Mixed Reactions To Coffee Bailout Scheme

Bangalore, Aug 25: | Updated: Aug 26 2002, 05:30am hrs
The coffee growers of Karnataka has expressed mixed reactions on the announcement of relief measures for coffee growers by Union minister of commerce and industry Murasoli Maran in colaboration with the Reserve Bank of India (RBI).

Commenting on the relief measures Cofei chairman and Karnataka Cofee Brokers Pvt Ltd managing director Arun Bidappa said, There is nothing new in the package which would benefit the growers in the long term.

According to Mr Bidappa, the impact of the package will depend on how the banks respond to the growers requirements.

We would like to inform the Centre to treat coffee as an industry and give full export benefits and prevent us from the hassles of sales tax and other levies. Also coffee producer-exporter need to be freed from agriculture income tax, Mr Bidappa said. The relief package, said to be an improvement on the earlier package of special coffee term loan (SCTL), includes features like raising of SCTL spread over from seven to nine years, and nine years and above by the concerned banks after an assessment of individual cases, moratorium period for payment of principal component of the loan could be raised by banks to two to three years. Banks could take decision regarding eligibility of fresh crop loans on a case to case basis, banks can provide export packing credit finance for producers exporting coffee from the proceeds of which agricultural loans can be liquidated, etc. Speciality Coffee Association of India chairman and Balanoor Plantations and Industries managing director Ashok Kuriean said, The relief measures like this at the time of crisis is a welcome move and gives a breather for the coffee growers. However, Mr Kurien added that the coffee growers would appreciate if the government would consider the relief package on a regular basis so that the productivity in the country does not get affected when compared to other parts of the world.

About the SCTL restructuring, Mr Kurien said the raising of repayment period for three years is also beneficial to the Indian coffee growers. Former chairman of Karnataka Planters Association Peter Mathias welcomed the move as a good improvement, but added that it would only help marginally as the main crisis is the price crash. According to him the price crash should be handled mainly by the growers by increasing productivity and quality which only can sustain the coffee sector in the country.