Tea producers can hope to be showered with financial incentives in the 12th Plan if the current thinking at the top level is any indication. The proposals before the government for consideration are for providing subsidy to the producers for undertaking capacity expansion of their existing gardens and for providing various other incentives, mostly financial, to make the Special Purpose Tea Fund (SPTF) more effective.
GROWING DEMAND
In contrast to the policy initiatives of the 10th Plan and 11th Plan when the accent was more on consolidation, rejuvenation and replantation, the thrust in the 12th Plan will be on larger production to bridge the current demand-supply gap, it is learnt. According to one estimate, the demand during the 10-year period from 2001 to 2010 increased by an additional 170 million kg but the supply by 130 mkg or so. The population growth alone, it is estimated, will create an additional demand of 20 mkg every year, assuming that the consumption growth remains unchanged at the current level of three per cent or so. On the export front, it is felt that the country's share in global trade should be maintained.
By March 2017, which will be the terminal year 12th Plan, domestic tea demand is projected to increase to 1,000 mkg, up from the present 800 mkg or so and the exports to 250 mkg from the present around 200 mkg. Where is this additional production going to come from? After all, land is a major constraint. Only the big tea companies which have surplus land available in their gardens can hope to add to their capacity. These companies therefore must be encouraged to pursue capacity expansion programme vigorously, it is felt.
CAPACITY EXPANSION
SPTF, launched about five years ago to encourage replantation, has not progressed as expected. Till March 2012, about 70,000 hectares are targeted to be covered under the scheme; in reality it will be only 26,000 hectares or so presumably because the incentives are not attractive enough. The crop loss caused by the uprooting has been a major stumbling block. The current thinking therefore is to provide cash compensation for the loss. The loan system too is proving to be cumbersome. Right now, the Tea Board takes loan from banks for on-lending to SPTF beneficiaries but Tea Board's job is not to undertake such activity. According to current thinking, Tea Board will withdraw from borrowing and lending activity, instead, the SPTF beneficiaries will take loan directly from the banks and Tea Board will provide interest subvention.
There are further proposals for introducing a reward system. It has been suggested that any tea company undertaking replantation over and above the stipulated two per cent of the area under SPTF should be rewarded with additional subsidy. Also, to encourage the tea companies to produce more of quality tea, Tea Research Association should play an active role in providing field-worth plantation materials.