Thread by @finshots

The Indian coffee industry is reeling under a financial #crisis.

And it’s big enough to make coffee associations knock on the government’s door for restructuring loans worth Rs. 5,000 cr.

Thread.👇(1/8)

This isn't the first time they're asking for a breather.

They’ve been under stress since the early 2000s. And since then the government has provided them with relief multiple times - from subsidies to MSP to restructuring of loans. (2/8)

But that hasn't really come a long way for the farmers.

See, growing coffee isn’t child’s play. Coffee planters have to face a host of challenges - they have to make sure that they get the right labor & the right weather. (3/8)

More often than not, they’re at the mercy of a fungi attack.

And like any other crop, they also have to face the brunt of climate change. (4/8)

In fact, 2018 & 2019 have been disastrous for coffee producers as they witnessed crops getting affected by floods & landslides, which caused a 20 -30% loss of the country's harvest in each of these years.

And then came the pandemic, which brought exports to a 9-year low. (5/8)

Which is why farmers have turned to the government now. And their ask is simple - they want loans of ~ 5,000 cr to be converted into term loans in order to get more time to repay them, and an interest reduction to 3% from the existing 10-12%. (6/8)

Now, banks would never budge & provide loans at such low rates to these farmers.

And this puts the govt in a tight spot, as bailing them out would mean burning a lot of cash, which might not be very affordable at the moment. (7/8)

So what's the road ahead for the coffee industry?

Only time will tell.

Sources:
~Coffee growers urge FM Nirmala Sitharaman to waive interest, recast loans:- Deccan Herald
~Coffee producers urge finance minister Nirmala Sitharaman to restructure Rs5000-cr outstanding loans: ET