Govt may unveil Rs 1,120 cr relief package for coffee growers

NEW DELHI: The government is likely to unveil a Rs 1,120 crore relief package for indebted coffee growers and may announce it in the full Budget, a highly placed Commerce Ministry official has said.

The package, proposed by the Commerce Ministry comprises an outright bank loan waiver of about Rs 400 crore and extending crop insurance cover of Rs 728 crore.

"Indebtedness of coffee farmers are very high. They are facing several problems like crop loss... we are trying to put a scheme like loan waiver for coffee growers," the official said.

He said coffee growers' loans in the books of banks till March 2009 would be eligible for waiver. About 17,000 coffee growers would be benefited from the loan waiver.

The new Commerce and Industry Minister Anand Sharma has said that the ministry is aware of the problems faced by plantation industry especially coffee growers.

"We shall soon be coming out with a relief package for them," Sharma said.

The main coffee growing states are Karnataka, Kerala and Tamil Nadu.

India has trimmed its coffee output forecast by 5 per cent to 2.62 lakh tonnes this season, ending September, after excessive rainfall damaged crops in the biggest-producing state of Karnataka.

Coffee Exporters' Association of India President Ramesh Rajah told PTI that supply of coffee bean is affected due to lower production of coffee, which is likely to be less by 45,000 tonnes at 2.3 lakh tonnes during 2008-09, compared with the government's estimates of 2.76 lakh tonnes for the same period.

The coffee production has declined as the crop was affected by unseasonal rains, Rajah said.