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The Tea Board of India's Rs 100 crore proposal to the Union Commerce Ministry to revive the 87-odd gardens in Darjeeling hasn't gone well with the industry as it feels it is too low an amount to provide any respite to the estates which resumed operations after an over 100-day closure.
Tea estates in Darjeeling closed abruptly in mid-June following escalated political tensions for a separate state of Gorkhaland.
Industry officials felt that a bailout package of at least a Rs 300 crore was needed to restore the estates and the Board's recommendation falls too short of their projected requisite.
Against the recommended Rs 330 crore bailout package proposed by the Tea Research Association (TRA) for the now sick tea estates, the Board decided to cut down the amount to just a little over 30 per cent at Rs 100 crore. The Board's argument is that the government can provide relief for a part of the loss but can't subsidise an industry segment fully in hard times.
Tea Board chairman P K Bezboruah told Business Standard that the recommendations put forward to the commerce ministry include monetary support to prune the bushes and the associated necessary sciffing.
"The package we have recommended includes the necessary costs to restore the tea bushes which also includes the cost of labour", he said.
The proposal worked out by the Tea Board doesn't include any recommendation for working capital subvention.
Based on the recommendations of the commerce ministry to work out a revival package, the Tea Board had asked the TRA to carry out a study on how the gardens can be restored in Darjeeling and at what cost.
The TRA, in turn, worked the revival cost per hectare to be Rs 1.82 lakh. With a total tea cultivation area of 18,155.23 hectares, the total cost works out at Rs 330.42 crore.
TRA field officials who had undertaken the study opined that the gardens in the Darjeeling hills not only requires serious pruning and sciffing which involves huge labour costs, but the problem is more acute in fear of a pest attack.
Over the years, nearly 80 per cent of the gardens in Darjeeling have moved over to organic production and minimised the use of chemical fertilisers and pesticides.
"Had the gardens been inorganic, the risk of restoration would have been much lower. But organic gardens takes more time to come back to normalcy and need more capital investment," a TRA official told this newspaper.
Faced with a near 80 per cent production loss, the Indian Tea Association had asked the Board to grant the estates an advance loan at a reduced six per cent interest and increase the orthodox tea subsidy from the current Rs 2.5 a kg to Rs 15.
"We had also asked the government to provide us some form of direct subsidy. These measures would have helped in addressing the working capital problem," Arijit Raha, secretary general at ITA said.
The Darjeeling Tea Association, in turn, had asked for a Rs 350 crore one-time grant.
Tea Board officials opined that 30 per cent of the recommended amount proposed by TRA is enough to address the Darjeeling tea industry's ongoing problem and help the industry get back to normalcy. As per the Board's estimates, Rs 350 crore is the total annual production cost and since the gardens faced a just over 100-days closure, the recommended amount is enough to address the current concerns.