The Hindu Business Line : Planters seek change in policies

Addressing the 53rd Annual Conference of PAT, its Chairman, Mr Vijayann P. Rajes, said the plantation sector was seeking the Government intervention for sharing the burden of social welfare costs; fixation of the VAT rate at one per cent for made tea, roasted coffee and RSS rubber; exemption from VAT for all agricultural produce; permission for crop diversification in plantations; relaxation of timber transit rules; and re-classification of local bodies in plantation areas into village panchayats.

Cost Component

Stating that the biggest cost component in the plantation industry was wages and labour welfare amenities, which amounted to almost 50 per cent of the production cost, he said a proposal to this effect was pending before the Union Government, although it has been accepted by the State Government in principle.

The domestic market for tea, coffee, rubber, cardamom and pepper was most promising, but by 2010, according to a J.P. Morgan Stanley study, the country would emerge as the only nation to have favourable demographics. "Favourable demographics along with structural reforms and globalisation would drive the country to a sustained 8-plus per cent economic growth. Without efforts to strengthen the domestic sector, opening up the market could subject growers to unfair competition, hurt their income and not advance their interest at all," he said.

Conceding that there was a marked increase in the all-India tea production and price levels during 2005 as compared to the previous year, he said due to low realisation on the export front, the earnings had practically remained unchanged in spite of a slight improvement in the quantum of exports.

He attributes the comparatively low prices for the South Indian tea to the ageing and non-clonal tea bushes.

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