Last Updated : 11 October 2012 at 09:00 IST
India cardamom is expected to trade volatile sessions in the coming days as prospects of farmer unrest looms demanding a complete decontrol of commodity.
As per the government rules, the Spices Board has been given exclusive mandate for cardamom and only licensed traders could carry out trade in the commodity. Prior to the time it got stalled, cardamom trade had been carried out through auctions controlled by the Spices Board which also set the benchmark price in spot markets.
The Board has provided license to 8 auctioneers. Six of them will conduct auctions in six days. The rest of two, who have notified least quantity of cardamom would jointly conduct auction in a single day; thus the eight players clock 7 days a week of cardamom auction process.
The said auctioneers are supposed to have pooling centres across the district of Idukki. Two days prior to the auction, farmers begin to take cardamom to auctioneer-operated pooling centers. The cardamom thus pooled are amassed in bags and assigned lot numbers. The corresponding lot number is given away to farmers for later identification.
A sample of 1 kilogram from lots is taken to the auction centre at Bodinayakanur and Puttady where the samples are examined and prices are arrived at. From that point on the auction begins. The farmers are entitled to their share of respective auction money in ten days starting the date of auction. The one who bids and wins the auction should pay the auction money to the auctioneer in a matter of seven days.
But this system got stalled as the Board increased tick price of cardamom from 50 paise to 5 rupees.
The increasing of tick price did not go down well with the traders who boycotted the auctioning process and demanded the tick price be maintained 50 paise. As a result, cardamom auctions got suspended in Idukki's Puttady and Bodinayakanur (in Tamil Nadu) since September 24.
It has to be noted that the rules do not forbid farmers from carrying out sales of cardamom in open markets to licensed traders.
Meanwhile, trader community has approached the Madurai bench of Madras High Court in Tamil Nadu to settle the auction issue. Also, a few traders in guise of farmers are learned to have approached the Kerala High Court with the same cause, as per a farmer.
A Spices Board official informed Commodity Online that Kerala High Court may take up the case on Thursday regarding auctions issue.
“Things may take time to settle. The High Court may demand the Kerala Govt to be a party in the case and is expected to ask the stakeholders to sit together and talk so as to reach an amicable solution. The Madurai Bench of Madras High Court meanwhile is deemed to refer the case to Kerala High Court given the fact that two courts may not pass the judgements on the same case.” he said.
The official confirmed that some traders in guise of farmers have presented the case before the High Court.
Farmer unrest in the offing?
A farmer meanwhile has said that with the auctions suspended and trade being carried out with licensed traders, the growers have started getting better price for their produce and grower community sentiment irrespective of political party affiliations is increasingly inclined to the discontinuing of auctions.
Hence a court judgement favouring auction may prove to be counter productive and even if the auction is resumed may witness lack of farmer participation as far as the glimpse allows.
The farmers may stop providing cardamom to auctioneers and may give it away directly to traders. The auction system thus may become obsolete, eventually.
“Since the time auctions got discontinued, farmers have obtained Rs.125-175 in price appreciation in cardamom.” the farmer noted.
In fact, the same activist-farmer said that the farmer community is ready to launch protests demanding decontrol of cardamom sector.
It seems a volatile season is in store for Idukki's cardamom sector.
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