The Hindu Business Line : Budget fails to answer coffee, tea subsidy issues

THE Government will have to shell out Rs 5 crore each month by way of subsidy to the nearly 60,000 small farmers in the Nilgiris alone as per the Budgetary announcement of the Finance Minister, Mr Jaswant Singh, to offer Rs 2 per kg as subsidy to the tea small farmers supplying green leaf to the factories.

Since the scheme would be in operation for four months, Rs 20 crore would be doled out. In 2000, when a similar scheme was in vogue for six months, the Government expended Rs 26 crore.

And, this time, the subsidy would be extended to the tea small farmers all over the country. So, the overall fiscal commitment on this account is likely to be much more.

If the factories continue with the new-found differential rate of payment for quality and non-quality leaves, the market price of non-quality leaves is bound to fall; in some cases, factories have said that they would procure only quality leaves.

All the same, unless the overall demand for the made tea increases, the market is unlikely to be buoyant. So, although the subsidy would help the small growers to get an outright support, the overall earnings are unlikely to increase unless the market is buoyant.

The Budget does not lay thrust on tea exports, which had fallen to a record low in 2003. The Upasi, for instance, had pressed hard for a subsidy of Rs 7 a kg for the orthodox teas meant for exports.

Likewise, the Budget is silent on the Upasi plea to allow 100 per cent of the export profits from plantations for exemption under Section 80 HHC of the Income-Tax Act.

The Budget has nothing specific for the coffee growers even as they demand the continuance of the special term loan assistance. .

The Upasi plea for the supportive mechanism for rubber exports has not found the necessary favour in the Budget. So, too, is the plea for hiking import duty on pepper and cardamom to 100 per cent.

In effect, the only consolation is that the Budget is interim and, hence, it is worth waiting for the final version!

More Stories on : Plantations | Coffee | Tea | Budget

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Dubai investment body, NYMEX in pact for commodity exchange

Monsanto to sell wheat patent as part of cereal biz

Budget fails to answer coffee, tea subsidy issues

Rubber growers see anomaly in visual grading system

Grading of rubber

CTC teas down at Kochi auction

Slight fall in cotton likely

`AP committed to execute Pulichintala reservoir project'

Coimbatore to host national cotton meet

Poultry sector losing Rs 10 cr daily on bird flu fears

Workshop on avian flu

Pepper prices slip further

Nandan Agro sets up Swiss herbal firm