The Hindu Business Line : Planters seek `rescue package' for arabica

The Karnataka Planters' Association (KPA) has urged the Union Commerce Ministry and the Coffee Board to consider a "rescue package" for arabica growers to reduce their debt burden.

The package should include waiver of interest and a write-off of significant portion of principal amount of all arabica growers in the special coffee term loan (SCTL) scheme, said Mr S.P. Muthuraman, Chairman of KPA.

Arabica growers are still facing problems in servicing their loans under the SCTL scheme, despite relief packages announced by the Centre, Mr Muthuraman said.

It is estimated that the total liability, exclusive of overdue interest, exceeds Rs 850 crore under the scheme.

Arabica growers have suffered serious crop loss due to the white stem borer menace. Despite better rains this year, the yield stands reduced, because of indifferent rains and drought conditions in past three years.

As a result, arabica growers have little resources to meet SCTL and other loan obligations owing to comparatively high production costs, he said.

In addition, arabica growers have to find resources to replant in areas, which have been destroyed by pests and also maintain these plants without any returns for the next five to seven years, he said.

Board reconstitution

Further, Mr Murthuraman noted that the delay in reconstitution of the Coffee Board was delaying the decision-making process at the board and requested the Commerce Ministry to see that the vacancies were filled up at the earliest.

Only 14 of the 32 slots on the reconstituted Coffee Board, for a period of three years with effect from July 7, 2006, have been filled up which include three representatives of large growers and two from small growers.

Five of the small growers' representative slots are yet to be filled up, he said.