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Organic spices export turning into thriving biz

Rina Chandran

"These exports created many jobs, generated income, reduced poverty."

Mumbai, Sept. 2

IT began as an idea for a project for an online competition called for by the World Bank three years ago; today it is a thriving business employing over 1,000 families, including tribals, in the rural south and Orissa. In the last two years, farmers aided by the Spices Board and NGOs have exported more than 200 tonnes of organic spices and 3.5 tonnes of aromatic herbs, valued at about $1.5 million, to Europe, and their success has prompted the World Bank to consider similar plans for different products in more than 10 countries.

The Spices Board presented the project, `Empowerment of Rural Communities to Export Organic Spices', to the `Development Marketplace 2000' online competition called for by the World Bank through the Geneva-based International Trade Centre (ITC). The project, evolved from an earlier ITC workshop organised by the Spices Board in Kochi, was short-listed from among 1,200 projects received from many countries. Eventually, 44 projects - described as "innovative for reducing poverty"— were selected for implementation, and this one received the second largest World Bank grant of $250,000.

About 500 families are involved in the project, besides another 500 families who have been given technical advice. The spices and herbs exported include pepper (black and white), clove, nutmeg, vanilla, rosemary and thyme. The spices are grown mostly in backyards in Kerala, while rosemary and thyme are cultivated by a group of tribals in the Nilgiris in a reserve forest area.

The Spices Board provided supplementary funding for tribal and scheduled caste farmers for acquiring planting material and organic input kits, said Mr K.P. Somasekharan, Director (Finance), Spices Board, Kochi. These tribals, who once lived below the poverty line, now earn about Rs 1,000 per month.

"These exports created many jobs, generated income, reduced poverty and gave confidence to those families of poor farmers," said a spokesperson for ITC, the technical cooperation agency of Unctad and the WHO. The farmers were trained in organic cultivation, preparation of organic inputs such as vermin compost, organic pesticides, harvesting, storage and documentation for organic certification.

Four NGOs are now master trainers and grass-root level implementing agencies, and are assisted in updating their Web sites, which are used for market promotion. They have also organised self-help groups of 150-200 farmers at each site.

With the growing health awareness, demand is expected to grow. The World Bank project will conclude by September-October, but the Spices Board - which has also had success with an UNDP-funded project in the North-East — will continue to support it, and pay a major portion of the certification cost. India has applied to the European Union for third country certification for its organic production; when approved, the products certified by Indian certification agencies can be imported directly by EU buyers.

Mr Somasekharan said: "The domestic market is yet to realise the importance of organic products, even though there is a niche market in cosmopolitan cities, where they are sold at 20-25 per cent above regular prices." In the international market, the price premium for certified organic spice products ranges from 30 to 100 per cent; for pepper (black and white) alone, margins are 50-75 per cent.

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