The Commerce Ministry has written to the Finance Ministry to put off recovery of debts from the small and marginal coffee growers, Union Commerce and Industry Minister Anand Sharma has said. A financial relief package for the coffee growers would be taken up for consideration by the Union Cabinet soon.

``We have written to the Finance Ministry asking them to issue the necessary directions to the banks to put off the recovery of debts from the coffee growers and farmers till the financial relief package is given the green signal by the Union Cabinet,” Mr. Sharma told visiting Indian journalists here. “The draft note is ready and has been circulated. It will be put up for the consideration of the Cabinet very soon in tune with the promise of the UPA regime to give relief to small and marginal coffee growers.”

Mr. Sharma said the relief package would address the debts of the small and marginal farmers who are facing difficult times. Prime Minister Manmohan Singh and Congress president Sonia Gandhi were very keen on this package, he said.

Mr. Sharma said the plantation sector had structural issues. In the case of tea and coffee, proper rejuvenation was not done and money was not invested back into the tea and coffee gardens by the farmers. “The government proposes to come out with a comprehensive package for the entire plantation sector. The massive relief package for tea gardens has proceeded very well. By the time it is completed and implemented we will see massive change in productivity levels. We have worked out the package for coffee growers and are working on a plan to support the spices and rubber sectors and cardamom farmers. The government had to step in as these were labour intensive sectors and it was its responsibility to ensure prevention of job losses.

Mr. Sharma said the Union Cabinet had set up an EgoM headed by Finance Minister Pranab Mukherjee to address the structural issues of the plantation sector and come out with a proper plan of action. Experts from one institute in Bangalore and another in Thiruvananthapuram had been asked to conduct studies on the sector and report to the EGoM.

Coffee prices had fallen sharply in the international market ahead of the harvest season from October in a number of countries, including India. “Although average monthly prices in August were higher than in July, prices of all four varieties of coffee seem to be on a downward trend as the new crop year approaches in a number of countries,” International Coffee Organisation (ICO) has said. Bean prices fell by 10.44 per cent in August in the international market. Besides the weather uncertainties, coffee growers were also facing a debt burden.

Coffee exports dipped by 19 per cent during January-August this year to about 1.33 lakh tonnes due to high prices of the Indian bean. Officials said that the debt relief package could comprise an outright waiver of about Rs. 450 crore in bank loans and extension of crop insurance cover for Rs. 800 crore.