Agri Business

Kerala’s plantation sector losing ground on rising imports, taxes

V Sajeev Kumar Kochi | Updated on January 10, 2018

BL25-RUBBER

Import, high taxes hit growers of cash crops

Kerala’s plantation sector has been severely hit due to the unrestricted import of cash crops – the total value of production in the State has declined from ₹21,000 crore in 2012-13 to ₹ 9,751 crore in 2016-17.

According to the Association of Planters of Kerala (APK), import of plantation commodities, coupled with the inability of planters to move up in the value chain, have made the sector a low-end commodity producer.

Thomas Jacob, Chairman, APK, cited issues related to climate change, high taxation and high input and manpower cost as the reasons for the surge in production cost and low productivity of land.

Cash crops affected

The huge imbalance between cost of production and price realisation in the industry has led to losses in tea, coffee, cardamom and rubber production.

Land-related issues, according to C Vinayaraghavan, former president of APK, have impacted re-planting in tea estates and production has come down to 1,200 kg/hectare. However, productivity has gone up in Tamil Nadu to touch 2,600kg/hectare due to re-planting initiatives.

A similar situation exists in rubber plantations as 2,000 hectares are yet to be re-planted, said N Dharmaraj, former president of Upasi, adding that re-plantation could bring in fresh investments worth ₹1,000 crore to the State.

To tide over the crisis, the planters body urged the State government to encourage inter-cropping and value-addition in plantations, which willincrease the overall turnover of the plantation industry. The major crops that could be cultivated are citrus crops, rambuttan, mangosteen, jackfruit and local varieties of mangoes that are getting extinct.

Kerala has over 7-lakh hectares of plantation crops, covering 27 per cent of the total cultivated land. Around 42 per cent of the GSDP contribution of crops in the State is from plantation crops. The plantation industry provides employment to around 3.3-lakh workers and distributes nearly ₹5,300 crore as wages in a year.

According to APK, growers still pay a Plantation Tax of ₹700 per hectare and an Agricultural Income Tax of 30 per centfor all commodities, along with GST. All other States, including Tamil Nadu and Karnataka, have repealed these taxes.

VK Ramachandran, Vice Chairman, Planning Board, said that the State government will resolve the crisis faced by the plantation sector in Kerala.

The planters body re-elected Thomas Jacob, the Director of Poabs Group, as the Chairman; BP Kariappa, General Manager, Kanan Devan Hills Plantation Company, is the Vice-Chairman.

Published on September 25, 2017

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