The Telegraph
Saturday , June 28 , 2014
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Hint of price shield for plantation crops

Tea Board chairman Siddharth (third from left) with Indian Tea Association chairman A.N. Singh (second from left) and other officials in Calcutta on Friday. Picture by Kishor Roy Chowdhury

Calcutta, June 27: The ministry of commerce and industry wants to relaunch a scheme to help the producers of commodities such as tea, coffee, rubber and tobacco deal with extreme price fluctuations in the domestic and international markets.

The scheme — price stabilisation fund scheme — was first introduced in April 2003.

A corpus of Rs 500 crore was set up and commodity growers could get compensation if prices tanked beyond 20 per cent.

The scheme was closed in 2013 because it did not find many takers. The main reason for the lack of interest in the scheme was the stiff threshold of 20 per cent. In most years, prices did not dip below 20 per cent so the growers could not claim compensation.

The ministry now wants to modify the scheme and relaunch it. It may allow farmers to claim the benefit of the fund if the prices dip even 10 per cent.

The scheme was not production linked and was meant to guard against a fall in prices even in a bumper crop year.

The ministry also wants a long-term support for growers instead of intervening only during a crisis.

“We are trying to compensate the farmer for his loss of income. The loss will be calculated per hectare. The price stabilising fund was there and was not used as the terms were stringent. Because of the price threshold the scheme of 2003 could not be implemented,” said Siddharth, chairman of the Tea Board of India. Siddharth is also joint secretary in the commerce ministry.

“Now when we are closing the scheme, the department is thinking of revising it and modifying it so it becomes more farmer-friendly by reducing the threshold. We are trying to propose a price band of 10 per cent and below based on the last five years’ average,” he said.

He was speaking at the 118th annual general meeting of the Calcutta Tea Traders Association.

As part of the 12th Plan Period, schemes to rejuvenate tea gardens and upgrade tea factories may be re-introduced.