14.09 hrs.Title: Problems being faced by coffee growers in Karnataka due to collapse of price in international market and steps taken by the Government.
(KANAKPURA): Sir, I call the attention of the Minister of Commerce and Industry to the following matter of urgent public importance and request that he may make a statement thereon:
“The problems being faced by coffee growers in Karnataka due to collapse of price in the international market and steps taken by the Government in regard thereto. ”
THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI RAJIV PRATAP RUDY): Mr. Speaker, Sir, in reply to the Calling Attention Motion given by the hon. Member of the House, I seek your permission to make the following statement.
At the outset, I would like to inform the hon. Members of the House that no incident of suicide by coffee growers has been reported.
Urgent attention has been drawn by the hon. Member towards the problems being faced by the coffee growers in Karnataka due to fall in the price of coffee. In this regard, I am giving some background of the coffee price situation and details of steps taken by the Government of India for the benefit of coffee growers in the country.
The Coffee prices in India are largely influenced by the New York Exchange for Arabicas and London Exchange for Robustas. The domestic prices of Indian coffee during the last four-five years both for Arabica and Robusta have been higher than the international prices of the two varieties. This is despite the fact that 80 per cent of the coffee is exported.
In recent times the international coffee prices have fallen due to surplus of production in the producing countries overtaking consumption in different parts of the world. The price fall has affected all the coffee producing countries including India. The Indian coffee growers are not getting the same prices today as they were getting two-three years ago. Even so, the domestic prices of coffee are higher than the international prices.
In the context of the current crisis faced by the coffee growers, the Government of India / Coffee Board have taken a number of steps for the benefit of the coffee sector which include interest relief, financial assistance to Indian coffee exporters for reducing the handling costs, waiving of penal interest to the tune of Rs. 9.84 crore on the developmental loans, rescheduling of crop loans of coffee growers and a package of relief by the commercial banks and NABARD under the direction of the Reserve Bank of India. This package envisages all types of outstanding coffee loans as on 30th June, 2002 and not classified as Non-Performing Assets (NPAs), will be consolidated into a single term loan namely Special Coffee Term Loans (SCTL) 2002. The repayment schedule of the SCTL will range between seven to nine years including an initial repayment holiday (moratorium) of two years, subject to review thereafter. During the moratorium period, the banks will charge one per cent less interest on SCTL.
The Government of India have also undertaken several steps to increase domestic consumption of coffee. In this direction, the Government of India / Coffee Board has taken initiative to encourage procurement and marketing of coffee by Indian Coffee Marketing Cooperative Limited (COMARK) in collaboration with cooperative societies, namely National Dairy Development Board (NDDB) and Gujarat Cooperative Milk Marketing Federation (GCMMF) (Amul) etc.
14.13 hrs. (Shrimati Margaret Alva in the Chair)
During the Tenth Plan period, the Coffee Board would be implementing a number of plan schemes supported by suitable financial incentives for development of coffee sector, to improve productivity and quality of Indian coffee to achieve competitiveness in the global markets. The Coffee Board has been allocated a sum of Rs. 300 crore during the Tenth Plan period, as against Rs. 124 crore during the Ninth Plan for implementing coffee developmental schemes.
Sir, the Government of India is fully seized of the problems being faced by coffee growers and is taking all suitable ameliorative measures to protect the interests of the Indian coffee growers. I am hopeful that the steps taken by the Government of India would bring about a positive impact on the plight of the growers and improve the situation in the coming days.
SHRI H.D. DEVE GOWDA : Madam Chairperson, I would like to ask certain clarifications from the hon. Minister of State for Commerce and Industry. You have stated in para 2 on page 2 as follows:
“procurement and marketing of coffee by Indian Coffee Marketing Cooperative Limited (COMARK) in collaboration with cooperative societies, namely National Dairy Development Board (NDDB) and Gujarat Cooperative Milk Marketing Federation (GCMMF) (Amul) etc. ”
May I know what is the rate fixed for the procurement of the coffee seeds from the growers? I would request you to kindly make a note of the points as I do not want to repeat again.
What is the procurement price fixed to purchase the coffee seeds from the growers? I want to know whether the co-operative societies have agreed to extend their co-operation to COMARK for procurement, whether the National Dairy Development Board has also agreed to co-operate in this connection to improve the situation in procurement and marketing and, similarly, whether the other organisation, Gujarat Co-operative Milk Marketing Federation has also agreed to co-operate. That is what he has said in his statement. Have all these organisations prepared to co-operate with COMARK? At what rate is procurement going to be made? Has he called the representatives of all these four organisations and discussed at his level?
Secondly, they have taken certain steps and asked the Coffee Board, with the co-operation of institutional finances, to give certain relief measures. I would like to know whether the relief measures proposed by the Government of India, that is, the Ministry of Commerce have been implemented according to the advice given by the Ministry of Commerce. Madam, I would like to just bring this to the notice of the hon. Minister, with your kind permission. A new package, what they call Special Coffee Term Loans (SCTL) 2002, is offered. Seventy five per cent of the previous loan should be deposited and then, they can avail of this benefit. Are the farmers in a position to pay 75 per cent of the loan to avail of the benefit of this so-called Special Coffee Term Loan? Are they capable enough to pay? The whole matter is that there is total collapse of the coffee industry because the international market is such. I would like to quote. In 1997, the price of 50 kilograms of Arabicas was Rs. 5,375. Today, its price is Rs. 1,870. The price of Robustas in 1997 was Rs. 1,309. Today, the price is Rs. 476. See the plight of the growers.
He has said that they have taken certain measures which are going to help them. An allocation to Coffee Board has been increased to Rs. 300 crore in the Tenth Plan from Rs. 124 crore in Ninth Plan. It is only for certain measures to improve the quality and to improve the production. I do not want to repeat all those details, but I would like to know whether these steps, which they have proposed, are going to bail out the coffee growers at the present juncture. That is the issue now.
I do not want to take up almost all the issues which he has mentioned in his statement. The hon. Minister has said that no incident of suicide has been reported, but I must say, because I know full well the present situation of the coffee growers, that 130 people have committed suicide in Karnataka. An Expert Committee was constituted and the Expert Committee has also given its Report to the Government of Karnataka. I do not know who has given this report that nobody has died. If the hon. Minister wants to have the names of those families who have suffered and who have died, I can give those names. At the outset, he has said that nobody has committed suicide. One hundred and thirty people have died including the people who were well engaged in the plantation crops and other crops.
Brazil has provided a 12-year reprieve for debt repayments and lower interest rate to farmers on all debt repayments. The quantum of relief they have given is 600 million dollars. In Vietnam, the Central Bank has ordered credit institutions to halt collection of loans and also not to levy interest on coffee growers for the next three years.
In Colombia, the Government has approved a debt relief package approximating about 270 billion pesos to restructure the coffee growers’ loans. In Mexico, a bail out plan worth US $ 209 million and a Minimum Support Price Scheme have been introduced. What is it that you have done? Have you made any attempt to fix the Minimum Support Price? You have not fixed the procurement price. At what rate, is COMARK going to purchase. The market has totally collapsed. At what price, they have to procure and wherefrom will they get the money or who is going to finance them? Will you kindly enlighten us on all these things?
You said that the Coffee Board has given a relief package by way of waiving the penal interest to the tune of nine crore rupees. This waiving of penal interest does not pertain to either the previous year or the last two years, when the prices have fallen. It does not pertain to this period. This waiving of penal interest pertains to the developmental loans taken by various small holders, which have been pending for the last twenty years. It is in that connection that the penal interest has been waived. This waiver is not for the current period, when the international prices have collapsed. This penal interest to the tune of nine crore rupees has been pending for the last twenty years; these arrears are due from various defaulters. This has not at all helped the farmers.
In Karnataka, what is the loan which a farmer has taken? He has taken a loan of Rs. 18,000. In Kerala, in respect of small farmers, the loan component is about Rs. 8,000 and Rs. 12,000. In Karnataka, the farmer has taken a loan of Rs. 22,000 for Arabica, and Rs. 18,000 for Robusta. This loan component was fixed by the Technical Committee where the Coffee Board is also a party. It has not been done on an ad hoc basis by the banks or the financial institutions. Based on the recommendations of the Technical Committee where the Coffee Board is also a party, they have decided to provide financial assistance up to Rs. 22,000 for Arabica and Rs. 18,000 for Robusta. The package that the Government proposed through the Coffee Board is not at all going to bail out these growers. Seventy per cent to eighty per cent of the growers are small holders and Scheduled Caste people having one hectare, two hectares, three hectares, four hectares or five hectares of land. Their condition is very precarious. Will you kindly enlighten us on these points that I have raised?
The other thing is that you have to waive the entire interest component. It will not be a heavy burden on the Government. To bail out UTI, you have given Rs. 500 crore yesterday. Your goodself, Madam Chairman, has mentioned this yesterday while participating in the debate on Supplementary Demands for Grants. You have provided Rs. 500 crore to bail out UTI. To revive a bank, you have given Rs. 1,500 crore, and to another bank, you have given Rs. 1,300 crore. So far as these poor farmers are concerned, where 80 per cent are small holders, the Government has only waived the penal interest to the tune of nine crore rupees on the developmental loans pending for the last twenty years. It is a peanut. I think, irrespective of party affiliations, Members of the House should form a Farmers’ Forum and try to fight it out. The farmers are not beggars. The House should collectively fight out this battle.
SHRI RAGHUNATH JHA (GOPALGANJ): Yes, we are ready.
SHRI H.D. DEVE GOWDA : It does not matter, whether you are a Congress Member or a BJP Member. The whole House should take up this issue.
Will you kindly enlighten the House on the issues that I have raised? The first point is to waive the entire interest component. The second point is about the procurement price that you are going to fix for COMARK, particularly with the cooperation of the organisations that you have mentioned in your Statement. Thirdly, how much money are you going to provide to COMARK?
The Karnataka Government has asked for a soft loan. Some of my friends here should not mistake me when I say that the financial condition of the State of Karnataka is just like any other State Government. All States are running on borrowed money. The Finance Minister knows this, and no State is an exception to this. Almost all the States today are living on borrowed money. The same condition is also there in Karnataka. The Karnataka Government cannot pay Rs. 250 crore or Rs. 300 crore to procure these coffee seeds.
Can you not give a soft loan of about Rs. 300 crore to Karnataka or to COMARK? I am not pleading for any one State. You have given the Minimum Support Price in four or five States to procure wheat and paddy. I am not going to grudge it. I have myself given the bonanza to Punjab, when I was in the office. There is no question of any discrimination from my side. When you are spending so much of money for procurement of wheat and paddy, whether it is from Western Uttar Pradesh, Haryana, Punjab or Andhra Pradesh, how much money have you given for procurement of such grains from Karnataka? When I say so, nobody should mistake me that Deve Gowda is discriminating one State against another.
The other day, I raised the issue of sericulture growers, but no decision has been taken till today. The Chief Minister along with all other party leaders met the Prime Minister and other Ministers. What is it that you people have done? What exactly the Government wants to do on some of the issues that I have raised? Please let me know about this. I want a categorical answer from the hon. Minister of State.