This is a discussion on special coffee term loans (SCTL) within the Product And Services forums, part of the Miscellaneous category; The union commerce ministry has agreed to consider additional measures to bail out the beleaguered coffee growers in Karnataka passing ...
The union commerce ministry has agreed to consider additional measures to bail out the beleaguered coffee growers in Karnataka passing through a difficult phase for around the past five years.
E.V.K.S. Elangovan, union minister of state for commerce, told the Karnataka Planters Association (KPA), the representative body of the coffee growers, that the government would soon consider lowering the interest rates charged on the special coffee term loans (SCTL).
"The 5-3 percent interest subsidy on the working capital loans for small as well as large growers would also be extended," Elangovan said at the 47th annual conference of the KPA here Wednesday.
"We have already requested the finance ministry to direct banks to reduce the interest burden on growers for SCTL to nine percent from 13.5-11 percent levied currently. We will consider seeking cabinet approval to extend the time-limit to avail the loans under the special relief package."
Though a Rs.1.91-billion coffee package was announced by the ministry in July to re-phase the loans and waive two-thirds of interest on them during the three-year moratorium period, only 12,000 growers have availed themselves of the scheme so far, with several more left out due to the ambiguity in the interest rates.
"In view of the crises faced by the growers on multiple fronts, the government has also decided to write off previous development loans and interest to the tune of Rs.640.50 million availed of by growers of small and tiny holdings.
The total financial benefits being offered to the growers under the package amounts to Rs.3.82 billion," the minister disclosed.
To address the cyclical problems of the coffee plantation sector, Elangovan said the ministry was working on a long-term strategy to bail out the growers from the crises arising out of price volatility, growing competition from other producing countries like Vietnam, damage to plants due to white stem borer disease and sluggish domestic consumption.
Coffee and tea growers have been passing through a difficult phase since the past four-five years due to poor realisation from their plantations, global supply exceeding demand, accumulated debts and lower production in drought-prone areas.
"Even as we consider the demands sympathetically, all the stakeholders in the coffee chain should strive to improve productivity, lower costs, enhance quality and go for value-added products such as specialty coffees, which have a great demand overseas.
To sustain the coffee economy, planters, producers, marketing agencies and retail outlets should aggressively promote the domestic consumption, which has been stagnant at 65,000 tonnes over the years," Elangovan asserted.
On the demand for budgetary support to step up generic promotion of coffee and tea, Additional Commerce Secretary Abhijit Sengupta said due to resource constraints and compelling reasons, the government was not in a position to fund such a scheme.
"The promotion of coffee in the domestic market is not the responsibility of the government. We will, however, facilitate such a promotion with inputs and logistics," Sengupta said.