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Land Development
Plantation / Horticulture
Plantation /
Horticulture Investment
Peper
Agricultural Credit
Engineering This is a
Forestry / Introduction long-term
WasteLand refinance
Fisheries Pepper, popularly known as black gold holds a prime position in the world facility, it is
of spices. The hot pungent produce from the berries of the perennial, intended for
Animal Husbandry
climbing vines of Piper nigrum L (Family : Piperaceae) is one of the oldest Investment in
Medicinal & and the most popular spice in the world. Pepper was largely instrumental in agriculture
Aromatic Plants shaping the modern history christened by the advent of the new world and and allied
Biotechnology sea route from Europe to India that ultimately led to the colonalisation of our activities
sub continent.
Technical
By virtue of its versatile uses in the modern world, black pepper has earned Services
the reputation as the “King of Spices” and as on date, is the most widely used Department
spice in the world. It has a share of more than one third of the global trade of This division
spices in terms of quantity and value. is the service
provider on
technical
Global Scene
issues
http://farmextensionmanager.com/English/Agribusiness%20oppertunities/Horticulture%20sector/Peper.htm 1/21
According to FAO, the global production of pepper during 2003 is 3,66,511 T

and the production base is 4,55,156 ha. As may be evinced from chart 1,
global pepper scenario, has recorded positive growth both in terms of area
and production during 2000 to 2003 period.
Chart 1
Year 2000 2001 2002 2003
Area (Ha) 403942 434290 448601 455156
Production (T) 288802 314994 322272 366511
India, Indonesia, Sri Lanka, Brazil, Vietnam, Malaysia and China are the
major growers of pepper. As per the FAO data (2003 ), India continues to
dominate the world pepper acerage ( chart 2 ) while Vietnam ( chart 3 ) has
emerged as the leading producer of pepper.
Chart 2
Chart 3
Indian pepper industry – a status analysis
According to FAO data for 2000 to 2003 period furnished in Table 1, Indian
pepper has recorded growth in area, while production has exhibited negative
trend
( Table 1 )
Trend in area, production and productivity of pepper : India
Year 2000 2001 2002 2003
Area (ha) 196000 214000 215000 215000
Production (T) 59000 64000 51000 51000
The trend analysis of Indian share in global pepper (table 2 ) shows no

significant change in area while production share has decreased from
20.43% in 2000 to 13.91% in 2003.
Table 2
Share of India in global pepper
Year 2000 2001 2002 2003
Area (%) 47.02 47.24 47.24 47.24
Production (%) 20.43 20.32 15.83 13.91
The distribution pattern of pepper across various states of India showed the
dominance of Kerala with 94.31% followed by Karnataka (3.32%) and Tamil
Nadu (1.90% ). Other states and Union Territories having pepper cultivation,
though on a small scale, include Maharashtra, Goa, MP, AP, W. Bengal,
Orissa, Assam,Tripura, Meghalaya, Arunachal Pradesh, Mizoram, Nagaland,
Manipur, Pondicherry and Andaman and Nicobar Islands.
India with 32000 T of average annual export (ranging from 19000-47000 T

during the decade ended in 2000) continues to be a significant exporter of
pepper. During this period, exports exceeded 47000 T in 1993 and 1999 and
touched the low level of 19000 T in 1991 and 1992. Pepper had 43.65% value
share of major spices exported from India during 1999-2000. However, of late
i.e., during the period from 2001-02 to 2003-04, the export of pepper from
India has shown a sliding trend.
( Table 3 )
Table 3
Export of pepper from India : 2001-02 to 2003-04
Year Quantity Value
(T) (Rs lakhs)
2001-02 22877 20369
2002-03 21609 17888
2003-04 (E) 16700 14351

Techno-economic parameters
An outline of techno-economic parameters relevant to the model scheme is

given in Annexure I and the details are furnished in the following section.
Agro-climatic and edaphic factors
Pepper is a plant of humid tropics requiring adequate rainfall and humidity. It

grows successfully between 20° North and South latitude. It can be grown
from sea level up to an altitude of 1500 M but lower altitudes are preferable.
The crop tolerates a minimum temperature of 100 C and maximum of 400 C,

the optimum being 20 - 300 C. Though a well distributed annual rainfall of
250 cm is considered ideal for the proper growth of the crop, it can also come
up well in low rainfall areas, if the pattern and distribution of rainfall are
conducive. About 70 mm of rainfall within a period of 20 days may be
sufficient for triggering flushing of flowering process in the plant, but once the
process is set off there should be continuous, though not heavy, rainfall until
fruit development starts. Any dry spell even for a few days , within this critical
period will result in substantial reduction of yields. Very long spells of dry
weather are unfavorable for the crop growth.
Pepper can be grown in a wide range of soils with a pH of 4.5 to 6.0, and in
its natural habitat it thrives well in red laterite soils. It prefers a light porous
and well drained soil rich in organic matter. Water stagnation in the soil, even
for a very short period is injurious to the plant. So, heavy textured soils in
locations where drainage facilitates are inadequate should be avoided.
Selection of site
Sites with slight to moderate slope with good drainage are ideal for pepper
cultivation. Slopes facing south are to be avoided as far as possible and
when such slopes are selected, the young plants are to be sufficiently
protected from the scorching sun during summer.
The pepper growing tracts in India include
coastal areas where pepper is grown in homesteads,

valleys where it is extensively cultivated on a plantation scale and

hills at an elevation of 800 to 1500 m above sea level, where the crop is
grown on shade trees in coffee, orange, cardamom and tea plantations.
Varieties
Panniyur-I, Panniyur-2, Panniyur-3 (Syama), Panniyur-4, Subhakara (KS 27),

Karimunda, Kottanadan, Kuthiravally, Arakulam Munda, Balankotta and
Kalluvally are the commonly cultivated varieties. Of these, Panniyur-1 is to
be grown in comparatively open areas.
Land preparation
In sloppy and uneven lands, contour bunding or terracing is resorted to, to

prevent soil erosion.
Standards
Murukku (Erythrina indica) Karayam or Killingil (Garuga pinnata) Ailanthus sp.

and Subabul (Leucaenea leucocephal) are suitable standards for growing
pepper. Dadaps (E.lithosperma) and silver oak (Grevilea robusta) in high
altitude areas and in certain tracts, Jack and male plants of Nutmeg after
training and pruning to suit the need, also are used as pepper standards. The
recommended norm is to have 1000 standards per ha.
Planting and post planting operations
The plant population considered is 2000 pepper vines ( @ 2 per standard )

per ha. For planting pepper, prepare pits on the northern side of standards at
a distance of 15 cm. The pit size should be 50 x 50x50 cm. Fill the pits with
a mixture of top soil and compost or well rotten cattle manure @ 5 Kg per
pit. With the onset of South West monsoon in June-July, plant 2 rooted
cuttings in the pits at a distance of about 30 cm away from the standards.
Press the soil around the cuttings to form a small mound slopping outward
and away from the cuttings to prevent water stagnation around the plants.
The growing portions of the cuttings are to be trailed and tied to the
standards. Provide shade to the plants if the land is exposed and if there is a
break in the rainfall. When pepper is grown on coconut or areca nut trees,
the pepper cuttings are to be planted 1 to 1.5 M away from the trunk of the
trees and trained on a temporary stake for 1-2 years till they attain sufficient
length to reach the tree trunk. Thereafter, the stake could be removed without
causing damage to the vines and train the pepper plants on to the tree trunk.
Shading with dry arecanut / coconut leaves or twings of trees and watering of
the young seedlings is necessary in pepper gardens located in open places
during summer months of the first 1 to 3 years.
Management operations
In the early stages, tie the vines to the standards.
Dig around the standards and vines at a radius of about 1 m from the
base or in the entire plantation, twice during the year, the first at the
onset of South West monsoon and the second towards the end of North
East monsoon.
Remove weeds around the plants twice in a year i.e., at the onset of
SW monsoon and by the end of NE monsoon.
Grow cover crops like Calapagonum muconoides in tracts where
plantation scale cultivation is taken up with proper safe guards against
twining of cover crops along with the pepper vines.
Lowering of vines after 1 year’s growth to promote lateral branch
production.
Mulching with saw dust, arecanut husk and dry leaves
Remove unwanted terminal shoot growth and hanging shoots
Prune and train the standards in March - April every year to remove
excessive overgrowth and to give them a proper shape. The effective
height of the standard is to be limited to about 6 m. A second pruning of
the standards may be done in July-August, if there is excessive shade
in the garden.
Inter cropping
Inter cropping of pepper gardens with ginger, turmeric, colocacia and

elephant foot yam is advantageous. Banana as an inter crop in yielding
gardens, reduces pepper yields. Therefore, this is not recommended beyond
three to four years after planting of pepper vines. However, in the early
years, banana provides shade to the young plants and protects them from
drying up during summer months.
Manuring
Manuring of pepper vines is done in basins around the plants 10-15 cm

deep and at 50-75 cm radius depending upon the growth of the plants. Apply
(i) cattle manure/compost/green leaves at the rate of 10 kg per plant per
annum just at the onset of South - West monsoon and cover lightly with soil
and (ii) NPK dose of 50:50:150 g per vine per year from third year onwards (
1/3 dose in first year and ½ dose in second year ) in two split doses in May-
June and August – September.
Plant protection
Diseases like quick wilt and slow wilt, pollu (fungal), yellowing and spike
shedding cause economic loss to farmers. Root grub, soft scale pollu (pest )
and nematodes are the major pests. Both chemical and bio control measures
are available against these pests and diseases.
Harvesting
The prebearing period is 3 years. The crop takes 6 to 8 months from

flowering to harvest. The harvest season extends from November to January
in the plains and January to March in the hills. The whole spike is hand picked
when one or two berries in the spike turn bright orange or red.
Yield
The yield pattern considered in the model scheme is as follow
Year Yield (Kg/ha)
I (-)
II (-)
III (-)
IV 100
V 300
VI 400
VII 800
VIII – XX @ per year 1000
Price realization : domestic and export trade
The domestic price for pepper ( October 2004 ) is Rs. 65 per Kg and the
international spot price in New York market ( October 2004 ) is US$ 1640 per
T. The farmers’ share is estimated at 88% of the f.o.b. price. The farm gate
price is Rs. 60 per kg.
Post harvest technology
The berries can be separated manually or mechanically using threshers.

Threshers with capacities varying between 0.5 to 1.5 T per hour are available.
This ensures speedy and hygienic separation of black pepper berries. When
dried, the berries retain the characteristic wrinkled appearance of black
pepper of commerce. The fresh berries are blanched i.e., dipped in hot water
for a minute before drying in the sun which results in an attractive black colour
with minimum mould load and reduces the drying time. Drying surfaces
recommended are bamboo mat coated with fenugreek paste, cement floor
and high density black polythene to facilitate the development of better
appearance and cleanliness to the dried product. Mechanical driers such as
convection and cascade types can also be employed for drying. The optimum
temperature to be maintained in mechanical driers should be around 60ºC.
The optimum moisture content in dried pepper to prevent mould attack is 8-
10%.
Product diversification and value addition
White pepper of commerce is prepared either from freshly harvested berries

or dried black pepper using special techniques such as retting, steaming and
decortication. The recovery of white pepper from ripe berries is about 25%.
Steeping in water is the most popular technique for preparing white pepper in
which ripe pepper berries are soaked in water for 8-10 days and the outer
skin is removed, washed and sun dried. The berries of Panniyur-1 are ideal
for the preparation of white pepper. The flavour is less pungent than that of
black pepper.
Green pepper are immature berries freeze dried or mechanically air dried. It
is also pickled in brine or vinegar.
Pepper oil and oleoresin : Volatile oil and the pungent component known as
piperine are the two main components of pepper. The extraction of these
yields two value added products of pepper viz., pepper oil and oleoresin.
Farm model
The farm model for pepper development in one hectare area with year wise
details of cost and returns is furnished in Annexure II
Cash flow stream
The year wise cash flow stream of the project is given in Annexure IV. In the
cash flow work out, it has been considered that pepper yield is towards the
end of the year and the cost of cultivation has to be incurred in the beginning
of the year. Hence, the effective availability of returns is considered for the
subsequent year only. Further, around 30% of the returns is set apart to the
farmers and the rest 70 % is reckoned as available to meet the cost of
cultivation and loan repayment.
Unit cost
Unit cost for one ha works out to Rs. 82500 spread over 5 years. Entire cost
during first four years and partial cost during the fifth year are reckoned in the
unit cost as per the cash flow stream already discussed.
Year Cost (Rs)
1 26000
2 11000
3 15500
4 18000
5 12000
Total 82500
Phasing
The physical and financial phasing of projects of larger outlay are based on
the availability of organisational and infrastructural arrangements.
Margin and Bank loan
The percentage of margin / down payment to investment cost prescribed is 5,

10 and 15% for small, medium and large farmers respectively. The rest of the
investment cost will be provided as bank loan. Margin and bank loan
considered in the present model are 10% and 90% respectively
Rate of interest
The rate of interest to be charged to the ultimate borrower would be guided by

RBI guidelines issued from time to time. However, the ultimate lending rate
has been considered as 12 % for working out the bankability of the model
scheme.
Security
Banks are guided by RBI guidelines issued from time to time in this regard.
Internal Rate of Return ( IRR )
The internal rate of return of the model works out to 25.22 %. Since IRR is
more than 15%, the project is viable. The details of IRR work out is
presented in Annexure III.
Benefit : Cost ratio
The B: C ratio of the model at 15% discounting factor is 1.48 (Annexure III )
as against the minimum requirement of 1.
Repayment Schedule
Income left after meeting the cost of cultivation and leaving 30% to the
growers is reckoned towards repayment. The bank loan disbursed during the
first five years may be recovered from the 10 thto 13thyears. The interest
accrued during the gestation period may be deferred and recovered from 7th
year onwards. The repayment of interest commences in 7th year and
concludes in 13thyear. The repayment schedule has been worked out and
furnished in Annexure IV.
A surplus income of Rs. 42000 per annum is generated from the 14 th year
of the project.
Organisational and development infrastructure
Development support
Spices Board with its head quarters at Kochi and its regional offices in
states
State Department of Agriculture / horticulture
Directorate of Arecanut and Spices, Calicut, Kerala
Research Support
Indian institute of Spices Research, Calicut

Pepper Research Station of Kerala Agriculture University at Panniyur.
State Agricultural Universities
Plan programmes
During the IX plan, pepper development was covered under the scheme for
integrated development of spices. The X plan programme for development of
pepper ( bracketed with ginger, turmeric and chillies) envisages an outlay of
Rs. 5900 million. In Kerala, the major pepper growing state of the country, the
Department of Agriculture is implementing the Technology Mission on Black
Pepper. Spices Board has included a scheme to promote organic pepper
development in North Eastern states during the X plan period.
Commercial aspects : Marketing setup
The existing marketing system for pepper is of decentralized type with

alternate channels. The noteworthy feature of the system is that it provides
an integrated link between the production centre and export market. The
produce moves through the channel as illustrated in the flow chart given
below.
PRODUCER
PRE-HARVEST SALE -------- ASSEMBLERS --------

POST HARVEST SALE
(Village merchants)
LOCAL TRADERS
(at primary market)
WHOLESALERS
(at secondary market)
DISTRIBUTORS FOR
DOMESTIC MARKET NETWORK/
EXPORTERS / INTRNATIONAL WHOLESALERS
The first link in the marketing channel from the farm gate is assemblers in the
village or popularly knows as village merchant. The area of operation for the
village merchant ends mostly in the local (primary) market. In the local
market, the produce assembled by the local trader (second intermediary)
.The third intermediary in the marketing channel is the wholesaler. The
wholesale trader purchases pepper from the assembly markets and moves it
to the terminal markets where it is sold to internal wholesale merchants and
exporters. The exporters who act between the terminal domestic market and
the overseas markets form the fourth link in the trade channel.The terminal
point in the marketing network of pepper grown in Kerala is the futures
market at Cochin / Cochin port for export.
The dominant trade mode involves farmers selling the dried black pepper at
the farm gate to the village merchants who are the main operators in the
primary market. Taking advantage of the long shelf life of dry pepper, farmers
generally store the dried pepper and sell it as and when prices are high
unless there is an exigency. Most of the pepper produced in India is
marketed through the established channel (Producer > Village assembler >
Local trader > Wholesaler > Exporter).
Demand projection
Global demand of pepper is estimated as 1,99,800 T. Major consumers of the

Indian pepper are
USA
Singapore
Germany
Netherlands
France and
Japan
The working group on horticulture for the X plan has projected the national
demand at 1,25,360 T by 2006-07.
ANNEXURE- 1
Techno-economic aspects ( Unit = 1 ha )
Techno economic aspect Norms considered
1 Standards 1000 Nos
2 Plant population 2000 plants @ 2 vines /

standard
3 Planting material Rooted cuttings
4 Pit size 50 cm X 50 cm X 50
cm
5 Manures and fertilizers
(a) Organic matter
(as basal dose at the time of filling pits) 5 T per

ha
(b) Fertilizer dose considered NPK @ 50:50: 150 g /

plant / year
(i) 1/3 dose during first year
(ii) 2/3 dose during second

year
(iii) Full dose from third year

onwards
6 Wage rate Rs 100 per person day
7 Person day requirement, Land preparation, 102 person days
Lay out, digging pits and planting (I year)
8 Management operations - person day

requirement
Year Person day requirement per year
I 60
II 70
III 100
IV onwards 120
9 Pre bearing period 3 years
10 Economic life 20 years
11 Yield - Year-wise
Year Dry pepper (kg/ha)
I -
II -
III -
IV 100
V 300
VI 400
VII 800
VIII – XX @ 1000
12 Farm gate sale price per kg dry pepper Rs 60
(Net of harvesting, cleaning,drying & packing cost)
Annexure II - Farm Model for Development of Pepper
Unit
COST : 1 ha
1Year II III IV V - XX @
Year Year Year

Sl. Partic
No ulars Input Cost Input Cost Input Cost Input Cost Input Cost
3
Filling,
planting
&
staking 32 pd 3200
Cost of
Stand 1000 100
4 ards Nos 1000 Nos 100
Cost of
rooted 2000 200
5 cuttings Nos 3000 Nos 300
Cost of
organic
manu
res to
6 fill pits 5 T 4000
Cost of
manures and
7 fertilizers 1500 3000 4500 4500 4500
Manage
ment
opera 70 100 120 120
8 tions 60 pd 6000 pd 7000 pd 10000 pd 12000 pd 12000
Plant
Protection -
9 LS 300 600 1000 1500 1500
Total 26000 11000 15500 18000 18000
returns
Pre
bearing
period (
years) 3
Econo 20
mic
life (
years )
Returns
:
Rs. per
Kg dry
pepper 60
(Net of harvesting, cleaning,drying
& packing cost)
Year Yield Returns *
( Kg /ha) @ Rs60/Kg
I (-)
II (-)
III (-)
IV 100 6000
V 300 18000
VI 400 24000
VII 800 48000
VIII- XX @ 1000 60000
Available by the end of the year. Hence to be reckoned as efferctively

available for subsequent year only
Annexure III - B: C ratio and INTERNAL RATE OF RETURN (IRR)
Annexure IV
Repayment Schedule
Unit cost Rs 82500
Margin Rs 8250
Loan Amount 74250
Rate of interest pa 12%
Repayment schedule
Interest from 7 to 13 years
Principal from 10 to 13 years
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NABARD&#39;s Model Bankable Projects

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3/6/2019 NABARD's Model Bankable Projects

About Role and Rural Model Bankable

Minor Irrigation Model Bankable Projects

According to FAO, the global production of pepper during 2003 is 3,66,511 T

Year 2000 2001 2002 2003

Area (Ha) 403942 434290 448601 455156

Production (T) 288802 314994 322272 366511

Indian pepper industry – a status analysis

Trend in area, production and productivity of pepper : India

Year 2000 2001 2002 2003

Area (ha) 196000 214000 215000 215000

Production (T) 59000 64000 51000 51000

The trend analysis of Indian share in global pepper (table 2 ) shows no

Share of India in global pepper

Year 2000 2001 2002 2003

Area (%) 47.02 47.24 47.24 47.24

Production (%) 20.43 20.32 15.83 13.91

India with 32000 T of average annual export (ranging from 19000-47000 T

Export of pepper from India : 2001-02 to 2003-04

Year Quantity Value

(T) (Rs lakhs)

2001-02 22877 20369

2002-03 21609 17888

2003-04 (E) 16700 14351

An outline of techno-economic parameters relevant to the model scheme is

Agro-climatic and edaphic factors

Pepper is a plant of humid tropics requiring adequate rainfall and humidity. It

The crop tolerates a minimum temperature of 100 C and maximum of 400 C,

The pepper growing tracts in India include

coastal areas where pepper is grown in homesteads,

valleys where it is extensively cultivated on a plantation scale and

Panniyur-I, Panniyur-2, Panniyur-3 (Syama), Panniyur-4, Subhakara (KS 27),

In sloppy and uneven lands, contour bunding or terracing is resorted to, to

Murukku (Erythrina indica) Karayam or Killingil (Garuga pinnata) Ailanthus sp.

Planting and post planting operations

The plant population considered is 2000 pepper vines ( @ 2 per standard )

In the early stages, tie the vines to the standards.

Inter cropping of pepper gardens with ginger, turmeric, colocacia and

Manuring of pepper vines is done in basins around the plants 10-15 cm

The prebearing period is 3 years. The crop takes 6 to 8 months from

The yield pattern considered in the model scheme is as follow

Year Yield (Kg/ha)

VIII – XX @ per year 1000

Price realization : domestic and export trade

Post harvest technology

The berries can be separated manually or mechanically using threshers.

Product diversification and value addition

White pepper of commerce is prepared either from freshly harvested berries

Cash flow stream

Year Cost (Rs)

Margin and Bank loan

The percentage of margin / down payment to investment cost prescribed is 5,

The rate of interest to be charged to the ultimate borrower would be guided by

Internal Rate of Return ( IRR )

Benefit : Cost ratio

Organisational and development infrastructure

Indian institute of Spices Research, Calicut

Commercial aspects : Marketing setup

The existing marketing system for pepper is of decentralized type with

PRE-HARVEST SALE -------- ASSEMBLERS --------

(at primary market)

(at secondary market)

DOMESTIC MARKET NETWORK/

EXPORTERS / INTRNATIONAL WHOLESALERS

NABARD's Model Bankable Projects

NABARD's Model Bankable Projects