The Hindu Business Line : Rs 1,200-cr special tea fund for southern States launched

Launching the Special Purpose Tea Fund for South India, Mr Jairam Ramesh, Union Minister of State for Commerce, said that though there were 1,600 tea plantations eligible for replantation funds in the country, only 479 plantations had applied for funds.

However, this was still a good response given that this was the first year. But the response from the South Indian plantations could be improved.

While there were 255 applications from Assam and 132 from West Bengal, there were only 24 from Tamil Nadu, 18 from Kerala and three from Karnataka. Mr Ramesh attributed the poorer response from the South to the existence of a large number of small tea holding with less than 25 hectares which are not eligible for the special fund. While the national average of small holders is 20 per cent, South Indian average is 40 per cent.

Limit raised

An amount of Rs 4,700 crore has been earmarked for the Special Purpose Tea Fund, of which, Rs 1,200 crore has been announced for the South.

The funds are to be used for re-planting senile tea bushes, which are sometimes over 50 years old. Over 38 per cent of the tea bushes spread across an area of two lakh hectares need replanting.

The limit for replanting has been raised from Rs 2.74 lakh to Rs 3.44 lakh per hectare. It has also been decided to increase the limit of replanting area per estate from 2.5 per cent per year to between 2.5 per cent and 12.5 per cent on a case-by-case basis.

With over 40 per cent of India’s tea plants requiring to be replanted, the Ministry has set a target of 11,000 hectares of re-plantation every year. Two lakh hectares are to be replanted during the next 15 years. In the first year itself, an area of 6,600 hectares is expected to be replanted.

Russian market

“We have to change our production to suit the export demand,” Mr Ramesh said. He said the plantations still produced more CTC variety tea, while the global demand has been increasingly shifting to plantation variety.

With the growing purchasing power in the Russian market, the customers have been shifting from CTC to plantation varieties and India has been losing an important market. Iraq continued to be an important market though payment problems are confronting Indian exporters. Iraq which was the largest export market for Indian tea collapsed last year.

The gains made in Pakistan in 2006 could not be sustained last year. Egypt is emerging to be a major export market.

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