Relief likely for coffee growers

There could be relief in sight at last for coffee growers. The Centre is expected to approve the long-awaited 'bailout' package this week. In anticipation, representatives from the coffee segment are rushing to the capital to iron out last minute glitches, if any.

Karnataka Planters Association and United Planters Association of Southern India sources said the finance ministry's nod is expected in three to four days. They expect specific interest waiver/rebate directives to come out in the first phase of the package.

They said that the Union commerce ministry had finalised the package about 10 days ago and forwarded it to other ministries for their opinion and approval before December 10. With very few return queries, the bail out package will be passed shortly.

The coffee sector, battered by the 40 per cent price fall between 2002 and 2003, three years drought and the white stem borer pest that destroyed crops, had pleaded to the Union government to write off interest and soften their loan terms.

They said that at the current price level of auction, it will be difficult to service debts. However with some recovery in sight, they said an immediate release of package will help them.

Nearly 1,78,308 coffee estates have been hit with world coffee prices plummeting. The industry estimates the cumulative indebtedness of coffee estates at over Rs 626 crore. Taking a six-year spectrum from 1998-99 to 2003- 04, the loss is said to be over Rs 1,210 crore. Also, the capital loss due to decline in per-acre value is projected around Rs 6,197 crore.

Though, pending loans with effect from 2000-01 have been merged into a special coffee term loan (SCTL) rehabilitation package with interest dues being capitalised, growers said it did not help as the continuing crisis is causing repayment defaults.