The Hindu Business Line : Tea industry seeks higher subsidy in protection fund

The tea industry is not eager to accept a subsidy level of anything less than 30-35 per cent in the proposed Special Tea Protection Fund (STPF) for the replantation and rejuvenation of bushes.

Talking to reporters after addressing the 123rd annual general meeting of the Indian Tea Association (ITA), Mr P.T. Siganporia, Chairman, said that the basic purpose of helping the tea planters would be lost if the subsidy level was reduced to 25 per cent.

Subsidy Level

At the initial level, when the STPF was chalked out by the tea industry, the associations of the sector had recommended a 40 per cent subsidy level.

Though there has been no official communication in this matter, still it was learnt that the Union Cabinet is likely to recommend a subsidy of around 25 per cent only. "It will negate the beneficial purpose of STPF and there will be few takers," Mr Siganporia said.

MULTIPLE CROPPING

ITA, according to Mr Siganporia, is trying to convince the West Bengal Government about the need for multiple cropping in the tea estates. At present, the tea garden lands are given to the planters only for the purpose of growing tea.

Leading tea companies, including Tata Tea, feel that to increase the profitability of the North Indian tea sector, there is a need for multiple cropping. The concept was already accepted by the Assam Government.

Mr M.V. Rao, Director, Industries of West Bengal Government, who was present at the meeting, said that the matter would be considered on a case-to-case basis and there would not be any blanket clearance.

However, the West Bengal Government has already given a blanket clearance to the planters for development of tourism projects within the tea estates. "Several things need to be changed. Amendments in laws are also necessary. It is a long drawn process. We are discussing the matter with the State Government and hopefully the process will start soon," Mr Siganporia said.

DOMESTIC CONSUMPTION

The ITA leadership reiterated that the domestic consumption of tea is growing at a rapid pace of 3.3 per cent and the per capita consumption is around 780 grams.

He said that cumulative stock position of the industry reflects a position, which is similar to what was prevalent in 1999. "It is indicative of some buoyancy in the market during 2006 and early 2007," he said. Despite the positive outlook, Mr Siganporia said that the Tea Board should not only continue with the generic promotion campaign but should further strengthen it.

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