STRUCTURAL TRANSFORMATION IN THE INDIAN COFFEE SECTOR: NEED FOR COPING WITH GLOBAL MARKET TRENDS

P.G. CHENGAPPA¹*, B.N. PRADEEPA BABU², C.M. DEVIKA^3
1Institute for Social and Economic Change (ISEC), Dr. VKRV Rao Road, Nagarbhavi, Bengaluru, 560072, India
²Institute for Social and Economic Change (ISEC), Dr. VKRV Rao Road, Nagarbhavi, Bengaluru, 560072, India
³Institute for Social and Economic Change (ISEC), Dr. VKRV Rao Road, Nagarbhavi, Bengaluru, 560072, India
* Corresponding Author : devika.cm@gmail.com, devika@isec.ac.in

Received : 22-05-2016     Accepted : 16-06-2016     Published : 01-10-2016
Volume : 8     Issue : 42       Pages : 1847 - 1854
Int J Agr Sci 8.42 (2016):1847-1854

Keywords : India, Coffee, Production, Productivity, Stagnation, Export, Niche markets
Academic Editor : Singh Ajit Kumar, Anoop M., Satyasai K.J.S.
Conflict of Interest : None declared
Acknowledgements/Funding : None declared
Author Contribution : None declared

India, the sixth largest producer of coffee in the world has reached stagnation in productivity resulting in area led growth of production. A structural shift in Indian coffee production from high quality and premium priced Arabica coffee to lower quality Robusta coffee is evident and attributed to the prevalence of high incidence of pest particularly white stem borer in Arabica. Growers of Arabica are at disadvantage; incurring higher expenditure in cultivation to control the borer infestation and heavy economic loss in production. This shift is happening despite higher net returns realized by Arabica growers as compared to Robusta growers. It is imperative for India to increase the yield; particularly of Arabica coffee to remain in the quality segment of world coffee market as our analysis indicates that India’s share has stagnated at around 4 percent. The paper also postulates that it is imperative to penetrate the niche market and in the process move from the conventional coffee production to a sustainable certification production systems in tune with the growing consumer recognition and demand for certified, organic and specialty coffee. The Coffee Board, the nodal agency for coffee research and development in India has to make concerted efforts in two direction;- (a) to break stagnation in productivity through technology and adopt strategies for arresting the decline in cultivation of Arabica coffee and; (b) focus on capturing niche markets by reorienting its efforts in the value chain.