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Hit by low prices and faced with a poor crop this year, coffee growers want the Government to consider a minimum support price (MSP) or a price compensation scheme for the commodity to alleviate their distress.
Coffee price movement in India are in tandem with the London and New York terminals, and have been volatile in the recent years, hurting growers’ earnings here.
Prices slide
Farmgate price of robusta cherry, which hovered around ₹3,700 per 50-kg bag last year is now at ₹3,000 levels — about 19 per cent lower. Similarly, the prices of Arabica parchment, which ruled at ₹9,900 levels per 50-kg bag last year are now at around ₹7,300 levels.
“We urge the Centre to look at an MSP or a support price scheme for coffee to help rescue the growers,” said BS Jairam, President, Karnataka Growers Federation, a body of coffee producers.
Lower output seen
Representatives of the beleaguered plantation sector are expected to meet the Commerce Minister and officials on Thursday in New Delhi to present their case.
In addition to the low prices, the output — mainly that of robusta — has turned out to be lower than initial expectations in Karnataka, which accounts for around 70 per cent of India’s coffee output.
Growers estimate that the current robusta crop, which is harvested in last stages, could be lower by about 30-35 per cent over last year’s 1.5 lakh tonnes.
“The price is below the cost of production and as a result the growers are finding it difficult to service their debts. We want the government to consider interest waiver on loans till the current year and extend loans on a concessional interest rate for 2018-19,” said HT Pramod, Chairman, Karnataka Planters Association.
Rising rupee
Besides the volatile global prices, a stronger rupee has also added to the pressure on prices here, said Vishwanath KK, a KGF official and planter.
Bose Mandanna, a planter in Coorg, said a price compensation mechanism would be beneficial for the growers and help them come out of the crisis. Commodities such as coffee are kept out of the MSP purview mainly because they are considered a cash crop and are largely exported.
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