Project

Assessing Risk and Risk Mitigation Strategies with Small Coffee Growers in India: The Case of Kodagu District in Karnataka

Coffee in India is largely grown in the southern part of the country and involves small growers. Small holding cultivation combined with the external reliance for markets have posed risks to coffee cultivators at different levels. In this context, the paper attempts to analyse various risks among the small coffee growers in India through the study conducted in the Kodagu district of Karnataka, the largest coffee growing district in India. The risks that are analysed are classified into- farm risk arising due to threat to yield, rising cost of inputs, lack of irrigation and extension services; marketing risks arising due to volatility of prices and the buyer driven supply chain; policy risks arising due to taxation and other regulatory barriers. Among these, the risks arising from threat of diseases, attack of wild animals, rising labour cost due to shortage of labour, exploitative marketing situations arising due to lack of co-operatives are problems of high severity. These calls for urgent policy interventions, which if properly addressed might help in mitigating some of the risks faced by the farmers. To mention some of them, there is an urgent need to enhance the R&D efforts of Coffee and Spices Board to address on the kind of diseases that attack coffee and other crops in the region.

There is a need for transferring the technology at the field level through arriving at efficient extension services. Intervention by forest officials in addressing the problem of wild animals is an immediate requirement. Shortage of labour being the most crucial of the input problems, there is an urgent need to move towards cost effective and crop specific mechanisation. Linking of MNREGS for plantation labour could provide some relief to the problem of labour shortage. A relook into the Plantation Labour Act to make it advantageous to both the farmers and the labourers is called upon to lead to more organized labour market.

To address the marketing risks, a seller driven supply chain would be useful in resisting the price related risks associated with the growers. Exploring the possible alternatives in terms of coffee marketing co-operative or local auction market can help creating a seller led supply chain process. The other way to minimize risk would be to promote crop diversification by the existing Boards. From the analysis of diversification at the regional level using secondary information on price and yield, it is visible that coffee and other intercropped commodities have different price and yield cycles, therefore, diversification of crops would act as hedge against price and yield risks. It is therefore, important to promote diversification of crops at farm level. Attempts made to address crop related issues by Coffee Board, Spice Board and horticulture department hardly encourages diversification. It is essential that these Boards work in tandem to promote diversification of crops in the region looking into the problems of farmers in totality.