The Hindu Business Line : `Domestic policies also hurting plantation sector'

THE plantation industry is being edged out of the market as much due to domestic policies as international competition. "Trade should not be just free but also fair," said Mr Vijayann P. Rajes, Chairman, Planters' Association of Tamil Nadu.

Wage costs account for about 55 per cent of the cost of production of plantation crops, cost of finances are high as compared to that available to competitors abroad, domestic rules and regulations hamper growth, and international agreements have put Indian products at a disadvantage, according to the association.

Though plantation crop prices are up compared to the same period last year, they are still lower than the cost of production, according to Mr Rajes.

For instance, the average auction price of tea in South India between January and September this year was Rs 45.16 a kg against Rs 42.17 in 2003, while the cost of production is about Rs 55 a kg.

Arguing for increased support from the Government, Mr Rajes said plantation companies were labouring under high costs of production, which was due to high wage costs.

Though trade unions in Tamil Nadu had acceded to a reduction in wages as an interim measure pending adjudication by the industrial tribunal, unions elsewhere were not so accommodating, and estates were being shut down.

The Plantations Labour Act, 1951 dictates that the estate management should provide free housing, medical care, and education and recreation facilities.

"While these were reasonable when rural infrastructure was not available, it is not needed when such facilities are available extensively. The State Government and Centre should also share in the cost - in Sri Lanka, the Government foots the entire bill," said Mr Rajes.

Regional trade agreements that permit imports of tea from Sri Lanka are being misused.

"Other countries such as Vietnam route their own tea through Sri Lanka and in some instances, inferior grade tea is being imported and re-exported as Indian tea. Such practices not only affect the domestic market but the image of Indian products abroad."

Mr Rajes expressed concern over the inclusion of tea and coffee under 12.5 per cent slab in the proposed VAT system.

This would push up cost even as the industry is pushing to increase consumption of such products, he said.

"Issues of concern also include the forest-related regulations that cover shade trees in plantations. The paperwork involved is elaborate and a disincentive to regular maintenance including cutting and replanting of shade trees like silver oak," he said.

The industry also needs support in shifting to production of orthodox tea, which is increasingly in demand in the domestic and international markets, while more than 90 per cent of the production in India is CTC tea, he added.

More Stories on : Plantations | Agricultural Policy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
The Indian farmer ploughs on

`Domestic policies also hurting plantation sector'

Rubber declines on weak global trend

Notification issued on rubber exports subsidy — Sops for all grades cut by half for current fiscal

Tea Board probing samples of consignment to Libya

Plan panel nod for jute tech mission soon

Call for indefinite strike in Bengal jute mills from Nov 29