India: change in compulsory coffee system sought.

India: Change in compulsory coffee system sought

The compulsory pooling system was introduced in India for coffee at the height of World War II to protect Indian coffee growers from the loss of European markets.

According to a leading coffee planter, a reversal of the existing practice should be made. It is felt that the only way to develop a strong and viable base for coffee cultivation is to release two-third of the population in the domestic market and one third in the international one. This would enable the growers from fluctuations in the international market by strengthening the domestic base especially if it is combined with the scrapping of the Minimum Release price.

With the collapse of the International Coffee Agreement ICA and the suspension of quotas, international coffee prices have plummeted to a level way below the price in the domestic market. Growers are feeling and have become increasingly critical of the practice adopted that of two thirds of the produce pooled with the Indian Coffee Board should be slated for export. A leading coffee planter has stated the Government of India's contention has always been that exporting two thirds of the country's coffee is in the interest of the nation since it generates the much needed foreign exchange. But the Government has itself not been above exploiting the situation. When the international price of coffee shoots up, the Government goes in for stiff bikes in the export duty. At the same when the international price plummets as prevailed now, the Government does not want to step in to offer any kind of assistance.

The Secretary General of the United Planters Assn. of Southern India (UPASI) has remained very critical of the compulsory pool-marketing system. He cited also the instance of tea marketing which was working effectively despite deregulation and the fact that over 75% of the commodity was sold at auctions.

The authorities in the Coffee Board has noted that the present system had effectively protected the interests of small and marginal growers who owned over 61% of the area on which the country's coffee was grown.

A study of the Indian Institute of Management, Calcutta (IIMC) has a solution to the problem of protecting the small and marginal growers while giving the bigger and more confident ones the freedom to avail of market forces. The study had recommended an optional pooling system where those growers who did not want to pool with the Indian Coffee Board could strike out on their own; it was argued, would not only give the industry a competitive edge but also place a premium on quality by encouraging all those growers (including the smaller ones) who were prepared to take the additional effort of producing quality or were already doing so.

The Government of India, in the Ministry of Commerce has stated that the Government had an open mind on the question of changes in the coffee marketing system. The Indian Coffee Board is expected to submit a report on the subject to Government and a final decision could be taken sometime in May

Coffee: The pride of

the Bremen seaports

The Bremen seaports owe their popularity to such import products as cotton, wool and tobacco - but above all to coffee, which mainly added to the credit of Bremen far beyond the national borders. As early as 150 years ago, the quality concept "Suitable for Bremen" was coined in important cultivation areas.

The people of Germany belong to the greatest coffee consumers in the world - with a per capita rate of seven kilos per year. In the past year, nearly 350,000 tons of green coffee - about 60% already packed up in containers - were imported by the Bremen seaports, where most of it was processed. Bremen is a recognized Tender Port of the London Commodity Exchange (LONDON FOX) for coffee and cocoa. The main countries of origin of the "Bremen Coffee" are Colombia, Kenya, Brazil, Tanzania, Mexico, El Salvador, Ethiopia and Indonesia.

The coffee import merchants in Bremen perform the function of a connecting link between the producers in the countries of origin and the processing establishments. The cooperation of all service enterprises involved in the coffee business guarantees a comprehensive service from the transshipment activities via the processing and seasoning up to the distribution throughout Europe.

Gulf War postpones

ASPAC coffee bloc

The formal organizational of the proposed Asia-Pacific (ASPAC) coffee bloc, which was to have taken place after the scheduled meeting in Bangkok, Thailand mid-January, has been indefinitely postponed due to the Persian Gulf War.

The Bangkok meeting would have also been highlighted by an ASPAC Coffee Producers Forum as agreed upon between the Association of Indonesian Coffee Exporters headed by Dharyono Kertosastro and the Coffee Exporters Association of the Philippines, Inc. then led by Emilio B. Custodio Jr.

The draft of the ASPAC coffee organization and its proposed secretarist has been submitted to the AICE by Antonio Reyes, director of the International Coffee Organization certifying agency in the Philippines, after a series of pre-coffee bloc meetings in Jakarta and Bali, Indonesia, among representatives of prospective members, like the Philippines, Indonesia, Thailand, Sri Lankas, Papua New Guinea and India.

The proponents of the Asia-Pacific bloc also considered the membership of Vietnam, which has been recently admitted to the ICO.

The meetings in Indonesia were attended not only by officers of private coffee organizations but also ambassadors and top government officials of countries involved.

The idea is to elevate the offensive at ministry levels to enable the envisioned coffee bloc to gain a seat in the ICO.

Meanwhile, three representatives of the Russian Trade Representation office in the Philippines recently met with ICOCA director Reyes to discuss the general outline of the possible joint ventures on coffee production, processing and trading proposed by Farukh Nahmedov of the Moscow Food Enterprises.

Trade Representative Pavel V. Bulavsky, who led Trade Representative Klair Iljashev and Viktor I. Belkin to the meeting in Makati, Metro Manila, raised the possibility of inviting Nahmedov and other appropriate Soviet trade officers to the Philippines to work out details of the joint projects.

Bulavsky said there was a time in the past when Russia sought to purchase US$10-million worth of Nescafe soluble coffee from the Philippines, but that this was not pushed through due to what Russian officials considered higher per-pack quotations.

Reyes also sought Russian assistance (financial or otherwise) for Arabica production in Davao, southern Philippines, the same way that the USSR currently funds a coffee production program in Vietnam.

As this developed, the U.S. remained the top buyer of Philippine coffee in 1989-1990 with a total purchase of $3.83 million, followed by Japan, with $2.28 million.

The top 10 buying countries in 1980 to 1990 are:

United States, $296.81 million; Singapore, $116.48 million; Japan, $30.21 million; Canada, $27.99 million; Australia, $21.5 million; Germany, $16.31 million; Papua New Guinea, $9.62 million; Netherlands, $5.60 million; and Spain, $3.72 million.

The Coffee Exporters Association of the Philippines has a new set of officers for 1990-1991. They are: Jose Mercado of Merlo Agricultural Corp., president; Emilio Custodio, Jr., of Prime Products International Corp., vice president; Feli Montemayor of General Milling Corp., secretary; and Florentino Damo of Cavite Coffee Trading Center, treasurer. Directors are: Mabini L. Antonio of Nestle Philippines, Alan Borbe of Filipinas Agribusiness Corp., Alfredo de Leon of Geocentric Agriculture, Sixto Silva of A.C. Silva Enterprises, and Walfrido Sy of Sympa International.

Kenyan coffee under stress

Kenya's coffee production is set to decline in 1991 due to low rainfall in the first three months of the year and the destruction of estates by peasants protesting against poor state management of the sector, industry officials said, reports Reuters.

"The crop is dropping away because of lack of rain, one said. The Coffee Board of Kenya, the state-owned monopoly marketing agency, has forecast a drop in production for the third year running, to about 72,500 tons in the 1990-91 season.