Professional services firm Ernst & Young LLP has suggested coffee growers avail the services of MGNREGA workers to solve the issue of labour shortage and rein in the consequent high production cost.
If a draft report prepared by the firm on the strategic road map for the Indian coffee sector, the firm suggested the use of MGNREGA labour up to the yielding stage. Currently, only trenching activities inside coffee plantations are covered under MGNREGA.
The sector’s labour woes reached a boiling point in March after a large population of immigrant labourers returned to their home towns.
Ernst & Young was commissioned by the Coffee Board to undertake a study on behalf of the United Planters’ Association of Southern India and several coffee growers’ associationsincluding Karnataka Planters’ Association, Karnataka Growers’ Federation, Kodagu Planters’ Association.
The draft recommended that the Coffee Board formulate cost norms similar to the convergence guidelines for rubber. It also suggested that small farmers, who hold up to 10 hectare of land, should be given access to MGNREGA labour pool.
As per the draft, the coffee sector is currently staring at several challenges around cost competitiveness, price volatility and lack of premiumisation. Coffee farmers are not price setters but price takers and Arabica farmers are selling below the cost of production and have been incurring net loss in the last five years consecutively.
Clarity needed
Commenting on the recommendations, Coffee Board chairman M.S, Boje Gowda said, “A proposal to make MGNREGA labour available in the coffee sector is a positive thing. However, a lot more clarity has to emerge with regard to the specifics of the work. We have to decide what kind of work can be allotted to these labourers, because on a coffee plantation certain activities can be done only by skilled workers.’’
Echoing similar sentiments, UPASI president ALRM Nagappan said linking MGMREGA scheme with the coffee sector was a constructive idea though a detailed scheme was required. Only then, the coffee growers would be able to take advantage of the scheme.
Anil Kumar Bhandari, president, India Coffee Trust, was of the opinion that, for the record, every coffee farmer would be in favour of getting MGNREGA labour. However, the draft had not fleshed out the modalities of the proposal, it didn’t explain how it could be set up or what works could be given to those labours.
“As we all know, MGNREGA labour is primarily meant to create rural assets: roads, culverts, canals public buildings, public wells etc. The question is: how can individual coffee growers can use their services when there is no public asset is created? Also, the EY draft said it would save costs significantly, but didn’t explain how,’’ he added.
A final report will be out once the Coffee Board decides on cost norms and guidelines around the ‘nature of coffee work’ that could be allotted to MGNREGA workers.
