Kerala - Kochi   

MSP: little to cheer for State coconut farmers

KOCHI: With the economics of transport and the landholding pattern working against them, coconut farmers in the State will find little solace in the upward revision of the minimum support price (MSP) for copra, approved by the Cabinet Committee on Economic Affairs (CCEA) on Thursday. The MSP for fair average quality (FAQ) milling copra will be Rs.3,660 a quintal for the 2008 season.

Despite the higher support price, the copra market in Kochi reported bullish sentiments on Thursday, at Rs.3,560 for a quintal of FAQ copra. The price has remained steady since Monday, starting to move up from Rs.3,475 a quintal for FAQ copra since January 2.

With the copra price moving up a little more, the support price will be topped, said Talat Mehboob of the Cochin Oil Merchants’ Association. He said that very little procurement had taken place even at the old MSP of Rs.3,640 a quintal, ie., the effect of the support price was not reflected in the market last season, he added.

A small-time coconut farmer like Somanathan Pillai, who represents the vast number of coconut farmers in the State, has not been helped by the support price system in the past. The fact that virtually none of the coconut farmers like Mr. Pillai is a processor is the main reason.

This is the reason why the Central government is working out the modalities for announcing support price for raw coconut, said Coconut Development Board Chairman Minnie Mathew. She said that coconut farmers will benefit from such a move because any higher price for raw coconut will go directly to them.

The Kerala government is one step ahead in this regard. It has declared the MSP for raw coconut, virtually helping to heat the market substantially. Kerala Kerakarshaka Sahakarna Federation Ltd (Kerafed), a government agency, has procured 1.5 lakh raw nuts from Kannur and Kozhikode districts over the last month, said N. Ravikumar, Managing Director of Kerala. The raw nuts were procured at Rs.4.40 a nut and the prices have moved up subsequently, Mr. Ravikumar said. He said the current support price for raw coconut was calculated based on the current MSP for copra. With the upward revision for copra being approved by the Cabinet panel, the support price for raw coconut will automatically go up.

Kerafed, which has a strong presence in the edible oil market in the State, milled 8,000 tonnes of copra during the last nine months and about 6,000 tonnes more will be milled during the coming three months.

Support price or no support price, coconut farmers in India have big reasons to cheer in the coming season. Both Sri Lanka and the Philippines have reported shortage of raw materials for their coconut processing industry.

According to some estimates, the shortage in Sri Lanka is about 25 per cent of their annual production. This has been reflected in serious enquiries being received from the Gulf market which has traditionally been catered to by Sri Lanka.

The 2004 tsunami had destroyed vast tracts of coconut plantations in the island country, the effects of which have lingered.

Indian coconut production, on the other hand, jumped more than 15 per cent between 2004-05 and 2005-06, from 12.80 billion nuts to 14.82 billion nuts.

Minimum support price for copra fixed at Rs.3,660 a quintal

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