Why farmers have been urging Centre to control import of arecanuts

In September this year, the Centre relaxed import restrictions on arecanuts from Bhutan

By Shagun
Published: Wednesday 21 December 2022

BY Raghavendra, Lok Sabha member from Shivamogga district in Karnataka, urged the Centre December 15, 2022 to levy a hefty import duty on arecanut to check falling prices in the domestic market. 

The country’s arecanut farmers are faced with an unfair challenge as imports of cheaper varieties, especially from Bhutan, flooded the domestic markets and dragged down the price of the product, after the central government relaxed import restrictions. 

This is when they have been already reeling from massive crop damage and financial losses due to plant diseases, like yellow leaf disease, fruit rot disease and blast disease, and excess rainfall. 

In Karnataka, which produces around 80 per cent of the country’s arecanut, about 35-40 per cent of the crop has been affected in 2022, owing to various reasons. This, farmers said, is the highest crop loss since 2013, when more than 50 per cent produce was lost due to continuous rainfall for 13 days. 

The price of arecanut fell to Rs Rs 39,000 per quintal in the second week of December this year from Rs 58,000 per quintal in the first week of September, said Raghavendra during the Zero Hour of the ongoing parliament session. He attributed the price crash to “the arrival of low-quality arecanuts from neighbouring countries”.

In September this year, the central government allowed the import of 17,000 tonnes of green (fresh) arecanut from Bhutan without minimum import price (MIP). MIP is the rate below which no imports are allowed. 

Imports without MIP or at low rates threaten the domestic prices and lead them to crash. One of the main reasons for that is the flooding of imported inferior quality products into the market. 

MIP on arecanut was first introduced in August 2012 at Rs 75 per kilogram to restrict unabated import and prevent entry of inferior quality arecanut into the Indian market, thereby destabilising the domestic prices. 

It has been revised from time to time since then. In 2018, the MIP was fixed at Rs 251 per kg and growers have been demanding to increase it to Rs 351-400 per kg to secure the interest of local farmers. 

“Instead of increasing the rate, the government instead allowed importers to import without any MIP,” said farmer Ravi Kiran, who is also state general secretary of Karnataka Rajya Raitha Sangha (KRRS).

In the last three years, import of arecanut has taken place mostly from Sri Lanka and Indonesia. In 2020-21, the total import quantity was 23,988 tonnes, according to data by the Directorate General of Foreign Trade (DGFT). However, this time 17,000 tonnes is being allowed to be imported from Bhutan alone. 

The decision was slammed by farmers, the arecanut growers association, the Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd and Karnataka’s leader of opposition Siddaramaiah. 

“It will affect the livelihood of local arecanut growers. The price has already started to fall by Rs 100-150 per kg,” said Chamras Malipatil, president of KRRS.

Large areas under the crop have been damaged by yellow leaf disease, blast disease and fruit rot disease, especially in Shivamogga, Dakshina Kannada and Chikkamagaluru districts.

“Average yield of different varieties of arecanut vary between 10-20 quintals per acre (0.4 hectare). But this time many farmers have got just 40 per cent of this. Heavy rainfall affected the cultivation during the flowering stage,” said Kiran. 

Karnataka produced 950,000 tonnes of arecanut in 2020-21. This was almost 80 per cent of the total arecanut production in the country. 

“Arecanut is considered a horticulture crop in the state, a commercial crop at the national level and a dry fruit at an international level. We have long been demanding an arecanut development board. But the government is not doing anything,” said Kiran. 

Earlier in August, a delegation of arecanut growers met the Union minister of commerce Piyush Goyal to demand a higher import duty and containing the import of areca projecting as dry fruits. 

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