The Hindu Business Line : Coffee rally gives sense of relief to growers

COFFEE crop is the lifeline of Kodagu district. The current price level appears to have infused a sense of satisfaction among the growers in the district as the prices of robusta and arabica varieties have just started looking up after going through a lean phase in the last six years.

Picking of coffee has just begun with the arabica, which ripens ahead of robusta, in the entire district. The estimated crop production for 2005-06 has decreased because of the heavy rains, particularly under the influence of the north-east monsoon. The rains have resulted in the rotting and dropping of berries.

Growers in a few specific areas are a worried lot as they have suffered extensively in the recent rains. Napoklu, Nelji, Ballamavati areas in Madikeri taluk, Parakatageri, Srimangala, Birunani areas in Virajpet taluk, apart from a few stretches in Somwarpet taluk, have taken a battering, more so in August.

Despite the `dropping' phenomenon, current prices appear encouraging, says Mr C.M. Pemmaiah, one of the Executive Committee members of the Karnataka Planters Association (KPA) and a grower from Murnad, 15 km from here. Or, there could be no panic situation for the next year as far as price is concerned, he says. The dominant robusta cherry (per 50 kg bag), which had fallen below Rs 500 a couple of years ago, could now fetch around Rs 1,500.

Similarly, the arabica cherry variety would fetch Rs 1,900 per bag. The Robusta parchment (outer cover peeled) could now fetch Rs 2,300, while Arabica parchment is priced at around Rs 3,600. The prices could be stable for sometime since there is no production surplus in leading coffee-growing nations in the world such as Brazil, Colombia and others, Mr Pemmaiah says.

The dropping of berries was up to 15 per cent in the rain-hit areas. Waterlogging had affected the plants for they could not utilise nutrients adequately, hastening low output, Coffee Board sources , told Business Line.A survey conducted by the Coffee Board here in September estimated losses due to rain to the tune of Rs 7.83 crore in the district alone this year, based on the price level of both arabica and robusta then.

The pre-blossom (or the wood estimate) estimate in Kodagu was made for a total crop production of 1,26,350 tonnes. Arabica crop was estimated at 28,250 tonnes while Robusta was put at 98,100 tonnes. However, the post-monsoon estimate by the Board projected the production at 1,05,950 tonnes. That includes 22,650 tonnes of arabica and 83,300 tonnes of robusta. Rainfall had crossed the 3,000 mm mark in some of the growing areas in the region, much above the normal pattern. There were 88 rainy days in 2001 whereas it was almost 100 this year.

Mr Nanda Subbaiah, former Chairman of the Codagu Planters Association (CPA) and a grower from Maldare area, echoes the sentiments of Mr Pemmaiah. Though the prices have shown a tendency to rise, or at least remain stable, the grower's crises are far from over, he says. The prospects of associated crops such as pepper, cardamom, too have touched the lowest ebb, which is not good. The costs of inputs, labour and loan burden have gone up since the time of the price boom in the late 90s. They could not be scaled down for fear of losing labour force. Only a price boom can save the coffee industry, he feels.

The former vice-chairman of the Coffee Board, Mr Bose Mandanna, speaking of the sale of coffee, is rueful, saying the business in the local market is falling into the hands of the unorganised sector. The organised sector buyers would come under the scanner of the Rule 7B, under income-tax, for they had to pay taxes for the curing coffee to derive `cleaned coffee' (coffee in the form of beans). Owing to liberalisation of the market, `farm gate sale' is being resorted to by the growers who sell raw coffee to all and sundry.

Coffee from Kodagu accounts for nearly 40 per cent of the country's total production. There are as many as 39,868 holdings in the district, of which 98 per cent belong to the small and marginal growers' category. As many as 446 growers possess holdings above 10 hectares.