Financial Daily from THE HINDU group of publications
Wednesday, Sep 08, 2004
Agri-Biz & Commodities
Relief packages for tea, coffee on anvil
Coonoor , Sept. 7
THE Government is in the process of formulating a comprehensive relief package for the coffee industry and a special package for the tea sector, according to the Union Minister of State for Commerce and Industry, Mr E.V.K.S. Elangovan.
The package for the tea sector would have particular emphasis on replantation and rejuvenation of tea bushes. Besides, the Government is planning a review of the export promotion scheme for natural rubber and a price stabilisation fund scheme (PSFS) for the benefit of the growers of tea, coffee, rubber and tobacco.
Addressing the 111th Annual Conference of the United Planters Association of Southern India (UPASI) on Tuesday, the Minister said t 2004 was the first year of implementation of the PSFS.
Having announced the price spectrum band for 2003, the Government is reviewing the scheme to make it attractive and useful to the growers of tea, coffee and rubber.
Mr Elangovan said the Special Tea Term Loan announced earlier would be extended on a case-to-case basis to large growers.
(The Special Tea Term Loan envisages restructuring and rephrasing of irregular portion of outstanding term loans and working capital loans with a repayment over 5-7 years and a moratorium of one year. It also provides for working capital up to Rs 2 lakh at a rate not exceeding nine per cent to small growers.)
On tea, the Minister said the Centre had announced a price subsidy scheme for small tea growers.
The maximum subsidy is Rs 8 per kg for made tea (which would amount to Rs 2 per kg for green leaf).
"The Bill has been passed. Only the disbursement is awaited. The Tea Board will commence the disbursement of this subsidy next week." The total amount of subsidy is expected to be Rs 23 crore.
Mr Elangovan said the various schemes to be financed out of additional excise duty collections were under consideration and would be implemented soon.
Reassuring coffee growers of all possible help, he urged them to face the challenges by taking up appropriate measures to improve production and productivity and undertake value-addition.
The UPASI President, Mr B.B. Medaiah, reiterated the need for an exclusive Plantation Policy Resolution on the lines of the Industrial Policy Resolution and Agricultural Policy Resolution encompassing all facets like production requirements, export objectives, domestic demand, land tenure, finance, taxation, diversification, etc.
Urging the Government to put in place policies and programmes for the revival of the plantation industry, he said the industry existed in an "administrative no man's land".
Through the enactments of the Commodity Acts and the creation of the commodity boards, the plantation sector was technically under the administrative control of the Commerce Ministry. However, for all practical purposes, the industry floats between the Central and State Governments.
"Income-tax is levied by both. The marketing policy is controlled by the Centre but land tenure is a State matter. Broad fiscal policy initiatives for agriculture are generally not available for the plantation sector."
Mr Medaiah appealed to the Minister to expedite the release of funds towards orthodox production and export promotion, generic promotion and research.
Later, speaking to newspersons, Mr Elangovan said the relief packages for the coffee and tea sector would be implemented within the next few days.
To a query on exports, he said the total exports had amounted to $62 billion last year. The Commerce Ministry had proposed to double this by 2009. In value terms it could work out to $175 billion, he added.
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