The Hindu Business Line : GoM panel to look into plantation sector issues

The Group of Ministers on Plantation, headed by the Union Minister for Agriculture, Food & Consumer Affairs , Mr Sharad Pawar, set up in March 2006, is meeting here on Tuesday for the first time to discuss a host of issues that have a bearing on the plantation industry.

Other members of the GoM include the Commerce & Industry Minister, Mr Kamal Nath, the Defence Minister, Mr A.K.Antony, the Finance Minister, Mr P. Chidambaram, the Labour Minister, Mr Oscar Fernandes, and the Overseas Affairs Minister, Mr Vyalar Ravi, while the Minister of State for Commerce Mr Jairam Ramesh, is a special invitee.

Mr Jairam Ramesh told Business Line here that though the GoM was meeting after 10 months of its formation, the Department of Commerce had been addressing the problems plaguing the plantation sector proactively. He cited the case of the Union Government's recent approval of a Special Purpose Tea Fund for funding replantation and rejuvenation activities aimed at improving the age profile of tea plantations. He said similar such replantation and rejuvenation programmes were being studied and a Special Purpose Coffee Fund was in the offing.

Officials said the GoM would also undertake a review on the status of the Rs 500-crore Price Stabilisation Fund (PSF) scheme of the plantation sector. They said though the scheme has been in operation from April 2003, initially for a span of 10 years with a rider for review after five years, it was found unattractive to the growers in its present form.

Expert committee

Against the backdrop of tepid membership and patronage to the PSF , an expert committee under the Chairmanship of Dr Pronab Sen, Adviser (Perspective Planning), Planning Commission, was set up. This committee held seven meetings during which several issues, relating to the PSF scheme as well as new initiatives such as enabling the growers to take part in the commodity exchanges for better price realisation; providing protection to these growers against price volatility risk; and fostering a market for new derivative products with features analogous to that of a price risk insurance product; were discussed threadbare. The high-powered committee of the Department of Commerce on Price Stabilisation Fund studied the suggestions of the expert committee at length.

Revamping of scheme

Under the proposed restructuring, the sources said, financial assistance would be available to growers on the basis of +15 per cent/-5 per cent, -15 per cent of the moving average of the global prices of a particular commodity for the preceding seven years, in place of the extant basis of +/- 20 per cent of the moving average of the global prices of a particular commodity for the previous seven years. They said categorisation of years into boom, normal, distress year level one and distress year level 2 have been made, in place of the current categorisation of boom year, normal year and distress year.

Distress year level 2 has been defined as the one where the average domestic price for the year falls below the lower price band 2 of - 15 per cent and PSF trust would deposit upto Rs 5,000 in PSF Savings Bank accounts of members. Entry fee amount of Rs 500 per member being deposited in the corpus fund is being waived and would be used by members to open his PSF SB account. In case of existing members, it would be refunded.

The GoM would study the restructured PSF programmes for the growers of tea, coffee, natural rubber and tobacco as also the personal accident insurance cover for the grower-members of PSF scheme, the sources added.

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