Coffee growers seek extension of loan moratorium, exemption of GST on inputs

The coffee growers and the coffee industry, which has financial loss estimated at ₹700 crore owing to lockdown due to COVID-19 pandemic, have demanded one-year moratorium for short-term crop loans and development loans, from April 1, 2020 to March 31, 2021.

In a memorandum to Finance Minister Nirmala Sitharaman, Karnataka Planters’ Association (KPA) chairman Shirish Vijayendra urged the Centre to restructure the principal and unpaid interest of short-term crop loans and term loans.

The Centre has extended interest subvention scheme of 2% a year and prompt repayment incentive of 3% per year up to May 31, 2020 for crop loans up to ₹3 lakh falling due between March 1, 2020 and May 31, 2020 advanced by banks as COVID-19 relief. Now, the planters have asked the Centre to extend the scheme for 2020-21 by increasing the limit for agricultural crop loans from ₹3 lakh by making it applicable for all growers irrespective of size of holdings.

They have also requested the Centre to exempt GST on fertilizers, chemicals and nutrients during 2020-21.

The coffee industry suffered during the last two years owing to heavy rainfall, floods and landslides and this has reduced production by over 35% in 2018-19 and by 50% in the year 2019-20, Mr. Vijayendra said.

“One-year moratorium from all payment of taxes and duties payable by the coffee growers such as land tax, property tax, and professional tax, and subsidy to compensate the excise duty and sales tax payable on diesel may also be considered compassionately”, the KPA chairman said.

The association also demanded the Coffee Board to release all pending claims of growers such as replanting subsidy, capital subsidy and various other subsidies offered at different points of time immediately. Most of these claims are pending for more than 2 to 3 years. The Board should honour its commitment when it offered the assistance to the growers, he said.

The lockdown measures have disrupted plantation activities, trading, curing and export operations. Planters are not able to fully harvest coffee and pepper due to scarcity of workers and prohibition of workers coming to work from outside the estate. Moreover, migrant workers, who were engaged by plantations during harvest season, had gone back to their native places.

Exports were affected as transportation of coffee to ports has slowed down. Offices of traders and exporters were closed due to lockdown. Domestic consumption was affected because of closure of retail shops, cafes and hotels, the KPA chairman said.

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