 "Kerala planters say value added products only future for sector in state")
Kerala's plantation sector is facing a major crisis due to land issues, labour strike, climate change, high production cost, drop in production etc.
While survival is being questioned, industry experts said value added products, forming consortium to bring new brands to tap the market is the only future.
While survival is being questioned, industry experts said value added products, forming consortium to bring new brands to tap the market is the only future.
C Vinayraghavan, chairman, Association of Planters of Kerala (APK), which represents nearly 90% of the owners of the plantations in the state said that the sector is going through the worst phase in its existence starting from land related issues (after nearly 100 years title issue has started now), people (workers are demanding for high wages), market (price and demand are very low) and change in the climate.
He noted, for tea price realisation is around Rs 84 as compared to Rs 107 a year ago, while cost of production if Rs 120, of which 62% is labour cost. Prices of rubber is around Rs 110 as compared to Rs 200. Forecast for rubber price till 2020 is, won't see any upward trend and for Kerala tea also there is no market beyond Karnataka or South.
Average price of Kerala tea is the lowest in India at Rs 84 as compared to Assam's Rs 140 and Tamil Nadu's Rs 100. He attributed this mainly due to quality and the sector in those two states have gone for more value added products.
"Way forward for plantation sector in Kerala is form a consortium and bring new brands to tap the market. Consortium is need to penetrate in the market," said Vinayaraghavan, adding that the state government also said they would help to take the tea to state government's network inside the state and outside .
Vinayaraghavan did not put any time frame for the new initiative, as the focus is now resolving the ongoing labour issue first.
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But this alone cannot be the solution for the Kerala industry, which has stopped new investment due to high agriculture income tax (AIT), for plantation sector in Kerala at 50% as compared to nil in Tamil Nadu and Assam and in Karnataka it is 20% and next two years Karnataka Government is looking at bringing it to nil. He also called for change in old laws, both in labour and plantation concerned.
According to him, the old law does not allow the sector to interchange the crops, when the traditional plantations are doing bad. To ease pressure on owners, he also asked the state government to take over the social cost.
On the ongoing labour problem, he reiterated at the current environment companies will not be able to offer the hike which the unions are demanding. The owners are ready to offer of 12- 14% hike on the basic, which is currently at Rs 232 a day, as against Union's demand of Rs 500 a day. He is hopeful that Wednesday's meeting will yield positive outcome.