Banks agree to work out relief package for coffee growers

New Delhi, June 19 (UNI) Banks, including the Canara Bank and the Corporation Bank, have agreed to be members of a Task Force that will devise ways to provide relief to 40,000 coffee growers reeling under the debt burden.

Coffee growers, particularly in Karnataka, have not been able to pay off their debts to commercial banks because of high incidences of white stem borer that has resulted in a drop in productivity.

The Task Force, being set up at the initiative of Minister of State for Commerce Jairam Ramesh will have representatives of the banks, Chairman of the Coffee Board and an outside expert from a reputed agency like the Indian Institute of Management.

The Central Government had rescheduled the accounts of the coffee growers twice in 2000-01 and 2001-02. The loans were converted into the Special Coffee Term Loan (SCTL). The first instalment of SCTL with interest is due to be paid on or before June 30, 2006.

At a meeting of the Coffee Board, Karnataka Growers Federation(KGF) and Chairmen of the banks with Mr Ramesh in Bangalore recently, it was pointed out that if the first instalment of the SCTL was not paid by June 30, it would become a non-performing asset for the banks creating more problems.

The minister was able to convince the KGF to pay at least the first instalment of the SCTL till the Task Force comes out with a relief package for the growers.

Meanwhile, the Coffee Board has hired the services of Brazil-based global marketing consultant Carlos Brando to work out a strategy for increasing the consumption of coffee in the domestic market.

''Eighty per cent of coffee produced is exported and of the 20 per cent consumed domestically, 80 per cent is in Tamil Nadu only.

Therefore, there is an urgent need to increase the domestic consumption so as to come out of the vagaries of international price fluctuations that plunges the coffee sector to crisis periodically'', Mr Ramesh told UNI.

He said Brazil managed to overcome a similar crisis by concerted efforts over a period of time by building the domestic market.

UNI PC CS DS1537