The Centre has hiked the allocation to the plantations sector significantly and believes that commodities such as tea, coffee, spices and rubber can contribute in achieving the targeted exports of $400 billion for 2021-22.

“The Expenditure Finance Committee has approved ₹4,112.29 crore for the 2021-22 to 2025-26 period against a budgetary allocation of ₹2,486.04 crore during the MTEF period (2017-2020) for the plantation sector, an increase of 65.42 per cent,” said Anupriya Singh Patel, Minister of State for Commerce and Industry, on Monday.

Addressing the 128th annual meeting of the United Planters’ Association of India (UPASI), Patel said the government has approved the continuation of tea development and promotion scheme from 2021-22 till 2025-26 with a financial outlay of ₹967.78 crore for the overall development of the tea sector.

While the incentives for orthodox tea has been discontinued, the focus has been on clearing the subsidy claims. A provision of ₹298.76 crore has been made for clearing subsidies in the tea sector, Patel said. The tea industry provides direct employment to more than a million workers of which nearly 55 per cent are women. The small tea growers sector is emerging as a major player in the tea industry by producing 50.23 per cent share during 2020, she said.

Boosting NR output

On rubber, Patel said the productivity of rubber plantations has increased from 284 kg/ha in 1950-51 to more than 1,442 kg/ha. Total production of NR is estimated at 7.80 lakh tonnes during 2021-22 and government has taken steps for expansion of rubber plantations to non-traditional regions including the North-East.

With the objective to ensure that country is able to produce at least 75 per cent of its requirement of NR from domestic sources by 2025, a project for supporting development of new rubber plantations in the North-East and improving quality of processed forms of rubber with a contribution of ₹1,100 crore from major tyre companies, represented by Automotive Tyre Manufacturers Association has been agreed and MoU signed. The plan is to develop 2 lakh ha under rubber plantations in five years, she said.

Patel said spices exports touched a high of $4 billion during 2020-21 and exports of ginger, pepper, cinnamon, cardamom, turmeric and saffron, which have known therapeutic qualities have grown substantially.

UPASI President Prashant Bhansali said the value of plantation commodities during 2020-21 is estimated at ₹54,840 crore and export realisations of ₹12,470 crore. The share of South India in plantation commodities value is around 50 per cent, while its share in exports is 70 per cent.

Challenges faced

Bhansali said plantations in South have been facing challenging times given the high cost of production vis-a-vis price realisations. The Covid-19 pandemic has compounded the turbulent times in the plantation sector resulting in severe cash flow issues.

Stating that restructuring of all crop loans and development loans into single term loan will help the sector and have a positive impact on its long-term viability, Bhansali said the industry needs to be funded at lower interest rate to increase domestic production and enhance global competitiveness. He said interest rate should be reduced to three per cent on all crops and development loans disbursed to all plantations as per applicable scale of finance.

Bhansali further said that there was need to revise the RoDTEP rates, which are much below the recommendations made by the Commodity Boards. The subsidised fertiliser for plantation be linked to the actual hectarage under cultivation and the allocation should be made on annual basis. Also, the archaic commodity acts enacted in the 1940-50s are outdated and need to be restructured in line with market realities while considering higher allocation to the commodity boards.

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