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C.J. Punnathara

Proposal awaits final clearance from Finance Ministry

Thekkady May 31 In a bid to revive the 33 closed tea estates in India extending over a geographic area of 11,500 hectares, the Union Government will come out with a consolidated package, the Union Minister of State for Commerce, Mr Jairam Ramesh said. The package is awaiting the final clearance from the Finance Ministry.

Waiver of penalties

The package includes restructuring loans to banks, waiver of dues to the Tea Board, waiver of penalties on Provident Fund, interest subsidy on loans from banks for the next seven years and creation of a Special Purpose Tea Fund. Kerala has 17 closed tea estates with an area of 4330 hectares, West Bengal has 14 with 5,500 hectares and Assam has two with 660 hectares.

Dues to the banks from these estates are rs 184 crore, to provident fund Rs 49 crore and to Tea oard Rs 5 crore.

The Special Purpose Tea Fund with a corpus of Rs 4760 crore spread over a period of 15 years will be launched from Guwahati in Assam on June 25, followed by Jalpaiguri in West Bengal on June 2 and in Coimbatore for Tamil Nadu and Kerala on July 1.

While the Central Government will contribute 25 per cent of the subsidy, 25 per cent will have to be borne by the tea gardens and 50 per cent will be extended as soft loans for replanting tea bushes, which are over 40 years old. It had set a target to cover two lakh hectares under 1600 tea gardens, Mr Ramesh said.

Earmarked funds

As much as 50 per cent of the funds are earmarked for Assam, 25 per cent for West Bengal, 15 per cent for Tamil Nadu and 7-10 per cent for Kerala. Tea prices were looking up in 2006 and despite a good crop expected from Kenya this year Indian tea prices are likely to hold steady. The time for revival of tea estates is most appropriate, the Minister said.

In order to pep up exports, India is looking at new countries like Pakistan, Iran and Egypt. The new markets are expected to prop up the fading sheen of Indian tea exports to destinations like Russia.

Changing preferences

As the Russians are getting richer, several of them have been shifting over from low-cost CTC varieties to the upmarket orthodox varieties. This is bound to be at the cost of countries like India.

In order to tide over the changing global preferences for better quality, the country will have to double the area under orthodox varieties from the current level of 10 to 20 per cent in the next five years, Mr Jairam Ramesh said.

Our Bureau reports from Kochi: Mr Ramesh said the Centre was planning to create a social fencing along the Indo-Bangladesh border in Tripura by planting natural rubber on a stretch of 850 km.

Addressing a press conference, he said discussions were under with concerned parties, the Tripura Government, the Border Security Force and the Rubber Board.

Plantations in N-E

The Union Minister said he had already discussed this issue with the Prime Minister, Dr Manmohan Singh, and the Home Minister, Mr Shivraj Patil, and the latter would discuss it with the security agencies. Financial implications would have to be worked out.

Besides, the Centre would be promoting rubber plantations in the North- Eastern States, while replanting would be encouraged in Kerala where there is no chance for expanding the area, he said. In five years time 34,000 hectares would be replanted involving an investment of Rs 680 crore.

`No Ban on futures'

Our Correspondent reports from Kottayam: Mr Ramesh said farmers were not benefited directly by rubber futures trading. Efforts were on to involve them in futures trading and the Rubber Board had been asked to workout the details in this regard. "Currently, middlemen are getting the profits. The solution is direct involvement and not banning the futures," the Minister said.

The Cashew Board would be constituted on the basis of the Rubber Board model, he said. All commodity boards in the plantation sector, including Spices Board, would be reconstituted following the model of the Rubber Board, he said

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