Tea majors propose Rs 4000cr replanting fund

Indian Tea Association (ITA) has asked the central government to create a Rs 4,000 crore special purpose fund for replantation and rejuvenation of tea bushes.

C K Dhanuka, chairman of ITA, said at the body's annual general meeting here today that ITA had submitted the proposal to the ministry and the feedback was positive.

Details of the corpus to be created was being worked out.

Dhanuka explained that one the reasons behind the high cost of production in the industry was the age profile of tea bushes.

According to the proposal, the replantation and rejuvenation thrust would commence from 2005 with the objective that by 2020 entire tea bushes would be below 50 years of age.

West Bengal commerce and industry minister, Nirupam Sen said the state government had started implementing the Sabyasachi Sen committee's recommendations on sharing of social welfare costs for tea garden workers between the government and tea companies.

Sen emphasised that productivity would have to be increased in the tea gardens.

Dhanuka said there was a need to regulate wages and pay proportionate wages to underperforming workers.

Tea estates must also have the flexibility in deciding total number of workers required and should not be forced to maintain unsustainable strengths by virtue of past agreements, he added.

Labour cost in the form of direct wage and associated costs of welfare accounted for over half of total cost of production of Indian tea plantations in general.

Dhanuka pointed out price realisations over last five years had crashed by some Rs 20 per kg from 1998 levels and many gardens had become unviable as a result.

Dhanuka said present trends indicated tea output in 2004 would be around 830 million kg, 27 million kg less than the previous year.

Even with price levels higher than last year, the industry with lower output would be recording lower turnover and cash flows would be under strain, he said.