5 Economic and Social Considerations
5.1 Overview of costs and losses
Herbs, spices and essential oils suffer the problems inherent in commodity trading. The market demand and price for agricultural production can be greatly affected by global crop growing conditions, the amount of stored product from the past, and the changing market demand driven by consumer preference and by manufacturing formulators. The market can be cyclical, moving from under-supply to over-supply as a result of price and crop productivity. Large fluctuations in price can make the crop uneconomic and in some cases perennial crops may be left unharvested until the commodity price rises to make harvesting and processing economic. More processing of herbs, spices and essential oils in the producing countries would aid greater price stability in the market place by providing contracts to growers and processors and enable the countries of origin to move higher up the processing chain away from the raw commodity trade and attain higher prices. The market state and prices paid for spices can be viewed on a number of websites and two examples are www.spizes.com or www.indianspices.com.
5.2 Major problems
One major problem for the industry is to ensure quality standards are maintained by growing and processing clean, high quality spice that has no adulteration or contamination. This requires a concerted effort by the growers, processors, and traders to make certain that the products are of the highest standard to meet food hygiene requirements. There is a need to identify the problem areas (e.g. drying methods, or storage) that can have a significant effect on the quality outcome. The adoption of a hazard analysis and critical control point (HACCP) system which focuses on prevention rather than relying mainly on end-product testing, would seem to be a worthwhile advance. The HACCP system provides a science-based and systematic approach to identify specific hazards, and measures for their control, to ensure the safety of foods (see http://www.fao.org/DOCREP/005/Y1579E/y1579e03.htm). There is a need for the production and processing stages for each crop to have individual HACCP procedures developed and adopted to ensure quality standards and to provide an insight into the most hazardous areas likely to affect spice quality.
A different but very real problem for developing countries is the temptation to invest effort in production of a novel niche crop such as a particular spice because of its high price, not realising how small the market is and how much the price may drop as the production rises. Successful niche marketing of high-value crops requires constant information flow from the market to the grower and vice versa.
The herb and spice and essential oil industry should adopt a HACCP system, specific to a crop, to help identify the main areas of hazard to food safety and quality in the production chain. There is a need to provide financial assistance to grower co-operatives or businesses to build infrastructure such as crop driers or processing equipment, to ensure high quality post-harvest methods. In addition, there is a need to encourage investment by governments, aid agencies or multi-national companies into state-of-the-art processing factories in the developing countries.
It is imperative that growers of niche products such as herbs, spices and essential oils are part of an integrated system which links their production to a particular anticipated (or contracted) market. It is critical to decide in advance whether production is aimed at urban consumers in the same country; an industrial processor in a neighbouring country; or affluent consumers in a distant country. Different investments are appropriate depending on these target markets; and all aspects of the post-harvest chain need to be in place before production begins. This includes the processing and transportation infrastructure and, importantly, systems for rapid and efficient information flow to and from the market.
Niche marketing of minor crops such as herbs, spices and essential oils provides enormous potential for generating improved incomes for rural women. The relatively high value and low weight of the products means they are suited for small-scale production and processing operations which can be organised to work around other farming and domestic duties which often traditionally fall on women. Medium-scale processing operations can be established at village level, ensuring maximal retention of the value of the crop in those rural areas.
Unfortunately there may be many negative social factors to overcome: for example, farm advisors may recommend diversification into niche crops without recognising that women’s time is not infinitely elastic. An assessment of their existing workload is required to ensure survival is not already filling their day. Also, social factors will determine whether there is any improvement in the financial status of women from participation in the spice trade; frequently, men, regardless of their contribution to the work, control household cash income and in some countries banks may not be able to lend to women.
Finally it is important to note that the appeal of growing a cash crop has often been found to differ between men and women. Men seem to be more willing to make risky cash cropping decisions than women, who generally prefer to ensure there is sufficient food to feed the family first. In very poor communities or unreliable environments, the consequences of such risks may be disastrous. Diversified farming choices are required to help ensure that a local community will not be left without food if a risky cash crop fails to generate income.
Acknowledgments
Malcolm Douglas, Bruce Smallfield and Julian Heyes of the New Zealand Institute for Crop and Food Research Inc. (http://www.crop.cri.nz) prepared this report.
Thumbnail images of spices were taken from http://www.indianspices.com/html/s2100lst.htm (for which permission has been sought).
