CHAPTER I INTRODUCTION Contents of the chapter
Page No.
General introduction 1
Abstmcts of the literature reviewed 3
Significance of the study 13
Statement of the problem 16
Scope of the study 18
Objectives of the study 19
Hypothesis formulated 19
Period of the study 20
Research design and methodology 20
Concepts and definitions 26
Limitations of the study 27
Layout of the research report 28 INTRODUCTION
The richness of the culture and the fragrance of the spices were the major sources of glory of the ancient India. It is really amazing to see that India could maintain her supremacy in the production and trade of spices even hmthe Vedic ages dating back to
6000 B.C, to the modem era of the third millennium. The vicissitudes of history made unbelievable changes everywhere but the Indian domination over the world spices market still remains unquestionable.
The geographical and climatic peculiarities of South India in general and Kerala in particular are the major gifts of nature still providing us an upper hand in the world of spices. Geographical advantages of the state coupled with the sterling efforts of the people, particularly of the high ranges of the Western Ghats, help us to produce the best quality spices favored all over the world. '
The history and destiny of our country, perhaps the whole world were influenced unbelievably by the spices. It was the taste of the 'Black gold' pepper and the flavour of the 'Queen of spices' Cardamom, which attracted the Arabs and Europeans to this country and ultimately led to the foreign domain.
It was the search for spices, which tempted the mariners like Vasco de Gama of
Portugal, Christopher Columbus of Spain and many others to undertake hazardous voyages to the East. ?'he significance of the spices in the history of the world is evident from the fact that even the discovery of the American continent by Columbus was accidental during the search for spices. The history of the world would have been different had India not been the land of spices. It was a new tum in the history when General Diaz, first arrived at the Cape of
Good Hope, in search of spices of Malabar coast, through the sea route. It was this discovery, which eventually led to the arrival of Vasco de Gama at Calicut The basic purpose of the exwtion of Gama was to obtain a direct link with the South India for spices trade, eliminating the Arab and 1tal;an spices traders who had monopoly at that time. 2
India had monopoly in spices production and export for a very long period But the situation is fast changing and we are facing extreme competition from many spices producing countries. Vietnam, Brazil, Indonesia, Malaysia and Thailand are the major opponents of India in the world pepper market. There are countries like Sri Lanka, China, and Madagascar etc, producing pepper though they do not raise much competition in the mternational market
On the other hand, Guatemala is the major opponent of India in the international cardamom market. They are able to supply cardamom at a price, which is far below the price of Indian cardamom. Tanzania, Sri Lanka, Costa Rica, Honduras and Papa New
Guinea are cardamom producing countries, though in small quantities.
China and Pakistan are the major countries competing with India in the lntemational ginger and chilly market. We have severe competition from Morocco, Egypt and Iran in the field of coriander, cumin seed, and aniseed. However India still has a dominant role in the export of turmeric. 3
Whatever may be the competition, India is still the leader in spices production and export On an average, we produce about 28,00,000 tomes of spices every year. In fact more than 90 percent of our spices production is consumed in India itself. It is amazing to see that the remaming 10 percent spices exported from India gives us 40 percent share of world spices market.
The state of Kerala has made considerable achievements in the export of spices during the last many years. Pepper, Cardamom, Ginger, Turmeric, Nutmeg, Garlic,
Chilly, Tamarind, Vanilla and Cinnamon etc are the major items of spices produced and exported from Kerala Pepper, Chilli, Cardamom and Turmeric constitute the lion's share of Indian spices export out of which more than 60 percent is the contribution from eral la'
The State of Kerala-has a remarkable share in the pepper production with about
1,80,000 hectares of land under pepper cultivation accounting for the production of more than 50,000 tonnes annually. This means that more than 90 percent of India's pepper production is fiom the state of Kerala It is interesting to see that the lion's share of
Indian pepper comes from the Idukki and Wayanad districts. Similarly, there are about
70,000 hectares of land under cardamom cultivation producing on an average 6,500 tonnes of cardamom annually. Of this, 45,000 hectares belong to the state of Kerala from which we produce on an average 5,000 tonnes annually. Here also the contribution of
Idukki district is remarkable with more than 80 percent.
1.1. Review of literature
Though spices have much economic, historic, political and cultural significance, the academic cornmuni@ seems to be neglecting the sector. This may be the reason why the researches on the topic, particularly about the marketing aspects of spices, are very limited in number. Another important point is that majority of the published research works do not have much significance now due to the rapidly changing cultivation practices and trading environments. However the researcher went through the available published works as far as possible to obtain a clear theoretical background for the present study. The findings of the literature review are briefly reproduced below.
Jose ' (1978) in his thesis 'Problems and prospects of India's major spices', has made an overall study about the problems and future possibilities of our major spices, pepper and cardamom. This study analyses the problems in the agricultural sector in general and about the problems in the spices sector in particular. He found that pepper and cardamom have considerable significance in the economy of the State of Kerala and the problems of the sector will affect the foreign exchange reserves of India
Thomas (1984) in his report 'Standardization techniques for retention of green colour in pepper'. explored the possibilities of maintaining green color in processed pepper by standardizing the techniques. The study has covered the market requirements of pepper particularly in European countries and proves that Europeans always prefer to get spices in their natural form and color. The findings of the study are still significant because the methods suggested are highly helpful to increase the export volume of processed pepper.
Suresh (1984) in his thesis 'Economics of cardamom plantation in Kerala', has made a detailed cost benefit analysis of cardamom cultivation, which throws much light into various cost components of cardamom production, processing and marketing. This study was primarily intended for analyzing the economics of cardamom plantation with special reference to high ranges in Idukki district Various statistical tools have been applied to have a microscopic view of the cost components and the impact of each such element in the net revenue of cardamom plantation. However this study is more or less silent about the marketing problems of cardamom. Joseph "(1985) in his thesis 'Analysis of the marketing and price formation of cardamom in Kerala' studied the economic aspects of cardamom production and marketing by making a detailed analysis of the marketing methods, channels and price formation. The prime objective of the study was to observe the scope of cardamom plantation and its significance in the economy of Kerala, particularly in Idukki district.
He demibes the process of price formation of cardamom, using various economic parameters. In his opinion the price formation of the cardamom in the international and domestic markets is based on global supply. The peculiar nature of the auction system prevailing for cardamom has also been discussed in detail.
Swaminathan I I (1985) in his thesis 'Trends in the area, production and export price of cardamom in Kerala, Tamilnadu and Kamataka', made a comparative study of the uends in area, production and productivity of cardamom in the three states of Keraia,
Tamilnadu and Karnataka with the basic objective of projecting the probable future share of these states in the international cardamom market He estimated an annual growth rate of 2.34 percent for cardamom. He also studied the trends in the export price of cardamom. He gave much importance for the regional comparison of cardamom production and growth so that all other aspects of the field were left untouched.
Baby Jacob l2 (1985) in his thesis 'Export development of Kerala', studied the export performance of Kerala, analysing the trends and problems and made a comprehensive analysis of the then prevailing export policies of the Govenunent The performance of pepper and cardamom, being major export items were evaluated well and remedial solutions were recommended to the problems of major export items including pepper and cardamom. Gopalakrishnan Nair l3 (1987) in his thesis, 'Problems and prospects of marketing cardamom in lndia and abroad', outlines the problems of marketing cardamom inside and out side our county. The study has highlighted the future market possibilities abroad and suggested measures for increasing the export volume and enhancing the prospects of cardamom in India and abroad. He has analyzed the production problems of cardamom and made some important suggestions to solve such problems to a great extent.
Gopinatha Menon l4 (1988) in his thesis 'Processing, procurement and marketing of pepper with special reference to cooperative sector', has made a detailed study of the various aspects of production, processing and marketing of pepper. He gives a detailed description of the cultivation practices, processing, channels of marketing, domestic and international market, problems and suggestions for improving the return of the producers and traders. However, the study was mainly intended to analyze the role of cooperative societies and to observe the future scope of cooperative sector in the field of pepper marketing. The study has not considered marketing problems of individual cultivators and traders.
Muhammed Sajjad (1987) in his report 'India's cardamom trade with Middle
East' clearly points out the changing pattern of India's cardamom trade with the Gulf countries. With the support of statistical data, economics of cardamom cultivation and the future prospects of the sector have been discussed in detail. According to him, high price of Indian cardamom is the reason for declining export volume and competitive pricing strategy is the only solution to the problem.
Meena Benjamin '' (1988) studied the problems and prospects of exports of value added spices in general and spice oils and oleoresins in particular, in her project report named 'Problems and prospects of Exports of Spices Oils and Oleoresins From India'. The study has covered the processing of spices, oils, major market trends in expo* problems, export incentives, review of the export volume of producing countries, and distribution problems of value added spices. The study gives some valuable indications about the future possibilities of spices relating to processing and value additions.
Ramesh " (1990) in his thesis 'Volume of tmde and its impacts on the economic development of Kerala', made a comprehensive study of the role of trade in Kerala's economy, including the structure and composition of Kerala's foreign trade and the interstate commodity flows. Spices are prominent export products and hence their trade significance has been discussed in detail. This study points out the scope and potentials of the spices of Kerala and also highlights the comparative advantages of spices over the other agricultural products of Kerala
Sreekumar (1990) in his project 'The test launch study of Milma Cardamom
Milk', discusses the effectiveness of test launching of cardamom milk by Milma. The report reveals that the project was a failure. Defective marketing system with inadequate
dealer push, inadequate distribution network, inadequate advertisements etc. are
highlighted as the major reasons for the failure. Had the project been a success it would
have been highly beneficial to the cardamom producers. The conclusion of the report
indicates that even though the test launching was a failure the opportunity still prevails as
untapped.
Radha et al. 19 (1997) in their book 'Marketing Management', describes the
normal channels of distribution of agricultural as well as industrial goods. In their
opinion, the specific peculiarities of agricultural commodities make their distribution
more difficult and so the normal channels followed for industrial products cannot be fully
resorted for agricultural commodities. Multiplicity of intermediaries, loss of weight and volume in transit, lack of organization, forced village sales, perishable nature of the produces, multiplicity of market charges, adulteration and market malpdces, inadequate storage, transportation and communication facilities etc are noted as the other major problems in agricultural marketing.
RS.N. Pillai et al. " (1998) in their book 'Modem marketing' ,classified markets of agricultural commodities into different groups on the basis of specific characteristics and highlighted the major differences between the marketing procedure and features of manufaaured goods and agricultural commodities. They have noticed the major defects of agricultural marketing and suggested remedial measures for solving such defects and problems. They have also described the importance of international marketing along with the major activities involved in the process including market and product selection, market entry, distribution channels, pricing in global markets, international marketing research etc.
George et al. 21 (1998) in their article, 'cardamom development past and present', describe cardamom development in India, considering past performance and firture possibilities in the world market. They observed that the emergence of Guatemala as a major producing country is real threat to Indian cardamom. The major constraints in the
Indian cardamom industry also have been investigated. The study also compares the area, yield, production, and productivity in India with that of Guatemala and suggests various schemes and programmers required to renovate the sector.
Sreekantan Thampy (1998) in his paper 'organic the only way', advocates that organic farming is the only way for the escape of Indian spices from the impending failure. He aptly points out the changing attitudes of the developed nations towards agricultural products from developing countries, which may turn out to be harmful to our spices sector also m future. In his opinion the judicious exploitation of technology and adoption of eco-iiiendly cultivation practices will help us to regain the glory of Indian
spices as in ancient periods.
Thomas et al (1998) in theii paper 'A brief review of development of spices in
India during post independent era', have made an evaluation of development of spices in
India during post independent em. This study covers the historical background of Indian
spices and the achievements in the development of spices after the independence. It
Mex says about the emergence of Cardamom Board and subsequently the Spices
Board. A comparative study of developmental programmers during different five-year
plan periods also has been made. It gives some importaut observations, conclusions and
recommendations for the revival of the Indian spices sector.
Sreekumar 24 (1 999) in his article 'World trade in spices- Import and Re-export
of pepper', has analyzed the world trade of pepper comparing the global demand and
supply. He arrived at a logical conclusion tbat many countries are importing and re-
exporting pepper with or without value addition, and making benefit out of such
transactions. This study throws much light into the market forces in the global spices
trade and hints the areas where India can concentrate more for better marketing of
pepper.
Sivadasan (1998) in his paper 'Action plan/ proposals to evolve suitable
strategies and adopt a common stand on the food safety standards in pepper', compares
the quality standards for pepper prevailing in major importing countries of black pepper.
The ASTA, ESA and IS0 specifications were analyzed and he has pointed out the
urgency of the adoption of different methods by the producers and traders to fulfill such
international cleanlmess requirements. He also suggested various action plans and suggestions deserve special significance in the context of world trade agreement under
WTO because the provisions of WTO insist all the countries producing agricultural
commodities to follow the minimum quality standards.
Peter 26 (1 999) in his article 'Making of the global leader', asserts a bright future
of Indian spices in the light of the statistics relating to the global production and demand
of the spices. He estimates an annual growth rate of 11 percent for black pepper and 5
percent for cardamom. In his opinion the global village in the new millennium will
witness perceptible changes in the food habits, dietary patterns and values, which would
offer ample scope for the spices sector, provided we are able to produce and supply as per
the changing quality requirements of the buyers. He also analyzed the emerging scenario
of the spices and the main production constraints. He also remarked about the spices
based novel products. In his opinion the major policy decisions taken by the Central
Government will help to boost production and export of spices in the years to come.
Damodaran *' (2000) in his paper 'WTO agreements on agriculture, implication
for Indian plantation sector', studied the consequences and probable impacts of WTO
agreements on Indian plantation sector. It has special significance in the context of
globaluation particularly in the spices sector because spices are export oriented
agricultural products. The AMS (Aggregate Measures of Support) and QRs (Quantitative
Restrictions) imposed as a result of the WTO agreements was analyzed. The
developments in various rounds of WTO negotiations were analyzed in detail and arrived
at the conclusion that there are some issues of concern to our country particularly to the
spices sector because the problems of pesticide residue was ever a problem to the Indian
spice which may get aggravated and there is a possibility of developed nations using
some of the provisions of WTO agreements against our country.
Alagappan et al. 3' (2001) in their article 'production of pepper in India, a global perspective', evaluated the production of pepper in India in the global perspective. The study includes global production and consumption pattern of black pepper in Werent countries. The authors estimated the compound growth rate and coefficient of variation of pepper production in various countries. They ranked the productivity in different origins and India has the least productivity ranking. The study amves at a conclusion that
India has much growth potential in the field but the present level of performance is extremely inadequate.
Indim 32 (2002) in her article 'Indian cardamom handicapped by poor productivity', argues that unstable area and poor productivity are the major drawbacks of
Indian cardamom. She substantiates the observation with a comparative analysis of the productivity of the major cardamom producing countries, India and Guatemala Export trends points out the dismal performance of Indian cardamom during the last decade and highlights the urgency of immediate steps to regain the global market share.
Sreekanton Thampy 33 (2002) in his article 'Bio terrorism and changing trade patterns', substantiates the impacts of 'The Public Health Security and Bio Terrorism
Preparedness& Response Act of 2002' passed by the United States of America consequent to the attack on world trade centre and Anthrax events. Bio terrorism is the intentional use of infectious biological agents or germs to cause illness, used as agents of terror. He establishes that U.S.A is the prime importer of Indian spices and so any restriction imposed by them will have definite impacts on the Indian spices exporters and consequently the sector as a whole. The legislation will compel the companies exporting food materials to U.S. to reveal their formulations and mixes and even the sources of materials. The article is particularly relevant because it underlines the urgency of
Table 3.1 Trend of Export and Imports since 1990
Year Exports Impom (Rs. Crores) (Rs.
32,553 43,193
1991-92 44,042 47,851
1992-93 53.668 63,375
1993-94 69.751 73,101
1994-95 82,674 89,971
1995-96 1.06,353 1,22,678 1996-97 / 1.18.817 1,38,920 1997-98 ) 1.30,101 1,54,176 I 1998-99 1.39,753 1,78,332
1999-00 1.59.561 2,15,236
2000-01 203,570 2,30,873
Source: - Ruddar Dun (2003) Indian Economy, page. 727
When we have a negative trend in the case of exports of industrial and manufactwed goods after 1993-94, spices show an upward trend year after year. Table
1.2. shows that the export of Indian spices is increasing both in terms of quantity and value up to 1999-2000. Though there is slight decrease in the total value of exports during 2000-01. there is increase in quantity exported. Table 1.2 Export of total spices from India Quantity Value (Tomes) (Rs. Crores) E-1990-91 1,09,636 42.14
I l 2000-01 2,30,000 1,612.07 L Sources : - Compiled from Annual Reports, Spices Board of India, Cochin and Spices Statistics, Spices Board of India, Cochin, 1997.
Spices have a very important role in the domestic market too. Being a tropical country, majority of the people in India regularly use different types of spices for their daily cuisine. More than hundred crores of people in the country offer a very vast domestic market base for spices. It has been estimated that on an average 2.8 percent of the income of the rural people is being spent for spices and the urban people spend 2.3 percent of their money for making their food spicy. 34 This shows the significance of spices in Indian iife. in India we have about 1,80,000 hectares of land under pepper cultivation and on an average we produce about 50,000 tonnes of pepper. Even though the spices have much economic significance, the sector is not getting the deserving care and promotion which causes much distress to the cultivators and traders. The present agricultd crises as a consequence of price falls and resultant stalemate in the sector lead to the following conclusions.
1. The efforts of the Governments, Research institutions and Universities to increase
the production of cash crops including spices, are not supplemented by adequate
analysis of the marketing problems.
2. The poor and totally unorganized farmers are not in a position to locate the real
problems behind the price fluctuations of their produces and they are not at all
capable of devising strategies to market their produces securing the best price.
These two are the vital issues, which necessitated a study liie this. The relevance of the study was felt more intensely when our country became a member of the World
Trade Organisation, which will have long standing impacts on our agricultural economy, particularly on export oriented products liie spices.
1.3. Statement of the problem
Scientific methods and techniques for effective marketing of spices and their associated products will be highly helpful to the general economic growth of our State because there are thousands of people depending on the spices sector for their livelihood including the producers. domestic traders, exporters, and the workers.
Unfortunately, our spices sector is really suffocating due to a variety of problems.
Generally, the price of a commodity must be either cost based or demand based. However a close observation of the prices trends show that this principle does not have much significance in the case of our major spices including pepper and cardamor.. Simiiariy, any upward vend in the prices of spices should benefit the producers. But it is paradoxical to see thar the producers of spices never get the benefits of price hikes but they have to bear all the evils of adverse market conditions. This is a clear evidence to believe that there is something wrong with the present marketing system of spices.
The export statistics show an upward irend in the total value since 1990 but in red terms, i.e. considering the devaluation of Indian rupee during the same period it can be observed that the trend is not so hopeful. (Table 5.35)
Another factor is that the Government investment in the sector is increasing year by year but there is no corresponding growth either in the production or trade of spices.35
At the same time the net benefit resulting from the spices sector to the producers and traders is declining considerably, which compels them to quit the field itself.
The quality of Indian spices, particularly pepper and cardamom, was well renowned even from the very beginning of the history. Even though there are many countries producing spices the quality of Indian spices remains unquestionable, yet we are getting ousted gradually horn the international spices market. We had monopoly in the international spices market until the second half of the 18 ' century. But now our contribution in the world pepper market is less than 25 percent. Same is the case with
Indian cardamom. India was the world's largest producer and exporter of cardamom till
1979-80, but the situation has changed now and Guatemala is presently dominating the world cardamom market (Table 2.3.)
We have best quality spices, the government and other agencies are trying their level best to increase production and export, the producers are trying hard to increase production and productivin, but still then our spices sector is facing a total doom. Why?
It was this factor, which inspired the researcher to go deep into the problems and prospects of the spices sector with special emphasis on major spices of Kerala, pepper and cardamom.
The problems and prospects of the sector can be analyzed hmthe following
viewpoints.
1. What is the significance of the spices sector in our economy?
2. What are the basic problems in spice marketing in and out side India?
3. Has our spices sector a bright future?
4. What are the probable impacts of globalization and WTO on our spices
sector?
These questions need immediate attention and analyses in the absence of which our precious spices will disappear from the international market and will receive an unnaturai death in the fast changing global economic scenario.
1.4. Scope of the study
In India we produce and market more than fifty types of spices and export them to more than 150 counbies around the globe. A study about the problems and prospects of all these spices is far beyond the scope of the study. Pepper and Cardamom, known as the 'King' and 'Queen' of spices respectively, have dominating role in terms of significance in the world market as well as in domestic production.
In terms of value all other items of spices are far below the pepper, because it procures more than 40 percent of the foreign exchange earnings hmspices export.
Cardamom is a major plantation crop in Kerala having much economic significance and a peculiar method of marketing. Pepper, Cardamom and the value added products from these two constitute the lion's share of the spices production and trade. So this study is contined to these two items of spices only. Similarly, almost all the states of India produce one or more of spices but
Kerala has a remarkable role in pepper and cardamom production. It is to be noticed that the major portion of the quality spices produced in Kerala wme from Idukki and
Wayanad Districts. So the present study concentrates on Idukki district alone for cardamom while Idukki and Wayanad districts for pepper.
1.5. Objectives of the study
The major objective of the study is to evaluate the present marketing system of spices and find out the critical issues hindering the growth and development of the sector.
However, the following are the specitic objectives of the study.
1. To make an oveniew of the present marketing system of spices, especially pepper
and cardamom.
2. To identify and analyze the major factors iduencing the marketing of spices by
the producers, domestic traders and exporters.
3. To review the role. played by the Spices Board of India, in marketing of spices.
4. To study the potentials and future prospects of the Indian spices in the changing
global economic scenario.
1.6. Hypotheses of the study
Based on the objectives of the study the following major hypotheses were
formulated and tested.
1. Pepper producers do not differ scale-wise, education-wise or experience-wise on
major factors influencing pepper marketing
2. Cardamom producers do not differ scale wise, education wise or experience wise
on major factors influencing cardamom marketing. 3. Domestic spices traders do not differ scale-wise or experience-wise on marketing
variables of splces.
4. Exportem of spices do not differ scale-wise, fom-wise or experience-wise, on
export market variables.
5. Spices board is not playing any significant role in marketing of spices.
Testing of each hypothesis required several sub-hypotheses due to the interdependent nature of variables. Such sub-hypotheses have been stated and tested at appropriate places in the research report.
1.7. Period of the study
The period of study was hm 1998 to 2002. However information and data pertaining to past several years became inevitable during the progress of the study and hence such relevant data are also used for analytical purposes.
1.8. Research design and methodology
This study is an exploratory one. The data and other information required for the
study were collected from both primary and secondary sources. Primary data were
collected £tom the respondents directly, using a structured interview schedule and the
secondary data were collected from various sources including libraries, journals,
newspapers and websltes.
Since this study required information fiom spices producers, domestic traders of
spices and the exporters, three sets of schedule of inte~ewwere prepared. (Appendix I,
I1 and In) In order to obtain an overall view of the practical problems of the above
mentioned groups and also to make the schedule of interview more accurate and relevant,
a pilot study was conducted. Twelve spices producers, six each from pepper and
cardamom producers (two each from small, medium and large) and twelve spices traders,
20 six each hmpepper and cardamom traders (two each hmsmall, medium and large) and six exporters (two each from small, medium and large) were interviewed for the pilot study. The responses and opinions collected fiom them helped a lot to get an overview of the sector and also to locate the major defects of the draft schedule of interview. Based on the findmgs of the pilot study, the 6nal schedule of interview was prepared.
1.8.1. Method of samphg and coUection of data
A stratified random sampling was adopted for the collection of data hmthe sample respondents. Sample data were collected fiom spices producers, traders and spices exporters using the schedule of interview.
There are 61,470 pepper cultivators and 10,864 Cardamom cultivators in Kerala 36 which constitute the total population of the spices producers. The spices cultivators are adopting mixed cropping and have the practice of crop shifting (Tables3.14 and 3.62)
Hence a different method was adopted for sample selection. The respondents were divided into three categories as small, medium and large scale (based on area of cultivation) and data were collected until each category became large enough for analytical purposes (more than 30 respondents in each category).
In total, 180 pepper producers and 105 cardamom producers were interviewed.
Similarly, 90 domest~cspices traders and 90 exporters belonging to small, medium and large scale categories (based on the turnover) were interviewed.
The sample of pepper producers was drawn equally (90 each) from Idukki and
Wayanad districts of Kerala State. Since the production of cardamom is concentrated mainly in Iduklu district, the entire sample of cardamom producers was selected fiom major cardamom producing centres of Idukki district. The domestic spices uaders operating in major spices trading centres in Idukki and Wayanad dishicts were included in the sample and 90 of them were interviewed. The centres so selected were Kattappana, Kurnily, Nedumkandom, Adimaly, Thodupuzha,
Vandenmettu and Munnar in Idukki District and Kalpettq Mananthavady, Sultanbethery, and Pulpally in Wayanad District
Similarly, 78 exporters of spices from Kerala were interviewed personally.
Moreover structured questionnaires were sent by mail to 30 spices exporters from other states but only 12 of them responded In total, responses from 90 exporters only wuld be collected. However there are only less than 500 registered spices exporters in India and so the sample of 90 was considered adequate for analysis. 37
1.82. Processing and analysis of data
Various statisheal tools like averages, percentages, ratios have been extensively used for the cross examination of the data. Chi-square test is used as the prime tool for analyzing tables drawn fiom the primary data One of the most powerful multivariate techniques, Factor Analysis has been applied for extracting the prominent factors influencing the problems faced by the producers, traders and exporters of spices. Time series analysis has been applied for observing the future potentials and scope of the sector. Along with these, Line Graphs, Charts and Segmental representations have been used for analytical purposes.
Version 6 of SPSS for MS WINDOWS was used for mathematical calculations
and analysis of the data. Figure 1.1. Pepper / Cardamom growing centres of Kerala
1. Idukki 2. Palghat 3. Waynad 4. Kozhikkode 5. Kannur
P. Pepper C. Cardamom Table 13 Sample Design
Total SI. District TaluWCen~ No.of respondents
I. Pepper a) idukki Udumpanchola Peermedu Devikolam b) Wayanad Mananthavady vytbki Sultansbattery 2. Cardamom Idukki Udumpanchola Peermedu Devikolam
11. Spires traders a) Idukk Udumpanchola 15 Peermedu 15 Devikolam 15 b) Wayanad Mananthavady 15 Vythiri 15 Sultanbattery 15
III. Spices exporters Emakulam & others 90 90*
~ --~ Total 465 - ---- * Includes 12 mailed responses 1.83. Major factors analyzed
The following factors have been analyzed in detail for drawing inferences.
Table 1.4 Major factors analysed From the point of view of From the point of view of From the point of view spices producers domestic spices traders of spices exporters Market price Supply of spices Demand 1 Market Awareness I So-Sofrpia 1 Pricingby 1 competition I Intermediaries I Difficulty in Financial 1 Crop shifting 1 Marketing Settlement Marketing time Value addition . opelatingcosts Quality of produces Stock velocity Monopolistic
Marketing costs Marketing Practices
Exploitation by Channels Competition
Middlemen Operating expenses Speculation
Role of marketing Sources of finance Exchange
Societies Warehousing Rate fluctuations
Governmental Facilities Legal formalities
Policies Government Amtude of banks
Role of the Spices Policies Governmental
Board Role of the Spices Policies
Organic farming Board Role of the Spices
Marketing system Board 1.9. Concepts and Definitions
The following specific concepts have been used in the report.
Table 15 Concepts and defmitions Concept Definition
Small-scale producer 1 A farmer having spices cultivation of one hectare or less I I Medium-scale A farmer having spices cultivation of more than one but producer less than ten hectares. I 1 Large-scale producer A farmer having spices cultivation of ten hectares or above I Small-scaie trader A spices trader with an annual turnover of ten lakhs or less
Medium-scale trader 1 A spices trader with an annual turnover of ten lakhs ' or above but less than one crore
Large-scale trader / A spices trader with an annual turnover of one crore or above.
Small-scale exporter ' An exporter with an annual export volume of ten tonnes or less
Medium-scale I An exporter with an annual export volume of exporter more than ten but less than hundred tomes
Large scale exporter ' An exporter with an annual export volume of hundred tonnes or more
Low education group I Respondents with SSLC or less
Medium Respondents belonging to SSLC - Graduation group education group
High education group i Respondents with post graduation and others. Low experience Respondents with experience of less than 5 years and in the case of producers, less than 10 years.
Average experience Respondents with experience of 5-15 years and WUP in the case of producers, 10 -15 years.
I Experienced group Respondents with experience of 15 years or more and in the case of producers, 25 years or more.
1.10. Limitations of the study
Some of the exporters and traders of spices did not cooperate with the data collstion because they were skeptical about the purpose of the study. Siarly, some of them were unwilling to fiunish the full details, particularly those relating the income, volume of trade etc.
The study is based on variables related with agricultural, climatic and economic conditions, and it is impossible to have complete precision in such studies.
The study covers only two items of spices viz. pepper and cardamom and the findings may not be relevant to other spices. Further, the study is based on the responses obtained ha spices producers, traders and exporters of two districts of Keraia State and hence generalizations need not be fully accurate.
The normal errors inherent in social surveys lie bias in reporting data, inadequacy of information, common limitations of statistical analysis etc might also have affected the study slightly. Chi-square test has been applied extensively for analytical purposes and merging of cells has become inevitable in certain cases leadiig to reduced degrees of hedom.
In spite of the above, maximum care has been taken to ensure that such litations do not affect the authenticity of findings or results of the study. 1.11. Layout of the Research Report
The research report has been divided and presented in six chapters. The first chapter gives a general introduction to the thesis explaining the theoretical background of the study, its relevance and significance, major objectives, hypothesis tested, definitions of concepts, methodology, sources of data, sample design, period of survey, tools applied for analysis of the data and major limitations of the study.
The second chapter is intended for providing the historical background of the global and domestic spices trade. This chapter has been divided into two parts and the first part gives the trend in the growth and development of the production and trade of spices in general and pepper and cardamom in particular. The second part of the chapter gives a general descnption about the functioning of the Spices Board, which is the prime governmental agency in the field.
Third, fourth and fiftb chapters include the analysis and interpretation of both the primary and secondary data. First part of the third chapter analyzes the marketing problems of pepper producers while the second part deals with the problems of cardamom producers.
Marketing problems of the domestic spices traders has been discussed in chapter four while the fiftb chapter is designated for analyzing various issues in the international spices market and the problems of the exporters of spices.
The sixth and final chapter contains the summary of findings and conclusion. References
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