Abstract:
Issues of marketing of and trade in Coffee assumes importance
due to its export potential as well as the livelihood dependency of large
number of small growers (98% of holdings). Global coffee market is
characterised by enormous clout of roasters and exporters at the upper
end of the value chain (who appropriate over 60% of value) and
increasingly the value accrued to the primary producers has reduced (to
mere 6 – 7%). Given that it is a buyer’s market (oligopolic), small
growers have limited or no incentive for productivity enhancement,
innovation and for participation in niche markets. Liquidity exigencies
force most of them to sell green coffee at the farm gate. Production
structure is unsustainable due to high labour costs.
Thus, sustaining coffee farmers’ income (and especially
smallholders) requires support from the government and private sector.
Initiatives like coffee certification, multi-sectoral partnerships for
sustainable coffee value chains need to gain confidence of small growers
in India. Small growers expect a more aggressive role of the Coffee
Board to facilitate market access, support to co-operative movement
and for diversification. Given that Coffee is grown in a multi-crop
production environment, small growers expect support from stakeholders
for ‘plantation economy’ as a whole for secured livelihoods and not
only for efficient coffee production thereby buffering risks. It also helps
in environmental and bio-diversity conservation.
Some concrete recommendations to support small growers include,
addressing short term liquidity problems, use of MGNREG labour works
for their benefit, creating incentives (and market mechanisms) for
environmental conservation, stabilisation of production environment
through mechanisation.
Market access through invoking origins, unique indigenous
certification, brand building for domestic and export markets,
organisation of small growers for inter-sectoral partnerships are few other
important suggestions in this direction.
