Pepper economy of Kerala in the pre and post WTO regimes
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Date
2015
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College of Agriculture, Vellayani
Abstract
The study entitled "Pepper economy of Kerala in the pre and post WTO regimes" was conducted to examine the structural instability, trade competitiveness, forecasting of pepper exports and changes in economics of pepper cultivation in the light of liberalized WTO regime and to suggest policy measures to improve pepper trade based on the results of the study. The study was based on both secondary and primary data. Secondary data were collected from various published sources and primary data were collected from 30 farmers and 10 traders from Idukki and Wayanad districts. The study covered a period of 34 years from 1980-81 to 2013-14. The analysis was done for two sub periods -pre WTO (1980-81 to 1994-95) and post WTO (1995-96 to 2013-14) period so as to ascertain the changes in pepper economy. The results of the instability index revealed that the instability in area, production and productivity of pepper in Kerala was more pronounced during the post WTO period with 9.27 per cent, 17.41 per cent and 16.36 per cent respectively. The instability in export quantity (29.35%), export value (41.64%) and export unit value (18.87%) in the post WTO period were high when compared to instability in pre WTO period. Instability index for international price during post WTO period was more than that of pre WTO period. In the case of domestic price the instability during the pre as well as post WTO periods were almost the same, which were 21.38 and 21.14 respectively. The forecast for quantity of pepper export from India for the years from 2014-15 to 2017-18 showed an increasing trend. The analysis of trade competitiveness using Nominal Protection Coefficient (NPC) revealed that pepper had competitive advantage in all lustrums except during 1995-96 to 1999-00. The cost of cultivation of pepper increased in the post WTO period when compared to pre WTO period which could be attributed to increase in input costs. The regression of export value with area, production and productivity showed that production had a positive and significant influence on export value of pepper. The major problems faced by pepper farmers were incidence of pest and diseases, unavailability of labour and changes in climate. The problems faced by pepper traders were fluctuating prices and import of pepper from other pepper producing countries like Vietnam and Srilanka. The study also revealed that 63.4 per cent of the farmers and 30 per cent of the traders were not aware about WTO. Majority of farmers opined that even though pepper is profitable (83.3%) in the current scenario, productivity of pepper is decreasing (90%) and according to the opinion of 76.6 per cent of the farmers pepper cultivation is affected by the fluctuations in price. The instability in area, production, productivity and export of pepper, in terms of quantity and value, showed an increasing trend during post WTO period. Forecasted value of pepper exports showed a positive trend and pepper exports were found to be competitive during post WTO period implying that export competitiveness of black pepper was not negatively affected by WTO agreements. The results of the study also revealed that the area, production, productivity, export quantity and domestic price of pepper had significant influence in the value of pepper export from India. Hence, urgent action is needed for enhancing the area, production and productivity of pepper in Kerala to reap more benefits from the WTO agreements.
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