Urges Commerce Ministry to bail out Kodagu Coffee Growers’ Co-operative Society

Mysore/Mysuru: Mysuru-Kodagu MP Pratap Simha met Commerce Secretary Sunil Brathwal in New Delhi on Aug. 2 to discuss the challenges faced by tobacco growers in the Mysuru region during the 2023-24 crop season.

He presented a representation to Brathwal, highlighting the difficulties encountered by Flue-Cured Virginia (FCV) tobacco growers due to unfavourable weather conditions, including delayed monsoon and prolonged drought, resulting in significant crop losses.

These challenges have severely impacted their livelihoods, as tobacco is their primary source of income. The Mysuru region is a major hub for FCV tobacco cultivation, with approximately 40,000 registered growers and an additional 11,000 unregistered farmers involved in cultivating the crop.

The adverse weather conditions led to uneven and unsatisfactory crop growth, compelling some farmers to consider fresh plantations to recover losses. However, the Tobacco Board restricted new plantations after July 31, 2023, causing distress among affected farmers who risk losing their licences, the MP said.

The estimated production for the season is expected to be 75 to 80 million kg, falling short of the authorised permitted quantity of 100 million kg. To support these struggling farmers, the MP has requested the Tobacco Board to permit fresh plantations until Sept. 15, 2023.

This extension of time is vital for farmers to recover and sustain their livelihoods. The proposed fresh plantation area is minimal, comprising just 400 to 500 hectares, which is less than 1 percent of the total planted area.

Additionally, in light of the challenging circumstances faced by the unregistered tobacco growers, the MP appealed to Brathwal to consider their situation as a special case and issue licences to the 11,000 unregistered farmers. The MP urged the officer to allow the sale of tobacco grown by unregistered growers from the beginning of the auction season without imposing any penalties.

The issuance of licences will enable them to access facilities from the Tobacco Board and obtain input loans from banks. Simha assured the Tobacco Board that the unregistered farmers will comply with all rules and regulations set forth by the Board.

Considering the critical situation faced by the farmers, this exception won’t significantly impact the market’s supply and demand. It is a necessary measure to support their livelihoods during these difficult times, he added.

In a separate representation, MP Simha also requested a waiver of penalties imposed on authorised tobacco growers. This request aims to alleviate the financial burden faced by these growers, who have also been affected by adverse weather conditions.

Kodagu Coffee Growers’ Co-operative Society

The MP has also appealed for a waiver of interest and costs for the Kodagu Coffee Growers’ Co-operative Society in Madikeri, which has been facing financial difficulties due to accumulated losses. The interest and costs amount to Rs. 5,63,85,185. The Society has more than 10,000 members.

Previously, the Society entered into a pooling agency agreement with the Coffee Board. Following its termination, an amount of Rs. 1,06,74,708.20 in agency remuneration was owed to the Society. The Society also had dues of Rs. 60,00,000 payable to the Coffee Board and the net amount to be received by the Society worked out to be Rs. 46,74,708.

However, the Society’s fortunes took a downturn and it approached the Court to recover dues from the Coffee Board, which in turn filed a suit to recover a much larger sum of Rs. 2,22,82,727.25, including the value of coffee and interest. After a prolonged legal battle, the Court decreed that the Society should pay Rs. 1,55,28,034.74 towards the value of the coffee and interest of Rs. 5,63,85,180.

Despite this, the Society approached the Coffee Board for an amicable settlement and the Coffee Board accepted the principal decree amount of Rs. 1,55,28,034.74 and the Society paid the same. However, the Coffee Board later demanded an additional Rs. 5,63,85,185 in interest, which would be an immense burden on the struggling Society, the MP reasoned.

The outbreak of COVID-19 pandemic further exacerbated the situation, impacting the demand for coffee and creating market volatility. Given the Society’s critical financial condition with an accumulated loss of Rs. 14,00,00,000, the Commerce Ministry must consider waiving the interest, which is over four times the decreed principal amount, the MP urged.