The Tea Board has dropped the loan component from the purview of the Special Purpose Tea Fund scheme as part of the current exercise aimed at restructuring the scheme.
“The demand for loan under SPTF leaves much to be desired”, said a spokesman for Tea Board. “In the past five years, the loan demand amounted to Rs 48 crore, covering 117 gardens belonging to 70 companies, or a meagre six per cent or so of the targeted Rs 150 crore each year, totalling Rs 750 crore in five years”.
The turnaround of the tea industry from 2008 onward is believed to be responsible for low loan demand. Also, many garden owners had expressed reservations about the structuring of the loan scheme. With the discontinuation of the loan scheme, the Tea Board's contract with the consultant entrusted with the operation of loan mechanism too has been dispensed with.
Replantation costs
Another important feature of the restructuring exercise is the review of the unit cost of the gardens opting for SPTF. A technical committee has been constituted to recast the estimated cost of replantation. The cost of replantation so far took into account the actual investment for preparation of land, upkeep and maintenance.
The technical committee, it is learnt, will examine other parameters the most important being the revenue loss due to uprooting entailing a drag on the cash-flow of the gardens.
Many tea garden owners insist on higher subsidy now offered at 25 per cent. Some want as high as 40 per cent. “We've placed the subsidy issue before the Commerce Ministry for consideration”, the spokesman said. “It is for the government decide on the subsidy amount and the date of the implementation”. In past five years, a total of 754 gardens received Rs 130 crore by way of subsidy.
Recommendations
The SPTF was launched in April 2007 after a series of meetings held in 2004, at the initiative of the then Union Commerce Minister, Mr Kamal Nath, involving all the stake-holders such as tea growers, State governments and various associations.
In all, 25 recommendations emerged from the meetings, paving the way for formation of SPTF, introduction of subsidy for Orthodox tea, setting up of a separate directorate for small tea-growers and review of land legislation, social cost and many others including declaring tea as a national drink and a national tea day.