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Home / Agriculture / Shade Coffee at the Altar of Sacrificeby Dr. Anand Titus and Geeta N. Pereira Page 1 | Page 2 | Page 3 | Page 4 Debt BurdenThe coffee farmers need a constant credit flow for running the plantations. As such it is normal for the farmer to approach the banks for loans. However due to the prolonged crisis and the cost realization below the cost of cultivation the farmers are in a helpless situation. Debt ridden plantations are at the mercy of pests and diseases. This will result in a situation where the asset value of the plantations will decrease tremendously and the grower will not be in a position to pay the interest and the Principal amount. If one were to look at the earlier track record of coffee farmers; for the last five decades the coffee grower has diligently repaid all the loans with interest, even when the interest was as high as 24%. The percentage of non performing assets (NPA) in plantation industry before the crisis was negligible at 0.1%. Spcio-Economic DisorderThe effect of Price decline has affected all sections of the plantation community starting from the lowest rung of the ladder. Credit flow has come to a complete standstill. Plantation owners are giving work for only four days in a week. Labor force has been reduced by more than 40 %. There is a mass exodus of labor to urban neighborhoods. Survival of 250,000 growers and 1,500,000 workers is at stake. For the first time the growers are voicing there inability to survive and sustain. Children are pulled out of school for want of money.
Karnataka Growers Federation (KGF) and Hassan Plantar's Association (HDPA)The KGF and the HDPA are at the fore front in highlighting the grower’s problems. Numerous delegations and representations to the State as well as the Central Governments are now slowly translating into small positive results. Karnataka Growers' Federation represents over 100,000 coffee and spice growers in the Hassan district of Karnataka, a state in Southern India. It is a member of the Global Coalition for Coffee and other commodities, facilitated by Oxfam. Plausible Solutions
Oxfam International18th September, 2002, UK Oxfam launches 'Coffee Rescue' plan. Francesca Arhin from Oxfam leads a protest in the City Corporate giants that make huge profits from selling coffee should be forced to pay farmers a decent price, according to the latest campaign from Oxfam. The charity claims that with coffee prices now at a 30-year low, as many as 25 million people who depend on the crop for a living are being forced into poverty. Oxfam is launching a "Coffee Rescue Plan" urging political and business leaders to take immediate action, such as destroying surplus stocks and guaranteeing a fair price for farmers. Oxfam claims export sales from poor countries were worth 30% of the total coffee market 10 years ago, but are now worth only 10%. The organization is criticizing the World Bank and International Monetary Fund for encouraging poorer countries to expand their export business without warning them of potential price crashes. ConclusionThe world is celebrating Christmas, or so it seems, at the wrong time of the year. The spirits are high but underneath the festivity there lies a somber reality, something that all of us need to know. The OXFAM REPORT (2002) has this to say : Designer coffee-bars selling mochaccinos; supermarket aisles dedicated to new specialty roasts and blends; major brands worth more than US$1 billion a year; - walk down most High Streets and you'd be forgiven for thinking it was boom-time in the coffee industry. But for some it's not. Allowing for inflation, today, farmers receive just 25 per cent of the price they were paid in 1960. Falling prices have forced coffee growers to take their kids out of school, watch their families suffer without medicines and cut back on basic food. Oxfam is campaigning to tackle a catastrophe. Action must be taken now, to help the millions of coffee farmers and their families who are facing ruin. Oxfam is attacking what it calls the big four coffee companies - Kraft, Sara Lee, Procter & Gamble and Nestle - which it says buy nearly half the world's coffee crop between them. The charity argues that the companies make huge profits while farmers receive only 5% of the retail price. "They know there is terrible human suffering at the heart of their business and yet they do virtually nothing to help," said Oxfam’s campaigns director Adrian Lovett. Oxfam wants governments and business leaders to change practices to reverse the current situation of supply far-exceeding demand. It suggests they trade only in quality coffee, pay farmers a decent price and back ICO attempts to rectify the problem 'Stunning policy failure' Oxfam estimates 8% more coffee is produced than necessary every year, causing a slump in export prices. World wide many coffee growing Nations have already taken remedial measures on a war footing. Interest has been waived and credit flow established at very nominal interest rate spread out over a decade. In India, the Ministry of Commerce needs to do some soul searching parliamentary arithmetic and bail out the coffee farmer with a special economic package to solve the coffee grower’s problem. If the package is beneficial to the grower; then the contents there in will resonate to the nearby coffee mountains and bring back the health of the unique coffee ecosystem. If not we are certain that if no remedial measures are taken, then in every likelihood, coffee cultivation will be wiped out from the map of India. Let’s hope we are not facing an environmental nightmare. The war is far from being won. It is now time to take the initiative to change the past and bring about sound fundamentals and technicals into the coffee industry. AcknowledgementThe authors wish to express their heartfelt gratitude to References
www.ineedcoffee.com/02/indian/ Dr. S. Radhakrishnan. 2004. Performance and direction of coffee exports from India. Indian coffee, Vol1XVIII No.6, June, 2004. Page 1 | Page 2 | Page 3 | Page 4 Tags: shade grown arabica robusta production debt |
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