Coffee (Promotion and Development Bill), 2022

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    • Recently, the Ministry of Commerce and Industry is planning to replace the 80-year-old Coffee Act with the new Coffee (Promotion and Development Bill), 2022.

    About

    • Shifting of Coffee Board: The government would not close the Coffee Board, but would rather shift it from the Ministry of Commerce to the Ministry of Agriculture, to ensure that the benefits of all agricultural schemes are extended to coffee growers.
    • Repealing the decades old laws: The government has also proposed to repeal the decades old laws on tea, spices and rubber, and introduce new legislations in order to increase the ease of doing business and promote the development of these sectors.

    Coffee Act, 1942

    • The Coffee Act, 1942 was first introduced during World War II, in order to protect the struggling Indian coffee industry from the economic downturn caused by the war. 
    • Purpose: To provide for the development of the coffee industry. 
    • Since the Cess Committee (formed in 1935) was not able to deal with the crisis faced by the industry, the government formed the Coffee Board.
    • The Board was tasked with supporting the industry in marketing, promotion of consumption, finance and research and development.

    Reasons for Scrapping the Law

    • Redundant and Restrictive:  the substantive portion of the Coffee Act, 1942, which deals with pooling and marketing of the commodity, have become redundant and are impediments to the coffee trade.
    • Hindering Growth: Some of these outdated regulations have stifled the sector’s growth, especially in marketing.
    • Need for Simplification: In order to facilitate growth and ease of doing business, the government would introduce a simplified version of the Act to suit the present needs of the industry.

    Key Provisions of draft Coffee (Promotion and Development) Bill, 2022

    • The new Bill aims to address several new areas of functions of the Coffee Board. 
    • These include support for production, research, extension, quality improvement and the promotion of coffee and skill development of coffee growers. 
      • Many of these activities were originally not included in the mandate of the Coffee Board but now they need to be incorporated into its functions and powers.
    • The Bill is also aimed at “holistic promotion and development” of the coffee industry, covering activities such as the expansion of the cash crop in new areas, sustainable cultivation, raising production as well as productivity, exports, promotion and the marketing of coffee. 

    Significance

    • The new legislation is primarily concerned with promoting the sale and consumption of Indian coffee, including through e-commerce platforms, with fewer government restrictions
    • It will not just create more employment opportunities but also benefit the entire coffee value chain.
    • It also aims at encouraging further economic, scientific and technical research in order to align the Indian coffee industry with “global best practices.”

    Coffee Cultivation in India 

    • India ranks 6th among the world’s 80 coffee producing countries, with some of the finest robusta and some top-notch arabica cultivated.
    • India is the only country in the world where the entire coffee cultivation is grown under shade, hand-picked and sun dried.
    • India currently has over three lakh small and medium coffee farmers.
    • Production: 
      • The cultivation is mainly done in the Southern States of India:
        • Karnataka – 54%
        • Kerala – 19%
        • Tamil Nadu – 8%
      • Traditionally grown in the rainforests of the Western Ghats in South India, covering Chikmagalur, Kodagu (Coorg), Wayanad, the Shevaroy Hills and the Nilgiris.
    • Exports: Nearly 70% of India’s coffee is exported, largely to European and Asian markets.
    • Climatic Conditions:
      • Coffee plants require a hot and humid climate with temperatures ranging between 15°C and 28 °C and rainfall from 150 to 250 cm.
      • Frost, snowfall, high temperature above 30°C and strong sun shine is not good for coffee crops and is generally grown under shady trees.
      • Dry weather is necessary at the time of ripening of the berries.
      • Stagnant water is harmful and the crop is grown on hill slopes at elevations from 600 to 1,600 metres above sea level.
      • Well drained, loams containing a good deal of humus and minerals like iron and calcium are ideal for coffee cultivation.

    Challenges for Coffee industry

    • Rising cost of production: 
      • The cost of coffee production has been rising 10%-15% annually as wage and input costs were on a constant rise. 
      • Over the last few decades the loss of forest cover has resulted in environmental degradation and costs of inputs such as fertiliser, labour wages, pesticides and fuel has drastically increased.
    • Diseases: 
      • Plant loss due to white-stem borer disease, the yield has also come down significantly.
    • Climate change:
      • Excessive rainfall played spoilsport for coffee plantations across the country. Because of early blossom showers in February, the crop was ready for harvest in October itself, instead of November. 
    • Shortage of skilled labour:
      • Coffee cultivation requires plenty of cheap and skilled labour for various operations including sowing, transplanting, and pruning, plucking, drying, grading and packing of coffee.
      • But in India there is an acute shortage of skilled plantation labour.
    • Stagnation in bulk coffee prices:
      • There is also stagnation in bulk coffee prices which has pushed the small growers who constitute 98% of coffee production to other avenues like coffee resorts, intercropping with pepper, etc.

    Source: IE