Tea exporters for more subsidy
Guwahati, Aug. 18: Tea exporters, who have to bear the cost of returning (repositioning) containers taken from the inland container depot at Amingaon here, are requesting the government not only to extend the repositioning subsidy scheme by another five years but also to increase the assistance.
The Tea Board of India offers a subsidy of Rs 1.50 per kg of tea to the exporters to cover the expenses borne during repositioning of empty containers at the inland container depot. The tea exporters are forced to return the empty containers, as there are hardly any imports to the container depot.
The Federation of Industries and Commerce of North East Region (FiNER) has requested the Centre to have the container-repositioning subsidy extended by another five years and enhanced to Rs 2 per kg in view of the massive increase in freight and other charges.
The current subsidy sch-eme is valid till March 2012.
“The subsidy is fully compatible with WTO norms as we are over 1,000 km from the nearest port,” FiNER plantation committee chairman Sudip De told The Telegraph.
In 2002, the Tea Board had approved a repositioning subsidy of Rs 1.5 per kg of tea exported from the depot to defray the cost of returning the containers.
All tea exporters registered with the Tea Board and holding valid export licences are eligible for assistance under the subsidy scheme, the claim for subsidy being restricted to teas of Indian origin only.
“This figure has remained constant in spite of the massive increase in railway freight and allied costs,” De said, adding that the Agricultural Processed Food Products Export Development Authority (Apeda) gave a subsidy of Rs 2 per kg for agricultural exports from the depot.
The Assam government has also requested the Centre to increase the subsidy.
Sources said the total annual outgo of subsidy was only Rs 4 crore — a fraction of the subsidies given by the Tea Board for its various schemes.
Approximately 30 million kg of tea valued at over Rs 400 crore is exported directly from the depot every year. “As a result of this export from Amingaon depot, the Centre sanctions approximately an additional Rs 10 crore under the Assistance to States for Developing Export Infrastructure and Allied Activities scheme for infrastructure development in Assam,” a state government official said.
De said foreign tea importers had also developed great faith in the Amingaon depot because of its efficiency and damage-free shipments. “Major Buyers like Tetley and others are now actually specifying the depot in their contracts as the port of shipment,” De said.
“It is feared that if a small sum of Rs 4 crore is not sanctioned, then the depot is in danger of closing down, as 98 per cent of exports from there is of tea,” a tea industry official said.
The tea export market is very competitive and exporters closely monitor the cost of shipment. The loss of subsidy will make Calcutta a much cheaper option for tea exports, thereby resulting in export teas being diverted to the metro, leading to closure of the Amingaon depot.
In 2010-11, tea crop losses arising out of pest attacks had taken a toll on the depot, as only 7 million kg of tea could be exported that fiscal.
In 2010-11, there was a drop of 669 containers compared to 2009-10. A total of 2,285 containers were dispatched in 2010-11, compared to 2,954 in 2009-10 — the highest since the inception of the depot.
A total of 36 rakes were sent from the depot, with the highest number of containers being sent by McLeod Russell (1,572), followed by Apeejay (336) and M.K. Shah Exports (224). In 2009-10, McLeod Russell had sent 2,273 containers.
Currently, nine companies are exporting teas to the UK, Europe, West Asia, Sri Lanka, United Arab Emirates, Canada and the US from the depot.
Among the various shipping lines involved with the region’s tea exports, the Shipping Corporation of India tops the list, having transported 1,135 kg of the beverage during the last fiscal.
Statistics reveal that since 1986, when the depot became operational, 50,121 kg of tea has been exported through the facility.
Industry officials said more companies should use the depot to export their teas so that the facility was put to optimal use.
The Container Corporation of India Limited, which is looking after the rail-linked depot, has put in a lot of investment to improve infrastructure and services there so that more tea could be sent through the facility.