The Coffee Act, 1942, was enacted on 2nd March 1942, during British colonial rule in India, to regulate and develop the coffee industry under the control of the Union (Central Government). The Act replaced the earlier Indian Coffee Cess Act, 1935, and was introduced to address the challenges faced by the coffee industry, including market instability, price fluctuations, and the need for organized production and export controls. The Act aimed to ensure fair practices in the cultivation, curing, marketing, and export of coffee, while also protecting the interests of growers, traders, and consumers.
During its inception, the Act was influenced by the need to expand India's coffee market, both domestically and internationally. Over the years, the Act underwent several amendments to adapt to changing economic and political scenarios, including India's independence in 1947 and the subsequent reorganization of states. Key amendments were made in 1954, 1961, and 1994, which refined definitions, expanded the Board's functions, and removed outdated provisions like cess duties.
Constitution and Functions of the Coffee Board
The Board is a corporate body with perpetual succession, responsible for implementing the Act's provisions.
It consists of a Chairman, Members of Parliament, and representatives from coffee-growing states, trade, labor, and other stakeholders.
The Board's functions include fixing prices, regulating sales, managing exports, and maintaining surplus coffee pools.
Registration and Regulation
Owners of coffee estates must register with the Board, providing details of their estates and production.
The Board allocates a "free sale quota" (initially termed "internal sale quota") to registered estates, allowing them to sell a portion of their produce freely, while the surplus must be delivered to the Board for inclusion in a central pool.
Control Over Sale and Export
The Central Government fixes wholesale and retail prices for coffee sold in India.
Export of coffee is restricted and can only be conducted by the Board or under its authorization, with exceptions for personal baggage and specific purposes.
Re-import of exported coffee requires a permit from the Board.
Curing and Quality Control
Coffee must be cured in licensed establishments to ensure quality.
The Board monitors curing processes and maintains records to prevent malpractices.
Financial Management
The Board maintains two funds:
General Fund: Covers administrative expenses, research, and development.
Pool Fund: Manages proceeds from surplus coffee sales and payments to growers.
The Board can borrow funds and make donations, such as to the Gandhi National Memorial Fund.
1954 Amendments: Renamed the Board, expanded its composition, and removed cess duties.
1961 Amendments: Clarified definitions, streamlined registration, and repealed redundant sections.
1994 Amendments: Replaced "internal sale quota" with "free sale quota," reflecting liberalization trends.
2006 Repeals: Removed obsolete provisions related to customs and excise duties.
The Coffee Act, 1942, laid the foundation for a structured and regulated coffee industry in India. It balanced control with incentives for growers, ensuring quality and market stability. While some provisions have been relaxed to align with liberalized economic policies, the Act remains pivotal in governing India's coffee sector, contributing to its global competitiveness.