Published on: October 22, 2022

Coffee industry

Coffee industry

Why in news?

In the coffee heartland of Karnataka, comprising the Kodagu, Chikkamagaluru and Hassan districts, coffee saplings were destroyed  by heavy rains between July and September.


  • The plants stood partially submerged in water for weeks at Kodagu district of south Karnataka. Soon, the plants began to rot.
  • The impact of the rains continues, with diseases affecting plants, and estate infrastructure suffers long-term damage.
  • Drastic changes in climate patterns over the last few years have adversely impacted Karnataka coffee production and the quality of the crop.
  • There were dry spells between 2015 and 2017 and unseasonal heavy rains, floods and landslides between 2018 and 2022
  • The Karnataka Planters’ Association reported fruit rot, stalk rot, root rot and other irreparable damage due to heavy rainfall and landslides and also expects this year’s production to be down by 35%

What are issues plaguing the coffee growers?

Cost of financing and existing debts :

  • Most growers fear that the frequently occurring pattern of droughts and floods could wipe out plantations. “Sturdy and weather-resistant varieties of coffee may help, but sadly the government is not providing adequate funds to coffee research stations to develop these.
  • The volatility in market prices and the reduced influence of producers in the value chain render coffee cultivation an increasingly loss-making proposition.
  • Most private banks insist that growers provide collateral for financing. Since small and medium-size growers are invariably not in a position to provide collateral, the interest rates are high
  • The accounts of many coffee growers have turned to non-performing assets (NPAs).
  • These growers are now facing recovery proceedings under the SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act), which gives banks the right to possess the security provided by the defaulting borrower against the loan and sell it to recover losses, without any intervention by any court of law

Low productivity, High cost of productions:

  • In India, production of coffee is low while the cost of production is on the rise compared to other coffee countries such as Vietnam and Brazil
  • Due to the rise in the cost of inputs around coffee such as fertilizers and agrochemicals , manure seedlings by year on year and the increase in the cost of labour and benefits, which constitute majority of total plantation expenditure, coffee growers are left with very little money
  • Chikkamagaluru, plantations face power cuts during the summer months. This makes irrigation expensive as the cost of diesel is high.
  • Most plantations simply don’t find skilled labour, especially for tasks such as shade-lopping, pruning, and borer tracing further aggravate the cost

Identity crisis in global markets

  • Karnataka coffee does not have an individual brand identity in the international markets despite offering innumerable favours, aromas and blends

What are the measures to be taken?

  • Finding alternative sources of revenue and increasing domestic consumption on the one hand and branding and promoting Indian coffee better in the global market on the other.
  • In addition to traditional inter-cropping of pepper and cardamom, coffee growers could try planting exotic fruit-bearing trees, food crops, or getting into fish farming, dairy farming, apiary or green tourism to increase incomes from their coffee gardens
  • Coffee Board has to embarked on a series of initiatives to unleash the full potential of the cuppa in the domestic and global markets. It should work on a separate India brand and certification system for coffee growers


Coffee·      It is a tropical plantation crop.·      Its seeds are roasted, ground and are used for preparing a beverage. There are three varieties of coffee i.e. Arabica, Robusta and liberica.·       India mostly grows superior quality coffee, Arabica, which is in great demand in International market·      India ranks eighth after Brazil, Vietnam and  Indonesia·      Production in India is dominated in the hill tracts of South Indian states, with Karnataka accounting for majority , followed by Kerala and Tamil NaduCoffee in Karnataka·      Coffee growing started with an Indian Muslim saint, Baba Budan, who bought from Yemen to Mysore in India.·      Coffee Arabica and Coffee Robusta are the two varieties of coffee grown in Karnataka. The Arabica beans cultivated in Karnataka, which have a sweeter and softer taste, have a huge demand in international markets.·      Kodagu, Chikmagalur and Hassan are the main coffee producing regions in Karnataka.·      Kodagu is the largest coffee producing region in Karnataka with more than 50% share in the total coffee produced in the state. Mysore and Shimoga are the other coffee producing regions in the state.