The Hindu Business Line : Include plantation sector in remission scheme: Upasi

Kochi, Aug. 19 The United Planters Association of Southern India (Upasi) has urged the Union Commerce Ministry to include the plantation sector in the remission scheme for labour-intensive sectors as it is the worst hit by the appreciating rupee.

Upasi sources told Business Line that the total area under plantation crops is estimated to be around 15.5 lakh hectares, which is around one per cent of total cropped area in the country. The total value of the plantation commodit ies in 2005-06 is estimated at Rs 14,100 crore accounting for nearly 2 per cent of the India’s total agricultural GDP.

Around 13.4 lakh growers and 22.8 lakh labourers are involved in raising plantations in the country. The recent Occupation Wage Survey reports that of the total workforce, 53.54 per cent are female workers, 45.25 per cent male workers and 1.21 per cent adolescent workers.

The plantation sector are governed by around 24 legislations, both Central and State, and have to pay 15 different taxes to Central Government, State Government and local panchayats besides innumerable policies that have direct and indirect bearing on the plantations. The excessive taxation, in fact, has affected the financial stability of the plantations due to lower profit after tax.

Contribution

The contribution of the plantation sector in the agricultural export portfolio is significant, with the export estimated at Rs 3,750 crore in 2005-06, accounting for nearly nine per cent of the total agricultural and allied product exports.

Specific package

Upasi also suggested that there should be a specific package for compensating the losses incurred by growers. This is proposed since conventionally any incentives provided under remission/duty drawback schemes are generally confined to merchant exporters while the benefits are not passed on to the duty paying producer. This assumes more relevance in the plantation sector compared to other sectors such as textiles, leather, gem and jewellery and handicrafts, given the fact that the former is largely a supply driven commodity while the latter are demand-driven commodities.

For instance, they pointed out, the countries that have reported higher appreciation in their local currency such as Columbia and Brazil, major producers of coffee, had already announced subsidy to growers to offset the losses on account of their local currency appreciation. Columbia has earmarked $105 million subsidies to surmount the Peso appreciation. In Brazil, which is the largest producer of coffee, Arabica growers will be given a subsidy of 40 reais ($21) a bag.

Given that the competing producing countries have already evolved schemes for growers to offset the loss due to currency appreciation, it is important that Ministry of Commerce, also implement schemes for offsetting the loss due to rupee appreciation at the earliest, so that our competitiveness does not get eroded, they said.

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