Coffee (Promotion and Development Bill), 2022
Context:
- The Ministry of Commerce and Industry is planning to replace the 80-year-old Coffee Act with the new Coffee (Promotion and Development Bill), 2022, which has been listed for the Monsoon Session of Parliament.
Background:
- During World War II, the Coffee Act, 1942 was initially introduced to safeguard the struggling Indian coffee industry from the war’s negative economic effects. As a result of its contention that many of the measures are unnecessary and overly restrictive, the government is currently attempting to repeal the law.
- To make conducting business easier and encourage the growth of these industries, the government has also recommended repealing the decades-old laws on tea, spices, and rubber and replacing them with new regulations.
What was the status before 1990s?
- The Coffee Board had complete control over the marketing of the good both in India and overseas before India’s economy was liberalised in 1991. Previously, it was also in charge of collecting, storing, processing, and selling on behalf of the growers.
- With the exception of the minimal quantities permitted for domestic use and seed production, each planter was compelled to distribute their whole output to a surplus pool controlled by the Board under the pooling system established by the Coffee Act.
- The coffee had to be harvested, dried, and sent to a curing plant where the producer would be paid in advance.
- The Coffee Board would pay registered private contractors to clean, sort, and grade coffee using a point system in exchange for a charge, which would then be subtracted from the grower’s payment.
- The Board then auctioned them in separate auctions, marketing 70% of the total pool for export and 30% for domestic markets.
Post Liberalisation:
- While the Board continues to be the chief governmental body to supervise the industry, it no longer maintains its monopolistic control over the marketing of Indian coffee.
- Through a series of amendments, the Board’s authority was reduced, and in 1996, the pooling system was abolished and growers were allowed to directly sell to processing firms.
- The coffee market was entirely deregulated and the growers exposed to the free market.
- Since liberalisation, the Coffee Board plays more of an advisory role, and aims at increasing production, promoting further export and supporting the development of the domestic market.
Source The Hindu
