Planters push for subsidy- Industry makes case for orthodox tea
Guwahati, Sept. 1: With orthodox tea reaping good dividend, the industry has called for continuation of the orthodox subsidy scheme till the end of the Twelfth Plan (2017).
The Indian Tea Association (ITA) has urged the ministry of commerce not only to continue the scheme but also strengthen it by increasing the subsidy from Rs 3 per kg to Rs 5 per kg.
The production of orthodox tea has also increased by 2 million kg from last year’s figure of 106.4 million kg and this can be attributed to the subsidy scheme to some extent, sources said.
A senior official of Assam tea industry said while the subsidy, which was introduced in 2005, had been extended to the Eleventh Plan (2007-2012), the Union government had in 2009 proposed a mid-term evaluation of the scheme, which had completed four years.
A consultancy firm, AC Nielsen, was appointed to carry out the mid-term evaluation and the lTA, among other stakeholders, submitted a detailed memorandum to it on the issues that needed to be addressed. The ITA suggested a multi-pronged approach to sustain orthodox production and encourage capacity-building and new entrants into orthodox manufacture, the official said.
“The firm presented its report to the Tea Board, clearly recommending the need to continue the (subsidy) scheme as it had made good progress,” the official added.
The ITA also suggested that soft loans should be given at a reasonable rate of interest and a higher subsidy of upto 40 per cent be provided under the special tea purpose fund for re-plantation of selected quality orthodox planting materials.
Sources said the Tea Board is said to have faced severe constraints in fund flow from the government during 2009-10 and disbursements under several schemes had to remain pending. No subsidy has, therefore, been reimbursed under the orthodox scheme of 2009-10 and some disbursements of 2008-09 may also be pending.
The tea industry official said given the monetary position, there could be recasting of the scheme, giving priority to segments like bought leaf factories and new entrants while the existing orthodox manufacturers may have to be compromised or put on low priority.
He said adequate care should be taken while encouraging the bought-leaf sector, as it neither had the expertise nor access to quality green leaf for the manufacture of good orthodox tea. He cautioned that this could lead to “more inferior orthodox tea, thereby, affecting the quality and image of Indian tea”. He also said the Tea Board should clearly specify the identity of new entrants.
Making a case for giving priority to existing orthodox tea manufacturers while providing subsidy, he said this was necessary to protect and maintain their existing production level through which India has made recent inroads into the international market. “lf the subsidy is withdrawn, producers facing market fluctuations and risk may switch over to CTC tea, adversely affecting export availability to the detriment of lndian tea exports,” he added.