"Coffee Debt Relief Package 2010

            The Coffee growers in the country have been facing long standing financial problems ever since the coffee prices fell to very low levels during the period 2000-2004. Relief Packages in the form of Special Coffee Term Loan 2002 and Special Coffee Relief Package 2005 were sanctioned to revive coffee sector, besides other initiatives like PM's Relief Package for Debt Stressed farmers and Debt Waiver and Debt Relief Scheme 2008. However, a large number of affected growers did not get the required relief.

            The Government has now decided to approve a fresh Coffee Debt Relief Package, specifically for the small growers. As per this, for pre-2002 loans, 50 per cent of the total liability shall be waived subject to a maximum benefit of Rs.5 lakh per farmer to be borne by Government of India. An additional 25 per cent shall be waived by banks and balance shall be rescheduled. The Package also envisages 20 per cent waiver of liability under Crop Loans with 10 per cent each being borne by the Government of India and banks respectively, subject to a maximum benefit of Rs.1 lakh. For Post-2002 Term Loans, 10 per cent of the total liability shall be waived subject to a maximum benefit of Rs.1 lakh. The Package shall also provide relief to medium and large farmers who shall be permitted to reschedule the loans. The total financial implication for the Government of India is Rs.241.33 crore while benefit to Coffee growers will be around Rs.362.82 crore.

Debt relief package for small coffee growers: government and banks share loan waivers and rescheduling measures. A targeted relief scheme provides a Debt Relief Package for coffee growers: pre-2002 term loans receive 50% waiver by the Government (capped per farmer), 25% waiver by banks, and the balance rescheduled; crop loans receive a 20% waiver split equally between Government and banks (subject to a cap); post-2002 term loans receive a 10% Government waiver (subject to a cap); medium and large farmers are allowed rescheduling. The package allocates financial burden between Government and banks and sets per-beneficiary caps and rescheduling rules.