Context: A block chain-enabled trading platform for coffee that will help connect growers with roasters and traders directly is likely to be launched by the Coffee Board of India. It will ensure better realizations of prices for the growers and will also help address the traceability issue for the buyers.
About Coffee and its production in India:
- It is believed to be an indigenous plant of the Abyssinian Plateau in Ethiopia
- The plant reached Arabia in 11th century as the propagators of Sufi Islam carried it with them.
- In the 17th Century Baba Budan Giri, a Sufi saint smuggled 7 beans of Coffee from Yemen to India while coming from a Hajj pilgrimage.
- He planted the beans on the slopes of the Chandragiri Hills in Chikkamagaluru district, Mysore State (present day Karnataka).
- This hill range was later named after him as the Baba Budan Hills and is one of the major Coffee producing areas.
- Heavy rainfall from 150 to 250 cm but stagnant water is harmful.
- So grown on hill slopes at elevations from 600 to 1,600 meters above sea level.
- Hot and humid climate with temperature varying between 15°C and 28 °C.
- It does not tolerate frost, snowfall, high temperature above 30°C and strong sun shine and is generally grown under shady trees.
- Dry weather is necessary at the time of ripening of the berries
- Well-drained, rich friable loams containing a good deal of humus and minerals like iron and calcium are ideal for coffee cultivation.
Coffee production India:
- In India, coffee is traditionally grown in the Western Ghats spread over Karnataka, Kerala, and Tamil Nadu.
- Coffee cultivation is also expanding rapidly in the non-traditional areas of Andhra Pradesh and Odisha as well as in the North East states.
Types of Coffees in India
- The two main varieties of coffee viz. Arabica and Robusta are grown in India.
- Arabica is mild coffee, but the beans being more aromatic, it has higher market value compared to Robusta beans.
- On the other hand, Robusta has more strength and is, therefore, used in making various blends.
Platform will help in Price discovery
- Currently, the coffee trade is largely unorganized and is not under the purview of the APMC system.
- Though prices of Indian coffee mirror the broader trend in the New York and London terminals.
- The curing houses and traders fix the actual farm gate prices depending upon the locations and quality parameters.
New mechanism based on blockchain platform:
- Coffee growers, curers, traders and exporters can participate and trade online on the trading platform where the price discovery will happen.
- Once the trading platform is operationalized-
- Growers can sell directly from their farm gates or
- They can ship to an empanelled warehouse that will approve the quality parameters and then the trade takes place online.
- Sellers can give a base price or an expected price for their coffees.
- After the seller accepts the trade, then a smart contract will be generated, after which the buyer has to transfer the money into the escrow account of the platform within 24 hours.
- Subsequently the seller has to ship or the warehouse has to raise the clearance.
- The buyer can go and collect the commodity and then the money moves to the seller’s account from the escrow account.
Advantages of having this platform:
- The blockchain-based traceability application by Acviss is an anti-counterfeiting solution that helps to reorganize the unstructured supply chain.
- It provides transparency in transactions, and protects farmers from fraud and fake GI tag products with the help of quality evaluation.
- This app also helps farmers to generate stable income and protects them from any collateral damage with the help of automated payments, insurance and financing as there are no middlemen involved.
- For the end users, this app also helps consumers by providing authenticated certifications ensuring that the bought product is safe for consumption.
The platform developed by the Acviss Technologies could be a game changer for all the stakeholders from growers, traders to buyers and can give fillip to the digitalization in Agri marketing. Although it remains to see if the Coffee Board can materialize such a beneficial platform given the past records of the coffee board wherein it had failed to activate a similar block chain based e-marketplace in collaboration with Eka Plus.
About Coffee Board of India:
- It is a statutory organization constituted under Section (4) of the Coffee Act, 1942.
- It functions under the administrative control of the Ministry of Commerce and Industry, Government of India.
- It is headquartered in Bengaluru.
- The Board has a Central Coffee Research Institute at Balehonnur (Karnataka)
- The Board comprises 33 Members including the Chairperson who are appointed by the GoI.
- Role of Coffee Board:
- Coffee Board serves as the friend, philosopher and guide to the Coffee sector covering the entire value chain.
- The Board is mainly focusing its activities in the areas of research, extension, development, market intelligence, external & internal promotion, and welfare measures.
Source: The Hindu
Previous Year Question
Q.1) Consider the following States:
- Andhra Pradesh
- Himachal Pradesh
How many of the above are generally known as tea-producing States? (2022)
- Only one State
- Only two States
- Only three States
- All four States