Agri Business

Plantation sector seeks higher allocation and loan rejig

Our Bureau Bengaluru | Updated on January 21, 2021

Reeling under the impact of changing weather pattern and volatile price trend, the plantation sector in South has sought higher allocation of funds for the Commodity Boards in the Budget 2021-22 for clearing the growers’ dues.

Besides, the labour-intensive sector has also sought a financial package for restructuring of loans for the coffee sector and urged the government to declare minimum support price for the plantation produce among others sops in the Budget.

Prashant Bhansali, President, United Planters Association of South India (Upasi), said the reduction in the budgetary allocation in recent years has affected the plantation sector as the Boards were not in a position to disburse the dues to the growers under various development schemes.

“We have asked the Government to increase the budgetary allocation for Commodity Boards for carrying out developmental activities besides one time grant to clear the amount due to plantation sector,” he said. The estimated dues for tea sector is about ₹75 crore.

Upasi has also urged for enhanced funding for Research and Development and extension activities in the sector as the flow of funds for R&D had reduced due to lower outlay for the Boards, besides seeking financial support to mitigate the effects of climate change. It has also suggested that the Orthodox Production Subsidy Scheme be included under the ambit of Section-10(30) of the Income Tax Act, 1961 so that the orthodox subsidy from Tea Board is not included as a part of total income. Further, Upasi has also urged the government to fix MSP for plantation commodities as per the recommendations of MS Swaminathan Committee at 50 per cent above the cost of production so as to provide security for the long-term investment decision ensuring remunerative prices to the growers.

Coffee sector

For the coffee sector, where growers have been facing severe financial crisis due to the set back in production during the last five years mainly due to unfavourable weather and unremunerative prices, Upasi has sought restructuring of loans. According to State Level Bankers Committees (SLBCs) of Southern States, ₹6,840 crore is due from coffee growers as on December 31, 2019, with an accrued interest of ₹820 crore.

“We urge that all the current and over-due loans, along with accrued interest may be restructured into a single term loan over a nine-year period with two years moratorium,” said Jeffry Rebello, Chairman, Upasi Coffee Committee.

In addition to restructuring of all loans, the interest rate on all crop and development loans should be reduced to 3 per cent per annum, said S Appadurai, Chairman, Karnataka Planters’ Association (KPA).

KPA has also urged the FM to delete the Rule 7B(1) of Income Tax Rules so that a large number of small growers can take up curing of coffee and sell in the open market, a move that could help them get better prices.

“Further, we are also looking for exemption or reduction in customs duty on import of inputs such as agriculture and plantation machineries/equipment, fertilizers, pesticides, herbicides, effluent treatment chemicals and plant material,” he said.

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Published on January 21, 2021
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