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Coffee growers in Karnataka, the largest producing State in the country, are staring at a crisis ahead of the harvest season, which begins next week, as prices have turned bearish despite an anticipated decline in the domestic crop amidst rising input costs.
While a crash in prices of pepper — grown largely as an inter-crop with coffee — on account of the surge in imports has already hurt planters’ earnings, an impending wage hike is seen aggravating their woes.
“The plantation industry is going through one of its most testing times,” said MM Chengappa, Chairman, Karnataka Planters Association, ahead of the body’s 59th annual conference.
Karnataka accounts for around 70 per cent of the coffee that is produced in the country and has pipped Kerala to become the largest pepper producer.
The price of pepper, which provides a cushioning effect to planters against low coffee prices, has crashed by over 50 per cent due to a surge in cheap imports from countries such as Sri Lanka and the ASEAN nations.
The Karnataka Planters Association has approached the Prime Minister’s Office and the Commerce Ministry seeking their intervention in curbing such imports, Chengappa said.
Wage HikeChengappa said the planters’ body has reached an agreement with the workers’ unions on increasing the daily wage to ₹305 per day as against the current ₹277.
The wage hike is expected to be implemented soon after the State government announces the new wages, he said.
Labour wages, which account for more than 60 per cent of the cost of coffee cultivation, have witnessed a sharp increase since 2008-09, Chengappa said.
Further, the planters have to bear the burden of the statutory and welfare costs for labour, which are over and above the wages and benefits, and work out to an additional 50 per cent of the wages.
Coffee prices have been volatile over the past few years, tracking global prices. Reports of a large Brazil crop are keeping the prices under pressure, Chengappa said.
India is the fifth largest producer of coffee in the world and Karnataka accounts for about two-thirds of the coffee produced in the country.
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