Government fixes support price of coffee

The National Tea and Coffee Development Board (NTCDB) – on the occasion of the 15th National Coffee Day – today fixed the support price of coffee for the current fiscal year.
Celebrating the National Coffee Day in Gulmi today, NTCDB has set the support price for six varieties of coffee, according to the board that has fixed the price of fresh cherry ‘A’ grade coffee (organic certified) at Rs 85 per kg while ‘B’ grade coffee (organic uncertified) Rs 75 per kg, Rs 5 less than last year. “Last year, price of ‘A’ grade fresh cherry and ‘B’ grade fresh cherry is set at Rs 85 per kg and Rs 80 per kg, respectively.”
Likewise, the board has set Rs 425 per kg for parchment ‘A’ grade coffee and Rs 375 per kg for parchment ‘B’ grade coffee. Last year, the price was settled at Rs 425 per kg and Rs 410 per kg for ‘A’ grade parchment coffee and ‘B’ grade parchment coffee, respectively.
Likewise, the board has set Rs 140 per kg for dry cherry ‘A’ grade coffee and Rs 90 per kg for dry cherry ‘B’ grade coffee. In previous year price of ‘A’ grade and ‘B’ grade dry cherry was set at Rs 140 per kg and Rs 100 per kg, respectively.
The board fixes the floor price annually to ensure that farmers get a reasonable rate for their crop and are not exploited by middlemen in the supply chain. The coffee farmers, however, say that they have no complaints about the reduction in the minimum support price for this year, but they want the government to formulate policy to increase production to benefit from rising market demand.
According to the board, the price of coffee has been fixed based on the investment cost of coffee farming. Currently, coffee farming is done on around 61,228 hectares of land. However, a total of 1.1 million hectares of land across the country is suitable for coffee farming, according to the board. Some districts like Gulmi, Palpa, Argakhanchi, Lalitpur, Tanahu, Kavre, Sindhupalchowk, Lamjung, Kaski, Gorkha, Syangja, Parbat and Baglung are successfully growing and producing coffee beans and production has been increasing gradually.
According to the board, Nepal exported a total of 530 tonnes of coffee in the last fiscal year while in the fiscal year 2017-18 a total of 513 tonnes of coffee had been exported to different countries. While the country had exported coffee worth Rs 996 million, coffee worth Rs 980 million had been imported in the last fiscal year. Nepal is exporting coffee beans mostly to Japan, America and European countries.
Due to surge in demand, the earnings from coffee export increased by 6.28 per cent compared to a a rise of 49 per cent of coffee imports in the fiscal year 2018-19.
Nepal exported Rs 99.61 million worth of coffee in the last fiscal year – up from Rs 93.72 million in a fiscal year ago in 2017-18, according to the board. “During the period, Nepal imported coffee worth Rs 65.89 million and Rs 98.01 million, respectively.”
Nepal imported eight-folds to 1,262 tonnes in the review period, whereas exports remained fairly stable at 84 tonnes, which means Nepali coffee is expensive than imported coffee. Nepal coffee is recognised as one of the high value agri products in the international market. Nepali product costs up to $10 per kg abroad.
Coffee is grown in 42 districts of Nepal that produces and exports Arabica coffee, which is typically grown at an altitude of 1,000 to 2,000 meters. According to the board, Nepal produced 530 tonnes of coffee in the fiscal year 2018-19, compared to 513 tonnes in the fiscal year 2017-18.
According to Trade and Private Sector Development Project – a European Union-funded programme –1.19 million hectares of land in Nepal is suitable for coffee farming. “Of them, some 61,228 hectares have the potential to give high yields,” it revealed, adding that Nepal is utilising only 4 per cent of the acreage potential.

Kavrepalanchowk tops in coffee production

Among the 77 districts, Kavrepalanchowk district tops in coffee production, according to the Central Bureau of Statistics (CBS).
According to a report 'Nepal Commercial Coffee Farming Survey 2018-19' released today in Kathmandu by the CBS, Kavrepalanchowk district holds the top position in the list of the highest coffee farming areas with 104.3 hectares land used for farming followed by 96.3 hectares and 94.1 hectares in Lalitpur and Syangja districts, respectively.
“Kavrepalanchowk, the largest producer amongst the 32 districts, produces 221 metric tonnes of fresh coffee cherries, followed by Syangja with 158 metric tonnes and Sindhupalchowk with 141 metric tonnes of fresh coffee cherries,” the report reads, adding that a total of 1,573 metric tonnes of fresh coffee cherries are produced annually in 32 districts commercially.
According to the survey done in a year – from April 14, 2018 to April 13, 2019 – some 6,346 farmers from 32 districts are engaged in the coffee farming in 973 hectares land.
“Farmers owning 50 or more coffee trees have been considered commercial farmers in the survey,” director of CBS Badri Karki said, adding that a total of 943 commercial farmers, the highest from Kavrepalanchowk followed by Sindhupalchowk, 753 and Syangja, 708 farmers in the respective districts.
The CBS data also revealed that 96 per cent of coffee farmers are engaged in organic coffee farming, of which 9 per cent are certified firms, 34 per cent are cooperative or company certified and 57 per cent are operating without any certification. “Of the surveyed farmers, 74 per cent of them are male and 26 per cent are female.”
But only 1.7 per cent of farmers have registered their businesses, the CBS report reads, adding that some 83 per cent commercial coffee farmers are found to have been shifted from agricultural occupation (other than coffee farming), some 3 per cent from business, 10 per cent from the day job and 4 per cent from other occupations. “Only 2.8 per cent of coffee farmers have opted for a bank loans for the business, whereas 11 per cent of commercial coffee farmers consider coffee farming as their main source of income>”
According to CBS, of the surveyed participants, half of them do not know about the minimum price of coffee determined by the government. “The expenses of Rs 2.56 million on purchase of coffee plants, 2.87 million on fertilizers and 9.17 million under the head of others were recorded for coffee farming.”
While Rs 154.1 million was earned from 1573 metric tonnes of fresh coffee cherries and Rs 29.7 million from shade-grown coffee and Rs 16 million from underground crops. At least 78 per cent of commercial coffee farmers have received training regarding coffee farming.
The CBS has identified 55 coffee nurseries in Nepal through the survey. The report also has collected suggestions from farmers regarding the promotion of coffee farming in Nepal. Quality technological service, access to irrigation, training and study facility, market for produced coffee and subsidy for coffee farming are among the suggestions from the farmers reported the CBS.
According to National Tea and Coffee Development Board (NTCDB), lack of lab in Nepal – despite the coffees produced here are of better quality due to climatic conditions – has hit the coffee export that is a cash crop.

Majority tea farmers borrow from cooperatives, pay higher interest

Tea farmers prefer local cooperative organisations despite of their higher interest rates, according to a report.
As the villagers do not have access to the commercial banks, majority of tea farmers prefer local cooperative organisations to borrow and also on higher interest rates, according to study conducted by Central Bureau of Statistics (CBS) in association with Nepal Tea and Coffee Development Board (NTCDB).
Among the farmers, who have taken loans, some 48.3 per cent have borrowed from cooperatives, some 23.6 per cent from banks and financial institutions and some 14.6 per cent from Agriculture Development Bank (ADB), the report reads, adding that some 3.9 per cent have taken personal loans whereas 9.6 per cent of tea farmers have taken loan from ‘other’ sources for their business.
Indeed, the data shows only few farmers are taking bank loans,” said executive director of NTCDB Shashikanta Gautam unveiling the report. Loan certainly plays a huge role in expanding business, he added.
Although tea has been considered one of the most competitive products of the country, most of the tea farmers are uninterested in expanding their business. "Only five per cent of tea farmers are taking loans to expand their business," the survey further reads, "more than half of the tea farmers were satisfied with their income and business."
According to the report, there are 9,236 tea gardens in country that produce over 2.2 million tonnes of tea every year. "Tea industry provides direct and indirect employment to more than 300,000 people."
The report also shows that 82 per cent of farmers have been cultivating tea on less than one hectare of land while only 0.8 per cent of farmers are cultivating tea on more than 20 hectares of land. "Commercial tea farming is being carried out on 12,065 hectares of land across the country in 14 districts – Taplejung, Sankhuwasabha, Bhojpur, Dhankuta, Terhathum, Panchthar, Ilam, Jhapa, Morang, Dolkha, Sindhupalchowk, Nuwakot, Lalitpur, and Ramechhap – with a total yield of 100 million tonnes of green leaves annually. Of them Ilam, Jhapa, Panchthar, Dhankuta and Tehrathum are the top five districts in terms of commercial tea production."
Every year, the country exports tea to other countries worth around Rs 3 billion. A total of 18,180 farmers are involved in tea farming directly or indirectly – some 9,374 are male while 8,807 are female. The farmers are collectively earning up to Rs 1.76 billion annually.
The report also revealed that tea farmers have been unable to get reasonable price. The tea farmers across the country are deprived of a reasonable price for their produce due to lack of proper price fixation mechanism, resulting in sluggish growth of the tea industry in the country, it reports.
Currently, tea price is fixed through consensus between farmers and factory owners.
The board has tried to fix minimum price of tea in 2015 but could not be implemented after both farmers and factory owners remained at odds over the rate.
He said that it is necessary to fix the minimum support price for tea every year as the Tea and Coffee Development Board Act, 1993 does not allow it to set base price for tea. "We are authorised only to recommend the support price for tea, while government has been giving less priority to address problems being witnessed in the tea industry," Gautam added.
The report has also highlighted the need to identify and explore potential markets for Nepali tea, subsidise tea farmers in green leaves, fertilisers and machinery, ensure availability of farming technologies at the local level and irrigation facilities and ensure availability of loans to tea farmers at a reasonable interest rate.