Relevance:

• GS3 II Economy II Industries II Major Industries

Why in the news?

Organic coffee farming is transforming the lives of tribal communities in Odisha’s Koraput district

Present context:

• A wide variety of spices and fruits grown in the coffee field diversifies the income of tribal farmers
• Not too long ago, Surya Chhautia was ready to give up on a 100-acre coffee plantation in Golurvillage in Odisha’s Koraput district. The plantation had been lying unattended, yielding little.

All about the coffee industry in India:

Introduction:

• Coffee, an economically important non‐alcoholic stimulating beverage, is the second largest traded commodity in the world market, coming second only to petroleum/crude oil.
• The majority of the world’s population consumes coffee, owing to its rich and unique taste, aroma and on reported health benefits. It is estimated that 25–30 million families in 52 coffee exporting countries depend on coffee production for their livelihoods.
• India, primarily two types of coffee varieties are grown: arabica and robusta.Of the total coffee produced in India, 70 per cent is exported and 30 per cent is consumed domestically
• Globally, Brazil, Vietnam, Colombia, Indonesia, Mexico, Ethiopia, Guatemala, India, Mexico and Uganda are some of the major coffee producing countries.

Coffee sector in India:

On‐Farm Challenges-

• Soil and Climatic Requirements: In India, coffee growing regions are grouped into traditional and non‐traditional. Traditional coffee regions include Karnataka, Kerala and Tamil, which mainly spread across the Western Ghats. Andhra Pradesh, Odisha and some of the North‐Eastern states encompass the non‐traditional coffee growing regions
  • Primarily, coffee is a tropical plant which is also grown in semi‐tropical climates. Coffee requires varying levels of heat, humidity and abundant rainfall at different stages of its crop cycle
• Water Management:Coffee is an extremely water‐sensitive crop and requires water during its critical growth stages such as pre‐blossom, post‐blossom, fruiting and maturation to achieve expected yields, Availability of water resources and the procurement and installation of irrigation accessories are major challenge on many coffee farms
• Cropping Systems: Multitier cropping systems in coffee farms provide additional income to growers and serve as buffer crops during a poor coffee year.
• Scope for mechanization:Coffee being a perennial crop requires constant care during its crop cycle. In India and elsewhere, coffee plantations are usually found in hilly regions that provide less opportunity for using sophisticated farm machinery
• Nutrient Management:Though coffee plant growing soils are rich in organic matter, maintenance of soil pH is a major challenge. Because of the slope, much of the soil’s are washed away by high rainfall
• Labor availability and cost: Coffee cultivation is a labour‐intensive business and, owing to there being less scope for mechanization in coffee cultivation, labour cost has escalated in recent years during critical farm operations such as planting, bush management, fertilization, weeding, irrigation, harvest and processing
• Processing Methods: There are basically two popular (wet and dry) methods for processing coffee beans in India, and they can influence the resultant coffee’s quality.
• Drying and Storage Facilities: Drying is one of the most important criteria that determine the shelf life of coffee beans
• Moisture Management, waste management and pollution abatement are also some challenges

Off‐Farm Challenges-

• Plant Capacity, Drying Facilities and Moisture Management: Curing factories are very limited in India, Entry level moisture checking is challenging for curing factories as the receiving coffee lot will be heterogeneous in nature.
• Dust Control, storage capacity and methods:In coffee curing factories, dust accumulation is a major problem. Different operations – such as de‐hulling, destoning and polishing – create a great deal of dust which is a potential source of mould contamination
• Coffee defects and mycotoxin contamination: ‘Defects’ is the collective term for undesirable particles found in bulk green coffee, In curing factories, the defect coffee has to be stored separately from the main clean coffee; otherwise, there is a high chance of cross‐contamination from the coffee defects
• Waste Disposal:Curing of coffee creates huge quantities of waste. In curing factories, the waste is just dumped near the curing units without any treatment or protective measures
• Moisture management and packaging methods: Cured coffees from curing factories are transported to ports for shipment.Increased moisture in the storage container, apart from inviting moulds, leads to physical and chemical changes to the coffee’s quality
• Shipment delays: The delay between loading and shipment should be kept to a minimum. During shipment, adequate care should be taken
• Marketing and Export Challenges:Marketing coffee is the prime and last activity in the coffee production chain. Marketing depends on many factors, such as demand, price on the international market, consumer preferences and trade barriers

Ecosystem service and environmental issues:

• Soil fertility degradation and restoration: Indiscriminate use of fertilizers,plant protection chemicals and other growth hormones also makes soil sick by overdose from leaching
• Soil and water pollution- waste disposal and its ecological effects: Coffee waste components include mainly lignin and cellulose waste, which can be used as an organic fertilizer, too.However, direct application of coffee waste to agricultural fields can lead to serious environmental problems
• Biodiversity Conservation:The coffee Agroforestry System in India conserves many permanent shade trees which support local and migratory birds, wild animals, micro‐ and mesofauna and microbial diversity
• Conservation of Shade Trees in Coffee Plantations (Deforestation and Afforestation):Nearly 50 different types of shade trees are found in coffee plantations in India

Benefits from coffee industry in India:

• It is way of earning for many small farmers and marginalize farmers
• Most of the tea gardens in India are major source of attraction for tourists
• India is the third-largest producer and exporter of coffee in Asia, The country accounts for 3.30 per cent (2017-18) of the global coffee production.
• The biggest exporter of Robusta coffee is Olam Agro India Pvt ltd at 17,640 tons or 31 million of Robusta coffee exports.
• The largest importer is Italy and that too for Robusta coffee.
• Other major importing countries are Germany, Russia and Belgium
• Belgium is the largest importer Arabica coffee.

Challenges for the government:

• Global Price Fluctuation, Market Volatility, and Market Intelligence: Brazil, Vietnam and Colombia constitute around 55% of global coffee production.The production and supply dynamics of these three countries decides the coffee price in the world market. When quantitative restrictions on export were lifted under the free trade policy, coffee from Brazil and Columbia began to reach India, which affected the local fee prices.
• Farm Finance and Subsidies: The main challenge for the Government in coffee cultivation is providing farm finance and subsidies to large numbers of coffee growers. The objectives of farm finance and subsidies is to extend financial incentives to coffee growers towards mechanization of farm operations
• Quality Issues and Certification: The Indian Coffee Board had also engaged in farmers’ services such as eco‐certification and organic certification to encourage coffee growers to improve quality for higher returns and improve access to high‐value speciality markets.
• A signatory to the Sanitary and Phytosanitary (SPS) agreement with the WTO, India (Coffee Board of India) takes care of all food safety issues related to the coffee production chain through its research and analytical services.
• Research and extension services: In India, research, development and marketing activities relevant to coffee production and its supply chain come under the direct control of the Indian Coffee Board (Ministry of Commerce and Industry, set up as an autonomous institution by Act of the Parliament
• Promotion and Marketing: Coffee growers have benefited from the market support services such as collection, storage and transportation of coffee to curing units and warehouses provided by the Coffee Board of India

Government Policies

• Government policies have been changing in terms of taxes and other duties. A few years ago, the Supreme Court ruled that cured coffee amounted to manufacture and could be liable to Central Income Tax (CIT). It had its expected impact on small coffee planters.
• They started avoiding auction by Indian Coffee Traders Association. Many growers were more comfortable with the state Agricultural Income Tax, levied on the basis of acreage and regularly waived in times of distress.

Conclusions:

India is one of the leading coffee producers in the worlds but not a leading consumer in the world. Considering the uncertainties and difficulties in export more domestic consumption should be encouraged. In India, the coffee industry (farming up to the table) plays a major role in conservation of forest ecosystems of the Western and Eastern Ghats apart from contributing to the national (and foreign) exchequer, and providing employment to a large portion of the population.

Mains oriented question:

Indian coffee Industry has great contribution in global coffee industry, what are the challenges associated with the coffee industry in India, on the farm and off the farm. Explain. (200 words)