Tea sector to get Rs 4000 cr loan for replantation

The Indian tea industry is set to get a new lease of life as government agencies are working on providing a Rs 4,000 crore soft loan for replantation of tea that would be repayable in 15 years.

The industry is also expecting an incentive package from the Central government for increasing production of orthodox tea that would help the country's overall tea exports next year.

"Tea industry, Tea Board and Indian Bank Association (IBA) is working on a proposal to provide Rs 4,000 crore soft term loan to the industry for replantation," said C K Dhanuka, chairman of Indian Tea Association (ITA), the apex body of tea manufacturers in the country.

Dhanuka said the IBA, Tea Board and ITA is meeting periodically for clearance of the proposal, which once approved, will be of immense help to the industry, which is suffering from high cost of production.

He said that in India most of the gardens had very old bushes and as such average yield per hectare was only 1,700 kg per hectare.

"As per the proposal, the soft loan would be utilised for replantation of about 40 per cent of existing bushes, which will increase country's yield to 2100 kg per hectare," Dhanuka said.

He, however, said that this was a long drawn process and the success would to a great extent depend on the availability and clearance of the loan. Giving the break-up of the Rs 4,000 crore package, Dhanuka said ita was laying stress on getting Rs 2,000 crore as loan and the balance Rs 2000 crore as subsidy.

About the Orthodox incentive, the ITA chairman said, "Unless we produce more Orthodox varieties, we cannot increase exports."

Incidentally, india's tea exports between the four months of july and october had registered a consistent decline because of less availability of orthodox variety of tea, which is consumed by most of the countries in europe and middle east.

Even russia, which once used to be a ctc market, was now consuming increased quantity of orthodox.

Despite the decline registered in the period from july to october, india's total tea export during the first ten months of 2004 was 142.94 milion kgs, up from 131.96 m kgs in the corresponding period of previous year.

"We hope an announcement on orthodox tea production by end of this month and if it comes, exports in 2005 will improve significantly," Dhanuka said.