The Hindu Business Line : Coffee Board seeks higher subsidy for replantation, mechanisation

Tackling competition: (from left) The Chairman of the UPASI coffee committee, Mr Shaji Philip, the President of UPASI, Mr T.V. Alexander, and the Chairman of the Coffee Board, Mr G.V. Krishna Rau, at the UPASI-KPA coffee conference in Bangalore on Friday.

Our Bureau

Bangalore Nov. 13 In a bid to support the domestic coffee growers face the situation arising out of Free Trade Agreement with the Association of South East Asian Nations (Asean), the state-run Coffee Board has asked the Government to increase subsidies for farm mechanisation and upgrading processing infrastructure.

Under the FTA with Asean, India has agreed to reduce the duty on coffee imports by five per cent every year over the next 10 years starting January 2010. Currently, India levies a 100 per cent duty on green and roasted coffee imports and reduction would mean duty levels coming down to 50 per cent by 2019.

Cheaper imports

Growers fear that reduced duty structure would hurt their competitiveness and expose them to cheaper imports from countries such as Vietnam and Indonesia that have emerged as low-cost producers in recent years.

Mr G. V. Krishna Rau, Chairman, Coffee Board, said the board has put forth a proposal to the Government seeking an increase in subsidies for coffee activities such as replantation, quality upgradation and farm mechanisation among others. Such increase in support, Mr Rau feels would attract investments to the sector thereby resulting in quality coffee output.

Mr Rau called upon the members of the Karnataka Planters Association (KPA) and the United Planters Association of South India (UPASI) to improve the quality of their coffees and focus on producing more of washed robustas, which command a significant premium of over $500 a tonne in the overseas market. He was speaking at the 51st Annual General Meeting of KPA.

The value-added washed robustas are produced by pulping the coffee fruits and washing the beans subsequently. Growers require adequate infrastructure such as the pulping and washing units and driers to produce the washed robustas. As 98 per cent of the country’s coffee producers are small growers, they are unable to afford investments in setting up and maintaining the required infrastructure. As a result, they just dry the beans and sell it.

Robustas account for about two-thirds of India’s coffee output of an average of 2.7 lakh tonnes. Washed robustas account for less than an eighth of the total robusta output of two lakh tonnes. “There’s great potential for our washed robustas in the international market,” Mr Rau said adding the country could increase the output of value added robustas to as high as one lakh tonnes.

The board has urged the Government to increase subsidy to 50 per cent of the total investments in infrastructure for quality upgradation for all category of growers. Investments in setting up pulping and washing units require investments of Rs 1-10 crore.

It has also suggested increasing the re-plantation subsidy to 50 per cent for growers owning less than 10 hectares and 25 per cent to growers with over 10 hectares.

Farm mechanisation subsidy has been suggested at 50 per cent for holdings upto 20 hectares and 30 per cent for over 20 hectares.

More Stories on : Coffee | Industry Associations

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Unstable weather forecast across country over weekend

New cane seeds could wipe out sugar shortage

Rubber prices end flat

Demand-supply gap in rubber likely to stretch further

Assam, Dooars CTC teas rule firm

Nilgiris tea output falls 9.6% in Oct

Tea prices stay weak at Kochi auction

Coffee Board seeks higher subsidy for replantation, mechanisation

Pepper futures end lower