Central dole gets thumbs up from coffee growers

The Central government relief package for coffee plantation sector will immensely benefit growers who are going through a rough patch for the last three years.

Growers were burdened with huge loans and interest payments in coffee growing regions like Chickmagalur, Hassan and Kodagu districts.

After the huge losses of the past three years and the burden of accumulated debt, the coffee package as approved by the Central Cabinet will go a long way towards stabilising the coffee industry and helping more than 30,000 small and medium growers, said Anil Kumar Bhandari, president, The United Planters Association of Southern India (UPASI).

As per the package, the accumulated interest of Rs 287.1 crore under the Special Coffee Term Loan (SCTL), announced three years ago, will be equally divided between the central government, banks and growers.

This has brought down the accumulated interest to be paid by the growers to Rs 95.7 crore. The Centre's share of interest in SCTL will be provided through an additional budgetary allocation of Rs 95.70 crore to the department of commerce to be routed through the Coffee Board during 2005-06.

Reacting to the government's relief package, Karnataka Plantation Association's (KPA) secretary, Vijay Karnad, said the government decision will immensely benefit growers who have been going through a rough patch in the last three years.

Although the price of coffee beans has increased in the last six months, the prolonged price fall in the previous three years was so devastating that the growers were not even able to cover their cost of production.

Besides the latest initiative, the central government had implemented a number of developmental schemes through the Coffee Board like providing financial and technical assistance to the coffee growers.

Also the government had implemented a scheme providing loans from financial institutions at the concessional rate of 5 per cent to the small coffee growers.

Furthermore, the commerce ministry had interceded with commercial banks for rescheduling the loans of coffee growers and extending fresh crop loans to this sector.