The Hindu Business Line : `Special package' for tea industry likely

THE Government is looking at a "special package" for tea taking "a holistic" view of the problems plaguing the country's tea gardens, auction systems, the industry and the plantation workers, the Lok Sabha was informed on Wednesday.

Responding to a calling attention motion moved by the CPI (M) member, Mr Basudeb Acharya, and three others, the Union Minister of Commerce and Industry, Mr Kamal Nath, denied that the removal of quantitative restrictions (QR) in 1999 and the consequent import of tea into the country had exacted their toll on tea industry's fortunes.

He said units located in export-processing zones and special economic zones only usually import tea and out of the imported tea 95 to 99 per cent goes to export production through value addition. "As long as imported tea does not seep into the domestic market, it does not affect domestic tea units," he said adding that the problem was with tea bushes in the country as 50 per cent of which required rejuvenation and replanting.

On the loss of Russian tea market about which much was made of, the Minister said that earlier Russians were importing CTC (curl, tear and cut) tea from India, which they subsequently changed into orthodox tea. Meanwhile, India was also exporting 90 per cent of its orthodox tea abroad but countries such as Sri Lanka and Vietnam captured the space left by India in Russia.

The Minister said that six crore labourers are employed in the tea industry and 20 per cent of tea production is accounted for small tea growers for whom tea provides "sustenance of employment". As such the question of not taking care of the welfare of this sector does not arise as the UPA Government is committed to providing employment to greater number of people, he said.

Earlier, in a statement, the Minister conceded that the Indian tea industry was passing through a long period of depressed prices which began skidding from November 1999. The all-India average auction prices for tea came down from Rs 76 per kg in 1998 to about Rs 56 kg during 2003.

"The continuous fall in prices of tea, coupled with high costs of production, sluggish rate of growth in domestic demand and increased age of tea bushes along with a perceptible fall in per hectare production of tea crop had adversely hit the viability of tea gardens, particularly the medium-sized and financially weak, leading to closure/ abandonment of tea gardens."

He said presently 54 gardens are closed, out which 20 are in West Bengal, 17 in Kerala, 11 in Assam and 6 in Tripura and about 28,000 workers are affected due to closure.

He said an expert committee appointed by the Government suggested remedial measures to help these sick tea gardens and based on their recommendations, the Union Government and Tea Board have facilitated discussions between management of the closed tea gardens and their bankers. Subsequently, 12 gardens — 11 in West Bengal and one in Assam out of the 36 studied by the expert committee — were reopened. The Minister said that a scheme is under formulation to provide interest subsidy by the Union Government, over and above the revival package, which includes promoter's contribution, further loans from the concerned banks and restructuring of the accounts.

Additional capital subsidy for replantation is also proposed and this package would cover the tea gardens to be privatised by Assam and West Bengal Governments.

He said the scheme would be financed from the special fund created out of additional duty of excise collected.

On the Plantation Labour Act, 1951 that imposed social burden on the industry, he said an inter-ministerial committee, set up by the Ministry of Labour, has studied issues pertaining to the plantation sector, including social costs, provident fund dues of the plantation workers and taxation structures. He said the report has been circulated to all concerned for their comments.

The Minister said it is now encouraging that there is some improvement in the auction pries of tea during the last few months and said if this trend is sustained, it would go a long way in ameliorating the sufferings of the tea garden workers.

Currently, 56 per cent of the of the tea production is sold through auction system. When members sought this to go up to 100 per cent, the Minister said that there would always be two sides to the same issue and this needs to be carefully studied.