The FAQs have been prepared by Anushka Khaitan, a 3rd-year, BBA.LLB student at Jindal Global Law School. She is currently interning with LatestLaws.com.
- Why was the Coffee Act enacted?
The story of coffee in India began in 1600 AD when seven coffee beans were secretly brought into India by holy saint Baba Budan and were planted on what is now known as Baba Budan Giri hills in Karnataka. Commercial plantation of coffee began only in the 18th century in India. Now, Indian coffee industry holds respect amongst coffee estates in the world. After the First World War, the Indian coffee economy was in a deplorable state and thus the Government of India established a Coffee Board and enacted the Coffee Act of 1942. This Coffee Board was constituted by the name Indian Coffee Market Expansion Board as per Section 4 of the Indian Coffee Market Expansion Board Ordinance, 1940. The Indian Coffee Board comes under the purview of Ministry of Commerce and Industry.
- What is the Coffee Board of India? What purpose does it serve?
The Coffee Board of India was enacted by the State through Section 4 of this Act as a means to uplift and improve the coffee industry. After trade barriers were removed and coffee trade was privatized in 1996. The board serves as a quality regulation body. It is the first-friend and guide of coffee growers and sellers. They taken activities such as R&D, supporting Indian growers and control of coffee exports and re-imports.
- Who is the Chairman and Secretary of the Coffee Board?
The current Chairman of the Coffee Board is Mr. M. S. Boje Gowda, as appointed by Section 4(2). The Secretary of the Coffee Board is Mr. N. N. Narendra, as appointed by S. 9(1). Their salaries fall in the Pay Band PB-4 and their pay scale ranges from ₹37,400-₹67,000.
- How is Coffee regulated by this Act?
Any person owning land with coffee plants planted on it, whether wholly or partly in India or divided amongst different estates has to apply for registration at the registration officer appointed by the State Government. They have to do so within one month of the date when they became owner. Once registered, it can only become invalid if the registering officer cancels it.
Section 35 states the punishment for non-compliance to above mentioned Section 14 procedure, which is a fine of up to one thousand rupees and a fine of up to five hundred rupees for each subsequent month.
- Is there a procedure for setting of prices of coffee?
As per Section 16 (1) of the Act, the Central Government can though notification in the Official Gazette, set prices for sale of coffee in the Indian market, in wholesale or retail. Section 16(2) stipulates that the same would be a price ceiling.
- How does the Act stipulate the check of quality of coffee produced in the Indian market?
All saleable coffee has to have been cured at licensed curing establishment or delivered to the buyer through a curing establishment licensed under Section 28. It can also be sold in accordance to a license procured from the Board under Section 24.
Section 24 allows for owners to get license from the Board to sell uncured coffee. Section 28 stipulates that every establishment made with the purpose of curing coffee must get a license from the Board for the same.
Coffee by all registered owners has to compulsorily be cured at a licensed curing establishment. The facility must have been obtained this license by the Board.
Once coffee is sent for curing, the owner is required to send a report to the Board, individually for each different estate. The report should contain the amount of coffee, the details of curing establishment as well as the details of the estate it was grown in. On doing so, the curing establishment divide the received coffee into two parts- - that for free sale and that for inclusion in surplus pool - depending on the free sale quote of the estate if one has been set.
If the grower himself owns the curing facility, then they need to send a report as mentioned above. If it is owned by a third-party then it shall be the curing facility that sends the report regarding quantity of coffee and details of estate.
- What control over export and re-import does the Coffee Board have?
As per Section 20 of the Act, Coffee cannot be exported from India by anyone except the Board or with the authorization of the Board. This applies to amounts of coffee considered reasonable by the Collector, not quantities passengers’ transport while travelling. The Cent Government has the power to decide the amount of coffee to be exported from India, which if decided, exports cannot happen in excess of.
Once coffee has been exported, according to Section 21 (1) it cannot be re-imported to India unless granted so by the Board.
- What is the surplus pool?
Many growers have to comply to the free sale quota assigned as per Section 22. As such, whenever the board requires, regardless of if they have exceeded their free sale quota or not, the board can ask Growers to deliver coffee for inclusion in the surplus pool. Once this is done the registered owner whose coffee it was does not retain any rights in respect of this coffee, except to receive payment for the same u/section 34
- How is the funding of the Coffee Board presented?
As per Section 30, the Finances of the Board are divided into the General Fund and the Pool Fund.
The pool fund is only used for payment and profits regarding the surplus pool, payments to owners, money for storage and curing of the surplus pool all come out of the Pool Fund. This is stipulated in Section 32.
The General pool is used for most other objectives which are considered to be for the benefit of the Indian coffee industry including technology building and incentives to growers. This is stipulated in Section 31.
- What are the penalties like under this Act?
The maximum fine given under this Act, if any of the Section 35 to Section 49 become applicable, is rupees one thousand.
According to Section 40 only a Metropolitan Magistrate or a Judicial Magistrate of first class can take cognizance of an offence under this Act.
Section 47A dictates that no legal proceedings can be initiated against a Board member for anything done in good faith or intended to be under this Act.
- What are the Coffee Rules of 1955?
As per Section 42 often Act, the Board is controlled by the central government, which can modify, overrule or rescind any action taken by the board. Building from this, the central government has been given the power to make rules regarding various aspects of the Coffee Act by Section 48 and they have done so too. These rules act as a guide to the implementation of the Coffee Act as well as a procedural rulebook. They elucidate details regarding meeting, quorum, filling of vacancies, and the duties of Board officials. It gives details of different standing committees or other committees that the board can appoint each year, including Research, Marketing, and Coffee Quality committees. It confers powers to the Chairman, Vice Chairman and so on while also explaining how the Budget for each year is to be kept and presented by the Board.
