Centre may raise coffee package to Rs 802 cr

The Centre is likely to increase the debt relief package for coffee growers to Rs 802 crore, 58 per cent more than the recommendations of Coffee Board, Union minister of law and justice, M Veerappa Moily said.

Addressing the 51st annual general meeting of Karnataka Planters’ Association (KPA), here, he said the government is working out the package for the coffee growers. The commerce ministry has already set in motion a cabinet paper in circulation to ensure that the package is announced at the earliest.

“There are discussions at different stages to work out the package. The figures of the total loan owed by the coffee industry to banks are Rs 1,700 crore. The coffee board recommended a scheme for

Rs 504 crore. And again associations asked for Rs 1,236 crore and I worked out a scheme and recommended to the commerce ministry that the industry’s legitimate demand could be narrowed to Rs 802 crore and that proposal is under circulation today” he said.

Moily said he would call a meeting of the coffee planters and commerce ministry officials and scientists before the next budget and prepare a big programme to ensure that the plantation industry interests are protected along with other segments of the agriculture sector.

He said there is a need to bring in a reform in labour laws and 101 bills will be presented in the Parliament during the next session.

Earlier, Ajoy Thipaiah, chairman, KPA said the first installment of the Special Coffee Term Loan which has become overdue for payment, will soon invite the NPA norms of the Reserve Bank of India, if not paid.

The coffee growers are in need of an urgent relief package, so as to give them a one-time life line to come out of the crisis. The coffee industry is continuously facing low productivity due to drought of 2003 and 2004, which have had a domino effect on productivity. Most coffee plantations in all the coffee growing regions of the the country lost over 30 to 40 per cent of their mature and productive coffee bushes as a result of severe stem borer infestations. This long period of low productivity has forced coffee growers to resort to fell and sell their shade trees, to meet their working capital requirements, he said.