The Hindu Business Line : ‘Successful revival of tea gardens needs support of all players’

Kochi, Aug. 12 Even as the Union Government has threatened to take over closed tea gardens invoking Section 16 E of the Tea Act 1953, the tea plantation industry is of the view that successful revival of the gardens in Kerala, which have been in deep crisis for many years now, would be difficult unless the trade unions, managements, financial institutions, and the State and Central Governments jointly hammer out a permanent solution.

Piecemeal measures are not enough to resolve the crisis, senior industry sources told Business Line.

According to them, barely one or two tea estates in Kerala can break even because of very stringent cost reduction measures.

Full co-operation of workers and efficiency are the key factors that could help save these estates, they said.

“One of the biggest problems is the lack of full co-operation on the part of the trade unions.”

The Government is also not extending the required assistance, they added.

“If the tea leaves plucked from closed gardens were sold to their own management for at least six months, it would help the management run the factories in a cost-effective manner.”

But the workers are dissuaded from doing so and the tea gets sold outside, they added.

On the other hand, provident fund (PF) authorities are demanding 37 per cent penalty on the defaulted amount towards workers’ PF accounts.

This penalty amount has become a heavy financial burden and needs to be waived so as to reduce the company’s liabilities, they said.

Power tariff

Similarly, power charges for plantations should be on par with agricultural tariff instead of high-tension (HT) consumer tariff at which they are being charged currently.

“We are in agriculture. Why then we are put under HT consumers?”

Estates are classified as HT 1 consumer and charged high tariffs; instead, they should be made HT3 consumers and charged agricultural tariff, the sources said.

Financial institutions also need to come forward for arriving at a one-time settlement with the plantations that are in deep financial crisis.

The Union Commerce Ministry and Nabard, having realised that the unit cost of Rs 2.73 lakh per hectare approved by the latter was insufficient for tea gardens in South India, has raised it to Rs 3.44 lakh.

“But that alone won’t help the plantations get out of the crisis. All other issues have to be sorted out through constructive discussions with all those involved.”

According to the sources, the increased tea prices of late are not enough for almost all estates to break even because of the high cost of production.

If any tea garden had shown a positive balance sheet, it belongs to corporate plantation companies with both tea and rubber, they added.

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