STC puts vanilla row to rest; moots Rs 100 a kg for raw beans

Kochi, Oct 30 | Updated: Oct 31 2005, 07:48am hrs
The controversy over falling vanilla price and allegations of attempts to bring it down have come a cropper with the State Trading Corporation (STC) study pointing to a Rs 100 per kg remunerative price to cover the cost of production. The corporation is also to procure 3 tonne of cured beans at Rs 1,500 a kg from farmers organisations.

STC had been asked by the Centre to undertake a study on the vanilla situation in the country, the cost of cultivation, the international price and other aspects, in the wake of price controversies. Even former prime minister HD Deva Gowda had joined the campaign writing to the Centre that vanilla farmers were facing marketing problems artificially created by unscrupulous traders/multinational companies with the help of the Spices Board.

At a meeting convened by commerce secretary SN Menon recently, STC officials who presented the study said that after interaction with a wide section of growers and going into different studies, it had come to the conclusion that a price of Rs 98 for a kilogram of raw beans was remunerative to cover the cost of production.

While a section of those present, including former minister PC Thomas, opposed it, Karnataka MP Anandkumar Hegde said that being a vanilla farmer himself, he stood by the STC study. STC managing director Ponnappa told FE that the corporation had roped in experts from the Karnataka University of Agriculture Science to prepare the study, though he refused to divulge details.

Vanishing Vanilla Profits
The Centre has asked
STC to undertake a study
on the vanilla situation, the cost of cultivation and the international price, in the wake of price controversies
Green beans were being sold at $2 per kg though some claimed that the prices were around $70 per kg
Mr Ponnappa said the corporation was concerned for the growers who had gone in for massive cultivation after the 2003 Madagascar cyclones destroyed the crop there. This led to increase in prices to Rs 4,000 kg for green beans.

Though the inter-crop, farmers had gone into mono-crop cultivation and with the revival of the crop in Madagascar, international prices fell, according to those in the trade, green beans were being sold at less than $ 2 a kg though certain groups had claimed that the prices were around $ 70. They admitted that these groups had asked farmers to hold back their produce as the prices would go up. This, according to Spices Board estimates, had led to farmers losing around Rs 100 crore.