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12th Plan looks to script tea insurance

- Move similar to that of Coffee Board’s

Guwahati, May 7: A Planning Commission panel has proposed an insurance scheme for the tea sector on similar lines of coffee, as India enters the Twelfth Plan.

The working group on the plantations sector that was constituted by the Planning Commission has made the proposal and suggested several steps, which are necessary for the tea industry in the Twelfth Plan.

The Coffee Board had implemented a weather (rainfall) insurance scheme for coffee growers during the Eleventh Plan.

“The scheme evoked a mixed response from growers. Since the tea plantation is dependent on the vagaries of nature as well as pests, it is proposed that an insurance scheme for the tea sector may be evolved during the 12th Plan on the lines of coffee vis--vis the peculiar nature of tea plantations,” the working group said in its report.

“Much of the industry is dependent on the vagaries of nature. Uneven rainfall, pest attacks and now climate change are some of the problems that the industry cannot face on its own,” an industry official said.

The tea industry has taken a severe beating owing to pest attacks. Crops are being damaged and rejected by foreign buyers.

Crop production is already down this year because of unfavourable weather conditions. The overall dip in tea production till April this year is estimated to be around 10 million kg.

The tea industry told the working group that a sizeable area under tea cultivation has bushes which have crossed the economic threshold age limit of 50 years.

Therefore, replanting and rejuvenation schemes with enhanced level of subsidies need to be implemented in a big way.

“For this, special efforts also need to be made through research and development, to meet the huge demand for planting materials, farm mechanisation and to address the problem of labour shortage and development of suitable technologies for development of high yielding clones,” it added.

The group also recommended that small tea growers need to be given more attention and given technical support on tea management, manufacturing aspects of bought leaf factories and organising themselves in the shape of societies/federations.

The group has supported the recommendation of the Indian Institute of Plantation Management, Bangalore, on sharing social costs of the tea industry by the Centre.

According to the Plantation Labour Act, 1951, garden owners have to provide certain welfare schemes for workers in tune with the provisions of the act. This has resulted in increased cost of production and makes the Indian tea uncompetitive in the international market.

The Indian Institute of Plantation Management (IIPM) Bangalore was entrusted with the task of finding the structural infirmities of the tea sector.

The recommendations submitted by the institute include sharing of social cost between the Centre and the industry.

“The recommendation may be suitably considered by the Centre while preparing the schemes for the Twelfth Plan to ease the burden of social cost on the industry and reduce the cost of production of tea,” the working group said in its report.

This may also be considered under the Rashtriya Krishi Vikas Yojana, the group suggested.

“We have been hearing that many have supported our case but ultimately it does not get approved at the top level,” a tea industry official said. Social cost comes to Rs 9 per kg of finished tea, adding to the cost of production.

Though the industry has been pleading with the Centre to share social costs, there has been no solution to assist the industry in mitigating this cost and make Indian tea competitive in the international market. Other tea producing countries are not burdened with such costs.

Cost control continues to be the major concern with labour wages comprising 55 per cent of total cost of production.