Coffee Board Plans Coops For Small Growers

Predicting that liberalisation would only increase the role of the coffee board, its chairman, Philipose Mathai says over 98 per cent of coffee growers are small ones who may become targets of exploitation at the hands of middlemen in the decontrolled era.

We will help them by setting up cooperative societies for marketing their produce at competitive prices, Mathai said in Bangalore.

He said the board has requested all the coffee producing states to set up cooperative societies for marketing coffee.

Now since the issue of pooling is out of the way, the board will coordinate with the state governments in setting up these societies, he said.

 

The board, which was the sole marketing agency for coffee in the country till four years back would also operate as an apex body keeping a watch on the market besides concentrating on research and development and extension activities, he said.

The board will emulate the example of tea board in finding internal market for coffee, while it will follow the example of rubber board in helping growers, he said.

The board has been forced to reorganise itself as the abolition of the pooling mechanism has taken away its marketing responsibility.

Faced with reduced responsibilites, the board has already retrenched about 1,200 employees through voluntary retirement scheme. Mathai said another 300 employees would opt for VRS this year. That would leave coffee board with 200 employees in marketing and another 800 in other departments. He said part of the Rs 9 crore budget of the board would be financed by growers.

However, plantation industry sources said the board could continue with the optional pooling till a clear marketing system evolved.

Even though the free sale quota for small growers was raised to 100 per cent in 1994-95, many of them continued optional pooling as they lacked the infrastructure to market coffee on their own.

Both Mathai and the plantation industry said the scrapping of mandatory pooling would not affect coffee prices as very little auction was taking place even now.

Even though it was mandatory for large growers to pool 30 per cent of their produce, the actual pooling available with the coffee board was much less.

After the free sale quota came into being the board has been pooling about 10,000 tonnes a year. Sources say a majority of even this 10,000 tonnes came from small growers, who opted for optional pooling.

On the anticipated shortage of coffee for domestic consumption by the year-end, plantation industry sources said it would have been felt even if the mandatory pooling had continued.

Sources said it would take some time for the domestic prices to come down to the global prices.

However, All India Coffee Merchants Association felt the domestic prices, which were already high, would shoot up due to the scrapping.

The association general secretary, A K Jayakumar, said coffee prices would be affected by the scrapping of mandatory pooling and coffee board's role being reduced to propagation and research.

The scrapping mandatory pooling was based on the recommendations of the four sub-groups of the board to the commerce ministry.