Agri Business

Will push for infrastructure status for sector: Tea Board

Our Bureau Kolkata | Updated on November 08, 2019 Published on November 08, 2019

Prabhat K Bezboruah, Chairman of the Tea Board of India Debasish Bhaduri   -  Debasish Bhaduri

Move aimed at getting funding to fight climate change

 

 

The Tea Board of India is planning to seek “infrastructure status” for the industry so as to be able to get much-needed funding support and work towards combating the effects of climate change.

According to PK Bezbaruah, Chairman, Tea Board, the tea industry as a whole occupies around 500,000 hectares of land. The entire tea area across the country has been developed by tea companies; hence it would only be logical to assign it infrastructure status.

“The Tea Board and industry will work hand in hand and come up with a proposal and then we will talk to the government,” Bezbaruah told newspersons on the sidelines of a tea conclave organised by the Indian Chamber of Commerce here on Friday.

The current borrowing rate of the industry is close to 10-11 per cent. If it gets infrastructure status then it would be able to borrow at 2-3 per cent. It would also help the industry bag funding from World Bank and other multilateral funding agencies.

The tea industry in South India has already started working towards this.

“We have been told if it is an infrastructure project battling climate change then we would get the support that is why we are thinking of this,” he said explaining the rationale behind the proposal.

The Indian tea industry has been grappling with issues of rising costs and lower realisation. The deteriorating financial health of most tea companies is visible from the fact that the majority of them, barring one or two large tea producers, have been downgraded in the last 12-15 months. This has made it difficult for the industry to get bank finance.

The Tea Board had recently announced that it would rope in ICICI Bank to extend a credit facility in the form of corporate credit cards to buyers registered on its auction platform.

Floor price for green leaf

The Tea Board Chairman also talked about the need to introduce a seasonal floor price or minimum price for green leaf. It had recently called for a meeting of stakeholders to work on the modalities to fix the green leaf price.

“The floor price can be fixed below which no transaction can take place. It will also help ensure quality of tea produced,” Bezbaruah said.

He also called upon the industry to pump in funds to push a generic promotion campaign on a more sustained basis. Apart from the generic promotion, the health aspect of tea drinking can be highlighted.

There is also a need to redeploy the assets of plantations towards alternative uses, he said. This would help address the issue of supply-demand imbalance.

Published on November 08, 2019
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