Spices Board may seek pepper subsidy extension

The Spices Board might request the commerce ministry to extend pepper export subsidy scheme, if the export target of 20,000 tonne is not met by the March 31 deadline, board officials said on Wednesday. Around 15,000 tonne of pepper was exported during the nine months to December.

The officials refused to specify the period for which the extension has been sought. The Kerala government too is likely to take up the matter with the Centre.

Kerala State Co-operative Marketing Federation Chairman P P Thankachan has already asked the state government to request the government to extend the scheme, as the federation still has around 2,800 tonne of pepper it had procured in 2004-05.

"Extension of the subsidy scheme will help exporters compete with other origins," M L Parekh, president of India Pepper and Spice Trade Association, said.

"There are inquiries for April and May delivery from foreign buyers. If subsidy is extended, exporters will be able to take those orders," he said.

The commerce ministry introduced a one-time domestic and international freight subsidy scheme, with export target of 20,000 tonne for April-March 2005-06.

The scheme offers domestic freight subsidy of Rs 2 for every kg of pepper and up to Rs 5 per kg as international freight subsidy.

According to figures with the Spices Board, India exported 15,000 tonne of pepper in April-December. Exporters said the remaining three months of the year would not be sufficient for shipping another 5,000 tonne.

Subsidy was introduced following pepper exports from the country dipping to a low of 14,150 tonne during 2004-05.