Lok Sabha Question No. 1658 (UNSTARRED), answered on 2020-09-21
Subject: Coffee Production
Ministry: COMMERCE AND INDUSTRY
Asked by: Shobha Karandlaje

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO.  1658 TO BE ANSWERED ON 21 st   SEPTEMBER, 2020

## COFFEE PRODUCTION

## 1658. KUMARI SHOBHA KARANDLAJE:

Will the Minister of COMMERCE & INDUSTRY ( वािण�य एवं उ�ोग मं�ी ) be pleased to state:

- (a) whether coffee production has declined during the last two years due to heavy rain, floods and landslides and if so, the details thereof;
- (b) whether COVID-19 has led to a decline in the demand for coffee in the export markets;
- (c) if  so,  whether  India's  coffee  export  declined  during  the  year  2019-20  and  if  so,  the  details thereof;
- (d) whether the Government has estimated the loss to coffee plantation sector due to lockdown and the COVID fallout and if so, the details thereof;
- (e) whether the Government plans to restructure existing debts with lesser interest and long term repayment options, in addition to releasing some fresh working capital to the coffee growers and if so, the details thereof;
- (f) whether the Government proposes to restore export incentive to 5 per cent from the present 3 per cent; and
- (g) whether the growers have demanded financial assistance for crop loss and one year moratorium on taxes and duties and if so, the action taken by the Government in this regard?

## ANSWER

okf.kT; ,oa m|ksx ea=h ( Jh ih;w'k xks;y )

## THE MINISTER OF  COMMERCE AND INDUSTRY (SHRI PIYUSH GOYAL)

- (a): Coffee  production  has  been  impacted  during  the  last  two  years  due  to  heavy  rain,  floods  and landslides in major coffee growing regions of Karnataka, Kerala and parts of Tamil Nadu. Coffee production during 2018-19 had shown an increase of 1.10% over 2017-18. It, however, declined by 6.73% during 2019-20 as shown in the Table below:

| Year    |   Coffee production (tonnes) | %change over previous year   |
|---------|------------------------------|------------------------------|
| 2018-19 |                       319500 | 1.10%                        |
| 2019-20 |                       298000 | -6.73%                       |

Source

: Coffee Board

- (b): The demand for coffee in the major coffee markets, has shown a downward trend since April, 2020 due to the situation arising out of the COVID-19 pandemic.
- (c):  India's coffee exports during 2019-20 have declined by 7.40% in terms of quantity and 10.32% in terms of export value realization as compared to 2018-19.
- (d): As per the assessment made by the Coffee Board, while the harvesting of the coffee crop was completed to a large extent by March 2020, some estate operations were delayed, which may have an  impact  on  the  coffee  crop.  However,  95%  of  the  Coffee  roasting  units  and  instant  coffee manufacturing units were closed due to the lock down. Due to restrictions imposed to contain the spread of the pandemic, demand from hotels, restaurants, cafe businesses as well as offices, vending machines, events etc., which are the major out-of-home customers, was impacted. With regard to exports, coffee exports (green coffee and value added coffee, including instant coffee) declined by about 26,400 MT during the period 25th March 2020 to 31st May 2020, as per the export permits issued by the Coffee Board and inputs received from exporters.
- (e) to (g): The Government /Reserve Bank of India (RBI), have taken various policy measures to ease the  financial  stress  caused  by  COVID  19  disruptions,  by  providing  relief  on  debt  servicing  and improving access to working capital. RBI vide its circulars dated 17 th April 2020, have permitted all commercial banks, to grant a moratorium till 31 st August 2020, on payment of all instalments in respect of  term  loans (including  agricultural  term  loans,  retail  and  crop  loans). The repayment schedule for such loans as also the residual tenor, has been allowed to be shifted across the board. In  respect  of  working  capital  facilities  sanctioned  in  the  form  of  cash  credit/overdraft,  lending institutions have been permitted to allow a deferment till 31 st August 2020, on recovery of interest applied in respect of all such facilities. This facility is applicable to all loans to agriculture and allied activities including coffee sector.

No proposal for revision / restoration of export incentive to 5 percent from existing 3 percent, given under Merchandise Exports from India Scheme (MEIS) for coffee sector, is under consideration.

********