Kochi: If the Coconut Development Board and State Government are serious about protecting the interests of coconut farmers, they must engage less in tinkering with prices and concentrate more on strengthening the physical side of the market. Kerala could not control the prices of coconut products even when it had a clear monopoly in the sector with a share of 80-85 per cent. Then how could it control the sector now with only a 40-45 per cent share in production, asks N. Ananthan, former secretary of the Cochin Oil Merchants Association and former chief executive officer of the Kochi-based First Commodities Exchange of India Limited.

In a study paper, Mr. Ananthan noted that coconuts and its products were prone to cycles. The cyclical production naturally translates into cyclical behaviour of price movements. As such, it is very difficult to predict price movements. Earlier (till 1980) there was a price cycle for coconut products and it was linked to production in Kerala. It used to peak at the end of the year and fall in the beginning of the year as the season set in Kerala.

That was the time when Kerala had a monopoly in coconut products, having a share of 80-85 per cent.

But that has changed in the last few years as Kerala's share reduced to 40-45 percent due to rise in production in Tamil Nadu, Andhra Pradesh and Karnataka, he says.

The statistics on production of nuts, copra and coconut oil that is available now is mostly based on approximation from trade. As such, the data collected may mean different things to evaluators.

Till now accurate and up-to-date data are not available either from the Coconut Development Board or the State Governments. It is unfortunate that no planned study has been made on this so far.

What is happening now is that government agencies are comfortable in following the tried and tested path or rather intuitively resisting anything new. Lack of accurate data on production hampers the marketing system and farmers are deprived of remunerative price.

Moreover, these statistics poses problems to policymakers and analysts alike and also mislead policymakers and their target.

Every year the Central and State Governments spend crores of rupees for research and development in the coconut sector. Still, coconut farmers are deprived of remunerative prices all these years except for some intervals. Coconut farmers continue to be a distressed lot. For the last one year the prices of copra are ruling far less than the maximum selling price (Rs.3,590 per quintal - open market prices are between Rs.3,000 and 3,200). No agency has so far taken any steps to help the farmers, the study said.

Marketing problems

The maladies in marketing coconut products are complex and, as such, cannot be tackled through a single measure overnight. Direct involvement of farmers in marketing is one measure.

This can be tried. This will improve farm-market linkage. Through the direct marketing system farmers would be able to take informed decision with full pricing freedom. If properly implemented, this will pave way for monitoring regular supply-demand in the market and also give clear indications about the real trend of the market without any distortion in prices. By this farmers can gain Rs.40 to Rs.45 a quintal by avoiding intermediaries.

Pragmatic policy

This will also provide more opportunity for rural employment and eradication of poverty among rural population to a certain extent.

A pragmatic policy with a time-bound programme is the need of the hour, the study adds.

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