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A crisis is brewing in the coffee industry

GS Paper 3


Source: The Hindu

 Context:  Coffee cultivation is becoming an increasingly loss-making proposition in India.


Coffee production in India

  • More than 75% of Indian coffee production is Exported.
  • India’s share in the global coffee market is less than 5%.
  • The coffee community in India, comprises close to 4 lakh coffee growers, hundreds of large planters, and associations.


Problems being faced by coffee producers

  • Erratic weather conditions are helping pests to breed and new diseases to emerge.
    • fruit rot, stalk rot, root rot and other irreparable damage due to heavy rainfall and landslides.
  • The volatility in market prices and the reduced influence of producers in the value chain render coffee cultivation an increasingly loss-making proposition.
  • Cost of financing: Most private banks insist that growers provide collateral for financing leading to interest rates being higher for small and medium-sized growers who lack collateral.
  • The rise in the cost of inputs year on year and the increase in the cost of labour and benefits, constitute 60% to 70% of total plantation expenditure.
  • Plantations face power cuts during the summer months. This makes irrigation expensive as the cost of diesel is high.
  • Identity crisis: Indian coffee is still facing an identity crisis in global markets as Indian coffee was never considered a separate origin coffee. It was always used as filler.


Way forward:

  • Finding alternative sources of revenue and increasing domestic consumption
  • Branding and promoting Indian coffee better in the global market on the other.
  • Inter-cropping: Growers should create additional revenue streams through inter-cropping or through innovative measures.
  • Considering the change in land use, the government could permit growers to plant alternate crops on land not suitable for coffee cultivation.
  • Sturdy and weather-resistant varieties of coffee may help.


Insta Links:

Coffee Promotion bill 2022 (check-in FFP)


Prelims Link

Which one of the following groups of plants was domesticated in the ‘New World’ and introduced into the ‘Old World’? (UPSC 2019)

(a) Tobacco, cocoa and rubber

(b) Tobacco, cotton and rubber

(c) Cotton, coffee and sugarcane

(d) Rubber, coffee and wheat

Answer: A

Tobacco, cocoa, and rubber came to India through Europeans in the late medieval or early modern era and so these are the groups of plants that were domesticated in the ‘New World’ and introduced into the ‘Old World’. All of them originated in South America