Centre might intervene on arecanut price

The government is planning a Market Intervention Scheme (MIS) for arecanut (source for the betel nut or supari) growers. Over two years, the price is down to about Rs 28,000 a quintal, from Rs 75,000 a qtl earlier.

An official in the ministry of commerce and industry said: “The Union government is looking at  options, including MIS, procuring from farmers directly through Special Purpose Vehicle to be floated by the Centre and the Karnataka government.” Close to half of the country’s crop comes from the state.

Sources in the government and the industry have confirmed that discussions were held to introduce an MIS for a limited period. The current production cost ranges from Rs 250 to Rs 337 a kg. The government needs to decide how much more it could give.

Suresh Bhandary M, managing director of Campco, the cocoa and arecanut growers cooperative, said an MIS would address the issue for the short term but the government should also curtail imports. “We have also tested samples from imports and found dangerous quality,” he alleged. Arecanut growers apart, coffee growers in Karnataka are also hit by the price drop, as reported last week in this newspaper. It is a major intercrop (grown in between rows or sections) for them.

Growers are attributing the price drop mainly to imports. Total demand in the country is estimated at 1.2 million tonnes; production is about 0.7 mt. Traders are said to be importing from Indonesia, through Sri Lanka, by getting a ‘Certificate of Origin’ from the latter country for value addition and processing. Imports from Sri Lanka attract no Customs duty under a free trade agreement, if there is such a certificate, supposed to be given for at least a 25 per cent value addition.

India imported 67,824 tonnes of arecanut worth $159 million in 2015-16. The previous year, it was 110,000 tonnes worth $230 mn.