Strategy dose to help plantation sector take on foreign rivals

NEW DELHI: In A bid to fight increasing competition from Kenya, Sri Lanka and Vietnam in the global market for tea, coffee, rubber and spices, the government is planning to carry out a competitiveness study on the Indian plantation sector to work out long-term strategies for its development.

After a two-hour long meeting with the plantation industry, Union commerce and industry minister Kamal Nath said that such a study assessing the global competitiveness of the sector was imperative as many small growers in the country depended on plantation for their livelihood.

The minister pointed out that while re-plantation of traditional plantation was necessary for enhancing productivity, another hurdle affecting exports of Indian processed foods, tea and coffee was the non-tariff barriers imposed on them by various developed nations.

Mr Nath said that a case in point was the EU where different countries adopted different standards. The issue will be taken up with the EU, he said. The government has also asked the industry to upgrade and modernise their laboratories, in order to ensure that Indian certification is held at par with international standards.

The minister laid specific emphasis on protecting agro-processed foods from health and food related non-tariff barriers of western countries as food productivity in this sector has gone up from 20% to 36% creating Rs 7,000 crore business. Market access is necessary for growth of this sector, he added.

The government has already set up a special purpose tea fund (SPTF) to assist re-plantation in the sector. The government will subsidise 30% of the total cost of replanting and 50% will come in the form of loans from this fund, the secretary general Indian Tea Association told reporters here on Monday.

The fund has a corpus of Rs 100 crore and an additional Rs 500 crore will come from public sector banks. “The fund is likely to start extending loans by November-December this year,” the official said.

While stating that Indian producers should be able to compete effectively in global markets and realise higher returns, Mr Nath emphasised on the need to maintain a balance between the requirements of domestic consumption and exports.