Coffee Board plans long term strategy to solve crisis

The Coffee package announced in June by the Centre has only provided an immediate relief, and not a long-term solution and there is a need to find a long-term sustainable strategy to help growers overcome continuing crises.

According to G V Krishna Rau, chairman, Coffee Board the problems of the coffee industry lie largely in the demand-supply imbalance.

Historically, low grower realisations have resulted in reduction in farm inputs and farm operations. This in turn has resulted in reduced productivity and a further drop in grower incomes.

"Despite the improved price situation prevalent today, compared to the prices prevailing between 2000 and 2003, most of the small and medium growers are yet to get out of the woods," he said.

Indian coffee growers need to emulate Brazil which has made remarkable strides in increasing production, productivity and quality in recent years. Apart from this, Brazil has also greatly succeeded in expanding domestic coffee consumption from about 5 million bags to 15 million bags in a span of some eight years, he said.

Delivering a keynote address on "Outlook on Coffee "" Indian Situation and Global Scenario", at the KPA-UPASI conference, here on Tuesday, Krishna Rau said the global coffee supply-demand situation for the next few months is expected to be more or less balanced if not "bullish".

Brazil is likely to produce over 40 million bags of coffee this year. Vietnam is also likely to produce more than what it produced last year. However, due to the recent hurricanes, the Central American crop is likely to be hit, he said.

Arabica (Plant A) prices will be in the region of 95-105 cents per pound whereas the Robusta (cherry AB) prices will be around $900-1,000 per tonne.

Referring to the outcome at the recent World Coffee Conference in Salvador in Brazil in September, he said there is a need to ensure a fair balance between production and consumption for a sustainable coffee economy.

"Unless the consumption and demand increase the income of producers cannot increase," he said. Rau called for focussed efforts to develop a coffee culture as well as improve the quality of coffee.

"The main hurdle is quality. As long as the coffee available for domestic consumption continues to be indifferent it will become difficult to develop a coffee culture especially for pure coffee. Without developing a vibrant coffee culture within the country, it becomes difficult to increase the local demand and thereby grower realisations," he added.

He said the Coffee Board has started looking at various measures in terms of its long term strategy.

"We have also started a dialogue with different growers' associations. We would like active inputs from associations like the Karnataka Planters Association and UPASI to firm up the long-term strategy to make Indian coffee a sustainable industry for all the players in the value chain," Rau stated.

The white stem borer infestation is of serious concern to the Arabica growers. The board has come up with a multi-pronged response to address the issue. Efforts are being made to provide direct benefit to the growers like relaxing the norms for sanctioning replanting subsidy, he added.