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A crisis is brewing in the coffee industry
Context:
Coffee cultivation is becoming an increasingly loss-making proposition in India. In addition to high input costs & labor shortages, changes in climate patterns are also affecting the industry.
The destruction caused by Rain patterns
- Damage due to Erratic weather conditions: The plantation in Kerala, Karnataka, and Tamil Nadu has been devastated by recent heavy rains and dry spells between 2015 and 2018.
- Need for weather-resistant Varieties: Heavy rainfall and landslides have resulted in infruit rot, stalk rot, and root rot. Sturdy and weather-resistant varieties of coffee may provide a solution.
Cost of financing and weak Infrastructure:
- Producers are getting marginalized: The market is rapidly turning out to be a buyer-driver and producers are losing their influence.
- Cost of Financing: The lending rates are at around 12%, which is too high compared to single-digit rates in other countries. Small growers are often left with little money to repay loans.
- Higher cost Irrigation: Frequent power cuts and increasing cost of diesel make the irrigation activity costlier. There is a need to work on developing a reliable infrastructure.
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