Comments on New Coffee Bill 2016 Invited

[Ministry of Commerce & Industry Office Memorandum dated 23 March 2016]

Subject: Repeal of Coffee Act, 1942 & Enactment of Coffee Bill, 2016

Department of Commerce is proposing to repeal Coffee Act, 1942 and enactment of Coffee Bill, 2016. As part of pre-legislative consultation, a copy of the draft bill is placed in the Ministry’s website (http://commerce.gov.in) for seeking comments from public/ stakeholders etc, within thirty (30) days. Comments may be sent to the undersigned within specified time.

Explanatory Note for the proposed draft Coffee Bill 2016

The Coffee Act 1942 was enacted in the wake of the 2nd World War with the aim to make arrangement to protect the Coffee Industry from adverse effects of the War. The Act empowered the Coffee Board to control marketing of entire coffee produced in India and regulate its sale in the domestic and international market. Planters were required to pool coffee with the Board, which had full control over its price and marketing. At the same time, all owners of coffee estates were required to register their estates with the State government authorities. On receipt of coffee into the Pool known as ‘Surplus Pool’, it was the responsibility of the Coffee Board to cure, store and dispose it in markets. The Board was also responsible for making payments to the registered owners from out of the Pool Fund after subtracting expenses.

Commencing from the year 1992-93, the pooling system of Coffee was dismantled and gradually replaced by Free Sale. From July 1996 onwards, the pooling system of coffee has come to an end and the Board has wound up its marketing activities. All growers and curers are now allowed to market their entire produce without intervention of the Coffee Board.

The activities of the Coffee Board are now increasingly focused on production, development, research, quality upgradation and market intelligence. It has therefore, become necessary that the existing arrangements for production, pooling and marketing of Coffee are abolished and a liberal regime for functioning of coffee growers, industry and trade is put in place. At the same time, the Coffee Board has to be strengthened to assist the coffee sector in development and growth while regulating the sector. Having regard to these developments, it is proposed that the Coffee Act 1942 is repealed and replaced with a modern legislation.

Rationale for repeal of the Coffee Act, 1942

The principal reason for repealing the Coffee Act, 1942 is that substantive portion of the existing Act dealing with pooling and marketing of coffee have become redundant/inoperative. Several other provisions need amendment in some form. Further, the legal regime has to be enabled to address several areas of modern functions of the Coffee Board, namely, support for production, research, extension, quality improvement, promotion of coffee and skill development of coffee growers. Many of these activities were originally not included in the mandate of the Coffee Board but now need to be incorporated into its functions and powers.

Accordingly, it is proposed that the Coffee Act, 1942 is repealed and a new legislation is enacted to reflect the present realities and objectives.