Arecanut Slips into Bearish Trends

Arecanut Slips into Bearish Trends

Mangaluru: In recent days the saviour of farmers especially small and marginal arecanut is being projected as a bane to the farmers. A lot of deliberations are being done at all levels to understand the distress experienced by the farmers. It looks as if there is an interest evinced in this commodity all of sudden, at unfavourable times for its growers.


The production side story,supply demand mismatch: It is noticed that there is a drastic increase in production of arecanut over the years. The crops of paddy and maize are highly labour intensive. Hence the farmers shifted towards arecanut in the Western Ghat region converting their paddy fields into arecanut plantations. When sugar went into a bearish phase worldwide many sugarcane fields were converted to arecanut plantations. This has added large production capacity. There has been a ban on a few mixed products recently of arecanut and tobacco which has resulted in decreased demand. At present, there is water crisis, especially in Mandya District. Due to insufficient rain and unavailable water, it is estimated about one lakh acres of sugarcane and paddy fields will be converted over a period of five years into arecanut plantations adding further capacity.

Pricing variation and Support Price:

Arecanut is a locally traded commodity. It is priced by a handful of people who are mainly traders and stockists. The practice is to buy the commodity when prices are low. When supply decreases the price increases and the trader is the major beneficiary as the farmers in distress will have sold the majority of their stock for their livelihood. Last year the maximum and minimum price had a variation of three hundred percent. Drastic price surgings were seen between Rs. 25000/- to Rs. 75000/- for quintal processed arecanut. This year the price is hovering around Rs.25000/-.


The price had hovered around Rs.32000/- per quintal this year as there were rumours of the government giving a support price around Rs.35000/-. But then the news spread of the support price much lower around Rs. 27000/- to Rs.28000/- per quintal. At the prevailing prices, it is extremely difficult to make a livelihood out of arecanut plantations. The farm labour costs have increased drastically. The manure prices and taxes on them have increased. In such a time farmers are also encountered with various tree and plant diseases. Specially prepared pesticides have to be sprayed regularly. The erratic rains and weather conditions are a challenge by themselves.


The right way to evaluate agricultural produce has to be in a scientific manner in totality taking into account the investment on land, interest on investment for their unproductive initial years and all other infrastructure created for the same. All other input costs and taxes have to be accounted for. This gives the actual cost of the produce which is at present way below even a marginal benefit to the farmer. This is a big blow to the farming community which has always been vibrant and full of life. If this situation continues most of the farmers children will have no choice but to look for greener pastors elsewhere in cities leaving behind in memories a great legacy of their forefathers and the green hinterlands that remain close to their hearts.

About Author:


Er Rohan Colaco, is a third generation planter from Chikkamagaluru. He is the past executive committee member Karnataka Planters Association (KPA). ‘A’ Class Trustee GSB-AA (Alcoholic Anonymous) India. The views in this article are the personal opinion of the author.

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