MARAN ANNOUNCES PACKAGE OF RELIEF MEASURES
FOR COFFEE GROWERS
COMMERCE MINISTRY AND RBI JOIN
HANDS TO GRAPPLE WITH THE PROBLEMS OF THE COFFEE SECTOR
Shri Murasoli Maran, Union Minister
of Commerce & Industry, has today announced a package to help
coffee growers which has been finalised in collaboration with
the Reserve Bank of India (RBI). The package, which is a considerable
improvement on the "Special Coffee Term Loan" (SCTL) announced
earlier this year, has the following essential features:
- The restructuring of SCTL currently spread over
7 – 9 years could be raised to 9 years and above by the concerned
banks after making an assessment of the merit of individual
cases;
- The moratorium period for payment of principal
component of the loan could be raised by the banks from two
to three years provided servicing of interest is also undertaken
by the loanees concerned;
- A number of long term loan components which stood
earlier excluded from the purview of the earlier SCTL have been
included if these could be related and established that these
loans were essentially for coffee-related operations;
- Regarding producers exporting coffee, banks can
provide EPC (Export Packing Credit) finance from the proceeds
of which the agricultural loans can be liquidated;
- To be eligible for fresh crop loans, 75% of previous
dues had to be repaid. It has been decided that banks could
take a decision in this matter on a case by case basis, subject
to approval by their respective Boards.
In addition to the above measures,
Government of India have already put in place an interest subsidy
scheme @ 5% of their borrowals towards crop loans for the benefit
of coffee growers with holdings of 10 hectares and below. This
was implemented during the last financial year. Taking into account
the unabated crisis in the coffee sector, Government is actively
considering continuation of the Interest Subsidy Scheme for this
group of growers as well as extending the relief measure to coffee
growers of other categories also. Coffee Board is actively engaged
in the implementation of these measures by fielding its team of
officers in all the coffee growing areas.
Shri Maran is monitoring the situation
periodically in order to ensure that the measures taken by his
Ministry as well as the RBI are fully in place at the field level.
It may be recalled that in July 2001,
when for the first time the coffee growers’ condition became desperate
in terms of their inability to repay their crop loan, Department
of Commerce and Reserve Bank of India held a series of meetings,
identified 24,169 crop loan accounts, involving a loan amount
of Rs. 275.50 crore, and identified 13436 term loan accounts for
rephasement. Unfortunately, for the Indian coffee growers, 80%
of whose production is exported, the situation continues to remain
grim with the international prices having slumped to alarming
lows. The picture is so telling that whereas for Arabica the international
price available was Rs. 138 per kg in 1997, it has come to the
level of Rs. 53 per kg in 2002. In the case of Robusta, the picture
is equally discouraging in the sense that whereas in 1997, it
was Rs. 54 per kg, it is Rs. 30 per kg as on July, 2002. It is
against this backdrop, that the Department of Commerce and Reserve
Bank of India have once again intervened and announced the current
package to alleviate the sufferings of the coffee growers.
The measures in the new package,
which are of a far-reaching nature, will go a long way in mitigating
the plight of coffee growers. It is expected that the genuinely
affected growers will find the package beneficial and the number
of coffee growers interested availing benefits under the new package
will also go up substantially.
