The Hindu Business Line : New relief measures for coffee growers

THE Government on Friday announced a new package of relief measures for coffee growers including a restructuring of the `Special Coffee Term Loan (SCTL)' announced earlier this year.

The essential features of this package, which has been framed by the Commerce Ministry in consultation with the Reserve Bank of India (RBI), includes empowerment of the banks to restructure the SCTL to 9 years and above after making an assessment of the merit of individual cases. SCTL is currently spread over 7-9 years.

Further, banks have been allowed to raise the moratorium period for payment of principal component of the loan from two to three years provided servicing of interest is also undertaken by the borrower concerned.

An official release said a number of long term loan components which had been earlier excluded from the purview of the earlier SCTL had now been included if these could be related and established that the loans were essentially for coffee-related operations.

It has now been specified that 75 per cent of the previous dues had to be repaid to be eligible for fresh crop loans. Banks could take a decision in this matter on a case-by-case basis, subject to approval by their respective boards.

On producers exporting coffee, the release said "banks can provide export packing credit finance from the proceeds of which the agricultural loans can be liquidated''.

Meanwhile, Government is considering continuation of the existing interest subsidy scheme for small growers holdings 10 hectares and below. It is also planning to extend this relief measure to coffee growers of other categories also.

The Government had during last financial year put in place an interest subsidy scheme (5 per cent) for coffee growers with holdings of 10 hectares and below.

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