Board as guide

In a liberalised economy, the Coffee Board has designed programmes for the domestic and external promotion of Indian coffee.

RAVI SHARMA in Bangalore

THE aroma and flavour of Indian filter coffee may have always been the same. But the economic liberalisation of the 1990s forced qualitative changes in the way the bean, which the legendary saint Bababudan `smuggled' from Yemen and planted in the Chandragiri hills of Karnataka around 400 years ago, is harvested and, more important, marketed.

Marketing the bean had for decades been under the monopolistic control of the Coffee Board, an autonomous body functioning under the Union Ministry of Commerce and Industry. The board was set up in 1942 under the Coffee Act. It was meant to focus on research, development, extension, quality upgradation, market information and the domestic and external promotion of Indian coffee. But since 1995, when marketing of coffee in India became a "strictly private sector activity", the Board has had to undergo radical changes not only in its strength - reducing its staff strength to one-third - but also in its philosophy. It has realised that it can no longer manipulate the market.

Today its activities are geared towards research, extension (transfer of technology) and development activities. Chairman of the board G.V. Krishna Rau said: "Earlier our development activities only consisted of implementing the various financial packages of the government which were focussed on the small growers, who account for almost 98 per cent of India's coffee growers and are very vulnerable to market fluctuations since they do not have adequate resources or infrastructure. But four to five years ago we realised that if Indian coffee were to do well its quality had to improve. The board introduced a number of across-the-board measures, including harvesting, roasting and handling, aimed at enhancing the quality of coffee.

"There is no doubt that the unit cost of production of coffee in India, given the high labour costs, low productivity, restricted area under cultivation and, most important, the fact that it is grown in difficult conditions (under the shade and in hilly, unirrigated terrain), is very high when compared to the major coffee-producing countries such as Brazil, Venezuela and Vietnam. And with neither mechanisation (because of the hilly nature of the terrain) nor a quantum increase in productivity possible in the short term, the board's emphasis on quality can well be understood. Otherwise, Indian coffee, which counts for hardly 5 per cent of the world's total output, could be swamped by its competitors."

Krishna Rau said: "The board's efforts to educate growers on improving farm techniques have started yielding results. For example, Arabica coffee, which three to four years ago sold at a discount of FAQ [fair average quality], today sells on a par with FAQ prices. Similarly, Robusta, which earlier commanded only a nominal premium, today commands the highest premium - around $500 a tonne of washed bean. If Indian coffee is to do well it will have to carve out a niche for itself. We have to position our coffee as boutique varieties. Also, consumers have become choosy. For example the Robusta plant itself has 12 varieties. Subtle variations, permutations and combinations, degree of roasting and so on, can all produce different brews."

The board, with mixed success, has been trying to increase the domestic consumption of the brew, which after stagnating for a few years has over the past five years been recording an annual growth of 5 per cent. It has also been conducting basic and applied research in coffee, with its Central Coffee Research Institute (CCRI) at Balehonnur (Chikamagalur district) being at the forefront of these activities. The CCRI has become one of the premier institutes in coffee research in the world and it is at present focussing its energies on formulating steps that can improve coffee production.

The board's unique `kaapi shastra' five-day programme for people interested in coffee retailing has met with success. Quality experts from the Coffee Board and guest speakers from the industry make up the core of the faculty.