Browsing by Author "Sachu, Sara Sabu"
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ThesisItem Open Access Implications of trade agreements on India's trade in black pepper and its products(Department of Agricultural Economics, College of Agriculture, Vellanikkara, 2022) Sachu, Sara Sabu; KAU; Anil, KuruvillaBlack pepper is one of the most traded spices in the world. The exports of black pepper from India as a share of world exports almost halved from 15.1 per cent in Triennium Ending (TE) 1992 to 7.8 per cent in TE 2017. India became one of the major importers of black pepper, accounting for a share of 7.4 per cent in world imports during 2018. In this context, the present study was undertaken with the objectives, to analyse the trade performance of Indian black pepper and its products, study the dynamics in the trade policies and tariff structure of black pepper, analyse the impact of multilateral and regional trade agreements on trade, ascertain the Non-Tariff Measures (NTMs) affecting black pepper exports from India, estimate the measures of trade competitiveness and to identify the constraints faced by producers and exporters in increasing the competitiveness and exports of Indian black pepper. The rate of growth in black pepper exports decreased in the post-2000 period as compared to the pre-2000 period, whereas the import growth has increased in the same period. The instability of black pepper exports has increased in the post-2000 period, while that of imports decreased during the same period. The export unit value contributed 96.77 per cent growth in the export value of black pepper between preand post-2000 periods. The commodity concentration of black pepper exports from India was high in pre-2000 period and became more diversified in the post-2000 period. The exports of black pepper neither crushed nor ground from India were diversified to different countries after 2000, whereas the crushed or ground black pepper exports were concentrated to few markets in both the periods. The Markov chain analysis showed that number of stable export markets for black pepper neither crushed nor ground have increased after 2000 and USA, Sweden, Canada, Turkey, Switzerland and Spain were found to be the stable markets in the post-2000 period. USA was the most stable market for crushed or ground Indian black pepper in all the periods. The trade complementarity of black pepper neither crushed nor ground was found to be less when compared to crushed or ground black pepper. The estimated import demand function showed that the import demand for Indian black pepper increased with the increase in the Gross Domestic Products (GDP) of the importing countries and the import price, whereas it was found to decrease in the post-2000 period. The estimated export supply function showed that the international price and II Indian production of black pepper were found to be positively influencing the export supply, while post-2000 period was found to be negatively affecting the export supply. The trade policy changes in India have affected the trade of black pepper and the major implication was on the imports of black pepper to India, which has increased after 2000 due to the removal of quantitative restrictions and reduction of tariffs on black pepper. The Regional Trade Agreements (RTAs) that are having implications on Indian black pepper trade are Indo-Sri Lanka Free Trade Agreement (ISLFTA), South Asian Free Trade Agreement (SAFTA) and Association of South East Asian Nations (ASEAN)-India Free Trade Agreement (AIFTA). The RTAs have caused a significant increase in India’s imports of black pepper from Sri Lanka and ASEAN countries. The SMART model showed that the tariff reduction under AIFTA increased the imports of black pepper from ASEAN countries after 2000 and it created a trade creation effect of 19.36 lakh US$, in which Indian consumers were benefitted by low-priced imports of black pepper from ASEAN. Even though there was an increase in black pepper imports from Sri Lanka to India, the ISLFTA and SAFTA caused trade diversion of 14,226 US$ among the non-member countries as compared to trade creation of 11,147 US$ between India and Sri Lanka and the agreements were found to be in favour of Sri Lanka. The interrupted time series analysis showed that the increase in black pepper imports to India after SAFTA was less when compared to increase in imports after ISLFTA. The NTMs imposed by the importing countries affected the black pepper exports from India. As the number of NTMs initiated by the importing country increases in a particular year, the export quantity of black pepper from India was found to decrease in the subsequent year. The values of Nominal Protection Coefficient (NPC) and Effective Protection Coefficient (EPC) were greater than one, which indicated that the export of black pepper from India was non-competitive in the international market. The major constraints faced by the producers were price volatility and disease and, pest incidence, while the constraints faced by exporters were price volatility, stiff competition from other countries and inadequate storage facilities. The trade policy measures to regulate black pepper imports to India should include bringing black pepper under the exclusion list in trade agreements, implementing a safeguard mechanism from surge in imports by imposing additional III tariffs on the basis of volume and price triggers, strictly verifying the country of origin of imported black pepper and monitoring the Advance Authorization Scheme. To increase the awareness of exporters on SPS and TBT measures specific to black pepper, the details of NTMs imposed by major importers of black pepper need to be published. In order to enhance the export competitiveness of Indian black pepper, farmers should be encouraged to increase the productivity and reduce the per unit cost of production. The country also needs to formulate trade policies for stable export markets and develop strategies for gaining entry into non-traditional markets. A market intelligence system with a crop specific price stabilization mechanism and provision for price deficiency payment ought to be developed to tackle the volatility in black pepper prices.ThesisItem Open Access Price volatility of black pepper and its implications in Kerala(College of Horticulture, Vellanikkara, 2015) Sachu, Sara Sabu; KAU; Anil, KuruvilaBlack pepper, the "King of spices", is one of the oldest and best known spices in the world. India, with an area of 1.23 lakh ha and a production of 65,000 tonnes in 2012-13, is one among the leading producers of pepper. The area under pepper in Kerala has declined from 1.08 lakh ha in 1980-81 to 0.85 lakh ha in 2013-14, while the corresponding decline in production was from 36,670 tonnes to 28,519 tonnes. As an internationally traded commodity, black pepper is highly prone to price fluctuations. The study entitled “Price volatility of black pepper and its implications in Kerala” aimed at assessing the magnitude and determinants of volatility in prices of black pepper in the pre-WTO and post-WTO periods. The transmission of volatility between Indian and international markets as well as spot and future markets of black pepper were studied. The implications of price volatility on input use, production, employment and income of farmers, who were members of Peermedu Development Society (PDS), an NGO organising organic pepper farmers, with a contractual agreement for purchase and non-PDS farmers, were also studied on a comparative framework. The study was based on both secondary and primary data. The main observations were annual, monthly, weekly and daily prices in domestic and international markets of black pepper from 1980 to 2014. The micro-level study was undertaken in Idukki district. 40 farmers each were randomly selected from the PDS and non-PDS categories, making the total sample size to 80. For the assessment of implications of price volatility, data was collected from the same 80 farm households at two points of time at an interval of ten months, using a pretested interview schedule. The intra-annual volatility of monthly nominal prices in rupee as well as dollar declined marginally in the post-WTO period. In the case of international prices, the decline in intra-annual volatility was comparatively more when compared to the Indian prices. The magnitudes of the estimated intra-annual ii volatility indices for weekly black pepper prices were larger in comparison with those computed for the monthly prices indicating that the weekly prices were more volatile. The intra-annual volatility for weekly international nominal prices was comparatively lower than that for the domestic prices in pre-WTO and post-WTO periods. While the inter-annual volatility for monthly prices increased for Malabar Garbled Cochin prices that of Cochin Ungarbled decreased for both nominal and real monthly prices in the post-WTO period. In the international markets, the year to year variability in real and nominal rupee and dollar prices decreased in the post-WTO period. The results of the analysis of instability in annual prices showed that the magnitude of the volatility indices of nominal as well as real prices in both rupee and dollar increased in the post-WTO period. The determinants of price volatility identified were, (i) variations in US dollar-rupee exchange rate (ii) behaviour of black pepper prices including the seasonal and cyclical components (iii) changes in international trade (iv) futures trading, and (v) variations in domestic and world production as well as consumption. The nature and extent of price transmission between the domestic and international markets of black pepper for the pre-WTO and post-WTO periods were analysed using both pair-wise and multiple cointegration analyses. The markets were found to be cointegrated and hence, it could be established that the Indian prices moved in unison with the international prices even before liberalization and liberalization per se has not much improved or affected the co-movement of prices between the domestic and international markets. The Granger causality tests carried out on monthly prices proved that there was unidirectional causality from domestic to international market in pre-WTO period and it developed into bidirectional causality in the post-WTO period. In the case of weekly prices, the existence of bidirectional causality between domestic and international markets was found in both the periods. The spot and future markets prices were also found to be cointegrated and bidirectional causality could be established between them in the long-run. The implications of price volatility of black pepper on producer households was studied by comparing the price, production, employment, income and number of plants replanted in two years (2014 and 2015) for PDS and non- PDS farmers. The results showed that there was slight reduction in price in 2015 when compared to 2014 for both PDS and non-PDS farmers. Even though the average production of black pepper has increased in PDS as well as non-PDS farms, the growth in production was slightly high in the case of PDS farms. Hence, the non-PDS farms experienced a higher decline in income between 2014 and 2015 when compared to the PDS farmers. Consequent to the reduction in price, when the replanting of black pepper per hectare was considered, it was found that the number of plants replanted increased in the case of PDS members, whereas it decreased in non-PDS farms. The cost incurred on labour and inputs also showed a similar nature of increasing pattern in PDS farms and a decreasing pattern in non-PDS farms. The vulnerability of farmers to price volatility was studied and it was found that age, education and experience in farming reduced the vulnerability, while the family size and share of income from pepper were found to increase the effect of price volatility. It was found that a contractual agreement alone could not protect the farmers from price variations. The policy recommendations include proper implementation of warehouse receipt system so as to enable the farmers to borrow from banks to meet their immediate needs and prevent distress sales, dissemination of timely market intelligence and training the farmers on suitable selling decisions based on price movements, an implementable black pepper price stabilization mechanism which could adjust for changes in the cost of cultivation as well as ensure a stable income for the farmers and ensuring participation of small and marginal farmers in futures markets.