Hedging product for coffee growers on cards

Hedging product for coffee growers on cards
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First Published: Thu, Jul 12 2007. 03 01 PM IST
Updated: Thu, Jul 12 2007. 03 01 PM IST
PTI
Bangalore: India’s Coffee Board is working on launching an instrument to help growers to hedge their market-related risks, a safety net expected to act as a stabilizing force.
“We are trying to work out some mechanism to provide an instrument to farmers to be able to use it as hedge”, Coffee Board chairman G V Krishna Rau told PTI here.
Rau expects such a mechanism to be implemented by the end of the current fiscal.
It’s a purely Coffee Board, based in Bangalore, intervention, he said. “Since it has to be market-related intervention...therefore, the exchanges etc will have to come into play. We are in dialogue with them”.
“If we are able to provide this sort of instruments to the growers to hedge their risks — whether it’s weather-related risk or market-related risk — to a large extent, these should give stability in the long term”, Rau said.
Rau said the Board will seek to organise small growers — who make up 99% of the total coffee growers in the country — and form them into small groups so that they have better bargaining power and get better value for their produce.
“Small growers are unable to deal with market because volumes are small”, he said.
The small groups would also help the Board to reach out to growers, in terms of transfer of technology, and also help them improve quality of produce and agricultural practices and lead to better bargaining power to get a better price.
Rau also said the Board plans to offer assistance to growers who want to set up processing plants for value addition.
The Board has also proposed to make the scheme, which offers subsidy support to growers for various infrastructure interventions, more broad-based and meaningful.
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First Published: Thu, Jul 12 2007. 03 01 PM IST