Extend MSP for tea, coffee and rubber also, says planters’ body

The beleaguered plantation sector wants the Centre to bring commodities such as tea, coffee and rubber under the ambit of minimum support price to bail it out of the prevailing crisis. Low prices, rising input costs and oversupply of these commodities have pushed the plantation sector into a crisis, which has been worsening by the year.

“The industry will not survive if things continue to go on like this. The Government should consider declaring MSP for commodities such as coffee, rubber and made tea,” according to AE Joseph, President, United Planters’ Association of India (Upasi).

Speaking to BusinessLine at Upasi’s annual event, Joseph said the prices of these commodities have hardly risen over the past couple of decades, while the costs for producers have gone up multi-fold during the same period. Over the past 25 years, the rate of inflation has grown by 4.38 times, Joseph said.

The growth in MSPs declared by the Centre for all the 22 crops has been higher than that of inflation during this period, except for tea, rubber and coffee, Joseph said. Tea prices have risen by only 2.3 times during the period, while that of coffee has moved up by 1.9 times and rubber 2.5 times.

In the same period, wages in tea sector have grown by 9.7 times, while that in the rubber sector has grown by 8.2 times.

“We are not even keeping up with the inflation in terms of price realisation. Unable to withstand the cost pressures many tea estates, especially in Kerala, have started closing down,” Joseph said stating that the Government’s intervention was crucial for the industry to survive in the days ahead.

The southern States — Kerala, Tamil Nadu and Karnataka — are major producers. These States account for 67 per cent of the growers and 55 per cent of the workers engaged in plantation activities all over the country. About 12.60 lakh growers — mainly small and marginal are cultivating plantation crops on 11.57 lakh hectares providing round the year employment to about 13.47 lakh workers.

Bleak outlook

Officials of various commodities boards who spoke on the outlook for coffee, pepper and cardamom, presented a bleak picture for the year-ahead as the erratic rainfall across key producing States such as Karnataka and Kerala is seen impacting the output.

“There will be an impact on the production of coffee because of the erratic rains,” said Babu Reddy, Director-Market Research, Coffee Board. The Board is still carrying out the crop loss survey and it is too early to quantify the crop size, he said.

Before the incessant rains impacted the crop in August, the Board had pegged the post-blossom estimates for 2019-20 at 3.55 lakh tonnes. The crop for 2018-19 year ending September is marginally higher at 3.19 lakh tonnes.

Similarly, with pepper and cardamom, the output is likely to be lower this year, while that of rubber is seen going up. Rubber production, which stood at 6.42 lakh tonnes in 2018-19, is seen higher by 15.7 per cent at 7.5 lakh tonnes during 2019-20, said Toms Joseph, Deputy Director, Rubber Board.

COMMENT NOW