The Government has said Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act for loan recoveries will not apply for coffee plantations. In a written reply to a Parliament question raised by Udupi-Chikamagalur MP Kota Srinivas Poojary on December 3, Minister of Commerce, Piyush Goyal said no, when asked whether the coffee comes under SARFAESI Act.
Growers have heaved a sigh of relief with this Government clarification. In a joint statement on Thursday, the Coorg Planters Association (CPA) and the Karnataka Growers Federation (KGF) said “the government’s response in Parliament has unequivocally clarified that coffee crops are not within the scope of the SARFAESI Act, thus providing critical legal protection for our growers.”
A Nanda Belliappa, Chairman of CPA, and KK Vishwanath, Vice-president, KGF, urged all the banking institutions to heed the parliamentary clarification and refrain from invoking SARFAESI on coffee plantation lands for loan recoveries. “This step is essential for maintaining the financial stability of coffee growers and the overall health of the coffee sector,” they said.
‘Undue burden’
Since 2018, banks have increasingly relied on the SARFAESI Act for loan recoveries, bypassing the Debt Recovery Tribunal (DRT), the growers bodies said. This practice has placed an undue burden on the plantation sector that is already struggling with severe natural disasters, continuous crop failures and low commodity prices, they said.
The use of SARFAESI, based on a High Court ruling allowing recovery from a coffee property, has resulted in the loss of many growers’ properties under this stringent legislation, the growers said.
“We extend our sincere gratitude to honorable MP Kota Srinivasa Poojary for raising this crucial question in the parliamentary session and to the Ministry of Commerce, Government of India, for their prompt and clarifying response. Their support is invaluable in safeguarding the interests of our coffee growers and addressing the pressing challenges faced by our sector,” they said. Although delayed, this clarification is crucial for the welfare of the plantation community.
