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14.28 hrs
THE MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE (SHRI SOMPAL): Mr. Chairman, Sir, may I be allowed to say a few words? It is a brief statement on reasons for and objects of the Amendment to the Coffee Act, 1942.
The Coffee Act, 1942 had made it compulsory for growers to pool all their produce and place it at the disposal of the Coffee Board established under that Act. In turn, the Coffee Board would dispose it off and pay the proceeds to the growers. But there has been a persistent demand since the beginning of this decade by the growers that this compulsory pooling system should be done away with and finding the demand reasonable, the Government decided for the first time in the coffee season of 1992 that an internal sale quota of 30 per cent of the total produce be permitted to be retained by the growers which they were allowed to sell in the internal market. In January, 1994, the Coffee Act was amended to provide for a free sale quota by which the growers were asked to pool 50 per cent of their produce with the Coffee Board and the remaining 50 per cent they were allowed to sell either in the internal market or export to other countries. This quota was further reduced and the Government allowed hundred per cent free sale quota to all the farmers who possessed less than ten hectares of land. For the farmers who possessed more than ten hectares of land, the quota was further reduced to 30 per cent. In September, 1996, this quota system was totally abolished. It was abrogated. So, it became necessary to effect the changes in the Coffee Act, 1942 and certain provisions which governed the pooling of coffee have, therefore, to be deleted.
The Government also decided to avail this opportunity for rationalisation of other provisions like penalties for violation of certain provisions of the Coffee Act and also enhancement of ceiling of duty of customs on coffee, etc. The money thus, raised will inter alia be utilised for undertaking further research, development and extension activities for giving a boost to coffee production and export.
Accordingly, Mr. Chairman Sir, the Government, with the approval of the Cabinet, introduced the Coffee (Amendment) Bill 1997 in Lok Sabha in February 1997. Then with due consideration after the discussion between the Speaker of the Lok Sabha and the Chairman of the Rajya Sabha and according to the rules pertaining to the Standing Committees, it was referred to the Standing Committee of Parliament related to the Ministry of Commerce. The Standing Committee gave its recommendations and those recommendations have also been considered.
Now, this Bill is being brought here to give effect to those objectives. Therefore, the present Amendment Bill is before this august House. With these words I request the hon. Members to pass it. Thank you.
In the normal course, I would have supported it but we all know that in 1942, the original Act was passed with a view to protect the interests of coffee growers throughout India. That was one of the main reasons for constituting the Coffee Board. It was the duty of the Coffee Board to protect their interests, especially, the interests of the poor and small farmers having a cultivation within an area of five hectares, six hectares or less than ten hectares. Primarily, their interests will have to be protected and for this purpose the Board was constituted.
The Government also had given grants and subsidies to the Coffee Board, which is giving subsidised manure to coffee growers, that is, to small growers, at last, and also to protect the interests of plantation workers who are working in large scale coffee plantation estates.
Now, the estates have spread. In Kerala, it is spread in Vayanar district and in neighbouring Karnataka State, that is, on the western Ghat side, there are a number of coffee growers and large scale plantations of coffee growing.
Now, I would suggest that in the larger interest of the small coffee growers that there must be a statutory authority to protect their interests. In due course of time these poor people are left to the mercy of large scale coffee producers having thousands of hectares of coffee growing areas under them. If the entire restriction or pooling process is taken away, I am sure that these poor growers will be left to the mercy of large scale producers of coffee, that is, the estate plantation owners. They will be controlling the entire market -- market in the sense, the internal or the domestic market as well as the international market. They can control the entire market and the poor growers or the small coffee growers will be put at their mercy. That is the main reason for me to oppose this Amendment.
Now, we are not in a position to control the international coffee market. We all know that coffee is a universally accepted international drink and the hon. Members of this House are fully aware that whenever you go outside you will have to have a cup of coffee and without which the life for a day will not be complete. So, it is a sweet drink internationally accepted throughout the world and the poor growers or the poor farmers are put at the mercy of the monopoly of the large scale plantation growers.
Previously there were one hundred per cent pooling. Nobody was permitted to sell coffee directly. The Coffee Board alone was authorised to pool the entire production and they would sell it and distribute the proceeds after deducting the pooling expenses. That was the procedure available from 1942. During the beginning of this decade, it was thought or found necessary that there must be some change in the system. So, at first, 30 per cent produce was allowed to be sold internally and the remaining 70 per cent was pooled by the Government. That process was very good. But that did not last long. Subsequently, the Government again changed the stand and the growers were allowed to sell 50 per cent of their produce either internally or internationally and the remaining 50 per cent would be pooled by the Coffee Board. If that system is allowed to continue, in the long run or in the larger interest of the poor growers, it will be very useful.
Now, there is a clamour by the large scale producers to do away with the entire system of pooling. They want to to away with all kinds of restrictions, all kinds of interference by the Government through the Coffee Board and they are conspiring into the functioning of the Coffee Board also. Of course, the Coffee Board was not functioning effectively. I do concede that. But that is due to the bureaucratic tendency of the people who are controlling the Coffee Board. They were not rising to the occasion and they were not coming to the help of the farmers as and when required. That did not take place. So, there were a lot of criticism regarding the functioning of the Coffee Board. I do admit that. But that will not be a justification for doing away with the functioning of the Coffee Board. There were some defective functioning of the Coffee Board and that would be rectified by a systematic administrative arrangement. I think, it could be rectified. Without doing that, the Government proposes to do away with the functioning of the Coffee Board and they want unrestricted functioning for the large scale producers.
Now, these poor coffee growers will have to sell even their holdings to these plantation people, very rich people, who control the international market and they will be left to their mercy. Moreover, it may be remembered that the Coffee Board could not help these people at times when they were in need. Even, manure could not be given to the poor coffee growers at subsidized rates. As I have said earlier, there were a lot of criticism against the Coffee Board.
Now, I would suggest that the present system be allowed to be continued because in the long run, the Government of India or anybody in India could control the international Coffee market because there is still competition in the international market and these poor coffee growers will be put at their mercy. The multi-national companies who are dealing in coffee will dictate terms and they will dictate the prices and that will lead to an adverse interest in the case of poor coffee growers of South India, especially Karnataka and Vayanar District of Kerala. So, I request the Government and the hon. Minister to reconsider this issue.
If we had an absolute control over the market, then it is all right. But we have no control over the international market. The price is determined by the multi-national companies who are dealing in coffee market. They will dictate terms and the entire produce will have to be sold according to their whims and fancies. In the other case, the Coffee Board is having the monopoly.
They will release the coffee as and when the conditions are favourable. There will not be any dictation from outside in the matter of coffee selling. Now, here the entire produce will be pooled by a public undertaking instead of the Coffee Board. The private agencies will pool the entire coffee production and they will dictate terms. They will fix up the prices and the poor growers are left to their mercy. Not only that, in the international market also, adverse circumstances may arise and that will lead to a very difficult situation so far as the Coffee industry is concerned.
We do not have any control. There are other countries like Malaysia, etc., who can compete with us. We cannot compete with their produce. So, leaving everything to the entire open market economy will lead to a catastrophe. So, I suggest that there must be some control. There must be some form of pooling, otherwise the interests of the workers, at large, will be detrimental.
On this ground, I have to oppose this Amendment. So, I request the hon. Minister to consider either to suggest a method by which there must be some pooling by the Coffee Board or he should show the magnanimity of withdrawing the Bill in the larger interests of the Coffee industry in India.
So, with these few words, I again appeal to him to withdraw this Bill. In any case, if he is very pertinent to have the amendment passed, I strongly oppose it.
The Coffee Act, 1942 has been passed in the pre-Independent era. After the advent of the Britishers into our country, they tested the Indian Coffee and they wanted to have some coffee reserved for their consumption. That is how the system of pooling was developed. The main intent of the Coffee Act, 1942 was to see that the coffee produced by the poor farmers are forcibly collected at one place and it is taken out of the country. I am not against the coffee being exported.
India is one of the coffee producing countries in the world. The Indian coffee is the best coffee available in the world. But our share in the international market is very meagre. Our share is just three per cent in the international market. We produce on an average about 2 to 2.5 lakh tonnes of coffee in this country whereas there are countries which are producing coffee to the extent of more than even 30 lakh tonnes. Since the Indian coffee could not be properly propagated in the international market and the Coffee Board was not able to undertake massive propaganda, the Indian coffee was not able to get the due price in the international market. That is how the coffee growers were able to avail the best price which was otherwise available in the international market. Now, for quite some time, the coffee growers have been making a demand that the system of pooling will have to be given up and the growers themselves must be allowed to enter the market.
I do not know why the elderly Comrade Radhakrishnan has been vehemently opposing the present Bill and wants to endorse what was stated by the Britishers here. I do not know why. This is what he has been arguing and has been vehemently requesting for the continuance of the pooling system. I do not know whether he is in the know of things.
SHRI VARKALA RADHAKRISHNAN : I have given my views in the interest of small farmers. I do concede that this large scale plantation people were in favour of doing away with pooling. But the poor farmers are left to their mercy if this pooling system is taken away. I always stand for the poor farmers who are in large numbers. I always stand for them. I do not want to argue that the entire pooling system should not be there. There should be some restriction.
SHRI C.P. RADHAKRISHNAN (COIMBATORE): You wanted them to be in the Coffee Board. You want the poor farmers to be always be in the Coffee Board in the queue.
SHRI VARKALA RADHAKRISHNAN : In the interest of the poor farmers there must be some restriction.
SHRI V. DHANANJAYA KUMAR : I want to refresh the memory of Comrade Raqdhakrishnan that even the small growers specially from Wynad wanted total de-pooling and they are getting a very good price now.
SHRI VARKALA RADHAKRISHNAN : That is only at this stage.
SHRI V. DHANANJAYA KUMAR : That is the difficulty with our Comrades. They would never agree for reasoning. I do not mind that. (Interruptions)
MR. CHAIRMAN : You address the Chair.
SHRI C.P. RADHAKRISHNAN : You have got a powerful Chairman today.
SHRI V. DHANANJAYA KUMAR : The other difficulty is that actually if coffee is properly consumed in our own country probably there is a vast scope for increasing our production. Coffee is such a stimulating drink which will have to be consumed in cold conditions especially in the Northern India.
SHRI VARKALA RADHAKRISHNAN : There is a propaganda by some interested persons that drinking coffee will lead to heart disease.
SHRI VARKALA RADHAKRISHNAN : Just like coconut that it would lead to some disease, so also there is a propaganda by some interested parties that drinking coffee would lead to heart disease. Some multinational people, who are interested in doing way with the coffee industry were propagating that if anybody is taking coffee it would lead to heart trouble. That is the worst propaganda.
SHRI V. DHANANJAYA KUMAR : Let me tell all the hon. Members through my learned friend that preparing liquid coffee is an art. The preparation of the liquid coffee is an art. Unfortunately, our people could not learn the art of preparing liquid coffee. That is why coffee is not being sold in the domestic market to the extent it ought to have been sold. There has been a demand that the Government should popularise coffee among the Army personnel. The Army personnel also, work in cold conditions and they would like to have a cup of very strong coffee. But unfortunately, we are not able to popularise coffee in those areas. That is why I would also agree with Comrade Radhakrishnan that if we are able to cultivate the habit of drinking good coffee especially in the northern parts of India, then there would not have been any occasion for us to export coffee which is produced in India. The difficulty here is that the art of preparing liquid coffee could not be developed by the people who would otherwise love to consume a good cup of coffee.
Sir, that being the situation, the growers were left with no other alternative but to depend on the international market. That is how, coffee started to be exported. The price of the coffee is determined on the basis of the demand, specially, in the London market. When the Coffee Board used to market the coffee under this pooling system, the handling charges used to be very high. Though the Indian coffee used to fetch good price in the international market, the growers in turn were not able to get that good price. The handling charges were beyond the expectation and that is why, the growers were suffering and they wanted to have this kind of open market system.
Today, I am very sure I represent the largest coffee-growing area in this country, Kodagu, where the best form of coffee is being produced. It is being represented by me. There are two kinds of coffee being produced in this country. One is, Arabica variety and the other is, Robasta variety. The Robasta variety is the strongest and the most stimulative coffee. That is being produced largely in parts of Kodagu and also in Chikmagalur. There is no doubt that it is being produced in small portions in Wayanad area also.
Today, what is required is this. The Coffee Board having been divested with the authority of collecting the coffee under the pooling system and then marketing the coffee so collected, they will have to undertake the work of research and development. There is a vast scope for increasing our production. Now, on an average, the coffee that is produced in our country is around 800 kilos per acre whereas in other advanced countries, the coffee produced per acre is not less than five tonnes. So, the Coffee Board will have to undertake extensive research programme. Also, they must help in its development. No doubt, the pest control would also be within the domain of the Coffee Board.
The functions of the Coffee Board will have to be assisted out of the money collected by imposing what is called `export duty'. Now, by exporting the coffee, the growers are able to get good price. At the same time, the Coffee Board's activities will be sustained by way of collecting the export duty. That money in turn will be ploughed back to the coffee industry by way of undertaking research as well as developmental activities.
Recently, there has been a Conference held in Bangalore. Many international coffee traders and some of the growers participated in it. There were elaborate discussions how to assist and augment the coffee industry in our country. It is heartening to note that over the years, since the last three or four years after this system of pooling had been given up, the growers have been able to get good price which is available in the international market.
With one suggestion, I would conclude my speech. I would request the hon. Minister to issue directions to the Coffee Board to work out some mechanism whereby the branded coffee could be sold in the international market. Now, we have many blends of coffee. Various kinds of coffees are properly mixed and blended at a particular ratio so that you will get a kind of distinct aroma. And, if you are able to prepare liquid coffee out of that powder, there is nothing like that. That coffee is loved especially by the countries where very severe cold conditions prevail. They would love to use this coffee.