Taking into account the loss of revenue that tea planters need to bear during the gestation period post re-plantation of tea bushes, the tea industry has asked the Tea Board and the Centre to increase the rate of subsidy under the Special Purpose Tea Fund (SPTF) from present 25 per cent to 40 per cent to “motivate” planters for re-plantation.
SPTF is a special corpus of Union ministry of commerce, earmarked for replanting tea bushes across the country which are more than 50 years old.
The tea industry is of the view that it had recently come out of a decade-long recession and is still suffering from its after-effects, and therefore, it can hardly bear the loss of revenue during the long gestation period of re-plantation.
“The prevailing subsidy of 25 per cent under SPTF is continuation of the erstwhile Plantation Development Scheme (PDS), and neither absorbs the heavy loss of revenue nor motivates the planters for developmental activities,” said Kalyan Basu, secretary general of Tea Association of India (TAI).
Basu said that at the formative stage of the SPTF Scheme, the Union ministry of commerce had agreed to a subsidy of 40 per cent, but had later reneged.
The industry has also demanded to bring rejuvenation and infilling of tea bushes, both in plains and hills, to be brought within the ambit of SPTF.
According to Basu, to minimise revenue loss, which arises in case of re-plantation, many planters prefer rejuvenation and infilling to renew their tea areas since it takes much shorter time to be ready for harvesting and also less investment.
“Rejuvenation and infilling should be brought under the ambit of SPTF and the government should make it eligible for availing loan and subsidies,” Basu said.
Basu further felt that though SPTF was designed to improve land-productivity and yield through renovation of the age-old tea bushes, the scheme could not yet achieve its targeted goal owing to a “certain procedural and structural impediments”.
He has identified “unattractive rate of interest”, “procedural complexities”, and “adverse credit appraisal by the agency” as some of the “structural impediments.”
The TAI has already written to the Tea Board and has requested the government to incorporate the demands in the 12th five year plan, which will commence from next year.
The SPTF, which was launched in June 2007, aims at replanting tea bushes across 2 lakh hectares throughout the country over the next 15 years. As per government estimates, around 1000 gardens, which account for around 80 per cent of total tea production in India, have tea bushes which are more than 50 years old, and thus are eligible to avail funds under the SPTF.
By any stretch, the SPTF has been the most ambitious project ever to be launched for tea industry in India, in terms of both investment as well as total area covered.