The government will loosen control over the coffee sector by scrapping several archaic provisions of the Coffee Act 1942, and undertake all-round development of the sector with emphasis on domestic as well as export requirements and farmer welfare, according to the draft Coffee (Promotion and Development) Bill, 2022, prepared by the commerce ministry. The new Bill will replace the Coffee Act of 1942.
The extant law empowers the government to control the marketing of the commodity, and regulate its sale in both local and global markets, through the state-run Coffee Board. In this process, adequate focus on the overall development of the sector, in sync with liberalisation and modern-day realities, wasn’t given. Some of these outdated regulations that have stifled the sector’s growth, especially on marketing, will be abolished under the new law.
Moreover, the new Bill aims to address several new areas of functions of the Coffee Board. These include support for production, research, extension, quality improvement and the promotion of coffee and skill development of coffee growers. “Many of these activities were originally not included in the mandate of the Coffee Board but now they need to be incorporated into its functions and powers,” said a senior official.
The Bill is also aimed at “holistic promotion and development” of the coffee industry, covering activities such as the expansion of the cash crop in new areas, sustainable cultivation, raising production as well as productivity, exports, promotion and the marketing of coffee. It will not just create more employment opportunities but also benefit the entire coffee value chain, said the official.
India’s coffee production is estimated to rise 15% in 2022-23 from a year before to 393,400 tonne. Coffee exports reversed a Covid-induced slide to record a 42% year-on-year jump last fiscal, to exceed the $1-billion mark for the first time. In the decade starting 2010, the country’s coffee exports have maintained a roller-coaster ride, having remained shy of the $1-billion mark at least twice. This warrants additional efforts and better regulations to ensure both production and exports move up steadily, boosting farmers’ income in this process. The new Bill is aimed at doing just that, said the official.
The extant law was enacted when coffee was in short supply, and there was a quota system for both importing and exporting countries that were members of the International Coffee Organization. Since every bean of coffee grown in India was marketed through the Coffee Board, the state-run entity’s focus was divided. Consequently, the other functions of the board, including research, transfer of technology to coffee growers, production improvement and promotion of Indian coffees in overseas markets, were not given due importance, said the official.