The Hindu : Karnataka / Bangalore News : ‘Let north India wake up to coffee’

Online edition of India's National Newspaper
Wednesday, Nov 05, 2008
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Karnataka

Karnataka - Bangalore

‘Let north India wake up to coffee’

V. Sridhar

Coffee Board chairman urges growers to reduce dependency on export, target home market

‘Cost of wages can be offset by raising productivity’
Decline seen in growers opting for insurance cover

— Photo: K. Murali Kumar

New range: Coffee and tea cultivation equipment on display at the UPASI-KPA Coffee Conference, in Bangalore on Tuesday.

Bangalore: The Chairman of the Coffee Board, G.V. Krishna Rau, urged coffee growers to explore opportunities in the domestic market instead of depending entirely on exports.

He was addressing the Coffee Conference organised by the United Planters’ Association of South India and the Karnataka Planters’ Association, in Bangalore on Tuesday.

Viability

Mr. Krishna Rau said the viability of the Indian coffee industry “was brought into question even if there were minor changes in the environment it operates in.”

Delayed production, the effect of the monsoon, pest attacks, global price levels and even foreign exchange rate fluctuations had an adverse impact on the coffee industry, he said.

“The coffee economy is an unequal world, those who produce it are powerless,” he said.

New focus

He said there was no point in complaining about high wage levels in the plantation sector because workers were entitled to a better standard of living.

Instead, he urged growers to focus their attention on improving productivity so that output and wages could rise at the same time. Mr. Krishna Rau said the slide in international prices had to be placed in the context “of the fact that prices have fallen from their highest-ever levels”.

For pleasure

He pointed out that coffee is consumed for pleasure. “The consumer will not drink coffee whatever the cost,” he added.

Mr. Krishna Rau said coffee growers had not shown an inclination “to participate in managing risk”.

Decline

He pointed out that the number of growers opting for insurance cover to protect against crop losses during the monsoon had declined from 12,000 last year to 7,000 in the current year. “An element of greed has crept in,” he said.

Growers need to engage in extensive replantation because “most of the plantations have gone beyond their productive age,” he said.

Future pressures

He also urged growers to reduce their dependence on green coffee and on the export market.

He pointed out that the Free Trade Agreement with the Association of South East Asian Nations (ASEAN) would result in import duties dropping from the current level of 100 per cent to 40 per cent by 2018. Indian growers were likely to face pressure from imports from Indonesia and Vietnam, he said.

New market

Growers should also seriously explore markets in north India to reduce their dependence on exports.

He pointed out that domestic consumption is growing at about 6 to 7 per cent a year.

Mr. Krishna Rau said the post-monsoon estimate of the 2008-09 crop (October 2008-September 2009) is likely to be revised downward.

The figures are expected to be released later in November.

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