India to do away with archaic provisions of the Coffee Act, 1942; new law to free coffee sector from restrictive controls

The government will loosen control over the coffee sector by scrapping several archaic provisions of the Coffee Act 1942, and undertake all-round development of the sector with emphasis on domestic as well as export requirements and farmer welfare. India’s commerce ministry has prepared a draft Coffee (Promotion and Development) Bill, 2022, which will replace the Coffee Act of 1942.

The existing law empowers the government to control the marketing of the commodity, and regulate its sale in both local and global markets, through the state-run Coffee Board. Some of the outdated regulations that have stifled the sector’s growth will be abolished under the new law.

Moreover, the new Bill aims to address several new areas of functions of the Coffee Board. These include support for production, research, extension, quality improvement and the promotion of coffee and skill development of coffee growers.

The Bill is also aimed at “holistic promotion and development” of the coffee industry, covering activities such as the expansion of the cash crop in new areas, sustainable cultivation, raising production as well as productivity, exports, promotion and the marketing of coffee. It will not just create more employment opportunities but also benefit the entire coffee value chain.

India’s coffee production is estimated to rise 15% in 2022-23 from a year before to 393,400 tonne. Coffee exports reversed a Covid-induced slide to record a 42% year-on-year jump last fiscal, to exceed the $1-billion mark for the first time. The extant law was enacted when coffee was in short supply, and there was a quota system for both importing and exporting countries that were members of the International Coffee Organization. Since every bean of coffee grown in India was marketed through the Coffee Board, the state-run entity’s focus was divided. Consequently, the other functions of the board, including research, transfer of technology to coffee growers, production improvement and promotion of Indian coffees in overseas markets, were not given due importance.

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