Agri Business

RTI activist alleges trade manipulation in pepper auctions; IPSTA denies

Sajeev Kumar | | | Updated on: Dec 28, 2021

Ajith Kodakara said IPSTA, an association to promote pepper trade, fixes benchmark price of pepper to reap and retain maximum profits

A Kerala-based farmer has written to the Ministry of Commerce and Industry alleging trade malpractices and price manipulation of black pepper by the Kochi-based India Pepper and Spice Trade Association (IPSTA).

In a complaint submitted to Nidhi Mani Tripathi, Joint Secretary, Ministry of Commerce and Industry, farmer and RTI activist Ajith Kodakara said IPSTA, an association to promote pepper trade, fixes the benchmark price of pepper to reap and retain maximum profits, thus denying adequate income or profits to farmers for their produce.

It urged the Ministry to take steps to initiate an inquiry and take appropriate actions for the illegalities committed by the IPSTA and to create and establish authority or body to fix the daily price of the pepper in the interest of pepper farmers and growers.

He appealed to the Ministry to give the Spices Board India the authority to regulate and fix the price for black pepper. The ministry can also look into the alternative of creating a board similar to the Spices Board so as to regulate the black pepper trade in the market, he said.

IPSTA denies allegations

However, IPSTA has denied the allegations. When contacted, Anand Kishore, President, IPSTA told BusinessLine that the association has 62 years of record of serving pepper and other allied spice industry and running futures trading in pepper since 1995 to 2000 when the Government permitted national level multi commodity exchanges. Every year, elections are held and since the last four years, only five to six nominations have been received for 11 seats.

Kodakara said in his complaint that pepper price for the local and global market is assigned and fixed by the IPSTA for their own personal gains though it does not have legal authority to do so. The IPSTA board of Directors monitors the working of the Price Fixation Committee which consists of 7 members. In recent years, committee members of the Price Fixation Committee have resigned due to the illegal malpractices adopted by the board.

The IPSTA consists of only big scale traders and merchants and there is no representation from farmers, brokers, agents, and small-scale traders. Sometimes the price fixed by IPSTA is so low that the farmer will not be able to cover the expenses incurred for production even if there is fair and reasonable price for pepper in the global market.

Kishore said rate fixing is done by an independent committee consisting of various sections of pepper traders and growers as well as aggregators, inter-State dealers and exporters, who are nominated by the board every year. The committee independently submits the rates connected with their respective markets since the Association has members from Karnataka, Wayanad, Kottayam, Kochi and Idukki. These members submit their market rates prevailing and the quantities traded which are being aggregated and average of the rate is being worked out.

“We believe in the philosophy that the farmers' existence is the prime factor for the trade to survive and therefore we have been trying our level best to ensure that producers' interest is kept alive. The existence of the entire pepper economy could withstand only if farmers' interest is protected,” the IPSTA President added.

Published on December 28, 2021

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