SALEM: Tapioca farmers in Salem have alleged that weak enforcement of bylaws by leading co-operative SAGOSERVE and the Food Safety and Standards Authority of India (FSSAI) has enabled parallel trade in untested sago, undermining consumer confidence, crashing demand and pushing prices to distress levels that now threaten the very survival of the region's sago industry.
(Sago Serve is the Salem Starch and Sago Manufacturers' Service Industrial Co-operative Society Ltd.)
Salem remains one of Tamil Nadu's major tapioca-producing regions due to its favourable soil composition and climatic conditions that support high starch content.
According to data available on SAGOSERVE's website, Salem accounts for around 15% of Tamil Nadu's tapioca production, and 34,61,357 sago bags (each weighing 90 kg) were routed through the cooperative over the past three years.
Under SAGOSERVE bylaws, its members - who are sago manufacturers - are required to sell their produce only through the cooperative, where the product undergoes 11 quality parameters before being auctioned via an e-tender platform.
SAGOSERVE does not fix prices; traders bid online and manufacturers decide whether to accept the rates. The cooperative collects payments and disburses them after deducting charges such as godown rent and service fees. Tapioca prices, however, are determined by the mill owners who produce sago based on supply and demand.
Despite this framework, farmers allege that the system is increasingly being bypassed. Of the 334 registered members, only around 100 are actively routing their produce through SAGOSERVE, a senior official admitted.
Farmers claim that significant quantities are being sold directly to traders in Maharashtra, Madhya Pradesh and Gujarat - with Maharashtra alone accounting for nearly 60% of the market without undergoing the mandatory 11-stage quality testing.
By allowing sales outside the regulated mechanism, stakeholders allege, supply flows beyond oversight, quality checks are diluted and price discovery weakens. "When large quantities are sold outside, SAGOSERVE cannot stabilise the market," said farmer M G Rajendran, who alleged that unregulated trade has steadily eroded demand.
The impact on prices has been severe. During 2024-25, tapioca fetched between Rs 12,000 and Rs 14,000 per tonne; it has now fallen to below Rs 5,000 per tonne.
For sago, even in 2024 prices were around Rs 6,000 per 90 kg sack; today they hover near Rs 3,500. Farmers say sago once touched Rs 7,500 per sack in 2014 before gradually declining, but the recent sharp fall coincides with rising volumes sold outside SAGOSERVE.
Demand trends reflect the strain. During Navaratri 2025 - a peak season when many North Indian consumers fast and consume sago - sales through SAGOSERVE reportedly fell by 21.31% compared to the previous year. Farmers attribute the drop to growing concerns about purity when products bypass formal testing.
Though the first-ever export of GI-tagged Salem sago to Canada has been flagged off by SAGOSERVE, farmers said the initiative alone would not provide significant relief unless issues of domestic price crash and unregulated trade are addressed.
Rajendran further claimed that adverse climatic conditions and prolonged storage sometimes lead to the alleged use of bleaching agents to enhance the pearly appearance of sago, fuelling perceptions that the product is chemically treated. While no official data confirming widespread adulteration was cited, farmers said such perceptions have damaged consumer trust.
"SAGOSERVE is only a facilitation body, not an enforcement agency," said Managing Director R Keerthy Priyadarshini, adding that consignments failing the mandatory tests are referred to FSSAI for action and that the cooperative has powers only to levy a fine - that too a very nominal Rs 5 to Rs 50 per consignment — on members who sell outside its system.
A senior SAGOSERVE representative said, "If FSSAI is more proactive in sago testing, this could be curtailed because they are an enforcement agency with powers to take action. Without their coordination, restricting sales outside the SAGOSERVE system is difficult," he said.
District Food Safety Officer Kavikumar said, "Our inspection teams are monitoring units across the district, and action is being taken wherever violations are detected."
TAPIOCA PRICES
2024-25: Rs 12,000 to Rs 14,000
Current: Below Rs 5,000
(Price per tonne)
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SAGO PRICES
2024: Rs 6,000
Current: Rs 3,500.
(Price per 90 kg sack )