Rs 700 crore COVID-19 blow to coffee planters

Coffee growers in Karnataka have run up losses of nearly Rs 700 crore as the lockdown to fight COVID-19 from March 25 disrupted the last phase of harvesting of Robusta beans and pepper crop in the growing regions of Kodagu, Chikkamagaluru and Hassan districts.

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The loss from exports alone is estimated at Rs 250 crore as exporters could not move their produce to ports due to shortage of logistics. A large quantity of coffee beans were also stuck at plantations and could not be moved to curing works.

“The coffee industry was already in severe distress and financial crisis due to heavy rainfall, floods and landslides in 2018-19 and 2019-20. Due to this, production was down by more than 35% in 2018-19 and by 50% in 2019-20. This year, the lockdown enforced to fight COVID-19 added to the problems of coffee growers as they could not complete harvesting of Robusta and gleanings in many estates,” Shirish Vijayendra, chairman, Karnataka Planters Association told DH.

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The losses were to the tune of Rs 441 crore due to loss in harvesting of Robusta crop, loss of Arabica and Robusta gleanings (fallen beans), loss of pepper harvest and loss of inventory, he said.

The steep rise in the cost of inputs, wages and social costs has pushed up the cost of production beyond the cost of realisation, Vijayendra added.

KPA has approached the Ministry of Finance with a demand for extension of moratorium on loan repayment for one year and special term loans at subsidised interest rates to fund next year’s operations.

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“The growers need to survive before taking up operations next year. We need a package for the long-term survival and working capital. We have estimated the losses as suggested by the Coffee Board,” said Vijayendra.

In their letter to Finance Minister Nirmala Sitharaman, KPA has urged the government to restructure the principal and unpaid interest of short-term crop loans, term loans and other agriculture loans by consolidating them into a single loan account and provide easy annual instalments like in SCTL Package announced in April 2002 with concessional rates of interest.