Press Information Bureau

Government of India

Ministry of Commerce & Industry

12-December-2012 17:39 IST

Un-remunerative Coffee prices, severe drought conditions, heavy rainfall and white stem borer infestation affected the Coffee sector during the early part of last decade which led to decrease in production, productivity and inability of Coffee growers to service their debts and make proper investments in their farms in the first half of the decade. However, due to favourable weather conditions and remunerative prices in the recent years and implementation of various development schemes by the Coffee Board, the Coffee production has increased from 2.71 lakh MT in 2003-04 to 3.14 lakh MT in 2011-12.

With a view to providing relief to Coffee growers during the distress period, relief measures have been extended by the Govt. of India from time to time, viz., Special Coffee Term Loan (SCTL) in April, 2002 and the Special Relief Package in June, 2005. Further, in order to help the coffee growers to deal with the accumulated debt burden of coffee crisis period of 2000-01 to 2005-06, the Coffee Debt Relief Package-2010 was sanctioned for the debt ridden small coffee growers and Rs. 241.00 crore was released to the Coffee Board for settling the claims. The waiver benefit was restricted to the small coffee growers (upto 10 hec.) and the medium and large growers were extended the benefit of rescheduling their loan. The entire amount had been utilized for the purpose. As additional claims from the banks were still pending, on the request made by the Coffee Board, additional fund of Rs. 58.00 Crores was released to the Coffee Board under CDRP-2010 for settling the pending/supplementary claims. About Rs. 52.20 crores of this amount has also been utilized. So far, 1,35,260 coffee growers have already benefited and the scheme has helped the growers to reduce their loan liability and reschedule their balance outstanding loans.

Representations were made by some Members of Parliament, the Karnataka Growers’ Federation etc. requesting for waiver of interest on the loans taken by the medium and large coffee growers. The matter was examined in consultation with the Ministry of Finance. However, the request was not found feasible on the ground that such a waiver would have financial implications for banks and result in similar kind of demands from other sectors.

This information was given by the Minister of State for Commerce & Industry Dr. D. Purandeswari in written reply to a question in Rajya Sabha today.

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DS/RK

Debt relief measures for coffee growers provided waivers for smallholders and loan rescheduling; interest waiver for larger growers denied. Central relief measures for distressed coffee growers comprised the Special Coffee Term Loan (2002), a Special Relief Package (2005) and the Coffee Debt Relief Package-2010, under which funds were released to the Coffee Board to settle small-grower claims and to reschedule loans of medium and large growers; the package limited waiver benefits to smallholders, utilised allocated funds with supplementary allocations for pending claims, and after finance ministry consultation rejected an interest waiver for medium and large growers due to financial implications for banks and potential cross-sectoral demands.