Karnataka needs international coffee trade fairs

The Coffee Board of India, under the administrative control of the Ministry of Commerce, Government of India, has to contribute to the coffee economy, which is in crisis with three years of near-drought, untimely rains and poor crop yields in Karnataka.

Coffee plantations also have pepper vines inter-planted among them to supplement income, which makes the crash in pepper prices since February this year, worsen the financial hardship of coffee planters.

Moreover, flaws in crop insurance and revenue protection insurance schemes have not really benefited 90% of the coffee-growers, who own plantations of 25 acres or below. The Rainfall Insurance scheme has been discontinued due to lack of adequate modalities in place. Moreover, the newly introduced Revenue Protection Insurance scheme which was initiated as a pilot project in Chikkamagaluru has not evinced much interest among the insurance companies. Therefore, the coffee plantation sector, which employs an estimated 11,00,000 skilled workers, finds that their livelihoods are at stake across the coffee districts of Kodagu, Hassan and Chikkamagaluru.

While coffee growers are confronted with high input costs in terms of labour wages and fertiliser prices, they have to endure low prices for coffee and pepper, which makes it financially unviable to manage plantations. If coffee plantations begin to suffer losses, then the coffee economy will become unsustainable and small growers will find it more remunerative to sell their plantations or convert them into holiday or health resorts -- a development which has already taken shape over the last five to seven years. That will surely herald the beginning of the end of the coffee plantation sector and its related industries. Therefore, the Coffee Board needs to transform to a market support role in addition to its R&D functions.

Till the mid 1990s, the Coffee Board functioned in a regulatory role. However, the Coffee Board now needs to adapt to a free market economy since the 1991 economic liberalisation and transition to that of a facilitator. It would need to support the coffee economy through the organisation of trade fairs and help small growers and international buyers to comply with the various statutory requirements towards coffee trade and export.

The Women's Coffee Alliance India, Bangalore, successfully conducts a vibrant Coffee Santhe or Coffee Fair in Bengaluru annually, and involves all the stakeholders of the economy. For instance, much like the Ministry of Defence organises Aero India at Bengaluru to connect foreign aeronautics majors with the domestic industry; the Ministry of Commerce can also conduct a coffee trade fair under the aegis of the Coffee Board.

The small coffee grower is unable to attend international coffee trade fairs overseas due to cost constraints of airline travel. Therefore, the Coffee Board should hold international trade fairs in Kodagu and Chikkamagaluru for buyers and sellers as a platform to interact with each other. The Coffee Board has large tracts of land with established infrastructure and research stations at Balehonnur, Chikkamagaluru and Chettalli in Kodagu, which can be utilised as centres for international coffee trade fairs and as integrated coffee parks.

Moreover, the boom in coffee tourism over the last decade has developed the hospitality and travel industry resources in these plantation districts to be able to hold the proposed trade fairs. Besides, the two international airports in the proximity are at Mattanur, Cannanore district in Kerala, which is a 90-minute drive from Kodagu and at Mangaluru, which is a two-hour drive away from Chikkamagaluru. As airline connectivity to these two coffee plantation districts, which are also internationally acclaimed biodiversity hotspots exists, these districts are ideal locations to organise trade fairs.

It will make the grower aware of the requirements of the discerning international consumer. The buyer will see for himself the journey of the Indian coffee bean from the plant to the cup. It will incentivise the grower to produce the kind of coffee that the buyer desires. Only a grower knows the trials and tribulations of coffee cultivation and only he can market his coffee with passion and obtain the best price possible for his crop.

Considering that 70% of the coffee grown in the country is exported, the small grower should market his coffee overseas. An important point to note is that Indian coffee is grown under shade, which uses ecologically sustainable methods and adoption of fair trade practices in the eco-sensitive zone of the Western Ghats, which can command premium prices in the international markets. To make Indian coffee competitive in the world market, the Coffee Board must publish a list of internationally-banned pesticides, which will also make the environment safe for plantation workers.

The outcome of such international trade fairs would lead to a demand for 'Single Origin Estate Specific and Area Specific' coffees, which will start to gain importance. Today, these fairs held at foreign locations are not inclusive of all stakeholders and have become the exclusive domain of a few elite coffee growers and traders. The Coffee Board should aim to democratise the sale of coffee and enable the small grower to export coffee to international markets rather than allow a select few to prosper at his expense.

(The writer is Chairman of Karnataka Planters Association, Chikkamagaluru)