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The Cabinet Committee on Economic Affairs(CCEA) today approved a package of relief measures to revive the coffee sector as follows:
(i) To share equally the total interest burden on Special Coffee Term Loan (SCTL) during the three year moratorium period of Rs.287.10 crore amongst the banks, the Government and the grower loanees to the extent of one third each;
(ii) To release the Government subsidy only after growers had paid their share in full by the end of June 2005;
(iii) To provide an additional budgetary allocation of Rs.95.70 crore to the Deptt. of Commerce during 2005-06 to meet the Government’s share of the interest on SCTL. The funds will routed to the growers’ SCTL accounts in the concerned banks through the Coffee Board;
(iv) To request the banks to lower the interest rates charged on SCTL from the existing 11 per cent to 9 per cent or rate applicable to agriculture sector whichever is lower, during the remaining repayment period of SCTL loans;
(v) To write off coffee developmental loans along with interest amounting to around Rs.24 crore, due from the Coffee Board to the Government of India. The Coffee Board will in turn waive the old developmental loans amounting to around Rs.64.59 crore extended by the Board to the coffee growers having below 10 hectares only;
(vi) To continue the interest subsidy scheme on working capital loans for small growers having below 10 hectares at the rate of 5 per cent and large growers at rate of 3 per cent for the remaining years of X Plan. The expenditure on this will be met out of overall X Plan allocations of the Coffee Board. However, this subsidy would be reduced by 1 per cent for a period of three years in the case of those growers who receive the benefit of reduced interest burden on SCTL during the moratorium period.
The scenario in the coffee sector over the last few years has been extremely unfavourable for the growers, particularly the small grower segment, with the continuing decline in prices of coffee in the domestic as well as international markets.
With the implementation of this relief package, which is aimed at debt amelioration, will bail out the coffee industry from its current crisis and will provide much needed financial relief to the coffee growers, who are facing financial difficulties.
RK:DS:LV
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