Government Excludes Coffee from SARFAESI Act

The government has officially stated that the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act does not apply to coffee plantations for loan recoveries. On December 3, Minister of Commerce, Piyush Goyal, responded to a parliamentary question raised by Udupi-Chikmagalur MP Kota Srinivas Poojary. He confirmed that coffee crops are excluded from the scope of this legislation.

Relief for Coffee Growers

This announcement has brought much-needed relief to coffee growers. In a joint statement on Thursday, the Coorg Planters Association (CPA) and the Karnataka Growers Federation (KGF) welcomed the clarification. They said, “The government’s response in Parliament has unequivocally clarified that coffee crops are not within the scope of the SARFAESI Act. This provides critical legal protection for our growers.”

CPA Chairman A Nanda Belliappa and KGF Vice-President KK Vishwanath urged banks to follow the government’s clarification. They emphasized the importance of refraining from applying the SARFAESI Act to coffee plantation lands for loan recoveries. According to them, this step will protect growers from financial instability and help sustain the coffee sector.

Challenges Facing Coffee Growers

Since 2018, banks have increasingly relied on the SARFAESI Act for loan recoveries. Unfortunately, they often bypassed the Debt Recovery Tribunal (DRT) process. This has added to the struggles of plantation owners, who are already dealing with frequent crop failures, low commodity prices, and natural disasters. The growers also pointed out that a High Court ruling allowed recoveries from coffee properties under SARFAESI. This led to many growers losing their land.

Gratitude for the Clarification

The CPA and KGF expressed their gratitude to MP Kota Srinivas Poojary for raising this matter in Parliament. They also thanked the Ministry of Commerce for its timely clarification. In their statement, they remarked, “Although delayed, this clarification is crucial for the welfare of the plantation community. It will address the pressing challenges faced by coffee growers and safeguard their livelihoods.”

Conclusion

This decision brings hope and legal protection to coffee growers. With this clarification, growers can focus on overcoming their challenges without fear of losing their lands. They are optimistic that the banking sector will respect this decision and work towards supporting the plantation community.





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