farmers and tradershave been selling all their pepper stocks before another price fall in thecommodity markets.

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er commodities earlier. Since last De-cember, these big cartels ofcommodity operating groups are intopepper. In June, July and August theycornered large quantities of the com-modity and are holding back. They areanticipating that since there is notmuch pepper, the prices will go fur-ther up to about Rs.500 a kg. [Now itis between Rs.375 and Rs.400 a kg.]So they are holding their stocks.”

But are the farmers not happy thatthe prices are up and they are getting

per than he needs at a time. Similarly,farmers have become more cautious.Now he sells when the prices are high,and only when he needs the money.The buyer also buys only when it isneeded. Nobody wants to create biginventories.”

C H A N G E S I N T H E T E R M I N A L M A R K E TThe way the pepper business and itspriorities are evolving is best illustrat-ed by the changes in the terminal mar-ket in Kochi in the past two decades.

Right in the middle of Mattan-cherry, on Jew Street, Kochi’s tradi-tional spice centre, is India’s first andonly international Pepper Exchange,a nondescript building into which thevisiting Queen of England once walk-ed in to get a sense of the bustle anddin of the open outcry system of pep-per trading. The bustle is long gone.Parts of the building have been rentedout; the remaining halls are empty,except for a few online traders.

The exchange is run by the IPSTA,but “its members can now do theirtrading from anywhere”. The volumeof trade is “only 10 tonnes to 15 tonnesa day, whereas it is 5,000 to 6,000tonnes in the national commodity ex-changes,” said Kishor Shamji, who is

good returns? “The trouble is, it cango the other way too. Once they findthat there is more production, theycan push down the price,” he said.

Thus, whether they understandthe new market realities or not, moreand more pepper farmers are beingexposed to the vagaries of the com-modity markets and intense interna-tional competition. “We are nowseeing a marked change in the buyingand selling patterns of pepper. Notrader or exporter is buying more pep-

SPICE STORES line the main road at Kumily, on the way to Thekkady, near the Kerala-Tamil Nadu border checkpost.

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ing deeper into the jungles of Idukkiand large forest tracts were being con-verted into pepper gardens. Later,cardamom too started being cultivat-ed there.

When the Idukki arch dam wasbuilt, a lot of area under pepper wentunder water. People then shifted tothe upper areas of Idukki, such as Kat-tappana, Nedumkandam and Adimalito grow the crop.

Every year I used to go to theseplaces with my father. We have linkswith three generations of dealersthere who procure pepper for us fromthe local farmers. We still hold on tothese links. Some of the dealers are nolonger there; in some cases a new gen-eration has taken over. Somewhere inbetween, the trade patterns changed.

With banks providing generouscredit, the breed of commissionagents, like my father, who used to

finance the traders from the primarymarkets to the exporters and inter-State dealers and who acted as a sort ofmiddlemen in the pepper trade, havenow completely disappeared. Dealersfrom the primary markets have startedsupplying pepper directly to theexporters.

Of late, some dealers have startedexporting pepper on their own. Somesuch dealers in Sulthan Bathery andKalpatta in Wayanad district and Ku-mily and Nedumkandam in Idukkidistrict have established their own fa-cilities for grading and processingpepper for exports and also for theIndian domestic market.

Earlier such processing facilitiesused to be concentrated invariablyaround Kochi. Now you can see themall over Kerala.

As told to R. KrishnakumarKISHOR SHAMJI KURUWA

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market with our products. So we buyfrom Vietnam at less than the Indianprice and re-export it after value addi-tion,” said Jojan, whose company hasnow established a presence in Viet-nam too.

“In recent months, Indian pepperhas been thoroughly outpriced in theinternational markets. So who willbuy our pepper at a higher price? Theworld over, people are looking for thecheapest available source of the com-modity,” Kishor Shamji said.

No doubt, lax pollution controllaws and comparatively cheaper la-bour costs are also among the mainreasons why there is such a concentra-tion of spice extraction units in Ker-ala. “Such units have become adifficult proposition in Europeancountries and the United States be-cause of the norms for controlling pol-lution. There are strict requirementsfor destroying the residue from sol-vent extraction units there. The lawsare very liberal here,” Kishor Shamjisaid.

To take advantage of such a toler-ant scene, perhaps, and to reach out tothe source markets, several multina-tional companies also have been es-tablishing themselves in Keralathrough joint ventures or buying outshares from existing companies tolaunch subsidiaries here. Amongthem are U.S.-based McCormick, theworld’s largest spice firm, which has awell-established joint venture withAVT (called AVT-McCormick); Neth-erlands-based Ned Spices; and Singa-pore-based Olam. Such companieshave invested heavily in India, andtheir main target has mostly been the

half, right now India is generating on-ly just about enough pepper to meetits own internal demand. This shift inthe destination of pepper producedfrom within is also significant, be-cause a major share of the pepper pro-duced in Kerala was earlier exportedto other countries.

“We don’t have enough produc-tion to depend on here, for example tomake pepper powder or oil. So weimport from a low tariff area, a lowcost area, we process it and export at abargain. Sometimes we may not beable to compete in the international

also a former president of IPSTA. Thecommission agencies in Jew Townand nearby areas, who used to financethe chain of pepper traders in the pre-liberalisation era, have all disap-peared or altered their profiles. Theirpresence now is restricted mostly tothe ginger trade. Out of nearly 70spice export firms, only a handful arestill functioning at Mattancherry, todate the main centre for procurement,processing and export of pepper, gin-ger and other spices, and coir. Thehuge warehouses on the waterfront,where pepper arriving in boats andbarges used to be unloaded andstored, have all been re-engineered asmarts selling huge antiques andhandicrafts.

Such changes are not directly link-ed to the decline of pepper productionin Kerala, but, strangely, to an expan-sion of business opportunities in pep-per (and in all spices), especially in theexport market. Big business hasadapted quite deftly to the reality ofdeclining production by turning awayfrom bulk pepper exports and concen-trating more on extraction, process-ing and export of value-added pepper.“It offers them better economies ofscale, whether it be with regard tostorage space, shelf life, price or vol-ume,” Sreekantan Thampi said.

By changing their focus to the pro-duction of value-added pepper prod-ucts, the companies have also reducedtheir dependence on the supply ofpepper from within Kerala. They cannow source it from wherever it is plen-tiful and cheap, Vietnam, for instance.

Today, therefore, even as the oncefamous Malabar Coast is fast turningout to be quite a marginal player inbulk pepper trade, 90 per cent of theworld’s spice extraction units are lo-cated in India, out of which 75 percent are located within the State itself,mostly in Ernakulam district. Eightyper cent of the world market share foroleoresin, spice extract and spice oil isaccounted for by companies now inKerala.

India has a huge domestic de-mand for pepper. It remains theworld’s largest consumer of the com-modity, with domestic consumptionestimated at 40,000 tonnes a year.With pepper output falling almost by

Earlier, people used to buywhole black pepper. Now theyprefer to have it in convenientpackets, 100 grams, 400 grams,and so on. We used to buy thebulk of our needs from the pri-mary markets. For the pastthree years, we buy from the na-tional commodity exchanges,through designated ware-houses. Our company alonemust have picked up 15,000tonnes to 18,000 tonnes of rawpepper from the commodity ex-change platforms. So we buywhole black pepper, grade it ac-cording to standards, grind it,sterilise it and pack it in smallpouches. We do from 100 gramsto 25 kg. The big packets are forthe industrial customers.”

Jojan Malayil,

CEO of Bafna Enterprises.

LIVE BITES

Regulatory authorities in themajor international markets in theUnited States now insist on pepperexporters having their own proc-essing facilities. Earlier anybodywith a telex connection and a faxmachine and a warehouse could bean exporter. Once you get an order,you buy the pepper from the mar-ket and ship it. That was all. Butthings have changed. Now an ex-

porter has several responsibilities.It has reached a stage when youwill have to identify even the vil-lage from where the pepper issourced. So the traditional exporthouses had no option but to engageprofessionals and enter into mech-anisation and marketing. Thechange is not voluntary. It is aforced change. Those who have re-fused to change have disappeared.”

P.S. Sreekantan Thampi, Deputy Director, Spices Board, Kochi.

LIVE BITES

43 F R O N T L I N E . O C T O B E R 1 9 , 2 0 1 2

traditional family-owned spice exportfirms operating in Kerala.

According to the reports of theInternational Pepper Community(IPC), Indian production is projectedto decline by 5,000 tonnes to 43,000tonnes in 2012. With trends so bleakfor pepper cultivation in Kerala, theNational Horticultural Mission hadlaunched a special package for the re-juvenation of pepper in Idukki andWayanad districts. The Rs.120-croreproject implemented in Idukkithrough the Spices Board aims at re-placing old, senile or disease-affectedpepper vines with disease-tolerant,high-yielding varieties.

The project has crossed its thirdyear, but there is much scepticism inthe farming community about its pro-spects. Thomas, for example, said thatfarmers had mainly made use of theopportunity to plant new vines on abig scale with the aim of getting thesubsidy of Rs.28 for every vine thatcame with it. It is doubtful whetherthey have subsequently taken care ofthe plants.

There is a clear trend both inIdukki and Wayanad not to dependon pepper as a mono-crop or to re-place pepper with cardamom. More-over, in almost all farmer households,the new generation is moving awayfrom agriculture. As a result, mostsmallholders are forced to depend onlabourers and often sell the entire har-vest in advance to contractors.

“The care that used to go into thecultivation of pepper is lost and, de-spite the rejuvenation project, at theend of five years, if my guess is right,pepper production is going to be low-er than what it is today. If pepper is tosurvive in Kerala, new disease-resist-ant varieties and good care through-out the year for the plants areessential. That is the bottom line. Thenew-generation farmers cannot reallybe bothered about Kerala’s glorioushistory in pepper production or trade.Farmers go where the money is. Theyswitch over to more remunerativecrops or they quit farming altogetherand seek other avenues,” Thomas toldFrontline.

Consequently, the famed MalabarCoast has already become a marginalplayer in the global black pepper mar-ket. Instead, it is fast turning out to bea huge centre for back-end operationsof big spice companies.

With the pepper processing in-dustry growing in sophistication,there also is a significant consolida-tion of the trade in the hands of themost powerful players and margin-alisation of a lot of traditional andsmaller players. Cheaper pepper sup-plies available from Vietnam and oth-er nations and the entry of retailgiants and spice multinationals havetransformed the game altogether andis driving out smaller traders andexporters.

The big purchasers may have

come in initially to get their hands onthe source markets for obvious pricebenefits as well as for ensuring qualityand food safety norms, which havebecome a premium requirement inAmerican and European home mar-kets.

But now they seem to have turnedtheir attention to value-added prod-ucts and are increasingly looking atthe huge Indian domestic market tosell them. They have established jointventures or subsidiaries in severalother pepper-producing countriestoo.

“We need to be cautious that un-controlled imports or interference ofthese big players in the market doesnot adversely affect Indian farmers,traders and export companies. Manyof these big multinationals are now adirect threat to Indian companies inthe value-added spice products sectortoo. And it is the huge Indian domes-tic market that is increasingly becom-ing a major attraction for them,”Kishor Shamji said.

The most famous story about Ker-ala’s pepper wealth and trade is theone about Vasco da Gama asking theZamorin of Calicut for a few peppervines for replanting in his own coun-try. As his courtiers remainedalarmed, or so the story goes, the su-premely confident Zamorin asked daGama: “You can take our pepper butcan you take our monsoons?”

Certainly, in the ancient world,among the long-held secrets of thepepper trade had been the inevitabil-ity of the twin monsoons and the trop-ical climate in Kerala for itscultivation, and the ways in which thelocal traders ensured control over itssupply.

Today, however, the climate ischanging fast, the mysteries of thetrade are long gone, the supply-chainis being snatched away by multina-tionals and big retailers, and pepperhas long ceased to be a store of valueor an exclusive prize to be had in theKerala coast.

The most surprising part of thistale of decline and perhaps the end ofthe region’s historic role is the sense ofresignation about it that pervades inthe pepper tracts of Idukki and therest of the Malabar Coast. �

A MONO-CROP PEPPER PLANTATION in Vietnam, where production andproductivity are very high.

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