Spice, a billion dollar industry by 2016

By Sanjeevi Jayasuriya

The spice industry has recorded a growth in volume and value in 2012 in the hope of becoming a billion dollar industry by 2016.

Welcoming the consistency and incentives in the last three budgets, Spice Council Chairman, Sarada de Silva said that the Spice Council is accruing the results of this new environment. The industry has recorded a marginal increase in exports, despite a decline in production and exports in the first half of 2012. Special focus is necessary to increase production and productivity, he said.

“We believe that with good agronomic practices, the industry can increase production by over 50 percent.

We are working closely with the Department of Export Agriculture (DEA) on issues related to production, extension and product-based research. The capacity of the DEA to assist growers with improved technology and best agronomic practices needs to be strengthened and upgraded,” he said.

The Spice Council will set up a Cinnamon Training Academy shortly with the assistance from the Standards and Trade Development Fund of the World Trade Organisation, the United Nations Industrial Development Organisation and FAO totalling $ 830,000.

The Government has provided Rs 45 m from the Budget and Rs 31 m is from industry funding.

Branding and value addition is the order of the day. Unless we focus on these two aspects, we will be trapped in the vagaries of the bulk market at the lower end of the value chain which will hinder obtaining reasonable prices for our producers. The possibilities of value addition in the sector are enormous, de Silva said.

The industry should be mindful of the threat posed by foreign companies who try to dominate the value-addition initiatives as spices could lose value and identity. While appreciating foreign investments to the industry, the same level of facilities should be provided to local industrialists, he said.

The granting of triple deduction for research and product development, removal of VAT for the SME sector and the continuation of fertiliser subsidies are among the measures being taken to develop the spice industry.