Coffee planters want less levies, cheaper loans

Coffee planters in major growing regions of the country have appealed to the government to slash the duty structure on the commodity. They also want low-interest loans.

Planters have demanded of the ministry of commerce and Coffee Board to get these measures into the next Union Budget. “As the majority of Indian coffee is exported to other countries, it should be considered a 'commodity deemed for export'. So, duties like excise, customs and sales tax should be reduced to increase the export competitiveness,” said A Nanda Belliappa, a planter from Karnataka and member of the Coffee Board.

He said this should give a cost saving of around 10 per cent to planters. India produces around 280,000 tonnes to 300,000 tonnes of coffee per year, of which 70 per cent is exported to other countries. Planters are also demanding loans from commercial banks on low interest rates. “When banks are refinanced by Nabard at 4-4.5 per cent interest, planters should get loans at 6-6.5 per cent than being charged higher rates,” he said. Under the priority sector lending guidelines, there should be cheaper loans for planters , he added. Planters also seek to have copper sulphate classified as a fungicide than as an industrial chemical.

“This will provide much-needed relief, as the cost of this fungicide is putting a burden on planters,” Beliappa said. Copper sulphate is used to restrict defoliation in Arabica coffee and costs around Rs 8,000 for per 50 kg. “As a planter has to use around 60 kg of copper sulphate per acre of coffee plantation, government should classify it as a fungicide, which will see a cost reduction of this chemical,” he added.

Another planter noted copper sulphate was used for this purpose in many other plantation crops.

Ramesh Rajah, president of the Coffee Exporters Association, said the government should also have a policy for stabilising the rupee. “With no restriction on capital inflows to the country, the rupee is set to appreciate, which has adverse impact on coffee exporters," he said.

He said the sector should be provided with low interest loans at par with other agricultural advances for growth of this industry. "Indian exporters can't compete with other exporting countries where the interest rate charged is less," he added.

Jabir Ashgar, vice-chairman of the Coffee Board, said the demands of the planters would be considered at its next meeting, on November 4. "The commerce ministry is of the opinion that coffee prices are at an all-time high. So, they are less inclined to give concessions on interest rates," he said.