Coffee output likely to fall 8% in FY17

Indian coffee production is likely to decline by around 8 per cent in the current financial year owing to lack of timely rains, parliament was told on Monday.

"It has been estimated that there is a likelihood of decline in coffee production in 2016-17 by 8 per cent compared to that in 2015-16 due to lack of timely rains and high temperature during the crucial flowering stage," Commerce Minister Nirmala Sitharaman told the Lok Sabha during Question Hour.

The Coffee Board is providing support to coffee growers in water augmentation and extension activities, she said.

Moreover, coffee growers are given compensation under the Rainfall Insurance Scheme for Coffee for crop losses caused by erratic rainfall, she added.

Sitharaman said her ministry is also looking into a Coffee Exporters Association representation for adding green coffee beans to the exempted list in the proposed GST.

She also said the Coffee Act, 1942 is "no longer serving the purpose".

"Over the years, the role of Coffee Board has changed and many provisions of the existing Act have become redundant, especially after abolition of Coffee Pooling System in 1996," the minister said.

She said it has been proposed to repeal the law which was enacted more than 70 years back and enact a new legislation - the Coffee Bill, 2016.

The suggestions received on the Bill were "regarding the control of coffee industry, definition of coffee and coffee estate, cognisance of offence under the Act etcetera, which are being examined", she added.

Replying to a supplementary, Sitharaman said India produces four per cent of the world's coffee, and 90 per cent of Indian coffee is exported - mainly to Italy, Russia, Germany, Belgium and Turkey.