Ten days after the state government embarked on its copra procurement operations, the rate of fall in prices has been brought down. Although, the prices have not improved significantly, from an overnight fall of Rs 200 per quintal coconut oil, the price fall in the last seven days has been curbed to Rs 50 per day. According to the state procurement operations, the procurement price for milling copra has been fixed at Rs 3,100 per quintal and for ball copra at Rs 3,325 per quintal.

This is the first time that the central government had taken so long to arrive at a decision on the copra minimum support price. The situation has afforded a joyride for the toiletry industry, where some of the players have been selling the branded product with nearly 100 per cent mark-up. However, the delay in the announcement of copra minimum support price has been costly to Kerala's coconut economy, already reeling under the mite epidemic.

For Kerala coconut farmers, the situation had reached a panic stage last week with the copra price falling to Rs 2,585 per quintal and the coconut oil price to Rs 3,850 per quintal. In January, the festival season demand had pushed the coconut oil price to a high of Rs 5,400 per quintal. In the first week of March, over a single day, the coconut oil price had fallen by Rs 200 per quintal, affording a heyday for the Mumbai buyers. Sources said that a Mumbai buyer last Monday had clinched a purchase 150 quintals coconut oil for less than Rs 5 lakh.

Despite repeated reminders from the Kerala government -both through the state's MPs and directly from chief minister to union cabinet- the union ministry of agriculture has been mum on the copra MSP, Kerala agriculture minister Krishnan Kaniyanparambil said. Last year the announcement fixing the copra MSP had come on February.

According to agriculture experts, the announcement of MSP will be meaningless unless it comes by December, since the coconut season in Kerala starts by January. Although the Committee on Agriculture Prices had visited the state to study the demand-supply situation and had submitted its recommendations to the centre, a decision on MSP is yet to come.

As a crisis reaction, the state government had sought the intervention of National Agriculture Marketing Federation (NAFED). It was after getting favourable signal from NAFED chairman that the state government authorised its two agencies -Kerafed and Marketfed - to procure copra from the 475 copra-processing farmer co-operatives in the state, Krishnan Kaniyanparambil said. For States like Tamil Nadu and Andhra Pradesh which also produce coconut, the impact of price fall is less grim because the coconut plantations can contain the loss through economy of size.

In Kerala, which contributes 40 per cent of the coconut in the country, 90 per cent of the produce is from homestead farms averaging at less than two acres.