MADIKERI: The town that coffee made

Eventually, the MBA didn't matter. Nor did a promising career with Godrej and the good life in Bangalore. The call of his Kodava roots and the prospect of a life away from it all enthused Nitish Nanjappa greatly. So in 1995, he decided to chuck it all up and run a coffee plantation.

''I was thinking whether marketing of some products was all I wanted to do for the rest of my life or whether I wanted to explore something else,'' muses Nanjappa, 34, dressed in his work uniform of faded jeans and a T-shirt. ''Also like all Kodavas, I am attached to our land. Therefore, when family circumstances made it imperative that I return, I made up my mind.'' As he gets off his Mahindra jeep, Nanjappa explains why so many young achievers from this highly literate corner of Karnataka quit the rat race and returned to the land. ''We thought we would make a decent living growing coffee,'' explains Nanjappa, who owns 20 acres of land. Coffee prices were high then and many bought more land to add to their ancestral holdings.

Today, in the sylvan, rolling landscape of Stewart Hills, Madikeri (Kodagu's capital), the rat race seems an unlikely reality-but unpleasantly near. Coffee prices have crashed to an all-time 30-year low; supply exceeds demand; and the government doesn't get involved. The income-expenditure equilibrium is so strained that many urban yuppies are regretting the transition they made to a life of quiet living and gentile farming. ''In retrospect, I wonder whether it was the right decision,'' says A.K. Deviah, 33, who worked for tea and rubber plantation major Harrisons Malayalam when he heard the call of the land in 1996. He now wonders if he can make a living off his 40-acre plantation.

"The call of Kodava roots and the prospect of a life away from the rat race enthused me greatly. I thought I could make a decent living growing coffee." Nitish Nanjappa/Planter

The Trouble With Coffee

As the new century rolled in, to be a gentleman-planter was to lead a semi-colonial, relaxed life-and watch the cash roll in. Coffee has traditionally been a boom commodity: production stood at 301,200 metric tonnes in 2001, a staggering 1,600 per cent rise over 50 years. As production rose, so did the prices of coffee.

As coffee prices climbed through the 1990s, many urban Kodavas decided to chuck their jobs to test their green fingers. ''I had all the good things in life. A stable job and the creature comforts of urban life," says Arun Appachu, 41, a senior sales manager with liquor giant McDowell's when he decided to return to Kodagu (as the district is called) in 1994. To his 14-acre family plantation, Appachu added 8 acres, bought with a Rs 25-lakh loan.

Today, he fears the bank may be thinking of foreclosing his loan. ''When my annual earning from coffee is in the range of Rs 1.5 lakh from my 25 acres, how can I service my debt at Rs 3 lakh per annum?" Leisurely mornings, traversing huge estates in jeeps as in a cigarette-advertisement fantasy, an evening at the Mercara Club with a chotta peg-all this is a fantasy, says Appachu, who starts work as the sun begins to rise.

Like any commodity, coffee has its own shortage and glut cycle. "But unlike other commodities, coffee is firmly aligned with the international market," says K.T. Aiyappa, 62, a veteran planter who's seen the ups and downs of the industry over the last four decades. Even when India was a closed economy, only 20 per cent of coffee was consumed domestically. Returns were good for the planter, even for the so-called "small planter" with holdings of less than 10 acres. Fortunes hit a peak in 1997 when international coffee prices rose to highs of $2.65 (Rs 127) at 1997 prices per pound (1 kg=2.1 pound).

"In most cases, our lands are inherited, and even if their cost is assumed to be zero, the returns are paltry ." Ram Bopiah/Planter

Those days are gone. A pound of coffee fetches a miserable 54 cents (Rs 26) on the international markets today. In Indian markets too, the fall has been dramatic. For instance a 50 kg bag of Arabica parchment that used to fetch Rs 8,000 in 1997, today fetches Rs 1,800. ''Never have I seen such a sustained drop in prices,'' laments Aiyappa. ''It has become more economical to leave the plantations untended and fallow rather than to grow, pluck and sell coffee,'' he adds.

The condition of small-plantation owners with 10 acres or less is especially desperate. With the average return per acre per annum around Rs 6,000, annual incomes are just about Rs 65,000 to Rs 70,000. ''This is not even taking the capital cost of buying these lands,'' says planter Ram Bopiah, 48. ''Since in most of the cases lands are inherited-and even if their cost is assumed to be zero-the returns are paltry.''

The Fallout Of The Coffee Crash

Kodagu is Karnataka's coffee heartland. The state grows 70 per cent of India's coffee-Kerala and Tamil Nadu are the other producers-most of it in Kodagu.

But it's not just the planters and the labourers who suffer. Coffee is the second-most traded commodity in the world after oil. India more than pulls its weight in this segment, as it has a share of 4.7 per cent of the world coffee market, compared to its overall world trade per centage of just 1.4 per cent. In 2001, coffee exports earned the country $333 million (Rs 1,598.40 crore).

So if the coffee growers suffer, it impacts a large segment of the society. If the planters feel that it is cheaper to allow estates to go to seed rather than maintain them, the effect will be felt widely.

"I saw the glut coming and hedged my bets by growing cardamom, pepper, vanilla, and anthurium. Coffee plantations allow for such inter-cropping." Betts Warunny/Planter

Herein lies the danger. Coffee bushes are of mainly two varieties, Arabica and Robusta. Arabica is a sensitive plant whose coffee seeds command a higher price in the market than the more common variety of Robusta (which is a very robust variety, as the name suggests). It takes seven-to-10 years after planting for coffee bushes to produce coffee cherries. Coffee is also a peculiar crop in the sense that it is a biennial harvest. That is, only every alternate harvest will be good. If the planters neglect to tend to the bushes, the effects are not immediate but will be felt in the long run. "Unless the government rushes to the aid of at least the small and marginal planters, production will collapse,'' warns Nanjappa.

But looking for a government handout isn't the only way out. Some innovative, progressive planters are eking out a good living by astutely using their education. Betts Warunny, 38, the owner of a 200-acre plantation saw the coming glut and hedged his bets by growing cardamom, pepper, vanilla, and anthurium. "The best thing about a coffee plantation is that it allows inter-cropping (growing several crops simultaneously)," says Warunny. Though coffee prices have fallen dramatically, cardamom prices have seen an upswing in the past two years from Rs 80 per kilogram to Rs 700 per kg. Similarly, pepper-this grows on the twines that circumbulate trees planted to provide shade to coffee bushes-prices have also been on an upswing.

The Age Of Self-Help

Others argue that intercropping is at best an incremental-income option-it cannot replace coffee.

Still, there are some systemic problems that can be tackled, like fragmented land holdings-less than 10 acres is today largely unviable-some of which are jamma lands; they can be passed on to the next of kin but not sold. Many planters bought land at Rs 5 lakh per acre at the height of the boom and now do not want to sell at Rs 1.5 lakh per acres.

A consortium of seven major planters has come together under ''CareTacres'' a privately-held company, which takes small holdings on long leases of around 30 years. "We will take over such small holdings and share 50 per cent of the profits generated from the estates," says Ram Bopiah. ''Given our expertise of running our own plantations we are confident of turning them around, as we will have leverage in terms of negotiating prices while buying fertilisers, pesticides and hiring labour." In the 11 months of its existence, CareTacres has acquired seven estates between five and 65 acres.

Self-help schemes like this offer hope to Prakash Karumbiah, 47, a small planter who might join the CareTacres scheme. "I can stay and earn in the city while at the same time being assured that my plantation is being taken care off," says Karumbiah. "If the situation improves, then my children or I might decide to come back." As for the government, he claims it just isn't doing enough. And it isn't likely to.

"The present crisis is due to fluctuations in the international markets over which we have no control," says Lakshmi Venkatachalam, Chairperson of the Coffee Board. "Coffee is the most globalised agricultural commodity in the world." She says the board has helped farmers reschedule their loans to the tune of Rs 400 crore and also ensured that the Ministry of Commerce provides an interest subsidy scheme of 5 per cent. That is something. But for the gentleman-planter and his way of life, it just might not be enough.