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Coffee industry seeks PM intervention for relief

Our Bureau

NEW DELHI, May 9

THE beleaguered domestic coffee industry with dismal export prospects and structural problems plaguing it in the face of stagnant crop for the past five years, on Wednesday presented a memorandum to the Prime Minister, Mr Atal Bihari Vajpayee, for his im mediate intervention to save the interests of the small coffee growers.

Briefing newspersons here, the Minister of State for Textiles and the leader of the All-India Coffee Industry Action Committee representing all facets of the industry, Mr V. Dhanjaya Kumar, said the Prime Minister assured the delegation that the Governme nt would evolve remedial measures at the earliest.

Mr Kumar said that coffee exports fetched Rs 1,,900 crore during 1999-2000 but this had skidded to Rs 1,350 crore last year in view of the fall in unit value realisation of export though the volume of coffee exported was higher. He said the coffee crop h as been stagnating for the past five years because of several fundamental problems facing the growers in Karnataka, Kerala and Tamil Nadu.

The main problem is rephasing of bank loans contracted to the tune of Rs 600 crore by growers from the scheduled banks. He said all loans comprising hypothecation loans, term loans, development loans and other loans availed till date with their carry-for ward dues might be consolidated into one block loan including the interest up to the financial year March 31, 2001 and must be rephased or rolled over to be repaid in three to five years' time.

He said that the beverage must be popularised indigenously, exploiting the retail outlets established by such cooperative giants like NDDB and Amul. He said NDDB and GCMMF (Amul) with their financial resources, brand image and marketing network could ste p up internal consumption currently stagnating at 60,000 tonnes.

Innovative sales through sachets as is done in tea could be attempted, he added. The delegation also demanded appropriate steps to include certain developmental programmes under `Green Box' provision of WTO so that coffee growers are supported through so me kind of subsidy.

There is no anomaly involved in subsidy for the coffee industry because during its halcyon days the industry gave enough revenues to the exchequer both through exports and also through other levies.

Though the removal of import curbs has not led to surge in coffee imports, relatively cheaper priced coffee from Malaysia and Indonesia might be imported and hence the customs duty on coffee should be raised from the extant 65 to the bound level of 100 p er cent, he said.

In order to make export of coffee competitive, a slew of measures need to be put in place, he said, adding these should include reduction in interest rate for exports, suspension of export cess of Re 0.50 per kg on coffee and amendment of the Central sal es tax Act to ensure complete tax freedom for all exports of raw or value-added coffee.

Mr Kumar said the delegation also met the Union Finance Minister, Mr Yashwant Sinha, on Tuesday and he immediately instructed the RBI and Nabard to look into rephasing of loans contracted by growers. A meeting of bankers with the Nabard and RBI to decide the rephasing frame would be held on May 14 at Bangalore, the Minister added.

The delegation also met Additional Secretary, Mr L.V. Saptharishi, in charge of plantation crops and he assured to convene a joint meeting of NDDB, Amul, Coffee Board members and Government officials to assist Comark, a multi-State cooperative coffee mar keting body as also steps to promote internal consumption of coffee.