Value Chain Upgrading Strategies for Integration of Indian Small Coffee Growers in Global Coffee Value Chain

Government of India believes boosting exports of agricultural commodities is a sure-shot way to enhance the farmers income in the country. Indian coffee is primarily an export-oriented commodity with over 75% of the annual production being exported to various destinations around the world. Small coffee growers dominates coffee production in the country. The main objective of the study is to estimate the operational cost involved in the production of Robusta coffee and also to estimate the price spread between the coffee growers at farm gate level and at exporters level. The results of the study indicates that, there is a huge price spread ( 34, 147 per ton) in coffee value chain due to the inability of the small coffee growers to ship their coffee directly to export destinations which is caused by a number of impediments like low bargaining power associated with fragmented production, lack of trade knowledge, lack of capital and information barriers. Thus, it is important to provide visionary long run sustainable solutions to micro level weakness and threats by considering strengths and opportunities of small coffee growers in the country to move up in the value chain. The results of the study also indicates that, there is huge potential for the coffee growers to enhance their gross income from existing 94, 900 per acre to 1, 29, 047 per ton by moving up in the value chain. The study also highlighted the initiatives taken by the Coffee Board to support small coffee growers to move up in the value chain.