Kochi: The government is planning to keep large coffee growers out of the Rs600 crore coffee replantation initiative, scheduled to be launched in June.
The Coffee Board, a government trade promotion body, earlier had proposed to cover around 90,000ha under the plan and include large growers. Nearly 30% of that area has coffee plants, which are more than 40 years old that need to be replaced with new plants in phases.
The proposal, which had anticipated a government subsidy of Rs180 crore, has not yet received cabinet approval. Meanwhile, the government, sources say, wants to fine-tune the initiative and confine the replantation exercise to growers with land holdings of less than 10ha.
United Planters Association of Southern India (Upasi), a growers’ body, plans to take up the matter with the Union government next week.
G.V. Krishna Rau, Coffee Board chairperson, refused to comment on the development, saying he has not received any official communication from the finance ministry.
Small coffee growers, with less than 10ha, account for nearly 98% of India’s coffee growers, but their land holding is around 70% of the 382,000ha under coffee cultivation.
Their share in 270,000-tonne annual coffee production in India is less than 60%. In other words, 2% of large growers who hold around 30% of the land and contribute more than 40% in the total output.
Anil K. Bhandari, a leading coffee planter in Karnataka and vice-chairperson of the Coffee Board, says the whole replanting exercise in coffee would be meaningless if the government goes ahead with its latest plans.
“The big players in coffee cultivation, with technical know-how in production, have given Indian coffee a face in the international market,” he says.
According to the original plan prepared by the Coffee Board in consultation with SBI Capital Markets Ltd, the investment banking arm of State Bank of India, the cost of replantation in 1ha with the higher quality Arabica variety is Rs1 lakh and that of inferior quality Robusta is Rs80,000. Of the total cost, 40% is slated to come as subsidy from the government for small growers owning land up to 4ha, 30% for medium growers holding land between 4ha and 8ha and 20% for large growers. Banks are to provide 50% of the cost as loan for the programme.
“The Rs4,700 crore replantation in tea has already begun and there is no discrimination between small and corporate estates,” says Ashok Kurian, proprietor of Balanoor Estates in Coorg in Karnataka and president of the Indian Specialty Coffee Association.