New Delhi: The Ministry of Commerce clarified that coffee crops do not fall under the purview of the SARFAESI Act, offering crucial legal protection to the plantation sector. This announcement, made during parliamentary proceedings on December 3, 2024, comes as a significant relief to coffee growers battling financial hardships and aggressive loan recovery measures.
The Karnataka Growers Federation and Codagu Planters Association jointly welcomed the clarification and expressed gratitude to Udupi-Chikkamagaluru MP Kota Srinivas Poojary for raising the issue in Parliament. The associations stated that since 2018, banks have increasingly relied on the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) instead of the Debt Recovery Tribunal (DRT) to recover loans from coffee plantations, often leading to growers losing their properties.
“This clarification is a critical milestone in protecting the livelihoods of coffee growers,” said A. Nanda Belliappa, Chairman of the Codagu Planters Association. “We urge banks to halt all notices issued under SARFAESI to coffee growers and instead adopt recovery practices that align with this directive.”
The growers’ associations highlighted the compounded challenges faced by the plantation sector, including continuous crop failures, natural disasters, and plummeting commodity prices. The High Court’s earlier ruling allowing loan recoveries from coffee properties under the SARFAESI Act had left many growers financially vulnerable.
Vishwanath K.K., Vice-President of the Karnataka Growers Federation urged the banking sector to immediately cease invoking the SARFAESI Act on coffee plantation lands.
The coffee sector is a vital part of Karnataka’s economy, and this clarification is seen as a significant step in restoring financial stability for growers. The association hopes that the government’s response will lead to fairer loan recovery practices and long-term relief for the plantation community.
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