The bill, introduced by parliamentary affairs minister Madan Lal Khurana, formalises the 100 per cent free sale quota given to coffee growers in September 1996.

Prior to 1996, small growers having a land holding less than 10 hectares were allowed 100 FSQ but large growers were given only 70 per cent FSQ.

The 100 FSQ to small growers followed the permission given for 50 per cent FSQ by the government in 1993 to both small and large growers. Before 1993, coffee growers had to pool their entire produce with the Coffee Board, which then made allocation for both the domestic market and exports.

The statement and objects of the bill - Coffee (Amendment) Bill, 1998 - said the FSQ announced in September, 1996,had to be formalised to help growers and exporters plan their activities in time.

As per the bill, the export cess is proposed to be raised to Rs 200 per quintal from Rs 50. The money collected through the cess will go towards research and development efforts of the Coffee Board.

The Coffee Board's role is also sought to be limited to that of a promotional body, including research and development activities, from its earlier function as a market regulatory body.

The bill now proposes that only curing houses, which receive coffee from any estate, report details to the Coffee Board for purpose of statistics.

Though the 1997 bill had proposed coffee growers to give details of their produce, it was shot down by the parliamentary committee, which opposed any curbs on the growers, a majority of them small farmers.

India produces around 2.25 lakh tonnes of coffee, two-thirds of which is exported. India's coffee production accounts for a meagre 3 per cent of total global output.

Khurana introduced thebill as commerce minister Ramakrishna Hegde was busy in the Rajya Sabha. The bill was earlier introduced in the 11th Lok Sabha in April 1997, but it lapsed after reference to the parliamentary standing committee due to dissolution of the house.

INSIGHT
Cartels may be formed

By giving a 100 per cent free sale quota to coffee growers, the government has virtually taken away all controls that the Coffee Board exercised on them. However, there could be a danger that consumers could be affected by cartels of large coffee growers and traders who have been known to keep prices high artificially. There have been instances where despite the fact that international prices had been falling, domestic prices showed a rise.

While the increase in export cess is a welcome move as far as domestic consumers are concerned, easing of coffee imports into the country should also be given a serious thought.