Health Ministry wants to ban Areca nut cultivation, other crops to suffer if ban is processed
Bangalore, May 2, 2018: The shrubs beside the Areca palm trees, water pouring out from the tiny pipelines crisscrossing the entire plantation. The fragrance of the earthy, muddy, wet-soil, being perfected for the cultivation floats in the air. Then you notice the little trail, leading you deeper inside the plantation. You take a stroll and a man in his twenties – sweaty, and grim-faced with curious eyes – makes you stop.
“I toil for 10 hours every day. It feels beautiful when you can nurture the plants with your hands. I have been here for seven years now. I hear there are some issues regarding the cultivation, but I cannot even begin to imagine what will happen if it stops,” sighed Keshav, a 24-year-old laborer in the Central Plantation Crops Research Institute (CPCRI) plantation.
Post the implementation of five per cent Goods and Services Tax (GST) on areca nut and 18 per cent GST on areca nut products, trading came to a standstill while farmers and growers have suffered a loss. But that was seven months ago, and business has picked up after that. The major issue right now is the fear of a ban by the government on the cultivation.
Areca nut is a major remunerative crop and happens to be the means of livelihood of most farmers in Dakshina Kannada. After Maharashtra, Karnataka- especially places like Dakshina Kannada and Shimoga district, account for 40 per cent of areca nut production.
The problem was caused by GST implementation, strategies of the state government, modifications in farming, and business strategies of companies. But what caused uproar, is the mention of areca nut chewing leading to cancer. In a country like India, it takes minutes to get such a mention up and running by the media. So, it was not surprising that Pan-masala makers in North India (UP) stayed away from making any deals with the traders in Karnataka after the danger of chewing the product was put forth.
To seek help for sustaining areca nut business, in September 2017, The Central Arecanut and Cocoa Marketing and Processing Co-operative Limited (CAMPCO) President S. R. Satishchandra met the Chief Minister of Uttar Pradesh- Yogi Adityanath, in order to discuss the ban on the crop and the issues that the areca nut growers are facing in Dakshina Kannada. In October, another meeting was conducted between Satishchandra and the Chief Minister of Goa- Manohar Parikkar, to discuss GST implementation on areca nut. Hindu Business Line has reported in January 2018 that cooperatives and growers are expecting an improvement in the domestic price of areca nut. Apart from one single report, there is no other latest development on the production.
Yogi Adityanath said that areca nut will not be banned in Uttar Pradesh, which will result in a smooth business with and sale of the product to a major consumer state. After bringing the matter into light and drawing the attention of the state government, GST rates on areca nut products might also be reduced. Availability of subsidy or price support from the government will help the farmers.
Since the consumption of the areca nut is quite famous, GST issues might not have come in the way of business, as much as an impending doom of ban on cultivation affects the same.
“A specific Nicotine compound called ‘Arecoline’ is found in the Areca catechu. Regular chewing of it might lead to cancer in the long run. That is why Ministry of Health is opposing the production and wants to ban the cultivation altogether,” stated S. Elain Apshara, Principal Scientist in CPCRI Vittal. “If areca nut chewing causes cancer, why does our ancient Ayurveda mention the fruit and its beneficial values? And if at all chewing leads to cancer, why not look at the therapeutic and medicinal values of the fruit! Areca nut has pharmaceutical values, and it is also used for various economic purposes,” argued Dr. K S Anand, director at CPCRI Vittal.
“Yes, it is true that regular chewing might lead to cancer. That is why we are looking at the pharmaceutical, herbal and therapeutic, and other economic usages of the fruit. I have manufactured beauty soaps, areca nut wine, and squash from the fruit, fragrances, and gum that can be used to attach pieces of PVC pipes together. Apart from that, the most important use of areca nut is the use of Tannin obtained from it. It is also being exported to middle-east nowadays, and that makes for good revenue,” said P. Shankara Bhat, a retired lawyer who owns his own farm, and manufactures a variety of products using areca nut.
Displaying his collection of products developed from the extract and the kernel of the fruit, the man in his late 70s, added, “There is an ongoing case in the Supreme Court, which was registered in the year 1980. The case deals with the damaging effects of Tobacco and areca nut. Regarding this, a conference will be conducted in April, where CPCRI, CAMPCO, and the Agricultural Development Board will be present to discuss matters of whether the areca nut chewing is indeed carcinogenic. The Supreme Court is looking to settle the matter within 2020. Hence, the issue is a pivotal one now.”
Dr. Krishnamoorthy, owner of Varanasi Farms in Puttur, seconded the views of Shankar Bhat, and said, “Regular and excessive chewing of areca nut might cause cancer, although we should focus on the medicinal values of the fruit, and try to promote and market that in order to convince the ministry not to ban the cultivation altogether.”
“We face the trouble of a lack of price-support from the government. When the GST came, everything was very confusing regarding the prices of the raw products and the processed retail ones. It’s been more than six months now that I, personally, have suffered losses. I own a small farm, and do not have the means to sustain my livelihood if areca nut goes out of business,” said Jayanth D, a farmer in Kasargod.
A loss in areca nut business affects the farmers and the growers directly, as areca nut is one of the major means of livelihood in Dakshina Kannada, and at least 70 per cent of farmers choose this crop to earn their livelihood.
The second major crop in the taluk is Cocoa- which is a food crop, and makes way for great income as the demand for Cocoa is ever-increasing. But Cocoa cultivation requires intercropping, i.e. the crop cannot be cultivated in a separate plantation where only Cocoa can be grown. It requires shades of palm trees; hence the ideal place to cultivate Cocoa is the plantation of areca nut or Coconut – under the shade of the Coconut or Areca palms. Therefore, areca nut plantation is indispensable for Cocoa cultivation in Dakshina Kannada. Now, a ban on areca nut will impede the Cocoa cultivation as well. If it really comes to that, the farmers of the agro-based taluk will lose the means of livelihood.
Regarding Cocoa production, there are issues like pest attacks, and a subtle negligence from the government, but marketing and business with companies like Cadbury India, Hershey, Britannia, and LuvIt have been hugely affected after the tax implementation.
Therefore CAMPCO is introducing new business strategies and diversification in cocoa products, which will help to grow the cocoa business. But Cocoa production faces varieties of problems. “Not anything and everything can be sold. Quality is very important when it comes to a crop of Cocoa. The dry bean has to weigh minimum one gram, only then 50 per cent of fat (cocoa butter) can be obtained,” stated S. Elain.
She added that farmers are reluctant to take up Cocoa cultivation. They are not as encouraged to grow Cocoa, as they are for Areca nut. She explained the major reasons for the farmers’ disinterest, which include – frequent price-fluctuation, a cheaper rate of imported Cocoa beans from Ghana, huge remuneration from Areca nut, the requirement of heavy processing that follows four-five steps before the product can be sold to the buyers. Also, the government provides a sum of Rs. 30,000 for 500 Cocoa plants, which is a miniscule amount and fails to convince the farmers to take up Cocoa cultivation.
She further said, “CAMPCO possesses a grinding capacity of 9000 tonnes, which makes them the second largest grinder in Asia. Our dry beans cost Rs. 165 per kilo and the wet beans cost Rs. 44 per kilo. India’s Cocoa cultivation covers 80,000 hectors in four states of South India. But the tragedy lies in the difference between the demand and the supply. India produces 16,000 tonnes, whereas India’s demand for Cocoa stands at 45,000 tons.”
“International price of Cocoa plays a pivotal role in pricing. CAMPCO buys beans from growers and farmers at an economic rate to sustain business, and the price is higher than the global market price. Hence, it is tough to compete with multinational brands,” stated Mr. Lakshman, manager of accounts in the CAMPCO chocolate factory.
He added that there are other issues that hinder wider cultivation. Those include – scarcity of water between January and May, instability of wet-bean prices due to the international market, limited plantations of Areca nut which provide shading to the Cocoa plants, unavailability of organic pesticides to stop pest attacks, and a fear of a ban on Areca nut- the biggest threat to Cocoa cultivation.
Shedding light on what causes the lack of alternative buyers of Cocoa, other than CAMPCO, in the taluk, Mr. Lakshman said, “When the international price is costlier than the price of indigenous beans, traders are there in the market to buy beans from co-operatives and associations. But these traders disappear into the thin air as soon as the international price crashes. Only CAMPCO remains in the market and every time, that results in a loss for both the farmers and CAMPCO. In 2017, during April-May, there was no buyer for wet-beans of Cocoa.”
With 25 varieties of retail products and premium chocolates, CAMPCO is working on expanding the business. Apart from that, CAMPCO crushes beans provided by Nestle India, Mondelez India, Hershey, LuvIt, and ITC; and the other customers include Amul group, Britannia, and Lotte etcetera, detailed P. Janardhan- Chief Manager of the CAMPCO chocolate factory in Puttur.
Cashew is another agro product in Puttur taluk. This can be a good substitute for farmers if Areca nut and Cocoa are threatened. “But due to- increased cost of cultivation, lack of encouragement from the state government, lack of proper price-support, and a shortage of skilled labors, the production suffers. The pest attack has also aggravated, and production faces the new challenge of organic farming- in which use of chemical pesticide is not encouraged, instead- organic substitutes are used for farming. Apart from these issues, lack of any co-operative or a growers’ society, makes it difficult for producing cashew on a large scale” said Narendra Rai Derla- a farmer who has his own Cashew farms.
For a crop like cashew, scope of exporting plays a pivotal role in the business.
“Any problem in the production or marketing of this crop affects the farmers and the growers. Since it is a remunerative crop, more farmers can take it up as a secondary production and also opt for intercropping, because it is a means of good business. Changes in import duty, fluctuation of rates in the global market, installation of new processing units abroad, and the demand of the raw product are some of the factors that contribute to the sale of the product” stated M. Gangadhar- the director of DCR, ICAR Puttur.
“Attention and action from the state government can help and encourage farmers to take up cashew for intercropping and earn more. Formation of co-operatives and growers’ societies can help in better business. Proper organic farming and more scientific techniques like ultra-high-density planting can enhance the production and sale of this crop,” stated Dr. G S Mohana, a scientist in ICAR DCR Puttur.