NEW DELHI, Dec 19 ? Alarmed by the plight of the tea industry, the Commerce and Industry Ministry has endorsed an Opposition-sponsored proposal to convene a high-level meeting involving all players including the State Governments and representatives of the industry to evolve a strategy to resolve the present crisis. A revival package for the industry, more loans for restructuring plantations, Central Government?s assistance and welfare packages for the tea workers are some of the schemes on the anvil to bail out the industry.
The Central Government?s response came after Opposition Members in Rajya Sabha today moved a Calling Attention Motion on ?plight of tea garden workers due to sickness and closure of large number of tea gardens leading to starvation deaths.? Significantly, even as members expressed concern over the fate the tea industry, the Congress and CPI-M pressed for regulation of the small tea growers identifying the sector as one of the factors responsible for the present plight of the industry.
The mushrooming growth of small tea planters without any responsibility will cause permanent damage to the tea industry and therefore regulation of small tea growers is essential, Pranab Mukherjee who initiated the discussion said. Replying to the concern raised by the members, Union Commerce and Industry Minister, Arun Jaitley said that the tea industry was passing through a challenging phase maintaining that prices was linked to international market and prices in international market have come down uniformly. The higher cost of production of tea in India has made the market more competitive, he added.
The domestic tea industry is faced with a situation of continuously falling tea prices at auctions for the last four years. The average auction prices of tea were about Rs 76 per kg in 1998. They have started declining from mid-1999 onwards and currently they have reached about Rs 55 per kg, the Minister disclosed. The Minister held that though the manufacturing cost of Indian tea was quite competitive, additional costs including the social cost led to high cost of production. ?There is a need to sit together and resolve the problem of excessive cost,? he observed.
However, the Minister held that there has been greater absorption of tea in the domestic market and the overall supply and demand imbalance has been greatly reduced. In fact, the North Indian auction centres since November have started showing better prices trends particularly for good quality tea, he asserted. According to available information 43 gardens in Assam, West Bengal, Tripura and Kerala have closed down. Of these, 25 are in West Bengal, 12 in Kerala and three each in Assam and Tripura. Over 35,000 workers are affected by the closure, Sri Jaitley said.
About the maladies plaguing the industry, the Minister held that glut in both domestic and international markets, lack of affective marketing and high cost of production were primary factors. The Government of India is fully alive to the problems confronting the tea sector. An expert committee was constituted to study in depth 36 closed gardens. According to the finding of the Committee, all these estates are required to invest both in the plantations as well as in the factory and other infrastructure to achieve better results in terms of quality, quantity and price realisation of their tea. However, bulk of the investment is required in the plantation itself.
On the measure taken by the Government, he said the Re 1 per kg surcharge would form a fund for the development, modernisation and rehabilitation of the tea plantation sector, a Price Stabilisation Fund with an initial corpus of Rs 500 crore has been set up for providing relief to small tea growers. The Centre has moved the Reserve Bank of India and the Indian Bank Association for an effective credit relief package for the industry. In order to promote export of tea, financial assistance is provided to tea exporters to meet part of the cost of handling, packaging, transport and value addition. The import duty on items of machinery used to improve productivity and quality of tea including value additions has been reduced to an all-inclusive rate of five percent, Sri Jaitley added.
The Government has felicitated discussions by the managements of these gardens with their bankers to work out a revival package. This package would include promoters? contribution, further loans from concerned banks with restructuring of the accounts and also interest subsidy up to a maximum of five percent for those gardens, which are considered financially viable by the concerned banks. An inter-ministerial committee set up by the Ministry of Labour has also studied the issues relating to the plantation sector, particularly the social costs, provident fund, dues of plantation workers and taxation structures. The recommendations are under consideration of the Government, he added.
As for the tea workers of the sick gardens the Minister said that the Centre was in touch with the concerned State Governments, for intervention and necessary relief. Steps taken included creation of employment opportunities through various schemes such as the Sampoorna Grameen Rozgar Yojana, extending health care, implementing nutrition programme for children, distribution of food grain among others. The Minister further allayed the apprehension expressed by few members over import of tea into the country, maintaining that quantity of tea coming into the country was negligible. In the current year 4.23 million kg of tea was imported and 95 percent of it was for value addition and re-exported, he claimed.
Earlier, Dhrupad Borgohain drew the attention of the Minister to the plight of the small tea growers mentioning that the rate of green leaves have fallen drastically from Rs 12-13 to Rs 4-5. He also wanted the Centre to react to an incident of police firing on tea workers who were demanding payment of bonus in Assam in October.