Cabinet clears Coffee Amendment Act

As per this, growers would be free to sell or market coffee grown by them. Till 1996, when 100 per cent FSQ was notified, growers had to pool their produce with the coffee board.

The amendment to the Coffee Act will also dilute coffee board’s role in marketing of the commodity. The spokesman said 100 per cent FSQ would result in estate promotion and bring down administrative cost incurred by government in marketing coffee.

The act also proposed to enhance the cess on coffee exports for developmental activities of coffee board. "Money realised from enhancement of ceiling duty of customs will be utilised toenable coffee board to mobilise funds required for market intervention, if necessary, and to strengthen research and extension wings of coffee board," he said.

Pooling of all coffee by growers was mandatory until economic reforms and liberalisation. Following pressure from the coffee industry, the P V Narasimha Rao government allowed growers the freedom to sell and market 30 per cent of coffee grown by them in 1993. It was further raised to 50 per cent in 1994 and to 70 per cent in 1995 for growers with less than 10 hectares. Soon after the United Front government assumed power, it allowed 100 per cent FSQ to all coffee growers.

A bill to amend the Coffee Act was scheduled to be introduced during the last winter session of parliament but the United Front government fell before it could be done.

Besides, allowing 100 per cent FSQ to growers and diluting coffee board’s role to that of a research and development agency, the amendment also proposes to make it mandatory for curing houses to report on thequantity of coffee cured by them.

The cabinet also approved amendments to the 1975 Tobacco Act, 1986 Spices Board Act, 1985 Apeda Act, 1953 Tea Act, 1947 Rubber Board Act and 1972 Mpeda Act, besides the Coffee Act, to give income tax exemption for the respective commodity boards. Government would not have to make budgetary allocations for these payments, the spokesman said.