Middlemen rule the roost in ‘lipstick seed’ trade

Middlemen continue to dictate terms in the trade of the famed Annatto seed, which is used in making lipstick.

Annatto plant is grown in the Rampa Agency, which is one of the largest producers of the species in South India. The plant species is locally known as ‘jabra’ or ‘lipstick seed’.

Integrated Tribal Development Authority (Rampachodavaram) Assistant Director for Agriculture D. Srinivasa Reddy told The Hindu: “Annatto is being grown in over 6,000 acres, and the majority of the produce comes from the Maredumilli forests. Nearly 2,500 farmers are cultivating it in the Rampachodavaram Agency. The irony is that middlemen from Visakhapatnam and Rajamahendravaram are dictating terms in its procurement and trade.”

ZBNF initiative

In the district, Annatto is cultivated under the Zero Budget Natural Farming (ZBNF) initiative.

When this correspondent visited Akumamidikota and Vollangi forest areas, the Konda Reddi tribal families that cultivate it said they would wait for the middlemen, who are non-tribals from coastal Andhra Pradesh, to procure the produce.

Mr. Srinivasa Reddy says 90% of the farmers belonged to the Konda Reddi community. The farmers forayed into Annatto cultivation after failure of the coffee and orange plantations.

At least 60 to 70 middlemen are active in the trade at the Maredumilli weekly shandy with the arrival of the seed that is harvested by January.

Low price

The total yield expected this year is nearly 2,500 tonnes to 3,000 tonnes. The yield per acre is expected to be around 500 kg, which is priced at ₹100 a kg (as per the Girijan Co-operative Corporation).

Amaranath Reddi of Maredumilli, whose family cultivates Annatto in a few acres, said: “Last year, the maximum price offered by the middlemen was ₹120 a kg. Those who did not accept the input cost from the middlemen got that price. The farmers who received input cost were offered as low as ₹60 to ₹70.”

The extent under Annatto cultivation has been increased significantly in the past three years after the tribal farmers started accepting the input cost from potential buyers or middlemen.

The GCC did not attempt to procure the seed, leaving the tribal farmers at the mercy of the middlemen.

GCC target

GCC Rampachodavaram Divisional Manager Jagannath Reddi said: “We did not procure the seed last year. This year, a target has been fixed to procure 500 quintals at ₹100 to ₹110 a kg. However, middlemen offer higher price.”

The GCC will sell the procured seed through open auction. The middlemen resell it to agents involved in the processing industry, or export it to foreign countries.

“The pure red coloured seed, which is preferred in making the lipstick, fetches a good price,” said Mr. Srinivasa Reddy.

According to the Indian Customs Authority data (2016), the seed has been exported to Spain, the U.S., Brazil, Iran, Argentina and Philippines from the JNPT and Mundra sea ports.

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