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Deeptha Rajkumar

`An unbridled increase in production with no corresponding rise in demand, will prove to be disastrous for the industry in the long term.'

Wellington (Nilgiris) , Nov. 2

THERE is a growing perception that production and export targets for tea have been ambitiously fixed and without taking into consideration the marketability of the product.

Highly placed tea industry sources told Business Line that an unbridled increase in production with no corresponding rise in demand, will prove to be disastrous for the industry in the long term.

The concern comes in the wake of the fact that by end of the Tenth Five Year Plan i.e. year 2006-07, the Government has set a target of 1,044 mkg for production with 264 mkg earmarked for exports and 780 mkg for domestic consumption.

``This is not an achievable target, specifically with regard to exports. The Government needs to assess the requirement and then set the target. One should produce what you can market. There is over emphasis on volumes,'' an official said.

At a time when tea supplies are plentiful and prices are at rock bottom levels, there is a growing belief that it is imperative to concentrate on improving yields and then think in terms of increasing production.

Given that the prevailing low price regime has resulted in mounting losses to the producers, industry sources stressed the need for the Government and the Tea Board to create awareness about the current surplus situation in the industry.

``Growers, in particular small growers, should be cautioned against further area expansion. To this extent the Government could conduct some sort of an awareness campaign, probably advertise more, about over production and the low price realisation in the industry today. This will make the growers more aware of the risks in the business and enable them to look at more appropriate crops,'' sources reasoned.

There is a growing conviction that apart from controlling production, given the glut in the industry today, crop diversification should be actively encouraged.

However, a thorough assessment of the suitability of the crop vis-a-vis the planting region needs to be made before implementing any such measures. ``For instance, one cannot really grow cashew in the Nilgiris. The region is, however, favourable for herbal spices cultivation,'' sources said.

While the Government would appear to be in favour of crop diverisfication, a major stumbling block in this instance is the land ceiling proviso.

``The State Governments need to exempt new crops from land ceiling. Today, we have a plethora of land and forest acts that have to be made more conducive for growing new crops. Only then can such measures be proactively encouraged.

For instance, it is in this line that the Kerala State Government has exempted cashew from land ceiling,'' sources opined.

As per UPASI data, all India tea production for the period January-August stands at 535 mkg, up 9.18 per cent as against 490 mkg for the corresponding period last year.

Tea exports for the same period stood at 88 mkg down by 43.18 per cent as against 126 mkg for the similar period last year.

All India tea production for 2002 stood at 826.2 mkg while tea exports for the period were 198.1 mkg.

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