Asom: Special fund launched to bail out tea industry

Guwahati, Jun 25: The ailing Asom tea industry today got a big boost with the formal launch of the Special Purpose Tea Fund (SPTF), which would help revive the aging tea gardens of the state.

The formal loan agreement signing ceremony between the Tea Board and the companies was conducted at the ITA Centre, Machkhowa, here today in the presence of Union Minister of State for Commerce Jairam Ramesh, DoNER Minister Manishankar Aiyar, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia, Asom Chief Minister Tarun Gogoi and other dignitaries.

Altogether 149 applications had been received for assistance under the SPTF from the state till now and 82 loan agreements, worth Rs 48 crore, were signed today.

An area of 1925 hectares has been covered under the agreements, with the Tea Board setting a target of doubling the number of agreements by the end of the fiscal.

The scheme will provide funds to the extent of 75 per cent of the unit cost by way of long term loan at the rate 50 per cent at a reasonable rate of interest and subsidy as the rate of 25 per cent of the unit cost.

Addressing a press meet later, Mr Ramesh said 1,000 tea gardens across the country, which accounts for 80 per cent of total tea production, would be targeted to be covered under the SPTF. The only criterion for selection being that the gardens should be more than 50 years old.

Out of the total 5 lakh hectares of land under tea cultivation in the country, two lakh hectares would be replanted / rejuvenated through the SPTF over the next 15 years, with the target of increasing the average annual productivity per hectare from 1.7 tonnes to 2.2-2.3 tonnes at the end of the 15 years.

''What had been done in 30 years by replanting / rejuvenation, we are planning to do five times more than that in 15 years,'' Mr Ramesh said.

He informed that the first batch of SPTF contracts would be signed for North Bengal at Jalpaiguri on June 29 and for South India, at Coimbatore, in the first week of July. Asom would be the largest beneficiary under the scheme, accounting for over 50 per cent of the total assistance.

The minister pointed out that small scale tea planters in Asom would not be eligible for assistance under the SPTF as the small tea gardens in the state are on an average 20 years old.

He, however, highlighted that a number of other measures are being taken for the benefit of the small tea growers.

The Barak valley gardens would also be benefitted under the SPTF and no distinction was being made between the gardens of Upper Asom and Barak valley, Mr Ramesh said. He said increasing production was the only means to meet the growing demand for tea, particularly in the domestic market, which accounted for market for 80 per cent of total production.

To a question if the workers' interest was being protected through the SPTF , the Union minister said the employment angle was a vital one for government, which had decided to invest further in the tea sector even though many economists advocated diversification from tea.

''We are not just targeting export figures. Employment and social factor is vital for us. That is why we are fighting to keep tea in the sensitive list in the free trade agreement,'' he added.

The minister said the Assam Tea Corporation, with its 12 tea gardens, was the most important beneficiary of the total 24 companies that signed contracts today.

He said, ''We approved assistance for the corporation even though it did not meet all requirements as welfare of the labour force was kept in mind.'' India is still the largest producer of tea in the world with 850 million kg output in 2006. It is a $1.5 billion industry. Asom, alone with its 800 tea gardens and 12 lakh labour force, accounts for 55 per cent of the market.

Since 2001 the plantations have has seen more downs than ups.

Last week, one of Asom's best quality teas was priced 10 per cent lower than what was five years ago. About 40 big tea plantations have shut down leaving thousands jobless.

In existing plantations, loss of profits has meant cutting labour benefits like ration and bonus and labour rage and attacks on managements have become quite common.

Brewing more trouble for the plantations are industry majors HLL and Tata who are exiting the estates.

The 24 estates owned by the Tatas in Asom and Dooars in West Bengal have formed a new company that wants to start growing alternative crops as well. The labourers have even been offered stakes.

All these forced the Union commerce Ministry to come up with the SPTF to tide over the crisis and be the biggest player of the World tea market.

UNI