Tea Board to start SPTF credit disbursement

Kolkata, Dec 31: Tea Board will start credit disbursement to thetea garden owners from the Special Purpose Tea Fund(SPTF) forreplantation and rejuvenation programme from January end.

"We will set up the necessary infrastructure in a month's time.

We hope to start disbursement from the end of January, 2007," Tea Board chairman Basudeb Banerjee said here today.

The SPTF was approved by the Union Cabinet on Thursday. The fundwould take care of the long-term credit requirements for the CommerceMinistry's replantation and rejuvenation programme for tea plantationswhich is estimated at a cost of whopping Rs 4,761 crore over the next15 years, Mr Banerjee told UNI, The fund would be headed by a CEO andmanaged like a corporate entity. Minister of State for Commerce JairamRamesh had said that he had proposed that a competent CEO should beappointed to administer the fund like a corporate entity.

The Tea Board would manage the fund while the CEO can do it from outside, Mr Banerjee added.

''The scheme would involve replanting and rejuvenating over twolakh hectares of plantation in the next 15 years, would call forgrowers to come up with 25 per cent of the required funds while thegovernment would provide 25 per cent funds as subsidies. Rest of thefund would be provided by the SPTF through long-term loans,'' the TeaBoard Chairman said.

Mr Banerjee said the SPTF was an "extremely important step" tomake Indian tea globally competitive. He pointed out that more than 50per cent of tea bushes in India were over 40-year-old, which reducedtheir productivity.

''That is why we are finding it difficult to fight competition from Sri Lanka, Kenya and Vietnam,'' he said.

Of the total required investment of Rs 4,761 crore, 46 per centwould be spent in Asom, 28 per cent in West Bengal while 22 per centwould go to tea plantations in Tamil Nadu and Kerala.

''This allocation has been determined based on the total numberand age of the bushes. The bushes which are more than 50-year-old willbe uprooted,'' Mr Banerjee said.

The fund would help plantation owners to have access to long-termfunding. Banks were unwilling to provide term loans beyond 7-10 yearsat a uniform rate of interest to tea growers whereas the minimum lengthof the loan period for replantation should be about 13 years with afive-year moratorium on repayment of principal.

The loans would be repayable in eight equal instalments startingfrom the sixth year of sanction with a moratorium of five years on therepayment of principal.

UNI