People's Democracy

         Solve Coffee Growers Problems

AIKS & AIAWU Write To Agriculture Minister

Following is the text of the letter written by S Ramachandran Pillai (AIKS president), K Varadha Rajan (AIKS general secretary) and A Vijayaraghavan (AIAWU general secretary) to agriculture minister Sharad Pawar on June 15 regarding the problems faced by the coffee growers of the nation. A copy of this letter was also forwarded to finance minister P Chidambaram, and commerce minister Kamal Nath.

WE wish to bring to your notice the sad plight of the coffee growers in the country in the context of the unprecedented crisis due to the steep price fall.  In Kerala alone, more than 100 coffee growers committed suicide in Wynad district where coffee cultivation is concentrated.  There are 3,46,716 hectares  under coffee cultivation in India.  The state of Kerala accounts for 84,735 hectares , i.e., 24.4 per cent of the total area.  The annual production of coffee ranges above  3,00,000 to 3,17,600 tonnes. Kerala state produces 70,550 tonnes or 23.4 per cent of the total production in 2000-2001.  There are over 1,54,211 small holdings below 10 hectares with  1,17,098  of them being below 2 hectares .  There are over 76,997 small growers in Kerala.  A total number of 4 lakh workers and their families are depending, either directly or indirectly, on coffee cultivation. 

The average price for coffee, especially for robesta coffee, has fallen very steeply recently.  The prices have fallen to less than one-third of what it was three years ago. It is to be noted that the multinational companies and the Indian big companies who are producing consumer products using coffee are making huge profits and have not reduced prices for coffee products.  Neither the coffee growers nor the consumer are getting any benefits from such high pricing of coffee. The peasants and other workers living in the coffee growing area are facing total ruin due to the steep fall in price for coffee.  The government of India should come forward to protect the interests of the peasants and workeRs  The following steps are urgently needed to save the coffee growers and workers from growing crisis:

1.      Income support scheme and export subsidy

 Provide an income support scheme to all small growers at the rate of Rs 15 per kg of coffee production in the present price situation.

As more than 80 per cent of the coffee is exported, export subsidy must be granted to small growers directly at the rate of Rs 10 per kg.    Since the exports account to 80 per cent of the total crop, subsidy levels may be broad based on the total quantity and disbursed to all small growers.  The subsidy will reach in the hands of growers only if it is directly passed on to growers.

2.  Provide subsidy on fertiliser  and other inputs

 The government should take appropriate measures to provide substantial subsidy on fertilisers for quality upgradation, water augmentation, drying yard and also for crop changing from coffee cultivation by diversification into other crops.  Many countries in the world are taking such measures to protect the coffee growers from the growing crisis.

3.  Impose ban/restrict all import of coffee

All kinds of import of coffee either for domestic market or for re-export should be banned.  The tariff rate for import of coffee should be increased to 150 per cent.

4.  Waiver of loans and interest

The benefits provided under Agricultural Debt Waiver Scheme should be extended to old loans availed by coffee growers through the coffee board.

All pending dues on interest may be waived.

Restructure all loans taken by small farmers by staggering repayments to a period of more than ten years.

All the revenue recovery proceedings initiated against the coffee growers should be stopped.

The interest rate to coffee growers may be reduced to 4 per cent.

5.      Remove all cess, taxes and duties etc

Considering the steep price of coffee, the central government should abolish all cess, taxes and other duties collected from the coffee sector.

The state governments may be advised to suspend all taxes – plantation tax and income tax – from the coffee growers

6.  Introduce a system of procurement of coffee from small growers on subsidy-linked basis

In order to help stabilise the prices of coffee for the small coffee growers, the government should come forward to implement a scheme for procurement of coffee from small growers with adequate subsidy component so that the growers get reasonable return and the market will improve.

7. Promote internal consumption and provide promotion funds

 The coffee consumption in India is very low and insignificant compared to many other countries.  There is a huge potential for developing the internal market.  The dependence on the highly volatile export market can be reduced only if domestic consumption is increased. The promotion projects which are kept in the cold storage should be reconsidered and efforts should be made for promoting internal consumption. The government should provide adequate funds for such programmes.