Pradeep Pooviah, a large coffee grower near Madikeri, spends more time at his estates these days. He has taken up the installation of sprinklers and laying underground pipelines strengthening the irrigation infrastructure across his estate.
Taking advantage of the current boom in coffee cycle, growers such as Pooviah are taking up capital investments to make their farms future ready. Retiring his existing loans, Pooviah said he has gone for fresh borrowings for enhanced capital investment and is spending close to ₹ 80,000 per acre to strengthen the irrigation infrastructure laying underground pipelines, while taking up enhanced seasonal fertigation.
As coffee prices rule at record highs with changing climatic patterns impacting output in key producing countries such as Brazil and Vietnam, and a section of growers in Karnataka, the largest producing State, are investing in improving their estate infrastructure and irrigation tops their agenda.
The priorities
“People are predominantly investing in irrigation infrastructures, water storage structure, sprinkler units etc. There has been an increase in sales and people are investing in HDPE pipes replacing the old aluminium pipes,” said Suryaprakash Rao N, advisor, Jain Irrigation and former director of Central Coffee Research Institute. HDPE pipes are cost effective and more durable.
“For the past few years, we are seeing erratic rainfall, inadequate blossom or backing showers and there is a need to ensure irrigation. The use of sprinklers in becoming common. Rain water harvesting has become popular and some people are going in for gravity irrigation” Rao said.
Sahadev Balakrishna, Chairman, UPASI Coffee Committee said mainly the irrigation equipment such as pipes, engines and pumps will be the most important of all the capital expenditure, followed by processing activity related such as pulper units. “Growers are still selling coffees and I guess by April, May most of the investment will start,” he said.
No gross capital formation
As rainfall-related damages have taken place in the past several years, people will also be investing in taking up the repair of roads, bridges, revetment etc. in the landslide areas, he said. “I think all these will take about three or four years to get back in shape,” Balakrishna said.
P G Chengappa, agri economist and former Vice Chancellor of University of Agricultural Sciences, Bengaluru, said, though some investments are happening at the production side with growers spending on irrigation and other equipment, the gross capital formation is not seen taking place in the coffee sector.
Chengappa, also a robusta coffee grower, said producers should look at investing in processing facilities to take up value-addition at the farm level in a bid to move up the value chain. Washed coffee and speciality coffee have a much higher premium and growers should look at tapping that niche market segment more seriously.
B S Jairam, former president of Karnataka Growers Federation said the surge in prices is seen helping growers clear their accumulated debts and make fresh investments. “These days people are showing more interest in maintaining their estates,” he added.