Chillies turn too hot for traders

Kilari Venkata Rosaiah, the president of Guntur Chillies Merchants' Association, has appealed to the state government to repeal the four per cent sales tax imposed on chillies.

The government should also take steps to increase the ground purchase rate offered to farmers and reduce the huge burden of cost of transporting chillies. These measures, if undertaken, will provide a fillip to the chillies exports, he said.

Speaking to Business Standard here, Rosaiah explained that the global chillies market was becoming Guntur-centric.

He put the Guntur chillies market size at Rs 550 crore, and said India, with an annual crop size of 10 lakh tonnes of chillies, was at present the world's number one producer. Andhra Pradesh produces 6 lakh tonne chillies, and of this Guntur alone accounts for 3 lakh tonnes.

"Despite this pride of place, that we export only 80,000 tonne of chillies, while the domestic market consume 9.2 lakh tonnes. So if we could fully tap the exports potential of chillies, all players connected with the chillies, particularly the farming community, would stand to benefit enormously. "China and Mexico are our main competitors in the international chillies market.

Pakistan also, of late, has emerged as a potential competitor. Hence the governments, state and centre, should give top priority to chillies exports, he stressed.

The staggering transport cost at the rate of over Rs 1,000 per tonne, being incurred by farmers, eats considerably into their incomes, Rosaiah pointed out the plight of chilli farmers in Andhra Pradesh. He observed that there was no logic in levying 4 per cent sales tax on chillies when the neighbouring states of Tamil Nadu, Madhya Pradesh and Maharashtra do not levy any tax on chillies. Karnataka collect only 2 per cent tax.

The forthcoming season is expected to witness a bumper chilli crop in the state. Farmers in the state are raising the crop in 1.5 lakh hectares, and Guntur crop area is alone about 60,000 hectares, Rosaiah informed.

Along with thousands of farmers, hundreds of mirchi yard staff, commission agents, buyers and exporters depend on the chilli crop in AP.