Kochi: The Rs4,761 crore special purpose tea fund—set up by the government and its trade promotion body, Tea Board of India, for replantation and rejuvenation of tea gardens across India—has run into trouble in the South, with just one firm seeking assistance from it. The fund was launched to prune old tea plants or replace them with new ones in an effort to increase productivity, but planters in South India say the subsidy provided to them under the scheme is inadequate and does not take into account the actual cost of replanting.
The programme that began in Assam and West Bengal last month, was supposed to start in mid-July in the South, but has missed that deadline. The poor response there may make the government and the Tea Board revisit the scheme to attract more planters, says Ullas Menon, secretary general of growers’ body United Planters Association of South India (Upasi). The government has already sought reports from Upasi on the matter.
South India accounts for more than 50% of the 200 million kg of tea that India exports in a year.
According to figures from the Tea Board, 130 companies in West Bengal and the North-East have applied for assistance for 262 tea gardens covering 7,637ha and involving a loan amount of Rs109 crore.
In the South, 38 firms covering 1,512ha had earlier evinced interest under the fund, but only one firm from Kerala has qualified for the scheme, where the government will provide a 25% capital subsidy (on the cost of replanting and rejuvenating) and another 50% as a long-term loan. The planter. will have to raise the remaining amount.
Upasi president J.K. Thomas said the scheme had been drawn up without considering the ground realities. “Unless a higher subsidy is offered for replantation and rejuvenation, there will be few takers in the South,” he says.
According to him, geographical conditions prevailing in the South are similar to those in Darjeeling, in West Bengal. The hilly terrain makes uprooting tea bushes manually difficult, and uprooting them mechanically is almost impossible. He adds that the labour cost in the South, especially in Kerala, is more than double of that in Assam or Darjeeling.
The cost of replanting has been calculated at Rs3.27 lakh per hectare for gardens in Darjeeling and Rs2.73 lakh for the South. But according to an estimate by the National Bank for Agriculture and Rural Development, the actual cost of replanting in the South is about Rs5 lakh per hectare.
There is nothing attractive about the 25% subsidy in the package that could draw small growers, owning less than 2 acres, to stake a claim for the fund, said Thomas.
He adds that the association had made several representations to the Tea Board to raise this.