Exporters, board clash over pepper subsidy

The distribution of export subsidy on black pepper has created a dispute between the exporters and the Spices Board.

The exporters have alleged that the Spices Board had shown favouritism in distribution of subsidy. But a top Spices Board official denied the allegations saying applicants with valid documents got the subsidy without any delay.

Two major Kochi-based export houses said that they were denied subsidy of Rs 21 lakh each despite submitting applications for each export since December 2005. "Our account books are in the red because a substantial amount is due on the account of the subsidy", said an exporting firm official.

"The board is denying subsidy on flimsy grounds," he added.

A notification on subsidy scheme in November 2005 mentioned that the scheme would work on 'first come first served' basis. But exporters said that it was never followed.

"The board has not shown any favouritism. It has to check manipulations such as re-exports. There is no delay for those who have proper documents," said S Kannan, director, marketing, Spices Board. "Orders can not be issued on the basis of some signed white papers presented as bills," he added.

Informing about the suspicious cases he said some exporters claimed 90 per cent content of tellichery garbled extra bold (TGEB) grade in every 100 kg. But, the farm grade pepper in the country does not have more than 65 per cent TGEB content.

In such cases the board has to check the bills and other necessary documents.

The exporters said that there are agencies such as DGFT and the customs department which check issues like re-export. The Spices Board is not a policing agency or promoting agency.

Thomas Philip, chairman, Spices Exporters Forum said that the forum was trying to settle the issue. He said that the Spice Board had agreed to release the freight subsidy (Rs 5 / kg) and the issue of subsidy on domestic transportation would be finalised soon.

He also said that the notification had nothing on the grades to be exported and this gave rise to TGEB issue. Meanwhile the board has disbursed subsidy for 2000 tonne so far against the targeted 20,000 tonne by March 31.